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IRS Releases 2015-2016 Priority Guidance Plan

NORWICH, Conn. – July 31, 2015

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The Internal Revenue Service (IRS) today released its 2015-2016 Priority Guidance Plan and fourth-quarter update to the 2014-2015 guidance plan. The 2015-2016 Priority Guidance Plan contains 277 projects, 40 projects fewer than the original version of last year’s document. The IRS said that some items that were removed may be considered for inclusion in a future plan. Compared to a previous version, Treasury removed the following priorities: update Rev. Proc. 2007-54, which provides relief under Section 42 in the case of a presidentially declared disaster; provide guidance concerning the exception under Section 42(d)(6) for any federally or state-assisted building; and clarify Notice 2013-26 and Notice 2013-60 regarding how to establish the beginning of construction of a facility under Section 45(d), as modified by the American Taxpayer Relief Act of 2012. Treasury added a priority to modify Notice 2015-4 by providing a revised effective date of the performance and quality standards for certain small wind energy property under Section 48.

Tune in to the Aug. 4 Tax Credit Tuesday podcast for more information.

Senate Finance Committee Announces Tax Extenders Markup

WASHINGTON – July 17, 2015

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Senate Finance Committee Chairman Orrin Hatch, R-Utah, and Ranking Member Ron Wyden, D-Ore., today announced that the committee will mark up a tax extenders bill Tuesday. The chairman's mark of the bill included extending the following provisions through the end of 2016: the minimum applicable percent of the 9 percent low-income housing tax credit (LIHTC) (for allocations made before Jan. 1, 2017); the new markets tax credit (NMTC) at $3.5 billion annually; the Section 45L energy efficient home credit; the Section 179D energy-efficient commercial buildings deduction; and the ability to claim the renewable energy investment tax credit (ITC) in lieu of the production tax credit (PTC). A minimum 4 percent applicable percentage for LIHTCs used to finance the acquisition of property is not included, but could be added in a modified chairman's mark expected for release Tuesday. Estimated revenue effects of the chairman's mark can be found here and a summary of the provisions can be found here.

Tune in to the July 21 Tax Credit Tuesday podcast for more information.

Bills Introduced to Provide NMTCs, LIHTCs to Disaster-Stricken Communities

WASHINGTON – July 17, 2015

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Bipartisan legislation was introduced in the House and Senate Thursday to provide tax relief to communities affected by natural disasters from 2012 to 2015, in the form of increased availability of new markets tax credits (NMTCs) and low-income housing tax credits (LIHTCs). The National Disaster Tax Relief Act would provide an increased LIHTC allocation in qualifying disaster areas equal to $8 per person or 50 percent of a state’s annual LIHTC ceiling, whichever is higher. In addition, community development entities (CDEs) serving disaster areas would be eligible to compete for an additional $500 million NMTC allocation for each year from 2012 through 2015. S. 1795 and H.R. 3110 will be posted on www.novoco.com when they are available.

CDFI Fund Releases NMTC Eligibility Data for Island Areas

WASHINGTON – July 17, 2015

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The Community Development Financial Institutions (CDFI) Fund released New Markets Tax Credit (NMTC) program eligibility data for 2010 census tracts for the Island Areas of the United States. It includes American Samoa, Guam, the Northern Mariana Island and the U.S. Virgin Islands. The CDFI Fund also updated the Census Transition FAQ document and the 2006-2010 American Community Survey Eligibility Data spreadsheet on its website. The updates have no impact on NMTC eligibility data for the 50 states, Puerto Rico or the District of Columbia.

Senate Tax Reform Working Group Report Estimates NMTC Expenditures

WASHINGTON – July 8, 2015

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The Senate Finance Committee today released reports from its five tax reform working groups. The Community Development & Infrastructure Bipartisan Tax Working Group Report included an overview of the New Markets Tax Credit (NMTC) program and estimated that NMTC tax expenditures for fiscal years 2014-2018 will be $5.2 billion. The report made no recommendations regarding the NMTC.

Tune in to the July 14 Tax Credit Tuesday podcast for more information.

