In an effort to promote more affordable housing developments, a bipartisan group of legislators is working to offer charitable taxpayers a carrot.
The bill was held over by the House Taxes Committee Wednesday for possible omnibus bill inclusion. Its companion, SF3301, sponsored by Sen. Carla Nelson (R-Rochester), awaits action by the Senate Agriculture, Rural Development and Housing Finance Committee.
A non-refundable tax credit would be granted to individuals and corporations who contribute between $100 and $5 million to the fund. The credit, which would not in total be allowed to exceed $25 million per year, would equal the amount of a taxpayer’s contributions and would apply against the individual income tax, corporate franchise tax or gross premiums tax.
“The donor themselves can designate which housing project [their contribution] goes to, so that really gets at the issue of encouraging locals to support efforts like this,” Anderson said.
Despite being sympathetic to the cause, Rep. Diane Loeffler (DFL-Mpls) voiced concern over supporting specific donations over others — a point Loeffler made Tuesday regarding a different bill that would provide a tax credit for donations to youth intervention organizations.
“This is another one of those most-favored donation bills … I tend to think it’s really tough for us as a committee to figure out why one donation should be worth whole lot more than another,” Loeffler said.
The bill specifies that grants and loans would fund an equal number of units in the metropolitan area and other parts of the state. Unused tax credits would be available to contributors for a period of 10 years.