Did South Carolina homeowners need historic-preservation certification before starting renovation work to claim the state tax credit?

Plain-English summary

The State Historic Preservation Officer asked whether certification for a historic residential rehabilitation tax credit had to come before work began. The AG said the 2004 statute's definition of “certified rehabilitation” required certification before commencement. It agreed with the Archives and History Department's practice of stopping a project already underway until review and certification were obtained; only work performed after certification was eligible under that reading.

The statute also required a copy of the officer's certification to accompany the tax return and contemplated verification of the completed project's compliance with rehabilitation standards. The opinion addressed timing for the then-existing credit, not a particular taxpayer's eligibility.

Currency note

This opinion was issued in 2004. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Could renovation work already completed qualify if certification came later?
A: The AG said credit eligibility was limited to expenses for work done after the preservation officer's certification.

Q: What if a historic-home project had already started?
A: The opinion found the department's practice of stopping work during review and certification consistent with the statute, with eligible work beginning after certification.

Q: Was a final review of the completed project still required?
A: The statute quoted by the AG required documentation verifying that the finished rehabilitation met the applicable standards.

Background and statutory framework

The opinion interpreted § 12-6-3535, which defined certified rehabilitation and required State Historic Preservation Officer certification before work commenced. It gave weight to the administering department's interpretation and distinguished advance certification from later verification that the completed work met rehabilitation standards.

Citations

• § 12-6-3535

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/february-5-2004-1/
• Original PDF: https://www.scag.gov/wp-content/uploads/2011/03/04feb5stroup.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
HENRv McMAsrER
AlTORNEY GENERAL

February 5, 2004

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Dr. Rodger Stroup
State Historic Preservation Officer
South Carolina Department of Archives and History
8301 Parklane Road
Columbia, SC 29223
Dear Dr. Stroup:
You have asked whether the certification by the Department ofArchives and History for state income tax credits for rehabilitation expenses on certified historic residential structures pursuant to S.C. Code Ann. § 12-6-3535 (B)(Supp. 2002) must be obtained prior to commencement ofthe work. This provision provides, in part as follows 1:

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(B) A taxpayer who is not eligible for a federal income tax credit under Section 47 ofthe Internal Revenue Code and who makes rehabilitation expenses for a certified historic residential structure located in this State is allowed to claim a credit against the tax imposed by this chapter. . . . . To claim the credit allowed by this

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subsection. the taxpayer must attach to the return a copy of the certification obtained from the State IDstoric Preservation Officer verifyine that the historic structure has been rehabilitated in accordance with this subsection, along with

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all information that the Department of Revenue determines is necessary for the calculation of the credit provided by this subsection. For the purposes of subsections (B) through (F): ...

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Paragraphs 2 and 3, infra, are set forth in reverse order to present the definition of rehabilitation expenses first.

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REMBERT C. DENNIS Bun.o!NG • Posr Omce Box 11549 • COLUMBIA, S.C. 2921 J.1 549 • Ta.m!ONE: 803-734-3970 •

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fA CSIMll.E: 803-253-6283

Dr. Rodger Stroup
February 5, 2004
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(3) "Rehabilitation expenses" means expenses incurred by the taxpayer in the certified rehabilitation of a certified historic residential structure that are paid before the credit is claimed including ...

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(2)
"Certified rehabilitation" means repairs or alterations consistent with the Secretary of the Interior's Standards for Rehabilitation and certified as such by the State Historic Preservation Officer before commencement of the work. The review by the State Historic Preservation Officer shall include all repairs, alterations, rehabilitation, and new construction on the certified historic residential structure and the property on which it is located. To qualify for the credit, the taxpayer shall receive documentation from the State Historic Preservation Officer verifying that the completed project was rehabilitated in accordance with the standards for rehabilitation....." (Emphasis added). According to your letter, Archives has interpreted these provisions to require that review and certification take place before work begins on projects for which a credit is to be claimed. If work has already begun on such project, Archives requires that the work be stopped until it is reviewed and receives certification. Archives takes the position that only work done after certification is received would be eligible for this credit. Archives reviews the completed work to verify that the project was completed in accordance with rehabilitation standards. The following standards of statutory construction apply to the review of this statute:

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The "...primary function in interpreting a statute is to ascertain the intention of the legislature." South Carolina Department ofHighways and Public Transportation v. Dickinson, 288 S.C. 134, 341S.E.2d 134 (1986). "Where the terms of a statute are clear and unambiguous, there is no room for interpretation and we must apply them according to their literal meaning." Id. The construction of a statute by the agency charged with its administration will be accorded the most respectful consideration and will not be overruled absent compelling reasons. Dunton v. South Cqro/ina Board ofExaminers in Optometry, 291 S.C. 221, 353 S.E. 2d 132 (1987). The statute plainly states that "[c]ertified rehabilitation" means repairs or alterations consistent with the Secretary of the Interior's Standards for Rehabilitation and certified as such by the State Historic Preservation Officer before commencement of the work ...." This language indicates that the legislature intended that the credit be limited to expenses for the work done after certification. When work has previously begun, Archives' requirement that it be stopped while certification is obtained. is consistent with these provisions. Archives' administrative interpretation

Dr. Rodger Stroup
February 5, 2004
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of these provisions would be entitled to great weight from a court, and a court would be likely to find them to be consistent with the literal meaning of the statute.

If you have further questions, please let me know.

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Reviewed and approved:

Robert D. Cook
Assistant Deputy Attorney General