State Rehabilitation Tax Credits
Our Position
In March 2009, Arkansas became the 30th state to offer a rehabilitation tax credit when Governor Mike Beebe signed Act 498. Introduced by Representative Robert Moore from Arkansas City, HB1953 received support from the Historic Preservation Alliance of Arkansas, the Arkansas Rural Heritage Development Initiative, and other preservation-minded individuals and organizations.
Credit: Arkansas Office of the Governor
We believe that state historic preservation tax incentives are critical to the revitalization of our country's older communities. >> Read More
Background
Although each incentive program is unique, the thirty programs offer credit against state tax liability for the qualified rehabilitation of a qualifying historic building (Arkansas became 30th in March 2009). Unlike the federal program, twenty-five states offer a tax credit for the rehabilitation of owner-occupied residences. >> Read More
Currently In Session
Preservation organizations across the country are leading advocacy coalitions to encourage, expand, and protect state historic preservation tax credit programs.
Pushing Ahead:
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In Pennsylvania, Preservation Pennsylvania is promoting House Bill 42 which would provide a 25% tax credit for qualified rehabilitation of historic commercial buildings.
Making the Case
Many economists have studied the benefits of these state-level preservation incentives. For example, a recent report for the Abell Foundation examines the environmental impacts of Maryland's Heritage Structure Rehabilitation Tax Credit and shows that there's a $8.53 return on every state dollar invested and details the resulting environmental benefits as well.
Rutgers University examined Missouri’s preservation program and found that every $1 invested by the state leveraged almost $4 in historic rehabilitation -- a four to one return on its investment. Because of the program, Missouri garnered 6,871 jobs and $60 million in total taxes in 3 years. Looking at the same program, researcher Donovan D. Rypkema of Place Economics found that rehabilitation creates 6.3 more jobs than manufacturing.
In January 2008, the Virginia Commonwealth University teamed up with the Virginia Department of Historic Resources to study the effects of its ten year incentive program. The Preservation through Prosperity study found that the program helped create more than 10,700 jobs and $444 million in associated wages and salaries over a 10 year period.
In their 2007 study of Rhode Island's credit, Lipman Frizzell & Mitchell LLC found that the state's investment of $1 leveraged $5.35 in total economic output.
Studies also show that state tax credits increase the use of the federal rehabilitation tax credit. During the 5-year period preceding enactment of the state historic tax credit program (1996-2001), Rhode Island attracted less than $10 million in federal historic tax credit investment. For the 5-year period since enactment (2002-2007), more than $78 million dollars in federal historic tax credits were awarded to
Many states, like Missouri, North Carolina, Ohio, and Virginia, describe the multitude of benefits offered by historic preservation tax credits.
Model Policy
Not all state tax credit programs are created equal. Some state programs have been extraordinarily productive in stimulating rehabilitation activity. Many others have produced mixed or minimal results. What causes these programs to fall short? In general, two factors greatly influence the effectiveness of state historic tax credits: a limit or cap on the amount of a credit and a lack of transferability.
Partnerships
Many stakeholders promote historic preservation incentives. The Coalition for Neighborhood and Economic Renewal boasts over 60 diverse groups supporting a state historic preservation tax credit for Rhode Island. Minnesota's coalition, led by Preservation Alliance of Minnesota, meets every two weeks when the legislature is in session to push for the adoption of a state rehabilitation tax credit.
Recognizing rehab tax credits as one of the best smart growth incentives, Smart Growth America offers a policy toolkit. To find a smart growth organization in your state, visit Smart Growth America
Advocacy
Preservation New Jersey's website
Iowa advocates created a brochure describing the benefits of expanding the program. The Michigan Historic Preservation Network commissioned an economic benefit study to show how changes to the existing program would generate more revitalization in Michigan’s aging communities. This type of educational outreach pays off. In 2009, the Iowa legislature raised the programmatic cap and in 2008, the Michigan legislature significantly expanded the program.
Case Studies
Read about use of state tax credits to rehab buildings in West Plains, Missouri and in Michigan.
National Trust Assistance
Along with our regional offices, the Center for State and Local Policy offers technical assistance for those working to encourage state rehabilitation tax incentives. For assistance, call 202-588-6000 or e-mail policy@nthp.org
Submitted by Guru at: March 10, 2009
Can any one give me a group or blog where I can find more information about the two bills pending in the Illinois legislature for the Illinois State Historic Tax Credit? Thank