Selling Tax Credits: A Solution When Redemption Is Not Possible

Selling tax credits is one of the ways of how people or organizations obtain immediate cash. What then is a tax credit? It is a sum deductible from the total amount a taxpayer owes the state. However not all tax credits are salable or transferable.

Sellable tax credits across the United States are the historic credits, Brownfield tax credits, low income housing tax credits, film production tax credits, green tax credits and energy tax credits.

For Missouri, selling tax credits will involve the:

• Missouri Historic Rehabilitation Tax Credits;

• Missouri Brownfield Tax Credits;

• Missouri Neighborhood Preservation Tax Credits;

• Missouri Film Production Tax Credits; and

• Missouri Affordable Housing Assistance Program Tax Credits

There are different terms for applying the tax credits. The Historic Rehabilitation and the Neighborhood Preservation tax credits may apply to pay other taxes that are outstanding for the past three years. However, all have a useful forward carry over at different terms.

The use of the tax credit can affect Missouri tax budget since the sources for Missouri General Revenues are income taxes, sales taxes and business taxes. It is possible to offset the Brownfield, the Neighborhood Preservation and the Film Production tax credits against the income tax, the corporate franchise tax, bank tax, insurance premium tax and other financial institution taxes.

When there is application of a number of tax credits in one taxable year, the Missouri tax budget may not be sufficient to fund the expenditures for the following year. The state government has the option to cut on the expenditure or increase taxes and fees.

Another means for the state government to increase the Missouri tax budget is to hold the redemption of the tax credits. When this takes place, beneficiaries may keep the tax credit until the state government allows the redemption. If the beneficiaries are in need of immediate cash, to sell tax credits is the option.

Selling tax credits is not very difficult through a tax credit exchange. The initial step is to register. You do not need to fear since registration online requires no obligation. The registration will only ensure that you will be on the priority list for matching. Submission of necessary documents is the next step so there is time to verify and complete documentation requirements. Once there is a match, the agency can execute the transfer of documents then you will receive the payment.

If you want to use your tax incentive but the state government cannot let you use it, it is possible that the state government of Missouri has concerns on Missouri tax budget. You can help the Missouri government by selling tax credits.

Tweet

Selling Tax Credits: A Solution When Redemption Is Not Possible