At the General Assembly, the Conference Committee released their report late Thursday afternoon. A two-year sunset was added to HB 2460
and SB 1034
. You will recall that these bills would, for taxable years beginning on and after January 1, 2017, limit the amount of the Historic Rehabilitation Tax Credit that may be claimed by each taxpayer to $5 million a year. While we had advocated for a one-year sunset, a two-year sunset is preferable to a permanent cap.
In Washington, there is some good news from our friends at the National Trust.
Historic Tax Credit Improvement Act (HTCIA) introduced
Good news! On Thursday, February 16th
, legislation was introduced in Congress that would make important changes to the historic tax credit. The bipartisan Historic Tax Credit Improvement Act (HTCIA)(H.R. 1158 / S.425) closely resembles legislation introduced in the last Congress that would improve access to the credit for smaller rehabilitation projects that will help revitalize our small towns and our inner cities.
The legislation was introduced in the House of Representatives by Congressmen Mike Kelly (R-PA) and Earl Blumenauer (D-OR) and is supported by 18 cosponsors, including nine Republicans and nine Democrats and eight members of the Ways and Means Committee. Senators Susan Collins (R-ME) and Ben Cardin (D-MD) introduced companion legislation in the Senate and were joined by Senators Cochran (R-MS), Gillibrand (D-NY), Leahy (D-VT), and Wicker (R-MS).
The Historic Tax Credit Improvement Act encourages redevelopment of smaller, income-producing properties by:
- Increasing the credit from 20 to 30 percent for projects with rehabilitation expenses of less than $2.5 million;
- Simplifying the application process for small developers by allowing a one-time transfer of the credits as a tax certificate;
- Making it easier to meet the substantial rehabilitation test; and
- Creating greater flexibility for nonprofit organizations to partner with developers in redevelopment projects.
Please contact your members of Congress and urge them to support the Historic Tax Credit Improvement Act, H.R. 1158 / S.425.
Tax Reform Update
As the Trump Administration works to implement its policy agenda, tax reform remains a leading priority. The President is expected to release an outline for tax reform in the near future, and many in Washington are closely watching to see if the Administration and Congress will reach consensus on the broad contours of a tax reform plan. A fundamental challenge to emerge in recent weeks is that a key funding mechanism in the House tax reform blueprint that would tax imports and exempt exports from taxation, referred to as a border adjustment tax, was met with resistance in the Senate and apparent skepticism by the President. This obstacle has sent House tax writers back to the drafting table to identify new ways to fill the $1 trillion shortfall without increasing the national debt.
As a result, the legislative process to develop tax reform legislation has slowed considerably from the Administration’s ambitious 100-day agenda. Despite this setback, the House Ways and Means Committee is working to release a tax reform bill after the April budget process with a possible markup occurring as soon as May or June. House leadership and Chairman Brady are still aiming to pass the chamber’s tax reform bill before the August recess. If legislative solutions do not manifest soon, however, this time frame could slip into the fall.
The Senate Finance Committee has not spent significant time developing its own tax reform bill as a result of its role confirming Cabinet nominees, advancing the Supreme Court nominee, and detangling the tax consequences of repealing the Affordable Care Act. Nonetheless, in early February, Chairman Orrin Hatch (R-UT) made it known he intends to develop his own tax reform bill instead of reacting to or amending a House bill. Senate Republican Leadership, however, appears to have adopted a wait and see attitude about whether to develop a Senate tax reform bill or take up a House version of the bill. For these reasons, it is anticipated the Senate will follow the House in developing its approach to tax reform with legislative action not likely to occur until after the August recess.
The HTCIA provides Members of Congress with a way to indicate their support for the credit and offers several reform ideas that could be incorporated into a larger tax reform bill. Adding cosponsors to the legislation is a critical step to protecting the historic tax credit during the tax reform process.
1. Urge Members of Congress to co-sponsor the Historic Tax Credit Improvement Act H.R. 1158 / S.425:
- Send your delegation an email encouraging cosponsorship of the HTCIA;
- If you are an organization, request that your members reach out to your state’s Congressional delegation to urge cosponsorship.
2. Ask Senate and House Members to Meet “In-district” During the Congressional Recess April 10th-21st
a. Contact district offices of both House and Senate Members and ask to schedule a meeting:
i. To locate the name and phone number of your House Representative go to: http://www.house.gov/representatives/find/
ii. To locate the names and phone number of your Senators go to: http://www.senate.gov/general/contact_information/senators_cfm.cfm?OrderBy=state&Sort=ASC
b. Helpful Tips:
- Combine your meeting with a tour of a completed or potential HTC project;
- If a meeting with the Member is not possible, request a meeting with staff;
- Coordinate meetings with local preservationists, developers, architects, mayors, Main Street organizations and others in order to convey the broad impact of the Historic Tax Credit program.
- Please share the outcomes of your advocacy with HTC Campaign Staff Members (see below).
Policy Webinar: Bills Introduced & Getting Media for Historic Tax Credits
- Join the Federal Policy Webinar on March 9 at 2:00 p.m. ET
Learn which Members of Congress have already co-sponsored the Historic Tax Credit Improvement Act and hear what you can do to get more sponsors.
Outreach via traditional and social media is an excellent way to urge Members to support the Historic Tax Credit. Learn tactics for extending the reach of your organization from Andy Grabel, Associate Director of Public Affairs, and Sarah Heffern, Director of Social Media, at the National Trust for Historic Preservation.
Also, learn from your peers about the amazing advocacy work they are undertaking to get Members to support the Historic Tax Credit.
To register, visit: https://attendee.gotowebinar.com/register/7377919116320287489
4. Join Advocates in Washington, DC for Preservation Advocacy Week
a. Visit Washington, DC and advocate in support of the HTC during Preservation Advocacy Week,
b. If you plan to visit Washington at some other time, e-mail Mike Phillips (firstname.lastname@example.org
) or Shaw Sprague (email@example.com
) for help scheduling Congressional visits.
Thank you for speaking up in support of the federal historic tax credit! With your ongoing engagement, the historic tax credit will continue to revitalize our communities, stimulate the economy, and preserve our irreplaceable historic buildings.