Senate panel reports bill to create 25% historic rehabilitation tax credit

The Senate Economic Development Committee voted to report Senate Bill 450 to the full Senate with the recommendation that it pass and that it first be referred to the Committee on Finance.

The bill, as explained by legislative counsel, would create the West Virginia Historic Rehabilitated Building Tax Act, effective July 1, 2026, and establish a tax credit equal to 25% of qualified rehabilitation expenditures for certified historic structures. Counsel said the credit is intended to encourage rehabilitation of properties listed individually in the National Register of Historic Places or located within registered historic districts for public use and enjoyment.

Under the bill, qualified rehabilitation expenditures include costs such as structural improvements, architectural and engineering work, survey fees, legal expenses and construction management costs; the cost to acquire or expand a structure would not qualify. Counsel described an application process that follows federal guidelines: applicants would submit to the State Historic Preservation Officer for initial review, after which the preservation officer would forward the application to the National Park Service for full review and certification. Once certified by the Park Service, the preservation officer would issue a tax certificate for the project.

The substitute would allow the transfer of unused credits with approval of the state tax commissioner, permit credits to be carried forward for 10 years and carried back up to three tax years, and preserve existing historic tax credits earned under current law until their statutory sunset. The bill applies the State Tax Procedure and Administration Act and authorizes the state tax commissioner to adopt implementing rules; the West Virginia Tax Crimes and Penalty Act would also apply. Counsel noted a fiscal note had been requested but was not yet available.

The committee approved the motion to report the bill in a voice vote and the committee chair said the bill will be reported to the full Senate and referred to Finance. The committee took no amendments during its consideration.