Compilation of Rules and Regulations of the State of Georgia › Department 560 - RULES OF DEPARTMENT OF REVENUE › Chapter 560-7 - INCOME TAX DIVISION › Subject 560-7-8 - RETURNS AND COLLECTIONS › Rule 560-7-8-.56 - Historic Rehabilitation Tax Credit

Current through Rules and Regulations filed through June 27, 2024
(1)
Purpose.
This regulation provides guidance concerning the
				implementation and administration of the tax credits under O.C.G.A. §
									48-7-29.8.
(2)
Coordination of Agencies.
The Georgia Department of Community Affairs is the state agency responsible for
				certifying that the rehabilitation meets the requirements of O.C.G.A. §
									48-7-29.8.
(3)
Definitions.
As used in this
				regulation, the terms "certified rehabilitation", "certified structure",
				"historic home", "qualified rehabilitation expenditure", "substantial
				rehabilitation", and "target area" shall have the same meaning as in O.C.G.A.
				§
									48-7-29.8. As used in this
				regulation, the terms "full-time employee" and "full-time permanent job" means
				a person who works a job that requires 30 or more hours per week.
(4)
Historic Rehabilitation Tax Credit
				for a Historic Home.
A taxpayer shall be allowed a tax credit equal to
				25 percent of the qualified rehabilitation expenditures for the certified
				rehabilitation of a historic home in the taxable year in which the certified
				rehabilitation is placed in service; except that in the case of a historic home
				located within a target area, an additional credit equal to 5 percent of the
				qualified rehabilitation expenditures shall be allowed.
(a) Credit cap. In no event shall the
				aggregate amount allowed for historic homes exceed the maximum aggregate limit
				in paragraph (5) for calendar year 2022 and $5 million per year for calendar
				years 2023 and 2024. No credit shall be issued for historic homes completed on
				or after January 1, 2025.
(b)
				Credit limitation. The amount of historic rehabilitation tax credit for a
				historic home shall not exceed $100,000 in any 120-month period.
(c) Preapproval for Historic Homes. Any
				taxpayer seeking preapproval to claim the historic rehabilitation tax credit
				for a historic home completed on or after January 1, 2022 must electronically
				submit Form IT-RHC-AP and their precertification from the Georgia Department of
				Community Affairs through the Georgia Tax Center. The taxpayer must estimate
				their credit amounts on Form IT-RHC-AP if the certified rehabilitation has not
				been completed. The amount of tax credit claimed on the taxpayer's applicable
				Georgia income tax return must be based on the actual amount of the qualified
				rehabilitation expenditures. If the taxpayer is preapproved for an amount that
				exceeds the amount that is calculated using the actual amount of the qualified
				rehabilitation expenditures when the return is filed, the excess preapproved
				amount cannot be claimed by the taxpayer, nor shall the excess preapproved
				amount be claimed by, reallocated to, assigned to, transferred to, or sold to
				any other taxpayer. If the taxpayer is a disregarded entity, then such
				information should be submitted in the name of the owner of the disregarded
				entity.
(d) Notification. The
				Department will notify each taxpayer of the tax credits preapproved and
				allocated to such taxpayer within thirty (30) days from the date the fully
				completed Form IT-RHC-AP and all required supporting documentation were
				submitted through the Georgia Tax Center.
(e) Allocation of Tax Credit. For any
				taxpayer seeking preapproval to claim the tax credits for a historic home
				completed on or after January 1, 2022, the Commissioner shall allow the tax
				credit on a first-come, first-served basis. The date the fully completed Form
				IT-RHC-AP is electronically submitted shall be used to determine such
				first-come, first-served basis.
(f)
				Applications received on the day the maximum credit amount is reached. In the
				event that the credit amounts on applications received by the Commissioner for
				historic homes completed on or after January 1, 2022 exceed the maximum
				aggregate limit in paragraphs (4) and (5) of this regulation, then the tax
				credits shall be allocated among the taxpayers who submitted Form IT-RHC-AP on
				the day the maximum aggregate limit was exceeded on a pro rata basis based upon
				amounts otherwise allowed under O.C.G.A. §
										48-7-29.8 and  this regulation.
				Such proration shall include all applications received on the day the maximum
				aggregate limit was exceeded, regardless of whether it is for the credit cap
				year at issue or for an earlier year where the credit cap has been reached.
				Only credit amounts for applications received on the day the maximum aggregate
				limit was exceeded will be allocated on a pro rata basis.
(g) For historic homes, priority for prorated
				applications and applications submitted after a calendar year cap is reached.
				Any application for the 2022 calendar year credit that is prorated because the
				2022 calendar year credit cap is reached and any application for the 2022
				calendar year credit that is submitted after the 2022 calendar year credit cap
				is reached shall not be approved for a subsequent calendar year whose credit
				cap has not been reached and shall not have priority over any applications with
				a later submission date. Any other application that is prorated because a
				calendar-year credit cap is reached and any other application that is submitted
				after a calendar-year credit cap is reached shall be approved for a subsequent
				calendar year whose credit cap has not been reached and shall have priority
				over any applications with a later submission date. In such cases, the taxpayer
				shall claim the credit in the taxable year that begins in such subsequent
				preapproved calendar year or as provided in paragraph (7) of this regulation.
				If the calendar-year credit cap for all subsequent calendar years has been
				reached, then the application shall be denied.
1. Example: Taxpayer submits the electronic
				Form IT-RHC-AP through the Georgia Tax Center on April 25, 2022 seeking
				preapproval to claim the 2022 historic rehabilitation tax credit for a historic
				home. On April 25, 2022, the 2022 calendar-year credit cap for historic homes
				was reached, and Taxpayer received an allocation of the 2022 historic
				rehabilitation tax credit on a pro rata basis. Taxpayer's preapproval
				application will not be approved for a subsequent calendar year and will not
				receive priority over applications with a later submission date.
2. Example: Taxpayer submits the electronic
				Form IT-RHC-AP through the Georgia Tax Center in 2023 seeking preapproval to
				claim the 2023 historic rehabilitation tax credit for a historic home. On the
				day that Taxpayer submits Form IT-RHC-AP, the 2023 calendar-year credit cap for
				historic homes was reached, and Taxpayer received an allocation of the 2023
				historic rehabilitation tax credit on a pro rata basis. Taxpayer's preapproval
				application will be approved for the 2024 calendar year if the 2024 credit cap
				has not been reached and will receive priority over applications with a later
				submission date.
(h)
				Claiming the Historic Rehabilitation Tax Credit for a Historic Home. For a
				taxpayer to claim the historic rehabilitation tax credit for a historic home,
				the taxpayer must submit with the taxpayer's Georgia income tax return Form
				IT-RHC, the property tax bill for the year immediately before the beginning of
				the 24 month (or 60 month) period, the property tax bill for the year
				immediately after the beginning of the 24 month (or 60 month) period, and their
				completed final certification from the Georgia Department of Community
				Affairs.
(i) In the event it is
				determined that a taxpayer has not met all the requirements of O.C.G.A. §
										48-7-29.8 and  this regulation,
				then the credits shall not be approved or the approved credits shall be
				retroactively denied. The taxpayer shall file amended returns for the taxable
				year the credit was claimed, reducing the credit. With respect to such denied
				credits, tax, interest, and penalties shall be due if the credits have already
				been used by the taxpayer or have been sold or transferred, regardless of
				whether the transferee has used the credit or not.
(j) Carry Forward. Any unused historic
				rehabilitation tax credit for a historic home may be carried forward for ten
				years after the close of the taxable year in which the certified rehabilitation
				was completed.
(k) Sale of the
				Historic Home. Except as provided in subparagraph (4)(l) of this regulation, in
				the event a historic rehabilitation tax credit for a historic home is claimed
				and allowed to the taxpayer, upon the sale or transfer of the historic home,
				the taxpayer shall be authorized to transfer the remaining unused amount of
				such historic rehabilitation tax credit to the purchaser of such historic home.
				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 the sale or transfer.
1. Such purchaser shall be subject to the
				limitations of this paragraph and O.C.G.A. §
											48-7-29.8 and  shall file with the
				purchaser's tax return a copy of the final certification from the Georgia
				Department of Community Affairs and a copy of the form evidencing the transfer
				of the tax credit.
2. Such
				purchaser shall be entitled to rely in good faith on the information contained
				in and used in connection with obtaining the final certification of the credit
				including, without limitation, the amount of the qualified rehabilitation
				expenditures.
(l)
				Recapture of the Historic Rehabilitation Tax Credit for a Historic Home. 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 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.
(m) Exception to Recapture Provision. The
				recapture provisions in subparagraph (4)(l) of this regulation shall not apply
				to a sale resulting from the death of the owner.