SB 22 MALL RENOVATION TAX CREDIT

Sen Ron Griggs

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 Senate Bill 22 (SB 22) creates new personal income tax and corporate income tax credits for mall renovations. 

 Senate Bill 22 (SB 22) creates the Mall Renovation Income Tax Credit and the Mall Renovation Corporate Income Tax Credit (credits). A mall is property located in the state that has space for at least 20 businesses that provide retail or food or beverage establishments. Mall renovation project means restoration, renovation, or rehabilitation of at least 75% of a mall. New construction is ineligible for the credits. Qualifying costs are for project planning, construction, and associated expenses for the renovation; at least $250,000; and excludes federal tax credits. 

The credit rate is equal to the qualifying costs for the renovation project multiplied by a rate equal to the sum state and local Gross Receipts Tax (GRT) rates (credit = project cost * (local + state GRT).

Taxpayers must apply for pre-certification from the Economic Development Department (EDD) prior to beginning a mall renovation project containing details such as project description, project costs, project dates, and a project plan with construction phases. Taxpayers have one calendar year after completion to apply for certification of eligibility from EDD that includes an affidavit from a certified public accountant verifying qualifying costs. 

The aggregate amount of credits per calendar year is $50 million each for the income tax credit and corporate tax credit. Eligibility applications received after the cap will not be approved. Credits are not refundable but may be carried forward for five successive tax years.

The Taxation and Revenue Department must compile an annual report about the credits and present to relevant legislative committees. 

SB 22 is effective beginning Tax Year 2024 (TY24) and contains a 10-year repeal date.