Originally published in the May 24, 2012 issue of the Missouri Wonk Report.
3rd Quarter Tax Credit Numbers Reported
Authorization, issuance, and redemption figures for major tax credit programs
Tax credit authorization, issuance, and redemption figures were released earlier this month. Total redemptions for the year to date are $418,164,556; tax credit redemptions were $380,362,843 at the same point last year. Below are the numbers for the major programs.
Historic Preservation Tax Credit
Compared to the first two quarters, the Historic Preservation Tax Credit Program had an extremely slow quarter in terms of authorizations, authorizing only $3,476,684. This brings its authorizations for the year to $94,612,535. The Department of Economic Development issued $30,445,928 in the 3rd quarter resulting in $78,845,289 in total issuances so far this year. Redemptions under the program increased by $10,453,656 in the quarter; as a result, total redemptions for the year so far are $92,579,182.
Low Income Housing Tax Credit
So far this year, the Missouri Housing Development Commission has approved nearly $153 million in state Low Income Housing Tax Credits. These credits will be streamed out over a 10-year period. Below is a breakdown of the credits authorized by type of credit (4% or 9%) and area of the state.
Joplin and Berkeley Projects
9% Credits- $47,780,000
Regular Projects for Kansas City, St. Louis, and Outstate
9% Credits- $83,045,000
Kansas City and St. Louis (funded with credits and tax-exempt bonds)
4% Credits- $22,153,800
All Credits- $152,978,800
Only $3,858,000 was issued under the program in the third quarter (most of the issuances under the program each year occur in the first quarter) bringing the total issuances for the year to $159,158,389. Redemptions under the program were $10,976,483, resulting in a total of $78,026,052 in redemptions so far this year; however, a large chunk of the program’s credits will be redeemed in the 4th quarter when insurance companies file their insurance premium taxes with the Department of Insurance.
Senior Citizen Property Tax Credit
The tax credit program that aids in offsetting property taxes of seniors and the disabled had $84,279,826 in redemptions, bringing the total redemptions under the program so far this year to $88,700,087. If trends from the past hold true for this year, the program will likely have approximately $20 million more in redemptions before the end of the year.
New Markets Tax Credit
The state New Markets Tax Credit Program is prohibited from authorizing new tax credits until the General Assembly passes a concurrent resolution allowing for new qualified equity investments or changes the program’s statute. However, issuances and redemptions will still occur under the program for several years. The program issued $14,311,446 in the third quarter bringing its total issuances so far this year to $20,859,446. Redemptions under the program for the third quarter were $4,092,271, which resulted in total redemptions so far this year of $13,887,660.
The Department of Economic Development didn’t authorize any new tax credits under the program in the third quarter; its authorizations for the year remain at $2,772,392. In the third quarter, there was $2,095,334 in issuances, resulting in a total of $5,537,157 in issuances so far this year. There was only $941,206 in redemptions under the program in the third quarter, bringing the total so far this year to $13,552,646.
The Department of Economic Development is on pace to set a record for authorizations under the state’s primary job creation incentive program. In the third quarter, the state authorized $26,166,229, resulting in $73,683,601 in authorizations for the year. The department issued $7,598,924 in credits during the third quarter, bringing total issuances for the year to $28,534,742. Redemptions in the third quarter were $12,633,968; so far this year, redemptions are $28,445,474.