This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0247.TIE
DATE: 2/11/2022
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 247 Florida Main Street Program and Historic Preservation Tax Credits
SPONSOR(S): Salzman and others
TIED BILLS: IDEN./SIM. BILLS: CS/SB 1310
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Tourism, Infrastructure & Energy Subcommittee Walsh Keating
2) Ways & Means Committee
3) Commerce Committee
SUMMARY ANALYSIS
The National Register of Historic Places, under the National Park Service, is “part of a national program to
coordinate and support public and private efforts to identify, evaluate, and protect America’s historic and
archeological resources.” Properties listed in the National Register are eligible for federal preservation tax
credits.
The Main Street America program offers community-based revitalization initiatives to assist in transforming
downtowns. In order to be designated as either an affiliate or accredited member of Main Street America, a
community must first become a member of the National Main Street Center and meet certain requirements.
Florida levies a 5.5 percent tax on certain income of corporations and financial institutions doing business in
Florida. Florida also imposes a 1.75 percent tax on most Florida insurance premiums.
The bill creates the Main Street Historic Tourism and Revitalization Act (Act) which provides a tax credit
against corporate income tax and insurance premium tax for qualified expenses incurred in the rehabilitation of
a certified historic structure. The bill provides eligibility and filing requirements. Under the bill, a tax credit as
authorized by the Act may be sold or transferred. The bill gives DOR the authority to audit tax credit applicants
to verify the legitimacy of qualified expenditures. Under the bill, DOR is granted rulemaking authority to
administer the Act.
The bill does not appear to impact local government revenues or expenditures. By implementing a new tax
credit, the bill will likely decrease state revenues. The bill may increase state expenditures.
The bill provides an effective date of July 1, 2022.
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DATE: 2/11/2022
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Present Situation
National Register of Historic Places
The National Register of Historic Places (National Register),
1
under the National Park Service, is “part
of a national program to coordinate and support public and private efforts to identify, evaluate, and
protect America’s historic and archeological resources.”
2
The program:
Reviews property nominations and lists eligible properties in the National Register;
Offers guidance on evaluating, documenting, and listing historic places; and
Helps qualified historic properties receive preservation benefits and incentives.
3
Properties listed in the National Register are eligible for federal preservation tax credits. A twenty
percent federal income tax credit is available for the rehabilitation of historic, income-producing
buildings that are determined by the Secretary of the Interior, through the National Park Service, to be
certified historic structures.
4
Main Street America
Main Street America, a program under the National Main Street Center,
5
is a network of grassroots
organizations that “revitalizes older and historic commercial districts to build vibrant neighborhoods and
thriving economies.”
6
The program offers community-based revitalization initiatives to assist in
transforming downtowns. In order to be designated as either an affiliate or accredited member of Main
Street America, a community must first become a member of the National Main Street Center and meet
certain requirements.
7
Main Street America has coordinating programs that are organized at the state,
county, and city level that partner with the National Main Street Center to provide support and training
to Main Street America communities.
Florida has two coordinating programs: Florida Main Street America located in Tallahassee and
Orlando Main Street located in Orlando.
8
Florida Main Street is administered by the Division of
Historical Resources (division) under the Florida Department of State.
9
Forty-five Florida Main Streets
and ten Orlando Main Streets have received technical assistance toward the goal of revitalizing historic
downtowns and encouraging economic development.
10
1
54 U.S.C., § 3201.
2
U.S. Department of the Interior, National Park Service, National Register of Historic Places, What is the National
Register of Historic Places?, https://www.nps.gov/subjects/nationalregister/what-is-the-national-register.htm (last visited
Feb. 11, 2022).
3
Id.
4
U.S. Department of the Interior, National Park Service, Technical Preservation Services, https://www.nps.gov/tps/tax-
incentives.htm (last visited Feb. 11, 2022).
5
The National Main Street Center was established in 1980 as a program of the National Trust for Historic Preservation to
address issues facing aging and historic downtowns. The Center launched the Main Street America program in 2015. See
Main Street America, About Us, https://www.mainstreet.org/about-us (last visited Feb. 11, 2022).
6
Id.
7
Main Street America, Designation, https://higherlogicdownload.s3.amazonaws.com/NMSC/390e0055-2395-4d3b-af60-
81b53974430d/UploadedImages/Main_Street_America_Tier_System_Overview_-_2021_July_Update.pdf (last visited
Feb. 11, 2022).
8
Main Street America, Coordinating Programs, https://higherlogicdownload.s3.amazonaws.com/NMSC/390e0055-2395-
4d3b-af60-81b53974430d/UploadedImages/The_Programs/2020_Coordinating_Program_List.pdf (last visited Feb. 11,
2022).
9
S. 267.031(5), F.S.
10
Visit Florida, Florida Main Street Programs Have Stories to Tell, https://www.visitflorida.com/travel-ideas/articles/florida-
main-street/ (last visited Feb. 11, 2022). STORAGE NAME: h0247.TIE PAGE: 3
DATE: 2/11/2022
Corporate Income Tax
Florida levies a 5.5 percent tax on certain income of corporations and financial institutions doing
business in Florida.
