A N
A C T
RELATING TO
TAXATION - - HISTORIC STRUCTURES - - TAX CREDIT
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Introduced By: Senator Michael J. McCaffrey |
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Date Introduced: March 07, 2002 |
It is enacted by
the General Assembly as follows:
SECTION 1. This
act may be referred to as the "Historic Preservation Investment Tax Credit
Act."
SECTION 2.
Sections 44-33.2-2, 44-33.2-3, 44-33.2-4, 44-33.2-5 and 44-33.2-6 of the
General Laws in Chapter 44-33.2 entitled "Historic Structures - Tax
Credit" are hereby amended to read as follows:
44-33.2-2. Definitions. [Effective January 1, 2002.] -- As used in this chapter:
(1) "Certified historic structure" means a property which is located in the state of Rhode Island and is:
(i) Listed individually on the National Register of Historic Places; or
(ii) Listed individually in the state register of historic places; or
(iii) Located in a registered historic district and certified by either the commission or Secretary of the Interior as being of historic significance to the district.
(2) "Certified rehabilitation" means any rehabilitation of a certified historic structure consistent with the historic character of such property or the district in which such property is located as determined by the commission guidelines.
(3) "Commission" means the Rhode Island historical preservation and heritage commission created pursuant to section 42-45-2.
(4) "Holding period" means twenty-four (24) months after
the commission issues a certificate of completed work to the taxpayer. owner.
In the case of a rehabilitation which may reasonably be expected to be
completed in phases as described in subsection 44-33.2(8) herein, the term
"holding period" shall be extended to include a period of time
beginning on the date of issuance of a certificate of completed work for the
first phase or phases for which a certificate of completed work is issued and
continuing until the expiration of twenty-four (24) months after the
certificate of completed work issued for the last phase.
(5) "Placed in service" means the that
substantial rehabilitation work has been completed which would allow for
occupancy of the entire structure or some identifiable portion of the structure,
or the owner has commenced depreciation of the qualified rehabilitation
expenditures, whichever occurs first.
(6) "Qualified rehabilitation expenditures" means any
amounts expended in the rehabilitation of a certified historic structure
properly chargeable to capital account for property, excluding personal
property, which is of a character subject to federal depreciation allowance
pursuant to 26 U.S.C. section 167 or 168. capitalized to the building
and either: (i) depreciable under the internal revenue code, or; (ii) made with
respect to property (other than the principal residence of the owner) held for
sale by the owner. Notwithstanding the foregoing, except in the case of a
nonprofit corporation, there will be deducted from qualified rehabilitation
expenditures for the purposes of calculating the tax credit any funds made
available to the person (including any entity specified in section
44-33.2-3(a)) incurring the qualified rehabilitation expenditures in the form
of a direct grant from a federal, state or local governmental entity or agency
or instrumentality thereof.
(7) "Registered historic district" means any district listed in the National Register of Historic Places, or the state register of historic places.
(8) "Substantial rehabilitation" means, with respect to a certified historic structure, that the qualified rehabilitation expenses of the building during the twenty-four (24) month period selected by the taxpayer ending with or within the taxable year exceed fifty percent (50%) of the adjusted basis in such building and its structural components as of the beginning of such period. In the case of any rehabilitation which may reasonably be expected to be completed in phases set forth in architectural plans and specifications completed before the rehabilitation begins, the above definition shall be applied by substituting "sixty (60) month period" for "twenty-four (24) month period".
(9) "Exempt from real property tax" means, with
respect to any certified historic structure, that the structure is exempt from
taxation pursuant to section 44-3-3 of the general laws.
(10) "Principal residence" means the principal
residence of the owner within the meaning of section 121 of the internal
revenue code or any successor provision.
44-33.2-3. Tax credit. [Effective January 1, 2002.] -- (a) Any person, firm, partnership, trust, estate, limited liability company, corporation (whether for profit or non-profit) or other business entity that incurs qualified rehabilitation expenditures for the substantial rehabilitation of a certified historic structure, provided the rehabilitation meets standards consistent with the standards of the Secretary of the United States Department of the Interior for rehabilitation as certified by the commission, shall be entitled to a credit against the taxes imposed on such person or entity pursuant to chapter 11, 12, 13, 14, 17 or 30 of this title in an amount equal to thirty percent (30%) of the qualified rehabilitation expenditures.
(b) Tax credits allowed pursuant to this chapter shall be allowed for the taxable year in which such certified historic structure or an identifiable portion of the structure is placed in service provided that the substantial rehabilitation test is met for such year.
(c) If the amount of the tax credit exceeds the taxpayer's total tax liability for the year in which the substantially rehabilitated property is placed in service, the amount that exceeds the taxpayer's tax liability may be carried forward for credit against the taxes imposed for the succeeding ten (10) years, or until the full credit is used, whichever occurs first for the tax credits. Credits allowed to a partnership, a limited liability company taxed as a partnership or multiple owners of property shall be passed through to the persons designated as partners, members or owners respectively pro rata or pursuant to an executed agreement among such persons designated as partners, members or owners documenting an alternate distribution method without regard to their sharing of other tax or economic attributes of such entity.
(d) (1) Taxpayers Provided, that the taxpayer has not
claimed such tax credits in whole or part, taxpayers eligible for such tax
credits may assign, transfer or convey the credits, in whole or in part, by
sale or otherwise to any individual or entity, including, but not limited to,
condominium owners in the event the certified historic structure is converted
into condominiums. The assignee of the tax credits may use acquired credits to
offset up to one hundred percent (100%) of the tax liabilities otherwise imposed
pursuant to chapter 11, 12, 13, (other than the tax imposed under section
44-13-13), 14, 17 or 30 of this title. The assignee may apply the tax
credit against taxes imposed on the assignee until the end of the tenth (10th)
calendar year after the year in which the substantially rehabilitated property
is placed in service or until the full credit assigned is used, whichever
occurs first. Fiscal year assignees may claim the credit until the expiration
of the fiscal year that ends within the tenth (10th) year after the
year in which the substantially rehabilitated property is placed in service.
