Sign on to Help Communities Recover by Extending and Expanding the New Markets Tax Credit
The NMTC has a 20-year track record of promoting revitalization in America’s economically distressed rural and urban communities. These communities – which were struggling with high poverty and unemployment before the recent economic collapse – now face severe challenges in securing capital, challenges that pre-dated the pandemic.
Please sign your organization onto this letter in support of additional NMTCs to address the Covid crisis. This letter is for organizations. We collect the city, state, and zip of your organization in order to ensure your members of Congress see the letter.
Text of Letter to Congress:
To the Congressional Leadership and Members of the 116th Congress:
We write to urge the 116th Congress to take action to extend and provide an emergency expansion of New Markets Tax Credit (NMTC) that will assist communities struggling with high poverty and unemployment due to the coronavirus, but that also faced severe challenges in securing capital that pre-dated the pandemic.
The NMTC is an important source of financing for businesses and community facilities in America’s most distressed rural and urban communities. Congress authorized the NMTC in 2000 to bring down the cost of capital in communities outside of the economic mainstream. Taxpayers receive a 39 percent tax credit (taken over seven years) for qualified investments into Community Development Entities (CDEs), organizations with a track record of loans and investments in underserved areas. CDEs use the proceeds of those investments to finance business expansions, community facilities, and other projects prioritized by communities.
The NMTC, which is set to expire at the close of 2020, has a 20-year track record of promoting revitalization in America’s economically distressed rural and urban communities. Through September 2019, the NMTC delivered over $100 billion total project financing to over 6,000 businesses and projects in areas of deep distress and creating over 1 million jobs.
In 2018, eighty percent of NMTC activity was in areas of extreme poverty and unemployment that far exceed the statutory requirements for economic distress. The NMTC – and the organizations that use it to deploy capital to underserved communities – is well-suited to provide patient flexible capital to support the disaster relief and economic stabilization needed as the virus fades.
Specifically, we urge Congress to:
- Permanently extend the NMTC, along the lines of the bipartisan New Markets Tax Credit Extension Act of 2019 (S.750/H.R. 1680);
- Provide an exception from the Alternative Minimum Tax (AMT ) for NMTC investments;
- Provide an emergency NMTC allocation of $1 billion to be added to the pending 2019 round (for a total of $4.5 billion); and
- Provide an additional NMTC allocation of $1.5 billion to be added to the 2020 round (for a total of $6.5 billion for 2020), and $1 billion to the 2021 round (for a total of $6 billion for 2021).
In addition, Congress should take steps to ensure more capital reaches businesses, nonprofits, and revitalization projects by expanding the pool of eligible NMTC investors to allow more individuals to participate, and adopting temporary policies that enhance the liquidity of investors.
We urge Congress to take action to ensure this important incentive is available for community revitalization that is needed now more than ever.
Thank you for your consideration of this request.