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Committee clarifies abandoned-building rehabilitation credit after DOR ruling; bill moves unanimously
Summary
Lawmakers approved clarifying language to ensure buildings that have been nonoperational for five years can qualify for the abandoned-building rehabilitation credit; Department of Revenue deferred a ruling to 06/01/2026 to allow legislative action.
A sponsor explained a technical fix to the abandoned-building rehabilitation credit to align the statute with legislative intent after a Department of Revenue revenue ruling introduced uncertainty.
Senator Turner told the committee that the current statute requires a building to have been closed or nonoperational for five years prior to notice of rehabilitation. The Department of Revenue recently interpreted the statute to require that the building must also once have been income-producing, a reading the sponsor said would disqualify many projects the program historically intended to cover, including churches, jails and schools. The bill clarifies that the five-year dormancy requirement applies prior to application but does not require that the building have been income-producing at some earlier point.
The sponsor cited legislative history and prior testimony and noted DOR deferred the ruling until June 1, 2026 to permit the legislature to act. The committee moved a favorable report and the voice vote in the hearing was unanimous.
Next steps: the clarification will be pursued on the calendar so that the DOR ruling will not retroactively disqualify previously approved projects.
