Individual income tax: credit; state historic preservation tax credit program; modify. Amends sec. 266a of 1967 PA 281 (MCL 206.266a). TIE BAR WITH: HB 4503'25
HB 4504 revises Michigan’s state historic preservation tax credit program in the Income Tax Act. The bill allows qualified taxpayers to claim a credit for rehabilitation of historic resources after receiving a certificate of completed rehabilitation, with credits generally equal to 25% of qualified expenditures for large and medium nonresidential historic resources and 30% for small nonresidential and residential historic resources. It keeps the credit tied to federal historic rehabilitation standards and to state review by the State Historic Preservation Office, while also allowing credits to be assigned or monetized and carried forward for up to 10 years. For smaller projects beginning after 2025, the bill adds an option to forgo carryforward and instead receive a 90% refund of the excess credit over tax liability.
The bill also restructures the program’s administrative framework. It sets application review deadlines, requires preapproval letters, establishes annual statewide credit caps, and creates separate allocation targets for different project categories. Before 2026, the annual cap is $5 million; beginning in 2026, the cap rises to $100 million, with minimum amounts reserved for large, medium, small, and residential projects. The bill also changes the size thresholds for “large,” “medium,” and “small” nonresidential historic resources beginning in 2026, increases the maximum credit that can be authorized for a single project in a year, and allows the office to charge fees to cover administrative costs.
In addition to the credit itself, HB 4504 adds compliance and oversight provisions. It authorizes inspections, revocation of preapproval letters or certificates for noncompliance, and “addback” recapture rules if a property is sold or disposed of within five years or if the rehabilitation is later revoked. It also requires advance notice before a transfer or sale, unless the taxpayer enters into a written agreement preserving the historic resource and securing repayment rights for the state. Taxpayers must attach certificates and historic-significance documentation to their returns, and the State Historic Preservation Office must submit annual economic impact reports to the Legislature.
The bill’s impact on state law is to expand and modernize Michigan’s historic preservation tax credit program while preserving its link to federal rehabilitation standards. It changes eligibility definitions, increases potential credit volume, creates a larger post-2025 program structure, and adds administrative, reporting, and recapture mechanisms that affect taxpayers, property owners, developers, assignees, and the State Historic Preservation Office. The bill is also tie-barred to HB 4503, meaning it does not take effect unless the companion legislation is enacted.
No committee transcript or vote history was provided, so there is no recorded legislative debate or roll-call sentiment in the materials supplied. Based on the bill text alone, the measure appears designed to support historic preservation and redevelopment, but it also imposes detailed compliance rules and fiscal controls that could draw attention from taxpayers, preservation advocates, and budget-minded lawmakers. The main likely point of contention is the size and structure of the expanded tax credit, especially the increase to a $100 million annual cap after 2025 and the new refund option for smaller projects.
HB 4504 amends MCL 206.266a to expand and revise Michigan’s historic rehabilitation income tax credit program. It changes eligibility definitions, application timing, project-size categories, annual credit caps, per-project limits, carryforward and refund rules, transfer/recapture requirements, and reporting obligations for the State Historic Preservation Office. The bill affects property owners, developers, long-term lessees, assignees of credits, and the state agency administering historic preservation approvals, while keeping the credit tied to federal Internal Revenue Code section 47 standards and state historic designation criteria.
No committee testimony or vote record was provided, so there is no direct evidence of support or opposition from hearings or floor action. From the bill’s structure, the overall tone appears supportive of historic preservation and redevelopment incentives, with a policy emphasis on expanding access to credits while adding oversight, deadlines, and recapture safeguards. The measure likely appeals to preservation and development interests, while fiscal concerns may arise from the larger post-2025 credit cap and refund option.
The most notable points of contention are likely fiscal and administrative. The bill substantially increases the program’s annual credit ceiling after 2025 and allows certain smaller projects to receive a refundable payment instead of carrying credits forward, which may concern lawmakers focused on revenue exposure. Another likely issue is the complexity of the program: the bill adds detailed category-based allocations, deadlines, priority rules, transfer restrictions, and recapture provisions, which could be viewed as necessary safeguards by supporters but burdensome by critics. The tie-bar to HB 4503 also suggests the package is interdependent and may be debated as a broader policy set rather than as a standalone measure.