Missouri Governor Michael L. Parson has signed legislation amending the historic tax preservation tax credit and naming it the Missouri Historic, Rural Revitalization, and Regulatory Streamlining Act. Various property tax provisions regarding tax liens and tax sales also are amended. (L. 2024, H2062, effective 08/28/2024, and as noted.)
Rehabilitation tax credit.
A tax credit is authorized for the rehabilitation of eligible property that is in a qualifying county and is a certified historic structure equal to 35% of the total costs and expenses of rehabilitation incurred on or after July 1, 2024. Ten percent of the total costs and expenses of rehabilitation upon which the tax credit is based may be incurred for investigation assessments and building stabilization before the taxpayer submits the application for tax credits. The total costs and expenses of rehabilitation include, but are not limited to, qualified rehabilitation expenditures if the qualified rehabilitation expenditures exceed 50% of the total basis in the property, and the rehabilitation meets the qualified rehabilitation standards of the Secretary of the U.S. Department of the Interior for rehabilitation of historic structures. State historic rehabilitation standards will not be more restrictive than the Secretary of the Interior’s Standards for Rehabilitation
Repealed provisions: Provisions relating to projects started between July 1, 2010, and June 30, 2018, are repealed. Properties that are not located in a qualified census tract will not be approved.
Maximum credits: For each fiscal year beginning on or after July 1, 2018, an amount up to, but not to exceed, an additional $30 million in tax credits will be authorized, provided the tax credits are authorized solely for projects located in a qualified census tract.
Applications: For all applications for tax credits, an amount equal to the applicable percentage may be issued for eligible costs and expenses incurred in the rehabilitation of an eligible property that is a non-income-producing single-family residential property occupied by the taxpayer applicant or any relative within the third degree of consanguinity or affinity of the applicant and that is either a certified historic structure or a structure in a certified historic district. For properties not located in a qualifying county, tax credits will not be issued unless the property is located in a distressed community.
Single-resource historic structures: Tax credits authorized for a single-resource certified historic structure of more than 1 million gross square feet with a Part I approval of a federal application prior to January 1, 2024, will count toward the aggregate amount of tax credits that may be authorized in a fiscal year but may be spread over a 6-year period under conditions described in the legislation.
Not-for-profit entities: Current law prohibits not-for-profit entities from receiving historic preservation tax credits. This legislation authorizes the entities to receive these tax credits.
Application cycle: The Department of Economic Development is required to establish an application cycle that allows for the year-round submission and year-round receipt and review of the applications.
Proof requirements: Currently, an application for tax credits must include proof that the property is an eligible property and a certified historic structure or a structure in a certified historic district. The legislation also allows proof that part 1 of a federal application or a draft national register of historic places nomination has been submitted to the State Historic Preservation Office. In such instances, the application may proceed as a preliminary application concurrent with the associated federal process for nomination to the National Register of Historic Places.
Application evaluation requirements: The Department is required, when evaluating an application, to consider the estimated number of housing units created by the project, the estimated number of construction and professional jobs associated with the project, capital improvements created by a project and the potential of future community investments and improvements, and increased revenues from sales or property taxes. Historic schools and theaters are exempt from this provision.
Satisfaction of required standards: The State Historic Preservation Office must determine whether a rehabilitation satisfies the required standards within 60 days of the filing of an initial application for tax credits and the determination must be based upon specific evidence and, if approved, must forward the application to the National Park Service within 60 days.
Project scope: If the scope of a project that has been approved materially changes, the taxpayer will be eligible to receive additional tax credits in the year in which the Department is notified of and approves of the change in scope, as specified in the legislation.
Evidence of capacity to finance: Currently, evidence of the capacity of the applicant to finance rehabilitation costs and expenses is required within 60 days of approval. The legislation changes the requirement to 120 days.
Approval time period: Currently, a taxpayer is required to receive approval for tax credits to commence rehabilitation within nine months of approval. The legislation changes the time period to 24 months from approval. A taxpayer must notify the Department of the loss of site control within 10 days of the loss. The legislation allows a taxpayer to forfeit approval of tax credits at any time.
Final approval: Currently, taxpayers are required to submit an application for final approval of tax credits. This legislation provides that final approval must be shown by either approval of the State Historic Preservation Office or an approved part 3 federal application. The legislation specifies a timeline for submission, approval, forwarding, and issuance. An applicant may appeal any official decision relating to the application submitted by the applicant, as specified in the legislation.
Property tax liens.
Provisions concerning liens of the state on property with unpaid taxes are amended to allow a county to elect to operate as a “partial opt-in county” for any parcel for which there is an unpaid tax bill for at least two years after its delinquent date after electing to establish a land bank agency under Mo. Rev. Stat. §140.981. The collector of the county will decide which tax delinquent parcels will proceed according to the provisions of current law. These parcels are exempt from the provisions of Mo. Rev. Stat. §140.030 to Mo. Rev. Stat. §140.722, regarding the collection of delinquent taxes. The collector must remove the parcels from any list of parcels advertised for first, second, third, or post-third sales.
Property tax sales.
If any lands or lots are not sold at a third offering, the collector must advertise or offer the lands or lots for sale once every 30 days (previously, more often than once every five years). A purchaser at any sale subsequent to the third offering of any land or lots, whether by the collector or a trustee, may elect to proceed by giving notice to the collector before the issuance of a collector’s deed.
Right to redeem: If no person redeems land sold for taxes before the expiration of the person’s right to redeem, current law provides that the collector will execute to the person’s heirs or assigns. The legislation adds that the state of Missouri or any person, taxing authority, tax district, judgment creditor, or lienholder that had a right, title, interest, claim, or equity of redemption on or to the lands or that had a lien upon the lands will be barred and forever foreclosed of such unclaimed right, title, interest, claim, or equity of redemption in or to the lands and of any lien upon the lands.
Petition for foreclosure.
A petition for foreclosure of a tax lien must name each person with a legal interest in the land affected by the suit, as reasonably discoverable by the collector from publicly available records and must contain certain information specified in the legislation. The collector must prepare and send, by first-class mail, a copy of the petition within 30 days after it is filed to the occupant of the parcel or property.
Miscellaneous provisions.
The legislation also provides information regarding title searches, the types of records needed to apprise interest parties of a suit regarding a tax sale, and notice requirements.
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