Historic Tax Credits – Helping to Revitalize Alabama and Lower Your Taxes
In 2013, Alabama enacted the Historic Rehabilitation Tax Credit Program. The program provides developers with tax credits for rehabbing (as opposed to tearing down) historic properties. More than 30 states offer such credits and they are primarily designed to complement the federal historic tax credit program which was enacted in the 1970s.
The Alabama program is proving to be effective at generating economic development, creating jobs, preserving culturally significant buildings, reducing blight, and reviving downtown and main street communities. It also encourages national developers to invest in Alabama. A recent study conducted by the national accounting firm Novogradac & Company found that for every dollar Alabama spends on historic tax credits, $2.36 in NEW state and local tax revenue is generated ($3.90 present value).
Historic Tax Credits are good for the state and they preserve our rich culture and history in the process. But, the program needs taxpayers like you. Most developers don’t need the credits because their projects may not generate positive cash flow for many years, so the credits must be sold to Alabama taxpayers in order to generate the capital required to finance the rehabilitation projects.
BMSS is pleased to support the Alabama Historic Rehabilitation Tax Credit Program. We have contracted for approximately $5 million worth of credits for our clients’ use. The credits are available for $.90 each, and each credit offsets $1.00 of Alabama state tax liability. So, by using historic credits, you’re not just doing something good for Alabama, you’re also saving money on your taxes. Please contact your BMSS professional for further information about how you can participate.