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State Income Commercial Tax Credit: 20% rehabilitation credit for eligible properties designated by national, state, or local government and contributing buildings in historic districts; 20% state credit can be coupled with 20% federal rehabilitation tax credit for commercial property.
State Income Tax Credit for Homeowners: 20% rehabilitation credit for eligible properties designated by national, state, or local government and contributing buildings in historic districts.
Program Details:
- Cap: $50,000 per project for any tax year; no annual statewide cap.
- Minimum investment: $5,000.
- Transferability: carry forward 10 years. Other: DOI standards apply. Work must be completed within 2 years of inception date of project. CLG can review and approve project. Sunset date for credit is 2009.
- Usage: Average credit given is typically $10,000-$13,000, indicating smaller rehabilitation projects are using the credit. Approximately 440 projects approved since the program began in 1991. A list of the Certified Local Governments and their individual incentives can be found at http://www.coloradohistory-oahp.org/programareas/clg/CLGcomp.pdf.
Method of Rehabilitation Expense Verification: We do not require back-up financial documentation. If an expense appears to be unreasonably high, we may decide to ask a question about it. We understand that some state tax credit users have been audited, but we do not know if rehabilitation expenses were the primary reason for the audit. Residential and non-residential properties are treated the same. CLG s may opt to review state tax credit projects locally and have some degree of leeway in setting their own standards regarding this type of documentation.
Contact: Dan W. Corson
Intergovernmental Services Director
Phone: 303-866-2673
E-mail: dan.corson@chs.state.co.us
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State Income Commercial Tax Credit: 25% credit for rehabilitating commercial or industrial buildings for “residential use.” Effective Jan. 1, 2008, 25% credit for rehabilitating certified historic structure for mixed residential and nonresidential uses where at least 33% of total square footage of rehab is for residential use. 5% add-on credit for inclusion of affordable housing.
State Income Tax Credit for Homeowners: 30% rehabilitation credit for owner-occupied residential, including apartments up to 4 units; properties must be on National and/or State Register and located in a targeted area. New program effective Jan. 1, 2008
Program Details:
- Cap: $2.7 million per project cap and $15 million annual statewide cap for rehabilitating commercial or industrial buildings for residential use; $30,000 per dwelling and $3 million annual statewide cap for owner-occupied structures; $50 million over 3 years aggregate program cap and $5 million per-project cap for new mixed use credit (effective 2008).
- Minimum investment: 25% of assessed building value prior to rehab for commercial; $25,000 for owner-occupied structures.
- Transferability: freely transferable either by direct sale or disproportionate allocation among partners of a syndication partnership; alternatively, credit for rehab of commercial or industrial structures for residential use can be carried forward 5 years. Carry forward 4 years for owner-occupied structures. Mixed-use credit can be carried forward 5 years and is transferable.
- Other: one unit must be owner-occupied for 5 years (recapture period 5 years for owner-occupied credit).
- Usage: Commercial credit went into effect 2006. Mixed-use credit goes into effect Jan. 1, 2008.
Method of Rehabilitation Expense Verification: Commercial property owners are required to we require submit a detailed schedule of values to be prepared by a "qualified professional" at the stage of reserving tax credits. Once the project is completed, the property owner must submit a certification of costs prepared by an independent CPA. The certification must specifically include an affirmative statement indicating that the procedures used included "verification of qualified rehabilitation expenditures by the examination of invoices, cancelled checks, settlement sheets and related documents." Residential property owners are required to submit a written estimate of eligible costs prepared by a “qualified professional” at the time at which the project is initially approved as eligible to receive the credit. Once the project is completed, the property owner is required to provide an accounting and proof of costs incurred in the form of cancelled checks, paid invoices, credit card receipts etc.
Contact: Linda Spencer
Phone: 860-256-2762
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State Income Commercial Tax Credit: 20% rehabilitation credit for income-producing properties; additional 10% credit for rental projects that qualify as low-income housing.
State Income Tax Credit for Homeowners: 30% rehabilitation credit for owner-occupied residential properties; additional 10% credit for rental and owner-occupied projects that qualify as low-income housing.
Program Details:
- Cap: $20,000 per homeowner; no income-producing property cap; $5 million annual statewide cap.
- Minimum investment: none.
- Transferability: credits can be transferred, sold, or assigned to anyone with Delaware income tax or franchise tax liability; carry forward 10 years.
- Other: Credit to be claimed in annual progress-based installments with phased projects.
- Usage: Approximately 41 projects approved since the tax credit program began in 2001. Kent County Levy Court passed (9/28/99) county property tax credit equal to 50% of qualified rehabilitation. Dover’s property tax credit program covers exterior improvements only, must meet DOI standards.
Method of Rehabilitation Expense Verification: Applicants are required to provide total “qualified” expenditures for the project supported by a full accounting of these expenditures attached to the Division of Revenue’s Computation Schedule for Claiming Delaware Historic Preservation Tax Credits (Form 1811AC 0702). The latter form must be enclosed with the Part 3 Application.
