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Wisconsin Historic Tax Credit - Baker Tilly

03-30-2016 16:41

Report Date: 2015

Since 1989, the State of Wisconsin has oered a 5% Historic Tax Credit (HTC) of the qualified rehabilitated expenditures on building projects and renovations across the state. On January 1, 2014, that credit was elevated to a 20% HTC. Wisconsin is one of 34 states that oer Historic Tax Credits, and is one of 16 states that have no aggregate cap on credits. Five additional states have annual aggregate caps that exceed Wisconsin’s recent annual historic tax credit awards.  While details to each state’s program vary, ten states match Wisconsin’s 20% HTC allowance and 20 states exceed Wisconsin with a higher HTC, most commonly in the form of a 25% credit. Of the 34 states to offer rehabilitation tax credits, Wisconsin is one of 23 states to offer credits to owner-occupied residences. 

The purpose of this report is to estimate the economic and scal impact of recent changes to Wisconsin’s historic tax credit, enabling projects to claim the 20% award versus the 5% HTC award. The approach in this report looks at the benefits of the program in terms of overall economic output, jobs created, and tax revenue created for 25 commercial, residential and mixed-use projects that were approved since January 1, 2014. These 25 projects in aggregate constitute $34,799,764 of the $35,071,257 in HTC awarded since January 1, 2014. Six residential structures make up the balance of the HTC awarded and have been excluded as they constitute less than 1% of the overall credit amount and are not considered material to the scope of the review.

The report is divided into three sections. The first section identifies the employment and labor income from the projects. The second section estimates the community economic impacts of the projects. The final section provides a discussion of impacts on taxes and includes a cost-benefitt analysis and pay-back schedule of the 25 projects analyzed that have received HTC awards. Background information and data for these projects were provided by the University of Wisconsin-Milwaukee Historic Preservation Institute (HPI). Analysis -figures on construction and operations employment and revenue figures were calculated using IMPLAN, economic modeling software that creates a model of the local economy and estimates the impact of a change in local spending on output, employment, and wages. See Appendix A for IMPLAN methodology. Wisconsin state property values were calculated based on the assessment data provided and the anticipated millage value from this to the state. Sales and income tax amounts were calculated based on the anticipated hard costs for construction, projected wages and anticipated revenues of the projects. Total figures shown throughout the report are idetifned as including direct, indirect and induced impact figures.

Author(s):Baker Tilly
Attachment(s)
pdf file
Wicsconsin's Historic Tax Credit - Full Report   2.11MB   1 version
Uploaded - 03-30-2016
PDF file
Wicsconsin's Historic Tax Credit - Two Pager   586K   1 version
Uploaded - 03-30-2016

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