SB 243 HOTEL RENOVATION TAX CREDITS

Sen Siah Correa Hemphill

Actions: [4] SCC/STBTC/SFC-SCC-germane-STBTC

Scheduled: Not Scheduled

 Senate Bill 243 (SB 243) creates Hotel Renovation Income Tax Credit and the Hotel Renovation Corporate Tax Credit.
 

 Senate Bill 243 (SB 243) creates Hotel Renovation Income Tax Credit and companion Corporate Income Tax Credit.

The credit for qualifying hotel renovations will be 30% of costs for a LEED-NC Silver certified hotel and 20% for all others. The credit amount is capped at 5% of the aggregate amount of credits ($1.250 million). A taxpayer must apply for pre-certification from the Tourism Department (TD) prior to the project. A proposal including description, projected costs, dates of the project, and a plan must be submitted with the application. TD will determine if the costs likely qualify. 

Hotels must have at least 15 rooms. The project cannot be new construction and must restore or renovate at least 40% of the rooms. LEED-NC silver is a framework adopted by the United States Green Building Council rating efficient and carbon and cost-saving green buildings. Silver is the third-highest rating. Qualifying costs include planning, construction, and equipment for the project in amounts that range from $25,000 to $40,000 depending on size of the county. A Federal New Markets Tax credit amount cannot be included in costs.

The taxpayer must apply for certification at TD within one year of project completion. An affidavit from an accountant that verifies qualifying costs must be provided. If the credit exceeds tax liability the remainder may be carried forward for five consecutive years.

Each credit has an aggregate cap of $25 million each. No applications will be approved if the cap is met in a calendar year.

Taxation and Revenue Department is charged with annual reporting to relevant committees with a cost analysis.

SB 243 includes a repeal date of 2028.