News Archive:

2011

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December

TAXPAYER BRIEF FILED IN HISTORIC BOARDWALK HALL TAX CREDIT CASE

WASHINGTON, D.C. - December 16, 2011

The New Jersey Sports and Exposition Authority yesterday filed an appellee brief with the Third Circuit Court of Appeals in Historic Boardwalk Hall LLC v. Commissioner. The Internal Revenue Service in April appealed a U.S. Tax Court decision to allow the Historic Boardwalk Hall partnership to claim federal historic rehabilitation tax credits. In November, the appellate court granted an extension until December 15 for taxpayer briefs in the appeal. Read more about the appeal in this month’s issue of the Novogradac Journal of Tax Credits.

November

IRS RELEASES CONSERVATION EASEMENT AUDIT GUIDE

WASHINGTON, D.C. - November 28, 2011

The Internal Revenue Service (IRS) on November 22 released an updated conservation easement audit technique guide (ATG). The ATG provides guidance for the examination of charitable contributions of conservation easements. The document, which the IRS revised on September 30, relates to parks, wetlands, farmland, forest land, scenic areas, historic land or historic structures donated for conservation purposes.

You can learn more about the updated conservation easement audit technique guide by tuning in to the Tax Credit Tuesday podcast on December 6.

ECONOMIC IMPACT ANALYSIS OF MINNESOTA HTC RELEASED

ST. PAUL, MINN. - November 22, 2011

The University of Minnesota Extension Center for Community Vitality yesterday released “Economic Impact of Projects Leveraged by the Minnesota Historic Rehabilitation Tax Credit.” The report analyzes the economic impact of the Minnesota Historic Rehabilitation Tax Credit, which was signed into law in April 2010. Among other things, the report finds that 14 tax credit projects have supported 2,948 jobs and the credit has spurred projects worth an estimated $343 million.

Tune into the Tax Credit Tuesday podcast on November 29 to hear more about the economic impact of Minnesota’s historic tax credit.

October

BILL WOULD ALLOW SCHOOLS TO BE REHABILITATED WITH HTCs

WASHINGTON, D.C. - October 12, 2011

Sens. Jim Webb and Mark Warner, D-Va., today introduced legislation to provide a tax credit for communities that partner with private developers to rehabilitate older school buildings. The Rehabilitation of Historic Schools Act of 2011 would amend existing law to allow local governments to use the federal historic tax credit (HTC) to rebuild deteriorating schools. Sens. Webb and Warner, and Rep. Eric Cantor, R-Va., introduced similar legislation in the 111th Congress.

Michael J. Novogradac, CPA, will discuss the Rehabilitation of Historic Schools Act in the October 18 Tax Credit Tuesday podcast.

September

BILL INTRODUCED TO EXTEND MIDWESTERN DISASTER CREDITS

WASHINGTON, D.C. - September 14, 2011

Rep. Bruce Braley, D-Iowa, introduced legislation yesterday to help rebuild Midwestern communities damaged by natural disasters. H.R. 2901, the Rebuilding Communities Act, would extend a provision enacted in 2008 that increased the historic tax credit to 26 percent and the rehabilitation tax credit to 13 percent in Midwestern communities affected by disasters. Congress originally passed the provision in H.R. 1424, the Emergency Economic Stabilization Act, and the enhanced tax credits expire on December 31. The Rebuilding Communities Act would extend the availability of the additional tax credits until December 31, 2014. The bill has been referred to the House Committee on Ways and Means. The text of H.R. 2901 will be posted to the Historic Tax Credit Resource Center when it becomes available.

July

SEN. COBURN PROPOSES ELIMINATING LIHTC, NMTC, HTC AND RETCs

WASHINGTON, D.C. - July 19, 2011

Sen. Tom Coburn, R-Okla., yesterday released the proposal “Back in Black: A Deficit Reduction Plan,” his outline for the federal government to reduce the deficit by $9 trillion over the next 10 years. The 614-page plan calls for the elimination of nearly $1 trillion in tax expenditures in a section entitled “Reforming Tax Expenditures & Ending Special Giveaways.” Among other tax incentives, the proposal would eliminate the low-income housing tax credit (LIHTC), new markets tax credit (NMTC), historic preservation tax credit (HTC) and renewable energy tax credits (RETCs). 

Tune in to today’s Tax Credit Tuesday podcast to hear Michael J. Novogradac, CPA, discuss this proposal and its prospects within the context of the ongoing debt ceiling and deficit reduction talks in Washington, D.C.

