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| 2 | 2 | | HOUSE DOCKET, NO. 1608 FILED ON: 1/18/2023 |
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| 3 | 3 | | HOUSE . . . . . . . . . . . . . . . No. 2789 |
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| 4 | 4 | | The Commonwealth of Massachusetts |
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| 5 | 5 | | _________________ |
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| 6 | 6 | | PRESENTED BY: |
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| 7 | 7 | | Ann-Margaret Ferrante |
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| 8 | 8 | | _________________ |
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| 9 | 9 | | To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General |
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| 10 | 10 | | Court assembled: |
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| 11 | 11 | | The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill: |
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| 12 | 12 | | An Act establishing a tax credit for artist work space. |
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| 13 | 13 | | _______________ |
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| 14 | 14 | | PETITION OF: |
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| 15 | 15 | | NAME:DISTRICT/ADDRESS :DATE ADDED:Ann-Margaret Ferrante5th Essex1/18/2023 1 of 9 |
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| 16 | 16 | | HOUSE DOCKET, NO. 1608 FILED ON: 1/18/2023 |
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| 17 | 17 | | HOUSE . . . . . . . . . . . . . . . No. 2789 |
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| 18 | 18 | | By Representative Ferrante of Gloucester, a petition (accompanied by bill, House, No. 2789) of |
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| 19 | 19 | | Ann-Margaret Ferrante for legislation to establish an artist workspace tax credit. Revenue. |
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| 20 | 20 | | [SIMILAR MATTER FILED IN PREVIOUS SESSION |
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| 21 | 21 | | SEE HOUSE, NO. 2896 OF 2021-2022.] |
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| 22 | 22 | | The Commonwealth of Massachusetts |
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| 23 | 23 | | _______________ |
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| 24 | 24 | | In the One Hundred and Ninety-Third General Court |
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| 25 | 25 | | (2023-2024) |
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| 26 | 26 | | _______________ |
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| 27 | 27 | | An Act establishing a tax credit for artist work space. |
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| 28 | 28 | | Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority |
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| 29 | 29 | | of the same, as follows: |
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| 30 | 30 | | 1 SECTION 1. Chapter 62 of the General Laws is hereby amended by inserting after |
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| 31 | 31 | | 2section 6N, as appearing in the 2012 Official Edition, the following section:- |
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| 32 | 32 | | 3 Section 6O. (a) For the purposes of this section, the following words shall, unless the |
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| 33 | 33 | | 4context clearly requires otherwise, have the following meanings:- |
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| 34 | 34 | | 5 “Commissioner”, the commissioner of revenue. |
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| 35 | 35 | | 6 “Cultural district”, a geographical area of a city or town within the commonwealth |
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| 36 | 36 | | 7designated as a cultural district pursuant to the provisions of section 58A of chapter 10. |
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| 37 | 37 | | 8 “Department”, the department of housing and community development, or its successor |
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| 38 | 38 | | 9agency. 2 of 9 |
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| 39 | 39 | | 10 “Eligibility statement”, a statement authorized and issued by the department certifying |
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| 40 | 40 | | 11that a given project is a qualified project. The department shall, in consultation with the |
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| 41 | 41 | | 12commissioner, promulgate regulations establishing criteria upon which the eligibility statements |
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| 42 | 42 | | 13will be issued. The eligibility statement shall specify the maximum annual amount of the |
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| 43 | 43 | | 14Massachusetts artist work shop tax credit authorized. The department shall only authorize the tax |
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| 44 | 44 | | 15credits to qualified projects which are placed in service on or after January 1, 2016. |
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| 45 | 45 | | 16 “Qualified project”, a project for the construction of a new building located in a cultural |
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| 46 | 46 | | 17district, or renovation of an existing building located in a cultural district, providing artists with |
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| 47 | 47 | | 18the workspace necessary to produce art, which meets the requirements of this section. |
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| 48 | 48 | | 19 “Taxpayer”, a person, firm, partnership or other entity subject to the income tax imposed |
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| 49 | 49 | | 20by the provisions of this chapter hired as a contractor, subcontractor or otherwise to perform |
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| 50 | 50 | | 21construction on a qualified project. |
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| 51 | 51 | | 22 (b)(1) There shall be a Massachusetts artist workspace tax credit. The department may |
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| 52 | 52 | | 23authorize annually under this section together with section 38GGH of chapter 63 the total sum |
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| 53 | 53 | | 24of: (i) $20,000,000; (ii) unused Massachusetts artist workspace tax credits, if any, for the |
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| 54 | 54 | | 25preceding calendar years; and (iii) Massachusetts artist workspace tax credits returned to the |
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| 55 | 55 | | 26department by a qualified project. |
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| 56 | 56 | | 27 (2) Unless otherwise provided in this section or the context clearly requires otherwise, the |
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| 57 | 57 | | 28department shall authorize, administer, determine eligibility for the Massachusetts artist |