11
Florida utilizes the taxable income determined for federal income tax purposes as
a starting point to determine the total amount of Florida corporate income tax due.
12
This means that a
corporation paying taxes in Florida generally receives the same benefits from deductions allowed when
determining taxable income for federal tax purposes as it does when determining taxable income for
state taxation purposes.
Insurance Premium Tax
Florida imposes a 1.75 percent tax on most Florida insurance premiums.
13
Insurance premium taxes
are paid by insurance companies under ch. 624, F.S., and are remitted to the Department of Revenue
(DOR). These revenues are distributed to General Revenue.
Effect of the Bill
The bill creates the Main Street Historic Tourism and Revitalization Act (Act) which provides a tax credit
against corporate income tax and insurance premium tax for qualified expenses
14
incurred in the
rehabilitation of a certified historic structure.
To be eligible for the tax credits, a taxpayer must apply to DOR for a tax credit before taking a credit on
their return and must document that:
The rehabilitation is a certified rehabilitation;
15
The structure is a certified historic structure,
16
is income-producing, is located within the state,
and was rehabilitated and placed into service on or after July 1, 2022;
The taxpayer had an ownership interest in the certified historic structure in the year during
which the certified historic structure was placed into service after the certified rehabilitation was
completed; and
The total amount of qualified expenses incurred in rehabilitating the certified historic structure
exceeded $5,000.
Under the bill, before a taxpayer can claim or transfer a tax credit, the taxpayer must provide the
following information to DOR:
An official certificate of eligibility from the Division of Historical Resources of the Department of
State signed by the State Historic Preservation Officer or the Deputy State Historic Preservation
Officer attesting that the project has been approved by the National Park Service and confirming
whether the project is or is not located within a Main Street local program area;
National Park Service Form 10-168c, signed by the National Park Service attesting that the
completed rehabilitation meets the U.S. Secretary of the Interior’s Standards for Rehabilitation
and is consistent with the historic character of the property and, if applicable, the district in
which the completed rehabilitation is located;
11
S. 220.11(2), F.S.
12
S. 220.12, F.S.
13
S. 624.509, F.S.
14
The bill defines “qualified expenses” as qualified rehabilitation expenditures (defined in 26 U.S.C., §47(c)(2)) and
structural components (defined in 26 C.F.R., § 1.48-1(e)(2)) at the time of project certification by the U.S. Secretary of the
Interior and the U.S. Internal Revenue Service (IRS).
15
The bill defines “certified rehabilitation” as the rehabilitation of a certified historic structure that the United States
Secretary of the Interior has certified to the United States Secretary of the Treasury as being consistent with the historic
character of the certified historic structure and, if applicable, consistent with the registered historic district in which the
certified historic structure is located as set forth in 36 C.F.R. s. 67.2.
16
The bill defines “certified historic structure” as a building and its structural components which are of a character subject
to the allowance for depreciation provided in s. 167 of the Internal Revenue Code and which is listed on the National
Register of Historic Places or located within a registered historic district and certified by the U.S. Secretary of the Interior
as being of historic significance to the registered historic district. STORAGE NAME: h0247.TIE PAGE: 4
DATE: 2/11/2022
Identification of the dates during which the structure was rehabilitated, the date the structure
was first placed into service after certified rehabilitation was completed, and evidence that the
structure was placed into service after the certified rehabilitation was completed;
A list of total qualified expenses incurred by the taxpayer in rehabilitating the certified historic
structure;
17
An attestation of the total qualified expenses incurred by the taxpayer in rehabilitating the
certified historic structure;
A completed “Florida Corporate Income/Franchise Tax Return” form issued by DOR for
insurance premium tax reporting; and
The information required to be reported by DOR to enable the agency to compile its annual
report based on the tax credit applications submitted and approved.
Under the bill, the tax credit may be used to offset the corporate income tax and the insurance premium
tax. The total tax credit claimed annually may not exceed the amount of tax due after any other
applicable tax credits and may not exceed:
Twenty percent of the total qualified expenses incurred in rehabilitating a certified historic
structure that has been approved by the National Park Service to receive the federal historic
rehabilitation tax credit; or
Thirty percent of the total qualified expenses incurred in rehabilitating a certified historic
structure that has been approved by the National Park Service to receive the federal historic
rehabilitation tax credit and that is located within a local program area of an Accredited Main
Street Program.
If a taxpayer is eligible for a tax credit that exceeds taxes owed, the taxpayer may carry the unused tax
credit forward for a period of up to 10 years.
The bill provides that there is no limit on the total number of transactions for the sale or transfer of all or
part of a tax credit. However, qualified expenses may only be counted once in determining the amount
of an available tax credit, and more than one taxpayer may not claim a tax credit for the same qualified
expenses.
Under the bill, a taxpayer that sells or transfers a tax credit and the purchaser or transferee must jointly
submit written notice of the sale or transfer to DOR no later than the 30th day after the date of the sale
or transfer. The notice must include the following information:
The date of the sale or transfer;
The amount of the tax credit sold or transferred;
The name and federal tax identification number of the taxpayer that sold or transferred the tax
credit and the purchaser or transferee; and
The amount of the tax credit owned by the taxpayer before the sale or transfer and the amount
the selling or transferring taxpayer retained, if any, after the sale or transfer.
