§ 10-416 — (Formerly Sec. 10-320j). Tax credits for rehabilitation of historic homes.

Connecticut § 10-416

• Jurisdiction: Connecticut
• Title 10: Education and Culture
• Ch. 184b: Department of Economic and Community Development: Culture and Tourism

Text

(a) As used in this section, the following terms shall have the following meanings unless the context clearly indicates another meaning: (1) “Department” means the Department of Economic and Community Development; (2) “Historic home” means a building that: (A) Will contain one-to-four dwelling units of which at least one unit will be occupied as the principal residence of the owner for not less than five years following the completion of rehabilitation work, and (B) is (i) listed individually on the National or State Register of Historic Places, or (ii) located in a district listed on the National or State Register of Historic Places, and has been certified by the department as contributing to the historic character of such district; (3) “Nonprofit corporation” means a nonprofit corporation incorporated pursuant to chapter 602 or any predecessor statutes thereto, having as one of its purposes the construction, rehabilitation, ownership or operation of housing and having articles of incorporation approved by the Commissioner of Economic and Community Development in accordance with regulations adopted pursuant to section 8-79a or 8-84 ; (4) “Owner” means (A) any taxpayer filing a state of Connecticut tax return who possesses title to an historic home, or prospective title to an historic home in the form of a purchase agreement or option to purchase, or (B) a nonprofit corporation that possesses such title or prospective title; (5) “Qualified rehabilitation expenditures” means any costs incurred for the physical construction involved in the rehabilitation of an historic home, but excludes: (A) The owner's personal labor, (B) the cost of site improvements, unless to provide building access to persons with disabilities, (C) the cost of a new addition, except as may be required to comply with any provision of the State Building Code or the Fire Safety Code, (D) any cost associated with the rehabilitation of an outbuilding, unless such building contributes to the historical significance of the historic home, and (E) any nonconstruction cost such as architectural fees, legal fees and financing fees; (6) “Rehabilitation plan” means any construction plans and specifications for the proposed rehabilitation of an historic home in sufficient detail to enable the department to evaluate compliance with the standards developed under the provisions of subsections (b), (c) and (m) of this section; and (7) “Occupancy period” means a period of five years during which one or more owners occupy an historic home as such owner's or owners' primary residence. The occupancy period begins on the date the tax credit voucher is issued by the Department of Economic and Community Development. (b) The Department of Economic and Community Development shall administer a system of tax credit vouchers within the resources, requirements and purposes of this section for owners rehabilitating historic homes or taxpayers making contributions to qualified rehabilitation expenditures. Any owner shall be eligible for a tax credit voucher in an amount equal to thirty per cent of the qualified rehabilitation expenditures. (c) The department shall develop standards for the approval of rehabilitation of historic homes for which a tax credit voucher is sought. Such standards shall take into account whether the rehabilitation of an historic home will preserve the historic character of the building. (d) Prior to beginning any rehabilitation work on an historic home, the owner shall submit a rehabilitation plan to the department for a determination of whether such rehabilitation work meets the standards developed under the provisions of subsections (b), (c) and (m) of this section and shall also submit to the department an estimate of the qualified rehabilitation expenditures. (e) If the department certifies that the rehabilitation plan conforms to the standards developed under the provisions of subsections (b), (c) and (m) of this section, the department shall reserve for the benefit of the owner an allocation for a tax credit equivalent to thirty per cent of the projected qualified rehabilitation expenditures. (f) Following the completion of rehabilitation of an historic home, the owner shall notify the department that such rehabilitation has been completed. The owner shall provide the department with documentation of work performed on the historic home and shall certify the cost incurred in rehabilitating the home. The department shall review such rehabilitation and verify its compliance with the rehabilitation plan. Following such verification, the department shall issue a tax credit