West Virginia Tax Credits Could Spur Development
CHARLESTON — Some lawmakers want to encourage companies to renovate West Virginia’s historic buildings by offering a higher tax credit on rehabilitating them comparable to those in surrounding states.
House Bill 2545, introduced Monday in the state Legislature, aims to even the playing field. It proposes increasing the allowable, corporation net income tax credit on rehabilitating historic buildings from 10 percent of the cost of the project to 25 percent.
Wheeling Vice Mayor Chad Thalman said advocating for the higher tax credit is the city’s highest priority for this year’s legislative session. Ohio and Pennsylvania both offer 25-percent historic rehabilitation tax credits.
“So if you are a developer in the region and you are looking at buildings to restore, every building in West Virginia is more expensive than buildings in surrounding states,” Thalman said. “So, it’s hurting us competitively.”
Mayor Glenn Elliott cited the former Wheeling-Pittsburgh Steel headquarters in downtown Wheeling as a good example of a building that could be used by a company if the historic tax credit were increased. Developer Steve Coon has indicated interest in tackling such a project — but has said it won’t make sense financially unless the Legislature increases the historic tax credit.
“I’ve talked to a developer who was looking at the Wheeling-Pittsburgh Steel building,” Elliott said. “That would be upwards of a $20 million investment in Wheeling, if the tax credit were raised.”
With the credit at only 10 percent, “they can’t get the building to make cash flow right now without that extra 15 percent,” Elliott added.
That ends up being a wasted opportunity, he said, because that investment would come back to government in the form of business and occupation tax revenue, sales tax, property taxes and more, he said.
Delegate Mark Zatezalo, R-Hancock, who is a co-sponsor of the bill, said it’s important to provide the opportunity for developers to use the state’s older buildings.
“I’m interested in historic preservation, and I think a lot of these buildings, the ones I’ve been in, are fine buildings. They just need a little help,” he said.
Zatezalo said the increased tax credit is a safeguard to protect the state’s heritage.
“I think there are plenty of buildings in West Virginia that, if you can restore them, they would be a great benefit to the state. … As such, I am more than happy to support a bill that gives more incentives to corporations, for example, who might use an old building for an office building, rather than trying to build a new one or destroy an old one.”
Delegate Erikka Storch, R-Ohio, who is also a sponsor of the bill, could not be reached for comment.
State law already specifies that the credit be used only for certified historic structures. “Certified” means they’re “reviewed by the West Virginia Division of Culture and History, and designated by the National Park Service, United States Department of the Interior, as a ‘certified historic building,’ and a ‘qualified rehabilitated building,'” the bill states.
A taxpayer can’t be in arrears on any state taxes or have a lien on the structure, and the credit can’t be combined with credits for consumer sales and service tax, the bill states.
Legislators filed the bill for introduction in the Legislature last week.