Historic Tax Credits


What are Historic Tax Credits?

The Basics:

Once a property is deemed ‘historic’ by being listed either on the National Register of Historic Places individually or contributing to a historic district or is part of a Certified Historic District, a project can receive tax credits, which lowers the taxes owed, on qualified rehabilitation expenses if their work conforms to the Secretary of the Interior’s Standards for Historic Building Rehabilitation.

Facts about the Federal Historic Tax Credit

Over the life of the program, the historic rehabilitation tax credit (HTC) has:

    • created nearly 2.5 million good paying, local jobs;
    • leveraged more than $117 billion in private investment in our communities;
    • generated a significant return on investment for the federal government;
    • and preserved more than 40,000 buildings that form the historic fabric of our nation.

State VS Federal Tax Credit

(via Missouri Dept. of Natural Resources)

The state credits apply to income-producing property including either commercial or residential rental property, or personal residences that are certified historic structures and meet the minimum investment threshold. Missouri law provides an investment tax credit equal to 25% of approved costs associated with qualified rehabilitation made after Jan. 1, 1998.

The federal credits are limited to income-producing, depreciable property only. The property may be either commercial or residential rental property that is certified historic. A taxpayer’s personal residence would not qualify for the federal credit. (The 20% credit is available for properties rehabilitated for commercial, industrial, agricultural, or rental residential purposes, but it is not available for properties used exclusively as the owner’s private residence).

The federal and state credits can be used in combination for the rehabilitation of commercial or income-producing properties.

(This information was provided by the National Trust for Historic Preservation, National Park Service, Missouri Department of Natural Resources)

Nationwide Impacts of the Historic Tax Credit Program

 

2014 Annual Report

Federal Tax Incentives for Rehabilitating Historic Buildings

Annual Report for Fiscal Year 2014

 2014 Statistical Report

State Historic Preservation Tax Incentives

“Many states offer state tax incentives of various kinds for historic preservation rehabilitation projects. Over 50% of the projects receiving Part 3 certification also used state historic tax credits in FY 2014. Over half of the states currently offer state income tax credits. The four states with the most rehabilitation activity in FY 2014 (Virginia (192), Louisiana (170), Missouri (169) and New York (130)) all have state historic tax credits that can be “piggybacked” with the Federal historic tax credit.” (p14)

Annual Report on the Economic Impact of the Federal Historic Tax Credit for FY 2014

ANNUAL REPORT ON THE ECONOMIC IMPACT OF THE FEDERAL HISTORIC TAX CREDIT FOR FY 2014:

HTC impacts at the State Level

National Economic and Tax Impacts of Federal HTC-related Investment by State, Fiscal Year 2014 (p7)

2014 Annual Report data (NPS)
2014 Annual Report data (NPS)

 Summary of HTC Impacts:

In short, the federal HTC is a good investment for local communities, individual states, and the nation. The cumulative impacts of the program to date (FY 1978-FY 2014) support this conclusion (p6)

  • An inflation-adjusted (2014dollars) $22.6 billion in HTC costs encouraged a five times greater amount of historic rehabilitation ($117.6 billion)
  • This rehabilitation investment generated about 2.5 million new jobs and billions of dollars in total (direct & secondary) economic gains
  • The cumulative positive impacts on the national economy included $271.4 billion in output, $134.1 billion in GDP, $98.6 Billion in income, and $39.3 billion in taxes, including $28.6 billion in federal tax receipts.
  • The leverage and multiplier effects noted above support the argument that the federal HTC is a strategic investment that works.

Check out more National Park Service Reports

Annual and Statistical Reports Archive


Impacts on Missouri’s Historic Tax Credit Program

Image provided by the Missouri Department of Natural Resources
Missouri National Register List Click on a county to see that county’s National Register listings.

 

Statistics from FY2010 show how well the program is working.  Tax credits awarded in FY10 reflect private investment that was taking place during the worst of the recession.

Here’s what historic tax credits did for Missouri during the recession:

  • Credits issued in FY2010 accounted for $632,894,262 in redevelopment, 1,571 jobs (not counting construction jobs), and 1,817 new housing units. -Department of Economic Development Statistics.

It should also be noted that, because not all project costs are eligible for the 25% credit, state historic tax credits accounted for just 16% of that total, and as always, credits were not issued until after the buildings were put into service.

BELOW: COMMUNITIES IN WHICH THE MISSOURI HISTORIC PRESERVATION TAX CREDITS HAVE BEEN UTILIZED

MO HTC locations to date Claggett
Map: Christina Claggett

Results of Missouri’s Historic Preservation Tax Credits Through 2014:

  • Over $7.5 billion in private investment before the credits were issued
  • 2,700+ projects in 72 communities
  • 72,000+ construction jobs
  • 22,000+ permanent jobs

Advocacy Tools and Resources:

The links below are resources to help understand the tax credit program and tools to demonstrate how Historic Tax Credits have had an economic impact on the state of Missouri. Use them to educate yourself and your elected officials.

Tax Credit Basics:

Economic Impacts:

Historic Preservation Tax Credits are NOT just for big cities. The economic benefits are felt in many places all over the State:

Take Action:

See Also:

Novogradac’s Historic Tax Credit Resource Center’s Resource & Reports page

Missouri’s DNR Federal and State Tax Credits, Grants, & Other Funding Sources

See Missouri By the Numbers to learn more about our Parks and National Register Listings. Check out the yellow tool bar on the right.

 


 

It is important that you let your legislators know that you support the positive economic impact that the State Historic Preservation Tax Credits deliver in Missouri. Don’t know your legislator’s name or contact information?  You can find it at http://www.moga.mo.gov.

 

INTERESTED IN BECOMING PART OF OUR PUBLIC POLICY TEAM?  CLICK HERE FOR AN INVITATION FROM OUR PUBLIC POLICY CHAIR,  PATRICK WOLF

 

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