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Real Estate Law

Ulmer & Berne LLP: Ohio Historic Tax Credit Program Renewed in Budget Bill

Ohio's legislature recently approved, and Governor Kasich signed, a fiscal year 2012-2013 budget that includes a renewal of the Ohio Historic Preservation Tax Credit Program(the "Program") for coming years in perpetuity. The new budget provides for annual credits to eligible projects worth up to $60 million, which matches prior years' funding allowances. Several modifications to the Program promise to make it more appealing to eligible building owners. For the first time, foreign and domestic insurance companies can take advantage of the Program, and projects may now be completed in "phases." Also, whereas ODOD was previously required to rescind approval to projects that fail to move forward within 18 months of approval, it now has discretion over whether to sustain the project despite such delays. 

Certain aspects of project approval and oversight are revamped under the new budget. Once rules are adopted by the Ohio Department of Development, applicant projects will be required to go through a cost-benefit analysis that will determine whether the project will result in a net revenue gain in state and local taxes once it is placed in service. Any project expenditure over $200,000 must also be certified by an accountant. 

The core Program details and benefits, however, remain unchanged. The Program provides a tax credit equal to 25 percent of "qualified rehabilitation expenditures," up to a maximum of $5 million per project, to owners of certain historic buildings. The expenditures generally include construction for the building's structure and interior that meets the U.S. Secretary of the Interior's historic rehabilitation standards. To qualify as an eligible historic property, a building must either be (1) listed in the National Register of Historic Places; (2) a local landmark designated by a certified local government; or (3) located in a registered historic district.

Eligible owners interested in using the Ohio Historic Preservation Tax Credit should stay tuned for ODOD's announcement of the next application period.

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