A bill introduced in the Pennsylvania House of Representatives would create a historic rehabilitation tax credit (HTC) for factory or mill buildings. H.B. 653 would create a 25% credit for qualified rehabilitation expenditures (QREs) on buildings built before 1973 that have been or will be used primarily for manufacturing, processing, wholesale trade or other commercial purposes and have been at least 75% vacant for the previous 24 months. QREs would be required to be a minimum of 20% of the appraised market value of the building and the buildings would be certified through a process beginning with a request from a municipality. The legislation also provides tax credits for higher annual wages paid to employees in the rehabilitated buildings and interest on loans for the substantial rehabilitation.

The Indiana Department of Revenue issued guidance this month to clarify how to carry forward the state’s expired historic tax credit (HTC). Indiana Information Bulletin IT87 states that credits for expenditures made before June 30, 2016, or in a taxable year beginning before Dec. 31, 2015, are eligible for carryforward. Those credits can be carried forward up to 15 taxable years following the taxable year in which the taxpayer is first entitled to the credit. The Indiana state HTC expired in 2019 and the state has only a residential HTC.

The National Park Service (NPS) issued more than 850 Part 3 certifications of completed work for the federal historic tax credit (HTC) in 2022, accounting for $6.56 billion in rehabilitation costs, according to an annual report. Federal Tax Incentives for Rehabilitating Historic Buildings: Annual Report for Fiscal Year 2022 also reported that 44% of completed federal HTC projects in 2022 had less than $1 million in qualified rehabilitation expenses (QREs) and that 17% of all projects had QREs of less than $250,000. There were 1,463 Part 1 certifications of significance and 1,187 Part 2 preliminary certifications of rehabilitation (Part 2) issued in 2022. During 2022, 5,533 housing units were rehabilitated and 9,036 new housing units were financed by the federal HTC. Of those, 6,789 were low- and moderate-income units. The 2022 figures come on the heels of a record-breaking 2021, when there was $7.16 billion in rehabilitation costs.

A bipartisan group of four senators today introduced the Historic Tax Credit Growth and Opportunity (HTC-GO) Act of 2023. The legislation would create a 30% HTC for projects that cost less than $3.75 million, while retaining the 20% credit for other projects. The bill eliminates the basis-adjustment requirement, which increases eligibility and brings parity with other tax credit incentive, and decreases the substantial rehabilitation test threshold to 50% from 100% of expenses. The bill is sponsored by Sens. Ben Cardin, D-Maryland; Bill Cassidy, R-Louisiana; Maria Cantwell, D-Washington; and Susan Collins, R-Maine. The 2023 legislation follows the introduction of similar bills in 2021 and 2019.  In 2019, there were 66 cosponsors in the House and 12 in the Senate. For the 2021 bill, there were 104 cosponsors in the House and 15 in the Senate. A similar bill is expected to be introduced in the House.

Legislation in the Arizona legislature would create a state historic tax credit (HTC). H.B. 2791 would create a credit worth 20% of qualified rehabilitation expenditures (QREs) for a certified historic structure, with the credit worth 25% of QREs if the property was affordable housing.

A bill in the Minnesota Legislature would reinstate the state historic tax credit (HTC) and allow taxpayers to claim the entire amount in the year a project is placed in service. S.F. 1340 would bring back the credit that expired June 30, 2021. The credit would be for up to 100% of the federal HTC and the credit–or a grant that could be issued in lieu of a credit for 90% of its value–could be claimed in the year in which the project was placed in service. The credit would be applicable for HTC certificates submitted after June 30, 2023.

Technical and administrative guidance released today by the Organization for Economic Co-Operation and Development (OECD)/Group of Twenty (G20) provides clarification on the treatment of key community development tax incentives concerning a global minimum tax (GMT) on multinational corporations. More than 140 nations agreed with the guidance, which will form a common approach for countries to implement the rules concerning the GMT.

Legislation introduced in the Indiana state Senate would create a state historic tax credit (HTC). S.B. 478 would create a state credit worth 30% of qualified rehabilitation expenditures (QREs) for nonprofit properties that don’t produce income. All other historic rehabilitations would receive a 25% state HTC. The credit could be carried forward up to 10 years. There would be a $10 million annual cap and the credit would expire Jan. 1, 2033. Indiana currently has a residential HTC only.

A bill introduced in the Nebraska Legislature would expand the state historic tax credit (HTC) percentage, while also decreasing the statewide cap beginning in 2024. L.B. 756 would increase the state HTC percentage from 20% to 25% for properties in counties with cities with a population 100,000 or more, while those in other counties would be worth 30% of eligible expenditures. The maximum HTC amount per property would be $2 million and beginning Jan. 1, 2024, the statewide annual cap would drop from $15 million to $12 million. The legislation would also add a provision requiring properties to be at-grade or aboveground to be eligible for the HTC.