Tax Credit 101

1. The Ins and Outs of the Delaware State Historic Preservation Tax Program Tax Credit 101

2. Definition of a Tax Credit Wikipedia says . . . A tax credit is a sum deducted from the total amount a taxpayer owes to the state. A tax credit may be granted for various types of taxes, such as an income tax or property tax. It may be granted in recognition of taxes already paid, as a subsidy, or to encourage investment or other behaviors. Tax systems may grant tax credits to businesses or individuals.

3. National Register of Historic Places The National Register of Historic Places is the official list of the Nation's historic places worthy of preservation. Authorized by the National Historic Preservation Act of 1966, the National Register of Historic Places is part of a national program to coordinate and support public and private efforts to identify, evaluate, and protect America's historic and archeological resources. These will include individual places or registered historic communities. From the web site of the National Park Service: www.cr.nps.gov/nr/

4. Two Different Tax Credits For Historic Properties • Federal Investment Tax Credit • Properties listed in the National Register of Historic Places • Awards 20% of the total project cost in Tax Credits to properties rehabilitated for income-producing purposes, including commercial, industrial, agricultural, rental residential or apartment use. [Private homes do not qualify for the Federal Tax Credit. ] • Can use both credits together for income producing properties- the documentation follows the same format

5. Two Different Tax Credits For Historic Properties • Delaware Historic Preservation Tax Credit • Any Property listed in National Register of Historic Places • Anybody can take advantage: transferable credits • Commercial Projects : 20% credit • Non-Commercial Projects:30% credit • Everyone Else: Homeowners In Historic Districts, Churches, Non-Profits

6. The Definition of Rehabilitation The process of returning a property to a state of utility, through repair or alteration, which makes possible an efficient contemporary use while preserving those portions and features of the property which are significant to its historic, architectural, and cultural values.

7. Secretary of the Interior’s StandardsFor Rehabilitation • Ten Common Sense Principles Including: • Choosing a use that requires Minimal Change • Keeping what’s Important about the building • Repairing Rather Than Replacing • Keeping later changes • Treating the building fabric gently • Letting the old building be the centerpiece http://www.nps.gov/hps/tps/standguide/rehab/rehab_standards.htm

8. The Secretary of the Interior's Standards for Rehabilitation Copies are available from the State Historic Preservation Office. It has also been transformed into a nice and easy navigable website. http://www.nps.gov/hps/tps/standguide/

9. Features of the Delaware Tax Credit Program • For commercial properties, 20% of approved rehabilitation costs are credited against state income or franchise tax liability • For Everyone Else, including owner-occupied residences, the credit increases to 30% of qualified costs. • An extra 10% credit is available for qualifying low income projects • Property must be listed in the National Register of Historic Places or located in a National Register-listed Historic District • Approved expenditures include most construction related costs • Tax credits can be sold to a bank or any Delaware income taxpayer who can use them as an offset against Delaware income taxes • The program is capped at $5 million in tax credits awarded per year

10. What Do You Do to Get Started? On the Web, go to the State Historic Preservation Office www.history.delaware.gov Or Contact Joan Larrivee, Tax Credit Program Manager joan.larrivee@state.de.us (302) 736-7406

11. Start at the Division of Historical and Cultural Affairs

12. Then go to Preservation Tax Credit Programs

13. The Basics

14. You Will Find……..

15. Four-Part Application Part One Fill Out for properties in historic districts only. Individually listed buildings can skip this step. History of the property

16. Four-Part Application Part Two Complete this part before the work is done. Take lots of photographs before starting. Plan and pictures

17. Four-Part Application Part Three Complete and submit with photos taken after the work is done. Results

18. Four-Part Application Part Four Submit copies of the invoices from the contractor. Request credit and document costs

19. If Your Property Is Located in a Local Preservation District, like in New Castle, or Wilmington, or Lewes, or Dover Your work is already subject to review. Why not use the credits? It is nothing spent and could be a great deal GAINED What are you waiting for?

20. Involved with a Church or other non-profit organization? You can do what Lewes Presbyterian Church, the Wilmington YMCA, the Laurel Historical Society, St. Peter’s Church (New Castle) and the Delaware Historical Society have all done. SELL YOUR TAX CREDITS in order to help pay for Rehabilitation Costs

21. Before you start . . . Contact the State Historic Preservation Office. The SHPO will always have the most up-to-date and current information. 302-736-7400

22. Want to talk to the tax credit coordinator? Program Manager, Joan Larrivee is ready and willing to help. Joan.Larrivee@state.de.us 302-736-7406

23. G0 to Preservation Delaware’s Website for general information and a copy of this presentation: www.preservationde.org

24. This Presentation Is Brought To You By A Grant From: Delaware Division of Historical and Cultural Affairs 21 The Green Dover, DE 19901 302-736-7400 // 302-739-5660 (fax) http://history.delaware.gov Timothy Slavin, Director, SHPO timothy.slavin@state.de.us Gwen Davis, Deputy SHPO gwen.davis@state.de.us Joan Larrivee, Tax Credit Program Manager joan.larrivee@state.de.us 302-736-7406

25. This Presentation Is Brought To You By Preservation Delaware The New Castle Court House Museum 211 Delaware Street New Castle, DE 19720 302/322-7100 // 302/322-8400 Terry Graham, Executive Director director@preservationde.org http://preservationde.org/

26. Web References Cited Acknowledgement of Support and Nondiscrimination Statement http://history.delaware.gov/pdfs/maloneyreport.pdf http://www.placeeconomics.com/wp-content/uploads /2011/03/rypkema_delaware_tax_credit.pdf www.preservationde.org http://history.delaware.gov/preservation/taxcredit.shtml www.cr.nps.gov/nr This presentation has been financed in part from funds provided by The National Park Service, U.S. Department of Interior as part of a grant from the Delaware State Historic Preservation Office. However the contents and opinions do not necessarily reflect the views and policies of the Department of the Interior. Under Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, and the Age Discrimination Act of 1975, as amended, the U.S. Department of the Interior prohibits discrimination on the basis of race, color, national origin, disability or age in its federally assisted programs. If you believe you have been discriminated against in any program, activity , or facility as described above, or if you desire further information, please write to: Office of Equal Opportunity, National Park Service, 1849 C Street, NW, Washington, D.C. 20240 Thank You!