Current through Reg. 50, No. 13; March 28, 2025
(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;
(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.
