SECTION 1. Chapter 63 of the General Laws is hereby amended by adding after section 38FF the following new section:
Section 38GG. (a) As used in this section the following words shall, unless the context clearly requires otherwise, have the following meanings:-
“Certified applicant”, a person, corporation, or other entity issued a certificate by the Department.
“Department”, the Massachusetts Office of Business Development.
“Director”, the Executive Director of the Massachusetts Office of Business Development.
“Incremental sales tax revenue increase”, the difference between the average sales tax collected by the certified applicant in the three years prior to the scheduled project completion date described in the application submitted under this section, and the annual sales tax collected by the certified applicant following the completion of the project.
“Qualified applicant”, a person, corporation, or other entity which owns and operates a hotel or restaurant in the Commonwealth.
“Qualified hotel”, a hotel with a minimum renovation expenditure of two million dollars for costs incurred for repair, renovation, improvements and upgrades of guest rooms or suites and common areas provided that such investment shall have a minimum expenditure of ten thousand dollars per guest room or suite.
“Qualified restaurant”, a restaurant with a minimum expenditure of one hundred thousand dollars for costs incurred for repair, renovation, improvements and upgrades relating to dining areas, restrooms, kitchens and common areas, as well as exterior upgrades such as signage, façade and landscaping.
"Qualified renovation expenditure", actual costs incurred by a certified applicant for repair, renovation, improvements and upgrades relating to guest rooms or suites of a project or actual costs for repair renovation, improvements and upgrades relating to dining areas, restrooms, kitchens and common areas as well as exterior upgrades such as signage, façade and landscaping for a project defined in this section. All costs shall be verified by an independent third-party Certified Public Accountant licensed to do business in the Commonwealth of Massachusetts. Applicant shall pay all costs for the third-party verification. Approved project costs may not increase regardless of the actual costs incurred by the project.
“Incremental sales tax revenue increase”, the difference between the average annual sales tax collected by the certified applicant in the three years prior to the scheduled project completion date described in the application submitted under this section, and the annual sales tax collected by the certified applicant following the completion of the project.
(b)(1) There shall be a Massachusetts restaurant and hotel renovation tax credit.
(i) The director shall develop, implement and administer the incentive program authorized in this section.
(ii) A qualified applicant must submit an application to the department. The department may impose a fee for the processing of applications for the certification of any renovation under this section.
(iii) The application must include plans for the proposed project and estimated project costs; a detailed description of the proposed project including an estimated completion date; a record of the annual sales tax generated by the qualified applicant at the location of the proposed project for the previous three years; and an estimate of the incremental growth in sales tax collections at the location that are expected as a result of the project.
(iv) The department shall review each application for completion and provide approval notification to the applicant within 60 days of receipt of the application.
(v) Upon completion of review of the application the department shall issue a certificate to the qualified applicant designating said applicant as a certified applicant and authorizing the certified applicant to participate in the restaurant and hotel renovation tax credit program.
(2)(i) Subject to the provisions of this subsection, the Department of Revenue, in consultation with the Massachusetts Office of Business Development, shall issue payments to a certified applicant that incurs qualified renovation expenditures related to a project described in this section. The payments to a certified applicant shall be for twenty-five percent of the incremental sales tax revenue increase collected from the operation of the project after making the improvements outlined in the application certified by the department.
(ii) The Department of Revenue shall make payments to a certified applicant on an annual basis after annual sales tax collections have been verified and the incremental sales tax revenue increase has been determined by the department. The aggregate amount of incentive payments that an approved applicant may receive shall not exceed twenty percent of the qualified renovation expenditures incurred by the certified applicant for the project. Expansions, enlargements or additional investments made by a certified applicant which are outside the scope of the certified application shall not increase authorized incentive payments certified by the department. The department shall make the calculations necessary to the make the payments provided for in this subsection.
(iii) The department shall cease making incentive payments to a certified applicant when the aggregate amount of twenty percent of the qualified renovation expenditures incurred by the certified applicant for the project has been paid to said applicant.
(iv) At such time as the payments are longer required to be made to a certified applicant, the department shall notify the Department of Revenue and the certified applicant’s participation in the program shall be deemed complete.
SECTION 2. This act takes effect upon its passage.
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