voucher to either the owner rehabilitating the historic home or to the taxpayer named by the owner as contributing to the rehabilitation. The tax credit voucher shall be in an amount equivalent to the lesser of (1) the tax credit reserved upon certification of the rehabilitation plan under the provisions of subsection (e) of this section, or (2) thirty per cent of the actual qualified rehabilitation expenditures. In order to obtain a credit against any state tax due that is specified in subsection (i) of this section, the holder of the tax credit voucher shall file the voucher with the holder's state tax return. (g) Before the department issues a tax credit voucher, the owner shall deliver a signed statement to the department that provides that: (1) The owner shall occupy the historic home as the owner's primary residence during the occupancy period; (2) the owner shall convey the historic home to a new owner who will occupy it as the new owner's primary residence during the occupancy period; or (3) an encumbrance shall be recorded, in favor of the local, state or federal government or other funding source, that will require the owner or the owner's successors to occupy the historic home as the primary residence of the owner or the owner's successors for a period equal to or longer than the occupancy period. A copy of any such encumbrance shall be attached to the signed statement. (h) The owner of an historic home shall not be eligible for a tax credit voucher under subsections (b), (c) and (m) of this section, unless the owner incurs qualified rehabilitation expenditures exceeding fifteen thousand dollars. (i) (1) The Commissioner of Revenue Services shall grant a tax credit: (A) (i) For a taxpayer holding a tax credit voucher issued prior to January 1, 2024, under subsections (d) to (h), inclusive, of this section, against any tax due under chapter 207, 208, 209, 210, 211 or 212 in the amount specified in the tax credit voucher. (ii) Any unused portion of such credit under this subparagraph may be carried forward to any or all of the four income years following the year in which the tax credit voucher is issued; and (B) (i) For a taxpayer holding a tax credit voucher issued on or after January 1, 2024, under subsections (d) to (h), inclusive, of this section, against any tax due under chapter 207, 208, 208a, 209, 210, 211, 212 or 229 in the amount specified in the tax credit voucher. (ii) If a taxpayer described under subparagraph (A) of subdivision (4) of subsection (a) of this section holding such tax credit voucher claims a credit against the tax imposed under chapter 229 and the amount of the tax credit voucher exceeds the taxpayer's liability for such tax, the Commissioner of Revenue Services shall treat such excess as an overpayment and, except as provided under section 12-739 or 12-742 , shall refund the amount of such excess, without interest, to the taxpayer. (iii) If a taxpayer holding such tax credit voucher claims a credit against any tax imposed under chapter 207, 208, 208a, 209, 210, 211 or 212, any unused portion of such credit under this subparagraph may be carried forward to any or all of the four income years following the year in which the tax credit voucher is issued. (2) The Department of Economic and Community Development shall provide a copy of the voucher to the Commissioner of Revenue Services upon the request of said commissioner. (j) A credit allowed under this section shall not exceed thirty thousand dollars per dwelling unit for an historic home, except that such credit shall not exceed fifty thousand dollars per such dwelling unit for an owner that is a nonprofit corporation. (k) The tax credit granted under subsection (i) of this section shall be taken in the same tax year in which the tax credit voucher is issued. (l) The aggregate amount of all tax credits that may be reserved by the Department of Economic and Community Development upon certification of rehabilitation plans under subsections (b) to (d), inclusive, of this section shall not exceed three million dollars in any one fiscal year. On and after July 1, 2015, seventy per cent of the tax credits reserved pursuant to this section shall be for owners rehabilitating historic homes that are located in a regional center as designated in the state plan of conservation and development adopted by the General Assembly pursuant to section 16a-30 or taxpayers making contributions to qualified rehabilitation expenditures on historic homes that are located in a regional center as designated in the state plan of conservation and development adopted by the General Assembly pursuant to section 16a-30 . (m) The Department of Economic and Community Development may, in consultation with the Commissioner of Revenue Services, adopt regulations in accordance with chapter 54 to carry out the purposes of this section.

