The program offers 25 percent of the total qualified rehabilitation expenditures (QREs) in the form of a dollar-for-dollar credit on Texas franchise tax or insurance premium tax. There is no required basis test, no recapture, and only a minimum expenditure of $5,000 to participate. In addition, non-profits may make use of the program unlike the federal credit. The credit mirrors the federal historic tax credit program, with a three-part application filed and approved by the SHPO: Part A certifies the building’s ability to be listed in the National or State Register of Historic Places, Part B details how the planned work meets the Secretary of the Interior’s Standards for Rehabilitation, and the Part C is the final certification after construction completion.
The program can be combined with the federal credit or undertaken as a state only application. State-only applicants can more readily phase projects to monetize a longer-term rehabilitation sooner, although there are review fees at Parts B and C for each phase. A combined federal and state application requires NPS approval for each phase in the form of a "phased advisory letter." The credits are transferable and have a five-year carry forward.
TAX CREDITS FOR STATE INSTITUTIONS OF HIGHER EDUCATION
A 2017 addition to the program allows for state institutions of higher learning to participate. Like non-profits, these entities can sell earned credits to private companies that can use them against their state franchise or insurance premium tax.
Who can use the credit?
The credit is freely transferable to any entity that pays Texas franchise tax or insurance premium tax.
Office & Retail
Developer: Alterra International
Total Project Costs: $13.5 million
HTCs Generated: Over $5 million
Completion Year: 2016
Hotel & Hospitality
Developer: Rockbridge Capital
Total Project Costs: Over $55 million
HTCs Generated: Over $13 million
Completion Year: 2018