Tax reform aimed at growing the economy should enhance, not diminish the historic tax credit.
For more than three decades, the federal Historic Tax Credit (HTC) has successfully implemented a national policy of preserving our historic resources. It is the most significant investment the federal government makes toward the preservation of our historic buildings.
Despite a proven track record of stimulating economic growth and preserving our architectural heritage, however, the historic tax credit faces an uncertain future. As pressure builds to reform the nation’s tax code, several influential tax reform proposals recommend a repeal of this essential credit.
In addition to revitalizing communities and spurring economic growth, the HTC returns more to the Treasury than it costs—$1.20-1.25 in tax revenue for every dollar invested. Yet because historic rehabilitation projects frequently have higher costs, greater design challenges, and weaker market locations, they face lender and investor bias against investments.
These resources demonstrate how the federal Historic Tax Credit is a proven job-creating, community-revitalizing investment throughout the nation. Use them to help educate your elected officials at home and in Washington. Learn more at Preservation Leadership Forum.
Fast Facts about the Historic Tax Credit
Over the life of the program, the historic rehabilitation tax credit (HTC) has:
- created more than 2.3 million good paying, local jobs;
- leveraged $120.8 billion in private investment in our communities;
- used $23.1 billion in tax credits to generate more than $28.1 billion in federal tax revenue;
- and preserved more than 41,270 buildings that form the historic fabric of our nation.
The Historic Tax Credit Improvement Act enjoys solid bipartisan support and would enhance the HTC by directing more investment to small business transactions along older Main Street corridors. Specifically, the bill creates a 30% credit for small deals to make these transactions more attractive to outside investors who tend to favor much larger investment opportunities.
In addition, the bill allows the historic tax credits in these small transactions to be transferred with lower transaction costs, as a tax certificate, making it easier for small business owners to bring outside investment into smaller transactions.
The economic benefits of historic rehabilitation go far beyond one building.
In 2012, the National Trust, in collaboration with the National Trust Community Investment Corporation, and the Historic Tax Credit Coalition, recognized a fundamental need to develop a nation-wide effort to raise awareness and build support for the historic tax credit. This multi-year initiative to preserve and enhance the federal historic tax credit presumes that Congressional tax writers will approach reforming the tax code as if it were a blank slate and that programs, like the historic tax credit, will need to demonstrate their value.
Demonstrating the value of the federal HTC program is not difficult to do. It has been used to attract new private capital to the historic cores of cities and Main Streets across the nation. This investment has, in turn, enhanced property values, created jobs, generated local, state and federal tax revenues, and revitalized communities. Your voice is needed, however, to make sure the historic tax credit story is told and retold to decision makers in Washington if we are to ensure historic tax credit is enhanced in tax reform and not weakened or eliminated.
Research commissioned by the National Trust proves for the first time that the economic benefits of historic rehab go far beyond one building. Historic tax credit projects spur an increase in property values, draw new businesses, attract new residents and enlarge the tax base. Projects in Maryland, Georgia and Utah are profiled. Download The Federal Historic Tax Credit: Transforming Communities report.
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Historic Tax Credit Stories
While we respect the need for tax reform, it must not come at the expense of a proven program that generates more money for the Treasury than it costs, while also creating local jobs and promoting strong communities. Don't let tax reform efforts threaten the federal Historic Tax Credit—ask your members of Congress to take a stand for preservation!
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