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Tennessee State New Markets Development Act Proposed, Similar to Federal NMTC

Tuesday, February 16, 2021 - 11:15AM

A bill in the Tennessee General Assembly would create a state new markets development tax credit similar to the federal new markets tax credit (NMTC), worth 50% of qualified equity investments (QEI). H.B. 1218 would create the credit with an annual statewide cap of $20 million and a transaction cap of $10 million, regardless of how many community development entities are involved. The credit would be worth 10% of the QEI for five years, beginning with the third credit allowance date of the property. The credit could be taken against the state insurance premium tax and would take effect Jan. 1, 2022.

The Novogradac New Markets Tax Credit Handbook is a definitive guide to state and federal NMTC, from application and financing to development and compliance.

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