Seeking to promote investments in underserved communities, U.S. Sen. Roy Blunt (R-MO) introduced a bipartisan bill that would establish a permanent tax credit for businesses and economic development projects with high rates of poverty and low household incomes.
The New Markets Tax Credit Extension Act, S. 384, would permanently authorize a 39 percent federal tax credit in communities where poverty rates are at least 20 percent, or communities where median incomes are at or below 80 percent of the area median.
“The New Markets Tax Credit (NMTC) program has a proven track record of spurring investment, expanding opportunity, and improving the quality of life in communities that need it most,” Blunt said. “In Missouri, the NMTC has benefited a total of 177 businesses and economic revitalization projects, creating thousands of jobs and resulting in a total of $3 billion in new investments.”
NMTC was first authorized in 2000 under the Community Renewal Tax Relief Act. From 2003 to 2012, more than $31 billion in direct investments made through NMTC resulted in the creation of 750,000 jobs in areas with high poverty and unemployment rates.
“The NMTC provides a critical incentive for drawing much-needed capital to low-income rural and urban areas, and I look forward to working with my colleagues to ensure it continues,” Blunt said.
S. 384, which Blunt introduced with U.S. Sen. Ben Cardin (D-MD), would index future NMTC allocations to inflation and exempt them from the alternative minimum tax in addition to making the tax credit permanent.
U.S. Rep. Pat Tiberi (R-OH) introduced companion legislation in the House.