Missouri's 25% State Historic Rehab Tax Credits

These credits are currently available to homeowners as well as to those who are using property for economic gain who
1) are rehabbing a building that's listed in (or that contributes to a district that's listed in) the National Register of Historic Places (NR) or contributes to a local district that has been certified by the National Park Service; and
2) the owners are doing rehabilitation work that meets the Standards for Historic Rehab set by the Secretary of the Interior (referred to as "the Secretary's Standards" and described below). Although only work being done on a contributing building counts for tax credits -- no landscaping, fences, additions to the building, or construction of additional outbuildings -- the (SHPO) must review everything hard (i.e. they don't review landscaping, but do need to see structural changes including driveways, pools, new walls etc.) that goes on the property during the project period; and 3) are doing rehabilitation whose allowable rehab expenses are greater than 50% of the purchase price of the property.

There are currently no recapture provisions for these state credits and they are currently fully transferable to any person/entity owing Missouri income taxes.

The state program is administered by Missouri's Department of Economic Development (DED). By state law, the Missouri Department of Natural Resources, State Historic Preservation Office (SHPO) must review the project according to the Secretary's Standards. Here are some places to begin to understand how the Standards are interpreted:

--Rehabilitation Incentives
--Rehabilitation Standards
--Interpreting the Standards Bulletins

And here are the forms you will need to apply:

Preliminary Application and Guidelines
Preliminary Approval Form
Continuation/Amendment Sheet
Final Application and Guidelines
Missouri Final Form HTC-E
Missouri Transfer of Credits Form

For questions pertaining to the financial end of state historic rehab tax credits, particularly auditing, please contact Gabrielle Fee in the MO Department of Economic Development at 573-522-6520.

For questions pertaining to the Secretary's Standards, their interpretation, and whether or not your building is eligible for this program, you can contact Kris Zapalac in the MO Department of Natural Resources, State Historic Preservation Office at 314-416-2960.

For-profit ventures retaining properties for five years often combine the 25% State Historic Rehab tax credit with the 20% Federal Historic Rehab Tax Credit. Federal Historic Rehab tax credit projects are also reviewed by the State Historic Preservation Office, before being passed on to the reviewer. Whether the applicant is seeking state historic rehab tax credits or federal historic rehab tax credits depends on use and amount of investment... not on the building or the impact of the project on the building, i.e. in either case the building must meet the same standards to be eligible and the rehab must meet the same standards to be certifiable at the end of the project.

Whether you're looking at state or federal tax credits, these are NOT grants -- the credits are issued only after the work has been completed & that completion documented by photographs & certified (approved) by the reviewer who reviewed the initial application.

In some municipalities, covenanted subdivisions, etc. changes to the exteriors of buildings may require local approval. In locally ordinanced districts or covenanted subdivisions, the review board has jurisdiction over changes regardless of whether or not the property is eligible for historic rehab tax credits. Getting something approved by your local review board is NOT the same as getting it approved for tax credits. You don't have to follow the Secretary's Standards or the conditions set by the tax credit reviewer unless you want tax credits, but if you want them, the review is of interior as well as exterior changes, and requirements for windows etc. may differ from those of a review board.

Please remember that your application constitutes a part of your permanent tax record and is subject to audit. All rooms, windows, stairs, doorways, doors, chimney breasts, etc. must appear in your floor plans regardless of whether you will be doing work in that room or not and -- unless you're doing a huge apartment complex in which the layout for all the units is the same, clear color photos of all rooms and all exterior elevations of the contributing building(s) must be taken (as well as a general photos showing any other buildings on the lot) as part of your application before your project begins as well as after! What the SHPO reviewer is certifying at the end of the project is that the project as a whole meets the Secretary's Standards and by definition everything you do on the lot during the period of the project is part of the project, i.e. only work done on the contributing building can receive tax credits, but the SHPO reviewer must consider the impact of the entire project in evaluating whether the project does or does not meet the Secretary's Standards. Just as the DED auditor must check to see that all your checks have in fact gone through the bank, etc., so the SHPO reviewer too must certify that nothing happened to the property during the project period that wasn't reviewed & approved.

The very best way to approach the photos is:

1) to put stickers with the building's street address on the back of each photo in the two sets you will need;

2) to put a number 1 on the back of each of the prints of the photograph you took of the front of the building; put a number 2 on the back of each of the prints of the photograph you took of the right side of the building ... and so on around the building and up and down the stairs and through each of its rooms;

3) to put a number 1 on the "before" plan of the first floor outside the building where you stood when you took that first photograph; add a > pointing the way your camera was pointing when you took the photo; put a number 2 on the "before" plan of the first floor outside the building where you stood when you took that second photograph; add a > pointing the way your camera was pointing when you took the photo ... and so on around the building and through each floor and each room until you've keyed every print to the place where you took it.

4) to make additional copies of your annotated floor plans once you've finished keying all the photos to them -- you will need one set of photos and one set of "before" floor plans and one set of "after" floor plans (you can skip the "after" if you won't be making any changes in the floor plans, walls, ceiling, doors, window sizes etc.) for each copy of the application plus one for yourself.

5) When you've gotten your preliminary approval and done the work as the reviewer specified, document that work by taking photographs from the same spots from which you took them before, having prints made, and numbering those prints in the same order, i.e so that the numbers on the back of the prints actually match the numbers on that annotated "before" floor plan... it really speeds up the review if the reviewer is looking at before and after photos of the same spot!!!!