1     
HISTORIC REHABILITATION TAX CREDIT AMENDMENTS

2     
2022 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Derrin R. Owens

5     
House Sponsor: Timothy D. Hawkes

6     

7     LONG TITLE
8     General Description:
9          This bill modifies the tax credit related to expenditures for rehabilitating a historic
10     building.
11     Highlighted Provisions:
12          This bill:
13          ▸     allows a taxpayer to claim a tax credit for rehabilitation expenditures made for
14     certain historic commercial buildings;
15          ▸     provides that a person may assign all or a portion of a historic rehabilitation tax
16     credit; and
17          ▸     makes technical and conforming changes.
18     Money Appropriated in this Bill:
19          None
20     Other Special Clauses:
21          This bill provides retrospective operation.
22     Utah Code Sections Affected:
23     AMENDS:
24          59-7-609, as enacted by Laws of Utah 1995, Chapter 42
25          59-10-1006, as renumbered and amended by Laws of Utah 2006, Chapter 223
26     

27     Be it enacted by the Legislature of the state of Utah:
28          Section 1. Section 59-7-609 is amended to read:
29          59-7-609. Historic rehabilitation credit.
30          (1) (a) [For tax years beginning January 1, 1993, and thereafter, there is allowed to a
31     taxpayer subject] Subject to Section 59-7-104, a taxpayer may claim as a credit against the tax
32     due, an amount equal to 20% of qualified rehabilitation expenditures, costing more than
33     $10,000, incurred in connection with any residential or commercial certified historic building.
34     When qualifying expenditures of more than $10,000 are incurred, the credit allowed by this
35     section shall apply to the full amount of expenditures.
36          (b) All rehabilitation work to which the credit may be applied shall be approved by the
37     State Historic Preservation Office prior to completion of the rehabilitation project as meeting
38     the Secretary of the Interior's Standards for Rehabilitation so that the office can provide
39     corrective comments to the taxpayer in order to preserve the historical qualities of the building.
40          (c) (i) A taxpayer may sell or assign all or a portion of a tax credit under this section.
41          (ii) A person to whom another person sells or assigns all or a portion of a tax credit
42     under this section may sell or assign all or a portion of the tax credit to which the person is
43     entitled.
44          (iii) There is no limit on the number of transactions for the sale or assignment of all or
45     a portion of a tax credit under this section.
46          [(c)] (d) Any amount of credit remaining may be carried forward to each of the five
47     taxable years following the qualified expenditures.
48          [(d)] (e) The commission, in consultation with the Division of State History, shall
49     promulgate rules to implement this section.
50          (2) As used in this section:
51          (a) "Certified historic building" means a building that is listed on the National Register
52     of Historic Places within three years of taking the credit under this section or that is located in a
53     National Register Historic District and the building has been designated by the Division of
54     State History as being of significance to the district.
55          (b) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable
56     to the rehabilitation and restoration of the physical elements of the building, including the
57     historic decorative elements, and the upgrading of the structural, mechanical, electrical, and
58     plumbing systems to applicable codes.
59          (ii) "Qualified rehabilitation expenditures" does not include expenditures related to:
60          (A) the taxpayer's personal labor;
61          (B) cost of acquisition of the property;
62          (C) any expenditure attributable to the enlargement of an existing building;
63          (D) rehabilitation of a certified historic building without the approval required in
64     Subsection (1)(b); or
65          (E) any expenditure attributable to landscaping and other site features, outbuildings,
66     garages, and related features.
67          (c) "Residential" means a building used for residential use, either owner occupied or
68     income producing.
69          Section 2. Section 59-10-1006 is amended to read:
70          59-10-1006. Historic rehabilitation tax credit.
71          (1) (a) [For tax years beginning January 1, 1993, and thereafter, there is allowed to a] A
72     claimant, estate, or trust, may claim as a nonrefundable tax credit against the income tax due,
73     an amount equal to 20% of qualified rehabilitation expenditures, costing more than $10,000,
74     incurred in connection with any residential or commercial certified historic building. When
75     qualifying expenditures of more than $10,000 are incurred, the tax credit allowed by this
76     section shall apply to the full amount of expenditures.
77          (b) All rehabilitation work to which the tax credit may be applied shall be approved by
78     the State Historic Preservation Office prior to completion of the rehabilitation project as
79     meeting the Secretary of the Interior's Standards for Rehabilitation so that the office can
80     provide corrective comments to the claimant, estate, or trust in order to preserve the historical
81     qualities of the building.
82          (c) (i) A claimant, estate, or trust may sell or assign all or a portion of a tax credit under
83     this section.
84          (ii) A person to whom another person sells or assigns all or a portion of a tax credit
85     under this section may sell or assign all or a portion of the tax credit to which the person is
86     entitled.
87          (iii) There is no limit on the number of transactions for the sale or assignment of all or
88     a portion of a tax credit under this section.
89          [(c)] (d) Any amount of tax credit remaining may be carried forward to each of the five
90     taxable years following the qualified expenditures.
91          [(d)] (e) The commission, in consultation with the Division of State History, shall
92     promulgate rules to implement this section.
93          (2) As used in this section:
94          (a) "Certified historic building" means a building that is listed on the National Register
95     of Historic Places within three years of taking the credit under this section or that is located in a
96     National Register Historic District and the building has been designated by the Division of
97     State History as being of significance to the district.
98          (b) (i) "Qualified rehabilitation expenditures" means any amount properly chargeable
99     to the rehabilitation and restoration of the physical elements of the building, including the
100     historic decorative elements, and the upgrading of the structural, mechanical, electrical, and
101     plumbing systems to applicable codes.
102          (ii) "Qualified rehabilitation expenditures" does not include expenditures related to:
103          (A) a claimant's, estate's, or trust's personal labor;
104          (B) cost of acquisition of the property;
105          (C) any expenditure attributable to the enlargement of an existing building;
106          (D) rehabilitation of a certified historic building without the approval required in
107     Subsection (1)(b); or
108          (E) any expenditure attributable to landscaping and other site features, outbuildings,
109     garages, and related features.
110          (c) "Residential" means a building used for residential use, either owner occupied or
111     income producing.
112          Section 3. Retrospective operation.
113          This bill has retrospective operation for a taxable year beginning on or after January 1,
114     2022.