An Alabama Department of Revenue administrative rule took effect Oct. 15 amending the state’s historic tax credit (HTC) to allow the recipient of an HTC transfer to claim a refund for the difference if their taxes owed are less than the tax credit in the year the property is placed in service.
Legislation introduced in Florida this week would create a state historic tax credit (HTC) worth 20% of qualified rehabilitation expenditures (QREs), with a 30% credit for properties in areas designed as part of the Florida Main Street Program. H.B. 247 would apply to income-producing properties that are rehabilitated and placed in service July 1, 2022, or later. Properties with more than $750,000 in QREs would be required to submit an audited cost report. The credit would be for 20% of QREs for properties that receive the federal HTC, with properties in the local program area of an accredited Main Street Program receiving the 30% credit.
Virginia Sens. Tim Kaine and Mark Warner reintroduced Wednesday the School Infrastructure Modernization Act, which would expand the federal historic tax credit (HTC) to allow for rehabilitations of schools that continue to operate as such. S. 2883 would exempt schools from the credit’s current requirement to serve a different function than previously. The law would apply beginning Dec. 31, 2021, with a window for the U.S.
The Georgia Department of Revenue will hold a meeting Nov. 3 at 10 a.m. ET to discuss a proposed rule that would establish the process for preapproval of claims for the state historic tax credit (HTC) for historic homes and certified structures earning less than $300,000. Proposed Rule 560-7-8-.56 would bring the state HTC regulations into conformity with state law. The rule would retain the statewide annual cap at $5 million for HTCs for historic homes and any certified structure earning $300,000 or less.
Delaware Gov. John Carney signed Sept. 15 legislation to extend the state historic tax credit (HTC) by nine years. S.B. 182 moves the credit’s sunset date to June 30, 2030, from June 30, 2021. Delaware’s HTC is for 20% of qualified expenditures for properties eligible for the federal HTC.
The Ohio Department of Development opened Tuesday the window to apply for its Transformational Mixed Use Development program, which provides a tax credit against costs incurred while building a development. One-hundred million dollars is available in estimated tax credits per year for fiscal years (FY) 2022, 2023, 2024 and 2025.
The House of Representatives approved the fiscal year 2022 budget resolution Tuesday, unlocking forthcoming $3.5 trillion reconciliation legislation that will likely include a significant expansion of the low-income housing tax credit (LIHTC), creation of the neighborhood homes tax credit (NHTC) to incentivize the development and rehabilitate single-family housing in distressed neighborhoods and more funding for a wide variety of U.S. Department of Housing and Urban Development (HUD) programs. In addition to these resources, the forthcoming reconciliation legislation possibly could include the creation of the middle-income housing tax credit (MIHTC) to serve renters earning just above LIHTC income limits and expansion and enhancement for the federal historic tax credit (HTC), permanence and expansion of new markets tax credit (NMTC), extension and substantial expansion of renewable and clean energy tax credits
The New Jersey Economic Development Authority published eligibility and award-size information concerning the state historic tax credit (HTC) that became law when Gov. Phil Murphy signed the Economic Recovery Act of 2020 in January. Eligible properties can receive credits worth up to 40% of qualified rehabilitation expenditures, up to a project cap of $4 million. Properties must be income-producing, qualify as a historic resource by one of four methods, demonstrate a project financing gap and have a developer with an equity participation of at least 20%.
Legislation introduced in the House of Representatives would provide an increase in the historic tax credit (HTC) for supermarkets in underserved areas. H.B. 4687 would increase the HTC for qualified rehabilitation expenditures (QREs) for properties that fit the definition of supermarkets in underserved areas from 20% to 24%. The bill would be effective for taxable years beginning after Dec. 31, 2021. The bill also would increase the work opportunity tax credit and create a tax credit for 15% of the gross receipts of sales of fresh fruits and vegetables for qualifying properties.
Legislation to resurrect New York’s Historic Barn Rehabilitation Tax Credit has passed the state Assembly and Senate and awaits the governor’s signature. S. 6042 would establish a credit for 25% of qualified rehabilitation expenditures on historic barns, bringing back a program that was abolished due to complications from federal tax reform in 2017. Barns built before 1945 would be eligible for the credit and those built after 1945 may qualify if they are listed on the state or National Register of Historic Places.
Legislators in both houses of Congress this week introduced a bill to create a tax credit to convert unused office buildings into residential, institutional, hotel or mixed-use properties. The Revitalizing Downtowns Act (S. 2511) would create a 20% tax credit for expenses to convert obsolete office buildings, which are structures that are at least 25 years old. Residential conversions would require at least 20% of the units to be dedicated to affordable housing. Bill sponsors–Sens. Debbie Stabenow, D-Michigan, and Gary Peters, D-Michigan; Reps. Jimmy Gomez, D-California, Dan Kildee, D-Michigan and John Larsen, D-Connecticut–noted a decrease in the use of office space in the wake of the COVID-19 pandemic and rise of remote work.
