Minnesota Historic Tax Credit Updates

Update May 18, 2023

The Minnesota Legislature is expected to extend the state Historic Rehabilitation Tax Credit, according to information shared during a Taxes Conference Committee hearing on Wednesday evening, May 17. House and Senate conferees have been negotiating terms of a tax bill agreement for the past week. During Wednesday evening's hearing, Senate Fiscal Analyst staff member Casey Muhm and Senate Taxes Chair Sen. Ann Rest stated that the HTC will be extended for eight years, with a planned 2031 sunset date. While we are still waiting to see the final bill language, which has not yet been posted, you can see the HTC extension indicated here on the final Taxes change items spreadsheet (line 46) and click here to hear the HTC addressed in the hearing. Under the agreement, the HTC program will continue to allow only one transfer of the credit certificate, rather than the two-transfer provision that Rethos & RevitalizeMN had been seeking and that was included in the Senate Omnibus taxes bill that was approved on May 2.

With only a few days remaining of the 2023 Legislative session, we expect that final bill language will be posted shortly, and that debate and passage of the Taxes bill will take place over the weekend. We will share news as soon as we can.

Update April 28, 2023

MN HTC Included in Senate Taxes Bill

The Senate bill includes an extension of the HTC with a retroactive provision for certain projects that started rehab work after June 30, 2022, as long as they apply within 60 days of July 1, 2023. The bill also repeals the sunset date – i.e. the extension will be permanent. The Senate bill also allows for one additional transfer of the credit certificate to a financial institution, which will allow more investors to participate and facilitate more historic tax credit projects. The Senate Omnibus bill does not include the single-refund amendment that was adopted in committee earlier this session, so it would keep in place the current 5-year ratable credit structure that MN adopted when it conformed to the terms of the Tax Cuts and Jobs Act in 2019.

MN HTC Not Included in House Taxes Bill

The House Omnibus taxes bill does not include the HTC at all; this is one of a few key differences between the House and Senate bills that will have to be hammered out in conference committee. We expect that conference committee members will be appointed sometime during the first week in May. Then the conference committees can be formed. For what it’s worth, the Gov/Lt. Gov’s budget recommendations included reinstating the HTC with an 8-year sunset date and the retroactive provision. And the House bill to reinstate the MN HTC has a record number of bipartisan authors.

Update March 1, 2023

Commissioner Marquart Presents HTC Extension

Revenue Commissioner Paul Marquart presented the Governor & Lt. Governor’s tax proposal at both House and Senate taxes committees this past week. Marquart, a former House member who had been a reliable supporter of the state Historic Tax Credit during his time as chair of the House Taxes Committee, provided this meme-worthy statement during his presentation: “It’s BACK!” Although not quite the done deal that it sounds like here, his enthusiasm was shared by Senate Taxes committee members in particular, which gives us confidence that this legislative session will finally end with a win for Historic Tax Credit supporters in Minnesota.

HTC Bills introduced and First Committee Hearing Held

In addition to the Governor/Lt. Governor’s bill, legislators in both House and Senate have introduced bills to retain and improve the MN Historic Tax Credit. One such bill had a hearing in the House Taxes committee on February 14 that was summarized in Session Daily, the House news service. A line-up of RevitalizeMN supporters provided great testimony. Follow this link to hear what they had to say about the economic and community benefits of historic tax credit projects.

January 11, 2023

On January 11, 2023, the Senate Taxes Committee heard testimony on the provisions that were included in last session’s Omnibus tax-bill-that-wasn’t. To refresh your memory – in May of last year, the House-Senate Taxes Conference committee worked out a bill that would have made the Minnesota Historic Structure Rehabilitation Tax Credit permanent, but the Legislature failed to reach agreement on other issues and adjourned without passing the Taxes bill, among many others.

At the recent Senate Taxes committee hearing, Rethos Executive Director Heidi Swank spoke on behalf of the RevitalizeMN coalition. Heidi shared information about the level of economic investment spurred by the historic tax credit, and emphasized the need to reinstate the credit and make it permanent. Other committee testifiers who highlighted the importance of retaining the HTC represented NAIOP and the League of Minnesota Cities.

Senate Taxes Chair Ann Rest has been a longtime supporter of the state Historic Tax Credit. We feel optimistic that, with Senate Majority Leader Kari Dziedzic, previous Taxes chair Sen. Carla Nelson, and new Department of Revenue Commissioner Paul Marquart in key leadership positions, the MN Historic Tax Credit has an excellent chance of being reinstated in 2023. And in the meantime, we’ll enjoy the occasional bursts of humor that make their way through wonky tax policy during committee hearings.