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Program Details: A grant for historic housing rehabilitation expenses, valued at 35% of applicable D.C. income taxes is available for homeowners living within specific districts. Must be contributing structure in one of 12 historic districts, and there is an additional 15% bonus for homeowners within the Anacostia District. Costs for purchase and new additions are excluded and grant is intended for structural repairs or exterior work only. Household income requirements apply. Must also be principal residence within 60 days after rehab is certified. Work must be approved prior to grant and consistent with DC preservation law. Penalty for failure to maintain property. Max grant is $25,000 per homeowner and owner must spend more than $5,000 within 24 month period or within 60 months in phased project.
Method of Rehabilitation Expense Verification: Homeowners must provide 3 itemized bids from contractors to establish the price of preservation work to be supported by the grant as part of their Part II application.
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Florida Ad Valorem Tax Incentive: In 1992, Florida voters passed a Constitutional amendment that created a local option in connection with ad valorem property tax exemptions for historic properties. The State enacted Florida Statutes 196.1997 and 196.1998, which provide the Program’s administrative guidance. City of Miami passed an ad valorem tax incentive for historic properties so the owners of historic homes could rehabilitate these and make necessary upgrades and improvements.
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State Income Commercial Tax Credit: 25% rehabilitation tax credit for eligible income-producing properties.
State Income Tax Credit for Homeowners: 25% credit for owner-occupied properties in non-target area; 30% for owner-occupied properties in target area.
Program Details:
- Cap: $100,000 for homeowners, $300,000 for commercial properties
- Minimum investment: for a historic home used as a principal residence, the lesser of $25,000 or 50% of the adjusted basis of the building. For a historic home used as a principal residence in a target area, $5000. For any other certified historic structure, the greater of $5000 or the adjusted basis of the building. At least 5% of the qualified rehabilitation expenditures must be allocated to work completed to the exterior of the structure.
- Transferability: The state income tax credit is only transferable if it has an "unused" excess portion, or is taken with a pass-through entity or syndication of ownership. If the credit is claimed by a historic home owner for his personal residence, he must retain ownership for three years or risk recapture.
State Property Tax Freeze: freezing property tax assessments for eight and one-half years. The assessment of rehabilitated property is based on the rehabilitated structure, the property on which the structure is located, and not more than two acres of real property surrounding the structure. The property must be listed or eligible for listing in the Georgia Register of Historic Places either individually, or as a contributing building within a historic district.
Program Details:
- Residential (owner-occupied residential property): rehabilitation must increase the fair market value of the building by at least 50%
- Mixed-Use (primarily owner-occupied residential and partially income-producing property): rehabilitation must increase the fair market value of the building by at least 75%
- Commercial and Professional Use (income-producing property): rehabilitation must increase the fair market value of the building by at least 100%
- Transferability: The property tax assessment freeze is transferable to new owners for the remainder of the alloted time; it stays with the property.
Method of Rehabilitation Expense Verification: For all programs, we informally track applicants’ expense information on our tax incentive database, per project. We are not responsible for their cost documentation, however. That is the applicant's personal responsibility. We will communicate with them should the need arise to clarify the numbers as stated on the forms.
Contact: Ced Dolder
Tax Incentives Coordinator
Phone:: 404-651-5566
E-mail: ced.dolder@dnr.state.ga.us
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State Property Tax Assessment Freeze: provides tax incentives to owner-occupants of certified historic residences who rehabilitate their homes. Through the Property Tax Assessment Freeze Program, the assessed valuation of the historic property is frozen for eight years at its level the year rehabilitation began. The valuation then is brought back to market level over a period of four years.
Program details:
To qualify for the Property Tax Assessment Freeze, a property must
- Be a registered historic structure, either by listing on the National Register of Historic Places, or designated by an approved local historic preservation ordinance;
- Be used as a single-family, owner-occupied residence or condominium, or as a cooperative, or as an owner-occupied residential building with up to six units;
- Have at least 25 percent of the property's market value spent on an approved rehabilitation project
- Be a substantial rehabilitation that significantly improves the condition of the historic building;
- Be rehabilitated in accordance with the Secretary of the Interior's "Standards for Rehabilitation."
For more information: http://www.illinoishistory.gov/PS/taxfreeze.htm
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State Income Commercial Tax Credit: 20% rehabilitation credit for commercial, rental housing, barns, and farm buildings that are on the State Register.
State Income Tax Credit for Homeowners: 20% rehabilitation credit for commercial, rental housing, barns, and farm buildings that are on the State Register; 20% rehabilitation tax credit for owner-occupied residential.
Program Details:
- Cap: $100,000 of tax credits per project for commercial, rental housing, barns and farm buildings; no per project cap for owner-occupied; $450,000 annual allocation for commercial, rental, barns and farm buildings; $250,000 annual allocation for owner-occupied residences.
- Minimum investment: $10,000 over 2 years for commercial, rental housing, barns and farm buildings; $10,000 for owner-occupied. Transferability: carry forward 15 years for commercial, rental housing, barns and farm buildings.
- Other: pre-approval of work required, no fees, and DOI standards apply for commercial, rental housing, barns, and farm buildings.
- Usage: Approximately 179 commercial projects approved since the program began in 1994. Approximately 60 residential projects approved since the program began in 2002.
