U.S. Treasury awards $185 million in New Markets Tax Credits to four Ninth District organizations
Published April 1, 2012 | April 2012 issue
The U.S. Department of the Treasury (Treasury) has awarded a total of $3.6 billion in New Markets Tax Credits to 70 organizations located in 29 different states and the District of Columbia. Four of the allocations, representing $185 million of the total, will go to organizations that are headquartered in and serve portions of 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. 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.
The four Ninth District allocatees and their award amounts are: Capital City Properties (St. Paul Port Authority), St. Paul, Minn., $20 million; Midwest Minnesota Community Development Corporation, Detroit Lakes, Minn., $60 million; Montana Community Development Corporation, Missoula, Mont., $30 million; and National New Markets Tax Credit Fund, Inc. (Community Reinvestment Fund USA), Minneapolis, $75 million. In addition, 24 of the remaining NMTC allocations, totaling $1.37 billion, went to organizations that are headquartered outside of the Ninth District but serve states that lie wholly or partly within the District.