Credit Worthy News

National Park Service Releases 2017 HTC Report

Posted by Katherine Ferguson on Tuesday, March 13, 2018

As historic preservation advocates spend the week on Capitol Hill for Preservation Action's Advocacy Week, the National Park Service has released the Federal Tax Incentives for Rehabilitation Historic Buildings: Annual Report for Fiscal Year 2017

Screen Shot 2018-03-13 at 9.30.15 AM.png| Click to view

Among the impressive findings for 2017:

  • Over $5.8 billion of private investment was certified (Part 3).
  • Almost 107,000 jobs were created.
  • There was a 16 percent increase in Part 2 approvals, representing an estimated $9.07 billion in QREs.

With FY 2018 well underway, and even with the late 2017 tax law changes, we expect that these trends will continue to show the positive effects of the historic tax credit program on our nation's historic buildings. 

Topics: federal HTC, National Park Service

HTC Watch | Tax Reform One Step Closer

Posted by Bill MacRostie on Tuesday, December 19, 2017

Hill_Christmas| Architect of the Capitol

The tax reform conference committee issued its report late Friday afternoon and the 20% HTC taken over five years was included, a provision that was introduced in an amendment by Sen. Bill Cassidy (R-LA) which reinstated the 20% rate from 10% as contained in the original version of the Senate bill. (The 10% credit for non-historic pre-1936 buildings has been completely eliminated.) Overall, this is good news for the historic rehabilitation industry and historic communities across the country. The next step will be the reconciled version of the bill to be voted on by the House and Senate this week, with signature by the President looking likely before Christmas. 

While the five year provision is not ideal, it appears the federal historic tax credit will continue to be a viable program, and hopefully there will be opportunities in the near future to improve the law. (An important note: should the bill pass as is expected, those wanting to qualify for the current federal HTC program must have the "taxpayer" claiming the credit as owner of the building by the end of 2017.)

An unexpected positive development in the conference report was the inclusion of the option for 60-month phased projects under the transition rule. This was a glaring omission from the earlier versions of the bill, which only addressed the 24-month basis test counting period and created uncertainty for current and future phased projects, and was an issue lobbied by the Historic Tax Credit Coalition (HTCC).

Many thanks are due those of you that stood with the HTCC to voice your support for the tax credit. We encourage you to reach out and thank the legislators that have been champions for the incentive in critical ways, such as Sen. Bill Cassidy (R-LA) and Sen. Tim Scott (R-SC). The need for our advocacy is far from over, but we could not have gotten to where we are now without the efforts of all involved.

Follow us on LinkedIn and Twitter for the latest on this and other historic tax credit news.  

Topics: federal HTC, tax reform

Historic Tax Credit Legislative Update (from NTCIC)

Posted by Katherine Ferguson on Friday, May 5, 2017

This update comes from Michael Phillips, Public Policy Manager at the National Trust Community Investment Corporation (NTCIC). 

The legislative environment in Washington has intensified as the Trump Administration moves past its 100th day in office. Today the House passed the American Health Care Act by vote of 217-213. If passed by the Senate, it could bring up to $1 trillion in baseline revenue, which would act as a partial offset to reducing the corporate tax rate.  Overcoming this legislative hurdle, even if the legislation fails to advance in the Senate, creates new momentum in the House to tackle tax reform legislation.

In the tax reform debate, attention shifted to the Administration on April 26th after the White House released its “Core Principles” for tax reform.  National Economic Council Director, Gary Cohn and Treasury Secretary, Steven Mnuchin, highlighted an aggressive cut to corporate and individual tax rates to encourage growth.  Beyond “Eliminat(ing) tax breaks for special interests,” the document provides few details about how the Administration would pay for its proposed rate cuts and is silent about how it would treat specific community development credits. The text of the White House document can be found at:

In the House and Senate, tax reform remains a critical priority. The Ways and Means Committee is continuing its lead role in developing legislative language for a tax reform bill. In late April, Republican members of the Committee participated in a retreat to find common ground on several outstanding questions that must be resolved before tax legislation moves forward.  Despite calls for greater leadership by the Senate to move the tax reform process forward and strong opposition by some Republican Senators to a House-devised Border Adjustment Tax, there has been little indication the Finance Committee is working quickly to assemble its own version of comprehensive tax reform.

Since the Administration announced it had pivoted its legislative priority to tax reform, there have been many statements about when legislation would be signed into law.  Details about the scope and structure of tax reform will be forthcoming, according to the Administration, but the window to complete tax reform appears to run between October 2017 and March of 2018. Many in Washington view the Administration’s statement of tax reform principles as the beginning of a negotiation process. 

The Administration’s engagement presents an important opportunity to advocate for the Historic Tax Credit with the House, Senate, and the Administration. Now is the time for stakeholders to engage and make the case for the HTC with Congress and the Administration. The future of the historic tax credit in tax reform will depend on the ability of advocates, both in DC and at home, to share the value and need for this economic development incentive. Please make plans to engage your member of congress on behalf of the HTC.


