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Senate Tax Reform Working Group Report Estimates HTC Expenditures

WASHINGTON – July 8, 2015

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The Senate Finance Committee today released reports from its five tax reform working groups. The Community Development & Infrastructure Bipartisan Tax Working Group Report included an overview of the historic tax credit (HTC) program and estimated that HTC tax expenditures for fiscal years 2014-2018 will be $5.4 billion. The report made no recommendations regarding the HTC.

Tune in to the July 14 Tax Credit Tuesday podcast for more information.

 

Louisiana Extends Historic Tax Credit

BATON ROUGE, La. – June 24, 2015

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Louisiana Gov. Bobby Jindal last week signed a bill into law that extends the sunset date of the state historic tax credit (HTC) from Jan. 1, 2018 to Jan. 1, 2022. H.B. 387 provides a 25 percent credit for eligible costs and rehabilitation expenses incurred before Jan. 1, 2018 and a 20 percent credit thereafter, regardless of the year in which the property is placed in service. The law does not allow credits for rehabilitation costs and expenses that are paid for with state or federal funds, unless those funds are reported as taxable income or are structured as repayable loans.

 

Texas Amends State Historic Tax Credit

AUSTIN, Texas – June 22, 2015

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Texas Gov. Greg Abbott last week signed into law a bill that amends the determination of eligible costs and expenses for purposes of the state historic tax credit (HTC). H.B. 3230 provides that under the Texas state HTC, “eligible costs and expenses” means qualified rehabilitations as defined by Section 47(c)(2) of the Internal Revenue Code (IRC), except that the depreciation and tax-exempt use provisions of that section do not apply to costs and expenses incurred by an entity exempt from the franchise tax. The law states that those costs and expenses are eligible costs and expenses if the other provisions of IRC Section 47(c)(2) are satisfied. H.B. 3230 takes effect Jan. 1, 2016.

 

South Carolina Amends, Expands State HTC

COLUMBIA, S.C. – June 12, 2015

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South Carolina Gov. Nikki Haley this week signed into law a bill allowing a taxpayer who qualifies for the federal historic tax credit (HTC) in South Carolina to take a 25 percent state HTC in lieu of the 10 percent state HTC, up to $1 million for each certified historic structure. Under H. 3725, the credit will be taken in equal installments over three years (previously five years) beginning with the year in which the property is placed in service. The legislation also defines a “state-owned abandoned facility,” allows a taxpayer who rehabilitates an abandoned building to take a credit against insurance premium taxes and details how a taxpayer may apply for certification of an abandoned building site. The law went into effect June 9.

 

Ohio Historic Tax Credit Threatened

COLUMBUS,Ohio – June 11, 2015

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The Ohio Senate yesterday proposed legislation that would place a moratorium on the Ohio Historic Preservation Tax Credit program. The proposal would prevent the Ohio Development Services Agency from issuing a rehabilitation tax credit certificate on or after July 1, 2015. Without a certificate, property owners are not be able to receive the state’s 25 percent historic tax credit. The legislative language was inserted into the Senate version of Ohio’s main operating budget for fiscal years 2016 to 2017 (Sub. H.B. No. 64).

Tune in to the June 16 Tax Credit Tuesday podcast to learn more.

 

OCC Updates Community Developments Insights Report about HTCs

WASHINGTON – May 28, 2015

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The Office of the Comptroller of the Currency today released an updated edition of its 2008 Community Developments Insights report, “Historic Tax Credits: Bringing New Life to Older Communities.” The report provides an overview of historic tax credits (HTCs) and explains how they may be attractive to banks or other entities. The updates include a discussion of regulatory changes since the 2008 edition, a discussion of IRS Revenue Procedure 2014-12 and an outline of how the HTC activities of banks and federal savings associations are evaluated for Community Reinvestment Act (CRA) purposes.

Tune into the June 9 Tax Credit Tuesday podcast for more information on the report.

Georgia Historic Tax Credit Expanded

ATLANTA – May 18, 2015

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On May 12, Georgia Gov. Nathan Deal signed into law H.B. 308, which revises the state historic tax credit (HTC). The bill expands the definition of a certified HTC structure to include those located within a national historic district or individually listed on the National Register of Historic Places; allows claimed but unused credits to be transferred or sold to another Georgia taxpayer; and increases the maximum credit from $300,000 annually to $5 million annually for certified non-residential structures or $10 million for large developments that meet certain job-creation standards.

Tune in to the May 26 Tax Credit Tuesday podcast to learn more.

HTCC Publishes Safe Harbor Recommended Practices

WASHINGTON – April 20, 2015

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The Historic Tax Credit Coalition (HTCC) published recommended practices for closing federal historic tax credit (HTC) investments intended to satisfy the requirements of Rev. Proc. 2014-12. Topics include the investor’s partnership interest, fees, lease terms, disproportionate distributions, investor’s capital contributions, flips, guarantees and options.

Tune into the April 28 episode of the Tax Credit Tuesday podcast for more information

Historic Preservation Groups Invite Others to Sign On to Letter Supporting HTC

WASHINGTON – March 27, 2015

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Five historic preservation groups are circulating a sign-on letter in support of the federal historic tax credit (HTC). The letter urges the Senate Finance Committee to protect and enhance the HTC during tax reform efforts. Stakeholders argue that weakening or eliminating the HTC would endanger the economic feasibility of nearly all historic rehabilitation projects. The letter is headed by the Historic Tax Credit Coalition, the National Conference of State Historic Preservation Officers, the National Trust Community Investment Corporation, the National Trust for Historic Preservation and Preservation Action. Parties interested in signing on to the letter should email Carl Wolf at cwolf@savingplaces.org by April 13.