Method of Rehabilitation Expense Verification: We calculate a value for the tax credit based on the cost attested to on the application and transmit that calculation to the Department of Revenue. The literature that we distribute informs applicants as to distinguishing qualified costs and disqualified costs. However, we rely on the accuracy of the applicant's testimony regarding their costs for the certification document. We do not require the submittal of proposals, statements, bills, receipts, release of liens, or other evidence for substantiation of costs incurred. The only time that we see such documentation is when such submittals from contractor proposals or claims may be necessary for understanding the effects of the work. When it is appears from documentation or correspondence that the taxpayer is seeking to claim the cost of disqualified activities for tax credit, we caution the applicant in this regard, but we rely on the accuracy of the accounting represented on application materials in calculating the tax credits attributable to the project. Applicants are informed that the veracity of the cost claims are an audit issue with the Department of Revenue.
Contact: David B. Duvall
Historical Architect
Phone: 317-232-1635
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State Income Commercial Tax Credit: 25% rehabilitation tax credit for eligible commercial properties; mixed use properties, and barns built before 1937.
State Income Tax Credit for Homeowners: 25% rehabilitation tax credit for income-producing, non-income-producing residential properties and barns built before 1937.
Program Details:
- 25% rehabilitation tax credit for eligible commercial properties, residential properties and barns built before 1937.
- Cap: $10 million annual statewide cap in State Fiscal Year 2008, $15 million in SFY2009, and $20 million in SFY2010 and each fiscal year thereafter; no per project cap.
- Minimum investment: For commercial property rehabilitation, costs must equal at least 50% of the assessed value of the property, excluding the land, prior to rehabilitation. For residential properties or barns, the amount of rehab costs must equal at least $25,000 or 25% of the assessed value of the property, excluding the land, prior to rehab. For mixed-use properties, the rehab costs shall not exceed $100,000 per residential unit.
- Transferability: credits are transferable.
- Refunds: Full refunds permitted for credits that exceed tax liability; or in lieu of a refund may be credited to tax liability for the following year.
- Other: DOI standards apply. Pre-approval of work encouraged. Review fees apply.
Method of Rehabilitation Expense Verification: We do not monitor costs or collect receipts. Once the part 2 application is approved, we reserve the tax credits on the basis of the estimated rehabilitation costs provided in the part 2 application. The Department of Revenue would be the one to audit the applicant if something seemed inappropriate.
Contact: Elizabeth Foster Hill
Tax Incentive Programs Manager/National Register Coordinator
Phone: 515-281-4137
E-mail: Beth.Foster@iowa.gov
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State Income Commercial Tax Credit: 25% rehabilitation tax credit for qualified expenses incurred during a qualified rehabilitation project for any property listed on the National Register or the State Register.
State Income Tax Credit for Homeowners: 25% rehabilitation tax credit for qualified expenses incurred during a qualified rehabilitation project for any property listed on the National Register or the State Register.
Program Details:
- Cap: none.
- Minimum investment: $5,000 on qualified expenditures
- Transferability: credits freely transferable; carry forward 10 years.
- Other: DOI standards apply. Pre-approval of proposed work required.
- Usage: Approximately 500 projects have been reviewed since September 2001 when the program began. During that time, approximately $68 million dollars has been invested in rehabilitation of historic properties in Kansas.
Method of Rehabilitation Expense Verification: In coordination with our State Dept. of Revenue, we developed a Schedule of Project Development Costs (Schedule 1) and a Schedule of Detailed Historic Preservation Costs (Schedule II) which itemizes invoices received, checks paid, etc. These Schedules were developed from similar spreadsheets used by regional CPAs doing cost certifications for federal rehabilitation tax credit programs and for the housing tax credits. An auditor at our DOR looks over the information submitted in these Schedules and issues a letter back to us which either accepts the qualified expenditures as the basis for the credit or adjusts them. We then issue a certificate to the applicant indicating that the project met the Standards and recording the amount of credits approved by the DOR.
Property Tax Incentives:
Topeka has a special program called the Neighborhood Revitalization Program, which provides property tax rebates to property owners based in their investments in their properties. The rebate is on the increased valuation resulting from improvements made to the property. For historic properties, the rebate is 100% of the increase in valuation for a period of 15 years. Non historic properties can also receive the rebate, at a rate of 95% for a period of 10 years. The rebates are available only in selected target areas of the city, and are not available for all historic properties if they are not located within the target areas. I'd like to change our regulations to extend the rebates to all historic properties regardless of their location.The program works very well, and has provided incentives for about $100 million in investment within the target areas over the past 12 years. Admittedly, the program works best, i.e. provides the maximum rebate for new construction, but the incentive is there for the restoration of historic properties as well.
Contact: Katrina L. Ringler
Grants Manager
Phone: 785-272-8681 ext.215
E-mail: kringler@kshs.org
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State Income Commercial Tax Credit: 20% rehabilitation credit for non-residential properties.
State Income Tax Credit for Homeowners: 30% rehabilitation tax credit for owner-occupied residential properties.
Program Details:
- Cap: $3 million annual statewide cap for total program; for owner-occupied residential, total credit can not exceed $60,000; $400,000 per project cap for all other properties.
- Minimum investment: $20,000 for owner-occupied; $20,000 or the adjusted bias, whichever is greater, for all other properties.
