Treasury awards $3.5 billion in New Markets Tax Credit allocations
Published July 27, 2015 | July 2015 issue
The U.S. Department of the Treasury (Treasury) has awarded a total of more than $3.5 billion in New Markets Tax Credit allocation authority to 76 organizations located in 27 different states and the District of Columbia. Three of the allocations, representing $185 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. Since the NMTC Program’s founding in 2000, the CDFI Fund has made 912 allocation awards worth a total of $43.5 billion. As of the close of fiscal year 2013, $35.3 billion of the total had been invested in low-income communities.
The 76 awardees were selected from a pool of 263 applicants and received allocations ranging from $15 million to $75 million. The three Ninth District recipients and their allocation amounts are: Dakotas America LLC, Renner, S.D., $65 million; Montana Community Development Corporation, Missoula, Mont., $65 million; and National New Markets Tax Credit Fund, Inc., Minneapolis, $55 million.