HB 2275 Summary

• Creates a 20% income tax credit for qualified rehabilitation expenses of certified historic structures, or 25% if the structure becomes certified affordable housing, for taxable years 2026-2035 (sections 43-1080 and 43-1166).

• Establishes the state historic preservation officer as the certifying authority to evaluate rehabilitations, requiring compliance with federal interior department standards, positive economic impact analysis by Arizona Commerce Authority, and a restrictive covenant on the property for 24 months.

• Reserves 60% of the $30,000,000 annual aggregate tax credit limit for projects in cities and towns with populations under 150,000 persons; limit increases to $60,000,000 combined annually for taxable years beginning after December 31, 2035.

• Allows unused credits to be carried forward for 10 consecutive years and permits taxpayers to assign, transfer, or sell credits to other persons; proceeds from sales are tax-exempt unless the credit is later recaptured.

• Sets application fees ranging from $0 to 15% of qualified rehabilitation expenses depending on project size, with fees used to administer the certification process.