CDFI Fund to Hold Listening Tour

WASHINGTON – June 22, 2015

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The U.S. Department of the Treasury’s Community Development Financial Institutions (CDFI) Fund today announced a national listening tour to solicit public opinion regarding a new strategic framework for the CDFI Fund. The CDFI Fund says the tour is intended to foster discussion and engagement among local community development leaders and practitioners. The sessions will be co-hosted by CDFI Fund Director Annie Donovan and Federal Reserve Bank representatives. For those unable to attend the listening sessions, the CDFI Fund has created an online survey that it will use to collect feedback that will be combined with feedback from the listening session participants.

CDFI Fund Awards $3.5 Billion in NMTC Allocation Authority

WASHINGTON – June 15, 2015

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The U.S. Department of the Treasury’s Community Development Financial Institutions (CDFI) Fund today announced the 76 community development entities (CDEs) selected to receive $3.5 billion in new markets tax credit (NMTC) allocation authority under the calendar year 2014 round of the NMTC program. The 76 CDEs receiving awards in the 12th allocation round were selected from a pool of 263 applicants that requested more than $19.9 billion in allocation authority. The 2014 allocatees are headquartered in 27 states and the District of Columbia, and have identified principal service areas that will cover nearly every state in the country and the District of Columbia. A list of the organizations selected and the additional information about today’s announcement can be found on the CDFI Fund’s website. Links to information for all 12 NMTC allocation rounds to date can also be found online at www.newmarketscredits.com under Allocation by Year.

Report: NMTC Created Nearly 40,000 Jobs in 2014

WASHINGTON – June 10, 2015

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In the New Markets Tax Credit Progress Report 2015, the New Markets Tax Credit Coalition reports that the new markets tax credit (NMTC) was responsible for creating nearly 40,000 jobs in 2014. The 32-page annual report, which was released this week, includes data from 67 community development entities (CDEs). The report reveals that 71 percent of analyzed NMTC projects in 2014 were located in severely distressed communities that far exceed the statutory requirements for poverty and income.

Tune in to the June 16 episode of the Tax Credit Tuesday podcast for more information on the report.

CDFI Fund Issues Updated NMTC Investments Report

WASHINGTON – June 2, 2015

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The Community Development Financial Institutions (CDFI) Fund today released data collected on new markets tax credit (NMTC) investments through fiscal year (FY) 2013. The report shows that from FY 2003 through FY 2013, community development entities (CDEs) disbursed $35.3 billion in qualified equity investment (QEI) proceeds to more than 4,200 qualified active low-income community businesses (QALICBs). During that time, real estate development and leasing activities accounted for $23.5 billion (66.4 percent) of total investments; $11.2 billion (31.8 percent) of investments went to operating businesses; and $625.2 million (1.8 percent) were used for other financing purposes. 

Tune into the June 9 Tax Credit Tuesday podcast to learn more.

Congressmen Circulate NMTC Sign-On Letter

WASHINGTON – May 21, 2015

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U.S. Reps. Mike Turner, R-Ohio, and Chaka Fattah, D-Pa., are circulating a sign-on letter urging leaders of the House Ways and Means Committee to support extension of the New Markets Tax Credit (NMTC) program, which expired at the end of 2014. The letter states that since 2003, the NMTC has generated more than $60 billion in capital investment for economically underserved areas, creating nearly 750,000 jobs. The letter cited recent Treasury Department data indicating that NMTC-financed businesses and jobs generate enough income tax revenue to more than cover the cost of the program. Parties interested in signing on to the letter should email Vince Erfe at vince.erfe@mail.house.gov or Jared Bass at jared.bass@mail.house.gov by June 16.

Tune into the May 26 Tax Credit Tuesday podcast to learn more.

CDFI Fund Opens Bond Guarantee Program, Modifies Certification Requirements

WASHINGTON – April 9, 2015

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The Community Development Financial Institutions (CDFI) Fund today opened the fiscal year (FY) 2015 application period for the CDFI Bond Guarantee Program in a notice of guarantee availability (NOGA) inviting qualified issuer and guarantee applications. The NOGA makes up to $750 million in bond guarantee authority available to CDFIs in FY 2015. To be considered for the issuance of a guarantee under FY 2015 program authority, qualified issuer applications must be submitted by June 5 and guarantee applications must be submitted by June 12.

