2023 Louisiana Laws › Revised Statutes › Title 47 - Revenue and Taxation › §47:6019. Tax credit; rehabilitation of historic structures

RS 47:6019 - Tax credit; rehabilitation of historic structures
A.(1)(a)(i) There shall be a credit against income and corporation franchise tax for the amount of eligible costs and expenses incurred during the rehabilitation of a historic structure located in a downtown development district, located in a cultural district, or contributing to the National Register of Historic Places. The amount of the credit shall equal twenty-five percent of the eligible costs and expenses of the rehabilitation incurred prior to January 1, 2018, regardless of the year in which the property is placed in service. The amount of the credit shall equal twenty percent of the eligible costs and expenses of the rehabilitation incurred on or after January 1, 2018, and before January 1, 2023, regardless of the year in which the property is placed in service. The amount of the credit shall equal twenty-five percent of the eligible costs and expenses of the rehabilitation incurred on or after January 1, 2023, and before January 1, 2029, regardless of the year in which the property is placed in service. No credit is authorized pursuant to this Section for expenses incurred on or after January 1, 2029.
(ii) For the rehabilitation of a historic structure that meets the requirements of Item (i) of this Subparagraph and is located in a rural area, the amount of the credit shall equal thirty-five percent of the eligible costs and expenses of the rehabilitation incurred on or after January 1, 2023, and before January 1, 2029.
(b) The tax credit for qualified rehabilitation expenditures is earned only in the year in which the property attributable to the expenditures is placed in service. The amount of the tax credit shall be determined according to the values provided for in Subparagraph (a) of this Subsection.
(c) No taxpayer, or any entity affiliated with such taxpayer, shall claim more than five million dollars of credit annually for any number of structures rehabilitated with a particular downtown development or cultural district.
(d) The tax credit shall not be allowed for the rehabilitation costs and expenses that are paid for with state or federal funds, unless the state or federal funds are reported as taxable income or are structured as repayable loans.
(e) For State of Louisiana Commercial Rehabilitation Tax Credit Part 2 applications received by the Department of Culture, Recreation and Tourism on or after January 1, 2021, the maximum aggregate total of tax credits that may be reserved by all taxpayers pursuant to the provisions of this Section shall not exceed one hundred twenty-five million dollars annually. If the amount of tax credit reservations issued in a calendar year is less than one hundred twenty-five million dollars, the excess reservation amount shall be available for issuance in any subsequent calendar year. The Department of Culture, Recreation and Tourism shall establish by rule the method of reserving available tax credits including, but not limited to a first-come, first-served system or any other method that the Department of Culture, Recreation and Tourism determines to be beneficial to the program. Rules promulgated pursuant to the provisions of this Subparagraph shall be subject to oversight by the House Committee on Ways and Means and the Senate Committee on Revenue and Fiscal Affairs. The Department of Revenue and the Department of Culture, Recreation and Tourism shall make reasonable efforts to post a listing of estimated credit amounts remaining under the annual cap on their websites.
(2)(a) In order to qualify for the credit, the historic structure located in the downtown development or cultural district shall also be listed on the National Register of Historic Places or be certified by the state historic preservation office as contributing to the historical significance of the district.
(b) Eligible structures must be nonresidential real property or residential rental property.
(c) A single fee shall be charged per application by the state historic preservation office and the Department of Revenue, the amount of which shall be determined in rules and regulations promulgated by the Department of Culture, Recreation and Tourism, in consultation with the Department of Revenue, in accordance with the Administrative Procedure Act, subject to oversight by the House Committee on Ways and Means and the Senate Committee on Revenue and Fiscal Affairs. The rules and regulations promulgated in accordance with the provisions of this Section shall provide for an equitable distribution of the application fee between the state historic preservation office and the Department of Revenue.
(3)(a) The credit shall be allowed against the income tax for the taxable period in which the credit is earned and against the franchise tax for the taxable period following the taxable period in which the credit is earned. If the tax credit allowed pursuant to this Section exceeds the amount of such taxes due, any unused credit may be carried forward as a credit against subsequent tax liability for a period not to exceed five years. This credit may be used in addition to the twenty percent federal tax credit for such purposes.
(b)(i)(aa) Persons who are awarded tax credits may elect to sell their unused tax credits to one or more individuals or entities. The tax credits may be transferred or sold by a taxpayer or any subsequent transferee an unlimited number of times.
(bb) The transfer of the credit does not extend the carry forward period of the credit.
