Overview

Owners of historic buildings that are certified historic structures in the Wilson Central Business District ­ Tobacco Warehouse Historic District ­ may be eligible for both federal and state rehabilitation tax credits. The following information is provided as a starting point to help you understand the program and determine if you are eligible for the tax credits. The Restoration Branch of the North Carolina State Historic Preservation Office (HPO) or the City of Wilson Historic Preservation Office can provide additional information.

Tax Credits ­
­ The rehabilitation tax credits lower the amount of taxes owed -- not the amount of income that is subject to taxation.
­ For instance, a tax bill of $10,000 will be lowered by a $4,000 tax credit to $6,000 owed.

Federal Credits ­
­ The federal credit is equal to 20% of Qualified Rehabilitation Expenditure (see definition under Qualified Project Costs on next page). Owners are required to claim the investment tax credit for the tax year in which the building was placed back in service upon completion of the building. The credit may be carried back one year and carried forward twenty years.

State Credits ­
­ Owners who qualify for the federal rehabilitation tax credit automatically qualify for the state rehabilitation tax credit. As with the federal program, owners must claim the credit for the tax year in which the building was placed back into service upon completion of the work; however, the credit must be taken over either a five-year or ten year period.

­ The building must be depreciable.

­ You must own the building for five full years after completing the rehabilitation or pay back a prorated portion of the credit.

­ Work must meet The Secretary of the Interior's Standards for Rehabilitation.

­ Rehabilitation costs must exceed the greatest of $5,000 or the adjusted basis of the building. The Internal Revenue Service defines the adjusted basis as the following:

Qualified rehabilitation expenditures include costs associated with the work undertaken on the historic building, as well as architectural and engineering fees, site survey fees, legal expenses, development fees, and other construction related costs if such costs are added to the basis of the property.

Non-eligible expenses include costs of acquiring or furnishing the building, additions that expand the square footage of the existing building, new building construction, and site work, such as parking lots, sidewalks, and landscaping.

­ The program is administered through The National Park Service (NPS) of the Department of the Interior in partnership with the HPO. Applications are subject to a joint review by the HPO and NPS with final authority resting with the NPS.

­ The application process is composed of three parts:

Part 1- Evaluation of Significance to determine if the property is a certified historic structure.

Part 2- Description of Rehabilitation where existing conditions of the property are documented and the proposed work is evaluated for compliance with the Secretary of the Interior's Standards for Rehabilitation.

Part 3- Certification of Completed Work where the completed work is documented and checked against the approved work items listed in Part 2 to determine if the project is a certified rehabilitation.

­ The review process normally takes from two to four months to be processed by the HPO and the NPS.
­ The processing fee is between $500 and $2,500 depending on the total cost of the rehabilitation.

Contact: Jeff Adolphsen, Restoration Specialist
Restoration Branch
State Historic Preservation Office
4613 Mail Service Center
Raleigh, NC 27699-4613
(919) 733-6547
Email: jeff.adolphsen@ncmail.net

Tim Simmons, Senior Preservation Architect/Tax Act Coordinator
Restoration Branch
State Historic Preservation Office
4613 Mail Service Center
Raleigh, NC 27699-4613
(919) 733-6547
Email: tim.simmons@ncmail.net

Lu-Ann Monson, Preservation Specialist
Development Services
City of Wilson
112 N. Goldsboro Street
Wilson, NC 27893
(252) 399-2217
Email: lmonson@wilsonnc.org

1. A property shall be used for its historic purpose or be placed in a new use that requires minimal change to the defining characteristics of the building and its site and environment.

2. The historic character of a property shall be retained and preserved. The removal of historic materials or alteration of features and spaces that characterize a property shall be avoided.

3. Each property shall be recognized as a physical record of its time, place, and use. Changes that create a false sense of historical development, such as adding conjectural features or architectural elements from other buildings, shall not be undertaken.

4. Most properties change over time; those changes that have acquired historic significance in their own right shall be retained and preserved.

5. Distinctive features, finishes, and construction techniques or examples of craftsmanship that characterize a property shall be preserved.

6. Deteriorated historic features shall be repaired rather than replaced. Where the severity of deterioration requires replacement of a distinctive feature, the new feature shall match the old in design, color, texture, and other visual qualities and, where possible, materials. Replacement of missing features shall be substantiated by documentary, physical, or pictorial evidence.

7. Chemical or physical treatments, such as sandblasting, that cause damage to historic materials shall not be used. The surface cleaning of structures, if appropriate, shall be undertaken using the gentlest means possible.

8. Significant archeological resources affected by a project shall be protected and preserved. If such resources must be disturbed, mitigation measures shall be undertaken.

9. New additions, exterior alterations, or related new construction shall not destroy historic materials that characterize the property. The new work shall be differentiated from the old and shall be compatible with the massing, size, scale, and architectural features to protect the historic integrity of the property and its environment.

10. New additions and adjacent or related new construction shall be undertaken in such a manner that if removed in the future, the essential form and integrity of the historic property and its environment would be unimpaired.