Tax Credit for Certified Rehabilitation of Certified Historic Structures
Frequently Asked Questions

A certified historic structure is a property in Texas that is:

• listed individually in the National Register of Historic Places;
• designated as a Recorded Texas Historic Landmark under Government Code, Section 442.006 (State Historical Marker Program) or as a state archeological landmark under Natural Resources Code, Chapter 191 (Antiquities Code); or
• certified by the Texas Historical Commission as contributing to the historic significance of:
  • a historic district listed in the National Register of Historic Places; or
  • a local district certified by the U.S. Department of the Interior in accordance with 36 CFR Section 67.9, Certifications of State and local historic districts.

"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 26 USC Section 47(c)(2) (Qualified rehabilitation expenditure defined).

Nonprofit Entities:

The depreciation and tax-exempt use provisions of 26 USC Section 47(c)(2) do not apply to costs and expenses incurred by an entity exempt from the franchise tax under Tax Code Section 171.063, Exemption-Nonprofit Corporation Exempt from Federal Income Tax. These nonprofit entities must satisfy all the other provisions of 26 USC Section 47(c)(2) to establish a credit.

Effective Jan. 1, 2022, expenditures incurred on or after that date by an entity exempt from franchise tax under Tax Code Section 171.063 to rehabilitate a structure that is leased to a tax-exempt entity in a disqualified lease, as those terms are defined by 26 USC Section 168(h), are not eligible costs and expenses.

Institutions of Higher Education and University Systems:

For the period of June 14, 2017 through Dec. 31, 2021, the depreciation and tax-exempt use provisions of 26 USC Section 47(c)(2) do not apply to costs and expenses incurred by an institution of higher education or university system as defined by Education Code Section 61.003 (Definitions). These institutions of higher education or university systems must satisfy all the other provisions of 26 USC Section 47(c)(2) to establish a 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" is a report that itemizes the eligible costs and expenses the entity incurred in the certified rehabilitation of the certified historic structure. The cost report must be audited by a certified public accountant.

You can claim the credit by filing the Texas tax report via Webfile, through an approved tax software provider or mailing the following forms with your Texas tax report.

Franchise Tax

• Form 05-160, Texas Franchise Tax Credits Summary Schedule
• Form 05-180, Texas Franchise Tax Historic Structure Credit Supplement for Credit Claimed on Report
• Form 05-901 Historic Structure Credit Certificate – The Comptroller’s office will mail this form to you upon approval of the credit (see Establishing This Credit section) or after processing the sale, assignment or allocation of the credit.

Insurance Premium Tax

• Form 25-125 Texas Historic Structure Credit Supplement for Credit Claimed on Insurance Premium Tax Report (PDF)
• Form 05-901 Historic Structure Credit Certificate – The Comptroller’s office will mail this form to you upon approval of the credit (see Establishing This Credit section) or after processing the sale, assignment or allocation of the credit.
• Please note: An insurance premium taxpayer cannot use a historic structure credit it establishes or receives as an allocation from a pass-through entity. Insurance premium taxpayers may only use a credit they acquire through a sale or assignment. Refer to Tax Code Section 171.908(e) regarding the sale or assignment of the credit for insurance premium taxpayers.

The historic structure credit is applied after all other tax credits.

If all other requirements are met, the first tax report on which a particular credit can be claimed is the tax report that is based on the accounting period or tax year that includes the date the structure was placed in service. The credit can also be claimed on the following five consecutive tax reports.

Franchise Tax

The 2015 report due May 15, 2015 is the first franchise tax report on which any credit can be claimed.

Insurance Premium Tax

The 2017 tax year report due March 1, 2018 is the first insurance premium tax report on which any credit can be claimed.

Yes, if you are a franchise taxpayer. An insurance premium taxpayer may not claim a credit that it has established. To establish and claim the credit, send these documents with the tax report:

• Form 05-160, Texas Franchise Tax Credits Summary Schedule (PDF)
• Form 05-180, Texas Franchise Tax Historic Structure Credit Supplement for Credit Claimed on Report (PDF)
• Form AP-235, Texas Historic Structure Credit Registration (PDF)
• the Certificate of Eligibility issued by the Texas Historical Commission
• an audited cost report completed by a certified public accountant

Please note: You must still file your tax report electronically if required to do so, and you must mail the required forms to the Comptroller’s office in order to claim the credit.

Upon the sale or purchase of a historic structure credit, the buyer should receive the following documents from the seller:

• a copy of current Form 05-901, Historic Structure Credit Certificate
• Form 05-179, Texas Sale, Assignment or Allocation of Historic Structure Credit (PDF) (this must be signed by both the buyer and the seller)
• A copy of the Certificate of Eligibility
• A copy of the audited cost report

Note: The buyer should maintain copies of all these documents for its records. Only the credit owner may request a copy of the credit certificate. The credit owner may provide a power of attorney to designate another party to receive a copy of the certificate.

Within 30 days from the date of the sale, mail Forms 05-901 and 05-179 to the Comptroller’s office.

The buyer cannot claim the credit on a report until it has received Form 05-901, Historic Structure Credit Certificate, from the Comptroller’s office. This may take up to four weeks from the date the Comptroller’s office receives the completed documentation.

After receiving and processing the required documentation, the Comptroller’s office will send each credit owner with a credit balance a new Historic Structure Credit Certificate reflecting its new 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 this form with their Certificate of Eligibility. The total of all the amounts listed on Form AP-235, Item 12 from 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, allocated or claimed.

"Carryforward" is the ability to use, in later tax years, the portion of a credit that cannot be fully claimed in the first year the credit is established because the credit exceeds the amount of tax due on the tax report.

The credit can be taken on a total of six consecutive tax reports.

The sale, assignment, or allocation of a credit does not extend the period for which the credit can be carried forward.

There is no limit on the total number of transactions for the sale or assignment of all or part of the total credit.