Florida Brownfields Tax Credit Program
The Voluntary Cleanup Tax Credit (VCTC) Program was enacted in 1998 by the Florida Legislature to encourage participants to conduct voluntary cleanup of certain drycleaning solvent contaminated sites and brownfield sites in designated brownfield areas. Participants may be private or public entities, but must meet the eligibility criteria set forth in the program rules. Tax credit certificates are awarded by the Florida Department of Environmental Protection (FDEP) from an annual $10 million authorization recently raised from $5 million in 2017 and are valid against the Florida Corporate Income Tax.
If a participant does not have the tax liability to use these tax credits against their Florida tax liabilities, then they look to Clocktower Tax Credits, LLC to sell them to a corporation which is seeking to buy these tax credits at a discount to par and use them to offset their own tax liability. Our investors count on us to provide them with amounts ranging from $50,000 to $1,000,000 of tax credits. We have many clients who earn small credits ($2,000-$25,000) that we are able to package together to offer investors, thus creating an efficient sale of otherwise unsaleable credits.
Clocktower has participated in this program since its inception. Our founder, Jeff Jacobson, an experienced tax credit broker, was in the working group that was instrumental in helping the FDEP decide how to craft the program to make the transfer of the tax credits efficient for both the FDEP and the buyer of these tax credits. To date, Clocktower has brokered 62% of all VCTCs since 2001.
The success of the program is all in the numbers. The program started with a $2 million annual tax credit limit that was increased to $5 million in 2011 and then doubled to $10 million in July 2017. Year after year, the program’s success has resulted in more applications for credits than are available and more designated brownfield areas that have been cleaned up and subsequently developed. When there is a backlog of approved applications with an exhausted supply of credits, the credits will usually be issued the following year as long as the application made it into the following year’s credit pool of $10 million. The backlogs have occasionally been cleared by the Legislature through one-time fundings for that year. The program operates on a first-come, first-served basis with applications due each January 31st. The FDEP advises developers to have their application in good order the first time it’s submitted to secure a spot in the credit queue; then Clocktower can work to sell the tax credit for cash by a date certain.
For more information, please contact Sue Ellyn Idelson at (978) 793-9574 or SIdelson@ClocktowerTC.com.