On July 2, 2012, Pennsylvania became the 30th state in the country to offer a state historic tax credit when Governor Tom Corbett signed HB 761 (an amendment to the Tax Reform Code) and enacted Act 85 (See page 103) that established the Historic Preservation Incentive Act. This tax credit will be a companion to the very successful tax credit program.
The program will offer a 25% state tax credit for the rehabilitation of qualified income-producing buildings that are also using the federal tax credit. By leveraging the existing 20% federal tax credit with an additional 25% state credit, the program will help lure investment into Pennsylvania. Data show that states with state credits tend to have an advantage over states that do not have tax credits in attracting investment in historic rehabilitation.
In the end, this program was established as part of the Commonwealth Budget in the Tax Reform Code. Efforts to establish this credit in Pennsylvania began in 1996.
What’s Next? The Pennsylvania Historical and Museum Commission and the Department of Economic and Community Development will develop the program guidelines. The credit goes into effect July 1, 2013. Just like the federal program, this credit is issued after the project is completed. To start, the program is limited to $3 million annually with an individual project cap of $500,000.