| (1) If an entity is eligible for a credit that exceeds
the limitations under subsection (e)(2) of this section, the entity
may carry the unused credit forward and apply the credit to the tax
imposed by this chapter in any of the succeeding five report years
following the first report year after the certified historic structure
is placed in service.
(2) A carryforward is considered the remaining portion
of a credit that cannot be claimed in the current year because of
the limitation under subsection (e)(2) of this section.
(3) The sale, assignment, or allocation of a credit
in accordance with subsection (h) of this section does not extend
the period for which a credit may be carried forward and does not
increase the total amount of the credit that may be claimed.
(4) For example, for a structure placed in service
in 2014, a credit may be claimed on the 2015 report and the credit
carryforward may be applied to the following five consecutive reports:
the 2016, 2017, 2018, 2019, and 2020 reports. The credit expires after
the 2020 report.
(h) Sale, assignment, or allocation of credit.
(1) Sale or assignment. An entity that incurs eligible
costs and expenses may sell or assign all or part of the credit that
may be claimed for those costs and expenses to one or more entities,
and any entity to which all or part of the credit is sold or assigned
may sell or assign all or part of the credit to another entity. There
is no limit on the total number of transactions for the sale or assignment
of all or part of the total credit authorized under this section,
however, collectively, all transfers are subject to the maximum total
limits provided by subsection (e) of this section.
(2) Allocation. A credit earned or purchased by, or
assigned to, a partnership, limited liability company, S corporation,
or other pass-through entity may be allocated to the partners, members,
or shareholders of that entity in accordance with the provisions of
any agreement among the partners, members, or shareholders and without
regard to the ownership interest of the partners, members, or shareholders
in the rehabilitated certified historic structure. A partner, member,
or shareholder to whom a credit is allocated may further allocate
all or part of the allocated credit as provided in this paragraph
or may sell or assign the allocated credit as provided in paragraph
(1) of this subsection. There is no limit on the total number of allocations
of all or part of the total credit authorized under this section,
however, collectively, all transfers are subject to the maximum credit
limits provided by subsection (e) of this section.
(3) Documentation.
(A) An entity that sells, assigns, or allocates a credit
under this section to another entity shall provide a copy of the certificate
of eligibility, together with the audited cost report, to the recipient
of the credit.
(B) An entity that sells, assigns, or allocates a credit
under this section and the entity to which the credit is sold, assigned,
or allocated shall jointly submit:
(i) written notice of the sale, assignment, or allocation
to the comptroller on a Texas Franchise Tax Sale, Assignment or Allocation
of Historic Structure Credit form, or any successor to the form promulgated
by the comptroller, not later than the 30th day after the date of
the sale, assignment, or allocation. The notice must include the date
of the sale, assignment, or allocation; the amount of the credit sold,
assigned, or allocated; the names and federal identification numbers
of the entity that sold, assigned, or allocated the credit or part
of the credit and of the entity to which the credit or part of the
credit was sold, assigned, or allocated; and the amount of the credit
owned by the selling, assigning, or allocating entity before the sale,
assignment, or allocation, and the amount the selling, assigning,
or allocating entity retained, if any, after the sale, assignment,
or allocation; and
(ii) Texas Franchise Tax Historical Structure Credit
Certificate.
(C) Until the required documentation under subparagraph
(B) of this paragraph is received by the comptroller's office, the
recipient entity will not be allowed to claim the credit.
(4) Carryforwards. The sale, assignment, or allocation
of a credit in accordance with this section does not extend the period
for which a credit may be carried forward and does not increase the
total amount of the credit that may be claimed.
(5) Limitation. After an entity establishes a credit
for eligible costs and expenses, another entity may not use the same
costs and expenses as the basis for establishing a credit.
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