In a separate notice scheduled for publication tomorrow, the CDFI Fund modifies CDFI certification requirements, allowing a CDFI’s affiliate to rely on the controlling CDFI’s activity or track record to meet the financing entity requirement of the CDFI Bond Guarantee program.

Tune into the April 14 episode of the Tax Credit Tuesday podcast for more information.

Georgia Legislature Passes NMTC Bill

ATLANTA – April 2, 2015

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Both houses of the Georgia General Assembly last month passed a new markets tax credit bill that is being reconciled before being sent to Gov. Nathan Deal. The latest version of the bill calls for a 55 percent state credit with a $4 million per-development cap and a $100 million statewide cap. It does not state a sunset date.
The state NMTC would apply to investments in qualified active low-income community businesses (QALICBs) that have fewer than 250 employees and less than $10 million in net income for the previous year. It excludes QALICBs that make 15 percent or more of their income from real estate, whether in rents or sales.

Tune into the April 7 episode of the Tax Credit Tuesday podcast for more information.

Senate Tax Reform Working Group Seeks Comments

WASHINGTON – March 11, 2015

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The Senate Finance Committee today announced that its tax reform working groups are seeking comments from the public as they work to advance tax reform efforts in the 114th Congress. The five working groups are community development and infrastructure; business income tax; individual income tax; international tax; and savings and investment. The community and infrastructure group’s jurisdiction includes the low-income housing tax credit (LIHTC), the new markets tax credit (NMTC) and the historic tax credit (HTC). The business tax reform group’s jurisdiction includes renewable energy tax credits (RETCs). Comments will be accepted through April 15.

Tune into the March 17 episode of the Tax Credit Tuesday podcast for more information.

Comment Invited on Annual Bond Guarantee Evaluation

WASHINGTON – March 4, 2015

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The Community Development Financial Institutions (CDFI) Fund is scheduled to publish tomorrow a notice inviting public comment on its proposed annual assessment evaluation for the CDFI Bond Guarantee program. The proposed reporting form allows certified CDFIs to demonstrate their ability to deploy long-term debt successfully with reporting requirements similar to those required of regulated financial institutions, to provide an accurate assessment of certified CDFI credit risk and to provide capital markets with a record of accomplishment that can be used in future lending and investment. The proposed assessment would only apply to eligible CDFIs participating in the CDFI Bond Guarantee program and to qualified issuers that have issued bonds under the program in fiscal year 2015 or later. Written comments are due on or before May 4, 2015.

Tune in to the March 10 Tax Credit Tuesday podcast to learn more about the proposed assessment requirements.

Bill Introduced to Permanently Extend NMTC

WASHINGTON – Feb. 10, 2015

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Reps. Pat Tiberi, R-Ohio, Richard Neal, D- Mass., and Tom Reed, R-N.Y., today introduced the New Markets Tax Credit Extension Act of 2015 to permanently extend the New Markets Tax Credit (NMTC). The legislation would also provide an annual inflation adjustment and allow the NMTC to be taken against alternative minimum tax liability. If the bill is enacted in 2015, Novogradac & Company LLP estimates that about $4.8 billion in allocation authority would be available. Sens. Roy Blunt, R-Mo., and Charles Schumer, D-N.Y., are expected to introduce companion legislation in the Senate soon.

Tune into the Feb. 17 episode of the Tax Credit Tuesday podcast for more information.

Administration Budget Would Permanently Extend NMTC

WASHINGTON – Feb. 2, 2015

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In its proposed budget for fiscal year (FY) 2016, the Obama administration proposes to permanently reauthorize the New Markets Tax Credit (NMTC) program in 2016 and requests $5 billion of allocation authority per year, as well as authority to offset alternative minimum tax (AMT) liability. The budget also proposes a new Manufacturing Communities Tax Credit (MCTC), with $2 billion in tax credit authority in each of three years through 2018. The proposal would also allow the Community Development Financial Institutions (CDFI) Bond Guarantee program to continue operating with a cap of $1 billion per year, but with no budgetary cost for new issuances.

Tune into the Feb. 3 episode of the Tax Credit Tuesday podcast for more information on the proposed budget.

