News Historic Tax Credit

2019 Year-End Budget and “Skinny” Tax Deal Prompts More HTC Advocacy in 2020

Written By: NTCIC

After a roller-coaster ride of negotiations, Congress passed a $1.4 trillion year-end budget bill, which the President signed into law in December 2019. The bill included several tax provisions in addition to appropriations. While HTC advocates were hopeful there would be a grand deal on tax issues, negotiations among Congressional leaders and the White House broke down in mid-December, forcing the parties to settle for a smaller “skinny tax” agreement.

Had a “fatter” agreement been a possibility, many community development advocates would have desired the inclusion of “technical corrections” for the Tax Cuts and Jobs Act of 2017. HTC advocates were poised to push forward provisions of the Historic Tax Credit Growth and Opportunity Act (HTC-GO) to be included in a larger negotiated package. In the end, no grand deal was struck. The agreement repealed 3 Affordable Care Act tax provisions (Cadillac tax, the health insurance tax, and medical device tax), extended the Bio-Diesel and Short-line Railroad credits through 2022, and funded dozens of expired tax extenders provisions through 2020, including many tax extenders that were set to expire in 2019, such as the New Markets Tax Credit (one-year, $5 billion in allocation authority).  The final bill also included a California wildfire disaster allocation for Low-Income Housing Tax Credits.

This smaller tax deal will temporarily relieve some of the pressure on Congress to address the most pressing tax issues, but with growing frustration on technical corrections and the 1-year tax extenders expiring again in 11 months, the stage is set for another year-end tax bill, likely after the elections.

In 2020, HTC advocates will have the opportunity to gain co-sponsorship and strengthen support for HTC-GO to positively position the bill for a year-end tax bill.

Senator Cassidy (R-LA), Senator Cardin (D-MD), Senator Collins (R-ME) and Senator Cantwell (D-WA) introduced the Senate version of the HTC-GO (S. 2615) last October and the legislation presently has 9 Senators signed on as cosponsors. The similar House version of HTC-GO (H.R. 2825), introduced last May by Rep. Blumenauer (D-OR) Rep. LaHood (R-IL), Rep. Sewell, (D-AL), and Rep. Kelly (R-PA), presently has 63 cosponsors.

Key provisions of the bill: 

  • Increasing the credit from 20 to 30 percent for projects with rehabilitation expenses of less than $2.5 million;
  • Making it easier to meet the substantial rehabilitation test;
  • Creating greater flexibility for nonprofit organizations to access HTC benefits; and
  • Eliminating the HTC basis adjustment requirement which will bring more value to all HTC projects by increasing the basis of rehabilitated historic buildings for building owners and eliminating the so-called 50(d) rules.
  • The House bill has an additional provision that would allow for HTCs to be transferred through a certificate for small transactions less than $2.5 million.

Please ask your Senators and House Representative to Co-sponsor the Historic Tax Credit Growth and Opportunity Act (H.R. 2825/S. 2615).

  • Call the Capitol Switchboard at 202-225-3121 and ask to be connected to offices to DC Congressional offices.
    • To locate the names and phone numbers of your Senators, click HERE 
    • To locate the names and phone number of your House Representative, click HERE 
  • Call (during office hours) House and Senate offices, identify yourself as a constituent and ask to speak with tax staff or ask for the email address of tax staff.

Resources

HTC Project Maps, Fact Sheets and Summaries

NPS Economic Impact of the Federal Historic Tax Credit for FY 2018

For questions or assistance related to HTC advocacy please contact:

Michael Phillips mphillips@ntcic.com

Shaw Sprague ssprague@savingplaces.org

Renee Kuhlman rkuhlman@savingplaces.org