State NMTC Programs

 

The links in the map above take users to the program descriptions below, which is maintained by Novogradac & Company. We will update this list as new information becomes available. If you would like to correct or update the information listed above please email [email protected].

 

Alabama

Program Alabama New Markets Development Act
Administering Agency Alabama Department of Revenue 
Enacting Legislation H.B. 257Act No. 2012-483
Amending Legislation Not Applicable
Related Statutes Alabama Code Section 281-5-1
Expired Legislation Not Applicable
CDE Application Process
  • The applying entity needs to be a CDE for federal purposes and needs to be authorized to serve businesses in Alabama.
  • The CDE shall submit an application to the Department of Commerce to certify a proposed investment as a qualified investment.
  • The qualified community development entity must issue the qualified investment in exchange for cash within 180 days after it receives certification approving an investment as a qualified investment (this includes a 90‐day cure period), otherwise the certification is void.
  • The application for certification as a qualified community development entity must include the amount of qualified equity investment authority the applicant agrees to designate as a federal qualified equity investment under Section 45D of the Internal Revenue Code. 
Annual State CAP Limits $50 Million
Transaction CAP Limits $10 Million QLICI per QALICB
Credit Description
  • 50 percent of the taxpayer's equity investment
How the Credit is Claimed Year 1: 0 percent, Years 2-7: 8.33 percent
Credit Period (Compliance) 7 years (same as federal)
QALICB Requirements

Same as federal;

QALICBs are any for‐profit or non‐profit corporation or partnership if:

  • At least 50 percent of the total gross income of that business is derived from the active conduct of its business within any QLIC,
  • A substantial portion (defined as at least 40 percent) of the use of the tangible property of that business (whether owned or leased) is within any QLIC,
  • Substantial portion (defined as at least 40 percent) of the services performed by that business' employees are performed in any QLIC; the business is not primarily holding collectibles. If (ii) or (iii) are 50 percent or more than (i) is deemed to have been met.
  • A business shall be considered a qualified active low-income community business for the duration of the qualified community development entity's investment in, or loan to, the business if the entity reasonably expects, at the time the qualified community development entity makes the investment or loan, that the business may continue to satisfy the requirements for being a qualified active low-income community business throughout the entire period of the investment or loan.
  • No qualified active low-income community business that receives a qualified low-income community investment from a qualified community development entity that issues qualified equity investments under the Act may directly or indirectly (i) own or have the right to acquire an ownership interest in a qualified community development entity or member or affiliate of a qualified community development entity or (ii) loan to or invest in a qualified community development entity or member or affiliate of a qualified community development entity. 
Recapture

Recapture can occur if:

  • the federal new market tax credits associated with a QEI are recaptured (recapture amount proportionate to the federal recapture)  
  • the CDE fails to issue the qualified equity investment in the amount of the certified amount within 90 days after receiving notice of certification, (recapture amount equal to all credits claimed); 180 days reinvestment period permitted after which the certification shall lapse;
  • the qualified community development entity fails to invest at least 85 percent of the purchase price in qualified low‐income community investments within 12 months after the issuance of a qualified investment;
  • the CDE redeems or makes a principal payment with respect to a QEI prior to the 7th anniversary of a QEI (recapture amount proportionate to the amount of redemption or repayment);  
  • the CDE fails to provide the office with information, reports, or documentation required by the New Markets Development Program Act;
  • the department determines that a taxpayer received tax credits to which the taxpayer was not entitled;  or  
  • the qualified community development entity fails to maintain 85 percent of the purchase price in qualified low‐income community investments until the last credit allowance date for a qualified investment
Related Documents An Introduction the New Markets Tax Credit Program,  Form ET-1; Transmittal Notice of Authorization
Other
  • Qualified investment into CDE can be an equity investment or a long‐ term debt security instrument (and in the case of a long‐term debt security QI, “a qualified community development entity may not make cash interest payments on a long‐term debt security that is a qualified investment in excess of the entity’s operating income for 6 years following the issuance of the security).
  • An insurance company that is subject to the insurance premium tax must apply the tax credit against the insurance premium tax.
  • The Alabama statute indicates that the Qualified Investment (QEI) is deemed to be state financial assistance and therefore the CDE is subject to auditing, testing and reporting of compliance and internal controls.  
  • The amount of the tax credit claimed may not exceed the amount of the taxpayer's state tax liability for the tax year for which the tax credit is claimed; however, the excess tax credits available can be carried forward to any of the taxpayer's subsequent taxable years.
  • Tax credits claimed under this act are not saleable or transferable.
  • Tax credits earned by a "pass‐through" entity may be allocated to the partners, members, or shareholders of that entity.
  • Any business that derives or expects to derive 15 percent or more of its annual revenue from the rental or sale of real estate is not considered a QALICB.
Novogradac Contact

