The 2013-15 state budget eliminates seventeen business tax credits in 2014 and one in 2015 with the intent of simplifying the state tax code.
Each of these credits is claimed by fewer than 1% of taxpayers. Six of these tax credits are refundable, meaning the state pays the taxpayer regardless if the taxpayer owes tax to the state. Some of the activities for which these credits were based may now be claimed under the Manufacturing and Agricultural Credit (Manufacturers Tax Credit), which takes effect in 2013.
The tax credits being eliminated in 2014 include (an asterisk denotes a refundable credit):
- Beginning Farmer and Farm Asset Owner*
- Biodiesel Fuel Production
- Community Development Finance
- Dairy and Livestock Investment
- Dairy Manufacturing Facility Investment*
- Electronic Medical Records
- Ethanol and Biodiesel Fuel Pump
- Film Production Services and Investment*
- Food Processing Plant and Food Warehouse Investment*
- Health Insurance Risk-Sharing Plan Assessment
- Internet Equipment
- Meat Processing Plant and Food Warehouse Investment*
- Post-Secondary Education
- Relocated Business
- Research Facilities
- Super Research and Development
- Water Consumption
- Woody Biomass Harvesting and Processing Investment (eliminated in 2015)*
The elimination of these credits yields about $30 million in tax revenue back to the state over the next two years and is used to bolster individual income tax relief.