Tax Credits: Economic Impact
What has the preservation tax credit program meant to North Carolina?
Conservative estimates show $1.4 billion in revenues, 14,100 jobs and $438 million in additional employee compensation.
by Becky Holton
From its implementation in 1998, North Carolina’s Historic Preservation Tax Credit program has done far more than preserve valuable historic structures.
While retaining irreplaceable assets, bringing new life to downtowns and inspiring sustainable development patterns, it has also had a tremendous impact on the state’s economy.
The catalytic effect of historic rehabilitation in the state and the multiplied returns to the North Carolina economy has meant over $1.4 billion in revenues, 14,100 jobs and $438 million in additional employee compensation.
From both a financial and social perspective, the state has recognized an incredible return on its investment in tangible revenues and intangible enhancements of citizens’ quality of life.
The substantial value of the tax credit program is readily apparent. Ultimately, it has not only created statewide profit in the past, but also offers a promising future for preservation activities and economic development throughout our state.
Facts and Figures
Between 1976 and 2007, a total of 1,989 projects were completed, generating $1.07 billion in project expenditures.
Tax credit activities have occurred in every county in the state.
Between 1998 and 2007, the tax credit facilitated the completion of 1,324 projects with total qualified rehabilitation expenditures of over $830 million dollars. These expenditures have, in turn, generated an estimated $1.4 billion dollars in statewide economic output.
Tax-credit projects directly created about 8,630 jobs and produced a total of 14,100 jobs through multiplication effects. The rehabilitation activities directly contributed $263 million in employee compensation, with an additional $176 million of income generated from related activities—offering a total of $438 million in additional household income.
The state issued an estimated $179 million in historic tax credits and received tax revenues of approximately $55 million in direct taxes from the rehabilitation activities. That cost to the state of roughly $3.6 million per year in foregone revenues has stimulated approximately $160 million in new economic activity annually.
Each $1 in state historic tax credits issued has been leveraged to create $12.51 (for income-producing projects) or $7.93 (non-income-producing projects).