Gregory Clements
 

State Contact

Linda Swann
(334) 353-0221
[email protected]

 

 

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Alaska

Program Alaska New Markets Tax Credit Assistance Guarantee and Loan Program
Administering Agency Alaska Industrial Development and Export Authority
Enacting Legislation S.B. 66
Amending Legislation Not applicable
Related Statutes Alaska Statutes Section 44.88.700
Expired Legislation Not Applicable
CDE Application Process

AIDEA’s program has two components:
1.   Loan Guarantee, and
2.   Direct Loan

Loan Guarantee

The applicant must have been awarded a NMTC allocation from a Community Development Entity, or be in the process of securing that allocation from one or more CDEs.  The applicant may then apply to AIDEA for a guarantee of the leveraged loan portion of the NMTC transaction. If, and when, AIDEA issues a Letter of Commitment the applicant can use it to secure a commercial loan to the transaction from an eligible financial institution.  If a loan is secured, AIDEA will work with the lender to ensure the terms and conditions of the guarantee and the loan are compatible and acceptable to both parties.  The guarantee will be executed at the closing of the NMTC transaction.

Direct Loan

AIDEA may make a loan under this program only if it determines that the applicant was unable to use AIDEA’s Letter of Commitment to obtain a loan from a financial institution under commercially reasonable terms.  In this case the applicant will be required to submit documentation demonstrating that at least two financial institutions have reviewed and rejected a loan application or that the application was approved but subject to terms AIDEA determines are commercially unreasonable.

The application will undergo a comprehensive underwriting process in which AIDEA will determine:

  • if the borrower is creditworthy
  • the financially and economically feasibility of the business plan
  • the viability of any collateral
  • the projected revenues are sufficient to cover operations, maintenance and debt service
  • if there is any other information required to determine the strength of the project.
Annual State CAP Limits $40 Million
Transaction CAP Limits Not Applicable
Credit Description Not Applicable
How the Credit is Claimed Not Applicable
Credit Period (Compliance) 7 years (same as federal)
QALICB Requirements

Any corporation or partnership (including nonprofits) engaged in the active conduct of a qualified business that meets all 5 requirements:

  1. Gross Income (50 percent LIC)
  2. Tangible Property (40 percent LIC)
  3. Services Performed (40 percent LIC)
  4. Collectibles (< 5 percent property)
  5. Nonqualified Financial Property (< 5 percent property)
Recapture

Not Applicable

Related Documents Not Applicable
Other

Only projects in Qualified Census Tracts (QCT) are eligible for the NMTC tax credits. QCTs are those that meet at least one of the following requirements:

  • Poverty rate greater than 20 percent; or
  • Median income less than 80 percent of the state/metropolitan median; or
  • Targeted populations
  • Population is less than 2,000 people, contiguous to a Low Income Community (LIC) and in an empowerment zone, or
  • High migration rural counties (85 percent median income)
Novogradac Contact

Gregory Clements

State Contact

Mike Catsi
Business Development Officer
(907) 771-3060
[email protected]

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Arkansas

Program Arkansas New Markets Jobs Act
Administering Agency Arkansas Economic Development Commission
Enacting Legislation H.B. 1832
Amending Legislation Not Applicable
Related Statutes Arkansas Code Section 15-4-36
Expired Legislation Not Applicable
CDE Application Process
  • A CDE must submit an application and requisite fees to the Arkansas Economic Development Commission seeking certification of the proposed equity investment or long-term debt security as a QEI.
  • Within 30 days after receipt of a completed application, the Commission will grant or deny the application in full or in part.  If any part of the application is denied, the Commission will inform the applicant of the grounds for denial. 
  • If the application is denied as incomplete, and the applicant provides the additional information or documentation required, or otherwise completes its application within 15 days of the notice of denial, the application shall be considered completed as of the original date of submission. If the applicant fails to do so, the application will be denied and must be resubmitted in full with a new submission date.
Annual State CAP Limits $166 Million in QEI
Transaction CAP Limits

Not Applicable

Credit Description 58 percent of the QEI
How the Credit is Claimed Year 0-1: 0 percent Year 2-4: 12 percent Year 5-6: 11 percent
Credit Period (Compliance) 6 years
QALICB requirements

