Title 44
Taxation

Chapter 33.6
Historic Preservation Tax Credits 2013

§ 44-33.6-2. Definitions.

As used in this chapter:

(1) “Certified historic structure” means a property which is located in the state of Rhode Island and is:

(i) Listed individually on the national register of historic places; or

(ii) Listed individually in the state register of historic places; or

(iii) 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.

(2) “Certified rehabilitation” means any rehabilitation of a certified historic structure consistent with the historic character of such property or the district in which the property is located as determined by the commission guidelines.

(3) “Commission” means the Rhode Island historical preservation and heritage commission created pursuant to § 42-45-2.

(4) “Construction worker” means any laborer, mechanic, or machine operator employed by a contractor or subcontractor in connection with the construction, alteration, repair, demolition, reconstruction, or other improvements to real property.

(5) “Exempt from real property tax” means, with respect to any certified historic structure, that the structure is exempt from taxation pursuant to § 44-3-3.

(6) “Hard construction costs” means the direct contractor costs for labor, material, equipment, and services associated with an approved project, contractor’s overhead and profit, and other direct construction costs.

(7) “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 which may reasonably be expected to be completed in phases as described in subdivision (15) of this section, “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 of completed work is issued and continuing until the expiration of twenty-four (24) months after the certificate of completed work issued for the last phase.

(8) “Part 2 application” means the Historic Preservation Certification Application Part 2—Description of Rehabilitation.

(9) “Placed in service” means that substantial rehabilitation work has been completed which would allow for occupancy of the entire structure or some identifiable portion of the structure, as established in the Part 2 application.

(10) “Principal residence” means the principal residence of the owner within the meaning of section 121 of the Internal Revenue Code [26 U.S.C. § 121] or any successor provision.

(11) “Qualified rehabilitation expenditures” means any amounts expended in the rehabilitation of a certified historic structure properly capitalized to the building and either:

(i) Depreciable under the Internal Revenue Code, 26 U.S.C. § 1 et seq.; or

(ii) Made with respect to property (other than the principal residence of the owner) held for sale by the owner. Fees paid pursuant to this chapter are not qualified rehabilitation expenditures. 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 tax credit any funds made available to the person (including any entity specified in § 44-33.5-3(a)) incurring the qualified rehabilitation expenditures in the form of a direct grant from a federal, state, or local governmental entity or agency or instrumentality of government.

(12) “Registered historic district” means any district listed in the National Register of Historic Places or the state register of historic places.

(13) “Remain idle” means that substantial work has ceased at the subject project; work crews have been reduced by more than twenty-five percent (25%) for reasons unrelated to scheduled completion of work in accordance with the project schedule, reasonably unanticipated physical conditions, or force majeure; or the project schedule that was originally submitted by the taxpayer to the commission has been extended by more than twelve (12) months for reasons other than reasonably unanticipated physical conditions or an event of force majeure (by way of example, and not in limitation, any delays, work stoppage, or workforce reduction caused by issues with project funding, finances, disputes, or violation of laws shall be deemed to cause a project to remain idle).

(14) “Scattered site development” means a development project for which the developer seeks unified financing to rehabilitate dwelling units in two (2) or more buildings located in an area that is defined by a neighborhood revitalization plan and is not more than one mile in diameter.

(15) “Social club” means a corporation or other entity and/or its affiliate that offers its facilities primarily to members for social or recreational purposes and the majority source of its revenue is from funds and/or dues paid by its members and/or an entity defined as a social club pursuant to the Internal Revenue Code section 501(c)(7).

(16) “Substantial construction” means that: (i) The owner of a certified historic structure has entered into a contract with the division of taxation and paid the processing fee; (ii) The commission has certified that the certified historic structure’s rehabilitation will be consistent with the standards set forth in this chapter; and (iii) The owner has expended ten percent (10%) of its qualified rehabilitation expenditures, estimated in the contract entered into with the division of taxation for the project or its first phase of a phased project.

(17) “Substantial rehabilitation” means, with respect to a certified historic structure, that the qualified rehabilitation expenses of the building during the twenty-four-month (24) period selected by the taxpayer ending with or within the taxable year exceed 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-month (60) period” for “twenty-four-month (24) period.”

(18) “Trade or business” means an activity that is carried on for the production of income from the sale or manufacture of goods or performance of services, excluding residential rental activity.