New Alabama Historic Tax Credit Enacted for 2018

The Alabama Historic Tax Credit that expired in 2016 was brought back to life by the Alabama Legislature with the passing of H.B. 345. The new Historic Tax Credit provides for $20 million of credits per year for the tax years 2018 through 2022. The new law provides for a tax credit up to 25 percent of qualified rehabilitation expenditures for historic commercial or residential structures. Commercial structures are capped at $5 million per project while residential structures are capped at $50,000 per project. There are however a number of key differences from the original credit.

Unlike the prior credit, the new credit is refundable, and must be claimed in the year the rehabilitated project is placed in service. The new credit requires that 40 percent of the available credits be reserved for counties with less than 175,000 in population. However, if the credits go unused, they may be awarded to other projects. In order for a property to be eligible, the property must be at least 60 years old or located within the boundaries of a National Monument or Park. Under prior law, the property only had to be 50 years old. In addition, the new law also creates a Historic Tax Credit Evaluating Committee to review and rank each application. This committee will be comprised of various government officials and two members each from the Alabama House of Representatives and the Alabama Senate.

The Alabama Historical Commission will promulgate any and all rules and regulations necessary to implement the provision of the new law by October 1, 2017 and applications will be accepted beginning November 1, 2017.

If you have any questions about the new Alabama Historic Tax Credit, please contact our office at 251-410-6700.