UPDATE: New Effective Date for the Ohio Historic Preservation Tax Credit Certificate Could Cause Delay in Claiming Credit
Originally published in Development Incentives Quarterly.
In order to claim Ohio Historic Preservation Tax Credits (OHPTCs) on a project, a taxpayer must first receive a tax credit certificate (certificate) from the Ohio Development Services Agency (ODSA). Once a taxpayer has received a certificate, a taxpayer may then claim the resulting OHPTCs for the taxable year of the effective date reflected on the certificate.
Prior to July of 2017, ODSA policy had been to issue certificates with an effective date backdated to the date that the taxpayer’s certification request package was received by the ODSA. On July 1, 2017, the ODSA revised its program policies (guidance) by changing how the effective date for a certificate is determined. Under the guidance, certificates will now be issued by the ODSA with an effective date of the date that the certificate is executed by the director of ODSA. This new policy could therefore result in a delay in the tax year in which a taxpayer may claim the OHPTCs on its tax return. A more detailed summary of the changes can be found here.
ODSA updated its guidance on September 28, 2017 by grandfathering projects from the new policy that received an award of OHPTCs in Round 18 (June 2017) or earlier, thereby making the new policy applicable only to projects receiving an award of OHPTC in Round 19 (December 2017) or later.
Thus, for example, assuming a project is placed in service in 2018, a certification request package is submitted to ODSA on December 31, 2018, and the certificate is executed and issued by the director of ODSA on January 31, 2019. If the project had received its OHPTCs award in Round 18, the project would receive a certificate with an effective date of December 31, 2018, enabling the applicable taxpayer to claim the OHPTCs on the taxpayer’s 2018 tax return. However, if the same project had received its OHPTCs award in Round 19, the effective date of the certificate would be January 31, 2019, and the applicable taxpayer would be required to wait to claim the resulting OHPTCs on the taxpayer’s 2019 tax return.
In addition, ODSA has updated Section 8.3 of its program policies to provide that a taxpayer who has submitted a certification request package to the ODSA will have 90 calendar days, rather than 30 calendar days, to respond to the ODSA’s request for additional information in regards to the taxpayer’s certification request.