Tax Credits: Endangered But Not Extinct

During a legislative season marked by state budget shortfalls and declining receipts, businesses have seen some sharp increases corporate tax rates, new limitations on use of  state net operating loss (NOL) carryovers, and a number of proposals to suspend NOLs or eliminated corporate tax credits. Some states have taken a different approach, enacting tax credits to aid business and promote growth in these tough economic times.

Notably, several states have adopted energy-related tax credits. Wisconsin enacted two laws creating tax credits for businesses relocating to the state and decreasing the tax burdens on small businesses. The list below, while not exhaustive, highlights some of the major tax credit legislation enacted so far in 2011.