Missouri Historic Preservation Tax Credits

Introduction to the Missouri Historic Tax Credit Program

State historic tax credits offer a significant incentive for the preservation and rehabilitation of historic buildings, contributing to the cultural and economic vitality of communities. In Missouri, the Historic Preservation Tax Credit Program aims to encourage developers to maintain the integrity of the state’s historic buildings. This article aims to explore and explain the intricacies of this program, its application process, qualification criteria, and potential benefits.

Overview | Missouri Historic Tax Credit Program

Missouri’s Historic Preservation Tax Credit (HTC) Program incentivizes developers to preserve the state’s historic buildings by breathing new life into them. By providing tax credits to developers who undertake rehabilitation projects on historic structures, the program helps maintain the state’s cultural heritage and contributes to economic growth. The Department of Economic Development (DED) and the Department of Natural Resources (DNR) oversee the program, and they periodically request public feedback on proposed changes to the program to ensure it meets the needs of its stakeholders.

Application Process

The application process for the Missouri Historic Preservation Tax Credit Program is comprehensive and involves multiple stages. It begins with the submission of a preliminary application and accompanying materials to the DED before the commencement of a rehabilitation project. The content and extent of these submissions are influenced by the amount of tax credits being sought for the project.

For projects where the requested tax credits exceed $275,000, additional documentation is necessary. These include the Application Scoring Guide and Scorecard, Exhibit 1 – Financing Committed, Property Lookup, and HTC Vacancy Table. However, all applications, regardless of the tax credit value, must include the Preliminary Application Checklist, Program Guidelines, Exhibit 2 – Average Wage for Estimated New Job Creation, Enrollment in Federal Work Authorization Program Sworn Affidavit, Developer Fee Agreement, and SOI Standards.

The State Historic Preservation Office (SHPO) advises applicants aiming for both state and federal historic tax credits to submit two complete copies of the federal application to the SHPO directly and as early as possible. This proactive measure facilitates the SHPO in verifying that a property is a certified historic structure and kickstarts the review of the proposed work scope while the DED completes scoring for a round.

After the completion of the rehabilitation project, a final application, along with supporting materials, must be submitted to the DED. A crucial part of this submission is the Cost Certification Form, which serves to verify the eligibility of the project costs. The refinement of the final application process, as a result of insights from external CPAs who review HTC projects, has streamlined this phase, making it more efficient for applicants.

Application Cycles and Project Size

The application process for the Historic Preservation Tax Credit Program depends on the amount of tax credits requested. Projects requesting $275,000 or more in tax credits must apply during an Application Cycle. For projects requesting less than $275,000 in tax credits, applications can be submitted all year round.

The application cycle dates vary each fiscal year. For instance, the 2024 Round 1 application cycle for the Historic Preservation Tax Credit Program will go live via Submittable at 8:00 a.m. on Monday, July 10, 2023, and will end at 5:00 p.m. on Thursday, August 10, 2023.

Program Cap and Allocation

The Historic Preservation Tax Credit Program operates under a statewide cap, which was $90 million in fiscal year 2023. Once this cap is exhausted, allocations for the $30 million Qualified Census Tract (QCT) cap commence. If a preliminary application is received by the department but is not approved due to the exhaustion of the program cap, it will be placed in line for review until there is sufficient program cap space due to a rescission of authorized tax credits for such state fiscal year in which the program cap has been exhausted or until the next state fiscal year with sufficient program cap space.

Eligibility Criteria for Buildings and Projects

The HTC program encourages private sector participation in the conservation of historic buildings and promotes economic revitalization. The buildings eligible for this program are those that are listed on the National Register of Historic Places or those that are located in registered historic districts. The program does not support projects that result in the inappropriate use of these properties.

Proof of Financial Commitment

An applicant receiving preliminary approval must submit evidence demonstrating the capacity to finance the expenses for rehabilitation within 60 days following the date of the preliminary approval letter. Proof can be in the form of a letter of commitment or a line of credit.

Amendments to the Project

Under certain circumstances, revisions to the project are necessary either prior to starting the work, during the rehabilitation, or even after completion of the rehabilitation. Various factors can affect the eligibility of the project; therefore, an amendment request must be submitted to the DED as soon as a revision is necessary.

Final Application Process | Missouri Historic Tax Credit Program

Upon completion of the rehabilitation project, applicants must submit a final application and accompanying materials to DED in order to receive the tax credits. This includes a Cost Certification Form to verify the eligibility of the project costs. The final application process has been streamlined with the help of external CPAs who review HTC projects to ensure efficiency and accuracy.

Conclusion

Missouri’s Historic Preservation Tax Credit Program offers a valuable opportunity for developers to contribute to the preservation of the state’s historic buildings while receiving significant tax benefits. With a clear understanding of the application process, developers can leverage this program to undertake rehabilitation projects that serve both their business interests and the preservation of Missouri’s cultural heritage.