Historic Tax Credits News Briefs - June 2021

Monday, June 7, 2021

The Louisiana Department of Revenue issued guidance April 8 explaining changes to the state’s historic tax credit (HTC) as a result of H.B. 4, signed into law in July 2020. Louisiana Revenue Information Bulletin No. 21-010 formalizes the new $125 million annual statewide cap starting Jan. 1, 2021, (previously, there was no annual cap) and clarifies that unused credits can be rolled over to subsequent years. The guidance also establishes that the Department of Culture, Recreation and Tourism is required to adopt rules for how to reserve credits.

***

State budget legislation signed by Virginia Gov. Ralph Northam April 7 established an annual taxpayer cap and a sunset date for the state HTC. Virginia H.B. 1800 allows taxpayers to claim no more than $5 million per year in state HTCs and establishes a June 30, 2025, sunset date for all tax credits. Virginia previously had no sunset date on its HTC.

***

Legislation signed to law in Kentucky April 9 creates a specific set-aside in the state HTC incentive to spur redevelopment in the west end of Louisville. H.B. 321 provides tax incentives for development in the area and creates a set-side before Dec. 31, 2021, for a major HTC development that meets certain qualifications–qualifications that specifically apply to the Seelbach Hotel. Refundable, transferrable HTCs can be claimed on the first $30 million of qualified rehabilitation expenditures on the project.

***

West Virginia Gov. Jim Justice signed legislation April 10 eliminating the sunset date for the state HTC. S.B. 344 removes the Dec. 31, 2022, sunset date. As introduced, the bill would have removed all annual caps, but the statewide cap of $30 million per year and the transaction cap of $10 million remain.

***

Budget legislation signed April 20 by New  York Gov. Andrew Cuomo allows developers of small HTC projects to receive a state credit worth 150% of the federal credit. S. 2509 enacts legislation introduced separately earlier this year and defines “small project” as a property with qualified rehabilitation expenditures (QREs) of $2.5 million or less. The change applies to taxable years beginning Jan. 1, 2022, through Jan. 1, 2025.

***

Mississippi Gov. Tate Reeves signed legislation April 16 reinstating the refundability of the state HTC, a provision that was removed last summer in legislation that extended the credit through 2030. H.B. 1296 allows a rebate of up to 75% of the state HTC if the amount of the credit exceeds the taxpayer’s tax liability. The statewide cap for refunds is $12 million for projects with qualified rehabilitation expenses (QREs) of less than $1.75 million and $12 million for projects with QREs of $1.75 million or more. Mississippi’s HTC is for 25% of QREs.

***

Two bills introduced in the Massachusetts legislature March 29 would make changes to the state HTC incentive. H. 2835 would increase the annual cap for the state credit from $55 million to $75 million and establish the credit at 20% (previously it was worth up to 20%). H. 2837 would extend the sunset date from Dec. 31, 2022, until Dec. 31, 2027.

***

A bill introduced in the New York Assembly April 14 would extend the period of expenses eligible for the state’s HTC for barns and change the date by which the barn was required to have been built to be eligible. A. 6947 would make QREs made within five years immediately preceding the year in which the HTC is applied eligible for the 25% credit. It also would change eligibility for the credit to barns built in 1945 and earlier from the current requirement of 1936 and earlier.

***

Arkansas Gov. Asa Hutchinson signed  legislation April 15 to extend the state HTC for 10 years and double the annual statewide cap. H.B. 1555 extends the sunset date from Dec. 31, 2027, to Dec. 31, 2037, and increases the statewide annual cap from $4 million to $8 million starting in 2022. When the bill was introduced, the proposed cap was $10 million.

***

A bill introduced Feb. 26 in the Illinois Legislature would amend the state HTC to institute a $3 million transaction cap. H.B. 1711 would retain the $15 million annual statewide cap and require the state to prioritize applications that meet at least one in a series of qualifications. Properties could not receive both the state HTC and the state’s River Edge HTC. The changes would be authorized for taxable years beginning on or after Jan. 1, 2019, through those ending on or before Dec. 31, 2023. Other legislation in Illinois would increase the annual state HTC cap to $45 million, create a Lincoln-Douglas state HTC for seven cities and extend the River Edge HTC for five years.

Journal Category: 
Historic Tax Credits
Authors: