House and Senate Begin Work on Extension of the New Markets Tax Credit
Mary Scott Balys
The authorization for the New Markets Tax Credit (NMTC) is set to expire at the end of 2019 and Congress has begun working on a plan for extending this valuable community development tool. The House and Senate are each pursuing their own paths to extend the NMTC.
The Senate Finance Committee has created task forces to examine each of these provisions. The Employment and Community Development Task Force is reviewing the NMTC, among other tax provisions. OFN submitted comments in support of the NMTC to the task force and participated in a stakeholder meeting organized by staff for the task force to speak about the impact and importance of extending the NMTC. The Senate Task Forces plan to release a report of their work at the end of July, prior to the August congressional recess.
In the House of Representatives, the Ways and Means Committee marked up a bill on June 20 that would extend several tax provisions, such as the NMTC through 2020. Although the bill is just a one-year extension, it does raise the allocation from the current $3.5 billion to $5 billion. The bill passed the committee by a vote of 25-17. It is anticipated that this bill will be combined with other tax bills and brought to the House floor as part of a larger package.
OFN is working to gain congressional support to make the NMTC permanent and increase the allocation to better support the work of CDFIs. OFN strongly supports the bipartisan New Markets Tax Credit Extension Act of 2019 (H.R. 1680/S. 750) to make the NMTC permanent, increase the annual allocation to $5 billion and index it to inflation in the future, and provide Alternative Minimum Tax relief to NMTC investors.
On June 28, Members of Congress introduced legislation to authorize an additional $500 million annually in NMTC allocations targeted to rural markets. The Rural Jobs Act (H.R. 3538/S. 2028) is a bicameral and bipartisan initiative championed by Terri Sewell (D-AL) and Jason Smith (R-MO) in the House and Mark Warner (D-VA), Roger Wicker (R-MS), Shelley Capito (R-WV), and Ben Cardin (D-MD) in the Senate.
For more information about OFN’s advocacy on the NMTC, contact Mary Scott Hardwick, Senior Associate, Public Policy at 202.318.0847 or [email protected].