We are living in a world of remakes. Music, movies and television have been taking the classics and repurposing them for years. Sometimes the remake is better than the original; sometimes it isn’t. However, the concept isn’t limited to entertainment. State historic rehabilitation tax credits are remaking landmarks across the country, and one might be coming to a neighborhood near you.
Facing a massive budget deficit, S.B. 977 recently passed Oklahoma’s Senate Committee on Finance, and is currently on the Oklahoma Senate floor awaiting a vote, as reported by Paul Stinson in Bloomberg BNA’s Weekly State Tax Report. In an attempt to raise revenues, the bill initially called for a moratorium on a number of state tax credits, including the historic rehabilitation credit.
However, some of the provisions that were originally included in S.B. 977 were amended before the bill passed through the committee, according to a Feb. 10 article in Tulsa World. The state’s historic rehabilitation tax credit, along with two other credits, benefitted from the amendment, according to the article. Although there remains a two-year moratorium on rehabilitations, the amendment allows historic rehabilitation projects that have begun prior to July 1, 2016 to qualify for the credit during moratorium period. Proponents of the amendment pointed to the number of projects already in progress as a reason to allow the credit to still be claimed during the two-year period, the article states.
If members of the Oklahoma legislature were looking for examples of a historic rehabilitation success story to hang their hat on, Massachusetts could fit the bill.
As a Massachusetts native, I can assure you that there is no shortage of old buildings in the state. That is why it isn’t surprising to find that the state historic rehabilitation credit is a major player in a growing wave of renovations turning historic churches into apartments and offices, according to a Feb. 2 article from The Pew Charitable Trusts. Taking real property that wasn’t originally taxable and converting it into taxable property is an added benefit of renovating historic churches, the article points out.
However, Oklahoma and the Bay State aren’t alone when it comes to historic rehabilitation credits. Two-thirds of the states across the country, as well as the federal government, all offer some form of a historic rehabilitation or preservation credit, according to the article.
Therefore, as long as historic rehabilitation credits allow states to provide incentives for turning old buildings into new projects, the remakes will likely continue.
*Continue the discussion on Bloomberg BNA's State Tax Group on LinkedIn: Are historic rehabilitation credits a good way to convert non-income producing property into income producing property?
For more information about tax credits, check out Bloomberg BNA’s Credits and Incentives Portfolios by signing up for a free trial of the Bloomberg BNA Premier State Tax Library today.
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