Bipartisan Support for Federal New Markets Tax Credit Grows
Senate Finance Committee Includes Extension and Inflation Adjustment for NMTC
WASHINGTON, D.C. –The Senate Finance Committee takes up tax extenders today, including action on the New Markets Tax Credit (NMTC). Signaling strong bipartisan support for this proven community development tool, Chairman Orrin Hatch (R-UT) released a modified Chairman’s mark this morning, which includes an amendment offered by Senator Cardin (D-MD) to increase the total NMTC allocation from $3.5 billion to $3.94 billion for 2015 and 2016.
“The New Markets Tax Credit is a tested and proven economic development tool. However, inflation has reduced the NMTC by 12 percent from 2008 to 2015,” said Bob Rapoza, spokesman for the NMTC Coalition. “The amendment provides what amounts to an inflation adjustment—the first increase in a number of years. We are pleased the Finance Committee has proposed action to extend and increase this critically important resource for job creation and local economic growth.”
U.S. Department of Treasury data indicates the NMTC has generated over $70 billion in capital investment—an unprecedented level of investment in economically distressed communities. This investment has resulted resulting in the creation nearly 750,000 jobs, expanding opportunities for credit-starved businesses and revitalization projects in communities with high poverty and unemployment rates since 2003.
There is currently legislation pending in the House and Senate to make the NMTC permanent, increasing annual credit authority and exempting NMTC investments from the Alternative Minimum Tax, bringing the Credit into parity with other similar tax credits. These bills are as follows:
- S. 591, introduced by Senators Blunt (R-MO) and Schumer (D-NY); and
- H.R. 855, by Representatives Tiberi (R-OH), Neal (D-MA), and Reed (R-NY).
Support from other legislators and decision-makers include a call for permanency in the President’s 2016 Budget, a bipartisan letter signed by 55 Members of the House of Representatives that was sent to the Committee on Ways and Means last month, and a resolution in support of the NMTC that was adopted at the 83rd Annual Meeting of the US Conference of Mayors.
This past May, a letter signed by more than 1,600 businesses, investors, and nonprofit and for-profit organizations from across the country was also sent to Congress, calling for immediate action to extend the currently expired NMTC. Examples of projects and state-specific data can be found on the Coalition’s website.