Saint Paul — An annual report for the Minnesota State Historic Preservation Office (SHPO) finds that a state tax credit for rehabbing historic structures will generate $176.5 million in economic activity within Minnesota from projects approved in fiscal year 2020, supporting 720 jobs statewide. The new jobs will provide an estimated $49.8 million in labor income, both in direct employment and in work provided by subcontractors and suppliers.
The Minnesota Historic Rehabilitation Tax Credit was signed into law in 2010 to stimulate job growth, increase local tax bases, and revitalize communities throughout the state. Additional benefits include efficient use of resources, improved neighborhoods and assets, and innovative use of existing places.
A tax credit of up to 20 percent is provided on qualifying expenses for historic properties that also qualify for a similar federal historic tax credit. Minnesota’s historic tax credit law is set to expire June 30, 2021; however, this does not apply to the Federal tax credit which will continue. Upon completion, the projects will be awarded $18.5 million in tax credits. With a total economic impact of $176.5 million for every dollar awarded, $9.52 of economic activity is generated.
In the past ten years, developers have invested $1.9 billion in projects that receive the tax credit. This has spurred a total of $3.5 billion of economic activity and has supported 18,650 jobs in Minnesota. A recent survey completed by project developers underscores the importance of the tax credit in spurring economic development. Eighty-nine percent of survey respondents indicated they would not have rehabilitated the historic building without the state tax credit.
An analysis of tax collections for six completed projects throughout Minnesota shows that for $16.3 million in awarded credits, half is returned to state and local governments in tax collections upon project completion, and within five years tax collections exceeded the credits awarded.
