Historic Tax Credits News Briefs - September 2017

Friday, September 8, 2017

The Rhode Island Division of Taxation issued Notice 2017-02 July 15 on the disclosure and reporting requirements of tax credits and incentives, specifically historic preservation tax credits (HTCs). The notice informs entities receiving specific tax credits and incentives that they must annually disclose certain information to the Division of Taxation. A tax credits and incentives disclosure form, Form TC-100, had to be filed by Aug. 15. 

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The Nebraska Department of Revenue released July 12 a PowerPoint presentation providing a demonstration of the Nebraska HTC. The presentation was specific to Part 5 of the HTC application on transfers or distributions of Type A and B credits. The presentation provided information on who may file for a request for the distribution of credits and when and where to file the application. Also included was a step-by-step guide to completing the application for the transfer of type a credits, and completing the application regarding distribution of Type A or B credits. 

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A study was released late July by PlaceEconomics on the state HTC in Louisiana. The study, “The Historic Tax Credit: Building the Future in Louisiana,” examined the role of historic preservation projects in Louisiana, and focused on projects completed from 2007 to 2016 that used HTCs. PlaceEconomics found that nearly $2.7 billion has been invested in Louisiana’s historic buildings because of the state commercial HTC and the federal HTC. According to the report, 24 of Louisiana’s 64 parishes have seen buildings rehabilitated through tax credits and 821 rehabilitation projects have been completed using the state tax credit. The study also stated that each year, on average, rehabilitation projects generated 1,725 direct jobs and an additional 1,429 indirect and induced jobs. In addition, every $1 that the state provides in commercial HTCs spurs $8.76 in additional economic activity. The report was prepared for the Louisiana Office of Cultural Development, Department of Culture, Recreation and Tourism.

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The Rhode Island Department of Revenue, Division of Taxation issued Administrative Hearing Decision No. 2017-09 July 24. The decision stated that since the taxpayer had not spent any money on the development fees claimed as a qualified rehabilitation expense (QRE), the hearing officer properly held that there has been no actual expenditure by the taxpayer. The Division of Taxation properly denied the development fees that the taxpayer claimed as QRE for purposes of the HTC that may be taken against business corporation tax, franchise tax, tax on banks, public service corporation tax, tax on insurance companies or personal income tax because they have not been actually paid. The decision said the hearing officer properly held that the plain language of the statute requires that the QRE actually be spent and that it is consistent with case law regarding the construction of tax benefits, such as exemptions, deductions or credits. The decision is available at www.historictaxcredits.com.

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The plans for the Merchants Plaza in Mobile, Ala., were revealed July 27. The 18-story former Merchants National Bank building, built in 1929, will be transformed into a 225,000-square-foot, mixed-use development in five buildings. The first floors of the buildings will offer commercial, retail and restaurant space. There will be 84 loft apartments and an adjacent eight-story, 80,000-square-foot office building will be renovated. The $30 million development is located on 1 acre and will be funded with federal and state HTCs. Construction is expected to begin in early 2018, with the completion scheduled for late 2019 or early 2020.

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