House Bill 452 Alabama 2026 Session

Summary

Primary Sponsor

Chris PringleRepresentative

Republican

Session

2026 Regular Session

Title

Income taxes, state income tax credit for qualified rehabilitation expenses of certified historic properties extended, annual credit amount increased

Summary

HB452 would extend and expand Alabama's historic preservation income tax credit through 2032, raise annual credit limits, and introduce rural/urban distinctions and updated eligibility rules for rehabilitating certified historic structures.

What This Bill Does

Extends the credit for substantial rehabilitation of certified historic structures through tax year 2032 and increases the annual cap for credits. Updates eligibility rules, including age requirements (property generally must be 60+ years old, with a 75-year age threshold for applications submitted after June 1, 2023) and standards for rehabilitation. Defines rural versus urban communities for credit calculations (with different percentages and per-year caps) and places a per-project credit cap of $5 million. Establishes a dedicated Historic Preservation Income Tax Credit Account within the Education Trust Fund and expands credit transferability, requiring documentation, cost certification, and an appraisal, with credits assignable to transferees at a minimum value and limited to a single transfer.

Who It Affects

• Owners or entities that own qualified historic structures and plan substantial rehabilitation, including differences in rural vs urban properties and the associated credit percentages and caps.
• Taxpayers who receive, hold, or acquire credits via transfer (including partnerships, LLCs, trusts, or estates), since credits can be transferred but must be used by the transferee.

Key Provisions

• Extends the historic rehabilitation tax credit through 2032 (sunset extended from 2027).
• Increases annual credit reservation caps: 20 million dollars for 2023-2027 and 25 million dollars for 2028-2032, with allowances for rescinded reservations.
• Allocates 40% of annual credits to projects in rural counties (population ≤ 175,000) and the remainder to urban/other areas.
• Credit percentages: 25% of qualified rehabilitation expenditures for 2023-2027; 30% for rural structures and 25% for urban structures for 2028-2032, with a per-project maximum credit of $5,000,000.
• Age and eligibility: certified historic structures must meet age thresholds (60+ years; 75+ for applications submitted after June 1, 2023) and meet federal standards; disqualifying uses (e.g., owner-occupied primary/secondary residence) are restricted.
• Process and timing: owners must submit an application and rehabilitation plan; start rehabilitation within 18 months of a reservation notice, incur 50% of estimated costs within 36 months, and complete within 60 months; documentation and cost certification plus independent appraisal are required before credit issuance.
• Credit issuance: credits are issued as certificates within 90 days after documentation approval, equal to the lesser of the reservation amount or a percentage of actual expenditures; transfers require formal transfer statements and fees, with a single permissible transfer.
• Funding and administration: creates the Historic Preservation Income Tax Credit Account in the Education Trust Fund; credits are administered by the Department of Revenue and subject to annual legislative reporting.
• Effective date: the act becomes effective October 1, 2026.

AI-generated summary using openai/gpt-5-nano on Feb 12, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation & Revenue