280-20-20 R.I. Code R. § 3.3

Current through June 20, 2024

Section 280-RICR-20-20-3.3 - Definitions

A. "Accountant's certification" means the certification of a certified public accountant licensed in the State of Rhode Island containing the information required in the Application for an Assignable Historic Preservation Investment Tax Credit Certificate. The Accountant's Certification includes but is not limited to certification of the Adjusted Basis at the beginning of the Rehabilitation, the Rehabilitation costs properly capitalized to the building, project costs incurred but not eligible for the Historic Preservation Investment Tax Credit such as costs for new construction and other costs not chargeable to capital account. The Accountant's Certification shall be completed in the form of the Tax Division's Form HTC-8016 and shall be accompanied by an opinion of the Accountant regarding the accuracy of the required information. The cost certification should include, but not limited to:

1. A Schedule of Development Costs (separating costs eligible for tax credit from costs not eligible for tax credit) and Calculation of Historic Tax Credit Basis based on documentation from the project.

2. Verification of the existence of Development costs by examination of invoices, canceled checks, settlements sheet and related documents.

3. Review of the respective development cost to determine whether the cost were eligible to be included in historic tax credit basis in accordance with R.I. Gen. Laws Chapter 44-33.2.

4. Calculation of the Substantial Rehabilitation Test in accordance with R.I. Gen. Laws § 44-33.2-2(8).

5. Computation of tax credits to be realized by the project based upon the determination of historic tax credit basis.

B. "Act" means R.I. Gen. Laws Chapter 44-33.2.

C. "Adjusted basis" means the Owner's basis in a building, adjusted by depreciation and other adjustments that impact basis, computed in accordance with federal income tax law. In general, adjusted basis is determined with reference to the cost of the building (excluding land) in the hands of the Owner at the time of acquisition, decreased by depreciation and other deductions that reduce basis, and increased by costs incurred in connection with the building and capitalized to the building, such as the cost of improvements to the building.

D. "Affiliate" means any entity controlling, controlled by or under common control with such person, firm, partnership, trust, estate, limited liability company, corporation (whether profit or non-profit) or other business entity that incurs Qualified Rehabilitation Expenditures for the substantial rehabilitation of a certified historic structure or some identifiable portion thereof.

E. "Allocation agreement" means an executed agreement among all Participants of a Pass-Through Entity, or among all Owners of a building having multiple owners, setting forth the method for allocation of the Historic Preservation Investment Tax Credit agreed upon among the Participants or Co-owners. An Allocation Agreement may include, without limitation, a partnership agreement, an operating agreement of a limited liability company, a shareholders agreement, or any other instrument executed by all Participants or Co-owner.

F. "Applicant" means a Person submitting an application for a Commission determination under § 3.5 of this Part.

G. "Assignable historic preservation investment tax credit certificate" means a certificate issued by the Tax Division to the Owner of a Certified Historic Structure or an identifiable portion thereof who has incurred Qualified Rehabilitation Expenditures that have been approved by the Commission as consistent with the Standards for Rehabilitation, and which Qualified Rehabilitation Expenditures have been Placed-in-Service. If the Owner of the Certified Historic Structure is a Pass-Through Entity, an Assignable Historic Preservation Investment Tax Credit Certificate may be issued to each Participant in the Pass-Through Entity. The Certificate shall specify the amount of the Historic Preservation Investment Tax Credit allocable to such Participant, determined pursuant to this Regulation.

H. "Assignee" means a Person to whom the Historic Preservation Investment Tax Credit Certificate is assigned pursuant to this Regulation.

I. "Assignor" means a holder of an Assignable Historic Preservation Investment Tax Credit Certificate pursuant to § 3.8(A) of this Part who assigns such Assignable Historic Preservation Investment Tax Credit Certificate to an Assignee pursuant to § 3.8(C) of this Part.

J. "Certified historic structure" means a building which is located in the State of Rhode Island and is:

1. listed individually on the National Register of Historic Places;

2. listed individually in the State Register of Historic Places; or

3. located in a Registered Historic District and certified by either the Commission or Secretary of the Interior as being of historic significance to the district.

