(Effective After December 31, 2021) Tax Credits for the Rehabilitation of Historic Structures; Conditions and Limitations

  1. Law
  2. Georgia Code
  3. Revenue and Taxation
  4. Income Taxes
  5. Imposition, Rate, and Computation; Exemptions
  6. (Effective After December 31, 2021) Tax Credits for the Rehabilitation of Historic Structures; Conditions and Limitations

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  1. As used in this Code section, the term:
    1. "Certified rehabilitation" means repairs or alterations to a certified structure which are certified by the Department of Community Affairs as meeting the United States Secretary of the Interior's Standards for Rehabilitation or the Georgia Standards for Rehabilitation as provided by the Department of Community Affairs.
    2. "Certified structure" means a historic building or structure that is individually listed in the Georgia Register of Historic Places or is certified by the Department of Community Affairs as contributing to the historic significance of a Georgia Register Historic District.
    3. "Historic home" means a certified structure which, or any portion of which is or will, within a reasonable period, be owned and used as the principal residence of the person claiming the tax credit allowed under this Code section. Historic home shall include any structure or group of structures that constitute a multifamily or multipurpose structure, including a cooperative or condominium. If only a portion of a building is used as such person's principal residence, only those qualified rehabilitation expenditures that are properly allocable to such portion shall be deemed to be made to a historic home.
    4. "Qualified rehabilitation expenditure" means any amount properly chargeable to a capital account expended in the substantial rehabilitation of a structure that by the end of the taxable year in which the certified rehabilitation is completed is a certified structure. This term does not include the cost of acquisition of the certified structure, the cost attributable to enlargement or additions to an existing building, site preparation, or personal property.
    5. "Substantial rehabilitation" means rehabilitation of a certified structure for which the qualified rehabilitation expenditures, at least 5 percent of which must be allocable to the exterior during the 24 month period selected by the taxpayer ending with or within the taxable year, exceed:
      1. For a historic home, the lesser of $25,000.00 or 50 percent of the adjusted basis of the property as defined in subparagraph (a)(1)(B) of Code Section 48-5-7.2; or, in the case of a historic home located in a target area, $5,000.00; or
      2. For any other certified structure, the greater of $5,000.00 or the adjusted basis of the property.
    6. "Target area" means a qualified census tract under Section 42 of the Internal Revenue Code of 1986, found in the United States Department of Housing and Urban Development document number N-94-3821; FR-3796-N-01.
  2. A taxpayer shall be allowed a tax credit against the tax imposed by this chapter in the year that the certified rehabilitation is placed in service, which may be up to two years after the end of the taxable year for which the credit was originally reserved:
    1. In the case of a historic home, equal to 25 percent of qualified rehabilitation expenditures, except that, in the case of a historic home located within a target area, an additional credit equal to 5 percent of qualified rehabilitation expenditures shall be allowed; and
    2. In the case of any other certified structure, equal to 25 percent of qualified rehabilitation expenditures.
    1. In no event shall credits for a historic home exceed $100,000.00 in any 120 month period.
    2. In no event shall credits for a certified structure exceed $300,000.00 in any 120 month period.
  4. In order to be eligible to receive the credit authorized under subsection (b) of this Code section, a taxpayer must attach to the taxpayer's state tax return a copy of the certification of the Department of Community Affairs verifying that the improvements to the certified structure are consistent with the Department of Community Affairs Standards for Rehabilitation.
    1. If the credit allowed under this Code section in any taxable year exceeds the total tax otherwise payable by the taxpayer for that taxable year, the taxpayer may apply the excess as a credit for succeeding years until the earlier of:
      1. The full amount of the excess is used; or
      2. The expiration of the tenth taxable year after the taxable year in which the certified rehabilitation has been completed.
    2. No such credit shall be allowed the taxpayer against prior years' tax liability.
  6. In the case of any rehabilitation which may reasonably be expected to be completed in phases set forth in architectural plans and specifications completed before the rehabilitation begins, a 60 month period may be substituted for the 24 month period provided for in paragraph (5) of subsection (a) of this Code section.
    1. Except as otherwise provided in subsection (h) of this Code section, in the event a tax credit under this Code section has been claimed and allowed the taxpayer, upon the sale or transfer of the certified structure, the taxpayer shall be authorized to transfer the remaining unused amount of such credit to the purchaser of such certified structure. If a historic home for which a certified rehabilitation has been completed by a nonprofit corporation is sold or transferred, the full amount of the credit to which the nonprofit corporation would be entitled if taxable shall be transferred to the purchaser or transferee at the time of sale or transfer.
    2. Such purchaser shall be subject to the limitations of subsection (e) of this Code section. Such purchaser shall file with such purchaser's tax return a copy of the approval of the rehabilitation by the Department of Community Affairs as provided in subsection (d) of this Code section and a copy of the form evidencing the transfer of the tax credit.
    3. Such purchaser shall be entitled to rely in good faith on the information contained in and used in connection with obtaining the approval of the credit including, without limitation, the amount of qualified rehabilitation expenditures.
    1. If an owner other than a nonprofit corporation sells a historic home within three years of receiving the credit, the seller shall recapture the credit to the Department of Revenue as follows:
      1. If the property is sold within one year of receiving the credit, the recapture amount will equal the lesser of the credit or the net profit of the sale;
      2. If the property is sold within two years of receiving the credit, the recapture amount will equal the lesser of two-thirds of the credit or the net profit of the sale; or
      3. If the property is sold within three years of receiving the credit, the recapture amount will equal the lesser of one-third of the credit or the net profit of the sale.
    2. The recapture provisions of this subsection shall not apply to a sale resulting from the death of the owner.
  9. The tax credit allowed under this Code section, and any recaptured tax credit, shall be allocated among some or all of the partners, members, or shareholders of the entity owning the project in any manner agreed to by such persons, whether or not such persons are allocated or allowed any portion of any other tax credit with respect to the project.
  10. The Department of Community Affairs and the Department of Revenue shall prescribe such regulations as may be appropriate to carry out the purposes of this Code section.
  11. The Department of Community Affairs shall report, on an annual basis, on the overall economic activity, usage, and impact to the state from the rehabilitation of eligible properties for which credits provided by this Code section have been allowed.

