Governor Charles D. Baker's Budget Recommendation - House 1 Fiscal Year 2018

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2.605 -Economic Development Incentive Program Credit

Item Description FY2014 FY2015 FY2016 FY2017 FY2018
2.605 Economic Development Incentive Program Credit
Under the provisions of the Economic Development Incentive Program (EDIP) established pursuant to M.G.L. c. 23A , the Economic Assistance Coordination Council (EACC) may authorize taxpayers participating in certified projects to claim tax credits under M.G.L. Ch. 62 S. 6(g) and M.G.L. Ch. 63 S. 38N . To be eligible, a project must be certified by EACC. The total dollar amount of the EDIP credit that may be used in a calendar year is $25 million ($30 million for each year from 2015 to 2018). From 2011 to 2016, the annual cap included amounts awarded pursuant to the certified housing development program authorized by G.L. c. 40V . See item 2.622 .

For projects certified prior to January 1, 2010:
The project must be in an economic opportunity area and the credit is 5% of the cost of any property that qualified for the investment tax credit (ITC) allowed by G.L. c. 63, S. 31A . To qualify for the 5% credit, the property must be used exclusively in a certified project within an economic opportunity area. The credit may be carried forward for up to 10 years or indefinitely with certain restrictions. The credit is neither transferable nor refundable.

For projects certified on or after January 1, 2010 and before January 1, 2017: Sections 21 to 24 and 47 of chapter 166 of the Acts of 2009 made significant changes to EDIP. Under the amended provisions of the EDIP, the EDIP credits must be awarded by the EACC and those credits were no longer limited to 5% (could be up to 40% of the cost of qualifying property). Further, it was no longer required that all certified projects be in an economic opportunity area. The EDIP credit for certain projects, if authorized by the EACC, may be refundable at the option of the taxpayer. This credit is not transferable.

For projects certified on or after January 1, 2017:
The credit is no longer calculated based on the cost of property that qualifies for the investment tax credit allowed under G.L. c. 63, S. 31A and is instead determined by the EACC based on factors set out in M.G.L. c. 23A, S. 3D . In addition, limitations on the maximum amount of the credit awarded to particular types of certified projects have been eliminated, and the EACC may designate the credit as refundable for any certified project (subject to a limitation that the EACC may not award more than $5 million in refundable credits per year) and may specify the timing of the refund. For further information, see TIR 16-15.

For job creation projects certified on or after January 1, 2015 and before January 1, 2017:
Effective for tax years beginning on or after January 1, 2015, the EDIP credit provisions have been expanded to include certified job creation projects. Individuals and entities pursuing certified job creation projects may be awarded a credit of up to $1,000 per job created (up to $5,000 in a Gateway Community as defined in section 3A of chapter 23A or within a city or town whose average seasonally adjusted unemployment rate, as reported by the executive office of labor and workforce development, is higher than the average seasonally adjusted unemployment rate of the commonwealth). The total award per project may not exceed $1 million. The credit for a certified job creation project is allowed for the year subsequent to that in which the jobs are created.

Origin:  M.G.L. c. 63, S. 38N
Estimate:   $23.1 		17.6 20.4 22.5 22.8 23.1

Key:

ORIGIN
IRC Federal Internal Revenue Code (26 U.S.C.)
M.G.L. Massachusetts General Laws
U.S.C United States Code
ESTIMATES All estimates are in $ millions.

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