An online exchange has been launched to facilitate the trading of state tax credits, a development that the exchange’s co-founder says will increase the transparency and efficiency of the market in such credits. The Online Incentives Exchange (OIX) is starting with tax credits issued by Louisiana and plans to add credits from two more states, California and Georgia, next month. Eventually it hopes to host trading in the tax credits of all 45 states that allow such transactions.
“Our goal is to bring efficiency to a market that is currently a bit opaque and fragmented,” says Danny Bigel, CEO and co-founder of the exchange. “There is currently no visibility in terms of pricing. By definition, transparency will bring efficiency to the marketplace.”
Peluso estimates buyers pay an average of 91 to 94 cents on the dollar for tax credits, with pricing varying by states.
“These are multimillion-dollar transactions,” she adds. “Our job is to eliminate mistakes and reduce risk to our clients—we do our program due diligence on behalf of both buyers and sellers, allowing them to confidently and effectively trade credits.”