- Transferability: credits freely transferable.
- Usage: 43 projects approved in first year of program represent 16 counties and demonstrates $17,272,802.95 private investment in rehab.
Method of Rehabilitation Expense Verification: Require both residential and commercial applicants to complete a Summary of Investment form to document rehabilitation expenses grouped by category which must be must be notarized if the project is an owner-occupied residence or certified by a Certified Public Accountant for all other projects.
Contact: Becky Shipp
Phone: 502-564-7005 ext. 133
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State Income Commercial Tax Credit: 25% rehabilitation credit for income-producing properties in Downtown Development Districts or Cultural Districts.
State Income Tax Credit for Homeowners: 10% - 25% rehabilitation credit (based on the owner's adjusted gross income) for owner-occupied residential properties in one of the following categories:
- National Register Districts,
- Individually Listed on the Register or buildings that are eligible for listing on the Register,
- Local Historic Districts,
- Main Street Districts,
- Cultural Districts,
- Downtown Development Districts or,
- Vacant or blighted buildings at least 50yrs. old.
Program Details:
- Cap: The commercial credit is capped at $5 million per taxpayer per Downtown Development District or Cultural District. The residential credit is capped at $25,000 per building for owner-occupied. The maximum amount of credits awarded annually for the Residential credit is $10 million.
- Minimum investment: For Commercial credit, minimum of $10,000 in qualifying expenditures and for Residential Credit, a minimum of $20,000 in qualifying expenditures.
- Transferability: the commercial credit may be carried forward for 5 years and is transferable.
- Other: The residential tax credit is divided into 5 equal portions, with the first portion being used in the taxable year of the completion date, and the remaining portions used once a year for the next four years. If the full credit for one year cannot be taken, the owner will receive that amount as a refund.
- Usage: The State Residential Tax Credit Program became effective on January 1, 2006.
- Method of Rehabilitation Expense Verification: For both commercial and residential applicants, an accounting of the Eligible Rehabilitation Expenditures for the project must be submitted with the Certificate of Completion. As part of their review, the Department of Revenue may ask applicants to provide further information on project costs.
Restoration Tax Abatement program: http://www.crt.state.la.us/hp/taxabate.htm
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State Income Commercial Tax Credit: 20% rehabilitation credit for income producing properties that qualify for the federal tax credit. Must be on, or eligible for, the National Register.
Program Details:
- Cap: $100,000 per year, per taxpayer; no annual statewide cap.
- Minimum investment: investment in excess of the adjusted basis of the building or $5,000 during taxable year, whichever is greatest.
- Transferability: usable by owner or lessee.
- Other: Compliance period is 5 years with pro rata recapture. DOI standards apply for rehabilitation and qualified costs. Useable by owner or lessee. Final project approval by Maine Historic Preservation Commission and the National Park Service.
Method of Rehabilitation Expense Verification: Our "old" state tax credit was a direct piggyback on the federal credit and did not require a separate submittal to document expenses. However, in the supplemental budget bill that was passed on 3/31/08, we have a completely new state tax credit program for income producing historic properties. It includes special incentives for the creation of affordable housing (30% rather than 25%), and a small projects provision for rehabilitations in the $50,000-250,000 range that cannot use the federal credit. Our agency is required to certify the amount of expenses associated with these rehabilitations, and the early thinking on this is that our rules will stipulate that an applicant use a CPA to certify the expenses allowed under Section 47 of the IRS Code. Using a CPA is something that some other states appear to be stipulating, and we intend to discuss this mechanism before adopting it to our program.
Contact: Kirk Mahoney
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State Income Commercial Tax Credit: 20% credit for commercial properties.
State Income Tax Credit for Homeowners: 20% credit for owner-occupied properties.
Program Details:
- Cap: commercial – $3 million per project; Governor required to include in budget $30 million for 2007, 2008, but legislature not required to appropriate funds for commercial projects; Not more than 50% of funds available in any year may go to Baltimore City or any one county. Owner-occupied – $50,000 in credits per project; no annual statewide cap; legislative appropriation not required.
- Minimum investment: $5,000 for homeowners and a rehab cost that exceeds the adjusted basis of the property for commercial applicants.
- Transferability: credits fully refundable.
- Other: competitive award process for commercial credits requires preference for geographic distribution; no competitive award process for owner occupied structures. Nonprofits are also eligible.
- Usage: Approximately 500 commercial and 2500 residential projects approved since the tax credit program began in 1997.
Method of Rehabilitation Expense Verification: We do not require back-up financial documentation. If an expense appears to be unreasonably high, we question the applicant and may request more information justifying the claimed costs. State tax credit users are made aware that they may be audited. Residential and non-residential properties are treated the same.
