Historic tax credits boost Alabama’s economy, study shows

Historic tax credits boost Alabama’s economy, study shows
Historic renovations like the Thomas Jefferson Tower experienced a major boost with the state historic tax credit program. (Michael Tomberlin / Alabama NewsCenter)

An independent study has concluded that historical tax credits provide an economic boost for the state, paving the way to revive the Alabama Historic Rehabilitation Tax Credit Program, said state Sen. Jabo Waggoner, R-Vestavia Hills.

The independent study, conducted by the University of Tennessee and commissioned by the Alabama Department of Revenue, awarded the program a “B” grade, which should convince lawmakers who had past concerns, Waggoner said.

The $70 million renovation of the Pizitz Building would not have been possible without the state historic tax credits, developers said. (contributed)
The $70 million renovation of the Pizitz Building would not have been possible without the state historic tax credits, developers said. (contributed)

“It will be one of the early bills considered in the Legislature,” said Waggoner, who is sponsoring the bill in the Senate. “I’ve got the support of leadership in the Senate.”

The Legislature convened today.

The three-year program expired in 2016. The state Legislature failed to renew the historic tax credit program before the end of last year’s legislative session. The bill passed the House last year, but did not get the support it needed in the Senate.

Waggoner said the study, delivered to lawmakers days ago, was important to the effort to revive the historic tax credits. He said he looks forward to working with Sen. Del Marsh (R-Anniston), president pro tempore of the Senate, who held up passage of a bill to renew the program in last year’s session.

The $30 million renovation of the Thomas Jefferson Tower used state historic tax credits. (contributed)
The $30 million renovation of the Thomas Jefferson Tower used state historic tax credits. (contributed)

“Overall the historic tax credit is a good program that could be a great program with a few modifications,” Marsh said in a statement. “I look forward to working with my colleagues in the regular session as we attempt re-establish the tax credit with the suggested improvements.”

Alabama’s historic tax credit has benefited nearly two dozen projects in Birmingham and more than 50 statewide including the Lyric Theatre, Federal Reserve, Pizitz and the Thomas Jefferson Tower.

With the favorable report, Waggoner said he’s confident the bill will “pass pretty quick in Senate and I feel real good about it,” he said.

Re-establishing the tax credit is more than an economic incentive tool for rehabilitating and developing historic structures, say supporters.

“You don’t attract a Mercedes to come to Vance, Alabama, without a tax credit,” Waggoner said. “It’s all about industrial development, and they need tax credits. And Alabama through the years has taken advantage of them.”

The historic tax credit program has been responsible for $384 million in private investment in Alabama since it started in 2013, according to another report in January 2016 by a Maryland-based accounting firm.

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