The Arkansas State Legislature passed important pieces of preservation-related legislation during the 2019 Regular Session.
Act 470 lowered the minimum investment for non-income-producing (private residential) state historic tax credit projects from $25,000 to $5,000. Our friends at the Quapaw Quarter Association led the charge on this initiative, which will make the state historic tax credit more accessible for all Arkansans and encourage the preservation of character-defining materials on historic homes.
Act 855 created a Major Historic Rehabilitation Income Tax Credit Act for projects with at least $1.5 million in qualified rehabilitation expenses, therefore picking up where the per project cap for income-producing projects cuts off under current state historic tax credit law. This legislation creates the vehicle by which the state may offer tax credit incentives for large historic rehabilitation projects but does not designate a clear funding source. There are several transformative projects that could benefit from this incentive. We are excited to see what happens when a funding stream is identified.
Act 201 established state opportunity zone tax incentives that mirror the federal Qualified Opportunity Zone program created by the Tax Cuts and Jobs Act of 2017. In 2018, Governor Asa Hutchinson designated 85 low-income census tracts throughout Arkansas as qualified opportunity zones. By investing assets in a qualified opportunity fund, investors may defer taxes on capital gains. While this legislation is not overtly related to historic preservation, it has the potential to work hand-in-hand with historic tax credit incentives, as many of the designated zones contain historic properties.