Contact: Elizabeth Hughes
Phone: 410-514-7604Property Tax Incentives:
There are numerous towns and counties in Maryland that offer tax credits ranging from 5-20% of approved rehabilitation costs and/or tax abatements at pre-rehab levels for historic properties. If you visit the homepages of many of the Commissions you should be able to find the relevant information. This is in addition to the Statewide Rehab Tax Credit of 20% for Commercial and Residential properties.
http://www.marylandhistoricaltrust.net/loc-taxcr.html
http://www.marylandhistoricaltrust.net/taxcr.html
http://www.marylandhistoricaltrust.net/hdc.html
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State Income Commercial Tax Credit: a certified rehabilitation project on an income-producing property is eligible to receive up to 20% of the cost of certified rehabilitation expenditures. The properties must produce income and be owned, in whole or in part, by a for-profit entity that is subject to Massachusetts state income tax liability. The building must be listed in, or eligible for listing in the National Register of Historic Places. If the building is not currently listed in the National Register, the Massachusetts Historical Commission must certify that it is a historic building that is eligible for listing in the National Register. http://www.sec.state.ma.us/mhc/mhctax/taxidx.htm
Program Details:
- Cap: $50 million annual statewide; no per project cap, but tax credit allocation per project may not exceed 20% of certified rehabilitation expenditures per project
- Minimum investment: none
- Transferability: Carry forward 5 years.
- Other: DOI standards apply.
- Usage: Program initiated in 2003. In 2006, cap rose and program extended until 2011. The state historic tax credit can be used as a credit on the taxpayer's state income tax return, or, since it is a certificate, it can be sold. The credit cannot be claimed until the project is completed and put into service.
Method of Rehabilitation Expense Verification: We require an estimate of certified rehabilitation expenditures prior to undertaking the project as part of our certification/allocation process. The applicant verifies their cost by signing the application forms. The regulations governing the program outline criteria that the applications must meet and guide the Massachusetts Historical Commission's allocation process. The regulations are found at 830 CMR 63.38R.1.
Contact: http://www.sec.state.ma.us/mhc
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State Income Commercial Tax Credit: 25% rehabilitation tax credit for historic commercial buildings; reduces to 5% when federal 20% rehabilitation tax credit is claimed for commercial properties. Must be National, State, or local designated property.
State Income Tax Credit for Homeowners: 25% rehabilitation tax credit for owner-occupied residential buildings. Must be National, State, or local designated property.
Program Details:
- Cap: none.
- Minimum investment: 10% of the State Equalized Value (SEV) of the property.
- Transferability: carry forward 10 years.
- Other: 5 years recapture period. DOI standards apply.
- Usage: Approximately 600 projects approved since 1999; average 75 to 80 Part 3 certifications per year.
Method of Rehabilitation Expense Verification: We do not monitor costs or collect receipts. The applicant verifies their cost by signing the application. We also use this cost to determine our fee. Our focus in the review process is compliance with the Standards. When the applicant actually files for the credit, they provide an itemized breakdown of expenditures on the Department of Treasury form. We do not see this form. Our advice to applicants who save receipts and want to send them to us is to keep them in case the Department of Treasury requests them.
Contact: Bryan Lijewski
Architectural Coordinator
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State Income Commercial Tax Credit: 25% credit for commercial property.
State Income Tax Credit for Homeowners: 25% credit for owner-occupied residences.
Program Details:
- Caps: none.
- Minimum investment: 50% of total basis for commercial properties; $5,000 for owner-occupied residences.
- Transferability: Credit may be carried forward 10 years.
- Usage: New program effective as of 2006.
Method of Rehabilitation Expense Verification: We do not require submittal of financial back-up documentation for expenses for the state tax credit program. We provide lists of expenses that qualify and those that do not, and if there is a question regarding eligible expenditures, we advise the owner to contact the State Tax Commission for guidance. We also advise property owners to retain all receipts in case they are ever audited.
Contact: Brenda Crook
Tax Incentives Coordinator
Phone: 601-576-6940
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State Income Commercial Tax Credit: 25% rehabilitation tax credit for commercial properties listed on the National Register or in a certified historic district.
Program Details:
- Caps: none.
- Minimum investment: costs must exceed 50% of the adjusted basis of structure.
- Transferability: carry back 3 years, carry forward 10 years.
- Other: DOI standards apply.
- Usage: Approximately 905 projects approved since the program began in 1998. During this period, $485,318,415 in credits were issued for $1,941,799,354 allowable rehab costs representing a total investment of $2,357,650,759 in Missouri’s older communities.
Method of Rehabilitation Expense Verification: The SHPO reviews state projects just as it does federal projects -- for compliance with the Secretary's Standards. The Department of Economic Development administers the program and actually audits each project after we've issued the final certification, but before the tax credit is issued. The applicant learns from DED just how much the credit is after all the financial paperwork has been audited. If the total project costs are under $250,000 the applicant may prepare the expenditures list using a from provided by us which groups expenses into “categories of work.” For example, all masonry expenses must be grouped together and then sub-totaled. Back-up documentation is required for each category of work, and paid invoices, receipts and/or cancelled checks must be grouped in the order in which they appear on the list of itemized expenditures on the form. Back-up documentation may include, but is not limited to, the following:
- Invoices or other documents that show expenses were incurred, AND
- Final signed AIA documents and supporting schedules if available;
- Final Bank and/or Title Company disbursement sheets and/or draw statements; OR,
- Copies of cancelled checks, credit card statements or other documents that show the invoices were paid.
