Historic Tax Credit

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Historic Tax Credit (Federal)

During the summer and fall of 2017 a Study Committee from the Georgia General Assembly took a close look at how the state measures the effectiveness of its hundreds of tax credits and subsidies.   Turns out that we do almost nothing to verify that taxpayers are getting their value from these laws.  AIA was very involved in working with this committee to develop such a verification tool, and provided a lot of information, specifically, about the state’s Historic Building Tax Credit – which has been of immense value to architects all over the state.   Members from Atlanta and Savannah testified at hearings held in their area of the state.   The good news is that the committee gave a thumbs-up to the HBTC.   Look for AIA Georgia to continue to work to improve and strengthen this tool for our members at the General Assembly, and for your state chapters to stay engaged in your towns and cities.   Read more about the work of the study committee in this article.

Updated: December 27, 2017 [12:30 P.M. EST]

FROM AIA NATIONAL: On Friday night the House and Senate Conference Committee released their version of the tax reform legislation, after combing through the massive bill this weekend we are encouraged by the changes made as the bill moved through the legislative process. This legislation moved through both chambers at lightning speed, but thanks to the rapid response of AIA’s members across the country we are pleased to say that we made significant progress for architects.

Pass-throughs: The conference agreement that will now almost certainly pass the House and Senate, allows for a 20 percent deduction for businesses organized as “pass-through” entities like S-corps, sole proprietorships and Limited Liability Partnerships, subject to income limitations. Both the House and Senate bills would have greatly restricted this deduction for “service” businesses like doctors, lawyers, architects and engineers. The final conference package now contains specific language stating that architecture and engineering firms are not subject to the limiting provision that applies to other service businesses. This tax relief for architects who organize as pass through companies – which includes the majority of U.S. architecture firms – is a big deal!

Historic Tax Credit: The original House draft abolished the Historic Tax Credit (HTC) altogether. Over the course of the last month, we saw incremental progress due to your outreach and the work of our coalition partners. The Senate bill ultimately kept the HTC though it eliminated the current 10 percent credit for pre-1936 structures and diluted the current 20 percent credit for certified historic structures by spreading it over a five-year period. The conference agreement keeps the HTC and further improves on the Senate bill’s language by adding some flexibility for architects wishing to utilize the 20 percent credit.

Energy Efficiency Tax Credit: Although the tax reform bill does not include language to reinstate the 179D Deduction for energy efficiency in commercial buildings, there is a chance that Congress could consider separate legislation to extend 179D and other expired tax provisions. AIA is working with a broad coalition of stakeholders to advocate for this approach, and is supporting efforts to extend expiring tax provisions outside of the tax reform process. More on this in the New Year – stay tuned!

As new AIA President, Carl Elefante, FAIA said in the press release here that, “We owe a deep debt of gratitude to our members for their efforts in reaching out to their elected representatives to make our views known and to make this legislation better for architects and the country. It’s clear that the conferees listened to our members, who showed the power of our profession to effect change even when the obstacles to change are huge.”

Thank you for speaking up for the profession and for making your voice heard. From everyone at AIA we wish you the happiest of holidays and a prosperous and fruitful new year.

Sarah Dodge,
Senior Vice President, AIA Advocacy and Relations

Updated: December 19, 2017 [12:00 P.M. EST]

Thank you to all of our AIA Georgia members who reached out to their Senators last week about the pending changes to the federal Historic Tax Credit in the tax reform bill working its way through Congress. Unfortunately, the Senate passed their version without addressing the profession’s strong concerns about the changes to the HTC. AIA Georgia is working closely with AIA National and our allied organizations on this issue, and more information will be sent out later this week. In the meantime, we wanted to keep you apprised of where the process is at.  Below, you will find an update that we hope you find helpful.