Same as federal

Recapture

Same as federal

Related Documents Rules and Regulations 
Other Not Applicable
Novogradac Contact Gregory Clements
State Contact

Hunter Hauk
Incentives Manager
[email protected]

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California (Proposed)

Program California New Markets Tax Credit
Administering Agency Responsible Tax Credit Administrator, designated by governor.
Enacting Legislation AB 1715
Amending Legislation Not Applicable
Related Statutes Not Applicable
Expired Legislation Not Applicable
CDE Application Process Not Available
Annual State CAP Limits $40 million per calendar year
Transaction CAP Limits

Not Available

Credit Description Zero percent of credit on first two credit allowance dates, seven percent for third and eight percent for final four dates, for a total of 39 percent of QEI. Community development investment is defined as projects, developments or activities where all or a substantial portion of investment has as its primary purpose community development for or that directly benefits low- to moderate-income individuals, families or communities. A high-impact investment is responsive to community needs and provides at least 51 percent social or environmental benefit to low-income individuals, families or communities.
How the Credit is Claimed Not Available
Credit Period (Compliance) Same as federal
QALICB requirements

Same as federal

Recapture

Same as federal

Related Documents Not Applicable
Other Would expire Dec. 31, 2022
Novogradac Contact Not Available
State Contact

Not Available

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Florida

Program Florida New Markets Development Program
Administering Agency Florida Department of Economic Opportunity
Enacting Legislation S.B. 406
Amending Legislation H.B. 5601
Related Statutes Florida Statutes Section 288.991-288.9922
Expired Legislation H.B. 7087
CDE Application Process

A qualified community development entity must submit an application to the department to approve a proposed investment as a qualified investment. The application must include:

  • The name, address, and tax identification number of the qualified community development entity.
  • Proof of certification as a qualified community development entity under 26 U.S.C. s. 45D.
  • A copy of an allocation agreement executed by the entity, or its controlling entity, and the Community Development Financial Institutions Fund, which authorizes the entity to serve businesses in this state.
  • A verified statement by the chief executive officer of the entity that the allocation agreement remains in effect.
  • A description of the proposed amount, structure, and purchaser of an equity investment or long-term debt security.
  • The name and tax identification number of any person authorized to claim a tax credit earned as a result of the purchase of the proposed qualified investment.
  • A detailed explanation of the proposed use of the proceeds from a proposed qualified investment.
  • A nonrefundable application fee of $1,000, payable to the department.
  • A statement that the entity will invest only in the industries designated by the department.
  • The entity’s plans for the development of relationships with community-based organizations, local community development offices and organizations, and economic development organizations. The entity must also explain steps it has taken to implement its plans to develop these relationships.
  • A statement that the entity will not invest in a qualified active low-income community business unless the business will create or retain jobs that pay an average wage of at least 115 percent of the federal poverty income guidelines for a family of four.
Annual State CAP Limits $74.14 million (per H.B. 5601)
Transaction CAP Limits $10 Million in QEI
How the Credit is Claimed Years 1-2: 0 percent, Year 3: 7 percent, and Years 4-7: 8 percent.
Credit Period (Compliance) 7 years (Same as federal)
QALICB Requirements

The department, in consultation with Enterprise Florida, Inc., shall designate industries using the North American Industry Classification System which are eligible to receive low-income community investments. The designated industries must be those industries that have the greatest potential to create strong positive impacts on or benefits to the state, regional, and local economies.

A qualified community development entity may not make a qualified low-income community investment in a business unless the principal activities of the business are within an eligible industry. The department may waive this limitation if the department determines that the investment will have a positive impact on a community.

Recapture

Notwithstanding s. 95.091, the department shall direct the Department of Revenue, at any time before Dec. 31, 2022, to recapture all or a portion of a tax credit authorized pursuant to the New Markets Development Program Act if one or more of the following occur:

  • The Federal Government recaptures any portion of the federal new markets tax credit. The recapture by the Department of Revenue shall equal the recapture by the Federal Government.
  • The qualified community development entity redeems or makes a principal repayment on a qualified investment before the final allowance date. The recapture by the Department of Revenue shall equal the redemption or principal repayment divided by the purchase price and multiplied by the tax credit authorized to a taxpayer for the qualified investment.
  • The qualified community development entity fails to invest at least 85 percent of the purchase price in qualified low-income community investments within 12 months after the issuance of a qualified investment; or
  • The qualified community development entity fails to maintain 85 percent of the purchase price in qualified low-income community investments until the last credit allowance date for a qualified investment.
Related Documents Application

 

Other Expires Dec. 31, 2022; The department may not approve a cumulative amount of qualified investments that may result in the claim of more than $216.34 million in tax credits during the existence of the program.  
Novogradac Conact

Christina Apostolidis

State Contact

Karl Blischke
[email protected]

 

 

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Georgia

Program

Georgia Agribusiness and Rural Jobs Act Program

Administering Agency Georgia Department of Community Affairs
Enacting Legislation S.B. 133
Amending Legislation  
Related Statutes  
Expired Legislation  
CDE Application Process

(1) All applications shall be received on forms promulgated by the Department, with all attachments and supporting documentation required in order to be deemed complete.

