A bipartisan group of lawmakers in the U.S. House of Representatives introduced legislation on April 6 that would make the New Markets Tax Credit permanent.
The New Markets Tax Credit was established in the Community Renewal Tax Relief Act of 2000 to help businesses and community facilities in low-income, urban and rural areas get financing. Private investors receive a 39 percent tax credit distributed over seven years for qualified investments into Community Development Entities (CDEs). The CDEs use the proceeds of those investments to finance business expansions, health centers, daycare facilities, business incubators, and other essential projects.
However, the NMTC is set to expire on Dec. 31, 2025. The bill introduced by U.S. Rep. Claudia Tenney (R-NY) and U.S. Rep. Mike Kelly (R-PA), the New Markets Tax Credit Extension (NMTC) Act of 2023, H.R. 2539, would make the NMTC permanent, index the allocation to inflation in future years, and exempt NMTC investments from the Alternative Minimum Tax.
“Rural America is often forgotten by the Washington elites, which means that rural communities sometimes lack the necessary resources to invest, grow, and expand,” Tenney said. “Congress must make the New Markets Tax Credit permanent to allow our rural communities to continue accessing this important resource which helps to create jobs and stimulate economic growth. As a small business owner from rural America, I will always be a tenacious advocate for investments in our rural communities and businesses in Congress.”
Kelly noted that since the program’s inception, the NMTC has created over 24,000 permanent jobs and 27,000 construction across Pennsylvania.
“Over the years, the New Markets Tax Credit has well-proven its worth by revitalizing neighborhoods and cities and that need the help the most,” said Kelly, chair of the House Ways & Means Subcommittee on Tax. “The New Markets Tax Credit Extension (NMTC) Act would allow more communities across the country to receive the benefits that I have seen firsthand in my district, including 518 new jobs from three projects in Northwestern Pennsylvania.”
Other cosponsors of the bill include U.S. Reps. Terri Sewell (D-AL) and Rep. Danny Davis (D-IL), among others.