Hutchinson The owners of a historic south-central Kansas building may be able to get the historic preservation tax credit they had been counting on.
But people planning future projects will be affected by tax credit cuts imposed by the Legislature.
Steve and Gina Nachtigal renovated a historic building in downtown Hutchinson to house a counseling center and ministry. The Legislature made significant cuts in the historic preservation tax credit program, which the Nachtigals expected to finance 25 percent of their project.
State revenue and historical society officials came up with guidelines Thursday so that tax credit certificates issued before June 15 won’t be affected by the legislative cuts.
But certificates issued after that date will come under the limit imposed by the Legislature. Any credits earned during calendar years 2009 and 2010 can be carried forward to fiscal year 2011, which starts July 1, 2010.
“If they hold a tax credit now, we will honor those. Any project that is placed in service after June 15, the cap will apply,” said Revenue Secretary Joan Wagnon.
Wagnon estimated there are about $8 million in tax credits that can be taken before June 15.
“If they have finished the building, they need to get their paperwork in before June 15,” Wagnon said.
She said the agency is meeting at 3 p.m. Wednesday at the Statehouse with interested parties to discuss the guidelines.
Before Thursday’s decision, Gina Nachtigal had been worried. “To not receive these tax credits would be huge,” she said. “The reason we worked with downtown development to purchase and restore a building on the National Register (of historic places) was specifically to take advantage of this tax credit program. It’s what we were counting on.”
The Kansas Historic Preservation Tax Credit Program, adopted in 2001, provides a funding mechanism for projects to rehabilitate historic properties listed on the National Register of Historic Places.
Historic preservation project developers can use the credits to reduce taxes they owe, or they can sell the credits to produce funding for the project. Eligible projects in Kansas have the opportunity to receive a 25 percent state tax credit and a 20 percent federal tax credit for improvements made to historic buildings.
Once a property is found eligible for the historic preservation tax credits, developers must submit plans that detail how the property will be restored to meet specific preservation standards. When the plans are approved, tax credits are allocated, but not awarded.