96-019

Response January 29, 1996

January 26, 1996

Dar XXXXX:

The purpose of this letter is to seek an advisory opinion concerning Utah state statute 59-10-108.5, Historic preservation credit. Specifically, we are seeking clarification on the definition of the term “Residential” as it appears in the statute under 59-10-108.5 (1) (c). Our intention is that the facts as they are presented here, will fall within the definition of “residential” as defined by the statute, thereby allowing our client use of the credit.

Our client has invested approximately $10 million into a building that qualifies as a “Certified Historic Building” as defined in the statute. This building will house commercial tenants exclusively. We respectfully request an advisory opinion detailing whether this building will qualify for the Historic preservation credit, assuming that all of the other requirements as they are specified in the statute are met.

If you have any questions or require further information, please call me at XXXXX. I look forward to your response.

Regards,

XXXXX

January 29, 1996

XXXXX

RE: Advisory Opinion - Historic Preservation Credit

Dear XXXXX

We have received your inquiry regard the availability of the Historic Preservation Credit to expenditures for rehabilitating a commercial building. We find as follows:

Section 59-7-609 of the corporate franchise tax act and section 59-10-108.5 of the individual income tax act provide for a historic preservation credit for certain expenditures related to the rehabilitation of historic residential property. To qualify, the subject of the credit must be a residential building. The statues define “residential” to mean buildings used for residential purposes.

Your letter indicates that your client has rehabilitated a building that “will house commercial tenants exclusively.” The building in question, then, fails to meet the definition of “residential” as required by the statutes. Therefore, the historic preservation credit does not apply to your client's project.

Please let us know if you have additional questions.

For the Commission,

Alice Shearer

Commissioner