K. "Certified rehabilitation" means any Rehabilitation of a Certified Historic Structure consistent with the historic character of such building or the district in which such building is located as determined by the Commission in accordance with the Standards for Rehabilitation.

L. "Certificate of completed work" means the written approval issued by the Commission that the Rehabilitation is consistent with the Standards for Rehabilitation.

M. "Certification of proposed rehabilitation" means the Certification issued by the Commission that the proposed Rehabilitation is consistent with the Standards for Rehabilitation.

N. "Commission" means the Rhode Island Historical Preservation and Heritage Commission created pursuant to R.I. Gen. Laws § 42-45-2.

O. "Contract" means a contract entered between Persons and the Tax Division, on behalf of the State, which guarantees that the stated estimated tax credits will be available when earned and may be claimed in full, to the extent of the taxpayer's tax liability, in the year earned subject in the case of Phased Projects to the provisions of § 3.5 of this Part.

P. "Estimated qualified rehabilitation expenditures" means the estimated amount of Qualified Rehabilitation Expenditures set forth in a Contract for a planned Rehabilitation.

Q. "Executive Director" means the Executive Director of the Commission.

R. "Exempt from real property tax" means, with respect to any Certified Historic Structure, that the building is exempt from taxation pursuant to R.I. Gen. Laws § 44-3-3.

S. "Historic preservation certification application" means Parts 1, 2 and 3 of the Commission's application forms for each stage of the certification process, as more fully set forth herein.

T. "Holding period" means twenty-four (24) months after the Commission issues a Certificate of Completed Work to the Owner. In the case of a Rehabilitation reasonably expected to be completed in phases as described in R.I. Gen. Laws § 44-33.2-2(8), "Holding Period" shall be extended to include a period of time beginning on the date of issuance of a Certificate of Completed Work for the first phase or phases for which a Certificate is issued and continuing until the expiration of twenty-four (24) months after the Certificate of Completed Work issued for the last phase.

U. "Initial certificate holder" means an Owner or Participant named by the Owner to receive the Historic Tax Credit Certificate.

V. "Inspection" means a visit by an authorized representative of the Commission to a property for the purposes of reviewing and evaluating the significance of the building and the proposed, ongoing or completed Rehabilitation work and by an authorized representative of the Tax Division to verify expenses and costs reported.

W. "Measuring period" means the 24-month period selected by the Owner ending within the taxable year in which a Certified Historic Structure is Placed-in-Service. In the case of a Rehabilitation which may reasonably be expected to be completed in phases set forth in architectural plans and specifications completed before the Rehabilitation begins, this definition shall be applied by substituting "sixty (60) month period" for "twenty-four (24) month period."

X. "Notification of assignment" means the notification filed with the Division of Taxation of the assignment of all or a portion the State Historic Preservation Investment Tax Credit.

Y. "Owner" means a Person or Persons who hold legal fee or leasehold title to the historic building or an identifiable portion thereof.

Z. "Participant" means a partner in a partnership, member of a limited liability company, shareholder of an S-corporation, beneficial owner of a trust, or any other Person having an interest in a Pass-through Entity.

AA. "Pass-Through entity" means a partnership, limited liability company, Subchapter S-corporation, association, nominee trust, or any other entity, the tax attributes of which are passed through to the Participants in such entity.

BB. "Percentage interest" means the Percentage Interest in the Historic Preservation Investment Tax Credit allocated to an Owner, a Participant, a co-Owner of a multiple-Owner building or identifiable portion thereof, or another Person pursuant to the terms of the applicable Allocation Agreement.

CC. "Person" means any person, partnership, firm, corporation, (including both business and non-profit corporations), limited liability company, trust, estate, association, or other business entity.

