Under the Tax Reform Act of 1976, incentives for the restoration and reuse of historic buildings were placed in the US tax code for the first time.  These incentives were enhanced dramatically under the "Economic Recovery Tax Act of 1981".  The incentives were changed again in the tax legislation of 1986, but this time the changes were less favorable.  They are, however, still highly advantageous under the proper circumstances.  Since 1976, the various incentives have
leveraged over $360,475,425 in investment in historic buildings with a current total of 530
projects which have been submitted for review.  In terms of dollars invested and buildings
affected, this program has been by far the most significant program for encouragement of the preservation, development, and reuse of historic buildings.  Though the level of activity has fallen from an average 36 projects annually submitted for review in the middle 1980's to a low of 12 projects in 1992, the program remains a highly significant tool for the leveraging of private investment in historic preservation.

To qualify for the incentives, developers must obtain certification that their building qualifies
under the terms of the Act.  This generally means that the building must be listed on the
National Register either individually or as part of a district.  Certification must also be obtained that the rehabilitation work which is done meets standards which are imposed to assure that the historic qualities of the building are preserved in the process of rehabilitation.  Applications to obtain these certifications are submitted to the THC and forwarded with comments and
recommendations to the NPS's Southeast Regional Office in Atlanta, (NPS-SERO) which issues or denies the requested certification.  As the preliminary point of contact for an historic building owner or developer, the THC serves as a critical liaison between the developer and the NPS. The agency serves to inform and explain program requirements and standards to developers and in turn can explain special situations, problems, and concerns to the NPS which may be
difficult to understand from a distance.

Information courtesy of the Tennessee Historical Commission.
http://www.state.tn.us/environment/hist/nhpa.htm#tax