Historic preservation transactions in Wisconsin received a great boost when Wisconsin Governor Scott Walker last month signed Assembly Bill (AB) 4 into law, which allows for an increase in the amount tax credits for the substantial rehabilitation of historic buildings. Specifically, AB 4 doubles the amount of tax credit that can be claimed from 10 percent to 20 percent of the qualified rehabilitation expenses for certified historic structures located within state and with qualified rehabilitation expenditures equal to at least $50,000. AB 4 also stipulates that rehabilitated property must be placed in service after December 31, 2012.
The legislation would allow a person to sell or otherwise transfer the credit to another person who is subject to Wisconsin tax if the person notifies the deparmtnet of the transfer and submits a copy of transfer documents.
This legislation helps lessen the burden of renovation and revitalization costs by allowing more tax credit equity to flow to the deal and puts Wisconsin on par with other state’s historic tax rehabilitation credits. A state Fiscal Estimate indicates that increasing the credit from 10 percent to 20 percent is expected to increase new claims by $3.55 million annual and that this change could result in about 42 new income-producing tax credit projects annually.
Click here to learn more about AB 4.
