Researcher: SL Page 1 4/9/24
OLR Bill Analysis
sHB 5190
AN ACT CONCERNING THE HISTORIC HOMES REHABILITATION
TAX CREDIT.
SUMMARY
This bill changes the taxes against which historic homes
rehabilitation tax credits may be claimed. By law, the Department of
Economic and Community Development (DECD) issues these credits,
subject to certain requirements, to (1) people and nonprofits who own,
rehabilitate, and occupy historic homes or (2) businesses that contribute
funds for rehabilitating historic homes that are or will be occupied by
their owners.
Under current law, taxpayers may apply only credits issued before
January 1, 2024, against specified state business taxes (i.e., the insurance
premiums, corporation business, air carriers, railroad companies, cable
and satellite TV companies, and utility companies’ taxes). The bill
allows taxpayers to continue claiming credits issued in the 2024 tax year
and all following years against these specified business taxes.
The bill also allows all taxpayers to apply credits issued on or after
January 1, 2024, against the unrelated business income tax (current law
allows only nonprofit corporations to do so). Existing law, unchanged
by the bill, allows all taxpayers to claim them against the personal
income tax.
The bill allows taxpayers applying the credit against any of the
business taxes mentioned above to carry forward any unused credits for
up to four income years, just as existing law allows for nonprofit
corporations claiming the credit against the unrelated business income
tax. Under existing law, credits applied against the income tax are
refundable for any amount of the credit that exceeds the taxpayer’s
liability. 2024HB-05190-R000359-BA.DOCX
Researcher: SL Page 2 4/9/24
EFFECTIVE DATE: July 1, 2024, and applicable to taxable and income
years beginning on or after January 1, 2024.
BACKGROUND
Historic Homes Rehabilitation Tax Credit
Under this program, qualifying property owners (people and
nonprofits) may receive a tax credit for 30% of the construction costs
they incur in rehabilitating a historic home. To qualify, the historic home
must (1) have no more than four units, one of which must be the owner’s
principal residence for at least five years after rehabilitation is
completed, and (2) be (a) listed on the National or State Register of
Historic Places or (b) located in a district listed in either register and
certified by DECD as contributing to the district’s historic character.
To qualify for the credit, the project’s construction costs must exceed
$15,000. The credit equals 30% of the eligible construction costs but may
not exceed $30,000 per dwelling unit (or $50,000 for owners that are
nonprofit corporations). DECD may reserve up to $3 million in vouchers
for these credits each fiscal year, 70% of which must be for rehabilitating
homes in the municipalities designated as “regional centers” in the
current state plan of conservation and development.
COMMITTEE ACTION
Commerce Committee
Joint Favorable Substitute
Yea 24 Nay 0 (03/22/2024)