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| 58 | 58 | | 29workspace tax credit. 3 of 9 |
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| 59 | 59 | | 30 (3) The department shall allocate the total available Massachusetts artist workspace tax |
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| 60 | 60 | | 31credit among as many qualified projects as fiscally feasible, with the goal of increasing the |
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| 61 | 61 | | 32commonwealth's stock of artist workspace. |
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| 62 | 62 | | 33 (c)(1) A taxpayer may be allowed a state tax credit with respect to a qualified project, |
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| 63 | 63 | | 34provided that the department issues an eligibility statement for that qualified project. This state |
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| 64 | 64 | | 35tax credit shall be termed the Massachusetts artist workspace tax credit. |
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| 65 | 65 | | 36 (2) The total Massachusetts artist workspace tax credit available to a qualified project |
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| 66 | 66 | | 37shall be authorized and allocated by the department, or its successor agency, based on the |
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| 67 | 67 | | 38qualified project's need for the credit for economic feasibility. |
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| 68 | 68 | | 39 (3) The Massachusetts artist workspace tax credit shall be taken against the taxes |
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| 69 | 69 | | 40imposed under this chapter, claimed equally for 5 years, subtracted from the amount of state tax |
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| 70 | 70 | | 41otherwise due for each taxable period and shall not be refundable. Any amount of the artist |
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| 71 | 71 | | 42workspace tax credit that exceeds the tax due for a taxable year may be carried forward to any of |
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| 72 | 72 | | 43the 5 subsequent taxable years. |
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| 73 | 73 | | 44 (4) All or any portion of tax credits issued in accordance with the provisions of this |
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| 74 | 74 | | 45section may be allocated to parties who are eligible under the provisions of paragraph (1) of |
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| 75 | 75 | | 46subsection (c). A taxpayer shall certify to the commissioner the amount of credit allocated to |
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| 76 | 76 | | 47such taxpayer. The taxpayer shall provide to the commissioner appropriate information so that |
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| 77 | 77 | | 48the artist workspace tax credit can be properly allocated. |
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| 78 | 78 | | 49 (5) In the event that recapture of Massachusetts artist workspace tax credit is required, |
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| 79 | 79 | | 50any statement submitted to the commissioner as provided in subsection (c) shall include the 4 of 9 |
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| 80 | 80 | | 51proportion of the state credit required to be recaptured, the identity of each taxpayer subject to |
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| 81 | 81 | | 52the recapture and the amount of credit previously allocated to such taxpayer. |
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| 82 | 82 | | 53 (6) The director of the department, in consultation with the commissioner, shall |
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| 83 | 83 | | 54promulgate regulations necessary to administer the provisions of this subsection. |
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| 84 | 84 | | 55 (d) The taxpayer shall submit, at the time of filing the taxpayer’s state tax return, a copy |
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| 85 | 85 | | 56of the eligibility statement issued by the department with respect to such qualified project. In the |
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| 86 | 86 | | 57case of failure to attach the eligibility statement, a credit under this section shall not be allowed |
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| 87 | 87 | | 58with respect to such qualified project for that year until the copy is provided to the department of |
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| 88 | 88 | | 59revenue. |
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| 89 | 89 | | 60 (e) The commissioner or the department, through the promulgation of regulations, may |
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| 90 | 90 | | 61require the filing of additional documentation necessary to determine the eligibility or accuracy |
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| 91 | 91 | | 62of a tax credit claimed under the provisions of this section. |
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| 92 | 92 | | 63 (f) The department, in consultation with the commissioner, shall monitor and oversee |
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| 93 | 93 | | 64compliance with the Massachusetts artist workspace tax credit program and may promulgate |
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| 94 | 94 | | 65regulations requiring the filing of additional documentation deemed necessary to determine |
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| 95 | 95 | | 66continuing eligibility for the Massachusetts artist workspace tax credit. The department or the |
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| 96 | 96 | | 67commissioner shall report specific occurrences of noncompliance to appropriate state, federal |
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| 97 | 97 | | 68and local authorities. |
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| 98 | 98 | | 69 (g) Except for unused credits carried forward pursuant to paragraph (3) of subsection (c) |
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| 99 | 99 | | 70and section 38GGH of chapter 63, a qualified project shall not be eligible for any Massachusetts |
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| 100 | 100 | | 71artist workspace tax credits for more than 7 taxable years. 5 of 9 |
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| 101 | 101 | | 72 (h) The department may provide that upon application for state tax credits issued by the |
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| 102 | 102 | | 73department, such taxpayer may elect to receive such state tax credit in the form of a loan |
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| 103 | 103 | | 74generated by transferring the credit to the department or its designee on terms specified by the |
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| 104 | 104 | | 75department in accordance with its qualified allocation plan. Neither a direct tax refund nor a loan |