Senate Finance Committee Announces Tax Reform Working Groups

WASHINGTON – Jan. 15, 2015

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Senate Finance Committee Chairman Orrin Hatch, R-Utah, and Ranking Member Ron Wyden, D-Ore., today announced the co-chairs of the five working groups they created to advance tax-reform efforts in the 114th Congress. The groups will work with the Joint Committee on Taxation (JCT) to review current tax law, analyze available reform options and produce a comprehensive report that can serve as a foundation for bipartisan tax reform legislation. The report is expected to be released by the end of May.

The five working groups are community development and infrastructure, co-chaired by Sens. Dean Heller, R-Nev., and Michael Bennet, D-Colo.; business income tax, co-chaired by Sens. John Thune, R-S.D., Ben Cardin, D-Md.; individual income tax, co-chaired by Sens. Chuck Grassley, R-Iowa, Mike Enzi, R-Wyo., and Debbie Stabenow, D-Mich.; international tax, co-chaired by Rob Portman, R-Ohio, and Chuck Schumer, D-N.Y.; and savings and investment, co-chaired by Sens. Mike Crapo, R-Idaho, and Sherrod Brown, D-Ohio. The community and infrastructure group will encompass the low-income housing tax credit (LIHTC), the new markets tax credit (NMTC) and the historic tax credit (HTC), and the business tax reform group will encompass renewable energy tax credits (RETCs).

Tune into the Jan. 20 episode of the Tax Credit Tuesday podcast for more information.

CDFI Fund Updates NMTC Compliance FAQs

WASHINGTON – Jan. 5, 2015

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The Community Development Financial Institutions (CDFI) Fund last week issued an update to its “New Markets Tax Credit Certification, Compliance Monitoring and Evaluation Frequently Asked Questions.” It supersedes the September 2011 edition of the document. Updated topics include dissolving subsidiaries, terminating allocation agreements and restrictions on the use of bond proceeds under the CDFI Bond Guarantee Program in activities related to the new markets tax credit (NMTC).

Tune into the Jan. 6 Tax Credit Tuesday podcast to learn more.

Obama Signs 2014 Tax Extenders Bill

WASHINGTON – Dec. 19, 2014

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President Barack Obama today signed “The Tax Increase Prevention Act of 2014” (H.R. 5571), a tax incentives bill that retroactively extends through the end of 2014 most temporary tax provisions that expired at the end of 2013. The one-year extension act passed the Senate earlier this week by a vote of 76-16. The House passed the legislation 378-46 on Dec. 3.

The bill includes several provisions of interest to the tax credit community. They include an extension of the 9 percent floor for low-income housing tax credit (LIHTC) allocations made for non-federally subsidized buildings before Jan. 1, 2015; an extension through the end of this year for the new markets tax credit (NMTC); and an extension of the production tax credit (PTC) for wind and certain other renewable energy sources for facilities that begin construction before the end of this year. The legislation also includes an extension of 50 percent bonus depreciation to property acquired and placed in service during 2014 (and 2015 for certain properties with a longer production period).

Tune into the Dec. 23 episode of the Tax Credit Tuesday podcast for more information.

Senate Approves 2014 Tax Extenders Bill

WASHINGTON – Dec. 17, 2014

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The U.S. Senate on Tuesday night passed “The Tax Increase Prevention Act of 2014” (H.R. 5771), a tax incentives bill that retroactively extends for one year–through the end of 2014–most temporary tax provisions that expired at the end of 2013. The bill was passed with a vote of 76-16 and will become law when signed by President Barack Obama. The House passed the legislation 378-46 on Dec. 3.

The bill includes several provisions of interest to the tax credit community, including an extension of the 9 percent floor for low-income housing tax credit (LIHTC) allocations made for non-federally subsidized buildings before Jan. 1, 2015; an extension through the end of 2014 for the new markets tax credit (NMTC); and an extension of the production tax credit (PTC) for wind and certain other renewable energy sources for facilities that begin construction before the end of 2014. The legislation also includes an extension of 50 percent bonus depreciation to property acquired and placed in service during 2014 (and 2015 for certain properties with a longer production period).

Tune into the Dec. 23 episode of the Tax Credit Tuesday podcast for more information.

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