March 2, 2023: Today, Senators Cardin (D-MD), Cassidy (R-LA), Cantwell (D-WA), and Collins (R-ME) reintroduced the Historic Tax Credit Growth and Opportunity Act (HTC-GO/ S. 639), in the Senate. The bill includes four permanent provisions that will add value to the Historic Tax Credit (HTC), improve access to the credit, make more projects eligible to use the credit, and increase investment in smaller rehabilitation projects.
Representatives Darin LaHood (R-IL) and Earl Blumenauer (D-OR) are expected to reintroduce a House companion HTC-GO bill next week. The bill will include similar permanent provisions and an additional temporary provision to address recent challenges facing historic rehabilitation projects.
How You Can Help Advocate for the HTC-GO
- Contact your Senators:
- Visit the senate.gov contact list to locate your Senators
- Send a message through their website and select “tax” or “taxation” as the issue area, OR
- Call (during office hours) the office, introduce yourself as a constituent, and ask for the email address of tax staff members.
- Talking Points to Encourage Your Senators to Cosponsor the HTC-GO:
- The Historic Tax Credit Growth and Opportunity Act (HTC-GO/ S. 639) is needed now more than ever.
- The Historic Tax Credit is a vital community revitalization tool in small towns and large urban areas but has lost value due to federal policies over the last ten years.
- The HTC has not been positively modernized since 1986. HTC-GO provisions would bring more value to the credit, make more buildings eligible to use the credit, and make the HTC easier to use.
- Would the Senator please cosponsor the Historic Tax Credit Growth and Opportunity Act (S. 639)?
- Please look for opportunities to include these provisions in future tax legislation.
About the Provisions of the HTC-GO Legislation
The federal HTC is the largest federal investment in historic preservation and a critical economic development tool used to revitalize our communities. Unfortunately, the value of the HTC incentive has diminished over the past decade because of IRS rulings, administrative burdens, changes in the credit structure, as well as spreading the distribution of the credit over five years as modified by the Tax Cuts and Jobs Act of 2017. As a result, the HTC has lost 20 – 25% of its investment value as interest rates continue to climb and materials and labor costs soar.
National Park Service statistics indicate that HTC applications are down 20% compared to pre-pandemic levels (2019), and the number of projects continues to decline even as the economy is rebounding.
Historic buildings have simply become more difficult to rehabilitate.
HTC-GO Permanent Provisions
The permanent provisions will make important changes to the HTC to encourage more building reuse and redevelopment nationwide and would be particularly impactful for small, midsize, and rural communities.
These provisions would:
- Make the credit easier to use by increasing the credit from 20% to 30% for projects with less than $2.5 million in qualified rehabilitation expenses.
- Make more projects eligible to use the HTC by lowering the substantial rehabilitation threshold.
- Increase the HTC’s value and promote affordable housing development by eliminating the requirement that the value of the HTC must be deducted from a building’s basis (property’s value for tax purposes), making it easier to pair with the federal Low-Income Housing Tax Credit.
- Enable further nonprofit use of the HTC by eliminating IRS restrictions that make it challenging for nonprofits to partner with developers. This change will create more opportunities for workforce development facilities, job/small business incubators, community health centers, local arts centers, affordable housing, and homeless services to be supported by the HTC.
Resources
For further assistance with your advocacy, please contact Mike Phillips, Shaw Sprague, and Patrick Robertson