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| 105 | 105 | | 76received as the result of the transfer of the credit shall be considered taxable income under this |
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| 106 | 106 | | 77chapter. |
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| 107 | 107 | | 78 (i) The department may pursue methods of enhancing the efficiency of the Massachusetts |
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| 108 | 108 | | 79artist workspace tax credit program including but not limited to: pursuing opinions from the |
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| 109 | 109 | | 80United States department of treasury's internal revenue service in the form of general counsel |
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| 110 | 110 | | 81memoranda, private letter rulings and other notices, rulings or guidelines; by reviewing other |
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| 111 | 111 | | 82state tax programs which utilize an option for taxpayers to receive such tax credit in the form of a |
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| 112 | 112 | | 83loan generated by transferring the credit to a designated state entity; and any other such methods. |
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| 113 | 113 | | 84 SECTION 2. Chapter 63 of the General Laws is hereby amended by inserting after |
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| 114 | 114 | | 85section 38FF, as so appearing, the following section:- |
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| 115 | 115 | | 86 Section 38GG. (a) For the purposes of this section, unless the context clearly requires |
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| 116 | 116 | | 87otherwise, the following words shall have the following meanings:- |
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| 117 | 117 | | 88 “Commissioner”, the commissioner of the department of revenue |
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| 118 | 118 | | 89 “Cultural district”, a geographical area of a city or town within the commonwealth |
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| 119 | 119 | | 90designated as a cultural district pursuant to the provisions of section 58A of chapter 10. |
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| 120 | 120 | | 91 “Department”, the department of housing and community development, or its successor |
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| 121 | 121 | | 92agency. 6 of 9 |
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| 122 | 122 | | 93 “Eligibility statement”, a statement authorized and issued by the department certifying |
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| 123 | 123 | | 94that a given project is a qualified artist workspace project. The department, in consultation with |
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| 124 | 124 | | 95the commissioner, shall promulgate regulations establishing criteria upon which the eligibility |
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| 125 | 125 | | 96statements shall be issued. The eligibility statement shall specify the maximum annual amount of |
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| 126 | 126 | | 97the artist workspace tax credit authorized. The department shall only authorize the tax credits to |
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| 127 | 127 | | 98qualified artist workspace projects which are placed in service on or after January 1, 2016. |
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| 128 | 128 | | 99 “Qualified artist workspace project” or “qualified project”, a project for the construction |
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| 129 | 129 | | 100of a new building in a cultural district, or renovation of an existing building located in a cultural |
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| 130 | 130 | | 101district, providing artists with the workspace necessary to produce art, which meets the |
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| 131 | 131 | | 102requirements of this section. |
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| 132 | 132 | | 103 “Taxpayer”, a corporation subject to an excise imposed by the provisions of this chapter, |
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| 133 | 133 | | 104including, without limitations, section 2, sections 20 to 23, inclusive, section 29A, section 32 and |
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| 134 | 134 | | 105section 39, hired as a contractor, subcontractor or otherwise to perform construction on a |
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| 135 | 135 | | 106qualified project.. |
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| 136 | 136 | | 107 (b)(1) There shall be a Massachusetts artist workspace tax credit. The department may |
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| 137 | 137 | | 108authorize annually under this section together with section 6O of chapter 62 the total sum of: (i) |
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| 138 | 138 | | 109$20,000,000; (ii) unused artist workspace tax credits, if any, for the preceding calendar years; |
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| 139 | 139 | | 110and (iii) any artist workspace tax credits returned to the department by a qualified artist |
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| 140 | 140 | | 111workspace project. |
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| 141 | 141 | | 112 (2) Unless otherwise provided in this section or the context clearly requires otherwise, the |
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| 142 | 142 | | 113department shall authorize, administer, determine eligibility for the artist workspace tax credit. 7 of 9 |
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| 143 | 143 | | 114 (3) The department shall allocate the total available Massachusetts artist workspace tax |
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| 144 | 144 | | 115credit among as many qualified artist workspace projects as fiscally feasible, with the goal of |
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| 145 | 145 | | 116increasing the commonwealth's stock of artist workspace. |
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| 146 | 146 | | 117 (c)(1) A taxpayer may be allowed a state tax credit with respect to a qualified artist |
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| 147 | 147 | | 118workspace project, provided that the department issues an eligibility statement for that qualified |
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| 148 | 148 | | 119project. This state tax credit shall be termed the Massachusetts artist workspace tax credit. |
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| 149 | 149 | | 120 (2) The total Massachusetts artist workspace tax credit available to a qualified project |
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| 150 | 150 | | 121shall be authorized and allocated by the department, or its successor agency, based on the |
