Historic Tax Credit program to be extended by proposed HB 399
A new bill would expand a state tax credit that has helped “bring back life” into historic buildings and communities across North Carolina, the mayor of one of those communities said Wednesday.
The bill, filed Wednesday, would extend the end date for the state’s historic tax credits from next year to 2030. It would also increase the amount that developers can apply toward the credit and add a new tax credit for people rehabilitating a historic building after a natural disaster.
“Historic tax credits have been used in 90 out of 100 counties,” said N.C. Rep. Steve Ross, a Burlington Republican who sponsored the bill. “They contribute to our economy by creating jobs while preserving historic identities of our communities.”
The bill is especially needed in rural areas and in eastern North Carolina, said Mayor Don Hardy of Kinston, which has a downtown by the Neuse River and has been hit hard by recent hurricanes.
“It’s very important to us because we want to revitalize those historic buildings that mean so much to our citizens in the city of Kinston.,” he said. during a press conference Wednesday.
The credits make costly rehabilitation projects more manageable, help generate sales and payroll tax revenue for the state and property tax revenue for local municipalities and counties, said Ramona Bartos, administrator of the state historic preservation office.
“It is a tremendous return on investment for North Carolina and the people of the state,” she said.
Three historic tax credits expired in 2014. The current law passed in 2015 gives a historic property developer a 15 percent income tax credit up to $10 million and then 10 percent up to $20 million. Under the proposed bill, HB 399, those caps would go up to $15 million and $25 million, respectively.
The cap for additional tax credits in economically distressed counties and for targeted projects, like former manufacturing or agricultural properties, would also go up if the bill becomes law.
This bill would add an additional 5 percent credit, capped at $25 million, if the historic property is in an area hit by a natural disaster.
The state credits often are paired with a similar federal historic tax credit, which offers a 20 percent credit without an amount cap.
“The historic tax credit is one of the greatest piece of legislation that we have passed in the General Assembly,” House Speaker Tim Moore said during the press conference.
There have been nearly 1,600 income-producing projects — resulting in nearly $2.5 billion of investment — that have used historic tax credits across the state. Of those, 134 are in Wake County, 86 in Durham County and 23 in Orange County. Buncombe County has the most with 185 projects.
Historic tax credits can spark local economies, especially in former textile, agriculture and downtown properties, said William Pitt, the vice president of the N.C. League of Municipalities.
“This has been especially true in cities and towns that have suffered manufacturing job losses during the 1980s and 1990s,” he said in a statement. “Many of those same towns have now suffered during recent natural disasters.”