Practitioner’s Insight – Nebraska’s Historic Tax Credit Program
Beginning in 2015, the Nebraska Job Creation and Mainstreet Revitalization Act provides $15 million in state historic preservation tax credits annually. The credit is equal to 20 percent of eligible expenditures incurred for improvements to qualifying historically significant real property. The credit is limited to a $1 million tax credit per project.
In its first two years, the historic tax credit program spurred revitalization of over 50 historic properties throughout Nebraska, including properties in Red Cloud, Norfolk, Columbus, Grand Island, Pender, Chadron, Lincoln, and Omaha.
The State Historic Preservation Officer and Department of Revenue, the agencies that jointly administer the program, continue to provide guidance to users of the program in a piecemeal fashion. To avoid some of the issues that slowed early projects, we offer the following insights as we continue to work with both agencies on administration of the program:
- Ensure the project applicant and the party making the expenditures are the same;
- Understand the differences between the state and federal programs, including eligibility for historic tax credits, whether certain expenditures such as deferred developer’s fees and real estate taxes incurred during the construction-phase of the project qualify for tax credits under each program, and what documentation the Department of Revenue will require to validate expenditures made for each program; and
- Understand eligibility for other tax incentives that can help move your project(s) forward, including state and federal new markets tax credits, state and federal low income housing tax credits, tax increment financing, and various other tax incentives.
Baird Holm attorneys can assist in all of these areas.
For additional information on the state and federal historic tax credit programs or how you can avoid potential administrative issues, please contact us.