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Historic Rehabilitation Credit

Alabama Historic Rehabilitation Credit of 2017

Act 2017-380, codified in Article 2 of Chapter 9F of Title 40, Code of Alabama 1975, provides a refundable income tax credit against the tax liability of the taxpayer for the rehabilitation, preservation, and development of historic structures. The credit is equal to 25% of the qualified rehabilitation expenditures for certified historic structures. No tax credit claimed for any certified rehabilitation may exceed $5,000,000 for all allowable property types except a certified historic residential structure, and $50,000 for a certified historic residential structure. The entire credit must be claimed by the taxpayer in the taxable year in which the certified rehabilitation is placed in service.  This credit is refundable and transferable but cannot be carried forward.

The tax credits can only be claimed by taxpayers holding a Tax Credit Certificate or a Transfer Tax Credit Certificate.  Any tax credits granted to or transferred to a pass-through entity shall be claimed at the entity level.  Tax credits granted or transferred to a single member limited liability company or a Q-sub that is disregarded for federal income tax purposes shall be claimed by the owner of the disregarded entity.  Any non-profit entity allowed a tax credit shall file an Alabama income tax return for the tax year the project is placed in service to claim the credit.

Departmental rules and the forms pertaining to the transferability will be available soon.

The Alabama Historic Commission is the administering agency.  For more information about applying for a historic rehabilitation tax credit contact:

Alabama Historic Commission
Alabama Historic Rehabilitation Tax Credit Program
408 South Perry Street
Montgomery, AL  36130
334-242-3184

More information on the Historic Rehabilitation Credit Program can be found on the Alabama Historical Commission website.

Alabama Historic Rehabilitation Credit of 2013

Act 2013-241, as amended in Act 2014-452, codified in Article 1 of Chapter 9F of Title 40, Code of Alabama 1975, provides an income tax credit against the tax liability of the taxpayer for the rehabilitation, preservation, and development of historic structures. The credit is equal to 25% of the qualified rehabilitation expenditures for certified historic structures. The act also provides a tax credit equal to 10% of the qualified rehabilitation expenditures for qualified pre-1936 non-historic structures. No tax credit claimed for any certified rehabilitation may exceed $5,000,000 for all allowable property types except a certified historic residential structure, and $50,000 for a certified historic residential structure. The credit may be claimed by the taxpayer in the taxable year in which the certified rehabilitation is placed in service.  This credit is transferable and can be carried forward. The tax credits can only be claimed by taxpayers holding a Tax Credit Certificate or a Transfer Tax Credit Certificate.

Administrative Rules for the Historic Rehabilitation Credit of 2013

A transfer is not valid until the Department of Revenue issues a transfer tax credit certificate to the transferee.  The taxpayer must submit a transfer statement, copy of the tax credit certificate issued by the Alabama Historic Commission, the transfer agreement, and a $1,000 fee per transferee to the Alabama Department of Revenue, Commissioner’s Office, P.O. Box 327001, Montgomery, AL  36132-7001.

Historic Rehabilitation Credit Transfer Statement (Form HRC-TS1) for the Alabama Historic Rehabilitation Credit of 2013

For more information about claiming the credit or the transferability of the tax credit for both programs contact:

Kelly Graham
Director of Economic Development, CPM
Office of the Commissioner
Alabama Department of Revenue
P.O. Box 327001
Montgomery, AL 36132-7001
(334) 242-1188
kelly.graham@revenue.alabama.gov

Ashley Moon
Revenue Examiner, CPM, MPA
Office of the Commissioner
Alabama Department of Revenue
P.O. Box 327001
Montgomery, AL 36132-7001
(334) 242-1184
ashley.moon@revenue.alabama.gov