Latest Tax Reform Update

Updated Comparison Chart

Statement from 2017 AIA President Thomas Vonier, FAIA

Updated: December 4, 2017 [3:23 P.M. EST]

Key Points of Interest

Economic Impact

The federal Historic Tax Credit (HTC) is exactly the kind of market-based incentive we need to leverage private investment in our communities. Since its inception, the credit has rehabilitated more than 42,000 buildings, created nearly 2.5 million jobs, and leveraged over $131 billion in private investment nationwide.   Real estate developers, architects, and community investment corporations couple Georgia’s Historic Building Tax Credit with the HTC to make projects viable, that would not otherwise make economic sense.

This week the U.S. Senate is considering their version of the Tax Cuts and Jobs Act, which will severely weaken the federal Historic Tax Credit (HTC).  Although it retains the credit for buildings on the Historic Register, it provides no benefit at all for projects that have not achieved that level of recognition yet.  This would be debilitating for many projects and would deal a damaging blow to the recoveries in many of Georgia small cities and towns.

Updated: November 30, 2017 [10:33 A.M. EST]

Multiplier Effect

The HTC is also responsible for enhancing property values, encouraging additional reinvestment by adjacent owners, and augmenting tax revenue for federal, state and local governments.  This kind of impact can be seen with Ponce City Market in Atlanta and the Kessler Hotel project in Savannah.

Community Investment

America’s historic places matter.  Once they are gone, they are gone forever.  Unlike new buildings, they are here now and can serve our communities again, but they need the HTC in its full form to make those communities great again.

Take Action Now!

We know that the Historic Tax Credit has made an enormous difference in communities across the country, bringing with it economic revitalization, good design and the protection and restoration of some of our most treasured works of architecture.  But unless Congress hears about its impact, the HTC will be gone forever.

Return on Investment

Not all tax incentives are created equal, but the HTC pays for itself, and then some. Best of all, for every dollar that goes out in tax credits, $1.25 is returned to the federal treasury in tax receipts generated solely by the rehabilitation projects, a degree of success that is largely unmatched by other federal programs.

It certainly will not be matched by killing the HTC in order to fund a generic tax cut for all American corporations. Focused, high ROI incentives simply work better.

The most effective action you can take is to CALL both of your Senators and share your opinion (see the box to the right).   They could vote on this bill at any time, and their staff is sharing phone calls with the Senators in real time.   Emails can be effective, but not as timely.   But we have provided the following in case you prefer electronic communication.

Fill out the below form to receive your customized letter to your legislators. Edit as you see fit and send out right away!

  • Sample Letter

    Dear Senator ___________ ,

    As a member of the American Institute of Architects, I am writing you today to ask you to restore the Historic Tax Credit (HTC) to its full impact in the tax reform package that the Senate is entertaining this week.

    This highly successful provision of the tax code has leveraged billions of dollars in private investment to spur job-creating rehabilitation projects in communities all across the country. It has revitalized small cities like Savannah, Macon, and Columbus – and projects along the Beltline in Metro Atlanta.

    The federal Historic Tax Credit (HTC) is precisely the kind of market-based incentive we need to leverage private investment in our communities. Since its inception, the credit has rehabilitated more than 42,000 buildings, created nearly 2.5 million jobs, and leveraged over $131 billion in private investment nationwide.

    Although the Senate bill would eliminate only part of the Historic Tax Credit, we need to ensure that the full credit remains available or else many rehabilitation projects will no longer be feasible.

    Please work to restore the Historic Tax Credit further as the Senate moves to advance its tax reform legislation. I urge you to support the retention of the Historic Tax Credit in any overhaul of the nation's tax code.

    Thank you.

    Sincerely,

    Member Name Home City Local Chapter
  • Select all or one

Representatives

Senator Johnny Isakson
Atlanta Office: (770) 661-0999
DC Office: (202) 224-3643
Email Portal:  Click Here

Senator David Perdue
Atlanta Office: (404) 865-0087
DC Office:  (202) 224-3521
Email Portal:  Click Here

Congressman John Lewis
Atlanta Office: (404) 659-0116
DC Office: (202) 225-3801
Email Portal: Click Here