2005 Vermont § 5930r. — Tax credit for code improvements to commercial buildings

§ 5930r. Tax credit for code improvements to commercial buildings

(a) Definitions.

(1) "Qualified project" means a project for capital improvements or fixtures in commercial buildings located within a designated village center under the provisions of chapter 76A of Title 24 that is undertaken by an owner or lessee that is not a religious entity operating with a primarily religious purpose, or a state or federal agency, political subdivision of the state or federal government, or instrumentality of the United States, involving a building that is not solely the residence of the owner or lessee, in order to comply with:

(A) requirements under Title 21 and related rules concerning fire prevention, life safety and accessibility, and determined by the department of labor to meet such requirements; or

(B) requirements under Title 18 and related rules concerning food establishments, and is determined by the department of health to meet such requirements; or

(C) requirements under Title 6, chapter 151 and related rules concerning sale of dairy products; Title 6, chapter 204 and related rules concerning sale of meat products; or Title 9, chapter 73 and related rules concerning weights and measures; and is determined by the agency of agriculture, food and markets to meet such requirements.

(2) "State board" means the Vermont downtown development board established pursuant to chapter 76A of Title 24.

(b) Prior to the commencement of any eligible work, a property owner or lessee may apply to the state board for a tax credit allocation under this section. No more than one award shall be granted with respect to any one building. The state board, within 45 days of receipt of a completed application, shall decide, based on the availability of credit, whether or not to grant a tax credit allocation. Upon granting such tax credit, the board shall issue a letter of approval. In all instances, the burden of proof shall be upon the applicant.

(c) Amount of credit. The owner or lessee of a qualified building shall be entitled to claim against the taxpayer's state individual income tax, state corporate income tax, bank franchise or insurance premiums tax liability a tax credit of 50 percent of the expenditures made for capital improvements or fixtures, or both, up to a maximum tax credit of $5,000.00.

(d) Claim for credit. A taxpayer claiming credit under this section shall submit to the department of taxes with the first return on which a credit is claimed a copy of the state board tax credit allocation.

(e) Availability of credit. A credit under this section shall be available for the first tax year in which that part of the qualified building for which the qualified expenditures were made is placed back in service. Any unused credit may be carried forward to reduce the taxpayer's tax liability for no more than nine succeeding tax years following the first year the tax credit is claimed.

(f) If, within five years after the building is placed in service upon completion of the qualified project, the owner of a building for which a tax credit has been awarded under this section disposes of the building, then for such year and all succeeding years, any unused credit shall be disallowed and the taxpayer shall be liable for a recapture penalty, and the recapture penalty shall be a percentage of the total credit used, computed in accordance with the following table: Years between close of tax year Percent of credit recaptured when credit became available and tax year when building was disposed Less than one year 100 percent of the credit One year 80 percent of the credit Two years 60 percent of the credit Three years 40 percent of the credit Four years 20 percent of the credit.

(g)(1) In any fiscal year after 1998, the state board may award tax credits to all applicants under this section and sections 5930n and 5930p of this title, so that the total shall not exceed $1,000,000.00, when added together with the following:

(A) total sales tax reallocated under section 9819 of this title; and

(B) credits awarded under section 5930q of this title, concerning the installation and improvement of platform lifts, elevators or sprinkler systems.

(2) A total of no more than 40 percent of these credits in combination with the sales tax reallocation may be awarded in connection with all of the projects in a single municipality.

(h) In lieu of using its tax credit allocation to reduce its own tax liability, an applicant may request the allocation in the form of a mortgage credit certificate which a bank may accept in return for adjusting the rate or term of the applicant's mortgage or loan related to a leasehold interest on the qualified building. The amount of the mortgage credit certificate shall equal the unused portion of the credit awarded under this section. An applicant requesting a mortgage credit certificate subsequent to receiving a tax credit allocation shall provide to the state board a copy of all returns on which a credit under this section was taken. A bank which purchases a mortgage credit certificate may use it to reduce its franchise tax liability under section 5836 of this title for the first tax year in which the qualified building is placed back in service after completion of the qualified project or in a subsequent year. (Added 2001, No. 114 (Adj. Sess.), § 11, eff. May 28, amended 2002; No. 114 (Adj. Sess.), § 16, eff. July 1, 2003; No. 42, § 2, eff. May 27, 2003; 2005, No. 103 (Adj. Sess.), § 3, eff. April 5, 2006.)