History of the Federal Rehab Tax Credit
The National Trust for Historic Preservation's role in the creation of a federal tax incentives for historic preservation began in 1970 when it was first recognized that there was a need to incentivize the revitalization of historic buildings through the Internal Revenue code. Steps were taken in 1973 to examine and review the National Trust's own programs -- particularly as they related to the environmental movement -- in an internal report which included the formulation of a taxation policy which recognized and addressed the fact that acccelerated depreciation rules encouraged property owners and developers to tear down old buildings in favor of new construction to recoup their investment quickly. The National Trust Board subsequently asked the Nixon Administration's Justice Department to draft a law addressing the problem of accelerated depreciation which resulted in legislation being introduced in two Congresses, but ultimately went nowhere.
However, on February 5-6, 1976, the National Trust organized the first national conference entitled "Public Tax Policy: Effect on the Conservation of the Built Environment." The conference brought together for the first time leaders in the tax field who discussed historic preservation. Participants included two former Commissioners of Internal Revenue, Mortimer Caplin and Sheldon Cohen. Overcoming his resistance to any new benefit for a class of taxpayers, Caplin said as the keynote speaker, "... it is evident that the Internal Revenue Code in the past has done little to encourage preservation in the private sector, and some might even say that it has discriminated against private preservation efforts." At the conference, Senator J. Glenn Beall, Jr. (R-Md.) and Representative Barber Conable (R-N.Y.) discussed bills they had introduced in 94th Congress that would permit accelerated depreciation for rehabilitation expenditures on historic buildings. Senator Beall's bill went on to pass Congress later that year after it was amended to include historic buildings designated by a local statute. The bill had been written to cover properties listed only on the National Register.
Later that year, President Gerald Ford signed the historic preservation tax legislation on October 4, 1976.
