2018 Directory

21 T he Historic Preserva- tion Tax Credit has long played a prominent role in the rehabilitation of historic buildings nationwide. Enacted as part of the Tax Reform Act of 1976, the tax credit allowed for owners of historic properties to be eligible to claim 20% of the cost of rehabilitating the build- ing as a credit on their federal income taxes. It also allowed the owners of non-historic buildings built before 1936 to claim 10% of rehabilitation costs as a credit. During the most recent tax reform in 2017 major changes were proposed that would have eliminated the preservation tax credits. Fortunately compromis- es were made that resulted in one major change to the tax credits and one minor change. The major change is that the 10% credit was eliminated. This credit applied to rehabilitation projects on buildings built before 1936 that were not listed in the National Register of Historic Places. These projects also were not required to follow the Secretary of Interior's Standards for Rehabilitation. Since these projects did not have to follow the Standards, they were not tracked by the State Historic Preservation Office or the na- tional Park Service. Therefore it is not known how many projects in Wyoming have been complet- ed with the 10% credit. The 20% credit survived largely intact with one minor change Tax Reform Brings Changes to Preservation Tax Credit BY BRIAN BEADLES, HISTORIC PRESERVATION SPECIALIST, WYOMING SHPO "Before and after pictures of a recent tax credit project for Park Addition School in Cheyenne, WY" in how owners claim the credit. Previously owners could claim the full value of the credit the year the building was placed into service. Then the owner had to retain ownership of the building for 5 years in order to avoid repaying any of the credit. Under the current tax law owners are forced to claim the credit over a minimum of five years. Instead of being able to claim the full value of the credit in the year the building is placed into service, owners can only claim a maximum of 20% of the value of the credit in the first year after the rehab is completed. The owner can again claim a maximum of 20% of the value of the credit in the second year after rehab. It is not yet clear how these changes will affect the use of the credit nationally. In Wyoming it is not believed that this will make a large impact in the volume of rehabilitation projects. b