§ 44-33.2-3. Tax credit.
(a) Any person, firm, partnership, trust, estate, limited liability company, corporation
(whether for profit or non-profit) or other business entity that incurs qualified
rehabilitation expenditures for the substantial rehabilitation of a property officially
recorded as having applied to be certified as a certified historic structure by the
Rhode Island historical preservation and heritage commission through its historic
tax credit application process prior to January 1, 2008, and verified by the division
of taxation, provided the rehabilitation meets standards consistent with the standards
of the Secretary of the United States Department of the Interior for rehabilitation
as certified by the commission, shall be entitled to a credit against the taxes imposed
on such person or entity pursuant to chapter 11, 12, 13, 14, 17 or 30 of this title.
For certified historical structures or some identifiable portion of a structure placed
in service prior to January 1, 2008 the credit shall be an amount equal to thirty
percent (30%) of the qualified rehabilitation expenditures. For certified historical
structures or some identifiable portion of a structure placed in service after December
31, 2007, the credit shall not exceed twenty-five percent (25%), twenty-six percent
(26%), or twenty-seven percent (27%) of the qualified rehabilitation expenditures
as contracted between the division of taxation and the person, firm, partnership,
trust, estate, limited liability company, corporation (whether for profit or non-profit)
or other business entity that incurs qualified rehabilitation expenditures for the
substantial rehabilitation of certified historic structures or some identifiable portion
of a structure to be placed in service after December 31, 2007.
(b) Notwithstanding any provisions of the general laws or regulations adopted thereunder
to the contrary, including, but not limited to, the provisions of chapter 2 of title 37, the division of taxation is hereby expressly authorized and empowered to enter into
contracts with persons, firms, partnerships, trusts, estates, limited liability companies,
corporations (whether for profit or non-profit) or other business entities that incur
qualified rehabilitation expenditures for the substantial rehabilitation of certified
historic structures or some identifiable portion of a structure to be placed in service
after December 31, 2007, for the following purposes, all of which shall be set forth
in more particular detail as follows:
(1) Upon payment of the fees as set forth in this section, the division of taxation shall,
on behalf of the state of Rhode Island, guaranty through a contract with persons,
firms, partnerships, trusts, estates, limited liability companies, corporations (whether
for profit or non-profit) or other business entities that will incur qualified rehabilitation
expenditures for the substantial rehabilitation of a certified historic structure
or some identifiable portion of a structure to be placed in service after December
31, 2007, the delivery of one hundred percent (100%) of the tax credit in an amount
which is the lesser of: (i) the amount of the tax credit identified in the contract
with the division of taxation on or before May 15, 2008 in consideration of any processing
fees; or (ii) the actual qualified rehabilitation expenditures multiplied by the tax
credit percentage selected by the taxpayer on or before May 15, 2008 and any processing
fees. The tax credit and fee shall not exceed the following combinations which shall
be selected by any person, firm, partnership, trust, estate, limited liability company,
corporation (whether for profit or non-profit) or other business entity that will
incur qualified rehabilitation expenditures for the substantial rehabilitation of
certified historic structures or some identifiable portion of a structure to be placed
in service after December 31, 2007:
(A) For an amount of credit not exceeding twenty-five percent (25%) of the qualified rehabilitation
expenditures, the fee shall be an amount equal to three percent (3%) of the qualified
rehabilitation expenditures.
(B) For an amount of credit not exceeding twenty-six percent (26%) of the qualified rehabilitation
expenditures, the fee shall be an amount equal to four percent (4%) of the qualified
rehabilitation expenditures.
(C) For an amount of credit not exceeding twenty-seven percent (27%) of the qualified
rehabilitation expenditures, the fee shall be an amount equal to five percent (5%)
of the qualified rehabilitation expenditures.
(D) As referred to in subsection 44-33.2-4(d), two and one quarter percent (2.25%) of the qualified rehabilitation expenditures
shall be paid by May 15, 2008 with the remaining percent to be paid by March 5, 2009.
Payments made after March 5, 2009 shall accrue interest as set forth in § 44-1-7.
(E) The division of taxation and the Rhode Island historical preservation and heritage
commission shall reconcile tax credits and fees with the persons, firms, partnerships,
trusts, estates, limited liability companies, corporation (whether for profit or non-profit)
or other business entities contracted with as part of the final project certification.
