Knowledge Center

Tuesday, August 04, 2015

The Transferability and Monetization of State Tax Credits

IPT Insider, August 2015

by Jennifer A. Zimmerman

The transferability and monetization of state tax credits is a relatively new concept. State tax credits evolved from two federal tax credit programs created in the 1980s. States use tax credits in order to promote investment in economic development and increasingly to prevent existing businesses from moving out-of-state. The problem encountered early on in the promotion of these credits was what to do if the credit cannot be fully used by the taxpayer. Sale, or transferability, of tax credits was one possible solution. While on the federal level there is a large pool of potential tax credit buyers, this is not necessarily true on the state level.

Download and read the full article beginning on page 5.

Jennifer A. Zimmerman is a partner in Horwood Marcus & Berk's SALT Group.

The Institute for Professionals in Taxation, founded in 1976, is a 501(c)(3) non-profit educational association serving over 4400 members representing approximately 1450 corporations, firms, or taxpayers throughout the United States and Canada. It is the only professional organization that educates, certifies and establishes strict codes of conduct for state and local income, property and sales & use tax professionals who represent taxpayers (government officials or organizations do not qualify for membership). The Institute also provides excellent educational programs in Value Added Tax (VAT) and Credits & Incentives. IPT members represent the spectrum of business and industry sectors of all sizes - from small firms to most Fortune 500 companies. What they share is a dedication to excellence and a desire to further professionalism and cooperation within the tax profession.

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