State Tax Credit - Potentially Huge Benefit for Colony

One of the Most Important pieces of legislation affecting the Colony Theatre will be the implementing of a state historic tax credit. This would mean one million dollars for the Colony Theatre.

Senator Kirk J. Schuring [(R) – District 29] will be introducing legislation that would create a 25% tax credit for the restoration and rehabilitation of Ohio’s vacant and under utilized historic buildings. The tax credit will encourage private investment in historic properties, generate additional jobs and stimulate economic development within existing communities. Additionally, this credit should spur greater investments in smaller commercial projects and Main Street commercial properties of older neighborhoods– particularly where there is a critical need for community revitalization.

What is a tax credit?
A tax credit is a dollar-for-dollar reduction in taxes owed. The State Investment Tax Credit is based on historic building rehabilitation costs, equaling 25% of qualified rehabilitation expenditures. It is a credit against taxes imposed and assessed under personal income tax; dealer in intangibles tax (state’s share only); public utility tax; and/or corporate franchise tax. If the amount of the credit exceeds the amount of tax otherwise due for any year,the excess may be carried forward.

What buildings are eligible?
Only Historic buildings in Ohio that are individually listed in the National Register of Historic Places, certified as contributing to a registered historic district, or designated by a certified local government.

Who can apply?
Owners holding the fee simple interest in or qualifified lessees of historic buildings in Ohio. What Expenditures Qualify? Expenditures for rehabilitation of an historic building, including architectural or engineering fees and cost of preparing National Register nominations. Qualified expenditures do not include acquisition costs or expenditures to expand or enlarge a building.

What is the application process?
Owners or qualified leasees will apply to the Ohio Historic Preservation Office for a rehabilitation tax credit certificate. The certificate will be issued if: (1) the building is a historic building, (2) the rehabilitation meets the Secretary of the Interior’s Standards for Rehabilitation, and (3) the qualified rehabilitation expenditures meet certain threshold levels ($5,000 for non-income-producing properties and the greater of $5,000 or the building’s adjusted basis for incomeproducing properties). An application fee will be charged for administrative purposes.

Can the tax credit be “assigned”?
Yes. The owner or qualified lessee to whom a rehabilitation tax credit certificate is issued may assign the certificate, or a certificate share, to any other person. This means that other investors can make use of the tax credit, including a mortgagee under a loan agreement.

When will the credit be available?
The credit may be claimed for return years beginning on or after January 1, 2006. Application forms will be available six months after the legislation is passed.

* Prepared by Heritage Ohio and Greater Ohio with information from the Ohio Historic Preservation Office. For more information visit www.heritageohio.org or call 614.258.6200