DD. "Phased project" means a project with identifiable portions of the building(s) to be completed in phases set forth in architectural plans and specifications prepared before the physical work on the Rehabilitation begins, as reported in the Part 2 of the application filed with the Commission. Credit will be allowed for phased projects pursuant to the addendum filed as part of the Contract entered between the developer and the Tax Division.

EE. "Placed in service" means that Substantial Rehabilitation work has been completed which would allow for occupancy of the entire building or some identifiable portion of the building, or the Owner has commenced depreciation of the Qualified Rehabilitation Expenditures, whichever occurs first. Issuance of a certificate of occupancy or similar permit authorizing occupancy of the entire building or some identifiable portion by the municipal authority having jurisdiction shall constitute sufficient evidence for purposes of the Act that the building or the identifiable portion thereof that is the subject of the certificate of occupancy has been placed in service. However, a building or identifiable portion thereof may be treated as Placed in Service without a certificate of occupancy if the building or identifiable portion thereof is placed in a condition or state of readiness and availability for a specifically defined function, or upon the commencement of the period for depreciation with respect to the building under the Owner's depreciation practice, whichever occurs earlier.

FF. "Principal residence" means the principal residence of the Owner within the meaning of 26 U.S.C. § 121 or any successor provision.

GG. "Processing fees" means any of the fees set forth, defined and imposed in R.I. Gen. Laws §§ 44-33.2-3(b) or 44-3.2-4(d).

HH. "Qualified rehabilitation expenditures" means any amounts expended in the Rehabilitation of a Certified Historic Structure properly capitalized to the building and either depreciable under the Internal Revenue Code, or made with respect to property (other than the principal residence of the Owner) held for sale by the Owner. Processing fees paid to the Division of Taxation are not Qualified Rehabilitation Expenses. Notwithstanding the foregoing, except in the case of a nonprofit corporation, there will be deducted from Qualified Rehabilitation Expenditures for the purposes of calculating the Historic Preservation Investment Tax Credit any funds made available to the Person incurring the Qualified Rehabilitation Expenditures in the form of a direct grant from a federal, state or local governmental entity or agency or instrumentality thereof.

II. "Registered historic district" means any district listed in the National Register of Historic Places or the State Register of Historic Places.

JJ. "Rehabilitation" means the preservation of a historic building, its component elements, and its structural system by means of repairs and/or selective replacement of worn out materials and alterations to the building generally which are consistent with the building's documented historic appearance without destroying historically significant later additions.

KK. "Standards for rehabilitation" or "Standards" means the United States Secretary of the Interior's Standards for Rehabilitation.

LL. "State register of historic places" means the state register of historical, architectural, and cultural sites, buildings, places, landmarks, or areas compiled by the Commission pursuant to R.I. Gen. Laws § 42-45-5. Properties are listed on the State Register in accordance with the Commission's Procedures for Registration and Protection of Historic Properties.

MM. "Substantial construction" means that the owner of a Certified Historic Structure has entered into a Contract with the Tax Division and paid the Processing Fee; Commission has certified that the Certified Historic Structure's Rehabilitation will be consistent with the standards as set forth in R.I. Gen. Laws § 44-33.2-4 and the Owner has expended ten percent (10%) of its Qualified Rehabilitation Expenditures estimated in the Contract entered into with the Tax Division for the project or its first phase of a Phased Project on or before May 15, 2013.

NN. "Substantial rehabilitation" means, with respect to a Certified Historic Structure, that the Qualified Rehabilitation Expenditures incurred with respect to the Certified Historic Structure during the twenty-four (24) month period selected by the Owner ending within the taxable year in which the Certified Historic Structure is Placed in Service exceed fifty percent (50%) of the Adjusted Basis in such building and its structural components as of the beginning of such period. In the case of any Rehabilitation which may reasonably be expected to be completed in phases set forth in architectural plans and specifications completed before the Rehabilitation begins, the above definition shall be applied by substituting "sixty (60) month period" for "twenty-four (24) month period".

OO. "Tax Division" means the Rhode Island Division of Taxation.

280 R.I. Code R. § 280-RICR-20-20-3.3