(2) Applications shall contain all elements required for statutory compliance, as well as any other elements required by the Department.

(3) The Department will begin accepting applications on April 2, 2018. Prospective applicants may submit applications to the Department in advance of that date; however, any submission received in advance of the date will be deemed as having arrived on the date in which applications will first be accepted. Applications will be deemed received when a paper-copy of the application is received by the Department. Applications received after 5:00 pm (Eastern) will be deemed to be received on the following business day.

(4) Eligible applicants under the Georgia Agribusiness and Rural Jobs Act must apply in a format and manner prescribed by the Department. Applications must be submitted in paper-copy format to the Department at:

Georgia Department of Community Affairs Georgia Agribusiness and Rural Jobs Act Program Community Development & Finance Division 60 Executive Park South, NE Atlanta, Georgia 30329-2231  

Annual State CAP Limits  
Transaction CAP Limits  
Credit Description  
How the Credit is Claimed

(1) Upon making a capital investment in a rural fund, a rural investor earns a vested right to a credit against such entity’s Georgia state tax liability that may be utilized on each credit allowance date of such capital investment in an amount equal to the applicable percentage for such credit allowance date multiplied by the purchase price paid to the rural fund for the capital investment. The applicable percentages that may be claimed are:

(a) Credit Allowance Date #1 – 0%;

(b) Credit Allowance Date #2 – 0%;

(c) Credit Allowance Date #3 – 15%;

(d) Credit Allowance Date #4 – 15%;

(e) Credit Allowance Date #5 – 15%;

(f) Credit Allowance Date #6 – 15%; and

(g) No subsequent credits apply.

(2) The amount of the credit claimed by an allocatee shall not exceed the amount of such entity’s Georgia state tax liability for the tax year for which the credit is claimed. Any amount of credit that an allocatee is prohibited from claiming in a taxable year as a result of this Code section may be carried forward for use in any subsequent taxable year. 

Credit Period (Compliance)  
QALICB Requirements

 

Recapture

(a) The rural fund does not invest 100 percent of its capital investment authority in qualified investments in the state of Georgia within two years of the closing date, with at least 10 percent of its capital investment authority initially invested in eligible businesses engaged in agribusiness as defined by the Department and at least 10 percent of such investment in agribusiness shall be equity investments;

(b) The rural fund, after satisfying the agribusiness and equity investment requirements above, fails to maintain qualified investments equal to 100 percent of its capital investment authority until the fifth anniversary of the credit allowance date. Qualified investments are considered maintained if the qualified investment was sold or repaid if the rural fund reinvests an amount equal to the capital returned or recovered by the rural fund from the original investment, exclusive of any profits realized, in other qualified investments in the state of Georgia within 12 months of the receipt of such capital. Amounts received periodically by a rural fund shall be treated as continually invested in qualified investments if the amounts are reinvested in one or more qualified investments by the end of the following calendar year. A rural fund is not required to reinvest capital returned from qualified investments after the fourth anniversary of the credit allowance date, and such qualified investments shall be considered held continuously by the rural fund through the fifth anniversary of the credit allowance date;

(c) Should the rural fund fail to meet the conditions of sections (a) and (b) until the fifth anniversary of the credit allowance date, the Department shall recapture credits 

Related Documents

Georgia Chapter 110-35

Other  
Novogradac Contact

 

State Contact

 

 

