Historic Tax Credits & City Bylaws - Tri-Cities

Land Use and Zoning Washington 4 Minutes Read · published February 10, 2026 Flag of Washington

Tri-Cities, Washington property owners and developers can combine federal and state historic tax incentives with local permitting to make certified restoration projects financially viable. This guide explains eligibility, how to coordinate with the State Historic Preservation Office (SHPO) and local historic commissions, application steps, typical municipal requirements, and enforcement pathways for Tri-Cities jurisdictions.

Eligibility & Overview

The primary federal incentive is the Federal Historic Rehabilitation Tax Credit (typically 20% for certified income-producing rehabilitations) administered by the National Park Service (NPS) in coordination with the State Historic Preservation Office; Washington State also offers technical assistance and links to incentives through the Department of Archaeology & Historic Preservation (DAHP). For local requirements, Tri-Cities municipalities (Richland, Kennewick, Pasco) maintain landmark and historic district rules that affect permits and approvals. See the NPS Technical Preservation Services page for program details and forms NPS tax incentives[1], the Washington DAHP programs page DAHP programs[2], and the City of Richland historic preservation overview for a local example Richland historic preservation[3].

Federal credits apply mainly to income-producing properties after certification.

Application Process

Typical steps combine federal/state certification with municipal permits:

  • Initiate a Part 1 (Evaluation of Significance) with your SHPO or DAHP to confirm eligibility.
  • Prepare and submit NPS Part 2 (Description of Rehabilitation) for approval before work begins to secure certification for the tax credit.[1]
  • Obtain required local building, demolition, or alteration permits from the city planning or building department; consult the local landmark commission early.
  • After completion, submit NPS Part 3 to certify the completed work and claim the credit on IRS returns.
Start municipal permit reviews early to avoid conflicts with federal certification timelines.

Permits, Local Approvals, and Coordination

Municipalities in the Tri-Cities typically require planning review for exterior changes in historic districts or on designated landmarks. Coordinate permit drawings and specifications with DAHP/SHPO guidance so that alterations remain eligible for federal/state certification. Contact local planning departments for required review steps and timelines; see the City of Richland example for local review roles and contacts.[3]

Penalties & Enforcement

Enforcement involves multiple authorities: municipal code enforcement and planning staff enforce local preservation bylaws and permit conditions; the State Historic Preservation Office (DAHP) advises on certification; federal tax matters (denial of credit or adjustments) fall under NPS coordination with the IRS. Specific monetary fine amounts for municipal preservation violations are not specified on the cited municipal overview page; refer to the municipal code or contact the city enforcement office for exact figures.[3]

  • Monetary fines: not specified on the cited municipal page; contact the local code enforcement office for amounts.
  • Escalation: first vs repeat or continuing offences and daily fines are typically defined in municipal code; not specified on the cited page.
  • Non-monetary sanctions: stop-work orders, restoration orders, permit revocation, or court action may be used by local authorities.
  • Enforcers: local planning/building departments and code enforcement, DAHP for SHPO coordination, and NPS/IRS for tax certification and tax adjustments.[2]
  • Appeals and review: municipal appeal routes (hearing examiner or city council) vary by city; time limits for appeals are set in local code and are not specified on the cited overview page.
  • Defences/discretion: permits, variances, or demonstrating a reasonable effort to comply can affect enforcement outcomes; federal/state certification decisions follow their published procedures.
If work begins before federal Part 2 approval, the project risks losing eligibility for the federal credit.

Applications & Forms

The NPS uses a three-part certification process: Part 1 (Evaluation of Significance), Part 2 (Description of Rehabilitation), and Part 3 (Request for Certification of Completed Work). DAHP provides state coordination and submission instructions. Fee schedules for NPS/IRS credit claims are not specified on the NPS overview; check DAHP and municipal permit fee schedules for local costs. Submission methods: DAHP accepts electronic submissions and local building departments accept permit packets; specific submission addresses or e-portal links are provided on the cited agency pages.[1][2]

Common Violations

  • Unauthorized demolition of significant features without permit or review.
  • Exterior alterations that compromise historic character and void certification.
  • Failure to obtain NPS/DAHP approvals before starting work.

FAQ

Who administers federal historic tax credits?
The National Park Service administers the Federal Historic Rehabilitation Tax Credit program in coordination with the state SHPO; final tax claims are processed through the IRS.
Do local Tri-Cities permits affect federal credit eligibility?
Yes. Local permits and compliance with municipal historic design standards can affect eligibility because federal certification looks at the preservation of historic character; obtain municipal approvals and NPS Part 2 before work begins.
Where do I submit NPS Parts 1–3?
Submit Part 1 and Part 2 through your State Historic Preservation Office or DAHP for review and forwarding to NPS; Part 3 is submitted after completion for final certification. Consult DAHP and NPS guidance for current submission procedures.
What if my project is income-producing vs owner-occupied?
The federal rehabilitation tax credit applies primarily to certified income-producing properties; owner-occupied residences are generally ineligible for the federal credit.

How-To

  1. Contact your city planning or historic preservation office to determine if the property is designated or in a historic district and to learn local permit requirements.
  2. Consult DAHP/SHPO to confirm historic significance and to begin Part 1 documentation.[2]
  3. Prepare architectural documentation and a scope of work that follows the Secretary of the Interior’s Standards; submit NPS Part 2 for proposed rehab approval.[1]
  4. Obtain required municipal permits and complete approved rehabilitation work while retaining required historic fabric.
  5. After completion, submit NPS Part 3 for certification and claim the credit on the appropriate IRS forms with your tax return.

Key Takeaways

  • Coordinate federal, state, and municipal reviews early to preserve eligibility.
  • Obtain NPS Part 2 approval before starting rehabilitation work.
  • Contact DAHP and your city planning office for local permit and submission guidance.

Help and Support / Resources

  1. [1] National Park Service - Technical Preservation Services: Historic Tax Incentives
  2. [2] Washington Department of Archaeology & Historic Preservation (DAHP)
  3. [3] City of Richland - Historic Preservation

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