We're pleased to share that the 20 percent federal historic tax credit (HTC) was retained in the final tax reform bill. Keeping the federal historic tax credit as a permanent part of the tax code is a significant victory for the historic preservation community—especially considering that the first House version eliminated the credit.
We owe this success to the thousands of advocates who rose to the occasion and made your voices heard, as well as to the leadership of key members of Congress. We are particularly grateful to Representatives David McKinley (R-WV) for exhibiting strong leadership during this process.
On Friday, December 15, House and Senate conference committee members reached agreement on the details of major tax legislation that will now proceed to a final vote in both chambers this week. The agreed-upon version keeps the historic tax credit at 20 percent but requires that the credit be taken over five years instead of all at once. The legislation repeals the 10 percent rehabilitation tax credit for non-historic buildings, but it does retain the New Markets Tax Credit.
Inclusion of the historic tax credit in the most significant tax legislation to move through Congress in more than three decades is an exceptional reaffirmation that rehabilitation of historic buildings is sound federal policy and good for the nation. While several steps remain before the Tax Cuts and Jobs Act (H.R. 1) becomes law, please take a moment to reflect on what a significant accomplishment retention of the historic tax credit is for the preservation movement and for the betterment of our communities. With the recent increase in the state historic tax credit to 25%, West Virginians will have access to 45% in combined state and federal tax credits when undertaking construction on a historic income-producing property. The 25% increase takes effect on January 1, 2018.
Thank you to the many preservationists, practitioners, and stakeholders who worked countless hours to ensure this critical preservation tool remains a pillar of federal historic preservation policy. Thank you to Congressmen McKinley and Jenkins for standing up to retain the historic tax credit and signing a Tax Credit letter focused on the Historic Tax Credit and New Markets Tax Credit.
You can thank Congressman McKinley through his website at https://mckinley.house.gov/email-me/. He has been instrumental in leading the effort to save the historic tax credit.
You can thank Congressman Jenkins through his website at evanjenkins.house.gov/contact/email.
Senate Passes Tax Reform Bill with a 20% Historic Tax Credit, HTC Eliminated in House
Urgent Action Needed: Advocate for a 20% HTC in Final House/Senate Reconciled Bill
Early on Saturday morning, the United States Senate passed its tax reform bill on a vote of 51-49, moving the legislation to a House and Senate Conference Committee to reconcile the two versions of tax reform. The Senate bill restores the 20% Historic Tax Credit (HTC) with a provision that it will be claimed over five years.
Your immediate ACTION is needed!
All advocates should be fully activated across the country, connecting with both House and Senate offices.
Call-to-Action: Call (during office hours) the offices of your Members of Congress. Ask to speak to tax staff, your staff contacts in offices or ask for email addresses of tax staff. Scroll down for contact information and suggested messages:
1. Introduce Yourself as a Constituent
McKinley, David - (R - WV, 1)
Suggested thank you: "I would like to thank the Congressman for his leadership during the tax reform bill and for his efforts to preserve the 20% Federal historic tax credit. We hope the Congressman will continue to fight for this important financial development tool during House and Senate conference committees related to the tax reform bill."
Mooney, Alex - (R - WV, 2)
Jenkins, Evan - (R - WV, 3)
Suggested Message to Congressmen Mooney & Jenkins: I am calling to request your help to ensure the existing federal historic tax credit (HTC) is retained through the tax reform process. The House tax reform bill repeals the HTC, but the Senate Finance Committee is proposing to keep the historic tax credit in place with certain reductions to the incentive. We need the HTC retained at its current level of effectiveness so that this proven tool can continue to restore under-utilized buildings, create local jobs and revitalize older commercial districts.
2. Explain why you value Historic Tax Credits, and that the redevelopment of historic buildings will not get done without the HTC.
3. Let them know some previous and future HTC projects in your state/district
4. Touch on why these historic buildings are so challenging but important to our communities.
5. If your Member of Congress has agreed to help, please remember to thank them and tell others about their support!
Manchin, Joseph - (R - WV)
Capito, Shelley Moore - (R - WV)
Suggested thank you - “I would like to thank the Senator for supporting a tax reform bill that includes a 20% Historic Tax Credit in Senate tax reform bill. This is a significant improvement compared to the elimination in the House bill. Please communicate to Senate Republican Leaders and Chairman Hatch (R-UT) that they must not weaken important protections for the Historic Tax Credit when they reconcile the House and Senate bills.”
It is extremely important to keep all Capitol Hill communication constructive and respectful.
In November, Senate Finance Committee legislation eliminated the pre-1936 10% non-historic “old-building” credit and reduced the 20% HTC to 10%. HTC advocates were successful in working with Senator Cassidy (R-LA), and other Finance Committee Senators, to support a provision to restore the HTC to 20% for historic buildings. As a cost saving measure, the “Cassidy Amendment” provided that the 20% credit will be released over the 5-year compliance/recapture period (or 4% per year). The Finance Committee approved the provision, which was included in a Manager’s Amendment, on a party line vote.
The House passed a tax reform bill on November 16th. The House version of the bill eliminates both the 10% pre-1936 non-historic “old building” credit and the 20% HTC. With House Republicans highly motivated for a legislative win, few Republicans voted against the bill.
House members will still have an opportunity to voice their continuing support of the HTC when the House and Senate negotiate the final tax package. Many House members and supporters of the HTC have encouraged House Leadership to accept the improvements in the Senate bill and advocates are encouraged THIS WEEK to continue sending this message to their Members of Congress.
While advocates are disappointed they could not fully restore the 20% HTC to current law and prevent the elimination of the 10% pre-1936 rehabilitation credit, they are standing their ground, insisting on the Senate provision and that no further erosion takes place.
News and Notes
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