| (a) Qualification for credit.
(1) An Owner is eligible for a credit for eligible
costs and expenses incurred in the certified rehabilitation of a certified
historic structure if:
(A) the rehabilitated certified historic structure
is placed in service on or after September 1, 2013;
(B) the Owner has an ownership interest in the certified
historic structure in the year during which the structure is placed
in service after the rehabilitation; and
(C) the total amount of the eligible costs and expenses
incurred exceeds $5,000.
(2) A property for which eligible costs and expenses
are submitted for the credit must meet Internal Revenue Code §47(c)(2)
which includes:
(A) non-residential real property;
(B) residential rental property; or
(C) other property types exempted from parts of Internal
Revenue Code §47(c)(2) as described in Chapter 172 of the Texas
Tax Code.
(b) Eligible costs and expenses. Eligible costs and
expenses means those costs and expenses allowed pursuant to Internal
Revenue Code §47(c)(2) or as exempted by Chapter 172 of the Texas
Tax Code. Such eligible costs and expenses, include, but are not limited
to:
(1) expenditures associated with structural components
as defined by United States Treasury Regulation §1.48-1(e)(2)
including walls, partitions, floors, ceilings, windows and doors,
stairs, elevators, escalators, sprinkler systems, fire escapes, components
of central air conditioning, heating, plumbing, and electrical systems,
and other components related to the operation or maintenance of the
building;
(2) architectural services;
(3) engineering services;
(4) construction management and labor, materials, and
reasonable overhead;
(5) subcontracted services;
(6) development fees;
(7) construction period interest and taxes; and
(8) other items referenced in Internal Revenue Code §47(c)(2).
(c) Ineligible costs and expenses. Eligible costs and
expenses as defined in Internal Revenue Code §47(c)(2) do not
include the following:
(1) the cost of acquiring any interest in the property;
(2) the personal labor by the applicant;
(3) any cost associated with the enlargement of an
existing building;
(4) site work expenditures, including any landscaping,
sidewalks, paving, decks, outdoor lighting remote from the building,
fencing, retaining walls or similar expenditures; or
(5) any cost associated with the rehabilitation of
an outbuilding or ancillary structure unless it is certified by the
Commission to contribute to the historical significance of the property.
(d) Eligibility date for costs and expenses.
(1) Part A of the Texas Historic Preservation Tax Credit
Certification Application must be submitted prior to the building
being placed in service per §13.1(21) of this title (relating
to Definitions). Projects that have been placed in service prior to
submission of Part A of the application do not qualify for the program.
(2) While the credit may be claimed for eligible costs
and expenses incurred prior to the filing of an application, potential
applicants are urged to file Parts A and B of the application at the
earliest possible date. This will allow the Commission to review the
application and provide guidance to the applicant that will increase
the chances that the application will ultimately be approved and the
credit received.
(e) Phased development. Part B applications for rehabilitation
of the same certified historic structure may be submitted by the same
owner only if they describe clearly defined phases of work that align
with a cost report that separates the eligible costs and expenses
by phase. Separate Part B and C applications shall be submitted for
review by the Commission prior to issuance of a certificate of eligibility
for each phase.
(f) Amount of credit. The total amount of credit available
is twenty-five percent (25%) of the aggregate eligible costs and expenses
incurred in the certified rehabilitation of the certified historic
structure.
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| Source Note: The provisions of this §13.2 adopted to be effective September 11, 2014, 39 TexReg 7081; amended to be effective August 15, 2016, 41 TexReg 5992; amended to be effective January 2, 2018, 42 TexReg 7680; amended to be effective May 29, 2018, 43 TexReg 3345; amended to be effective April 30, 2023, 48 TexReg 2089; amended to be effective November 23, 2023, 48 TexReg 6739 |
