We Must Protect Historic Tax Credits
The 115th Congress convened on January 3 and those of us concerned about the future of historic rehabilitation tax credits are watching the discussion of tax reform very closely.
The Republicans in Congress have made it clear that one of their priorities is reform of the federal tax code – and the message has been echoed by the incoming Trump administration. In fact, following the election, the Chairman of the House Ways and Means Committee, Congressman Kevin Brady (R-Texas), said his committee would be focused on building tax reform legislation based on House Speaker Paul Ryan’s A Better Way Forward on Tax Reform blueprint released last year. This document proposes to streamline the federal tax code by eliminating most tax credits and deductions, including the federal Historic Rehabilitation Tax Credit program.
A recent editorial in the Buffalo News illustrates that here in New York, historic rehabilitation tax credits have been instrumental in attracting investment to our hard-to-develop urban centers. Projects in our state are able to access not only federal but also New York State rehabilitation tax credits – for up to 40% of their qualified rehabilitation expenses. This helps developers balance risk and reward when taking on challenging renovation projects, and ultimately benefits all New Yorkers.
Data from the National Park Service show that between 2002 and 2015, $3.8 billion of rehabilitation costs were incentivized by the tax credit in New York State, generating over 49,000 jobs and nearly $990 million in federal, state and local taxes. Preliminary reports for the most recently completed fiscal year rank New York State first in the country in the total value of rehabilitation expenses utilizing the tax credit, surpassing the next closest state by $160 million.
With the new Congress in place and tax reform likely in the very near future, editorial boards throughout the state are taking notice. In addition to the Buffalo News, the Albany Times Union called on Congress to protect the federal historic tax credit in Washington at a time when uncertainty surrounding tax reform is stalling potentially transformational projects.
The League has long been, and will continue to be, a vigorous supporter of this vital tool for economic revitalization. We’ll be taking this message to Washington, D.C. later this year.