REVISED HISTORIC TAX CREDIT MODERNIZATION BILL INTRODUCED

WASHINGTON, D.C. – July 11, 2011

On Friday, July 8, Reps. Aaron Schock, R-Ill., and Earl Blumenauer, D-Ore., introduced H.R. 2479, the Creating American Prosperity through Preservation Act (CAPP) of 2011. The CAPP Act would make five changes to the federal historic tax credit (HTC). The bill would provide a boost to 30 percent for small deals of less than $5 million in qualified rehabilitation expenditures and provide a 2 percent HTC boost for achieving energy use savings at least 30 percent greater than established industry standards for similar buildings. The CAPP Act would also eliminate the federal taxation of the proceeds of a state HTC transaction for both state credit certificate sales and credits allocated through partnerships. The bill would also expand the number of properties that qualify for the HTC by indexing the eligibility date for the 10 percent non-historic rehabilitation tax credit so that both 20 percent and 10 percent credits would apply to buildings 50 years and older. And finally, supporters of the CAPP Act say it would help target the HTC’s impact to low-income communities by allowing not-for-profits to act as HTC project sponsors and building tenants.  

Tune in tomorrow to the July 12 Tax Credit Tuesday podcast to hear Michael J. Novogradac, CPA, discuss the Creating American Prosperity through Preservation Act (CAPP) of 2011 and its prospects for passage.

NPS RELEASES REVISED HISTORIC PRESERVATION CERTIFICATION APPLICATION

WASHINGTON, D.C. – July 8, 2011

The National Park Service today issued a revised application for historic preservation certification. Applicants should begin using the 2011 application immediately. State historic preservation offices will not accept the old application form after January 1, 2012.

June

SECOND ANNUAL STUDY SHOWS POSITIVE ECONOMIC IMPACT OF HISTORIC TAX CREDITS

WASHINGTON, D.C. – June 1, 2011

The Historic Tax Credit Coalition and Rutgers University today released their annual study on the economic impact of the federal historic tax credit (HTC). This year's report shows that the federal HTC continues to outpace other economic activities such as highway construction, manufacturing and service sector industries in its ability to generate jobs, labor income, taxes and gross domestic product. The Second Annual Report on the Economic Impact of the Federal Historic Tax Credit analyzes the economic impact of the federal HTC and concludes that the historic tax credit is a highly efficient job creator—accounting for the creation of 2 million new jobs over the life of the program, 145,000 of which were generated in the past two years. The study was conducted by researchers at the Edward J. Bloustein School of Planning and Public Policy, Rutgers, the State University of New Jersey, and commissioned by the Historic Tax Credit Coalition, a public policy advocacy organization. 

Read more about the report from Historic Tax Credit Coalition Chairman John Leith-Tetrault in his monthly History and the Hill column in the June issue of the Novogradac Journal of Tax Credits.

May

NPS AMENDS HISTORIC PRESERVATION CERTIFICATION PROCEDURES

WASHINGTON, D.C. – May 26, 2011

The National Park Service (NPS) today issued a final rule that amends its procedures for obtaining historic preservation certifications for rehabilitating historic structures. Individuals and corporations must obtain these certifications to be eligible for historic tax credits (HTCs). The final rule, published in today’s Federal Register, removes outdated references to the Internal Revenue Code; replaces references to regional offices with its Washington Area Services Office; requires NPS to accept appeals for denial of certain certifications; and removes the certification fee schedule from the regulation. The final rule goes into effect on June 27.

Tune in to the May 31 Tax Credit Tuesday podcast to hear Michael J. Novogradac, CPA, discuss the final rule and its significance to the HTC community.

NPS PUBLISHES ILLUSTRATED GUIDELINES ON SUSTAINABILITY

WASHINGTON, D.C. – May 6, 2011

The National Park Services has published a new document called “The Secretary of the Interior’s Standards for Rehabilitation & Illustrated Guidelines on Sustainability for Rehabilitating Historic Buildings” that offer guidance on how to make historic buildings more sustainable in a manner that will preserve their historic character and that will meet The Secretary of the Interior’s Standards for Rehabilitation. NPS says the sustainability guidelines were developed with the guidance and support of numerous public agencies, professional organizations and individuals. The written guidance is illustrated with examples of appropriate or “recommended” treatments and some that are “not recommended” or could negatively impact the building’s historic character.

April

IRS APPEALS HISTORIC BOARDWALK HALL TAX CREDIT CASE

WASHINGTON, D.C. – April 1, 2011

The Internal Revenue Service (IRS) this week filed a notice to appeal to the 3rd Circuit Court of Appeals the U.S. Tax Court decision in Historic Boardwalk Hall LLC v. Commissioner. The case addressed a number of issues related to structuring federal historic tax credit transactions.

