§ 44-33.6-3. Tax credit.
(a) Subject to the maximum credit provisions set forth in subsections (c) and (d) below,
any person, firm, partnership, trust, estate, limited liability company, corporation
(whether for profit or nonprofit) or other business entity that incurs qualified rehabilitation
expenditures for the substantial rehabilitation of a certified historic structure,
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 and said person, firm, partnership, trust, estate, limited liability
company, corporation or other business entity is not a social club as defined in § 44-33.6-2, 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 in an amount equal to
the following:
(1) Twenty percent (20%) of the qualified rehabilitation expenditures; or
(2) Twenty-five percent (25%) of the qualified rehabilitation expenditures provided that
either:
(i) At least twenty-five percent (25%) of the total rentable area of the certified historic
structure will be made available for a trade or business; or
(ii) The entire rentable area located on the first floor of the certified historic structure
will be made available for a trade or business.
(b) 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.
(c) Maximum project credit. The credit allowed pursuant to this chapter shall not exceed
five million dollars ($5,000,000) for any certified rehabilitation project under this
chapter. No building to be completed in phases or in multiple projects shall exceed
the maximum project credit of five million dollars ($5,000,000) for all phases or
projects involved in the rehabilitation of such building.
(d) Maximum aggregate credits. The aggregate credits authorized to be reserved pursuant
to this chapter shall not exceed sums estimated to be available in the historic preservation
tax credit trust fund pursuant to this chapter.
(e) Subject to the exception provided in subsection (g) of this section, 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. Credits may be allocated to partners, members,
or owners that are exempt from taxation under section 501(c)(3), section (c)(4) or
section 501(c)(6) of the U.S. Code and these partners, members, or owners must be
treated as taxpayers for purposes of this section.
(f) 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
and assignees of the credits that have not claimed the tax credits in whole or part
may assign, transfer, or convey the credits, in whole or in part, by sale or otherwise
to any individual or entity. 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 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 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.
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 this chapter,
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 chapter 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.
(g) Credits allowed to partners, members, or owners that are exempt from taxation under
section 501(c)(3), section (c)(4) or section 501(c)(6) of the U.S. Code, and only
said credits, shall be fully refundable.
(h) Substantial rehabilitation of property that either:
(1) Is exempt from real property tax;
(2) Is a social club; or
(3) Consists of a single-family home or a property that contains less than three (3) residential
apartments or condominiums shall be ineligible for the tax credits authorized under
this chapter; provided, however, a scattered site development with five (5) or more
residential units in the aggregate (which may include single-family homes) shall be
eligible for tax credit. 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.
(i) 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.
(j) For construction projects that have executed a tax credit agreement on or after July
1, 2025, and involving a budget of direct hard construction costs (as defined in § 44-33.6-2) in excess of twenty-five million dollars ($25,000,000), all construction workers
construction workers shall be paid in accordance with the wages and benefits required
pursuant to chapter 13 of title 37 and all contractors and subcontractors shall file certified payrolls on a monthly
basis for all work completed in the preceding month on a uniform form prescribed by
the director of labor and training. Failure to follow the requirements pursuant to
chapter 13 of title 37 shall constitute a material violation and a material breach of the agreement with
the state. The tax administrator, in consultation with the director of labor and training,
shall promulgate such rules and regulations as are necessary to implement the enforcement
of this subsection.
(k) No tax credits shall be awarded under this chapter unless the division of taxation
receives confirmation from the department of labor and training that there has been
compliance with the prevailing wage requirements set forth in subsection (j) of this
section.