| Purpose
 The State Historic Preservation and Cultural and Entertainment District Tax Credit Program provides a state income tax credit for the sensitive rehabilitation of historic buildings. It ensures character-defining features and spaces of buildings are retained and helps revitalize surrounding neighborhoods. The Program provides an income tax credit of 25% of qualified rehabilitation costs.
Another 20% is available if the property qualifies for the Federal Rehabilitation Investment Tax Credit (for income-producing properties only) see www.cr.nps.gov/hps/tps/tax/index.
Eligibility Requirements
Several types of properties are eligible for the state tax credit:
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Properties listed on the National Register of Historic Places, or determined by the staff of the State Historic Preservation Office to be eligible for listing.
- Properties contributing to the significance of a historic district that is listed, or eligible to be listed, on the National Register.
- Properties designated as local landmarks via local government action.
- Barns constructed prior to 1937.
Program eligibility varies depending on the type of building. For residential properties and barns built prior to 1937, the value of the work must equal at least $25,000 or 25% of the fair market value of the property, excluding the land, prior to rehabilitation, whichever is lower. For commercial properties, including multi-family housing projects, the work must be at least 50% of the fair market value, excluding the land.
As with other State Historical Society of Iowa incentive programs, the rehabilitation work must meet the Secretary of the Interior’s Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings - www.cr.nps.gov/hps/tps/tax/standards_guidelines.
To find out a building’s National Register status or for information about how to nominate a property go to the National Park Service website www.cr.nps.gov/nr.
Availability of Funding
The State Historic Preservation and Cultural and Entertainment District Tax Credit Program includes three separate appropriations: for historic properties statewide, for historic properties with qualified rehabilitation costs under $500,000 and for historic properties within Cultural and Entertainment Districts (CEDs) certified pursuant to section 303.3B of the Iowa Code www.culturalaffairs.org/funding/cultural_and_entertainment_districts/index or identified in Iowa Great Places agreements developed pursuant to section 303.3C www.culturalaffairs.org/greatplaces.
Of the tax credits budgeted for each fiscal year, 10% is allocated for projects with qualified costs of $500,000 or less, 40% is allocated for projects in cultural and entertainment districts or Great Places agreements. The 2007 legislation also mandates tax credits for the program cannot be reserved for more than three years into the future.
Other considerations:
- Credits are reserved on a first-come first-served basis as the Part 2 applications are approved.
- Only qualified rehabilitation expenditures for the two years prior to project completion are used to calculate the state tax credit.
- Rehabilitation expenditures prior to the date of approval of the Part 2 are incurred at your own risk and must be considered qualified expenditures under the federal rehabilitation credit in Section 47 of the Internal Revenue Code.
- Applications are not considered submitted until complete information is received. If
 more information is requested, the application is put on hold. Additional information should be sent as soon as possible.
- When a project is completed, a Part 3 application must be submitted for review. After the Part 3 application is reviewed and approved, the applicant will receive a tax certificate which is attached to the state income tax form in the year the credits are reserved.
 If final project costs provided on the Part 3 application exceed the estimated cost provided on the Part 2 application, additional credits may be reserved in the next state fiscal year in which credits are available.- Credits issued under this program in excess of the tax liability shall be refunded. In lieu of claiming a refund, a taxpayer may elect to have the overpayment credited to the tax liability for the following year.
For more information see www.iowahistory.org/preservation/index or contact Elizabeth (Beth) Foster Hill, Tax Incentive Programs Manager/National Register Coordinator, at (515) 281-4137 or Beth.Foster@iowa.gov.
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