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| 151 | 151 | | 122qualified project's need for the credit for economic feasibility. |
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| 152 | 152 | | 123 (3) The Massachusetts artist workspace tax credit shall be taken against the taxes |
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| 153 | 153 | | 124imposed under this chapter, claimed equally for 5 years, subtracted from the amount of state tax |
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| 154 | 154 | | 125otherwise due for each taxable period and shall not be refundable. Any amount of the tax credit |
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| 155 | 155 | | 126that exceeds the tax due for a taxable year may be carried forward to any of the 5 subsequent |
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| 156 | 156 | | 127taxable years. |
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| 157 | 157 | | 128 (4) All or any portion of tax credits issued in accordance with the provisions of this |
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| 158 | 158 | | 129section may be allocated to parties who are eligible under the provisions of paragraph (1) of |
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| 159 | 159 | | 130subsection (c). A taxpayer shall certify to the commissioner the amount of credit allocated to |
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| 160 | 160 | | 131such taxpayer. The taxpayer shall provide to the commissioner appropriate information so that |
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| 161 | 161 | | 132the artist workspace tax credit can be properly allocated. |
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| 162 | 162 | | 133 (5) In the event that recapture of Massachusetts artist workspace tax credits is required, |
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| 163 | 163 | | 134any statement submitted to the commissioner as provided in subsection (c) shall include the 8 of 9 |
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| 164 | 164 | | 135proportion of the state credit required to be recaptured, the identity of each taxpayer subject to |
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| 165 | 165 | | 136the recapture and the amount of credit previously allocated to such taxpayer. |
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| 166 | 166 | | 137 (6) The director of the department, in consultation with the commissioner, shall |
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| 167 | 167 | | 138promulgate regulations necessary to administer the provisions of this subsection. |
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| 168 | 168 | | 139 (d) The taxpayer shall submit, at the time of filing the taxpayer’s state tax return, a copy |
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| 169 | 169 | | 140of the eligibility statement issued by the department with respect to such qualified project. In the |
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| 170 | 170 | | 141case of failure to attach the eligibility statement, a credit under this section shall not be allowed |
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| 171 | 171 | | 142with respect to such qualified project for that year until the copy is provided to the department of |
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| 172 | 172 | | 143revenue. |
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| 173 | 173 | | 144 (e) The commissioner or the department may require the filing of additional |
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| 174 | 174 | | 145documentation necessary to determine the eligibility or accuracy of a tax credit claimed under |
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| 175 | 175 | | 146the provisions of this section through the promulgation of regulations. |
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| 176 | 176 | | 147 (f) The department, in consultation with the commissioner, shall monitor and oversee |
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| 177 | 177 | | 148compliance with the Massachusetts artist workspace tax credit program and may promulgate |
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| 178 | 178 | | 149regulations requiring the filing of additional documentation deemed necessary to determine |
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| 179 | 179 | | 150continuing eligibility for the Massachusetts artist workspace tax credit. The department or the |
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| 180 | 180 | | 151commissioner shall report specific occurrences of noncompliance to appropriate state, federal |
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| 181 | 181 | | 152and local authorities. |
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| 182 | 182 | | 153 (g) Except for unused credits carried forward pursuant to section 6O of chapter 62 and |
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| 183 | 183 | | 154paragraph (3) of subsection (c) of this section, a qualified project shall not be eligible for any |
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| 184 | 184 | | 155Massachusetts artist workspace tax credits for more than 7 taxable years. 9 of 9 |
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| 185 | 185 | | 156 (h) The department may provide that upon application for state tax credits issued by the |
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| 186 | 186 | | 157department, such taxpayer may elect to receive such state tax credit in the form of a loan |
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| 187 | 187 | | 158generated by transferring the credit to the department or its designee on terms specified by the |
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| 188 | 188 | | 159department in accordance with its qualified allocation plan. Neither a direct tax refund nor a loan |
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| 189 | 189 | | 160received as the result of the transfer of the credit shall be considered taxable income under this |
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| 190 | 190 | | 161chapter. |
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| 191 | 191 | | 162 (i) The department may pursue methods of enhancing the efficiency of the Massachusetts |
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| 192 | 192 | | 163artist workspace tax credit program including but not limited to; pursuing opinions from the |
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| 193 | 193 | | 164United States department of treasury's internal revenue service in the form of general counsel |
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| 194 | 194 | | 165memoranda, private letter rulings and other notices, rulings or guidelines and reviewing other |
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| 195 | 195 | | 166state tax programs which utilize an option for taxpayers to receive such tax credit in the form of a |
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| 196 | 196 | | 167loan generated by transferring the credit to a designated state entity. |
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