Peabody Main Street Association and Peabody Economic Development Director Shane Marler will testify today before members of the Kansas Legislature. Marler was invited to address the House Taxation Committee after he wrote a letter to members relaying the importance of historic tax credits to sustainable economic development in small Kansas communities.
He will present testimony in support of House Bill 2496, which is set to repeal the cap placed on the program during last year’s legislative session. The bill would also allow the transferability of tax credits to continue.
Historic tax credits are usually used in multimillion dollar rehabilitations of buildings on the National or State Register of Historic Places. The program provides an incentive to offset tax liability to investors and developers. The credits then are used to either offset the cost of the development or are used as “gap” financing to fund the overall project.
Recently, nonprofit organizations have used the program for development in historic districts when the private sector is either unwilling or unable to act. Because nonprofit organizations do not have a tax liability to offset, the ability to transfer the credits is essential to making the program work.
Nonprofit organizations that receive tax credits can, in turn, sell them at a discounted rate to corporations, most commonly banks, to offset the tax liability that corporation has acquired. The funds the nonprofit receives from the sale of the tax credits are, in turn, used to offset the cost of the development.
Marler will be joined by historic preservation experts from across the state giving testimony on the program and its impact on economic development in communities large and small.