Brownfields Tax Credits
The credit is available only to those with “Eligible Person” status – essentially, innocent parties who did not cause the contamination or even own the land when it occurred. Real estate developers are primary targets for the credit. Many others qualify as well depending on the facts and circumstances. Eligibility for the Massachusetts Brownfields Tax Credit program requires that an applicant meet the following eligibility criteria:
- The site property must be used for commercial purposes (owner-occupied residential property is not eligible).
- The property must be located in a Census Tract, city, or town designated as an Economically Distressed Area, or EDA, or be a former MGP site.
- The applicant must be the owner, operator, or tenant of the property, or have been at the time of the spending.
- The applicant cannot be responsible for the contamination (generally, the contamination originated prior to ownership or use of the property).
- The project was reported to the Department of Environmental Protection (DEP), and generally performed under the direction of a Licensed Site Professional (LSP).
- Eligible spending must exceed a minimum threshold based on the property value.
- The project was completed no more than five years ago.
Typical tax credit recipients include individual commercial property owners (including real estate trusts, LLCs, and limited partnerships); small and large businesses; developers; not-for-profit organizations such as charities and community development corporations (CDCs); and colleges and universities. Agencies of the municipal, state, or federal government are not eligible. Parties may qualify for investigating and/or remediating contamination from a prior use of the site, including the result of historic fill or past practices, whether this condition was known at the time of purchase or discovered later.