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New Market Tax Credit News Briefs - January 2023

The Community Development Financial Institutions (CDFI) Fund published a notice in the Nov. 28, 2022, Federal Register, inviting comments concerning the new markets tax credit (NMTC) program allocation and qualified equity investment tracking system (AQEI). The CDFI Fund developed the AQEI to enhance an allocatee’s ability to report information concerning the issuance of its qualified equity investments (QEIs), enhance the CDFI Fund’s ability to monitor the issuance of QEIs within the required timeframes, provide the CDFI Fund with basic investor data to be aggregated and analyzed and provide the CDFI Fund with information about the status of qualified active low-income community businesses and qualified low-income community investments at the end of the NMTC compliance period. In response to a 2014 Government Accountability Office report, comments are invited on two new data points: the tax credit amount received in conjunction with a pass-through entity for another tax credit program and other public subsidy used to fund leveraged loan data points. Comments must be submitted in writing by Jan. 27 to [email protected].

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The CDFI Fund Dec. 5, 2022, posted an updated frequently asked questions (FAQ) document for compliance monitoring and evaluation concerning the NMTC incentive. The updated document includes additional guidance on how to designate a QEI for Treasury Directive 9600 purposes, reminds NMTC allocatees to maintain documentation for “unrelated” entity assessments required under Section 3.2(d) of the allocation agreement, emphasizes that the “substantial rehabilitation” threshold is applicable to each building on a property to meet Section 3.3(h) of the allocation agreement and more. The updated FAQ document supersedes the November 2021 FAQ document.

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The CDFI Fund Nov. 4, 2022, published in the Federal Register a request for public comment on its revised CDFI Certification Application for submission to the Office of Management and Budget. There are revisions to the application and reporting requirements. The proposed revisions were announced in October and public comment was accepted through Dec. 5, 2022.

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Dot Foods Inc. received Oct. 24, 2022, a $15 million allocation in NMTCs from Mascoma Community Development for its new 177,000-square-foot food product distribution center for in Manchester, Tennessee. The endeavor will allow Dot Foods to double its capacity in Tennessee, become the anchor tenant of its rural business park and looks to create more than 250 new jobs. Capital One invested in the NMTCs for the property.

Journal Category:

New Markets Tax Credit

Authors:

Novogradac

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