Collins, Cardin, Cassidy, and Cantwell Introduce Bill to Expand Access to Historic Tax Credit
Washington, D.C. – U.S. Senators Susan Collins (R-ME), Ben Cardin (D-MD), Bill Cassidy, M.D. (R-LA), and Maria Cantwell (D-WA) introduced legislation that would expand the Historic Tax Credit to foster economic growth and urban renewal.
“I have long supported the Historic Tax Credit, a proven tool for revitalizing communities and catalyzing economic development in Maine and across the nation,” said Senator Collins. “This bipartisan legislation will make the historic tax credit even easier to use, leveraging greater investments in restoration projects and creating good-paying jobs for hardworking Americans.”
“The Historic Tax Credit is a vital economic and preservation tool, creating jobs and saving history in small and rural Maryland communities, and across America,” said Senator Cardin. “Maryland is home to hundreds of projects supported by this incentive, directly driving growth and revitalizing neighborhoods.”
"From Biddeford to Bangor, communities across Maine have benefited from the historic rehabilitation tax credit, whether through housing and job creation, cultural and economic revitalization, or all of the above," said Tara Kelly, Executive Director of Maine Preservation. "Our 2020 economic impact report found that in the prior ten-year period alone, these projects generated $525 million of construction investment; rehabilitated 3.6 million square feet of commercial and residential space; created or preserved 1,911 housing units, of which nearly 1,300 were affordable; and generated between 200-700 full-time-equivalent jobs annually. Moreover, nearly 700 new full-time, year-round jobs were created through building maintenance and occupancy, resulting in $13 million of income per year for families living in these communities."
The Historic Tax Credit Growth & Opportunity (HTC-GO) Act would create a new 30 percent credit for projects that cost less than $3.75 million while maintaining the existing 20 percent credit. Credits are capped at $750,000. The bill lowers the threshold the cost of a project must meet to be eligible by eliminating the basis-adjustment requirement, which will bring the HTC in line with other credits such as the Low-Income Housing Tax Credit.
It further expands eligible renovation projects by decreasing the rehabilitation investment threshold from 100 percent to 50 percent of the project’s expenses. Project expenses would only have to exceed half of the project’s cost to qualify for the credit. It also amends rules for tax-exempt entities – such as health care centers, arts organizations, community services, and workforce training providers – to allow better access to the credit.
Elimination of the basis adjustment will increase the value of the credit and simplify transaction structures. Under current tax law, a building owner must subtract the amount of credits received from a building’s basis (the amount a property is worth for tax purposes). Eliminating this requirement will bring more value to all HTC projects by increasing the basis of rehabilitated historic buildings for building owners, providing additional depreciation and other tax benefits, and attracting more capital from tax credit investors.
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