On Thursday, May 28, 2020, the Ways and Means Committee of the Mississippi House of Representatives passed HB 1729. The bill, among other things, contains provisions to reauthorize Mississippi’s Historic Tax Credit program, initially enacted in 2006.
This program was created in the wake of Hurricane Katrina and offers a 25% tax credit for the rehabilitation of historic structures used for business purposes. Owner-occupied dwellings and properties used for income-producing purposes are eligible. Properties qualifying for the 20% federal preservation tax credit automatically qualify for this state tax credit.
When combined, the federal and state credits can reduce the cost of a certified rehabilitation of an income-producing historic structure by 45%.
Since this program’s inception, it has provided multiple benefits to the State of Mississippi, including:
- Saving 329 historic places with a total of approximately $297,377,452 in local, qualified, non-acquisition related historic construction expenditures.
- Helping to create 3,119 construction jobs and 3,236 permanent jobs.
- Generating $169,144,700 of income for households and $141,814,200 of income for businesses.
- Generating $9,242,700 for local taxes, $9,432,300 state taxes and $49,327,800 federal taxes.
- Bringing historic places back to life in 50 cities and towns across the state.
For this program to be available for future projects, HB 1729 must be voted off of the House floor by end-of-day Wednesday, June 3rd. It would then head to the Senate. In addition to the reauthorization of the program, lawmakers have proposed several other key features to enhance the program.
HB 1729 also:
- Allocates an additional $60,000,000.00 in available tax credits to the program for a total of $180,000,000.
- Extends the program deadline to 2030.
- Removes the annual cap of $12,000,000, allowing more projects to take advantage of the credit each year.
- Restores residential eligibility, which was previously removed.
- Allows taxpayers who receive the credit to sell or transfer the credit after notifying the Mississippi Department of Revenue with certain information.
We have advised many clients on the tax credits and other incentives available when rehabilitating a historic property. Please give us a call at 601-487-4550 if you have any questions about this legislation or any other legal matter regarding your development project.