S.1459 - Historic Tax Credit Growth and Opportunity Act of 2025 (119th Congress)
Summary
The Historic Tax Credit Growth and Opportunity Act of 2025 (S.1459) aims to enhance the historic rehabilitation tax credit by amending the Internal Revenue Code of 1986. The bill introduces several key changes, including allowing the full credit in the year the building is placed in service and increasing the credit for certain small projects. It also expands the types of buildings eligible for rehabilitation and eliminates the rehabilitation credit basis adjustment.
Additionally, the bill modifies rules regarding tax-exempt use property. These changes are intended to incentivize the rehabilitation of historic buildings, particularly smaller projects and those in rural areas.
The bill seeks to stimulate economic activity, preserve historic structures, and promote community development through targeted tax incentives.
Expected Effects
The likely effect of this bill is an increase in the number of historic building rehabilitation projects undertaken across the country. The increased tax credit and relaxed restrictions should make such projects more financially viable.
This could lead to revitalization of historic areas and increased investment in communities. The transferability of credits for small projects could also create a market for these credits, further incentivizing investment.
Potential Benefits
- Increased investment in historic building rehabilitation.
- Revitalization of historic areas and communities.
- Job creation in construction and related industries.
- Preservation of cultural heritage and historic landmarks.
- Potential for increased property values in revitalized areas.
Potential Disadvantages
- Potential for increased complexity in the tax code.
- Risk of misuse or fraud in the transfer of tax credits.
- Possible unintended consequences related to tax-exempt use property.
- The cost to the government in terms of lost tax revenue.
- Benefits may disproportionately accrue to developers and investors.
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution (Preamble), as it aims to promote economic growth and preserve cultural heritage. Congress has the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States (Article I, Section 8, Clause 1).
The bill's provisions regarding tax credits and incentives fall under this enumerated power. There are no apparent infringements on individual rights or liberties as defined in the Bill of Rights.
However, the specific allocation of tax benefits could be subject to scrutiny under the equal protection principles implied in the Fifth Amendment, if it were shown to unfairly discriminate against certain groups or regions.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).