Treasury Awards $5B in NMTC

WASHINGTON, DC-The Treasury Department has dispersed another round of New Market Tax Credits, following its $1.5-billion allocation in May. Altogether, entities in several states will be receiving $5 billion in these credits. Established by Congress in December 2000, the NMTC program permits an individual or corporate taxpayer to receive a credit against federal income taxes for making equity investments in Community Development Entities (CDEs). The investor receives a credit totaling 39% of the cost of the investment. Like Low Income Housing Tax Credits, the demand for NMTC has not been as robust as in previous years given the economy; declining profits usually translate into a declining need to offset them with a credit.

However as the general economy moves hesitantly towards recovery, there is an expectation that more of these credits will be put into actual use. Locally, several organizations were awarded credits in this round, including CDF Development, for $50 million; Community Development Funding, $10 million; Harbor Bankshares Corp., $20 million–Harbor received $50 million in the last round; Mid-City Community CDE, $60 million; Urban Action Development Community, $15 million; and Urban Research Park CDE, $30 million.