Is the Recapture of Brownfields Tax Credits Common?
James T. Curtis, PE, LSP President, Cooperstown Environmental LLC
Q: My lawyer is worried about Recapture – a “claw back” – of my Brownfields Tax Credit. Is that a big problem?
A: Theoretically you can receive a tax credit and have it reversed or “clawed back” later. This is called recapture and the provisions for it appear in the statutory language itself:
If the taxpayer ceases to maintain the remedy operation status or the permanent solution in violation of the Massachusetts Contingency Plan prior to the sale of the property or the termination of the lease, the difference between the credit taken and the credit allowed for maintaining the remedy shall be added back as additional taxes due in the year the taxpayer fails to maintain the remedy operation status or permanent solution.
However, in the more than 20 years that the Massachusetts Brownfields Tax Credit program has been in existence, my understanding is that this still has never occurred.
To read more about the topic of Brownfields Tax Credit recapture, see our blog post at: http://cooperstownenv.com/recapture-ma-brownfields-tax-credits/
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“Ask Mr. Brownfield” is a regular column regarding the highly-acclaimed Massachusetts tax credit program for reimbursements of environmental expenses. Jim Curtis is an acknowledged expert with more than 15 years of industry-leading experience and knowledge; Cooperstown Environmental LLC of Andover has completed hundreds of successful applications for its clients.