Historic Tax Credits
What are Historic Tax Credits?
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
Federal Tax Incentives for Rehabilitating Historic Buildings
Annual Report for Fiscal Year 2014
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:
HTC impacts at the State Level
National Economic and Tax Impacts of Federal HTC-related Investment by State, Fiscal Year 2014 (p7)
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
Impacts on Missouri’s Historic Tax Credit Program
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
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:
- Video: Local Impacts of the HPTC in Missouri
- Missouri Historic Preservation Tax Credit Basic Information
- Missouri Tax Credit Fact Sheet/Talking Points March 2014 from AIJP
- Protect Historic Tax Credits (National Trust for Historic Preservation)
- Tax Incentives for Preserving Historic Properties (National Park Service)
- Before You Apply: 20% Historic Rehabilitation Tax Credit (National Park Service)
- Missouri State HTC list (2014) (National Trust for Historic Preservation)
- Missouri State HTC map and economic impacts (2014) (National Trust for Historic Preservation)
- Missouri’s Kansas City HTC map and economic impacts and list (2014) (National Trust for Historic Preservation)
- Missouri’s St. Louis HTC map and economic impacts and list (2014) (National Trust for Historic Preservation)
- 2012 Report From Mark Miles, Deputy State Historic Preservation Officer
- 2012 Rutgers Study: Economic Impact of Federal Historic Tax Credits
- National Trust: Economic Benefits of State Historic Preservation Tax Credits
- Dollar for Dollar, Historic Preservation Creates More Jobs and More
Household Income than Manufacturing
- Historic Preservation as Economic Stimulus Tool
- An Economic Analysis of the Missouri Historic Preservation Tax Credit – RCGA
- ACHP: Measuring Economic Impact of Historic Preservation
Historic Preservation Tax Credits are NOT just for big cities. The economic benefits are felt in many places all over the State:
- Missouri Tax Credit Case Study – West Plains
- Missouri Tax Credit Case Study – Farrar
- Missouri Tax Credit Case Study – Cape Girardeau
- Missouri Tax Credit Case Study – Lexington
- Missouri Tax Credit Case Study – Ironton
Missouri’s Chief Tax Credit Lobbying Organization is Historic Revitalization for Missouri
Novogradac’s Historic Tax Credit Resource Center’s Resource & Reports page
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.
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