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Tax Credits & Loans: State Historic Tax Credits

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<Many of the commercial buildings along Westminster Street in Providence are listed on the National Register and are eligible for the Rhode Island Historic Preservation Tax Credit.

The Rhode Island Historic Preservation Tax Credit helps you restore your historic income-producing building by making preservation work more affordable. If your preservation project is approved, you will receive a credit on your state income tax return.

Download materials, and read the Q & A section to learn more about the RI Historic Preservation Tax Credit.

The following materials are for projects begun in 2013; for ongoing projects, please confer with RIHPHC architects Virginia Hesse or Roberta Randall.

DOWNLOADS and LINKS (.pdf unless otherwise noted)

>RI Taxation advisory
>RI Taxation application

>RIHPHC Application instructions
>RIHPHC Application part 1 (.doc)
>RIHPHC Application part 2 (.doc)
>RIHPHC Application part 3
>RIHPHC Application checklist

>Causes for denial
>Emergency regulation (2013)
>Legislation
>Photographic instructions
>Regulation (2008)
>Secretary's Standards for Rehab (link)

What are the latest changes to the State Historic Tax Credit? 
In June 2013, the General Assembly included $34.5 million in Historic Preservation Tax Credits in the State Budget. The new application process will be as similar as possible to the way it has worked in the past. However, RIGL 44-33.6 is a new state law, and new regulations will have to be promulgated in accordance with the Administrative Procedures Act.

A new Emergency Regulation is now available.

RIHPHC and Taxation will send out more information and updates on the program as we learn more details.

What is the fee for tax credit certification?
The fee is 3% of Qualified Rehabilitation Expenditures. Payment is made to the RI Division of Taxation at the time the Tax Credit Contract is signed.

What are the results of recent analyses of the tax credit?
The 2007 study prepared for Grow Smart RI found that the RI Historic Preservation Investment Tax Credit is stimulating economic development, creating jobs, rehabilitating housing, and helping to revitalize communities statewide.  In 2012, the RI Public Expenditure Council also studied the historic preservation tax credit and recommended renewal of the program.

How big is the credit?
The credit equals 25% of the cost of approved rehabilitation work for projects that rehabilitate space for a trade or business, and the credit equals 20% of the cost of approved rehabilitation work for residential apartments and condominiums.

Can I get it all at once?
The entire credit may be claimed when the project is completed. Unused portions of the credit may be taken over a 10-year period. Also, the owner does not have to use the credit him/herself, but instead can sell the credit to another individual or to a corporation. Non-profit owners can qualify for the credit and assign or sell it to a tax-paying partner or investor.

Is my building historic?
Yes--if it is listed on the National Register of Historic Places or is located within a National Register Historic District and contributes to the district's significance, or if it is part of a local historic district. To confirm if your property is eligible, first try the Historic Property Search database; for assistance, email Mercedes Monteiro or call her at (401) 222-4133.

What if my building seems historic but isn't listed on the National Register or State Register?
To qualify for the State Historic Tax Credit, the property must be listed before the rehabilitation project is completed and the building is placed in service. Owners of properties that the Commission considers to be eligible for listing may apply for preliminary certification of their properties. Preliminary certifications will become final when the building is listed on the National Register of Historic Places. Issuance of preliminary certification does not obligate the Commission to nominate the property. Applicants proceed with rehabilitation projects at their own risk; if the historic property is not listed prior to completion of the project, the preliminary certification will not become final. To get your property listed on the National Register, email Mercedes Monteiro or call her at (401) 222-4133.

What kind of building qualifies?
Most historic buildings that are used to produce income will qualify, such as offices, stores, rental apartments, and factories; development of condominiums may qualify also. Private one- and two- family residences, social clubs, and tax-exempt properties like schools, hospitals, and churches do not qualify.

What size project qualifies?
Owners must "substantially" rehabilitate their historic building. For the State Historic Preservation Tax Credit, this means the cost of the project must be greater than the value of the building (not including the value of the land the building occupies). See the definition of "Substantial Rehabilitation" in the State Regulations. For federal tax credits, the same requirement applies.

What work qualifies?
Exterior and interior rehab qualify for the tax credit as long as the work meets the Secretary of the Interior's Standards for Rehabilitating Historic Properties. Eligible projects include work on the roof, exterior walls, windows, foundations, structure, heating, plumbing, electrical system, and interior improvements that are capitalized to the building.

What work doesn't qualify?
New additions to the building, site work, landscaping, and costs of fixtures and furnishings are not eligible. For more information, see Causes for denial.

How do I apply?
The process for applying for the R.I. Historic Preservation Tax Credits begins with an application to the R.I. Division of Taxation. See the advisory and application (also posted above). In addition, applicants must file the following with the RIHPHC: Part 1/Certification of Historical Significance | Part 2/Certification of Proposed Rehabilitation | Part 3/Certification of Completed Rehabilitation. Applications must be filed before the project is completed. See RIHPHC Application instructions for more detail.

How long does it take?
Submit a completed Part 1, Part 2, or Part 3 application to RIHPHC at any time. Reviews take approximately four to eight weeks.

I already filed Part 1 and Part 2 applications with the RIHPHC for a federal tax credit application or a previous state tax credit application.  Do I have to file new Part 1 and Part 2 applications for the 2013 R.I. Historic Preservation Tax Credit?
Every Applicant for the R.I. Historic Preservation Tax Credit must file the state Part 1 and Part 2 applications with the RIHPHC signed and dated after July 3, 2013.  If a previous Part 1 and Part 2 application was filed with the RIHPHC and the information about the building and the project has not changed, it will not be necessary to submit new documentation; only the state Part 1 and Part 2 cover sheets will be required.  However, if there have been changes to the historic building or if the scope and design of the rehabilitation project have changed, additional documentation will be required in addition to the state Part 1 and Part 2 cover sheets.

Can I get restoration advice?
We encourage applicants to discuss their project with one of our staff architects before beginning work. This consultation will make sure that the project will qualify and ensure that good historic preservation practices are followed. Please email Roberta Randall or call her at (401) 222-4333, or email Virginia Hesse or call her at (401)222-4135.

What's the fine print?
The new historic tax credit legislation was enacted in 2013 (RI General Law 44-33.6) and new regulations are being drafted. Click the following links for the 2013 Legislation and the 2013 Emergency Regulation. For projects grandfathered under the Historic Preservation Investment Tax Credit, click for the 2008 Regulation.