On December 18, 2015, President Obama signed the Protecting Americans from Tax Hikes Act of 2015, which reauthorized and extended the new markets tax credit program (the NMTC Program) through 2019. The reauthorization and extension will allow the Community Development Financial Institutions Fund (CDFI), which oversees the NMTC Program, to allocate up to $3.5 billion of credit authorization annually to certified community development entities. Use of NMTCs can provide subsidies to a project as high as 20 percent of the project costs.
In order to stimulate investment within low-income communities, the NMTC Program utilizes tax credits to incentivize private investment in businesses located therein. According to the CDFI, the NMTC Program, since its inception, has allocated over $43 billion dollars to certified community development entities, which has resulted in: (1) eight dollars of private investment for every one dollar of federal funding; (2) the creation 164 million square feet of manufacturing, office, and retail space in low-income communities; and (3) the financing of over 4,800 businesses in low-income communities. The next round of allocations are scheduled to be awarded to certified community development entities this summer.
Briggs and Morgan, P.A. has assisted community development entities and businesses in securing and deploying these credits since the inception of the NMTC Program. We have advised clients in a wide array of industries and geographic locations including a vocational training facility for the homeless in Seattle; a waste to energy project in Maine; for-sale low-income housing in Puerto Rico; and commercial retail development in Guam.