Sugar Creek Capital’s guaranteed state tax credit funds are an effective, reliable tax planning opportunity for companies and individuals alike. The credits, available in states with robust affordable housing state tax credit programs, allow companies and high-income individuals to maximize cash flow by reducing their state income tax liability.
We work closely with banks, insurance companies, corporations, CPA firms and investment advisors as our funds provide the tax mitigating tools needed for their organizations and high income clients. Because our team includes experienced state tax experts with CPA, JD and tax LLM credentials, we understand how to maximize the value of state tax credits for corporate and individual purchasers.
We stand behind our state tax credits with a guarantee provided by the applicable state credit fund. Our in-house legal department and underwriting committee analyze all potential investments before we move forward. Investment oversight is performed by Sugar Creek professionals who are responsible for inspecting projects and ensuring investments perform as promised. We conduct ongoing asset management reviews on the performance of our investments.
Thanks to Sugar Creek Capital’s disciplined approach, tax credit investors can have peace of mind about the safety and stability of their investments.
Created under the Tax Reform Act of 1986, the Low-Income Housing Tax Credit (LIHTC) program is a dollar-for-dollar tax credit for affordable housing investments in the U.S. These federal tax credits are used by the majority of all affordable housing created in the U.S. today.
In addition, several states have enacted legislation to bring the benefits of affordable housing tax credits to the state level. These state tax credits enable private developers to build high-quality, multi-family residential communities without passing on the high cost of construction and maintenance to residents. Instead, developers can reduce the cost of development of these multi-family residential communities by applying for tax credits that are acquired by individual investors as a strategy to reduce their own tax liabilities. The investment helps make affordable housing more accessible to more families and individuals who can benefit from it.
They are currently available in Missouri and Georgia. In addition, several other states have passed recent legislation approving the creation of state tax credits for affordable housing properties. These include Colorado, Oklahoma, Hawaii and California.
They are obtained by acquiring a small interest in one of Sugar Creek Capital's affiliate state credit funds that either directly or indirectly has invested in one or more low-income housing projects located in the state where you reside.
Typically, individuals acquire state tax credits through their CPA firm or wealth management firm. They are available to taxpayers in states where affordable housing tax credits programs exist. The individual must have annual taxable income that exceeds a specified amount or have a one-time cash event.
Tax credits can be acquired for anywhere from 60 cents to 95 cents per credit depending on the time of year and the type of credit.
We encourage you to expand your knowledge about this industry. Here are some resources that may help:
Yes. The credits will first offset your state income tax liability, and any excess withholding will be refunded to you.
It varies by state. Typically, the credits are not available until late spring at the earliest. In some states, they must be acquired by the end of the calendar year.
State tax credits that exceed your current year’s liability typically may be carried forward for up to three years.
They are reported on the Credits Section. Sugar Creek Capital provides its investors with all documentation necessary to claim the state tax credits.
No, it will not alter the probability of an audit.
Hampton Mallis, CPA
Principal, Senior Vice President, Investments
Director of Tax Credit Sales
17 W. Lockwood Avenue St. Louis, MO 63119 p: 314-968-2205
1819 Peachtree Road, NE Suite 230 Atlanta, GA 30309 p: 404-343-1062
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