Section 140. Entitlement to credit

A. Effective for taxable years beginning on and after January 1, 2003, any individual, trust or estate, or corporation incurring eligible expenses in the rehabilitation of a certified historic structure shall be entitled to a credit against tax in the manner and amount set forth in these regulations. Credits granted to a partnership, electing small business corporation (S corporation), or limited liability company shall be passed through to the partners or shareholders, respectively. Credits granted to a partnership, electing small business corporation (S corporation), or limited liability company shall be allocated among partners or shareholders, respectively, either in proportion to their ownership interest in such entity or as the partners or shareholders mutually agree.

The members, partners or shareholders at the end of the taxable year in which there is an entitlement to credit shall be allocated the state rehabilitation tax credits for which a project is certified.

B. The Department of Historic Resources shall certify the amount of eligible rehabilitation expenses. The certification shall consist of a letter signed by an authorized representative of the department confirming that the rehabilitated property is a certified historic structure and that the rehabilitation is a certified historic rehabilitation, and shall specify the amount of eligible rehabilitation expenses, based on the Request for Certification of Completed Work form. The department's certification shall make reference to any partnership, S corporation, or limited liability company allocation document, as defined in subsection A of this section. A person with an interest in the property who materially rehabilitates a certified historic structure may apply for a certificate of material rehabilitation. Persons with an interest in the property include those individuals or entities that have a possessory interest in the property. The application for certification of a project shall set forth the name of the individual or entity entitled to the credit on its tax return. The taxpayer shall attach the letter of certification to the Virginia tax return on which the credit is claimed.

C. If the amount of the credit exceeds the taxpayer's tax liability for such taxable year, the amount that exceeds the tax liability may be carried over for credit against the income taxes of such taxpayer for the next 10 taxable years or until the full credit is used, whichever occurs first. For purposes of pass-through entities (e.g., general and limited partnerships, limited liability companies, S corporations) this paragraph shall be applied to the partners, members or shareholders, as applicable.

Historical Notes

Derived from Volume 22, Issue 13, eff. April 5, 2006; amended, Virginia Register Volume 32, Issue 10, eff. February 10, 2016.

Statutory Authority

§§ 10.1-2202 and 58.1-339.2 of the Code of Virginia.