MN Historic Tax Credit – Sunset Shortens Completion Time Available

History

The Minnesota Historic Structure Rehabilitation Tax Credit (MN HTC) was enacted in 2010. To qualify a historic building rehabilitation project for the MN HTC, a MN Part A application must be submitted to the Minnesota State Historic Preservation Office (MN SHPO) along with the Federal Part 2 Application. After the National Park Service (NPS) approves the Federal application, MN SHPO can then issue an Allocation Certificate. After completing the project, a MN Part B application and a Federal Part 3 application must be submitted and approved. MN SHPO can then issue a Credit Certificate that allows the owner to claim the MN HTC.

The MN HTC program was originally set to expire in June 2015 before its extension to June 2021 in a 2013 legislative session. In 2021, the program was extended to June 2022. Under the original and extended programs, historic building owners that receive an Allocation Certificate from MN SHPO prior to the expiration date have three calendar years to place the project in service, so long as MN SHPO has the authority to issue Credit Certificates after the three calendar years end. For example:

Allocation Certificate date: June 30, 2021
Three calendar year end date: December 31, 2024
Credit Certificate deadline: December 31, 2025

Credit Certificate Deadline

The 2021 extension allows MN SHPO to issue Credit Certificates through December 31, 2025. This shortens the amount of time available to place a project in service if the Allocation Certificate was issued in 2022 because the Credit Certificate must be issued by the end of the three-calendar year window. The amount of time that it takes MN SHPO and NPS to review and approve the Part B and Part 3 applications is not finite. In order to ensure enough time for the applications to be approved and a Credit Certificate issued, historic building owners should complete their project well before December 31, 2025.

The shortened time window was eliminated in the past by extensions of the program. Future legislation may or may not be enacted to further extend the program.

For questions or additional information on MN Historic Tax Credits, please contact Trent Senske, CPA or the Real Estate Solutions Team at Mahoney.