This bill amends the eligibility and award criteria for economic revitalization tax zone credits by extending the reevaluation period for these zones from every 5 years to every 8 years. It increases the aggregate tax credits available from $825,000 to $1,000,000 per fiscal year and allows unclaimed credits to be carried forward for up to 2 fiscal years instead of just the next calendar year. Additionally, the maximum credit a taxpayer can utilize in any fiscal year is raised from $40,000 to $50,000. The bill also modifies the calculation of tax credits based on new job creation and associated wages, increasing the thresholds for credit eligibility. New provisions specify that employers classified as "foreign principals" are ineligible for these tax credits, and any employees or investments used for credits awarded prior to July 1, 2027, cannot be used for credits in subsequent years.

Furthermore, the bill repeals previous laws related to the repeal of economic revitalization zone tax credits and the reevaluation of these zones. It shifts the program year from a calendar year to a state fiscal year and expands the types and amounts of expenditures eligible for credit. A provision is introduced to prevent taxpayers who have reached the maximum available credit through carry forward from applying for additional credits until they have sufficiently utilized their existing credits. The effective date for the new provisions is set for July 1, 2027, while some sections will take effect immediately upon passage. The fiscal impact is expected to decrease revenue for the General Fund and Education Trust Fund by an indeterminable amount, as the Department of Business and Economic Affairs cannot accurately estimate the fiscal implications due to uncertainties regarding the credits that will be requested, issued, or utilized in the coming years.

Statutes affected:
Introduced: 162-N:2-a, 162-N:5
SB404 text: 162-N:2-a, 162-N:5