The House and Senate tax bill Conference Committee has reconciled differences between the two versions of the legislation and final votes are expected this week. President Trump is expected to sign the bill before the end of the year.
The agreement eliminates the pre-1936 older building tax credit but includes the 20 percent historic tax credit (HTC) with provisions that require the credit be claimed over five years. While these changes diminish incentives to rehabilitate older and historic buildings, survival of the 20 percent credit in the most significant rewrite of the tax code in 30 years confirms that incentivizing investment in our historic properties remains a widely accepted and supported federal policy.
Retention of the 20 percent historic tax credit comes after the credit was repeatedly targeted for elimination. The House passed H.R. 1, The Tax Cuts and Jobs Act, on November 16, 2017, which eliminated both the 10 percent pre-1936 non-historic “old building” credit and the 20 percent historic tax credit. The Senate Finance Committee released its tax reform bill in mid-November, which eliminated the “old-building” credit and retained the HTC at a reduced level of 10 percent.
HTC advocates worked successfully with Senator Cassidy (R-LA) and other Finance Committee members in support of an amendment to restore the HTC to 20 percent. As a cost-saving measure, the “Cassidy Amendment” stipulated that the 20 percent credit would be earned over five years (or four percent per year). The Finance Committee approved the provision. The full Senate approved the tax bill, including the 20 percent HTC provision, by a 51-49 vote on November 25, 2017.
As the House and Senate tax bills were considered by the conference committee to work out differences, advocates continued their outreach to conferees in support of fully restored rehabilitation tax incentives. On Friday, December 15, the conference committee completed its work on a final bill, which included the Senate-passed HTC provisions and a final vote in by the House and Senate is expected this week.
At some point in the New Year, it is widely anticipated Congress will need to pass a “technical corrections” bill to amend certain aspects of the tax legislation. This may present an opportunity to encourage favorable changes to the HTC provisions that the National Trust, along with our partners at National Trust Community Investment Corporation and the Historic Tax Credit Coalition, will be working toward.
This impressive achievement for preservation would not have happened without the strong leadership by many members of Congress who heard from constituents about the importance of the HTC and its role in revitalizing our communities. Thank you to everyone who took time to reach out to members of your Congressional delegation—it made a difference!