Article 3H – Mill Rehabilitation Tax Credit

Except for credits allowed under new subsection G.S. 105-129.71(a1), this Article expired January 1, 2015, for rehabilitation projects for which an application for an eligibility certification was submitted on or after such date.  Eligibility certifications for this Article expire January 1, 2023.  Eligible taxpayers may continue to take remaining installments and carryforwards of prior year credits by completing the applicable Form NC-478  series form.

This article was amended by the 2019 General Assembly to add new subsection (a1) to G.S. 105-129.71.  This new subsection creates a credit for taxpayers that qualify for a credit under section 47 of the Code for making qualified rehabilitation expenditures of at least ten million dollars to a certified rehabilitation of an eligible reailroad station.  "Eligibile railroad station" is a site located in North Carolina that satisfies all of the following conditions:

  1. It was used as a manufacturing facility and either (i) used as a railroad station or (ii) is located adjacent to a site that is or was used as a railroad station.
  2. It is a certified historic structure or a State-certified historic structure.
  3. It has been at least eighy percent (80%) vacant for a period of at least two years immediately preceding the date the eligibility certification is made.
  4. It is a designated local landmark as certified by a city on or before June 30, 2019.
  5. It is located in a development tier one or tier two area, determined as of the date of the eligibility certification.
  6. It is located in a designated qualified opportunity zone under sections 1400Z-1 and 1400Z-2 of the Code, determined as of the date of the eligibility certification.
  7. It is issued a certificate of occupancy on or before December 31, 2021.

The G.S. 105-129.71(a1) credit is equal to 40% of the qualified rehabilitation expenditures.  The qualified rehabilitation expenditures must be inccured on or after January 1, 2019, and before January 1, 2022.  The G.S. 105-129.71(a1) credit may not be claimed for rehabilitation projects not completed and placed in service prior to January 1, 2022.  The credit cannot be claimed for a taxable year beginning prior to January 1, 2021.  The tax credit must be taken in two equal installments on returns filed for taxable years 2021 and 2022.

Individuals claiming the credit for rehabilitating an income-producing historic mill facility Article 3H shall enter qualified rehabilitation expenditures in the year the credit is taken on Line 10a and the credit amount on Line 10b of Form D-400TC.

Individuals claiming the credit for rehabilitating a nonincome-producing historic mill facility Article 3H shall enter rehabilitation expenses in the first year the credit is taken on Line 11a and the installment amount of the credit on Line 11b of Form D-400TC. The credit is claimed in five equal installments beginning with the taxable year in which the property is placed in service.

Important: Any unused portion of either tax credit may be carried forward for the succeeding nine years. Complete Form D-400TC, Part 3, Line 14, to claim tax credits carried over from a previous tax year, if any.

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