§ 44-33.2-3 - Tax credit.
SECTION 44-33.2-3
§ 44-33.2-3 Tax credit. – (a) Any person, firm, partnership, trust, estate, limited liability company,corporation (whether for profit or non-profit) or other business entity thatincurs qualified rehabilitation expenditures for the substantial rehabilitationof a property officially recorded as having applied to be certified as acertified historic structure by the Rhode Island historical preservation andheritage commission through its historic tax credit application process priorto January 1, 2008, and verified by the division of taxation, provided therehabilitation meets standards consistent with the standards of the Secretaryof the United States Department of the Interior for rehabilitation as certifiedby the commission, shall be entitled to a credit against the taxes imposed onsuch person or entity pursuant to chapter 11, 12, 13, 14, 17 or 30 of thistitle. For certified historical structures or some identifiable portion of astructure placed in service prior to January 1, 2008 the credit shall be anamount equal to thirty percent (30%) of the qualified rehabilitationexpenditures. For certified historical structures or some identifiable portionof a structure placed in service after December 31, 2007, the credit shall notexceed twenty-five percent (25%), twenty-six percent (26%), or twenty-sevenpercent (27%) of the qualified rehabilitation expenditures as contractedbetween the division of taxation and the person, firm, partnership, trust,estate, limited liability company, corporation (whether for profit ornon-profit) or other business entity that incurs qualified rehabilitationexpenditures for the substantial rehabilitation of certified historicstructures or some identifiable portion of a structure to be placed in serviceafter December 31, 2007.
(b) Notwithstanding any provisions of the general laws orregulations adopted thereunder to the contrary, including, but not limited to,the provisions of chapter 2 of title 37, the division of taxation is herebyexpressly authorized and empowered to enter into contracts with persons, firms,partnerships, trusts, estates, limited liability companies, corporations(whether for profit or non-profit) or other business entities that incurqualified rehabilitation expenditures for the substantial rehabilitation ofcertified historic structures or some identifiable portion of a structure to beplaced in service after December 31, 2007, for the following purposes, all ofwhich shall be set forth in more particular detail as follows:
(1) Upon payment of the fees as set forth in this section,the division of taxation shall, on behalf of the state of Rhode Island,guaranty through a contract with persons, firms, partnerships, trusts, estates,limited liability companies, corporations (whether for profit or non-profit) orother business entities that will incur qualified rehabilitation expendituresfor the substantial rehabilitation of a certified historic structure or someidentifiable portion of a structure to be placed in service after December 31,2007, the delivery of one hundred percent (100%) of the tax credit in an amountwhich is the lesser of: (i) the amount of the tax credit identified in thecontract with the division of taxation on or before May 15, 2008 inconsideration of any processing fees; or (ii) the actual qualifiedrehabilitation expenditures multiplied by the tax credit percentage selected bythe taxpayer on or before May 15, 2008 and any processing fees. The tax creditand fee shall not exceed the following combinations which shall be selected byany person, firm, partnership, trust, estate, limited liability company,corporation (whether for profit or non-profit) or other business entity thatwill incur qualified rehabilitation expenditures for the substantialrehabilitation of certified historic structures or some identifiable portion ofa structure to be placed in service after December 31, 2007:
(A) For an amount of credit not exceeding twenty-five percent(25%) of the qualified rehabilitation expenditures, the fee shall be an amountequal to three percent (3%) of the qualified rehabilitation expenditures.
(B) For an amount of credit not exceeding twenty-six percent(26%) of the qualified rehabilitation expenditures, the fee shall be an amountequal to four percent (4%) of the qualified rehabilitation expenditures.
(C) For an amount of credit not exceeding twenty-sevenpercent (27%) of the qualified rehabilitation expenditures, the fee shall be anamount equal to five percent (5%) of the qualified rehabilitation expenditures.
(D) As referred to in subsection 44-33.2-4(d), two and onequarter percent (2.25%) of the qualified rehabilitation expenditures shall bepaid by May 15, 2008 with the remaining percent to be paid by March 5, 2009.Payments made after March 5, 2009 shall accrue interest as set forth in §44-1-7.