If total project costs are more than $250,000, an audit by an independent Certified Public Accountant is required. The CPA must perform a 100% review and verification of all available invoices and proof of payment documentation to ensure that 100% of all project costs were incurred and paid. The CPA firm must also document, for review by DED, any and all accrued expenses. If an expense has been incurred and not yet paid, the applicant must submit a legal agreement outlining the scope of work and time for payment. Once the project has been certified and the audit performed, DED notifies the applicant of the amount of the tax credit & that s/he owes an issuance fee of 2.5% of that credit amount (i.e. not of project costs -- and there are no review fees collected by or for SHPO). Once that issuance fee has been paid, DED issues a letter with the certificate number the applicant uses on his/her state income tax form or when transferring it to another Missouri tax payer.
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State Income Commercial Tax Credit: Income-producing certified historic property receives automatic 5% state rehabilitation tax credit if property qualifies for the 20% federal rehabilitation tax credit.
Program Details:
- Caps: none.
- Minimum investment: must meet the requirements for the 20% Federal Rehabilitation Tax Credit.
- Transferability: carry forward 7 years.
Method of Rehabilitation Expense Verification: There is no requirement for property owners to document their expenses, they simply claim the credit on their state tax forms. It would be up to the State Dept. of Revenue to determine if applications are fraudulent.
Contact: Pete Brown
Historic Architecture Specialist
Phone: 406-444-7718
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Nebraska has a property tax incentive program called VIP (Valuation Incentive Program) that applies to historic homes and other qualified properties, however the catch is that the property in whatever form must be listed in the NR not just eligible for NR listing. When this incentive comes back up for renewal (it sunsets in 2010), we will encourage tweaking it to include properties that are eligible for listing but not yet listed.
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State Income Commercial Tax Credit: 50% of rehab costs for all properties listed in the State Register of Cultural Properties
State Income Tax Credit for Homeowners: 50% of rehab costs for all properties listed in the State Register of Cultural Properties
Program Details:
- Caps: $25,000 per project for projects not located within an Arts and Cultural District; $50,000 per project cap for projects located within an Arts and Cultural District; no annual statewide cap.
- Minimum investment: none.
- Other: DOI standards apply. Carry forward 4 years. Pre-approval required. Also applies to stabilization and protection of archaeological sites listed in the State Register of Cultural Properties.
- Usage: Approximately 580 projects approved since the program began in 1984.
Method of Rehabilitation Expense Verification: Two phased approach, Phase 1 asks for cost estimate of proposed work. Once project is completed, Phase 2 requires that applicants
provide documentation of the actual costs of the completed project by submitting invoices accompanied by receipts, cancelled checks or other written forms of payment documentation. Costs are to be coordinated as closely as possible to the categories identified in Part 1. The same documentation is required for both commercial & residential applications.Contact: Kak Slick, SHPO
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State Income Commercial Tax Credit: A state rehabilitation credit equal to 30% of the federal credit value (approximately 6% of the rehabilitation cost) is available for commercial properties that receive the federal rehabilitation tax credit.
State Income Tax Credit for Homeowners: A 20% state rehabilitation credit is available for owner-occupied residences listed on the State or National Register and located in federally-recognized distressed census tracts
Program Details:
- Cap: $100,000 per commercial project; $25,000 cap per homeowner project. No annual aggregate statewide caps.
- Minimum investment: commercial projects, same as federal requirements; $5,000 for homeowner projects.
- Transferability: None. Unlimited carry-forward for commercial and homeowner credits.
- Other: For homeowner tax credit, municipal authorization required to identify areas of use at local level. Pre-approval and completed work certification required.
- Usage: New program effective as of January 1, 2007.
- New York State Historic Barns Tax Credit: To qualify for an income tax credit equal to 25% of the cost of rehabilitating historic barns: it must be a barn; it must meet the tax definition of income-producing; it must have been built or placed in agricultural service before 1936; the rehabilitation cannot “materially alter the historic appearance” of the barn; and only costs incurred after January 1, 2003 are eligible.
Method of Rehabilitation Expense Verification: Does not require back-up financial documentation.
Property Tax Incentive:
New York State has statewide enabling legislation that local taxing authorities can adopt to abate property taxes on capital improvements to locally designated historic properties – commercial and residential.
Established in 1996, the program is beginning to see increased local adoption. In NYS, the average property owner’s tax bill is dominated by school taxes… and I am aware of only one community where the school district has agreed to abate taxes on such improvements (the program is more frequently adopted by cities/towns/villages).
To be clear, the program does not cut tax rates or tax income, just defers the increased assessment outright for 5 years, and then builds to the new assessment at a 20% rate over the next five years. The fact that no school district has adopted this policy in support of investment/homeownership in community centers has always frustrated me – school tax (or other municipal tax) income does not go down upon adoption of the abatement; it’s increase is simply deferred.
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State Income Commercial Tax Credit: 20% rehabilitation tax credit for income-producing property owners; and a 30%-40% credit for income producing and non-income producing historic industrial properties.
State Income Tax Credit for Homeowners: 30% rehabilitation tax credit for historic homeowners.
Program Details:
- Cap: none.
- Minimum investment: $25,000 for homeowners.
- Transferability: None. Unlimited carry-forward for commercial and homeowner credits.
- Other: state credit must be taken in equal annual installments over 5 years. The 20% commercial rehabilitation credit can be combined with federal rehabilitation tax credit of 20%.
