We did not expect this, but are regrouping and rolling up our sleeves.
With recent federal tax changes, New York State is facing a deficit of $4.4 billion this year, and we have amended our priorities with that in mind. Our top two goals for 2018 are now:
- Extension - through December 31, 2024 - of the NYS Historic Commercial Properties Tax Credit and NYS Historic Homeownership Rehabilitation Tax Credit.
- Extension in the 2018 budget will ensure that projects currently in the pipeline for investment and rehabilitation continue to move forward, with investor and developer confidence that the program will remain in place.
- Decoupling the NYS Historic Tax Credit from the Federal Historic Tax Credit to ensure that the NYS credits may be taken all at once rather than over 5 years.
- The Federal Tax Cuts and Jobs Act of 2017 requires that the Federal Historic Tax Credit be taken over five years. Current estimates place the impact of this change at a 15% credit value reduction. As the law is currently written, the NYS Historic Tax Credit would likely see a similar reduction in value.
New York State’s Division of Tax and Finance released a preliminary report on possible responses to the federal tax changes. On page 28 of that report they offer the possibility of separating the NYS Historic Tax Credit from the Federal, along with noting the consideration of a NYS Historic Tax Credit program extension. This is just one option, but a positive sign.
NYS Tax and Finance is seeking feedback on this report and has provided an email address for comments. We recommend taking advantage of this opportunity to comment by supporting the suggestion to decouple the NYS Historic Tax Credit from the Federal Historic Tax Credit, and to recommend extension through 12/31/24.
In the meantime, we'll be focusing on advocacy with members of the legislature. Our goal is to get extension and decoupling of the NYS Historic Tax Credit in the NYS Senate and NYS Assembly one-house budget bills, as a proposal the Governor will accept. For more information on our recommendations, see this PDF.