WASHINGTON, Dec. 22, 2020 /PRNewswire/ -- The Consolidated Appropriations Act of 2021, passed by the House and Senate and expected to be signed by the President includes a five-year, $25 billion annual extension of the New Markets Tax Credit (NMTC), the largest extension in the history of the Credit. This allocation will go far to deliver resources to low-income and marginalized communities, creating jobs, increasing economic opportunity and improving lives at a time when the economic frailty of our underserved communities has never been more apparent.
The NMTC, which faced expiration on December 31 after 20 years of success stories and strong bipartisan support, is one of only two tax extenders to receive a five-year extension. By providing $5 billion annually for 2021-2025, the Consolidated Appropriations Act of 2020 exceeds the $17.5 billion authorization included in the PATH Act of 2015.
The projected annual impact of $5 billion in New Markets Tax Credits includes an estimated 690 new manufacturing expansions and industrial projects; 275 mixed-use projects combining housing, commercial, and social services; 255 new or improved health clinics, hospitals, and medical offices; and 775 investments in daycare centers, Boys and Girls Clubs, and other community facilities. It will also generate an estimated 590,000 jobs.
Established in 2000 in the Community Renewal Tax Relief Act (P.L.106-554), the New Markets Tax Credit is a bipartisan effort to stimulate investment and economic growth in low-income urban neighborhoods and rural communities. Since then, the New Markets Tax Credit has financed more than 6,500 projects and created over one million jobs in all 50 states, the District of Columbia and Puerto Rico.
"As we celebrate the 20th anniversary of the New Markets Tax Credit this five year extension is absolutely vital for many of America's urban neighborhoods and rural communities that have been devastated by the impacts of the global COVID-19 pandemic and will provide billions of dollars for high-impact, community revitalization projects businesses," said Bob Rapoza, spokesperson for the NMTC Coalition. "No other federal tax incentive is generally available to economically distressed rural and urban communities to promote economic revitalization. All NTMC financing goes to low-income areas, and 80 percent goes to the poorest communities in America, far exceeding statutory requirements. We appreciate the leadership of several Members of Congress in gaining this victory for communities, including Sens. Roy Blunt (R-MO) and Ben Cardin (D-MD) and Reps. Terri Sewell (D-AL), Tom Reed (R-NY). We also are grateful to Ways and Means Committee Chairman Richard Neal (D-MA) who is a longtime supporter of NMTC."
"Communities have come to count on the NMTC as a source of low-cost capital for challenging projects that would not have been possible but-for the NMTC," said NMTC Coalition President Yvette Ittu, the President of Cleveland Development Advisors. "Since its inception, the Credit has delivered well over $105 billion in flexible capital to farming towns and urban neighborhoods left outside the economic mainstream. During this difficult time for many communities that were already struggling, the NMTC provides a tremendous opportunity to create jobs, spread opportunity and help put America back on a solid financial footing."
For examples of how the NMTC is making an impact in each state, see the NMTC Coalition's newly released report, NMTC at Work in Communities Across America, featuring updated state statistics sheets on NMTC efficacy and more than 80 Tax Credit success stories.
About New Markets Tax Credit Program
The New Markets Tax Credit (NMTC) was enacted in 2000 in an effort to stimulate private investment and economic growth in low-income urban neighborhoods and rural communities that lack access to the patient capital needed to support and grow businesses, create jobs, and sustain healthy local economies. Since its inception, the NMTC has generated more than one million jobs. Today, due to NMTC, more than $105 billion is hard at work in underserved communities in all 50 states, the District of Columbia, and Puerto Rico. For more information, visit www.NMTCCoalition.org.
Contact: Ayrianne Parks
SOURCE New Markets Tax Credit Coalition