Bill
HB 4503
HB 4503 updates Michigan’s historic preservation tax credit to align with federal rules, boosts annual cap to $100M from 2026, and speeds SHPO reviews.
Status and procedural history
- Introduced March 12, 2025; electronically reproduced May 20, 2025.
- Referred to Committee on Economic Competitiveness; committee substitute reported favorably (April 16, 2025) and committee report sent to Calendars (April 25, 2025).
- Companion/related bill: SB 1188. Tie-bar: HB 4504'25.
Purpose
- Amend MCL 206.676 (section 676 of the Income Tax Act of 1967) to revise Michigan’s state historic preservation tax credit program — aligning eligibility with federal rehabilitation tax-credit rules, changing application timelines and administrative deadlines, and substantially increasing annual credit reservation caps beginning January 1, 2026.
Key provisions and changes
- Eligibility window: Allows a qualified taxpayer with a certificate of completed rehabilitation issued after Dec 31, 2020 and before Jan 1, 2031 to claim the state credit, subject to other limits.
- Claim timing: A credit must be initially claimed within 5 years after the certificate of completed rehabilitation is issued; failure to do so invalidates the certificate and eligibility.
- Qualified expenditures: Only expenditures paid or incurred during the time periods prescribed by Internal Revenue Code (IRC) section 47(a)(2) and related Treasury regulations qualify.
- Credit rates: Mirrors federal categories—
- Large or medium nonresidential historic resources: 25% of qualified expenditures.
- Small nonresidential or residential historic resources: 30% of qualified expenditures.
- These percentages apply whether a taxpayer claimed the federal §47 credit or is seeking the state credit for projects not eligible for the federal credit.
- Application and approvals:
- Applicants submit a rehabilitation plan and application to the State Historic Preservation Office (SHPO).
- Completed applications considered in order received.
- The bill shortens administrative review deadlines: completed Part 1 and Part 3 applications must be approved/denied within 30 days (previously 120 days) and Part 2 within 60 days.
- SHPO issues a preapproval letter indicating that the plan qualifies and stating the maximum reserved credit amount; denials may be appealed or refiled.
- Annual credit reservation caps and allocations:
- Through Dec 31, 2025: total credits reserved capped at $5,000,000 per calendar year, with minimum allocations (when demand exceeds thresholds): at least $2,000,000 for small nonresidential, $2,000,000 for large nonresidential, and $1,000,000 for residential projects.
- Beginning Jan 1, 2026: cap increases to $100,000,000 per calendar year, with minimum allocations (when demand exceeds thresholds): at least $70,000,000 large nonresidential, $20,000,000 medium nonresidential, $5,000,000 small nonresidential, and $5,000,000 residential.
- Per-project limit (partial text): The bill prevents SHPO from authorizing more than $2,000,000 in credits for a single taxpayer in one tax year before Jan 1, 2026 (text truncated in document).
Who is affected
- Qualified taxpayers (including corporations subject to Michigan income tax) undertaking certified historic rehabilitation projects.
- Real-estate developers, property owners, and investors doing rehabilitation of eligible historic resources.
- State Historic Preservation Office (administrative workload and faster review deadlines).
- State budget/fiscal outlook: larger tax expenditures beginning 2026 if full demand materializes.
Potential impact
- Encourages preservation and adaptive reuse by increasing available state tax credits (modestly through 2025; substantially from 2026).
- Shorter SHPO review windows aim to speed project approvals.
- Tighter claiming window (5 years) increases urgency to place projects in service and claim credits.
- Fiscal exposure increases markedly from $5M/year (through 2025) to up to $100M/year beginning 2026, concentrated toward large commercial rehabilitations per allocation rules.
Notes
- The bill references and integrates federal IRC §47 (the federal historic rehabilitation tax credit) for defining qualified expenditures and eligibility timing.
- Some language in the provided text is truncated; the summary reflects the available provisions and stated dollar and date thresholds.
Compiled from official sources — confirm details with the bill’s official record.
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