Budget legislation signed by Gov. Roy Cooper extended the North Carolina state historic tax credit (HTC) and reinstated and extends the state’s mill rehabilitation credit. The budget legislation extends the sunset date for the state HTC from Jan. 1, 2024, to Jan. 1, 2030. It also adds a 5% bonus for qualified rehabilitation expenditures (QREs) of up to $20 million if the property was originally used for educational purposes. The mill rehabilitation credit is effective for taxable years beginning on or after Jan. 1, 2021, and allows a state credit of 40% for a taxpayer who is allowed a federal HTC on QREs of at least $10 million with respect to the certified rehabilitation of an eligible railroad station. 

The U.S.  House of Representatives today passed the Build Back Better Act, a $1.7 trillion bill that includes an expansion of the low-income housing tax credit (LIHTC), the introduction of the neighborhood homes tax credit (NHTC), an additional tribal allocation of the new markets tax credit (NMTC) and $325 billion in renewable energy tax incentives. H.R. 5376 passed 220-213 and now goes to the Senate. The legislation includes an extension of the 12.5% increase in 9% LIHTC allocations that began in 2018 through 2024, adding a 10% increase, plus an annual inflation adjustment, to that amount. The bill also would reduce the 50% test for affordable rental housing financed with private activity bonds (PABs) to 25% for calendar years 2022-26, establish a 50% basis boost for extremely low-income housing and provides a 30% basis boost for LIHTC properties in tribal areas.