U.S. Rep. Claudia Tenney (R-NY) introduced legislation that would make the New Markets Tax Credit (NMTC) permanent.
The New Markets Tax Credit Extension (NMTC) Act, H.R. 1103, would make the NMTC permanent, index the allocation to inflation in future years, and exempt NMTC investments from the alternative minimum tax. The tax credit is set to expire Dec. 31, 2025.
Established under the Community Renewal Tax Relief Act of 2000, the NMTC is an important funding source for businesses and community facilities in low-income and economically distressed communities. Private investors are incentivized with a 39 percent tax credit, distributed over seven years, for qualifying investments in Community Development Entities (CDEs). These CDEs utilize the investment proceeds to fund business expansions, health centers, daycare facilities, business incubators, and other revitalization initiatives.
“The New Markets Tax Credit, set to expire on December 31, 2025, has been a cornerstone of economic growth, creating millions of jobs and channeling billions of dollars into communities, including New York’s 24th District. In our community, this credit supported the development of the new GLOW YMCA facility in Batavia, NY, in addition to the thousands of other revitalization projects nationwide,” Tenney said. “Making the NMTC permanent will ensure rural communities continue to benefit from this vital resource by creating jobs and supporting economic development.”
The bipartisan bill was also sponsored by Reps. Mike Kelly (R-PA), Terri Sewell (D-AL), and Danny Davis (D-IL).
“In Alabama’s 7th Congressional District, we have seen the power of the New Markets Tax Credit to spur investment and incentivize economic growth in some of our must vulnerable and underserved communities,” Sewell said. “The New Markets Tax Credit remains a critical tool to promote job creation and provide opportunities to those who need them most. Now more than ever, Congress must ensure that this tool is made a permanent part of our tax code.”
Kelly said that over the years, the New Markets Tax Credit has revitalized neighborhoods and cities that need help the most. “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,” Kelly said.
Enterprise Community Partners supports the bill.
“From rural towns to urban neighborhoods, New Markets Tax Credit investments have transformed neighborhoods, funding essential projects like healthcare centers, schools, and workforce development facilities,” Lori Chatman, president of the capital division at Enterprise Community Partners, said.