Yesterday, April 15, was the deadline for the Senate Finance Committee Tax Reform Working Groups. The New Markets Tax Credit (NMTC) Coalition submitted comments to the Community Development and Infrastructure Tax Reform Working Group.
Coalition spokesperson Bob Rapoza notes that the NMTC has delivered an unprecedented level of investment to low income communities.
“Since the Credit was implemented, $31 billion in direct NMTC investments were made in businesses, creating approximately 750,000 jobs, and these investments leveraged over $60 billion in total capital investment in businesses located in communities with high rates of poverty and unemployment,” Rapoza said.
In its submission, the Coalition’s comments document the impact of the NMTC, describe how it fits within the federal community development landscape, and recommend several changes to the program. The group recommended NMTC permanence and increased allocation authority indexed to inflation. The Coalition also recommended relief for NMTC investors from the Alternative Minimum Tax—as has been done with other credits like the Low Income Housing Tax Credit—which would allow a greater pool of investors to participate in the program. All of these recommendations are contained in the bipartisan NMTC extension bills introduced in the House (H.R. 591) and Senate (S. 855).
The working groups are a part of a bipartisan effort by Finance Committee Chairman Orrin Hatch (R-Utah) and Ranking Member Ron Wyden to address the nation’s tax code and create a more efficient and fairer system. There are five working groups, covering the areas of the following jurisdictions: individual income tax, business income tax, savings and investment, international tax, and community development and infrastructure. Comments and input were solicited from the public and other stakeholders to provide guidance to the working groups and better evaluate how our country’s tax policies effect people, businesses and communities. The Infrastructure and Community Development Working Group is headed by Sens. Dean Heller (R-NV) and Michael Bennet (D-CO). Bob Rapoza represented the Coalition at a roundtable sponsored by the working group on April 7.
The NMTC was authorized in the Community Renewal Tax Relief Act of 2000 (PL 106-554) as part of a bipartisan effort to stimulate investment and economic growth in low income communities that lack access to the patient capital needed to support and grow businesses, create jobs, and sustain healthy local economies. The NMTC has proven its effectiveness time and again over the last decade. These results make it clear that this Credit should be a priority in any efforts to reform our nation’s tax code—the NMTC is a flexible financial tool, addressing both the needs of small town communities, as well as urban neighborhoods left outside the economic mainstream.
Read the full comments from the Coalition to the Community Development and Infrastructure Tax Reform Working Group.