City of Saginaw, Michigan

The new State Historic Tax Credit program will help support place-based projects while promoting the preservation of Michigan’s historic resources. Eligible properties must be listed in the National Register of Historic Places, the State Register of Historic Sites, or be in a local historic district, and either be individually listed or contribute to a listed district. The credit has a $5 million cap per calendar year.

If you own a home in the Heritage Square Neighborhood, please see the map below to see if your home qualifies. Homes categorized in groups A, B, and C Qualify.

This is entirely new legislation which created an entirely new program. Previous instructions, application forms, fee structures, rules, guidance, etc. do not apply to this program.

In accordance with the legislation, the State Historic Preservation Office (SHPO) needs to promulgate rules governing the operation of the program, develop application materials, and seek public input. The State rulemaking process as outlined in Administrative Procedures Act (PA 306 of 1969) will take between 12 and 18 months to complete. Please visit the SHPO website for the most current program information and process updates.

PA 306 of 1969: http://www.legislature.mi.gov/(S(52aadvxwpcirkdecbv4vtxod))/documents/mcl/pdf/mcl-act-306-of-1969.pdf

The credits are available as either Michigan Personal Income Tax Credits (Sec. 266a), Michigan Business Income Tax Credits (Sec. 676) or a combination thereof. In no case shall the total combined credits exceed 25% of the total qualified rehabilitation expenditures.

If you own a home in the Heritage Square Neighborhood, please see the map below to see if your home qualifies. Homes categorized in groups A, B, and C Qualify.

PA 343 of 2020: http://www.legislature.mi.gov/documents/2019-2020/publicact/pdf/2020-PA-0343.pdf

There will be a new State tax credit application form that will need to be completed for each project. The Application will be modeled after the Federal form and include three parts:

• Part 1 – Verification of Eligibility will be used to verify that the property is eligible to participate in the program.

• Part 2 – Description of Rehabilitation will be used to document all proposed work and to determine if the work appears to conform with the guidance contained in the Secretary of the Interior’s Standards for Rehabilitation. This form will function as the “preapproval letter” for the project.

• Part 3 – Certification of Completed Work will be used to: o Document that the work was completed in accordance with the approved Part 2 application and any associated conditions, and the Secretary of the Interior’s Standards for Rehabilitation;

o Collect the relevant information for each qualified taxpayer that will be claiming any portion of the credit and to;

o Collect cost, tax and other economic data that must be reported to the legislature on an annual basis.

Projects with Federal Part 2 approvals issued before January 1, 2021 are not eligible to participate in the program.

No. Work that was completed before January 1, 2021 or that is completed in advance of approval of the associated State Part 2 application is not eligible for credits.

The SHPO has 120 days from receipt of a complete application to issue a determination relating to that portion of the application.

Yes, owner occupied residential properties that meet the definition of historic resources in the Act may apply for the credits.

If you own a home in the Heritage Square Neighborhood, please see the map below to see if your home qualifies. Homes categorized in groups A, B, and C Qualify. Structures rated D would have to come before the HDC for evaluation and a letter stating if it is contributing.

A person who owns the property, has a long-term lease on the property or is assigned all or any portion of the credits.

Historic Resources individually listed in or, that are located in and contribute to an historic district listed in the National Register of Historic Places, the State Register of Historic Sites, or are within a local historic district designated in accordance with PA 169 of 1970.

All proposed work will be reviewed against the guidance contained in The Secretary of the Interior’s Standards for Rehabilitation (36CFR61); the associated interpretation and explanation found in the Preservation Briefs Series; the Interpreting the Secretary of the Interior’s Standards as published by the National Park Service; and other State tax credit program guidance that may be published by the SHPO.

There is a $2,000,000 credit limit on any given project impacting a specific historic resource.

For owner occupied residential historic resources the minimum expenditure is $1,000 or more. For all other project types, the minimum expenditure threshold is 10% of the State Equalized Value as determined by the local assessor having jurisdiction.

Yes, State credits may be transferred as a certificated credit in whole or in part. The SHPO is responsible for certifying the assignment and/or reassignment of credits as a part of the project request for certification of completed work.

All credit assignments and/or reassignments must be made in the year in which the Request for Certification of Completed Rehabilitation approval is issued on the form provided by the SHPO. Once assigned, the assignment and/or reassignment is irrevocable.

For income-producing properties, the State and Federal credits may be combined.

No. When combined, the project may receive both the full 25% State and 20% Federal credits. (Please Note: There may be federal tax consequences associated with combining the credits. You should always discuss your specific tax circumstances with a well-qualified tax professional. The SHPO cannot give tax or legal advice.)

Credits are claimed after the project receives final certification of the completed work, issued by the SHPO. The taxpayer must begin claiming the credits within 5 years of the date the Part 3 certification is issued.