State Rehabilitation Tax Credits

State Historic Tax Credits Map

Research has found that an effective state program leverages the use of the federal historic tax credit. For example, Missouri's state tax credit doubled the usage of the federal incentive when it was put into place. To further support the federal historic tax credit, it is essential to also advocate to protect, expand, and gain tax incentives at the state level.

To spur more private investment in older neighborhoods, 35 states have adopted laws creating credits against state taxes to provide incentives for the appropriate rehabilitation of historic buildings. (See map above.) Well-crafted state historic tax credit programs, such as those in Minnesota, North Carolina, and Virginia, increase the number of federal rehabilitation projects.

State Advocacy Campaigns

Advocacy Tools

State Tax Credits for Historic Preservation: A Public Policy Report. This policy tool was produced by the National Trust for Historic Preservation and written by Harry K. Schwartz. You can use it in two ways: hand it out to your legislators, and use it to compare your state program to others.

Case Studies

    • The National Trust Policy Fellow, Shawn Kravich, used the Rutgers University Preservation Economic Impact Model on three deteriorating historic buildings across New Jersey to show the economic benefits that would be generated by such a tax credit program.
    • On April 1, 2010, Minnesota became the 29th state in the country to offer a state rehabilitation tax credit to incentivize historic preservation. This case study, prepared by the National Trust Community Investment Corporation, examines this important win.

State Historic Tax Credits Increase Use of the Federal Historic Tax Credits

  • The presence of an active state tax credit program boosts the use of the federal credit on average between $15 and $35 million in certified expenditures according to research from the Washington Office of Planning. That means the states with active tax credit programs are bringing in between $3 to $7 million federal dollars, which would not otherwise be available, to the state.

Research

Ohio law requires the state to conduct a cost-benefit analysis for each historic building seeking a tax credit. The state must determine whether rehabilitation of the building and awarding of the credit will result in a net revenue gain in state and local taxes once the building is used. The Ohio model takes into account tax revenues generated after the building is placed in service. Click here to learn about Ohio's program.


The reports below quantify the numbers of direct jobs and other substantial economic impacts created through state tax incentives. They also show how the rehabilitation of historic buildings starts to pay back the state’s investment immediately through taxes on construction jobs and materials.