Tax Incentives

Minnesota Historic Structure Rehabilitation State Tax Credit / Grant Program

The Minnesota Historic Structure Rehabilitation Tax Credit offers a 20% state tax credit for qualified historic rehabilitations, and parallels the existing federal rehabilitation tax credit. It also offers project investors an option of a grant in lieu of a credit, whichever option best suits a developer’s tax situation, in order to maximize the efficiency of the public dollars assisting the project.  Only income-producing properties are eligible for this incentive. This tax credit/ grant program is funded by the State of Minnesota; funds are awarded to eligible applicants who meet the program requirements and receive the approval of the Minnesota SHPO and National Park Service.

MN Historic Rehabilitation Tax Credit The Program At-A-Glance – November, 2011

MN Historic Rehabilitation Tax Credit as Job Creation

Federal Historic Rehabilitation Tax Credit–20%
Federal Agency: National Park Service, administered by the Minnesota State Historic Preservation Office (SHPO)
Recipients:
 Owners of commercial, industrial, agricultural, or rental residential properties

The Federal Government offers a variety of tax credits that assist preservation projects, notably a credit that is available only for rehabilitation of income-producing historic properties.  Under this historic preservation tax credit, property owners who rehabilitate historic buildings for commercial, industrial, agricultural, or rental residential purposes can receive a tax credit equal to 20 percent of the rehabilitation costs. The National Park Service must certify that the rehabilitation work meets the Secretary of the Interior’s Standards for Rehabilitation.

Other Federal tax credits can also be used in preservation projects and can be combined with the historic preservation tax credit.


Federal Rehabilitation Tax Credit for Non-Historic Commercial Buildings Built before 1936–10%
Federal Agency:
 Internal Revenue Service

The Internal Revenue Service offers up to a 10 percent tax credit for rehabilitation on commercial buildings not listed on the National Register and built before 1936.

 

Federal New Markets Tax Credit
Federal Agency:
 U.S. Department of the Treasury
Recipients:
 Community Development Entities (CDE) that pass through to developers

This credit is targeted at drawing investment to businesses and commercial projects in distressed urban, rural, and suburban communities.  Taxpayers can receive a credit against Federal income taxes by making qualified equity investments in designated Community Development Entities (CDEs).  All qualified investment is used by the CDE to invest in low-income communities.  New Markets Tax Credits are allocated to a CDE, which then acts as a pass through for funds.

 

Preservation Easements
Federal Agency: Internal Revenue Service
Recipients:
 Property owners

Donation of a historic preservation easement on National Register of Historic Places listed property generally qualifies as a charitable contribution for Federal tax purposes, and thus would result in income tax deductions. This provision of Federal tax law thus provides a cash incentive to owners of historic properties to protect them through donations of easements. The Preservation Alliance of Minnesota, a 501(c)(3), nonprofit organization, is a preservation easement holding entity.

Contact: Erin Hanafin Berg,, Field Representative Preservation Alliance of Minnesota, (651) 293-9047 x4, ehberg@mnpreservation.org

 

 

Disabled Access Tax Credit

Federal Agency: Internal Revenue Service
Recipients: 
Small businesses

The Internal Revenue Service offers tax credit up to 50 percent on expenses incurred by providing access to persons with disabilities.

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