Join historic tax credit experts to discuss the IRS appeal in the Historic Boardwalk Hall case at the National Historic Tax Credit Conference on April 7-8, in Cleveland, Ohio. It’s not too late to register for the conference!

March

APPEALS COURT REVERSES HISTORIC TAX CREDIT FUND DECISION

RICHMOND, Va. – March 29, 2011

The U.S. Court of Appeals for the Fourth Circuit today published an opinion in the case of Virginia Historic Tax Credit Fund v. Commissioner of Internal Revenue that reverses the December 2009 U.S. Tax Court opinion. The reversal could have significance for historic tax credit transactions, especially those involving state tax credits.

Today’s ruling, and what it means for historic tax credit development, will be discussed at The National Historic Tax Credit Conference: Credits and Capital on April 7-8 in Cleveland. It’s not too late to register! 

Questions about the ruling can also be directed to Thomas Boccia, CPA, at 216-298-9000 or thomas.boccia@novoco.com.

NPS RELEASES 2010 REPORT ON HTCs

WASHINGTON, D.C. – March 28, 2011

The National Park Service (NPS) has released its annual report for fiscal year (FY) 2010 on the historic tax credit (HTC) program. The report, Federal Tax Incentives for Rehabilitating Historic Buildings: Annual Report for Fiscal Year 2010, includes information about the program’s use and performance throughout FY 2010. According to the NPS, the HTC has spurred $3.42 billion in new rehabilitation work, which created 41,641 jobs and 5,514 low- and moderate-income housing units. Along with the annual report, the NPS released Federal Tax Incentives for Rehabilitating Historic Buildings: Statistical Report and Analysis for Fiscal Year 2010. The statistical report provides a more detailed analysis of the program, including state-by-state project activity and program trends over time.

Learn more about the HTC by attending The National Historic Tax Credit Conference: Credits and Capital, April 7-8, in Cleveland, Ohio. Questions about the HTC? Call Charlie Rhuda, CPA, at 617-330-1920 or Tom Boccia, CPA, at 216-298-9000.

NY DEMOCRATS CALL FOR END OF STATE HTC DEFERRAL

ALBANY, N.Y. – March 23, 2011

New York’s Independent Democratic Conference (IDC) last week called for the reinstatement of New York’s Historic Rehabilitation Tax Credit (HRTC) Program. The IDC, a group of four lawmakers that broke away from the state’s Senate Democratic Conference to caucus together as a third legislative conference, also released a report touting the benefits of the HRTC. The IDC’s “Investing in our Upstate Economy: The Historic Rehabilitation Tax Credit,” reports that that the HRTC program would create more than $460 million in private investment and more than 1,600 jobs in Upstate New York. The IDC had previously asked for a deferral until 2014 of HRTC awards of more than $2 million; that provision was included in the 2010 budget. Because the program is set to sunset in 2014, the IDC says that the credit delay effectively kills the program as an economic development tool.

Tune in to next week’s Tax Credit Tuesday podcast to hear more about the report and the communities that would benefit from the tax credit’s reinstatement.

CONGRESSMAN SEEKS TO MAKE HISTORIC TAX CREDIT RULES MORE USER FRIENDLY

WASHINGTON, D.C. – March 8, 2011

Rep. Brian Higgins, D-N.Y., yesterday announced his intention to work with the National Park Service (NPS) to facilitate changes in regulatory interpretations that create barriers for developers seeking to use federal and state historic tax credits (HTCs). In a letter, Rep. Higgins wrote that the NPS’s current interpretation of HTC regulations “could have a chilling effect on development.” Rep. Higgins says he looks forward to facilitating changes that alleviate the current obstacles and allow for the rebirth of historic properties.

Learn more about how to maximize HTCs next month at Novogradac & Company’s National Historic Tax Credit Conference: Credits and Capital, April 7 and 8 in Cleveland, Ohio.

February

NEW JERSEY GOVERNOR VETOES STATE HISTORIC TAX CREDIT

TRENTON, N.J. – February 22, 2011

Gov. Chris Christie on Friday vetoed a bill that would have created a state historic rehabilitation tax credit program in New Jersey. The Historic Property Reinvestment Act (A1851/S659) would have provided a tax credit to businesses and homeowners for 25 percent of qualified rehabilitation expenses for renovation of historic buildings. In a press release announcing his veto of A1851 and 13 other bills, Christie referred to the bills as irresponsible spending. The bill had passed unanimously in the Senate and received heavy support from the Assembly.

