Federal officials recently awarded $5 billion in New Markets Tax Credits (NMTC) to 107 organizations across the country to receive NMTC allocation awards.
The New Markets Tax Credit Program permits individual and corporate taxpayers to receive a non-refundable tax credit against federal income taxes for making equity investments in financial intermediaries known as Community Development Entities (CDEs). CDEs are domestic corporations or partnerships that provide loans, investments, or financial counseling in low-income urban and rural communities.
“Twenty years ago, the Treasury Department announced the first New Markets Tax Credit awards, and for many economic development projects across the country since then, the New Markets Tax Credit has been a vitally important piece of the puzzle,” Treasurer of the United States Chief Lynn Malerba said, announcing the awards. “This program has created or retained hundreds of thousands of jobs and spurred economic growth in many low-income communities across our country. It is important that Congress sustain these investments over time by making the New Markets Tax Credit Program permanent.”
Malerba made the announcement at the Lexington Market building in Baltimore, home to the nation’s longest continuously operating public market. Malerba was joined by U.S. Sens. Benjamin Cardin (D-MD) and Chris Van Hollen (D-MD), U.S. Reps. Kweisi Mfume (D-MD), and Community Development Financial Institutions Fund Director Jodie Harris.
“Lexington Market demonstrates what can be accomplished when projects in low-income communities can access needed financing for initiatives that will help revitalize them,” Harris said. “We often associate the New Markets Tax Credit with new buildings, but just as frequently, the tax credit allows for a new use of an existing property. The Lexington Market project will breathe new life into this neighborhood by making fresh food available to residents, build local businesses and wealth, and provide a community gathering place.”
The 107 CDEs that received awards were selected from a pool of 199 applicants that requested an aggregate total of $14.7 billion in tax credit allocation authority. The award recipients came from 35 different states and the District of Columbia. More than 20 percent of the investments will be made in rural communities.
Since 2000, the NMTC Program has awarded more than $71 billion. The awards have generated $8 of private investment for every $1 invested by the federal government.