Support HB4 to Extend Historic Tax Credits (Updated)
UPDATE: LEGISLATURE EXTENDS, CAPS STATE HISTORIC TAX CREDIT
During the special session that ended June 30, state lawmakers voted to extend the Commercial Rehabilitation Tax Credit, a very successful incentive program that was poised to expire without legislative action. HB 4, a bill introduced by Rep. Tanner McGee and signed into law by Gov. John Bel Edwards in July, keeps the 20% tax credit available through 2025, providing much needed certainty to investors and property owners.
Louisiana Landmarks Society joined a coalition of nonprofit and industry groups in calling for the extension, which enables historic preservation to play a vital role in the state’s economic recovery. Fiscal woes brought on by COVID 19 and related closures were top of mind for lawmakers, who placed a $125 million annual aggregate cap on credits issued. Intended to add predictability for purposes of balancing the state budget, the cap is sufficiently high that it is not expected to hinder projects in the near term.
Multiple studies have shown the tax incentive, commonly known as the state historic tax credit, not only creates jobs but more than pays for itself over time in new taxes on materials, labor and income. In order to qualify, buildings must be located in a Downtown Development District (DDD) or a Louisiana Cultural District and be used for commercial or rental purposes. Statewide, the program has unleashed investments approaching $4 billion. New Orleans leads the state in total rehabilitation projects, including hotels, food halls, apartments and affordable housing,
ORIGINAL POST BELOW
Louisiana's Commercial Rehabilitation Tax Credit, better known as the State Historic Tax Credit, has unleashed nearly $4 billion in private investments in less than two decades. Much of that has taken place in Greater New Orleans, creating regional jobs in design and construction while strengthening our local tax base.
Many of the beautifully restored buildings that have received Louisiana Landmarks Society Preservation Awards would still be in disrepair without the State Historic Tax Credit. This 20% credit not only offsets the cost of doing restoration the right way; it helps preservation projects get financing from banks and investors. Losing the credit would mean losing jobs and investment to other states.
A 2017 study by PlaceEconomics found that each dollar in State Historic Tax Credits generates $8.76 in economic activity. This in turn produces sales and income taxes that more than offset the credits given. For every $1 in State Historic Tax Credits, Louisiana receives $0.42 in tax revenue before the credit is issued (after the building restoration is completed). No other tax credit provides a return on investment of over $2.75 in state tax collections for every $1 credit and over $8.00 in indirect impact for every $1 credit.
Extending the State Historic Tax Credit provides much needed certainty during turbulent economic times. It will pay off in jobs for Louisianans while bringing life and beauty back to historic towns and neighborhoods.
Call or email the senate committee members today today to let them know you support HB 4 to extend the State Historic Tax Credit.