Both the U.S. Government and the State of Texas offer tax credits to individuals or organizations that rehabilitate historic buildings. In historic preservation, the term rehabilitate means “the act or process of making possible a compatible use for a property through repair, alterations, and additions while preserving those portions or features which convey its historical, cultural, or architectural values.” In other words, historic tax credits help property owners to update dance halls while repairing, rather than replacing, character-defining features.
The federal historic tax credit program has been used to rehabilitate more than 47,000 buildings since it began in 1976. It can return up to 20% of qualifying rehabilitation expenses through a tax credit on federal income tax. It is available to owners of properties that have a commercial, business, or other income-producing use. To qualify for the federal tax credit program, a dance hall must be eligible for the National Register of Historic Places and the project has to exceed a financial threshold based on the value of the property.
The Texas Legislature, in 2013, established a state tax credit for historic rehabilitation projects. It officially went into effect in January 2015 and has supported the historically appropriate renovation of hundreds of historic buildings statewide since then.
The state historic tax credit program can return up to 25% of qualifying expenses to the property owner. The program is available to both for-profit and non-profit individuals and organizations. If the applicant has no use for a credit against one of the state taxes, they can transfer or sell the tax credit through the State Comptroller’s office. (Some private firms buy and sell tax credits for applicants who don’t want to do that themselves.)
To qualify for the state tax credit program, a dance hall must be eligible for the National Register of Historic Places or already designated as a Recorded Texas Historic Landmark or a State Antiquities Landmark. The minimum project cost is $5,000 and the tax credits can be taken over time on multiple projects for the same building.
For more information about both Historic Tax Credit programs, please visit the Texas Historical Commission’s website.
Bellville interior photo by Deb Fleming
Bellville furniture study by Stern and Bucek Architects
Support Texas Dance Hall Preservation
Your kind and generous help makes it possible for us to work directly with dance hall owners by providing technical consulting, financial assistance, business management advice, fundraising consulting, and moral support. Please become a TDHP Member and make a donation today.