Legislative History

(P.A. 99-173, S. 34–37, 65; June 30 Sp. Sess. P.A. 03-6, S. 230; P.A. 04-205, S. 5; May Sp. Sess. P.A. 04-2, S. 30; P.A. 06-159, S. 2; P.A. 11-8, S. 30; 11-48, S. 120; P.A. 13-266, S. 1; P.A. 14-217, S. 139; P.A. 23-204, S. 357; P.A. 24-109, S. 1; 24-151, S. 128.) History: P.A. 99-173 effective June 23, 1999, and applicable to tax years beginning on or after January 1, 2000 (Revisor's note: In codifying sections 34 to 37, inclusive, of P.A. 99-173 as a single section, the Revisors codified all internal references accordingly and treated a reference to “this act” in Sec. 35(a) of the act as though the reference had been to “sections 34 to 37, inclusive, of this act”); June 30 Sp. Sess. P.A. 03-6 amended Subsec. (a)(1) to substitute Connecticut Commission on Arts, Tourism, Culture, History and Film for Connecticut Historical Commission, effective August 20, 2003; P.A. 04-205, effective June 3, 2004, and May Sp. Sess. P.A. 04-2, effective May 12, 2004, both replaced Connecticut Commission on Arts, Tourism, Culture, History and Film with Connecticut Commission on Culture and Tourism; Sec. 10-320j transferred to Sec. 10-416 in 2005; P.A. 06-159 amended Subsec. (j) to require commission to submit voucher rather than taxpayer, effective June 6, 2006, and applicable to taxable years commencing on or after January 1, 2006; P.A. 11-8 made a technical change in Subsec. (a)(6), effective May 24, 2011; P.A. 11-48 replaced definition of “commission” with definition of “officer” in Subsec. (a)(1), changed authority for adoption of regulations from mandatory to permissive in Subsec. (d) and replaced “commission” with “Department of Economic and Community Development”, “officer” or “department”, effective July 1, 2011; P.A. 13-266 amended Subsec. (a) to replace definition of “officer” with definition of “department” in Subdiv. (1), delete targeted area requirement in Subdiv. (2), delete former Subdiv. (5) re definition of “targeted area” and redesignate existing Subdivs. (6), (7) and (8) as Subdivs. (5), (6) and (7), reduced minimum expenditure to qualify for a tax credit voucher from $25,000 to $15,000 in Subsec. (h), increased maximum credit to $50,000 for a nonprofit corporation in Subsec. (j), and replaced “officer” with “department” and made conforming and technical changes, effective July 1, 2015, and applicable to income years commencing on or after January 1, 2015; P.A. 14-217 amended Subsec. (l) to add provision requiring 70 per cent of tax credits be reserved for owners rehabilitating historic homes that are located in a regional center, effective July 1, 2015; P.A. 23-204 amended Subsec. (b) to delete reference to income years commencing on or after January 1, 2000, amended Subsec. (f) to replace reference to Subsecs. (i) to (l) with reference to Subsec. (i), amended Subsecs. (g) and (l) to make technical changes, substantially revised Subsec. (i) re taxes to which credit is applicable on or after January 1, 2024, and amended Subsec. (k) to delete reference to credit carry forward, effective January 1, 2024, and applicable to taxable years commencing on or after January 1, 2024; P.A. 24-109 amended Subsec. (i)(1)(B)(i) to delete “described under subparagraph (A) of subdivision (4) of subsection (a) of this section”, change “the tax due” to “any tax due” and add “207, 208, 208a, 209, 210, 211, 212 or”, amended Subsec. (i)(1)(B)(ii) to insert “a taxpayer described under subparagraph (A) of subdivision (4) of subsection (a) of this section holding such tax credit voucher claims a credit against the tax imposed under chapter 229 and”, change “liability for the tax imposed under chapter 229,” to “liability for such tax,”, deleted former Subsec. (i)(1)(C)(i) re owners that are nonprofit corporations holding tax credit vouchers issued on or after January 1, 2024, redesignated existing Subsec. (i)(1)(C)(ii) as Subsec. (i)(1)(B)(iii) and therein added “If a taxpayer holding such tax credit voucher claims a credit against any tax imposed under chapter 207, 208, 208a, 209, 210, 211 or 212, any”, and make technical and conforming changes throughout Subsec. (i)(1), effective July 1, 2024, and applicable to taxable and income years commencing on or after January 1, 2024; P.A. 24-151 made identical changes as P.A. 24-109, effective July 1, 2024, and applicable to taxable and income years commencing on or after January 1, 2024.