State Historic Tax Credits at risk

ADVOCACY ALERT – We need your help!

As many of our members and followers may know, New York State is lucky enough to have two excellent state historic tax credit programs: the NYS Historic Tax Credit Program for Income Producing Properties (or the NYS Commercial Tax Credit), and the NYS Historic Homeownership Rehabilitation Tax Credit. The NYS commercial program works alongside the Federal Historic Tax Credit program and has been a critical element in the ongoing revitalization and economic development in downtown Rochester, city neighborhoods, and other smaller communities throughout our region. Many of the adaptive reuse projects we’ve seen across our region simply would not have been possibly without these programs – projects like Sibley Square, Eastman Dental Dispensary, Hilton Garden Inn, Carriage Factory Apartments, and many more.

The NYS Homeowner program provides tax credits to owner-occupied homes in historic districts and individually listed National Register properties. This program has helped homeowners in neighborhoods like Maplewood, the 19th Ward, Browncroft, the South Wedge, and more make improvements and repairs to their homes. (Visit the State Historic Preservation Office’s website to learn more about these programs).

Unfortunately, the NYS tax credit programs were not included in the Governor’s Executive Budget released on January 16th. This means the existence of these programs is at risk. But it’s not too late for your voice to make a difference. We need your help to communicate the economic value of the historic tax credit programs to NYS elected officials NOW.

Please contact your State representatives in the NYS Assembly and Senate as soon as possible (by Wednesday, 2/14 if possible) to let them know that the State Historic Commercial and Homeowners Tax Credit programs are important to you. Ask them to advocate for them in the budget process.

The Landmark Society (and our statewide partners at the Preservation League of NYS) are focusing on two major requests:

  1. Extension – through December 31, 2024 – of the NYS Historic Commercial Properties Tax Credit and NYS Historic Homeownership Rehabilitation Tax Credit.  Extension in the 2018 budget will ensure that projects currently in the pipeline for investment and rehabilitation continue to move forward, with investor and developer confidence that the program will remain in place.
  2. Decoupling the NYS Historic Tax Credit from the Federal Historic Tax Credit to ensure that the NYS credits may be taken all at once rather than over 5 years. The Federal Tax Cuts and Jobs Act of 2017 requires that the Federal Historic Tax Credit be taken over five years. Current estimates place the impact of this change at a 15% credit value reduction. As the law is currently written, the NYS Historic Tax Credit would likely see a similar reduction in value.

Not sure who your NYS Senator is? Click here.

Not sure who your NYS Assembly representative is? Click here.

Not sure what to write? Feel free to use our template below as a starting point:

Dear __________:

I write to you to ask for your support of the NYS Historic Commercial and Historic Homeowners Tax Credit programs. As you may know, neither program was included in Governor Cuomo’s budget. As a citizen who lives in a community that has benefited greatly from these programs and stands to be harmed by their loss, I urge you to advocate for their inclusion in the 2018 budget.

The state and federal historic tax credit programs have been essential tools in economic development efforts throughout western New York. Without these programs, the ongoing revitalization of downtown Rochester and smaller rural communities in our region would be weakened and many more historic buildings would sit vacant, not contributing to local tax rolls.

The passage of the Federal Tax Cuts and Jobs Act of 2017, which requires that the credit be spread over 5 years, has negatively impacted the market for historic tax credits and has jeopardized investor confidence in tax credit projects. Because the NYS Historic Commercial Tax Credit is linked to the federal, the changes in the federal program have also weakened the value of the state program. 

In light of this new situation, [insert company or individual name] respectfully requests that you advocate for the following critical changes to the NYS Historic Tax Credit programs during budget discussions:

(1)  De-couple the State Historic Tax Credit program from the Federal program. Currently, the 20% State Commercial Historic Tax Credit is contingent upon use of the Federal Historic Tax Credit, with the NYS credit defined as “equal to 100% of the federal credit allowed under the Internal Revenue Code (IRC) subsection 47(a)(2).” We request that state law redefine the state credit as 20% of Qualified Rehabilitation Expenditures (QREs). This would allow the state credit to maintain its effectiveness in encouraging investment.

(2)  Extend the NYS Commercial Historic Tax Credit and NYS Historic Homeownership Rehabilitation Tax Credit programs through 2024. This will help ensure investor confidence and keep large and small commercial rehabilitation projects in our cities, villages, and towns on track. The credits are currently set to expire on December 31, 2019. Extension in the 2018 budget will ensure that projects currently in the pipeline for investment and rehabilitation continue to move forward, with investor and developer confidence that the program will remain in place. This will allow much of the revitalization that we are seeing in our urban and rural commercial cores to continue.

Thank you for your consideration. Please do not hesitate to contact me should you have any questions.

Sincerely,

[insert name]

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