One US economic development program is paying off for the economy, according to a new report, spurring everything from a public library to an entrepreneurship campus.
The New Market Tax Credit (NMTC) helped create 60,000 jobs through $5.8 billion in total project investment in 2017 alone, according to a report released by the New Market Tax Credit Coalition. The NMTC lets qualified investors receive tax credits for investments they make in low-income communities.
“State by state, community by community, the impact and flexibility of the NMTC continues to create economic opportunity in every corner of the nation,” said Coalition spokesperson Bob Rapoza.
A sophisticated system ensures accountability for NMTC investments. They must be made through Community Development Entities (CDEs), which are authorized by the US Department of the Treasury to serve as intermediaries between investors and projects. Projects might include anything from businesses and loans to financial counseling.
Every year, the Coalition surveys CDEs across the country on their work on NMTC projects. This year’s survey gained insights from 89 CDEs working in 45 states and the District of Columbia.
In 2017, NMTC financing flowed into 271 communities and provided a vital boost to projects including:
● Expanding a manufacturing business in New Hampshire
● Retail and pop-up spaces for small entrepreneurs in Ohio
● Mixed-income housing and job training and placement for low-income individuals
● A wood pellet manufacturer in the Arkansas Delta
● Several health care centers, schools and other community facilities
Although the future of the New Market Tax Credit (NMTC) was uncertain during debates surrounding the federal tax overhaul in 2017, the Credit eventually made its way into the new tax code. However, if the Credit is not made permanent, it will expire in 2019.