Income-producing | SC Department of Archives and History

Tax Incentives - Income-Producing

Taxpayers who rehabilitate their income-producing historic buildings may be eligible for a number of Federal and State historic rehabilitation tax credits. To take advantage of the federal and state programs, the building must produce income, the building must be designated historic, the rehabilitation costs must be substantial – exceeding the adjusted basis, and the way the work is done must be compatible with the historic building. For more information please see our Income-Producing FAQ and Tips Sheet (PDF).

20% Federal Historic Rehabilitation Tax Credit: Owners and some lessees of historic buildings used to produce income may be eligible for a federal income tax credit equal to 20% of their rehabilitation costs.

State Historic Rehabilitation Tax Credit: In South Carolina, taxpayers who qualify for the 20% federal income tax credit may also qualify for a state income tax credit of 10% or an optional 25% (not to exceed $1 million for each certified historic structure) of their rehabilitation costs under the South Carolina Historic Rehabilitation Incentives Act (SC Code of Laws Section 12-6-3535).

Helpful Resources

Incentives is a comprehensive web guide to all aspects of the federal program from the National Park Service that includes more detailed information on the review process, how to apply the Standards for Rehabilitation to your project, and how to avoid incompatible work. See links to specific pages below:

IRS FAQ - Includes answers to questions relating to the IRS code

IRS - Rehabilitation Tax Credit - Real Estate Tax Tips

Preservation Hotline #11: Tax Savings for Owners of Historic Buildings (PDF)

Tips on How to Apply for Mixed Use Projects (PDF)

Tips for Developers of Textile Mill Projects in South Carolina (PDF)

Application

Important Notice! Transition to Electronic Application

The National Park Service released an electronic application in July 2023. The South Carolina SHPO will accept either hardcopy or electronic submissions through August 14, 2023. All electronic submissions must be on the application forms dated Rev. 6/2023. Application materials submitted on or after August 15, 2023 must be sent electronically and on the updated application forms dated Rev. 6/2023. Beginning August 15, 2023 hard copy submissions will no longer be accepted. All electronic applications materials must be uploaded using the ShareBase link provided on the application submittal page. No other forms of electronic submission will be accepted.

Please visit the electronic application submittal page for access to application forms, instructions, and the ShareBase upload link.

Fees

H. 3485 (Act 172) was signed by Governor Henry McMaster on September 29, 2020. The Act amended Section 12-6-3535, Code of Laws of South Carolina, 1976, to provide that a taxpayer claiming the credit must pay a preliminary and final fee to the Department of Archives and History for the State Historic Preservation Grant Fund.

H. 4300, the General Appropriations Bill for FY 23-24 contains proviso 117.157 (GP: Historic Preservation Certification Fee), which states: “For the current fiscal year, the requirements of Section 12-6-3535(G) are suspended.” Section 12-6-3535 (G) is the section that established the preliminary and final fee.

Therefore the Department of Archives and History will suspend collection of preliminary and final fees for applications received during FY 23-24 (July 1, 2023 - June 30, 2024).

Contact Us

For questions about compiling your tax application please contact Christopher Tenny, 803-896-5638

This website does not provide legal, tax or accounting advice; the information provided is intended to be general in nature; and visitors to the website are strongly encouraged to consult their own professional tax, accounting and legal advisors on individual tax matters, or consult the SC Department of Revenue or the Internal Revenue Service (IRS). The SHPO is not responsible for the information or advice provided here as it may affect the specific tax consequences to any individual (including sole proprietor), corporate, partnership, estate or trust taxpayer, which will depend on many other facts and circumstances. The information is for the general benefit of persons interested in obtaining certifications from the SHPO that may allow them to qualify for federal and/or state historic income tax credits. Given the frequency of changes in federal and state tax laws, regulations and guidance, the information represents a good faith effort to reference controlling laws and regulations as accurately as possible.