Historic rehabilitation tax credits survived in the new Tax Cut and Jobs Act, the first major tax reform at the federal level in three decades.
The question now is will the credits also survive potential state tax reform efforts.
The Special Tax Exemption Senate Study committee, which includes State Sen. Chuck Hufstetler, R-Rome, has been looking at the issue. Among a series of policy recommendations, there has been a suggestion the subsidy be eliminated for non-income producing properties such as private residences.
The committee is hoping to develop a process to better review applications for the tax credits before they’re approved as well as a review after they’re approved to see if they were beneficial in generating additional economic activity.
“We’re not doing anything immediately,” Hufstetler said.
The study committee reports that over the last decade, five projects in Rome have received historic rehabilitation tax credits for work that cost more than $16.4 million.
Four were income producing projects while one was deemed a personal residence.
The maximum credit in Georgia for any certified structure other than a personal home is $5 million for any taxable year until December 31, 2021. After that date the maximum becomes $300,000 in any 120-month period.
Greg Sumner, a Rome businessman has been approved for both state and federal tax credits for his rehabilitation of two buildings in the 200 block of Broad Street. Those tax credits made his projects work, Sumner said.
“When you’re restoring historic buildings they get pretty expensive, especially to bring them back to authenticity the way both the state and federal government require you to do so,” Sumner said.
An amendment to the federal tax bill that saved the historic rehab credits requires that they be utilized over a five-year period of time rather than all in one year.
The amendment wouldn’t be a deal breaker for an otherwise win-win situation, Sumner said.
“It’s good for the community because it’s bringing revitalization back to the historic area and then for the investor they’re getting the tax credit piece so it all works out,” Sumner said.
Historic tax credits also played a key role in the financial package for the renovation of the Greystone Apartments on Second Avenue, the renovation of the Curry-West buildings at Broad Street and Second Avenue and Dr. Miniyar’s International Food Court building at 114 Broad Street in recent years.
“We had to do historic tax credits on a lot of them to make a lot them work,” said retired Rome Downtown Development Director Ann Arnold.