Treasury announces New Markets Tax Credit allocations
Published January 1, 2008 | January 2008 issue
Sixty-one organizations will receive a total of $3.9 billion in New Markets Tax Credits (NMTC) over the next seven years, according to an October 2007 announcement from the U.S. Department of the Treasury (Treasury). Eleven of the allocations, representing $945 million of the total, will go to organizations that serve portions of the Ninth Federal Reserve District.
The 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. NMTCs are allocated through a competitive application process and then claimed over a seven-year period. The total credit for each allocatee equals 39 percent of the cost of investment.
One of the 2007 NMTC allocatees, Midwest Minnesota Community Development Corporation (MMCDC) in Detroit Lakes, Minn., is located in the Ninth Federal Reserve District. MMCDC will receive $85 million in credits. Ten other allocatees serve markets that lie partly within the Ninth District. These organizations, which will receive NMTCs ranging from $15 million to $125 million, are: Fifth Third New Markets Development Company, LLC, Dublin, Ohio; MSD New Markets, Inc., New York; National City New Markets Fund, Inc., Cleveland; National Community Fund I, LLC, Portland, Ore.; NCB Capital Impact, Arlington, Va.; Travois New Markets, LLC, Kansas City, Mo.; U.S. Bank CDE, LLC, St. Louis, Mo.; Waveland Community Development, LLC, Milwaukee; Wisconsin Brownfield and Economic Development, Madison, Wis.; and Wisconsin Community Development Legacy Fund, Inc., Madison, Wis.