SB 1066 — Historic rehabilitation; increases maximum amount of tax credit, effective provision.

SESSION INTRODUCEDENGROSSED 23100398D I SENATE BILL NO.

1066 OfferedSenate JanuaryAmendments 11,in 2023[ N] - February 6, 2023 Prefiled January 8, 2023 T A BILL to amend and reenact § 58.1-339.2 of the Code of Virginia, relating to historic rehabilitation tax credit.

R–––––––––– Patrons––Surovell,Patrons Hanger,Prior Locke,to Lucas,Engrossment––Senators MasonSurovell and Stanley;Mason;

Kory O –––––––––– E Referred to CommitteeCommit––––––––––ance on Finance and Appropriations DN –––––––––– U Be it enacted by the General Assembly of Virginia:

CG § 58.1-339.2.

ER A.

Effective for taxable years beginning on and after January 1, 1997, any individual, trust or estate, or corporation incurring eligible expenses in the rehabilitation of a certified historic structure shall be entitled to a credit against the tax imposed by Articles 2 (§ 58.1-320 et seq.), 6 (§ 58.1-360 St seq.) and 10 (§ 58.1-400 et seq.) of Chapter 3;

Article 1 (§ 58.1-2500 et seq.) ofdof Chapter 25;

and Article 2 (§ 58.1-2620 et seq.) of Chapter 26, in accordance with the followingfollowingS schedule:

YearE 1997 % of EligibleEl10%ble Expenses 1997 10% 1998 15% D 1999 20% 2000 and thereafter 25% S If the amount of such credit exceeds the taxpayer's tax liability for such taxable year, the amount that exceeds the tax liability may be carried over for credit against the taxes of such taxpayer in the next ten taxable years or until the full credit is used, whichever occurs first.

Credits granted to a partnership or electing small business corporation (S corporation) shall be passed through to the partners or corporation) shall be allocated among all partners or shareholders, respectively.respectively, either in proportion to their ownership interest in such entity or as the partners or shareholders mutually agree as provided in an executed document, the form of which shall be prescribed by the Director of the Department of Historic Resources.

CreditsE grantedB. to a partnership or electing small business corporation (S corporation) shall be allocated among all partners or shareholders, respectively, either in proportion to their ownership interest in such entity or as the partners or shareholders mutually agree as provided in an executed document, the form of which shall be prescribed by the Director of the Department of HisB.

Effective for taxable years beginning on and after January 1, 2000, any individual, trust, estate, or corporation resident in Virginia that incurs eligible expenses in the rehabilitation of a certified historic structure: in any other state that has in effect a reciprocal historic structure rehabilitation tax credit 36 program and agreement for residents of that state who rehabilitate historic structures in Virginia shall be 37 entitled to a credit to the same extent as provided in subsection A and other applicable provisions of 38 law;

35 structure in any other state that has in effect a reciprocal historic structure rehabilitation tax credit 36 program and agreement for residents of that state who rehabilitate historic structures in Virginia shall be / 37 entitled to a credit to the same extent as provided in subsection A and other applicable provisions of 38 law;

C.Department of Historic Resources, which shall determine the amount of eligible rehabilitation expenses and issue a certificate thereof to the taxpayer.

1.The taxpayer shall attach the certificate to the Virginia tax return on which the credit is claimed.

To2. claim the credit authorized under this section, the taxpayer shall apply to the Virginia Department of Historic Resources, which shall determine the amount of eligible rehabilitation expenses and issue a certificate thereof to the taxpayer.

The taxpayer shall attach the certificate to the Virginia tax ret2.

Should the taxpayer incur eligible expenses in the rehabilitation of a certified historic structure in a locality that has a designated enterprise zone pursuant to § 59.1-542, the taxpayer may claim up to an additional $10 million, including amounts carried over from prior taxable years.yeaD.

When used in this section:

SB1066SB1066E 2 of 2 "Eligible rehabilitation expenses" means expenses incurred in the material rehabilitation of a certified historic structure and added to the property's capital account.

[ 2.

That the provisions of this act shall not become effective unless the revenue change reasonably anticipated to result from the implementation of this act is affirmatively accounted for in the total projected revenues set forth in § 3 of the first enactment of the general appropriation act passed in 2023 by the General Assembly that becomes law.