AB 147

Under current law, a person may claim an income and franchise tax credit for

5 percent of the qualified rehabilitation expenditures, as defined under the federal

Internal Revenue Code, for certified historic structures on property located in this

state, if construction begins after December 31, 1988, and the rehabilitated property

is placed in service after June 30, 1989. The credit is a supplement to the federal tax

credit for 20 percent of the qualified rehabilitation expenditures for certified historic

structures. The federal credit, and the supplemental state credit, apply to

nonresidential real property and residential rental property.

Under this bill, a person may claim an income and franchise tax credit for 20

percent of the qualified rehabilitation expenses, as defined under the federal

Internal Revenue Code, for certified historic structures on property located in this

state, if the cost of the person's qualified rehabilitation expenditures is at least

$50,000 and the rehabilitated property is placed in service after December 31, 2012,

and before January 1, 2023.

The bill also allows a person to claim a credit equal to 5 percent of the qualified

rehabilitation expenses for qualified rehabilitated buildings, as defined under the

federal Internal Revenue Code, located in this state. The credit is similar to the

federal credit for rehabilitating a building that was first placed in service before

1936, except that the federal credit is 10 percent of the qualified rehabilitation

expenses.

Under the bill, the Department of Revenue, in conjunction with the State

Historical Society, must submit a report to the Joint Committee on Finance (JCF),

no later than June 30, 2018, describing the economic impact of the tax credits and

making a recommendation as to whether the tax credits should continue. The

recommendation, however, may be implemented only upon approval of JCF.