(cc) Transferors and transferees shall submit to the Department of Revenue in writing a notification of any transfer or sale of tax credits within ten business days after the transfer or sale of such tax credits. The notification shall be accompanied by a tax credit transfer processing fee, the amount of which shall be determined in rules and regulations promulgated by the Department of Revenue, in accordance with the Administrative Procedure Act, subject to oversight by the House Committee on Ways and Means and the Senate Committee on Revenue and Fiscal Affairs. A "transfer", for purposes of the fee requirement, means an assignment, disposition, transfer, or allocation of tax credits. The notification shall include the transferor's tax credit balance prior to transfer, the credit identification number assigned by the state historic preservation office, the remaining balance after transfer, all federal and Louisiana tax identification numbers for both transferor and transferee, the date of transfer, the amount transferred, and any other information required by the Department of Revenue. Failure to comply with this notification provision will result in the disallowance of the tax credit until the parties are in full compliance.
(ii)(aa) All entities taxed as corporations for Louisiana income or corporation franchise tax purposes shall claim any credit allowed under this Section on their corporation income and corporation franchise tax return.
(bb) Individuals shall claim any credit allowed under this Section on their individual income tax return.
(cc) Estates or trusts shall claim any credit allowed under this Section on their fiduciary income tax returns.
(dd) Entities not taxed as corporations shall claim any credit allowed under this Section on the returns of the partners or members as follows:
(I) Corporate partners or members shall claim their share of the credit on their corporation income or corporation franchise tax returns.
(II) Individual partners or members shall claim their share of the credit on their individual income tax returns.
(III) Partners or members that are estates or trusts shall claim their share of the credit on their fiduciary income tax returns.
B.(1) For purposes of this Section, the following words and phrases shall have the meanings ascribed to them in this Paragraph:
(a) "Contributing to the National Register of Historic Places" means listed or deemed as a contributing element within a National Register Historic District as determined by the National Park Service.
(b) "Cultural district" shall mean a district designated by a local governing authority in accordance with law for the purpose of revitalizing a community by creating a hub of cultural activity, including affordable artist housing and workspace. The Department of Culture, Recreation and Tourism shall develop standard criteria for cultural districts. Such criteria shall include that the district must be geographically contiguous and distinguished by cultural resources that play a vital role in the life and cultural development of a community. The district shall focus on a cultural compound, a major art institution, art and entertainment businesses, an area with arts and cultural activities or cultural or artisan production and be engaged in the promotion, preservation, and educational aspects of the arts and culture of the locale and contribute to the public through interpretive and educational uses. The Department of Culture, Recreation and Tourism may determine whether or not a district complies with this definition.
(c) "Downtown development district" shall mean a downtown development district or central business development district created by law, pursuant to law, or by ordinance adopted prior to January 1, 2002, in a home rule charter municipality.
(d) "Eligible costs and expenses" shall mean qualified rehabilitation expenditures as defined in Section 47c(2)(A) of the Internal Revenue Code of 1986, as amended, except that "substantially rehabilitated" shall mean that the qualified rehabilitation expenditures must exceed ten thousand dollars.
(e) "Rural area" means any of the following:
(i) A parish of this state with a population of less than one hundred thousand according to the most recent federal decennial census.
(ii) A municipality of this state with a population of less than thirty-five thousand according to the most recent federal decennial census.
(iii) An unincorporated area of a parish of this state, which parish has a population of one hundred thousand or more according to the most recent federal decennial census.
(2) Federal law terms. Except as otherwise provided or clearly appearing from the context, any term used in this Section shall have the same meaning as when used in a comparable context in federal law.
C. The provisions of this Section shall be effective for taxable years ending prior to January 1, 2029.
Acts 2002, No. 60, §1, eff. July 1, 2002, for all taxable years ending prior to Jan. 1, 2005; Acts 2005, No. 439, §1, eff. July 11, 2005; Acts 2007, No. 298, §1; Acts 2009, No. 444, §1, eff. July 8, 2009; Acts 2011, No. 409, §1, eff. July 6, 2011; Acts 2013, No. 263, §1, eff. June 13, 2013; Acts 2013, No. 418, §1, eff. June 21, 2013; Acts 2014, No. 825, §1, eff. July 1, 2014; Acts 2015, No. 108, §1, eff. June 19, 2015; Acts 2017, No. 403, §2, eff. June 26, 2017; Acts 2020 1st Ex. Sess., No. 25, §1, eff. July 1, 2020; Acts 2023, No. 426, §1.
NOTE: Acts 2002, No. 60, §3, provides that the Act is effective for all taxable periods ending prior to Jan. 1, 2005. Acts 2004, 1st Ex. Sess., No. 12, §1, extends this applicability to all taxable years ending before Jan. 1, 2008.