- Usage: Approximately 412 commercial and 762 residential projects approved since the program began in 1998. New credit for historic industrial buildings effective in 2006.
Method of Rehabilitation Expense Verification: Does not request any evidence of project costs. The SHPO looks at the rehab in light of the Standards and once we approve the final project, the owner attaches that certification to their tax return to claim the credit. As with the federal application for the income-producing credit, we do ask for an estimate of the rehabilitation costs since our review fee is on a sliding scale, but we leave it up the Department of Revenue to require
any supporting documentation.
When we were working to establish a residential credit ten years ago, early draft legislation called for the SHPO to certify the rehabilitation costs, but that certification of rehab costs was dropped by the time the final legislation was enacted.Contact: F. Mitchener Wilds
Restoration Branch Supervisor
Phone 919-807-6588
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State Income Commercial Tax Credit: 25% tax credit for preservation and renovation of eligible property that is part of a Renaissance Zone Project.
State Income Tax Credit for Homeowners: 25% tax credit for preservation and renovation of eligible property that is part of a Renaissance Zone Project.
Program Details:
- Cap: $250,000 per project; no annual statewide.
- Minimum investment: none
- Transferability: carry forward 5 years.
Method of Rehabilitation Expense Verification: We do not require any type of financial back-up documentation from either commercial or residential owners. North Dakota uses the same application as the federal tax incentives, so the Part III provides all the information required.
Contact: Thomas Linn
Architectural Project Manager
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State Income Commercial Tax Credit: 25% of qualified rehabilitation expenditures for approved projects can receive state credit. Credit is fully refundable.
State Income Tax Credit for Homeowners: 25% of qualified rehabilitation expenditures for approved projects can receive state credit. Credit is fully refundable.
Program Details:
- Cap: No aggregate annual cap, but program is limited to 100 projects per year for two years. Applications to be accepted in the order filed. The Ohio Department of Development (ODOD) must conduct a cost benefit analysis on each proposed project; only projects that will result in a net gain in state and local taxes will be approved. ODOD must determine that the tax credit is a major factor in applicant’s decision to rehabilitate the building or increase the level of investment in the building.
- Minimum investment: No express requirement for minimum investment, but ODOD has authority to establish eligibility requirements.
- Transferability: This credit can not be transferred and must be taken by the owner.
- Other: Pre-approval of work required; DOI Standards for Rehabilitation apply.
- Usage: new program effective July 1, 2007 through June 30, 2009.
Method of Rehabilitation Expense Verification: We do not require back-up documentation for expenses incurred - we consider that a matter between the applicant and the tax department; the applicants is made aware that they may be audited and should maintain financial records necessary to comply with a potential audit.
Contact: Franco Ruffini
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State Income Commercial Tax Credit: 20% rehabilitation tax credit for any certified rehabilitation that meets the requirements for the federal rehabilitation credit.
State Income Tax Credit for Homeowners: 20% rehabilitation tax credit for any certified rehabilitation that meets the requirements for the federal rehabilitation credit.
Program Details:
- Cap: none.
- Minimum investment: same as federal credit ($5,000).
- Transferability: freely transferable at any time for 5 years following the year of qualifications; credit may be carried forward for 10 years against subsequent income tax liability.
- Other: Does not apply to owner-occupied houses.
- Usage: Program created in 2005 and last amended in 2006.
Method of Rehabilitation Expense Verification: To qualify for the State credits, a project must meet all requirements for the federal credit. We have no requirements for documentation of the rehabilitation expenses.
Contact: Melvena Heisch
Phone: 405-522-4484
E-mail: mheisch@okhistory.org
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Pennsylvania has no state tax credit at this time.
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Puerto Rico has the following - Law 7, Mar. 4, 1955 (53 YEARS AGO!) as amended:
- 5 year abatement - no property tax, no state tax on net rental income for 5 years - if facades, front yards (where they exist), entry halls and main stairs are restored or rehabbed as to Instituto de Cultura guidelines. Extensible for another 5 years if rest of the building is restored or rehabbed as it becomes then a de facto 10-year abatement (see below).
- 10 year abatement on the same terms if the whole building inside and out is restored or rehabbed from the beginning. Renewable in authentic old buildings if conservation standards are met at the end of the period and a renewal application is made.
New compatible buildings or harmonized nonhistoric buildings may qualify for up to ten years (one whole-building cycle). Abatement is independent of use (as long as use is permissible by the property's specific zoning) and neither does it depend on the owner residing in the premises. These abatements may be canceled before the period's end, if the building is allowed to fall into disrepair, or unauthorized alterations or demolitions are made.
Rhode Island
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State Income Commercial Tax Credit: 30% rehabilitation tax credit for income-producing projects; State Register properties qualify.
State Income Tax Credit for Homeowners: 20% rehabilitation tax credit for owner-occupied residential. State Register properties qualify.
Program Details:
- Cap: $2,000 per year for owner-occupied; no per project for income-producing projects; no annual aggregate statewide cap.
- Minimum investment: must exceed 50% of adjusted basis of structure for income-producing projects; $2,000 for owner-occupied residential.
- Transferability: credits for income-producing projects are freely transferable and can be carried forward 10 years; unused credits for owner-occupied residential can be carried forward as long as property is maintained.