(Code 1981, §48-7-29.8, enacted by Ga. L. 2002, p. 954, § 1; Ga. L. 2008, p. 1179, §§ 1, 2/HB 851; Ga. L. 2015, p. 1340, § 1/HB 308; Ga. L. 2016, p. 864, § 48/HB 737; Ga. L. 2017, p. 774, § 48/HB 323; Ga. L. 2019, p. 661, § 1-1/HB 224; Ga. L. 2020, p. 38, § 9/SB 473; Ga. L. 2020, p. 493, § 48/SB 429.)

The 2015 amendment, effective January 1, 2016, rewrote this Code section. See Editor's notes for applicability.

The 2016 amendment, effective May 3, 2016, part of an Act to revise, modernize, and correct the Code, revised punctuation in subparagraph (a)(5)(A).

The 2017 amendment, effective May 9, 2017, part of an Act to revise, modernize, and correct the Code, substituted "subsection (d) of this Code section" for "subsection (d)" near the end of the last sentence of paragraph (g)(2).

The 2019 amendment, effective June 1, 2019, substituted the present provisions of subsection (b) for the former provisions, which read: "A taxpayer shall be allowed a tax credit against the tax imposed by this chapter for the taxable year in which the certified rehabilitation is completed:".

The 2020 amendments. The first 2020 amendment, effective July 1, 2020, substituted "Department of Community Affairs" for "Department of Natural Resources" throughout this Code section. The second 2020 amendment, effective July 29, 2020, part of an Act to revise, modernize, and correct the Code, deleted "and" following "credit;" at the end of subparagraph (e)(2)(C); and substituted "; and" for a period at the end of subparagraph (e)(2)(D). See Editor's notes for explanation of implementation.

Code Commission notes.

- Pursuant to Code Section 28-9-5, in 2015, "the" was inserted preceding "House Committee" in subsection (j).

Editor's notes.

- Ga. L. 2020, p. 493, § 54(e)/SB 429, not codified by the General Assembly, provides that: "In the event of a conflict between a provision in Sections 1 through 53 of this Act and a provision of another Act enacted at the 2020 regular session of the General Assembly, the provision of such other Act shall control over the conflicting provision in Sections 1 through 53 of this Act to the extent of the conflict." Accordingly, the amendment to this Code section by Ga. L. 2020, p. 493, § 48(4)/SB 429 was not given effect.

Code Section 48-7-29.8 is set out twice in this Code. The first version is effective until December 31, 2021, and the second version becomes effective on that date.

Ga. L. 2002, p. 954, § 5, not codified by the General Assembly, provides that this Code section is applicable to taxable years beginning on or after January 1, 2004.

Ga. L. 2008, p. 1179, § 3/HB 851, not codified by the General Assembly, provides that the 2008 amendment to this Code section shall apply to all taxable years beginning on or after January 1, 2009.

Ga. L. 2015, p. 1340, § 2/HB 308, not codified by the General Assembly, provides that: "The amendments enacted in this Act shall take effect on January 1, 2016, and shall be applicable to certified rehabilitations completed on or after January 1, 2017, and shall stand repealed on December 31, 2021, unless otherwise modified by the General Assembly. In the event the amendments provided for in this Act are repealed, the provisions of Code Section 48-7-29.8 as they existed prior to this Act shall remain in full force and effect."

Administrative Rules and Regulations.

- Georgia state income tax credit program for rehabilitated historic property, Official Compilation of the Rules and Regulations of the State of Georgia, Georgia Department of Natural Resources, Chapter 391-5-14.


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