This bill creates a credit against state tax liability for a person who incurs expenses for the rehabilitation of a certified historic structure after July 1, 2020. The credit will be an amount equal to the applicable percentage of the qualified rehabilitation expenditures incurred by such person, not to exceed $500,000 per annual allocation, if:
(1) The rehabilitation meets the standards of the United States secretary of the interior;
(2) The project commenced construction no earlier than January 1, 2020, or begins within 18 months of application approval, and is completed within 36 months of application approval; and
(3) The total amount of qualified rehabilitation expenditures is equal to or greater than $5,000.
For purposes of this bill, state tax liability means liability for insurance premium taxes and franchise and excise taxes.
The historical commission will not approve applications for tax credits in the aggregate to exceed $5 million per fiscal year, and 65 percent of that amount must be reserved for projects that take place in specially designated areas.
Under this bill, the entire tax credit must be earned in the year in which the certified historic structure is placed in service. If the amount of such credit exceeds the total tax liability for the year in which the rehabilitated property is placed in service, the excess amount may be carried forward for the succeeding seven years, or until the full credit is used, whichever occurs first.
This bill sets out in detail the requirements and procedures for receiving the credits. Applications will be submitted to the Tennessee historical commission. To claim the credit, the owner must notify the commission that the certified historic structure has been placed in service and certify the qualified rehabilitation expenditures incurred with respect to the rehabilitation plan. In addition, a person must also provide to the commission any employment related data as deemed necessary by the commission, including, but not limited to, the number of temporary construction jobs, the number of anticipated jobs to be created on site, anticipated use of the completed building, and pre- and post-assessed property valuation.
This bill requires the commission to promulgate rules to implement this bill within 180 days of this bill's effective date.
Beginning February 1, 2025, the commission must submit a report to the governor, the speaker of the senate, the speaker of the house, the fiscal review committee, and the finance, ways and means committees of the senate and the house that details the commission's activities for the prior fiscal year. The report must also include, but not be limited to, all projects begun or completed, in addition to an accounting of revenues by source, expenditures, and project, and any recommendations for further legislative action.
This bill will be repealed on December 31, 2025, unless it is reenacted or extended by the general assembly prior to such date. Any person who has had an application approved under this bill prior to December 31, 2025, will be entitled to the full benefits of any tax credits received pursuant to this bill, including, without limitation, any carryforward.