The goal of the Historic Tax Credit (HTC) Program is to incent reinvestment into historic main streets, downtowns, and commercial districts in the state of Wisconsin.
This program supports the following WEDC Strategic Pillar and Focus Area:
Community and Economic Opportunity: Downtown Development
The Historic Preservation Tax Credit Program provides transferable tax credits to eligible entities rehabilitating certified historic buildings. The state program acts as a supplement to the federal program, allowing for a state credit of 20 percent of qualified rehabilitation expenditures for certified historic structures.
A “certified historic structure” is a building that is listed individually in the National Register of Historic Places or is located in a registered historic district and is certified by the National Park Service as contributing to the historic significance of that district.
Nonprofits are not eligible for certification unless 1) the entity is a 501(c)3 and the entity intends to sell or otherwise transfer the tax credit, or 2) the entity is a nonprofit other than a 501(c)3 as described above and WEDC receives approval of the proposed project from the Joint Committee on Finance under 14-day passive review.(1)
For taxable years beginning after December 31, 2013, applicants may be certified to claim tax incentives for qualified rehabilitation expenditures on eligible buildings and projects.
Certification requires that the claimant provide the following to WEDC:
- Evidence that the rehabilitation was recommended by the State Historic Preservation Officer (SHPO) for approval by the Secretary of the Interior before the physical work of construction, or destruction in preparation for construction, began.
- Taxpayer obtained written certification from SHPO that the property qualifies under any of the following:
- Listed in the national Register of Historic Places or the State Register of Historic Places;
- Determined by the Wisconsin Historical Society (WHS) to be eligible for listing in the National Register of Historic Places or the State Register of Historic Places;
- Located in a historic district that is listed in the National Register of Historic Places or the State Register of Historic Places and is certified by the SHPO as being of historic significance to the district; or
- An outbuilding of an otherwise eligible property certified by the SHPO as contributing to the historic significance of the property.
- The costs were not incurred before the Wisconsin Historical Society approved the proposed preservation or rehabilitation plan.
- The cost of the person’s qualified rehabilitation expenditure, as defined in section 47 (c)(2) of the Internal Revenue Code, is at least $50,000.
- The rehabilitated property is placed in service after December 31, 2013.
- The proposed preservation or rehabilitation plan complies with standards promulgated under Wis. Stat. §44.02(24) and the completed preservation or rehabilitation substantially complies with the proposed plan.
- No physical work of construction or destruction began prior to the recommendation of the proposed preservation or rehabilitation by the SHPO.
- The eligible costs are not incurred to acquire any building or interest in a building or to enlarge an existing building.
WEDC may deny certification to an otherwise eligible project based on funding availability or other application criteria. Funding certifications will be effective for three years commencing on the initial date of certification and must be claimed based on actual qualified rehabilitation expenditures by the conclusion of the three-year period; however, a project may be approved for six years if the rehabilitation is substantial and occurring in phases. WEDC may extend certification windows at its discretion.
If a person who claims a credit under this subsection and a credit under section 47 of the Internal Revenue Code for the same qualified rehabilitation expenditures is required to repay any amount of the credit claimed under section 47 of the Internal Revenue Code, the person shall repay to the Department of Revenue a proportionate amount of the credit claimed under this subsection.
(1) Wis. Stat. §238.17(3)(b)
Incentives and Available Funding (FY19):
The incentive through this program is a 20% transferable tax credit of qualified rehabilitation expenses. Fund certifications are awarded on a rolling basis, at the discretion of WEDC. In accordance with 2017 Wisconsin Act 280, the maximum amount of credits for all projects undertaken on the same parcel may not exceed $3,500,000.(2)
(2) Wis. Stat. §238.17(2)
Activities and Expected Outcomes:
Assist 25 community projects and achieve a 5:1 leverage of other investment.
Recipients will be required to submit WHS Part III of the Historic Preservation Certification Application upon project completion.
WEDC may impose additional reporting requirements to evaluate project performance and to ensure compliance with contract deliverables.
Application and Awards Process:
WEDC certifications for Certified Historic Buildings will adhere to the following process:
- Applicant must submit Part I and II of the Historic Preservation Certification Application to WHS.
- WHS will provide to WEDC evidence that the planned rehabilitation is recommended by the SHPO.
- WEDC, upon review, may issue a Historic Preservation Tax Credit Certification.
- Upon completion of work, the applicant will submit to WHS Part III of the Historic Preservation Certification Application.
- WHS will provide to WEDC evidence that the completed rehabilitation complies with WHS standards.
Certifications may be amended by submitting the project through SHPO’s Part II amendment process or upon completion of the Part III Historic Preservation Certification Application. WEDC will determine if the amendment warrants an increase in certified funds.
For more information on application review, internal process and award distribution, please refer to WEDC’s award administration policies and procedures.