WASHINGTON, D.C. – U.S. Sen. Sherrod Brown (D-OH) today announced that the end-of-year tax legislation includes a five-year extension of the New Markets Tax Credit (NMTC), which has helped communities across Ohio revitalize low-income areas.
“Local entities in Ohio depend on the New Markets Tax Credit to help them finance major investment projects in their communities,” said Brown. “This five-year extension means more capital will be funneled into revitalization efforts in low-income communities. Efforts like these build up our state and grow our economy.”
The bill includes a five-year extension of the NMTC, which incentivizes community developers to invest in low income areas. NMTC provides tax credit incentives to Community Development Entities (CDE) with a primary mission of investing in low-income communities. Under the program, CDEs apply to the U.S. Treasury Department for the authority to raise a certain amount of capital, also known as Qualified Equity Investments (QEI), from investors. Awardees are then given a tax credit that equals 39 percent of their investment output over the span of seven years: five percent in each of the first three years and six percent in the final four years. The NMTC has helped several Ohio entities attract new investment in economic development projects.
Last year, Brown helped pass legislation that would extend the NMTC, which incentivizes community developers to invest in low income areas. The NMTC was included in the Senate Finance Committee’s tax extenders package that passed out of committee in 2014.