Mudd: A State Historic Tax Credit Program Makes Sense for Tennessee
Submitted by Reggie Mudd, Cumberland Region Tomorrow Board Member
Across our region, we can see how historic buildings contribute to our communities’ character and economic vitality. From the historic downtowns of Franklin and my home of Gallatin – to iconic buildings like the Ryman and the Hermitage Hotel – the value of historic buildings is evident. Our region’s rapid growth, however, is imperiling our historic buildings and making holding on to our community character and sense of place more important than ever.
The State Legislature is considering establishing a Historic Tax Credit program that will go a long way in helping save these places. The Main Street Historic Tourism and Revitalization Act, would give communities across our region an important tool – helping them leverage their historic assets to create vibrant places, grow their economies, and support sustainability, while preserving their historic character.
New incentives for historic rehabilitation would particularly help rural counties. Owners of historic properties – and those who would like to own them – often want to bring them back to their former glory, but rehabilitation can be prohibitively expensive. Historic Tax Credits can change the equation, making rehabilitation “pencil out”. The proposed state tax credit could be used to rehabilitate any income-producing certified historic structure, allowing owners to claim between 10-30 percent of eligible improvement expenses against their state tax liability. The incentive is structured to spur economic development in more rural counties, allowing owners in those counties other than Davidson, Williamson, Hamilton, Knox, and Shelby to claim the maximum deduction.
Historic Tax Credits make economic sense wih the return on the investment greatly outweighing any costs. Studies have repeatedly shown that historic tax credits create jobs, leverage private investment, enhance property values, and return underutilized properties to tax rolls.
Historic Tax Credits have been adopted in most states, bringing notable success. The success of State Historic Tax Credits is proven in the 35 states that have adopted them, including all of Tennessee’s neighboring states. Since it created its tax credit program in 2005, Kentucky has driven $484 million of private fund investments in 813 buildings across the state by leveraging $36.1 million in credits. While in Virginia, which implemented its tax credit over two decades ago, the success has been even more pronounced. Since 1997, the state has issued more than $1.2 billion in tax credits, stimulating more than $4.5 billion in private investment.
In Middle Tennessee, we haven’t always been on the right side of historical preservation. Through bad polSubmiicy decisions, including urban renewal and weak historical protection laws, we have lost many important buildings and scarred the fabric of our communities. The establishment of a State Historic Tax Credit won’t correct those mistakes, but because of them and our explosive growth the passage of this bill is of critical importance. I encourage you to join me in supporting this bill.
Reference HB 1063/SB 1053 http://wapp.capitol.tn.gov/apps/BillInfo/Default.aspx?BillNumber=HB1063
If you would like your voice to be heard on the issue, click the below link to contact your Legislator. http://www.capitol.tn.gov/