Federal, state, and local tax incentives exist for owners of historic properties. The Federal Historic Preservation Tax Incentives Program includes a 20 percent income tax credit for the rehabilitation of historic, income-producing buildings.The new Texas Historic Preservation Tax Credit Program offers a 25 percent tax credit for the rehabilitation of historic buildings.
Additionally, a state sales tax exemption on labor is available for work to buildings listed in the National Register of Historic Places. County and local taxing authorities may grant property tax exemptions for buildings with state or local historical designations.
Income generated by federal rehabilitation tax credit projects in Texas between 1979 and 2011
Tax Legislation Changes Affect the Federal Tax Credit Program (December 2017)
On December 22, 2017, Public Law No: 115-97 (Pub. L. 115-97) was signed and enacted, amending the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses.
Pub. L. 115-97 (Sec. 13402) modifies the 20% Historic Rehabilitation Tax Credit as well as provides certain transition rules. These and other changes to the Internal Revenue Code may affect a taxpayer's ability to use of the 20% Historic Tax Credit.
Pub. L. 115-97 also repeals the 10% Rehabilitation Tax Credit for non-historic buildings. The text of Pub. L. 115-97 is available at www.congress.gov.
Applicants requesting historic preservation certifications by the National Park Service as well as others interested in the use of these tax credits are strongly advised to consult an accountant, tax attorney, or other professional tax adviser, legal counsel, or the Internal Revenue Service regarding the changes to the Internal Revenue Code related to Pub. L. 115-97.
State Tax Credit Program Highlights: Certified Projects
The Texas Historical Commission has recently certified our 100th project under the Texas Historic Preservation Tax Credit program!
Projects 99, 100, and 101, are all located in downtown Ennis, a Texas Main Street City. The building at 207 W. Ennis Avenue, built circa 1900, has its original cast iron and wood storefront. It is now home to the second location of restaurant and bar based in Fort Worth. The Livery Building at 213 W. Ennis Avenue, suffered significant damage by a tornado in 2013, during which a portion of its brick façade fell into the street. In order to restore the façade, the building’s developer had custom bricks made to match the original. The interior of the building has been divided into multiple spaces allowing for small retail shops or other businesses. The Franklin Building at 107 S. Dallas Avenue was modified in 1945 from its original appearance and was not considered a contributing building as part of the 1986 Ennis Commercial National Register Historic District. To qualify for the tax credit programs, the entire National Register district had to be updated to document the mid-century history of Ennis and establish a later period of significance—stretching to 1966. The Franklin Building now has small office spaces, for 1 or 2-person businesses, with shared meeting room and service areas.