Last week, U.S. Senators Shelley Moore Capito, R-West Virginia, and Mark Warner, D-Virginia, introduced S. 631, which focuses on rural historic tax credit (HTC) use and also includes transferability for small projects (those with $5 million or less in qualified rehabilitation expenditures). The legislation will help make rural HTC projects more financially feasible and will result in a higher number of these projects being completed in rural areas and states. The highlights of the proposed legislation are:
- Making HTC projects in rural areas eligible for an increased credit from the current 20 percent to 30 percent.
- Including an additional increase in the credit to 40 percent for affordable housing creation.
- Allowing the credit to be used in addition to the Low-Income Housing Tax Credit (LIHTC).
- Allowing small rural projects to claim the credit in the first year of use.
- Allowing transferability of the credit to a third party.
- Eliminating basis adjustment to simplify credit transactions.
This initiative reflects ongoing efforts to support rural development through the preservation of historic buildings, recognizing their significance to local identity and potential to stimulate economic growth. The bill has the support of the tax credit community, and its companion legislation in the House of Representatives is being led by U.S. Rep. Mike Carey, R-Ohio.