(E) The division of taxation and the Rhode Island historicalpreservation and heritage commission shall reconcile tax credits and fees withthe persons, firms, partnerships, trusts, estates, limited liability companies,corporation (whether for profit or non-profit) or other business entitiescontracted with as part of the final project certification. In the event thatthe processing fee paid is greater than the amount of actual qualifiedrehabilitation expenditures multiplied by the percentage chosen pursuant tosubsection 44-33.2-3(b), the persons, firms, partnerships, trusts, estates,limited liability companies, corporations (whether for profit or non-profit) orother business entities that incur qualified rehabilitation expenditures forthe substantial rehabilitation of certified historic structures or someidentifiable portion of a structure to be placed in service after December 31,2007, shall be refunded such difference, without interest.
(F) Any contract executed pursuant to this chapter by aperson, firm, partnership, trust, estate, limited liability company,corporation (whether for profit or non-profit) or other business entity thatincurs qualified rehabilitation expenditures for the substantial rehabilitationof certified historic structures or some identifiable portion of a structure tobe placed in service after December 31, 2007, shall be assignable to: (i) anaffiliate thereof without any consent from the division of taxation or (ii) aperson, firm, partnership, trust, estate, limited liability company,corporation (whether for profit or non-profit) or other business entity thatincurs qualified rehabilitation expenditures for the substantial rehabilitationof certified historic structures or some identifiable portion of a structure tobe placed in service after December 31, 2007, with such assignment to beapproved by the division of taxation, which approval shall not be unreasonablywithheld. For purposes of this subsection, "affiliate" shall be defined as anyentity controlling, controlled by or under common control with such person,firm, partnership, trust, estate, limited liability company, corporation(whether for profit or non-profit) or other business entity.
(c) Tax credits allowed pursuant to this chapter shall beallowed for the taxable year in which such certified historic structure or anidentifiable portion of the structure is placed in service provided that thesubstantial rehabilitation test is met for such year.
(d) If the amount of the tax credit exceeds the taxpayer'stotal tax liability for the year in which the substantially rehabilitatedproperty is placed in service, the amount that exceeds the taxpayer's taxliability may be carried forward for credit against the taxes imposed for thesucceeding ten (10) years, or until the full credit is used, whichever occursfirst for the tax credits. Credits allowed to a partnership, a limitedliability company taxed as a partnership or multiple owners of property shallbe passed through to the persons designated as partners, members or ownersrespectively pro rata or pursuant to an executed agreement among such personsdesignated as partners, members or owners documenting an alternate distributionmethod without regard to their sharing of other tax or economic attributes ofsuch entity.
(e) If the taxpayer has not claimed the tax credits in wholeor part, taxpayers eligible for the tax credits may assign, transfer or conveythe credits, in whole or in part, by sale or otherwise to any individual orentity, including, but not limited to, condominium owners in the event thecertified historic structure is converted into condominiums. The assignee ofthe 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 section 44-13-13), 14, 17 or 30 of thistitle. The assignee may apply the tax credit against taxes imposed on theassignee until the end of the tenth (10th) calendar year after the year inwhich the substantially rehabilitated property is placed in service or untilthe full credit assigned is used, whichever occurs first. Fiscal year assigneesmay claim the credit until the expiration of the fiscal year that ends withinthe tenth (10th) year after the year in which the substantially rehabilitatedproperty is placed in service. The assignor shall perfect the transfer bynotifying the state of Rhode Island division of taxation, in writing, withinthirty (30) calendar days following the effective date of the transfer andshall provide any information as may be required by the division of taxation toadminister and carry out the provisions of this section.
(2) For purposes of this chapter, any assignment or salesproceeds received by the taxpayer for its assignment or sale of the tax creditsallowed pursuant to this section shall be exempt from this title. If a taxcredit is subsequently recaptured under subsection (e) of this section, revokedor adjusted, the seller's tax calculation for the year of revocation,recapture, or adjustment shall be increased by the total amount of the salesproceeds, 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 taxcalculation under chapters 11, 12, 13 (other than with respect to the taximposed under section 44-13-13), 14, 17, or 30 of this title, as applicable,for the year of revocation, recapture, or adjustment, shall be increased byincluding the total amount of the sales proceeds without proration.
(f) Substantial rehabilitation of property that is exemptfrom real property tax shall be ineligible for the tax credits authorized underthis chapter. In the event a certified historic structure undergoes asubstantial rehabilitation pursuant to this chapter and within twenty-four (24)months after issuance of a certificate of completed work the property becomesexempt from real property tax, the taxpayer's tax for the year shall beincreased by the total amount of credit actually used against the tax.
(g) In the case of a corporation, this credit is only allowedagainst the tax of a corporation included in a consolidated return thatqualifies for the credit and not against the tax of other corporations that mayjoin in the filing of a consolidated tax return.