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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.
Sens. Ben Cardin, D-Maryland, Bill Cassidy, R-Louisiana, Maria Cantwell, D-Washington, and Susan Collins, R-Maine, introduced S. 2266, the Historic Tax Credit Growth and Opportunity (HTC-GO) Act late this week. The text of the bill was not immediately available, but the legislation is identical to the 2019 version of the bill, which would provide an increase in the HTC percentage from 20% to 30% for the first $2.5 million of qualified rehabilitation expenditures for smaller projects; provide a drop in the substantial rehabilitation test threshold from 100% to 50% of the adjusted basis; eliminate the HTC basis adjustment, eliminate the Internal Revenue Code Section 50(d) income recognition requirement and more
Texas Gov. Greg Abbott signed legislation that amends the state historic tax credit (HTC) regulations to make expenses for a nonprofit corporation to rehabilitate a historic structure ineligible for the HTC if the structure is leased to a tax-exempt entity in a disqualified lease. H.B. 3777 takes effect Jan. 1, 2022.
Illinois Gov. J.B. Pritzker signed legislation to implement the state budget that includes provisions to extend the sunset date for the state’s River Edge historic tax credit (HTC) and the state credit for affordable housing donations. S. 2017 extends the sunset date for the River Edge HTC from Dec. 31, 2021, to Dec. 31, 2026.
An omnibus tax bill agreed to by the Minnesota Legislature includes a one-year extension of the state historic tax credit. H.F. 9, which passed in the Legislature’s special session, would extend the sunset date of Minnesota’s HTC until June 30, 2022.
Legislation introduced in the Delaware General Assembly would extend the state historic tax credit (HTC) nine years. S.B. 182 would extend the credit’s sunset date from June 30, 2021, to June 30, 2030. Delaware’s HTC is for 20% of qualified expenditures for properties eligible for the federal HTC.
The National Park Service this week released new flood adaptation guidelines to help property owners make their historic buildings–including those financed with historic tax credit (HTC) equity–more resilient to flooding risks while preserving their historic character. Guidelines on Flood Adaptation for Rehabilitating Historic Buildings includes guidelines to help property owners identify and evaluate adaptation options to best preserve the historic character, site and setting of their buildings.
The Internal Revenue Service (IRS) this week published an updated frequently asked questions (FAQ) document concerning the federal historic tax credit (HTC). The questions addressed include eligibility and definitions, qualified rehabilitation expenditures, basis and several other key aspects surrounding HTC. The FAQ provides a quick overview of the HTC incentive, as well as references to the relevant sections of the Internal Revenue Code, key Treasury Regulations and other IRS guidance. The IRS emphasized that the answers do not constitute legal authority and may not be relied upon as such. They do not amend, modify or add to the income tax regulations or any other legal authority.
Legislation in Maryland takes effect July 1 that will expand the types of property eligible for its state historic revitalization tax credit (HTC). H.B. 539 expands the definitions of “certified historic structures” and “single-family, owner-occupied residences” to include structures located on property owned by the Maryland Department of Natural Resources, is occupied by a person under an agreement with the department that allows the occupant to pay for the structure’s rehabilitation as a condition of occupancy and meets one of the criteria to be designated as a certified historic structure or be eligible to be listed in the National Register of Historic Places as determined by the director of the Maryland Historical Trust.
The Iowa Economic Development Authority (IEDA) in May released its Historic Preservation Tax Credit Program 2020 Progress Report. Created in 2000, the Iowa historic tax credit (HTC) provides a state tax credit equal to 25% of a development’s qualified rehabilitation expenditures. The annual report on Iowa’s HTC includes information on awards and claims made under the program, the liability to the state and the potential impact on local property taxes as a result of completed projects.
The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation today published a statement that extends for 36 months the period for favorable Community Reinvestment Act (CRA) regulation consideration for bank activities that help revitalize or stabilize disaster areas in Puerto Rico and the U.S. Virgin Islands hit by Hurricane Maria. The extension now lasts through Sept. 20, 2023, and applies to institutions located outside of the areas.
Texas Gov. Greg Abbott vetoed legislation that would replicate key provisions in the franchise tax code concerning the state historic tax credit (HTC) to the insurance code. S.B. 813 would have ensured that the state HTC could be taken even if the franchise tax was repealed. In his veto message, Abbot said the legislation would have “created parameters for certified historic structures that differ from House Bill 3777 and thus could cause confusion with respect to the qualification of a project for insurance or franchise tax credits.”
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