Historic Rehabilitation Tax Credit: Talking Points
Download the PDF version of these talking points here.
As the House and Senate tax writing committees move toward a re-write of the Tax Code, the Historic Tax Credit should remain part of permanent law as a result of its overwhelming success over the last four decades. Here are some key points to consider when communicating with your members of Congress and other elected officials.
- Since 1981, the historic rehabilitation tax credit (HTC) has:
- created more than 2.4 million good paying, local jobs;
- leveraged nearly $109 billion in private investment in our communities;
- generated a significant return on investment for the federal government;
- and preserved more than 39,600 buildings that form the historic fabric of our nation.
- Since it was permanently written into the tax code more than 30 years ago, the HTC has been a widely used redevelopment tool for inner cities, towns, and rural communities across the country. The HTC has a proven track record of stimulating economic growth and creating jobs through public-private leveraging opportunities.
- The HTC accomplishes all the stated objectives of tax reform: it generates enormous economic activity by leveraging billions of dollars in private capital, makes the tax code fairer, and promotes a longstanding social priority.
- The HTC is the most significant investment the federal government makes to preserve our nation’s historic properties.
- When the HTC was examined by Congress in the lead up to the 1986 Tax Reform bill, legislators concluded an incentive to rehabilitate historic structures remained justified. The House Ways and Means Committee report reasoned that without the HTC market forces would drive investment away from more costly rehabilitation and urban cores and toward more predictable new construction in the suburbs.
- This justification is as valid today as it was then. Developers, both large and small, report that historic rehabilitation projects would not occur but for the HTC. Even in situations where developers benefit from lower tax rates, the less profitable option of historic preservation will not be favored over building on previously undeveloped commercial sites. Absent the HTC, which fills a critical financing gap, there will be a halt to the rehabilitation of historic commercial properties in the United States.
- A new study commissioned by the National Trust, the first-ever research on the HTC’s catalytic impacts, found that the benefits of historic tax credit projects go far beyond the project itself, including increasing the surrounding area’s number of construction permits, business licenses, and surrounding property values in the study areas.
- In 2012, the National Park Service commissioned a study that concluded the HTC generates a significant return on investment for the federal government. According to the Park Service, over the life of the program the IRS has issued $21 billion in tax credits while generating more than $26.6 billion in direct federal tax revenue from income taxes paid by material manufacturers, construction workers, and the retail and service sector tenants that ultimately occupy rehabilitated properties.
- The HTC continues to fulfill the federal public policy goal set forth in the National Historic Preservation Act of 1966 of preserving the nation’s architectural heritage by rehabilitating historic structures that tell America’s story. It benefits communities throughout the nation where thousands of iconic historic buildings have been brought back to life and are contributing to the local economy.
- As Congress examines ways to improve our nation’s tax code, there is a critical opportunity to modernize the HTC so that it better serves the needs of both large and small communities throughout the country. The Creating American Prosperity through Preservation Act (“CAPP”) Act (S.1141), introduced by Sen. Cardin (D-MD) and Sen. Collins (R-ME) in the Senate and pending introduction in the House, includes several practical changes to the current program that will enhance the HTC’s ability to preserve historic buildings and revitalize our communities.