The sale or transfer of a tax credit does not extend the period for which a tax credit may be carried
forward and does not increase the total amount of the tax credit that may be claimed.
The bill provides that a tax credit earned, purchased, or transferred to a partnership, limited liability
company, S corporation, or other pass-through taxpayer may be allocated to the partners, members, or
shareholders of that taxpayer and without regard to the ownership interest of the partners, members, or
shareholders in the rehabilitated certified historic structure.
The bill provides that if the tax credit is reduced due to a determination, examination, or audit by DOR,
the tax deficiency must be recovered from the taxpayer that sold or transferred the tax credit or the
purchaser or transferee that claimed the tax credit up to the amount of the tax credit taken. Any
17
For certified rehabilitations with qualified expenses that exceeded $750,000, the taxpayer must submit an audited cost
report that itemizes the qualified expenses incurred in rehabilitating the structure as provided in the Florida Single Audit
Act. STORAGE NAME: h0247.TIE PAGE: 5
DATE: 2/11/2022
subsequent deficiencies must be assessed against the purchaser or transferee that claimed the tax
credit, or in the case of multiple succeeding entities, in the order of tax credit succession.
Under the bill, DOR is authorized to perform additional financial and technical audits and examinations,
including examining the accounts, books, or records of the tax credit applicant, to verify the legitimacy
of the qualified expenses included in a tax credit return and to ensure compliance. It is grounds for
forfeiture of previously claimed and received tax credits if DOR determines that a taxpayer received a
tax credit to which the taxpayer was not entitled. The taxpayer must return the forfeited tax credits to
DOR, which will then be paid into the General Revenue Fund.
The bill provides that the taxpayer must file an amended tax return and pay any required tax within 60
days after the taxpayer receives notification from the IRS that a previously approved tax credit has
been revoked or modified, if uncontested, or within 60 days after a final order is issued following
proceedings involving a contested revocation or modification order. DOR may issue a notice of
deficiency at any time within five years after the date on which the taxpayer receives notification from
the IRS that a previously approved tax credit has been revoked or modified.
The bill permits DOR to issue a notice of deficiency at any time if the taxpayer fails to notify DOR of any
change in its tax credit claimed. The amount of any proposed assessment in the notice of deficiency is
limited to the amount of any deficiency from the precomputation of the taxpayer’s tax for the taxable
year. Furthermore, a taxpayer is subject to applicable penalties and interest for failing to report and
timely paying any tax due as a result of the forfeiture of its tax credit.
The bill provides that DOR must provide an annual report that identifies, in the aggregate:
The number of employees hired during construction phases;
The use of each newly rehabilitated building and the expected number of employees hired;
The number of affordable housing units created or preserved; and
The property values before and after the certified rehabilitations.
Under the bill, DOR must also establish any necessary forms required to claim a tax credit; provide
administrative guidelines and procedures required to administer the Act, including rules establishing an
entitlement to and sale or transfer of a tax credit; and provide examination and audit procedures
required to administer the Act.
The bill grants DOR rulemaking authority to administer the Act.
B. SECTION DIRECTORY:
Section 1: Creates 220.197, F.S., which creates and provides terms for the Main Street Historic
Tourism and Revitalization Act.
Section 2: Provides an effective date of July 1, 2022.
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DATE: 2/11/2022
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVER NMENT:
1. Revenues:
By implementing a new tax credit, the bill will likely decrease state revenues.
2. Expenditures:
According to DOR, the bill will have a non-recurring negative fiscal impact in the amount of
$250,772 for fiscal year 2021-2022 in order to make modifications to the DOR’s software systems,
databases and applications.
18
Additionally, new rules and forms must be promulgated in order to
administer the tax credit.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Taxpayers who have an ownership interest in a certified historic structure in the year during which the
structure was placed into service after the certified rehabilitation was complete may be eligible to
receive a tax credit to offset corporate income taxes and insurance premium taxes for qualified
expenses incurred in the rehabilitation of the certified historic structure. This may lead to greater private
investment in the rehabilitation of certified historic structures, which may have a positive impact on jobs
and property values.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to impact county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill authorizes DOR to adopt rules to administer the Act.
C. DRAFTING ISSUES OR OTHER COMMENTS:
To administer this section, DOR suggests that the bill include language which gives them emergency
rulemaking authority and changes the effective date to July 1, 2023.
19
18
Department of Revenue, Agency Analysis of 2022 House Bill 247, p.11 (Oct. 25, 2021).
19
Id. at 8. STORAGE NAME: h0247.TIE PAGE: 7
DATE: 2/11/2022
The bill makes multiple references to when the certified historic structure is “placed into service,” but
does not define this term. According to DOR, the bill is also unclear when it refers to a certified historic
structure that has been “rehabilitated and placed into service on or after July 1, 2022.” This language is
unclear as to whether the rehabilitation may begin before July 1, 2022.
20
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
Not applicable.
20
Id.