Guidance, Oversight, Credits, And Amazon
Biden administration releases proposed guidance for advanced manufacturing production credit. The Inflation Reduction Act-established tax credit is available to US manufacturers of clean energy components like wind turbine blades, solar modules or critical minerals. The proposed guidance defines eligible components and minerals, clarifies when the credit can be claimed, and establishes safeguards against fraudulent, duplicative credits for the same component. The tax credit will be available through 2032 but will phase down after 2029.
GAO: There are opportunities to improve oversight of the low-income housing tax credit (LIHTC). The new report from the GAO (Government Accountability Office) finds that the cost of projects using the LIHTC varies widely, with minimal federal oversight. The LIHTC is a key federal program supporting affordable housing, but no federal agency currently has the authority to collect and report on the tax credit data. The GAO recommends designating an agency to collect and report on project development costs and improving the standardization of cost data.
Georgia’s film tax credit is projected to cost over $1 billion in 2024. A new audit report from the Georgia State University Fiscal Research Center forecasts the state’s film tax credit will cost taxpayers $1.1 billion next year. The center also forecasts the film industry in Georgia will generate only $290.4 million. State officials have said that film production has created tens of thousands of jobs in Georgia—as many as 60,000. But the center estimates the industry created closer to 35,000 jobs.
Michigan’s newly expanded EITC will reach 700,000 households. Michigan’s expanded earned income tax credit (EITC) is now equal to 30 percent of the federal EITC, up from 6 percent. Checks will hit mailboxes after Feb. 13, 2024. The average Michigan credit, called the Working Families Tax Credit, will be about $550, according to Gov. Gretchen Whitmer’s office. In the 2022 tax year, those who worked and earned income under $59,187 (and had investment income of $10,300 or less) will qualify for the state credit.
Europe’s top court sides with Amazon in $270 million tax dispute. The European Commission had accused Amazon of enjoying illegal tax benefits through a 2017 tax agreement with Luxembourg. Amazon had to pay back roughly $270 million to Luxembourg in 2017. But the European Court of Justice ruled this week that the European Commission had “not established” that the tax agreement was “state aid that was incompatible with the internal market.”
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