Tune in to the Tax Credit Tuesday podcast on March 1 to hear more about the veto and reaction from New Jersey preservation groups.

MICHIGAN GOVERNOR PROPOSES ELIMINATING STATE TAX CREDITS

LANSING, Mich. – February 18, 2011

Michigan Gov. Rick Snyder yesterday revealed his executive budget for fiscal years (FY) 2012 and 2013, in which he proposes to restructure the state’s tax system by replacing the business tax with a flat 6 percent corporate income tax and eliminating all state tax credit programs. Under the proposal, the historic preservation tax credit (HTC), brownfield redevelopment, Michigan Economic Growth Authority, Next Energy, film, and renaissance zone programs, among other tax incentives, would expire after the state has honored existing commitments. Any new economic development incentive would be awarded through the appropriations process and reviewed for effectiveness.

MARYLAND AWARDS FIRST SUSTAINABLE COMMUNITIES TAX CREDITS

BALTIMORE, Md. February 11, 2011

Maryland Gov. Martin O’Malley today announced 10 recipients of more than $11 million in Sustainable Communities Tax Credits to spur community revitalization and create an estimated 740 construction jobs. The state received 36 applications requesting a total of $40 million in credits for the $10 million program’s initial allocation round. This year’s funding also includes $1.8 million carried over from 2010. Under the Sustainable Communities Tax Credit, enacted last year to succeed the Heritage Rehabilitation Tax Credit, historic structures are eligible for a credit of as much as 25 percent of qualified rehabilitation expenses and non-historic buildings can receive a credit of as much as 10 percent of qualified rehabilitation expenses if they are certified sustainable under a rating system such as LEED.

The governor’s office reports that the two tax credit programs have invested more than $358 million in revitalization projects and supported 15,000 jobs in the past 15 years. O’Malley’s fiscal year 2012 budget proposal maintains funding for the Sustainable Communities Tax Credit at $10 million.

PRESIDENT TO PROPOSE CONVERTING SECT. 179D DEDUCTION TO TAX CREDIT

Washington, D.C. February 3, 2011

President Barack Obama today announced a Better Buildings Initiative designed to make commercial buildings 20 percent more energy efficient over the next decade by catalyzing private sector investment using incentives to upgrade commercial and municipal buildings. As part of the initiative, the White House announced that the president’s fiscal year 2012 budget will propose, under Internal Revenue Code Section 179D, reforming the current tax deduction for energy efficient commercial building upgrades by converting it to a more generous tax credit. The administration says this change could result in a ten-fold increase in commercial retrofits.

Tune in to the February 8 Tax Credit Tuesday Podcast to hear more about this proposal.

January

BILL WOULD LIMIT TAX CREDIT USERS CAMPAIGN CONTRIBUTIONS

JEFFERSON CITY, Mo. – January 21, 2011

Mo. State Senator Jason Crowell, R-Cape Girardeau, introduced S.B. 141 on Wednesday. The bill would prohibit anyone who has made a campaign contribution in the past two years from applying for state credits. The bill would also prohibit tax credit recipients from making campaign contribution for two years after they receive the state tax credits. Violation of the campaign contribution restrictions would result in recapture of the state tax credits. The act would apply to more than two dozen existing state tax credit programs, including the state historic tax credit, low-income housing tax credit, new markets tax credit, distressed areas land assemblage tax credit and brownfield redevelopment tax credit. Crowell also introduced several other tax credit related bills on Wednesday, including S.B. 139, which would subject all state tax credits to appropriation. If passed, all of the bills would have an August 28, 2011 effective date.

TAX COURT FINDS PARTNERSHIP HAS SUBSTANCE, CAN CLAIM HTCS

Washington, D.C. – January 4, 2011

The U.S. Tax Court found yesterday in Historic Boardwalk Hall LLC v. Commissioner that a partnership formed to invest in the rehabilitation of the East Hall of the Atlantic City, N.J. convention center was not a sham lacking economic substance. In the case, the Internal Revenue Service final partnership administrative adjustment argued that, because the New Jersey Sports and Exposition Authority sold the tax credits to Pitney Bowes in return for $18 million in capital contributions on which the company received a 3 percent preferred return, the partnership was not entitled to the historic tax credit (HTC). It also claimed a Section 6662 accuracy-related penalty applied. In its ruling yesterday the Tax Court found that the partnership is entitled to claim HTCs.