On November 7, 2011, the Treasury Department published in the FEDERAL REGISTER the attached request for public comment regarding potential changes to the New Markets Tax Credit (NMTC) Program. The NMTC Program is jointly administered by the Internal Revenue Service (IRS) and the Community Development Financial Institutions (CDFI) Fund to encourage investment in Low Income Communities (LICs) by permitting individual and corporate investors to receive a tax credit against their federal income tax in exchange for making equity investments in specialized financial institutions called Community Development Entities (CDEs). Comments are due by February 6, 2012.
The Treasury Department seeks comments on the following topics with regard to the eligibility for and the administration of the NMTC program:
1. Lower Income Communities and Areas of Higher Distress
2. Treatment of Certain Businesses
3. Community Accountability
4. Transaction Costs
5. Evaluation of Financial Products
6. Use of Other Federal Subsidized Financing in Conjunction with NMTCs
The request for public comment is part of a larger study on the NMTC Program which will conclude in 2012. Included in the NMTC Program is a Native American CDFI component which has been a useful tool for many tribes to facilitate increased investments in their communities. See our General Memorandum 11-137 of November 18, 2011, regarding the solicitation for FY 2012 financial assistance and technical assistance grants for Native CDFI’s.
Please let us know if we may provide additional information on the Treasury Department’s request for public comment or on the New Markets Tax Credit Program generally.