Res 2026-017 Approving the City of San Marcos Historic Preservation Plan

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PRESERVATION INCENTIVES The first federal Historic Tax Credit (HTC) program was created in 1976 to incentivize the rehabilitation of historic buildings. Following its success, in the 1980s, state agencies and local municipalities began offering incentives such as state credits modeled on the federal program and local tax credits, exemptions, freezes, and incremental financing. The NPS and Internal Revenue Service (IRS) administer the Federal Rehabilitation Tax Credit program. THC administers the Texas State Rehabilitation Tax Credit program. The federal and state HTCs can be used together and are outlined below. Credit Applied To Percent Credit Credit Recipient Eligible Applications Eligible Resources Required Designation Minimum Project Application Structure Recapture Period Time Limit for Use Architectural Oversight Financial Oversight Application Deadline Federal Income Tax 20% of qualified expenditures Current owner(s) Individuals, companies, and partnerships Income -producing historic properties NRHP (individual or district) $5,000 or value of building (whichever is greater) 3-part federal application 5 years 20 years Texas Franchise Tax or Texas Insurance Premium Tax 25% of qualified expenditures Current owner(s); can be sold and used against Texas Business Franchise Tax or Texas Insurance Premium Tax Individuals, companies, partnerships, and nonprofits Income -producing, nonprofit, or public university historic properties NRHP (individual or district), RTHL, or SAL; required when credit is claimed $5,000 3-part application that mirrors federal No recapture period 5 years Must follow SOI Standards; NPS certifies with Must follow SOI Standards; THC certifies; NPS THC's recommendation reviews first if combined with federal HTC Credit managed by IRS; qualified consulting CPA recommended Must apply before project completion Credit managed by Texas Comptroller; qualified consulting CPA recommended Must apply before project completion Local taxing units (like counties, cities, or school districts) may exempt in whole or in part the assessed property value of a historic resource or archaeological site —as well as the land necessary to access it —if it is: Designated as a RTHL or as a SAL. Designated by local ordinance or law as historically or archaeologically significant t and designated for preservation via a local ordinance or law. 22 SAN MARCOS HISTORIC PRESERVATION PLAN (2026)