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Topics: policy, Advocacy, federal HTC

Historic Tax Credits and Urban Revitalization

Posted by Bill MacRostie on Wednesday, April 19, 2017

@4240 | Cortex Innovation Community

This week’s edition of The Economist magazine has an informative article about urban revitalization in St. Louis. In a city with a turbulent history of racial segregation and housing discrimination, and one The Economist calls “one of the country’s most troubled,” the article describes signs of hope in the form of Millennial in-migration and successful educational efforts in the city’s most challenged neighborhoods. At the heart of these trends the article highlights a public/private innovation district named Cortex Innovation Community being developed—and thriving—in a formerly abandoned industrial area between Washington and St. Louis Universities.

The article describes scores of biotech, medical and scientific start-ups being nurtured by business incubators and other Cortex-sponsored efforts. What the article doesn’t mention—but we know because Cortex and its joint venture partner Wexford Science + Technology are long-standing clients of our firm—is that one of the first efforts in the district was the renovation of an historic warehouse building that obtained critical project financing from federal and state historic tax credits.

In yet another example of what has been repeated hundreds of times across the country for decades, historic tax credits provided risk-capital in the early stages of a multi-year project… and served to catalyze future development in its surrounding neighborhood. We are proud to have been a part of this pioneering project.

We believe that as the new administration and Congress begin to tackle comprehensive tax reform, they would be well-advised to keep in mind the value of federal tax policy in directing capital toward certain activities widely acknowledged to be in the public interest. Republican tax reform orthodoxy in Congress—especially in the House of Representatives—holds that removing incentives from the tax code means the federal government will “stop picking winners and losers” and will allow a purer market to function on its own in choosing where capital should be directed. The reality of our history in the last half century is that widespread disinvestment in many of our cities and small towns make early investment in revitalization efforts too risky for the “pure” market to stomach without backup from government. The historic tax credit has played a vital role in revitalization efforts all over the country, and should be kept in the tax code.

Topics: policy, Advocacy, federal HTC, St. Louis, Cortex Innovation Community

Presidential Policy & the Federal Historic Tax Credit

Posted by Katherine Ferguson on Thursday, February 23, 2017

Congress believes that the rehabilitation and preservation of historic structures and neighborhoods is an important national goal. Congress believes that the achievement of this goal is largely dependent upon whether private funds can be enlisted in the preservation movement.
- Tax Reform Act of 1976

A new president. An energized Congress. An aggressive approach to legislative reform. We have seen these themes dominate newspapers for the past month. In addition to the new administration, much has been made about legacies – that of the outgoing president and those of presidents past that are invoked for comparison’s sake.

President Trump and the 115th United States Congress have vowed to make tax reform a priority in 2017, and those paying attention will most assuredly draw comparisons between these efforts like the Tax Reform Act of 1986 that were overseen by the Reagan administration, a popular administration by which most Republican bodies benchmark policies and platforms.

For supporters of historic tax credits, these tax reforms were the birthplace of the current federal programs. Having originally been part of the Ford administration’s Tax Reform Act of 1976, early Reagan reform included the Historic Rehabilitation Tax Credit as part of the Economic Recovery Act of 1981.

Our historic tax credits have made the preservation of our older buildings not only a matter of respect for beauty and history, but of course for economic good sense.
- President Ronald Reagan, 1984 

Permanent changes were made to the federal Historic Rehabilitation Tax Credit in the Tax Reform Act of 1986 (the most extensive overhaul of the federal tax system since 1913) that reduced the income-producing credit from 25 percent to 20 percent while other real estate tax benefits were cut – a testament to the program’s value that was apparent to lawmakers. Those changes remain, 31 years later, as the basis for the program in its current form. 

Supporters of the federal historic tax credit are not just preservationists but also developers, investors, architects, local business owners, private citizens, government regulators, and elected officials – both Republican and Democrats. Architecture Magazine has called it a “model of governmental initiative” and the Internal Revenue Service in 2002 stated that the Historic Preservation Tax Incentives program “is the nation’s most effective Federal program to promote urban and rural revitalization and to encourage private investment in rehabilitating historic buildings.”


The Federal Historic Rehabilitation Tax Credit | By the Numbers

  • Over 42,000 historic buildings have been rehabilitated
  • Over 2.3 million jobs have been created
  • Over $117 billion in private investment has stimulated local economies
  • On average, every $1 in federal credit yields $4 of private investment
  • For $23.1 billion in costs, the program has generated $28.1 billion in federal tax receipts.


In short, the legacy and success of the Historic Rehabilitation Tax Credit is one that should be honored in upcoming tax reform. Sweeping change proposed by Speaker of the House Paul Ryan (R-WI) currently appears to eliminate altogether incentive programs like the historic tax credit. In addition, a reduction in the corporate tax rate could de-incentivize the program even if the program remained intact. While the primary goal of historic tax credits is to serve as an economic development tool, it is also as Reagan noted a matter of respect for beauty and history that is protected by an incentive that rewards good preservation.

(An argument can be made that is also a matter of sustainability. But a topic for another day.)

Topics: policy, federal HTC, tax reform