In the event that the processing fee paid is greater than the amount of actual qualified
rehabilitation expenditures multiplied by the percentage chosen pursuant to subsection 44-33.2-3(b), the persons, firms, partnerships, trusts, estates, limited liability companies,
corporations (whether for profit or non-profit) or other business entities that incur
qualified rehabilitation expenditures for the substantial rehabilitation of certified
historic structures or some identifiable portion of a structure to be placed in service
after December 31, 2007, shall be refunded such difference, without interest.
(F) Any contract executed pursuant to this chapter by a person, firm, partnership, trust,
estate, limited liability company, corporation (whether for profit or non-profit)
or other business entity that incurs qualified rehabilitation expenditures for the
substantial rehabilitation of certified historic structures or some identifiable portion
of a structure to be placed in service after December 31, 2007, shall be assignable
to: (i) an affiliate thereof without any consent from the division of taxation or
(ii) a person, firm, partnership, trust, estate, limited liability company, corporation
(whether for profit or non-profit) or other business entity that incurs qualified
rehabilitation expenditures for the substantial rehabilitation of certified historic
structures or some identifiable portion of a structure to be placed in service after
December 31, 2007, with such assignment to be approved by the division of taxation,
which approval shall not be unreasonably withheld. For purposes of this subsection,
"affiliate� shall be defined as any entity controlling, controlled by or under common
control with such person, firm, partnership, trust, estate, limited liability company,
corporation (whether for profit or non-profit) or other business entity.
(c) Tax credits allowed pursuant to this chapter shall be allowed for the taxable year
in which such certified historic structure or an identifiable portion of the structure
is placed in service provided that the substantial rehabilitation test is met for
such year.
(d) If the amount of the tax credit exceeds the taxpayer's total tax liability for the
year in which the substantially rehabilitated property is placed in service, the amount
that exceeds the taxpayer's tax liability may be carried forward for credit against
the taxes imposed for the succeeding ten (10) years, or until the full credit is used,
whichever occurs first for the tax credits. Credits allowed to a partnership, a limited
liability company taxed as a partnership or multiple owners of property shall be passed
through to the persons designated as partners, members or owners respectively pro
rata or pursuant to an executed agreement among such persons designated as partners,
members or owners documenting an alternate distribution method without regard to their
sharing of other tax or economic attributes of such entity.
(e)(1) If the taxpayer has not claimed the tax credits in whole or part, taxpayers eligible
for the tax credits may assign, transfer or convey the credits, in whole or in part,
by sale or otherwise to any individual or entity, including, but not limited to, condominium
owners in the event the certified historic structure is converted into condominiums.
The assignee of the tax credits may use acquired credits to offset up to one hundred
percent (100%) of the tax liabilities otherwise imposed pursuant to chapter 11, 12,
13, (other than the tax imposed under § 44-13-13), 14, 17 or 30 of this title. The assignee may apply the tax credit against taxes
imposed on the assignee until the end of the tenth (10th) calendar year after the
year in which the substantially rehabilitated property is placed in service or until
the full credit assigned is used, whichever occurs first. Fiscal year assignees may
claim the credit until the expiration of the fiscal year that ends within the tenth
(10th) year after the year in which the substantially rehabilitated property is placed
in service. The assignor shall perfect the transfer by notifying the state of Rhode
Island division of taxation, in writing, within thirty (30) calendar days following
the effective date of the transfer and shall provide any information as may be required
by the division of taxation to administer and carry out the provisions of this section.
(2) For purposes of this chapter, any assignment or sales proceeds received by the taxpayer
for its assignment or sale of the tax credits allowed pursuant to this section shall
be exempt from this title. If a tax credit is subsequently recaptured under subsection
(e) of this section, revoked or adjusted, the seller's tax calculation for the year
of revocation, recapture, or adjustment shall be increased by the total amount of
the sales proceeds, without proration, as a modification under chapter 30 of this
title. In the event that the seller is not a natural person, the seller's tax calculation
under chapters 11, 12, 13 (other than with respect to the tax imposed under § 44-13-13), 14, 17, or 30 of this title, as applicable, for the year of revocation, recapture,
or adjustment, shall be increased by including the total amount of the sales proceeds
without proration.
(f) Substantial rehabilitation of property that is exempt from real property tax shall
be ineligible for the tax credits authorized under this chapter. In the event a certified
historic structure undergoes a substantial rehabilitation pursuant to this chapter
and within twenty-four (24) months after issuance of a certificate of completed work
the property becomes exempt from real property tax, the taxpayer's tax for the year
shall be increased by the total amount of credit actually used against the tax.
(g) In the case of a corporation, this credit is only allowed against the tax of a corporation
included in a consolidated return that qualifies for the credit and not against the
tax of other corporations that may join in the filing of a consolidated tax return.