Colorado’s Preservation Tax Credit Extended 10 Years
HB 1190 Colorado Job Creation & Main Street Revitalization Act Signed by Governor
The reauthorization of the Historic Preservation Tax Credit was signed by Governor Hickenlooper on May 30, 2018 for another 10 years.
The Commercial Historic Preservation Tax Credit was established in 2014 following the passage of HB14-1311 with overwhelming bipartisan support. The credit was set at $10 million annually, with $5 million for small projects and $5 million for larger projects. The credit spurs investment in communities throughout the state, and the specific carve out for small projects helps ensure that rural communities are well represented. It is jointly administered by History Colorado and the Office of Economic Development and International Trade.
SUCCESSES SINCE INCEPTION
Although the tax credit has only been in place for two and a half years, the impacts from the program are visible throughout rural and urban Colorado. Since the program went into effect, tax credit recipients have used the credit to kick start 52 commercial projects across the state. Tax credit projects span the state from Trinidad to Telluride, Greeley to Walsenburg, and across the Front Range. Cities utilizing the program range from Victor (403) to Denver (682,000).
Economic impact from the $18.8 million in credits reserved by applicants to date includes:
- $170 million in rehabilitation costs
- 808 new full-time jobs with $34 million payroll added
- $13.2 million in total sales tax (in addition to the sales taxes generated by the economic activity of these revitalized buildings)
- $246 million increase in property values post rehab
- $17.9 million income generated for property owners
- $36 million spent by owners on additional capital improvements after initial rehab
The 2018 reauthorization effort included:
- Continuing the credit at $10 million annually, with $5 million for small projects and $5 million for larger projects.
- Additional incentives (35% credit) for projects in rural areas.
- Adjustments to current qualifiers for the program to remove obstacles for small projects such as adjusting the lease requirement for rural projects and replacing a complicated formula to determine ‘qualified rehabilitation expenditures’ with a flat amount.
- Separating the residential and commercial tax credit in statute to provide clarity to taxpayers about the specific rules for each
- Technical program changes to increase efficiency and reduce the cost of program