VEPC authorizes, rescinds tax credits

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VEPC authorizes, rescinds tax credits

Tue, 12/14/2004 - 8:00pm -- tim

COUNCIL AUTHORIZES AND RESCINDS TAX INCENTIVES

Windsor's Harpoon Brewery Approved
MONTPELIER -- The Vermont Economic Progress Council approved tax incentives for the potential expansion of the Harpoon Brewery in Windsor at its November meeting. The Council also rescinded tax credits for several projects that never occurred and required the recapture of tax credits from companies that have ceased operations in Vermont.
MBBC Vermont, LLC (aka Harpoon Brewery) of Windsor was authorized for $83,395 in payroll and capital investment tax credits. The company plans to add capacity and jobs. The incentives will ensure that the expansion planned by Harpoon to add fermentation capacity will occur at the Windsor, Vermont plant instead of the Boston, MA facility.
The tax incentives were authorized based on business activity that must occur before the credits can be claimed. The Council approved the application after reviewing nine guidelines and applying a rigorous cost-benefit analysis that projects whether the activity encouraged by the tax incentives will have a positive or negative impact on the region and state. The Council also determined that the project would not occur or would occur in a significantly different and less desirable manner if not for the incentives being authorized.
"These incentives generate good jobs that pay well and increase income levels here in Vermont," said Lawrence Miller, chair of the nine-member council of business people from around the state. "If the credits are claimed, it means that the applicant has performed as expected and invested in Vermont. The net fiscal impact is outstanding for Vermont and we're pleased to offer these incentives."
The Council also voted to rescind, disallow, or require the recapture a total of $3,042,998 in tax incentives based on inactivity or severe reductions in workforce. The Council took the following actions:
- Vermont Cheesecake Company - Rescinded $194,085 originally approved in April 2004 because a project in Chester never occurred.

- New England Dairy Processing Cooperative - Rescinded $87,218 originally approved in August 2003 because a project in Springfield never occurred.

- Evergreen Paper and Phoenix Paper Companies - Rescinded $592,452 originally approved in March 2003 because a project in Ryegate never occurred.
- Moore/Wallace North America - Disallowed $162,167 originally approved in May 2003 because new owners are closing plant in Manchester.

- U.S. Tsubaki - Disallowed and/or require recapture of $146,815 originally approved in January 2000 because parent company has closed its division in Bennington.

- Homebound Mortgage, Inc. - Disallowed and/or require recapture of $1,860,261 originally approved in January 2002 because owners closed operation in Colchester.
Tax credits are rescinded if the activity required to earn the credits never occurs. The credits are no longer available to the company. Credits are disallowed if some activity has occurred but there are credits that have not been earned or some credits have been earned but have not yet been utilized to reduce the company's tax liability. These credits are also no longer available to the company. Credits are recaptured if they were earned and utilized to reduce a company's tax liability. The Vermont Department of Taxes is responsible for recapturing the required amount back from the company.