- Other: interior and exterior rehab qualifies for income-producing properties; only exterior rehab qualifies for owner-occupied residential properties.
Method of Rehabilitation Expense Verification: In general, for the homeowner credit, we ask for documentation of reported costs in the form of copies of cancelled checks, and/or copies of itemized receipts for payments (marked paid), and copies of signed contracts, bills, and any other documentation of costs. Since these projects are generally small, we check the math, and make sure they are submitting for eligible expenses.
For our state commercial credit, we require a cost certification by a licensed CPA. We do not have a standard format for these cost certifications, and they come in many forms. Some are fairly detailed and allow us to see if the applicant is claiming ineligible expenses. But some certify to the most basic categories of expenditures: eligible and non-eligible expenditures. We provide guidance to applicants on cost certification and our staff is all in agreement that we need a basic format to be followed by the accountants which would break out costs for new construction, site work, labor, materials, A&E services, etc.Contact: Virginia Hesse, R.A.
Principal Historical Architect
State Income Commercial Tax Credit: 10% state rehabilitation tax credit for income-producing properties that also receive federal rehabilitation tax credit.
State Income Tax Credit for Homeowners: 25% rehabilitation tax credit for owner-occupied residential properties.
Program Details:
Method of Rehabilitation Expense Verification: South Carolina's law lists seven categories of work that qualify as 'rehabilitation expenses' and applicants must itemize expenses in these categories as part of their documentation of completed work. We may ask the applicant to revisit their paperwork if the categories in which expenses are reported do not match the proposed work. However, our role is to review whether the work meets the Standards. The SC Department of Revenue will review the expenses if they determine that an audit is neccessary.
For a complete list of programs, click: http://shpo.sc.gov/laws/sclaws.htm#financialincentives
Richard Sidebottom
Compliance, Tax Incentives, and Outreach Supervisor
Phone: 803-896-6183
Tennessee | Texas
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State Income Tax Credit for Homeowners: 20% rehabilitation tax credit for residential properties – both owner-occupied and non-owner-occupied.
Program Details:
- Cap: none.
- Minimum investment: $10,000 over 3 years.
- Transferability: n/a
- Other: DOI standards apply. No fees.
- Usage: Approximately 750 residential projects approved, $65 million invested in rehabilitation and 1750 housing units rehabilitated, since the program began in 1993.
Method of Rehabilitation Expense Verification: Utah SHPO does not verify expenses as part of our state residential rehab tax credit program. We tell our owners to keep receipts in case they are audited by the state tax commission.
Contact: Nelson Knight
Tax Credit Program Coordinator
Phone: 801-533-3562
E-mail: nwknight@utah.gov
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State Income Commercial Tax Credit: 10% add on tax credit for projects approved for the federal 20% rehabilitation tax credit. Eligible projects must be located within a designated “downtown” or “village center.”
Program Details:
- Cap: $50,000 per project for 10% credit projects; $1.5 million annual statewide. No more than 30% of total annual allocations can go to projects in a single municipality.
- Minimum investment: $5000.
- Transferability: carry forward 10 years; in lieu of a tax credit, the state will issue a bank credit certificate which may be sold to a bank to for cash or other terms.
- Other: Eligible projects must be located within a designated “downtown” or “village center”
- Usage: Program last expanded in 2006.
- 25% façade tax credit for buildings built before 1983 that do not qualify for the federal rehabilitation credit
- Cap: $25,000 per project for 25% façade credit projects
- 50% Credit for Elevators, Lifts, Sprinklers and for Code Improvements that bring the building into code compliance.
- Cap: $50,000 for elevator, $12,000 for lifts, $50,000 for sprinkler, and $25,000 for code work.
Method of Rehabilitation Expense Verification: Our application requires upfront cost estimates and a series of self-certifications. All of the approved applications and a spreadsheet of the Fiscal Year’s activity are shared with the tax department which may audit tax credit recipients if they so choose.
Contact: Chris Cochran
802-828-3047
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State Income Commercial Tax Credit: 25% rehabilitation tax credit for certified historic, income-producing buildings.
State Income Tax Credit for Homeowners: 25% rehabilitation tax credit for certified historic, owner-occupied residential properties.
Program Details:
- Cap: none.
- Minimum investment: rehabilitation expenses must amount to at least 25% of the assessed value for owner-occupied buildings and at least 50% of the assessed value for all other eligible structures, or $5,000, which ever is greater.
- Transferability: carryover 10 years; state credit may be syndicated through partnership arrangement.
- Other: DOI standards apply.
- Usage: Approximately 1300 projects approved since the program began in 1997.
Method of Rehabilitation Expense Verification: In Virginia, projects that exceed $100,000 in final rehabilitation costs require verification by a CPA as to the actual costs attributed solely to the rehabilitation of the historic structure.
Contact: Karen Brandt
Architectural Historian
Phone: 804-367-2323 x135
Washington
State Income Commercial Tax Credit: 10% rehabilitation tax credit for income-producing structures eligible for federal rehabilitation tax credit.State Income Tax Credit for Homeowners: 20% rehabilitation tax credit for private residential structures listed on National Register.Program Details: