LANSING — Gov. Gretchen Whitmer has signed legislation reinstating a tax credit for historic preservation projects that was eliminated in 2011 as part of former Gov. Rick Snyder’s state tax reform strategy.
Senate Bill 54 — which was sponsored by Sen. Wayne Schmidt, R-Traverse City, and signed into law on Dec. 30 — amends the state Income Tax Act to provide a historic preservation tax credit of up to 25 percent of qualified costs to rehabilitate historic buildings, structures and sites. Rehabilitation projects and sites that utilize the tax credit will have to be certified by the State Historic Preservation Office.
Historic preservation advocates have called the tax credit an important tool, especially for homeowners to maintain and redevelop their historic properties. Proponents of reinstating the tax credit previously told MiBiz that its elimination slowed down redevelopment activity throughout Michigan.
The initial state historic tax credit, for example, was put to use in Kalamazoo before it was eliminated. Property owners in the city of Kalamazoo spent more than $3.6 million to rehabilitate historic buildings, making Kalamazoo the largest per capita user of the tax credit in the state.
Residents in Grand Rapids’ Heritage Hill Historic District also supported reinstating the tax credit.
“We know everyone is eager to use this tax credit after too many years without,” according to a statement posted to the neighborhood association’s website. “It goes to show what an important preservation and economic tool this is for our communities.”
Under the historic preservation tax credit, the total of all pre-approved credits could not exceed $5 million in a calendar year, and taxpayers couldn’t claim a credit of more than $2 million for a single property.
Before property owners or long-term lease holders can apply to use the new tax credit, the Michigan State Historic Preservation Office needs to conduct a formal rulemaking process, which will include public comment over the next several weeks.