Texas law provides a franchise tax credit for the certified rehabilitation of certified historic structures, up to 25 percent of eligible costs and expenses for franchise tax reports originally due on or after Jan. 1, 2015.
To qualify for the credit:
The Comptroller’s office will review your documents within four weeks of receiving all required documentation.
A certified historic structure is a property in Texas that is:
“Certified rehabilitation” is the rehabilitation of a certified historic structure that the Texas Historical Commission has certified as meeting the U.S. Secretary of the Interior’s Standards for Rehabilitation as defined in 36 CFR Section 67.7, Standards for rehabilitation.
“Eligible costs” are qualified rehabilitation expenditures as defined by Internal Revenue Code , Section 47(c)(2), Rehabilitation credit.
Contact your certified public accountant for information on eligible costs and expenses. The Comptroller’s office cannot provide this information.
An “audited cost report” itemizes the eligible costs and expenses the entity incurred in the certified rehabilitation of the certified historic structure and must be issued by a certified public accountant.
A taxable entity can claim the credit by mailing the following forms with their Texas franchise tax report:
If you have not yet established the credit, you can establish and claim the credit by sending these documents with your franchise tax report:
Upon the sale or purchase of a franchise tax credit for the rehabilitation of a historic structure, the buyer should receive from the seller:
Within 30 days from the date of the sale, mail Forms 05-179 and 05-901 to the Comptroller.
Note: The buyer cannot claim the credit on a report until it has received Form 05-901, Historic Structure Credit Certificate, from the Comptroller. This may take up to four weeks.
Once the credit is transferred, the Comptroller will send each credit owner with a credit balance a new Historic Structure Credit Certificate reflecting their new franchise tax historic structure credit balance.
Yes, multiple owners can receive a share of the credit if each owner completes Form AP-235, Texas Historic Structure Credit Registration (PDF), and mails these together with the Certificate of Eligibility. The total of all the amounts listed under Form AP-235, Item 12 on each registration form must equal the total of the eligible costs and expenses covered on the audited cost report.
The expiration date listed on Form 05-901 is six years from the placed-in-service date listed on the Certificate of Eligibility, regardless of whether the credit is sold, assigned or allocated.
“Carryforward” is the remaining portion of a credit that cannot be claimed in the current year because the credit cannot exceed the amount of franchise tax due for the report after any other applicable tax credits.
The unused portion of the credit can be carried forward for not more than five consecutive reports.
There is no limit on the total amount of transactions for the sale or assignment of all or part of the total credit.