The assignor shall perfect such transfer by notifying the state of Rhode Island
division of taxation in writing within thirty (30) calendar days following the
effective date of the transfer and shall provide any information as may be
required by the division of taxation to administer and carry out the provisions
of this section.
(2) For purposes of this chapter, any assignment or sales proceeds received by the taxpayer for its assignment or sale of the tax credits allowed hereunder shall be exempt from this title. If a tax credit is subsequently recaptured under section 44-33.2-3(e), revoked or adjusted, the seller's tax calculation for the year of revocation, recapture, or adjustment shall be increased by the total amount of the sales proceeds, without proration, as a modification under title 44, chapter 30. In the event that the seller is not a natural person, the seller's tax calculation under chapters 11, 12, 13 (other than with respect to the tax imposed under subsection 44-13-13), 14, 17, or 30 of title 44, as applicable, for the year of revocation, recapture, or adjustment, shall be increased by including the total amount of the sales proceeds without proration.
(e) Substantial rehabilitation of property that is exempt from
real property taxation tax shall be ineligible for the tax
credits authorized under this chapter. In the event a certified historic
structure undergoes a substantial rehabilitation pursuant to this chapter and
within twenty-four (24) months after the property is placed in service issuance
of a certificate of completed work the property becomes exempt from real
property tax, the taxpayer's tax for the year shall be increased by the total credit
taken for the qualified rehabilitation expenses. amount of credit
actually used against the tax.
(f) In the case of a corporation, this credit is only allowed
against the tax of a corporation included in a consolidated return that
qualifies for the credit and not against the tax of other corporations that may
join in the filing of a consolidated tax return.
44-33.2-4. Administration. [Effective January 1, 2002.] --
(a) To claim the tax credit authorized in this chapter, taxpayers shall apply
to the commission (i) prior to the certified historic structure being placed in
service for a certification that the certified historic structure's
rehabilitation will be consistent with the standards of the Secretary of the
United States Department of the Interior for rehabilitation; and (ii) after
completion of the rehabilitation work of the certified historic structure for (A)
a certification that the rehabilitation is consistent with the standards of the
Secretary of the United States Department of the Interior for rehabilitation.
and (B) a certification as to the amount of tax credit for which the
rehabilitation qualifies. The commission shall be entitled to rely on the facts
represented in the application without independent investigation and, with
respect to the amount of tax credit for which the rehabilitation qualifies,
upon the certification of a certified public accountant licensed in the state
of Rhode Island. Applications Such applications shall be
developed by the commission and may be amended from time to time.
(b) Within thirty (30) ninety (90) days after the
commission's receipt of the taxpayer's application requesting certification for
the completed rehabilitation work, the commission shall issue the taxpayer (i)
a written determination either denying or certifying the rehabilitation ,
and (ii) a certification of the amount of credit for which the rehabilitation
qualifies. To claim the tax credit, the commission's certification as to
the amount of the tax credit shall be attached to all state income
tax returns on which the credit is claimed. In the event the commission's
certification has not been issued at the time the return is filed for a year in
which the credit is being taken, a copy of the application set forth in section
44-33.2-4(a)(i) signed by the commission must be attached to the income tax
returns.
(c) No taxpayer may benefit from the provisions of this chapter unless the owner of the certified historic structure grants a restrictive covenant to the commission, agreeing that during the holding period no alterations to the certified historic structure will be made without the commission's approval and in a manner inconsistent with the standards of the Secretary of the United States Department of the Interior.
(d) The commission is authorized to establish a schedule of fees for the review of tax credit applications, but the fees shall be no greater than two thousand dollars ($2,000) in total for each project.
(e) If information comes to the attention of the commission at
any time up to and including the last day of the holding period that is
materially inconsistent with representations made in an application, the
commission may deny the requested certification or revoke a certification
previously given.
44-33.2-5. Examination of taxpayer's records. Information
requests. [Effective January 1, 2002.] -- The tax administrator
and his or her agents, for the purpose of ascertaining the correctness of any
credit claimed under the provisions of this chapter, may examine any books,
paper, records, or memoranda bearing upon the matters required to be included
in the return, report, or other statement, and may require the attendance of
the person executing the return, report, or other statement, or of any officer
or employee of any taxpayer, or the attendance of any other person, and may
examine the person under oath respecting any matter which the tax administrator
or his or her agent deems pertinent or material in determining the eligibility
for credits claimed, and may request information from the commission,
and the commission shall provide such information in all cases, to the extent
not otherwise prohibited by statute.
44-33.2-6. Election. [Effective January 1, 2002.] -- Taxpayers
who elect and qualify to claim tax credits for the substantial rehabilitation
of a certified historic structure pursuant to this chapter are ineligible for
any tax credits that may also be available to the taxpayer for the substantial
rehabilitation of that particular certified historic structure under chapter
33.1 of this title or chapter 64.7 of title 42. the provisions of
chapters 44-33.1, 42-64.7, and/or 44-31.
SECTION 3. In
the case of a substantial rehabilitation that is placed in service after
January 1, 2002, rehabilitation expenditures incurred prior to January 1, 2002,
but no earlier than January 1, 2000, may be included in (1) the calculation of
tax credits available with respect to a certified historic structure, and (2)
the determination of whether there has been a substantial rehabilitation of
such certified historic structure.
SECTION 4. This act shall take effect upon passage and shall be
applied retroactively to January 1, 2002.