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Mississippi's State Historic Preservation Tax Incentives ProgramIn March 2006, Governor Haley Barbour signed Senate Bill 3067, which created the Mississippi state historic preservation tax incentives program to encourage the rehabilitation of historic buildings. The Mississippi Department of Archives and History (MDAH) is responsible for the administration of the program, which provides for a state income tax credit equal to 25% of the qualified expenses of rehabilitating historic structures used for residential or business purposes. Properties do not need to be income-producing to qualify for the state tax credit; therefore, rehabilitations of owner-occupied residences are eligible. Only expenditures incurred after January 1, 2006, qualify. Properties qualifying for the 20% (or 26% in the Gulf Opportunity Zone) federal preservation tax credit will also qualify for the state tax credit. In effect, the combined federal and state credits can reduce the cost of a certified rehabilitation of an income-producing historic structure by 45% (51% for properties located in the Gulf Opportunity Zone). Eligible PropertiesProperties eligible to receive the credits are those
Eligible Projects
Application ProcessTo qualify for the state tax credit, property owners must submit a three-part State Historic Preservation Certification Application, along with photographs, to MDAH. However, for properties that also qualify for the federal credits, the property owner need only submit the federal certification application, along with the one-page form, "Statement of Intent: Mississippi State Historic Preservation Tax Credit." The three-part application is used to: (1) request certification that the property is eligible to receive the credit; (2) request a determination that the proposed rehabilitation is in compliance with the Secretary of the Interior's Standards for Rehabilitation ; and (3) request certification that the project, as completed, meets the Standards. MDAH reviews the entire project, including related demolition and new construction, and certifies the project only if all work meets the Standards. It is strongly recommended that the application be submitted for review and approval before starting work so that potential problems in compliance with the Standards, which might jeopardize the tax credit, can be avoided. PhotographsAlong with the Historic Preservation Certification Application, a complete set of color photographs, no smaller than 4"x6" in size and showing both the interior and exterior of the building before the start of the project, must be submitted. Photographs must be clear and of high quality, showing each exterior elevation (front, rear, and both sides) and all major and representative minor interior spaces. In addition, photos of significant features, such as porches, mantelpieces, staircases, ceiling medallions, etc., should be included. No Polaroids, photocopies, photographs sent via e-mail, or photographs on disk, CD, or DVD will be accepted. When the project is completed, a full set of "after rehab" photographs must be submitted with the request for final certification. Qualified ExpendituresAllowable expenditures include costs associated with the work undertaken on a structural component of a historic building—such as walls, roofs, windows, floors—as well as central air conditioning and heating systems, plumbing and plumbing fixtures, electrical wiring and lighting fixtures, elevators, and other components related to the operation or maintenance of the building. In addition, there are "soft costs" that qualify, such as architectural and engineering fees, site survey fees, development fees, and other construction-related costs. The tax credit does not apply to such costs as acquiring or furnishing the building, new additions, new building construction, or parking lots, sidewalks, landscaping, or other facilities related to the building. (Qualified rehabilitation expenditures are defined in Section 47(c)(2)(A) of the Internal Revenue Code of 1986, as amended.) Claiming the CreditThe Department shall issue a certificate verifying the eligible credit, and this certificate shall be attached to all income tax returns on which the credit is claimed. If the amount of the tax credit exceeds the total state income tax liability for the year in which the rehabilitated property is placed in service, the unused tax credit may be carried forward for the ten (10) succeeding tax years. Additional InformationFor additional information about the state and federal tax incentives, and to determine if a property is listed on the National Register of Historic Places or is a Mississippi Landmark, please contact the Department at the address or telephone number listed below. The National Park Service's web site contains additional information about the federal tax program, as well as technical guidance, including the Secretary of the Interior's Standards for Rehabilitation and the Preservation Briefs. An application packet, which includes the State Historic Preservation Certification Application form, instructions, a sample completed application, and a copy of the Secretary of the Interior's Standards for Rehabilitation, is available for $6.00 from the following address:
Historic Preservation Division Mississippi State Tax Incentives Forms
CHECKLIST FOR PROJECTS USING MISSISSIPPI STATE TAX CREDIT ONLY
HISTORIC PRESERVATION CERTIFICATION APPLICATION INSTRUCTIONS
HISTORIC PRESERVATION CERTIFICATION APPLICATION
SAMPLE APPLICATION |
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