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Tuesday, June 10, 2014

More than $800K improperly awarded as tax credits to NH businesses

CONCORD – Nearly half of the tax credits for jobs created in state economic revitalization zones went to ineligible businesses according to a legislative audit released Monday.

Over a two-year period, the auditors found $875,750 in business tax credits were improperly awarded to firms. The state budget had allocated $825,000 a year for these credits from state business taxes. ...

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CONCORD – Nearly half of the tax credits for jobs created in state economic revitalization zones went to ineligible businesses according to a legislative audit released Monday.

Over a two-year period, the auditors found $875,750 in business tax credits were improperly awarded to firms. The state budget had allocated $825,000 a year for these credits from state business taxes.

The finding was one of seven uncovered in a performance audit the Legislative Budget Office’s Audit Division did on the Division of Economic Development in the Department of Resources and Economic Development. The audit examined programs from July 1, 2011, to June 30, 2013.

“By awarding a business more than it qualified for, the division effectively prevented another business from receiving the proper amount of tax credits,’’ the audit said.

Resources and Economic Development Commissioner Jeff Rose said his agency is responding to the audit and making changes in staffing and procedures as a result.

The tax credits are available to firms that make capital investments to create new jobs in an unused or underutilized industrial park or a commercial area with a high vacancy rate in the state.

The tax credits can be claimed up to $40,000 per business and the firm is allowed to receive them for the next five years as long as the requirements are met.

Rose’s staff responded in the audit that some of the problems occurred because there were two vacancies in upper management of the division, and the Legislature had eliminated the office’s finance administrator in the state budget in June 2011.

Since then, the agency has filled the position of director of the division that was left vacant for nearly three years and officials said they are considering legislation to give the office more clear authority to verify the accuracy of these tax credit applications.

Among the 29 applications for tax credits, here’s what auditors found:

Not housed there: Four of the recipients given $237,000 in tax credits were for firms not located in the economic zone.

Employees not hired: Auditors found that employees claimed in four businesses were not hired on the year of their applications for the tax credit.

Poor documentation: State auditors with three firms getting $305,100 in tax credits could not determine based on the information given that employee wages or expenses the company made were accurate.

Late filing: One company got $188,200 in tax credits even though it missed the deadline for filing. Agency officials granted it the tax credit for the following year even though auditors said it did not appear to be allowed under state law.

Kevin Landrigan can reached at 321-7040 or klandrigan@nashua
telegraph.com. Also, follow Landrigan on Twitter (@Klandrigan).