58.1-339.2 - Historic rehabilitation tax credit.
§ 58.1-339.2. Historic rehabilitation tax credit.
A. Effective for taxable years beginning on and after January 1, 1997, anyindividual, trust or estate, or corporation incurring eligible expenses inthe rehabilitation of a certified historic structure shall be entitled to acredit against the tax imposed by Articles 2 (§ 58.1-320 et seq.), 6 (§58.1-360 et seq.) and 10 (§ 58.1-400 et seq.) of Chapter 3; Chapter 12 (§58.1-1200 et seq.); Article 1 (§ 58.1-2500 et seq.) of Chapter 25; andArticle 2 (§ 58.1-2620 et seq.) of Chapter 26 of this title, in accordancewith the following schedule:
Year % of Eligible Expenses
1997 10%
1998 15%
1999 20%
2000 and thereafter 25%
If the amount of such credit exceeds the taxpayer's tax liability for suchtaxable year, the amount that exceeds the tax liability may be carried overfor credit against the taxes of such taxpayer in the next ten taxable yearsor until the full credit is used, whichever occurs first. Credits granted toa partnership or electing small business corporation (S corporation) shall bepassed through to the partners or shareholders, respectively. Credits grantedto a partnership or electing small business corporation (S corporation) shallbe allocated among all partners or shareholders, respectively, either inproportion to their ownership interest in such entity or as the partners orshareholders mutually agree as provided in an executed document, the form ofwhich shall be prescribed by the Director of the Department of HistoricResources.
B. Effective for taxable years beginning on and after January 1, 2000, anyindividual, trust, estate, or corporation resident in Virginia that incurseligible expenses in the rehabilitation of a certified historic structure inany other state that has in effect a reciprocal historic structurerehabilitation tax credit program and agreement for residents of that statewho rehabilitate historic structures in Virginia shall be entitled to acredit to the same extent as provided in subsection A and other applicableprovisions of law; however, no eligible party shall receive any creditauthorized under this subsection prior to taxable years beginning on andafter January 1, 2002.
C. To claim the credit authorized under this section, the taxpayer shallapply to the Virginia Department of Historic Resources, which shall determinethe amount of eligible rehabilitation expenses and issue a certificatethereof to the taxpayer. The taxpayer shall attach the certificate to theVirginia tax return on which the credit is claimed.
D. When used in this section:
"Certified historic structure" means a property listed individually on theVirginia Landmarks Register, or certified by the Director of the VirginiaDepartment of Historic Resources as contributing to the historic significanceof a historic district that is listed on the Virginia Landmarks Register orcertified by the Director of the Virginia Department of Historic Resources asmeeting the criteria for listing on the Virginia Landmarks Register.
"Eligible rehabilitation expenses" means expenses incurred in the materialrehabilitation of a certified historic structure and added to the property'scapital account.
"Material rehabilitation" means improvements or reconstruction consistentwith "The Secretary of the Interior's Standards for Rehabilitation," thecost of which amounts to at least fifty percent of the assessed value of suchbuilding for local real estate tax purposes for the year prior to the initialexpenditure of any rehabilitation expenses, unless the building is anowner-occupied building, in which case the cost shall amount to at leasttwenty-five percent of the assessed value of such building for local realestate tax purposes for the year prior to the initial expenditure of anyrehabilitation expenses.
"Owner-occupied building" means any building that is used as a personalresidence by the owner.
E. The Director of the Department of Historic Resources shall establish byregulation the requirements needed for this program, including the fees todefray necessary expenses thereof, and, except as otherwise prohibited bythis section, the extent to which the availability of the credit provided bythis section is coextensive with the availability of the federal tax creditfor the rehabilitation of certified historic resources.
(1996, c. 520; 1998, cc. 371, 372; 1999, cc. 152, 183, 213; 2000, cc. 356,367, 429.)