State Historic Tax Credits

Preservation & State Historic Tax Credits

To spur more private investment in older neighborhoods, 35 states have adopted laws creating credits against state taxes to provide incentives for the appropriate rehabilitation of historic buildings. (See map below.) Well-crafted state historic tax credit programs, such as those in Minnesota and Virginia, increase the number of federal rehabilitation projects. For example, Missouri's state tax credit doubled the usage of the federal incentive when it was put into place.

State historic tax credits increase the use of the federal historic tax credit. The presence of an active state tax credit program boosts the use of the federal credit on average between $15 and $35 million in certified expenditures according to research from the Washington Office of Planning. That means the states with active tax credit programs are bringing in between $3 to $7 million federal dollars, which would not otherwise be available, to the state.

Federal Historic Tax Credit

Statewide tax credit programs are often used in conjunction with the Federal Historic Tax Credit. Learn more about this important historic preservation tool.

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The reports below quantify the numbers of direct jobs and other substantial economic impacts created through state tax incentives. They also show how the rehabilitation of historic buildings starts to pay back the state’s investment immediately through taxes on construction jobs and materials.

*Note: Hawaii doesn't have a credit, but Historic Hawaii researched how a tax credit would help preserve the state's heritage.

Pay Back to the State

Ohio law requires the state to conduct a cost-benefit analysis for each historic building seeking a tax credit. The state must determine whether rehabilitation of the building and awarding of the credit will result in a net revenue gain in state and local taxes once the building is used. The Ohio model takes into account tax revenues generated after the building is placed in service. Click here to learn about Ohio's program.