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HF 2142

Income and corporate franchise taxes; second assignment of historic structure rehabilitation credit allowed, and requirements for issuing allocation certificates modified.

2025-2026 Regular Session Introduced by Esther Agbaje and 7 co-sponsors

HF 2142 allows a second assignment of the historic rehabilitation credit and tightens how allocation certificates are issued to improve liquidity and oversight.

Introduction and first reading, referred to Taxes
#corporationsandpartnerships #historicsitesandhistoricalsocieties #taxation #taxation-income
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Bill Summary · HF 2142

Summary of HF 2142 (2025-2026) – Income and Corporate Franchise Taxes; Second Assignment of Historic Structure Rehabilitation Credit

Overview

HF 2142 proposes changes to Minnesota's income and corporate franchise tax policies related to historic structure rehabilitation credits. The bill modifies the eligibility and issuance framework for the historic rehabilitation tax credit by allowing a second assignment of the credit and adjusting requirements for issuing allocation certificates. The actions aim to broaden the use and transferability of the credit while refining administrative procedures.

Purpose and Intent

  • Expand liquidity and marketability of the Historic Structure Rehabilitation Credit by permitting a second assignment.
  • Streamline or tighten the process for issuing allocation certificates that accompany the credit.
  • Align credit administration with broader tax credit transfer practices to support historic preservation projects.

Key Provisions and Changes

  1. Second Assignment of Historic Structure Rehabilitation Credit

    • Allows a second assignment of the credit after the original taxpayer assigns or sells the credit to a first transferee.
    • The second assignment is subject to specified conditions and limitations set forth in the bill (exact terms would be defined in the statutory language).

  2. Requirements for Issuing Allocation Certificates

    • Modifications to the criteria or process used to issue allocation certificates for the historic rehabilitation credit.
    • Potential changes may include:
      • Updated qualifications for properties eligible for the credit.
      • Revised deadlines or documentation requirements.
      • New administrative steps or thresholds for certificate issuance.
    • The goal is to ensure certificates are issued only for compliant projects and to improve program oversight.

  3. Tax Credit Translation to Payable Effects

    • While not explicitly stated, changes to credit assignment often affect how credits are utilized against Minnesota income and corporate franchise taxes.
    • The bill may extend the pool of buyers/investors who can use the credit and may impact the timing of credit utilization for eligible taxpayers.

  4. Administrative and Compliance Provisions

    • Clarifications on responsibilities of taxpayers, assignors, and transferees.
    • Possible reporting, tracking, and verification requirements to prevent abuse and ensure project eligibility.

Who Is Affected

  • Taxpayers Claiming the Credit: Eligible businesses or individuals undertaking historic rehabilitation projects.
  • First and Second Transferees: Entities purchasing or receiving the credit, including potential financial institutions or investors involved in the transfer market.
  • Property Owners/Developers: Those pursuing historic preservation projects who rely on the credit as part of project financing.
  • Tax Administrators/Department of Revenue (Minnesota DOR): Responsible for administering allocation certificates and monitoring compliance under the revised framework.

Procedural and Timeline Aspects

  • Introductory Step: The bill was introduced on March 10, 2025, and referred to the Taxes committee.
  • Legislative Path: As with other tax-related bills, it will undergo committee hearings, potential amendments, and votes in the House and Senate before any enacted language is transmitted to the governor.
  • Implementation Timing: Specific effective dates and any phase-in provisions would be defined in the enacted text. If the bill includes transitional provisions, they would outline how existing credits and allocations are to be treated.

Notes for Readers

  • The summary reflects the bill’s stated direction to permit a second assignment of the historic rehabilitation credit and to modify allocation certificate issuance requirements. Details such as eligibility thresholds, transfer restrictions, and certificate mechanics will be found in the bill’s statutory language and any accompanying fiscal note or committee discussion.
  • For project developers and investors, this bill could affect financing structures and the timing of tax benefits tied to historic rehabilitation work.

If you’d like, I can tailor this summary to a specific section-by-section breakdown once the bill text is available, or track updates from the Minnesota House Taxes Committee on HF 2142.

Compiled from official sources — confirm details with the bill’s official record.

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