A tax budget trailer bill signed by California Gov. Gavin Newsom extends the state’s historic tax credit (HTC) by one year. A.B. 150 includes a provision that extends the sunset date of the HTC from taxable years that start on or before Jan. 1, 2026, to those starting on or before Jan. 1, 2027. California’s state HTC is for 20% of qualified rehabilitation expenses (QREs), with a 5% bonus for certain types of property. There is a $50 million annual cap, with a $2 million set-aside for residences and an $8 million set-aside for developments with QREs of $1 million or less.
Delaware Gov. John Carney signed legislation June 30 to regulate issuance of bonds and other delineations of capital, including extending a maximum of $8 million for fiscal years 2022 through 2027 for the state’s historic preservation tax credits (HTCs). S.B. 200 pushes the applicable years for the $8 million maximum forward one year; it previously applied from 2021 through 2026.
Rhode Island Gov. Daniel McKee signed budget legislation that contained an 18-month extension to the state historic tax credit (HTC). H. 6122 makes appropriations for the fiscal year ending June 30, 2022 and extends the sunset date of the state HTC from June 30, 2021, to Dec. 31, 2022, or when the maximum aggregate credit limit is reached. Rhode Island’s HTC is for 20% of qualified rehabilitation expenditures for commercial properties, condominiums and nonprofits. The credit is worth 25% if 25% of the total rentable space or entire first floor is used in trade or business.
New Jersey Gov. Phil Murphy signed legislation that shifts tax credits to the state wind energy program and makes changes to the state historic tax credit (HTC) and brownfield program concerning prevailing wage requirements. A. 5939 moves $350 million in tax credits originally intended for the New Jersey Emerge Program and the New Jersey Aspire Program to the wind energy tax incentive and provides that if less than the annual limitation of credits under those programs is awarded, the uncommitted credits be made available to qualified offshore wind projects. The HTC and brownfield program change requires that prevailing wage requirements also apply to building services work under those incentives.
The Michigan state historic preservation office (SHPO) presented draft rules for the reinstated state historic tax credit (HTC) and is accepting comments until 5 p.m. ET July 30. The state HTC, which was signed into law at the end of 2020, is for 25% of qualified rehabilitation expenditures with an annual statewide cap of $5 million and a taxpayer cap of $2 million.
Minnesota Gov. Tim Walz signed legislation late last week that extends the state historic tax credit (HTC) for one year, to June 30, 2022. The extension was included in an omnibus tax bill. The Minnesota HTC is worth 20%, matching the federal HTC. It can also be taken as a grant worth 90% of the federal credit.
The Novogradac Historic Rehabilitation Tax Credit Handbook provides an overview of the HTC and how state and federal incentives interact.
Missouri Gov. Michael Parson signed legislation creating the Capitol Complex tax credit, which can be used to rehabilitate or renovate buildings in the Capitol Complex in Jefferson City, Missouri. S. 36 covers rehabilitation or renovation of five buildings in the Capitol Complex. Taxpayers who make a monetary donation to the Capitol Complex Fund are allowed a tax credit of 50% of the amount and taxpayers who make an artifact donation are allowed a credit of 30% of the value of the artifact. The credit is effective for tax years beginning on or after Jan. 1, 2021.
The Rhode Island Division of Taxation issued a final decision and order June 29 that a taxpayer’s tax credits were deemed null and void after the taxpayer failed to provide supporting documentation for the quarterly reports and the properly remained idle for more than six months. Case No.: 19-T-013 determined the division was within its province to deny the credits allocated in August 2015 after the taxpayer’s development remained idle from October 2016 to March 2018, saying the taxpayer’s quarterly reports “lacked the requisite documentation and the Taxpayer did not supply any documentation despite requests from the Division.” The division said the decision was consistent with statute and regulation.
The board of governors of the Federal Reserve System (Fed) and Federal Deposit Insurance Corporation (FDIC) released the list of distressed or underserved nonmetropolitan middle-income geographies for 2021, which makes revitalization or stabilization activities in those areas eligible for Community Reinvestment Act (CRA) consideration. The designations reflect local economic conditions, including unemployment, poverty and population changes. The Fed and FDIC continue to apply a one-year lag period for areas listed in 2020 that are no longer designated as distressed or underserved, making revitalization or stabilization activities in those geographies eligible for CRA condensation for 12 months after the publication of the current list.
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