The U.S. Department of the Treasury (Treasury) has awarded a total of $3.5 billion in New Markets Tax Credit allocation authority to 87 organizations located in 32 different states and the District of Columbia. Three of the allocations, representing $153 million of the total, will go to organizations that are headquartered in the Ninth Federal Reserve District.
The New Markets Tax Credit (NMTC) Program, which is administered by the Treasury’s Community Development Financial Institutions Fund, promotes private-sector capital investment in underserved areas by providing federal tax credits to individual or corporate taxpayers who make qualified investments in low-income communities. To qualify for NMTCs, taxpayers must provide their investments through intermediary vehicles known as Community Development Entities, or CDEs. A CDE is a domestic, nonprofit or for-profit corporation or partnership with a primary mission of serving low- and moderate-income persons or communities. The total credit for each investor equals 39 percent of the cost of investment and is claimed over a seven-year period. From the NMTC Program’s founding in December 2000 through the end of fiscal year 2012, Treasury has reported more than $31 billion in NMTC transactions, and NMTC investments have created an estimated 562,000 jobs.
The three Ninth District allocatees and their award amounts are: Midwest Minnesota Community Development Corporation, Detroit Lakes, Minn., $60 million; Montana Community Development Corporation, Missoula, Mont., $55 million; and Sunrise Banks, St. Paul, Minn., $38 million.