The House and Senate Conference Committee has reconciled the differences between the two versions of the tax bill. The agreement eliminates the pre-1936 10% non-historic tax credit and includes the 20% Historic Tax Credit (HTC) with a provision that it will be claimed over five years. Also, the Conference Committee included additional transition rule language that now clearly covers phased rehabilitations for which the taxpayer may select a 60-month period.
Both the House and Senate are likely to pass the final bill today and the vote is expected to be on party lines. President Trump is then expected to sign the bill before the end of the year.
While advocates may be disappointed they could not fully restore the 20% HTC to current law and prevent the elimination of the 10% pre-1936 rehabilitation credit, there is plenty to celebrate. Despite this being the most significant overhaul of the nation’s tax code in three decades in which hundreds of deductions and credits have been reduced or eliminated, the HTC is expected to be retained as an incentive to protect and restore historic buildings across the country.
Background
The House passed H.R. 1 “The Tax Cuts and Jobs Act” on November 16th. The House version of the bill eliminated both the 10% pre-1936 non-historic “old building” credit and the 20% HTC. With House Republicans highly motivated for a legislative win, few Republicans voted against the bill.
Last month, Senate Finance Committee legislation also eliminated the non-historic “old-building” credit but retained the HTC at a level of 10%.
HTC advocates were successful in working with Senator Cassidy (R-LA), and other Finance Committee Senators, to support a provision to restore the HTC to 20% for historic buildings. As a cost saving measure, the “Cassidy Amendment” provided that the 20% credit will be earned over the 5-year compliance/recapture period (or 4% per year). The Finance Committee approved the provision, which was included in a Manager’s Amendment, on a party line vote. The full Senate approved the bill with the HTC provision with a 51-49 vote on November 25th.
As the two bills moved to conference for the reconciliation process, advocates continued to reach out to conferees in both the House and the Senate with the request that the Senate provision related to the HTC be incorporated into the final bill.
Next Steps
At some point in the New Year there will also be an opportunity to make positive adjustments to the HTC in a “Technical Corrections” bills that will clean up ambiguities unanticipated consequences of changes in the tax code.
Additionally, there may be opportunity for improvement to the HTC in new legislation that could be considered next year. Within these opportunities, advocates will focus to further improve the HTC by attempting to eliminate the basis reduction (bringing parity with Low-Income Housing Tax Credits), strive for more favorable transition rules, and enact main street revitalization provisions of the Historic Tax Credit Improvement Act (H.R. 1158/S.425).
Please Thank Those Who Voiced Support!
We could not have achieved this great result without the leadership of many Members of Congress who responded to the requests of their constituents and fought for the retention of the HTC in the tax code.
Please thank your House and Senate Members for voicing support for the HTC!
Message: “I understand that the final tax reform bill includes a 20% Historic Tax Credit. Thank you for voicing support through the legislative process and retaining this market driven incentive to bring investment, preserve our heritage and revitalize our communities.”
SENATE: https://www.senate.gov/general/contact_information/senators_cfm.cfm
Both the House and Senate are likely to pass the final bill today and the vote is expected to be on party lines. President Trump is then expected to sign the bill before the end of the year.
While advocates may be disappointed they could not fully restore the 20% HTC to current law and prevent the elimination of the 10% pre-1936 rehabilitation credit, there is plenty to celebrate. Despite this being the most significant overhaul of the nation’s tax code in three decades in which hundreds of deductions and credits have been reduced or eliminated, the HTC is expected to be retained as an incentive to protect and restore historic buildings across the country.
Background
The House passed H.R. 1 “The Tax Cuts and Jobs Act” on November 16th. The House version of the bill eliminated both the 10% pre-1936 non-historic “old building” credit and the 20% HTC. With House Republicans highly motivated for a legislative win, few Republicans voted against the bill.
Last month, Senate Finance Committee legislation also eliminated the non-historic “old-building” credit but retained the HTC at a level of 10%.
HTC advocates were successful in working with Senator Cassidy (R-LA), and other Finance Committee Senators, to support a provision to restore the HTC to 20% for historic buildings. As a cost saving measure, the “Cassidy Amendment” provided that the 20% credit will be earned over the 5-year compliance/recapture period (or 4% per year). The Finance Committee approved the provision, which was included in a Manager’s Amendment, on a party line vote. The full Senate approved the bill with the HTC provision with a 51-49 vote on November 25th.
As the two bills moved to conference for the reconciliation process, advocates continued to reach out to conferees in both the House and the Senate with the request that the Senate provision related to the HTC be incorporated into the final bill.
Next Steps
At some point in the New Year there will also be an opportunity to make positive adjustments to the HTC in a “Technical Corrections” bills that will clean up ambiguities unanticipated consequences of changes in the tax code.
Additionally, there may be opportunity for improvement to the HTC in new legislation that could be considered next year. Within these opportunities, advocates will focus to further improve the HTC by attempting to eliminate the basis reduction (bringing parity with Low-Income Housing Tax Credits), strive for more favorable transition rules, and enact main street revitalization provisions of the Historic Tax Credit Improvement Act (H.R. 1158/S.425).
Please Thank Those Who Voiced Support!
We could not have achieved this great result without the leadership of many Members of Congress who responded to the requests of their constituents and fought for the retention of the HTC in the tax code.
Please thank your House and Senate Members for voicing support for the HTC!
Message: “I understand that the final tax reform bill includes a 20% Historic Tax Credit. Thank you for voicing support through the legislative process and retaining this market driven incentive to bring investment, preserve our heritage and revitalize our communities.”
SENATE: https://www.senate.gov/general/contact_information/senators_cfm.cfm