Tune in to the April 7 Tax Credit Tuesday podcast  to learn more about the sign on letter and efforts to protect the HTC.

Arkansas Extends, Clarifies Historic Tax Credit Program

WASHINGTON – March 26, 2015

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Arkansas Gov. Asa Hutchinson on Monday signed into law Act 567, which extends the state historic tax credit (HTC) program through 2027. The legislation amends the Arkansas Historic Rehabilitation Income Tax Credit Act to define “certified rehabilitation” as the total of appropriate and approved rehabilitation work on an eligible property that results in a substantial rehabilitation of an eligible property that has been issued an eligibility certificate. Act 567 also adds a provision to the statute that allows each eligible property to receive the state historic tax credit only once in any 24-month period, beginning with the March 20 effective date of the act.

Tune into the March 31episode of the Tax Credit Tuesday podcast to learn more about the legislation.

Senate Tax Reform Working Group Seeks Comments

WASHINGTON – March 11, 2015

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The Senate Finance Committee today announced that its tax reform working groups are seeking comments from the public as they work to advance tax reform efforts in the 114th Congress. The five working groups are community development and infrastructure; business income tax; individual income tax; international tax; and savings and investment. The community and infrastructure group’s jurisdiction includes the low-income housing tax credit (LIHTC), the new markets tax credit (NMTC) and the historic tax credit (HTC). The business tax reform group’s jurisdiction includes renewable energy tax credits (RETCs). Comments will be accepted through April 15.

Tune into the March 17 episode of the Tax Credit Tuesday podcast for more information.

Reports: NPS Approved $5.98 Billion in Proposed HTC Investment in FY 2014

WASHINGTON – March 2, 2015

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The National Park Service (NPS) on Saturday released its Federal Tax Incentives for Rehabilitating Historic Buildings Annual Report for Fiscal Year 2014 and a supplementary Statistical Report and Analysis for Fiscal Year 2014. According to the reports, NPS approved 1,156 proposed projects worth $5.98 billion in rehabilitation work in fiscal year (FY) 2014. Completed projects certified in FY 2014 created an estimated 77,762 jobs, and more than 50 percent of completed projects certified in FY 2014 used both federal and state historic tax credits.

Tune into the March 10 Tax Credit Tuesday podcast to hear more about the reports’ findings.

IRS Clarifies Income Inclusion Amount Under Section 50(d)(5)

WASHINGTON – Feb. 2, 2015

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The Internal Revenue Service (IRS) last week issued Chief Counsel Advice Memorandum 201505038, which addresses the amount of additional income required to be recognized by a lessee in a historic tax credit (HTC) transaction using a lease pass-through structure. The memorandum states that the additional income, often known as 50(d) income, is 100 percent of the credit allowable. There had been some question as to whether 50(d) income is based on 50 percent or 100 percent of the allowable credit.

Tune into the Feb. 3 episode of the Tax Credit Tuesday podcast for more information.

Senate Finance Committee Announces Tax Reform Working Groups

WASHINGTON – Jan. 15, 2015

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Senate Finance Committee Chairman Orrin Hatch, R-Utah, and Ranking Member Ron Wyden, D-Ore., today announced the co-chairs of the five working groups they created to advance tax-reform efforts in the 114th Congress. The groups will work with the Joint Committee on Taxation (JCT) to review current tax law, analyze available reform options and produce a comprehensive report that can serve as a foundation for bipartisan tax reform legislation. The report is expected to be released by the end of May.

The five working groups are community development and infrastructure, co-chaired by Sens. Dean Heller, R-Nev., and Michael Bennet, D-Colo.; business income tax, co-chaired by Sens. John Thune, R-S.D., Ben Cardin, D-Md.; individual income tax, co-chaired by Sens. Chuck Grassley, R-Iowa, Mike Enzi, R-Wyo., and Debbie Stabenow, D-Mich.; international tax, co-chaired by Rob Portman, R-Ohio, and Chuck Schumer, D-N.Y.; and savings and investment, co-chaired by Sens. Mike Crapo, R-Idaho, and Sherrod Brown, D-Ohio. The community and infrastructure group will encompass the low-income housing tax credit (LIHTC), the new markets tax credit (NMTC) and the historic tax credit (HTC), and the business tax reform group will encompass renewable energy tax credits (RETCs).

Tune into the Jan. 20 episode of the Tax Credit Tuesday podcast for more information.

Camp Introduces Tax Reform Legislation; Senate Finance Committee GOP Staff Releases Tax Reform Report

WASHINGTON – Dec. 11, 2014

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Today House Ways and Means Committee chairman Rep. Dave Camp, R-Mich., officially introduced H.R. 1, the Tax Reform Act of 2014. Camp’s legislation proposes formalizing the tax reform discussion draft released last February. It retains the low-income housing tax credit (LIHTC), doesn’t mention the new markets tax credit (NMTC) and proposes the repeal of the historic tax credit (HTC) and renewable energy tax credits (RETCs). Camp called for the legislation to “spur further action” during the 114th Congress, which begins in January.

Meanwhile, the U.S. Senate Finance Committee Republican staff today released a report titled “Comprehensive Tax Reform for 2015 and Beyond,” outlining issues that policymakers will face if they attempt comprehensive tax reform in the upcoming Congress. While LIHTCs, NMTCs, HTCs and RETCs are not specifically mentioned, the report calls for “permanence and certainty,” and indicates that some tax credits should be enhanced and made permanent.  

Tune into the Dec. 16 episode of the Tax Credit Tuesday podcast to learn more.

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