Current through Reg. 49, No. 38; September 20, 2024
(a)
Qualification for credit.
(1) An Owner is eligible for a credit for eligible
costs and expenses incurred in the certified rehabilitation of a certified historic structure if:
(A) the rehabilitated certified historic structure is placed in service on
or after September 1, 2013;
(B) the Owner has an ownership
interest in the certified historic structure in the year during which the structure is placed in service
after the rehabilitation; and
(C) the total amount of the
eligible costs and expenses incurred exceeds $5,000.
(2) A property for which eligible costs and expenses are submitted for the
credit must meet Internal Revenue Code §47(c)(2) which includes:
(A)
non-residential real property;
(B) residential rental property;
or
(C) other property types exempted from parts of Internal
Revenue Code §47(c)(2) as described in Chapter
172 of the Texas Tax Code.
(b) Eligible costs and expenses. Eligible costs and expenses means those
costs and expenses allowed pursuant to Internal Revenue Code §47(c)(2) or as exempted by Chapter
172 of the Texas Tax Code. Such eligible costs and
expenses, include, but are not limited to:
(1) expenditures associated with
structural components as defined by United States Treasury Regulation §1.48-1(e)(2) including walls,
partitions, floors, ceilings, windows and doors, stairs, elevators, escalators, sprinkler systems, fire
escapes, components of central air conditioning, heating, plumbing, and electrical systems, and other
components related to the operation or maintenance of the building;
(2) architectural services;
(3)
engineering services;
(4) construction management and labor,
materials, and reasonable overhead;
(5) subcontracted
services;
(6) development fees;
(7) construction period interest and taxes; and
(8) other items referenced in Internal Revenue Code
§47(c)(2).
(c) Ineligible costs and expenses.
Eligible costs and expenses as defined in Internal Revenue Code §47(c)(2) do not include the following:
(1) the cost of acquiring any interest in the property;
(2) the personal labor by the applicant;
(3) any cost associated with the enlargement of an existing
building;
(4) site work expenditures, including any landscaping,
sidewalks, paving, decks, outdoor lighting remote from the building, fencing, retaining walls or similar
expenditures; or
(5) any cost associated with the rehabilitation
of an outbuilding or ancillary structure unless it is certified by the Commission to contribute to the
historical significance of the property.
(d)
Eligibility date for costs and expenses.
(1) Part A of the Texas Historic
Preservation Tax Credit Certification Application must be submitted prior to the building being placed in
service per §
13.1(21) of this title (relating to
Definitions). Projects that have been placed in service prior to submission of Part A of the application do
not qualify for the program.
(2) While the credit may be claimed
for eligible costs and expenses incurred prior to the filing of an application, potential applicants are
urged to file Parts A and B of the application at the earliest possible date. This will allow the Commission
to review the application and provide guidance to the applicant that will increase the chances that the
application will ultimately be approved and the credit received.
(e) Phased development. Part B applications for rehabilitation of the same
certified historic structure may be submitted by the same owner only if they describe clearly defined phases
of work that align with a cost report that separates the eligible costs and expenses by phase. Separate Part
B and C applications shall be submitted for review by the Commission prior to issuance of a certificate of
eligibility for each phase.
(f) Amount of credit. The total
amount of credit available is twenty-five percent (25%) of the aggregate eligible costs and expenses incurred
in the certified rehabilitation of the certified historic structure.
