State Historic Rehabilitation Tax Credits – FAQs

1. Are state credits structured in the same manner as federal credits?

In some cases yes, and in other cases, no. Some states mirror the federal program. Other states award credits via an application process. Furthermore, some states provide for the credits to be “certificated” and freely transferred between sellers and buyers.

2. Can the credit by sold?

Yes, in some states. However, it varies by state so it is important to check the particular state’s statute. Monarch Private Capital has the expertise necessary to assist you in this regard as well as other pertinent provisions in which you need to be aware.

3. Is the credit subject to recapture?

It varies by state with some states not having a right of recapture. US Trust for Historic Preservation’s latest “Survey on Historic Credit Recapture; 2002-2012” quantified credit recapture risk at 0.73% of tax credits claimed.

4. Is there any risk associated with this credit?

Yes, there can be some risk which typically falls into two areas – real estate and tax compliance. Rutgers University studies show that a properly-structured transaction between competent parties carries extremely low risk to an investor.

5. Is there a standard pricing scheme for the state credits?

No. A number of factors and variables enter into the cost or pricing of each credit that only competent professionals can address.

6. I’ve not heard of this tax credit. Has it been around long?

The federal program dates back to the 1970’s in its earliest form and 1986 in its current form. The state programs vary in terms of legislative history.

7. How long has MPC been selling these credits?

Principals of MPC have been involved in historic rehabilitation projects dating back to the early 1980’s.

8. Where can I learn more?

For more information, contact Peter Rourk.

STATE FILM / ENTERTAINMENT

Many states offer film & entertainment tax credits to encourage production, expenditure and job-creation within their states.  See which states offer these tax benefits.

STATE HISTORIC REHABILITATION

These credits offer the possibility to offset up to 100% of your tax liability.  Also, some states offer abandoned mill tax credits which are similar in nature to historic tax credits.

STATE RENEWABLE ENERGY

Utilizing renewable energy tax credits can improve the environment and your tax liability. Learn more about these types of projects.

STATE AFFORDABLE HOUSING

These credits are awarded to developers of affordable housing projects.  Affordable housing tax credits are dollar–for–dollar credits which act against the individual trust and corporate income tax and, in some states, insurance premium taxes and bank taxes.

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