Notes from Novogradac

Published by H. Blair Kincer, Tony Grappone on July 1, 2020

Like so many other industries across the world, the solar investment tax credit (ITC) equity market is effected by the COVID-19 pandemic.

However, ITC investors and syndicators are moving forward on existing developments and continuing to make new investments.

“In the immediate COVID-19 market shock, we saw the large players that define the tax equity market stand by their commitments,” said Jessica Robbins, senior director of structured finance at Sol Systems. “Their consistency helped greatly to calm the market.”

Published by Mark Shelburne, Thomas Stagg on July 1, 2020

The Internal Revenue Service today provided long-awaited, much-needed relief for low-income housing tax credit (LIHTC) properties facing COVID-19 related challenges. The guidance in Notice 2020-53 falls into four overall categories.

Deadlines

The notice allows longer time to meet timing requirements. Specifically, if

Published by Michael Novogradac, Peter Lawrence on June 24, 2020

H.R. 2, the Moving Forward Act, sweeping infrastructure legislation released yesterday in the House of Representatives, includes a robust set of low-income housing tax credit (LIHTC) provisions, including a permanent minimum 4 percent rate, a significant increase the annual LIHTC allocation amount, temporarily reduce the 50 percent test for tax-exempt bond-financed housing to 25 percent.

Published by Roy Chou, Thomas Boccia on June 4, 2020

The Internal Revenue Service (IRS) recently released proposed regulations concerning the historic rehabilitation tax credit (HTC), including rules to coordinate the new five-year period over which the credit may be claimed with other special rules for investment credit property. The long-awaited rules provide welcome clarity that will allow the historic preservation community to work more confidently with the HTC.

Published by John Sciarretti on May 28, 2020

Given the state of the nation’s infrastructure and the ability of infrastructure to assist in the economic recovery from the COVID-19 pandemic, many advocates have pushed for infrastructure funding to be included in the COVID-19 spending packages to date. Addressing the country’s infrastructure needs has been one of the few issues both Democrats and Republicans could rally behind.

Published by Thomas Stagg on May 28, 2020

The Affordable Housing Credit Improvement Act of 2019 (AHCIA) includes several provisions that affect boosts to eligible basis (similar provisions were included in the 2017 version of AHCIA). If enacted, these provisions could make the low-income housing tax credit (LIHTC) more productive and effective.

Published by Brad Elphick, Peter Lawrence on May 22, 2020

The coronavirus pandemic has swept the United States with more than 1.3 million cases and counting. While the pandemic has had huge health and economic impacts nationally, it is disproportionately affecting low-income, minority and rural communities that desperately needed investment even before COVID-19. The new markets tax credit (NMTC) is designed to serve these communities in the form of investments that support small businesses, manufacturing, and community-based facilities like hospitals and health clinics. As such, the NMTC can be an important tool in the nation’s economic recovery moving forward.

Published by Michael Novogradac on May 18, 2020

On May 14 California Governor Gavin Newsom proposed a revised budget that addresses what will be severe COVID-19 related revenue shortfalls. To help raise revenue over the near term, many changes are proposed, including a “three-year suspension of net operating losses and limitation on business incentive tax credits to offset no more than $5 million of tax liability per year.”

Published by Michael Novogradac on May 15, 2020

A change in a 30-year-old statutory provision for tax-exempt private activity bond (PAB) financing for affordable rental housing could result in hundreds of thousands of additional homes being built or preserved over a decade–a change that could also rescue some properties whose construction is endangered by the COVID-19 pandemic.

Published by Brad Elphick, H. Blair Kincer on May 15, 2020

The new markets tax credit (NMTC) equity market—like so many others—is affected by the COVID-19 pandemic.

However, the incentive helps finance many of the deemed ‘essential businesses.’  

“The types of businesses we are financing are the ones whose work is needed now more than ever,” said Gina Nisbeth, director at Citi Community Capital. Nisbeth said those business sectors include grocery stores, education, manufacturing and health care.