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Illinois

Program Illinois New Markets Development Program
Administering Agency Illinois Department of Commerce and Economic Opportunity
Enacting Legislation S.B. 2015 (Public Act 095-1024)
Amending Legislation S.B. 652
Related Statutes 20 Illinois Compiled Statutes 663
Expired Legislation Not Applicable
CDE Application Process
  • Needs to be a CDE for federal purposes that have entered into an allocation agreement with the CDFI Fund pursuant to which Illinois is included in the CDE's service area.
  • Need to submit an application to the Illinois Department of Commerce and Economic Opportunity (DCEO) to approve a proposed investment as a QEI.
  • Must issue QEI within 30 days of DCEO approval, and must provide evidence of DCEO of receipt of cash investment within 10 days of QEI issuance.
Annual State CAP Limits $20 Million in Credit
Transaction CAP Limits $10 Million in QEI
Credit Description 39 percent of the QEI
How the Credit is Claimed Years 1-2: 0 percent, Year 3: 7 percent, and Years 4-7: 8 percent
Credit Period (Compliance) 7 years (Same as federal)
QALICB Requirements Same as federal
Recapture

The following events cause recapture:

• The federal new market tax credits get recaptured
• The CDE redeems or makes a principal payment with respect to a QEI prior to the 7th anniversary of a QEI (recapture amount proportionate to the amount of redemption or repayment)
• The CDE fails to invest 85 percent of a QEI within 12 months and maintain such level of investment until the last credit allowance date for such QEI (recapture amount equal to all credits claimed)

Related Documents

NMTC Program GuidelinesAnnual Report Form

Other
  • QEI into CDE can be an equity investment or a long-term debt security instrument (minimum 7 year term, no acceleration, amortization, or prepayment features, but no limitation on acceleration for default on covenants designed to ensure compliance with IL NMTC Act or Section 45D).
  • Insurance companies that are subject to the insurance premium tax and claims the credit against the insurance premium tax is not require to pay any additional retaliatory tax imposed pursuant to the Illinois Insurance Code.
  • Any business that derives or expects to derive 15 percent or more of its annual revenue from the rental or sale of real estate is not considered a QALICB, except this restriction does not apply to a business that is controlled by or under common control with another business if the second business (i) does not derive or expects to derive 15 percent or more of its annual revenue from the rental or sale of real estate, and (ii) is the primary tenant of the real estate leased from the initial business.
  • Can be used irrespective of use of federal NMTCs in same transaction.
  • Credit is not refundable or saleable on the open market; may be allocated through pass-through entities. Five year carry forward permitted if credit cannot be used in a taxable year.
  • Program Sunsets June 30, 2021
Novogradac Contact

Annette Stevenson

State Contact

[email protected]

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Kentucky

Program Kentucky New Markets Development Program
Administering Agency Kentucky Department of Revenue
Enacting Legislation H.B. 445
Amending Legislation 103 KAR 15:180
Related Statutes Kentucky Statutes Section 141.433, Kentucky Statutes Section 141.434
Expired Legislation H.B. 2
CDE Application Process
  • A CDE that seeks to have an equity investment or long-term debt security certified by the department as a qualified equity investment eligible for the tax credit permitted by KRS 141.434 shall file an application with the department.
  • The department shall notify the CDE within thirty (30) days after receipt of the application whether the application is approved or denied.
  • If the department intends to deny the application, the CDE shall be notified in writing by the department of the reason for the denial, and the CDE may correct the application as provided by KRS 141.433(2).
  • If the department finds that the application is in compliance with KRS 141.432 to 141.434, a copy of the application shall be returned to the CDE with written notice of the department’s approval.

The department will:

  • Accept an application on or after July 15, 2016, if the application is received via hand-delivery, mail, express mail, or courier; and
  • Not accept an application received via facsimile, CD-Rom, CD, or electronic means.
  • The date that the application is stamped received by the Office of Income Taxation, Division of Corporation Tax, Tax Credits Section, shall be the date that the application is recorded as received pursuant to the provisions of KRS 141.133.
  • An application received prior to July 15, 2016, shall be recorded as received on July 15, 2016. 
Annual State CAP Limits $5 million
Transaction CAP Limits $10 million in QEI
Credit Description 39 percent of the QEI
How the Credit is Claimed Years 1-2: 0 percent, Year 3: 7 percent, and Years 4-7: 8 percent
Credit Period (Compliance) 7 years (same as federal)
QALICB Requirements Same as federal
Recapture

If there is an event as provided by KRS 141.433(6) that would result in the recapture of any portion of the tax credit previously approved:

  • The CDE shall notify the department upon discovery of the event; or
  • The department, upon discovery of the event or after receiving notice from the CDE of the event, shall provide written notice of the proposed recapture to the CDE as provided by KRS 141.433(6)(b).
  • If the entity fails or is unable to cure the deficiency within ninety (90) days after receiving the department’s notice of proposed recapture as provided by KRS 141.433(6)(b), the department shall notify the CDE and each taxpayer of the amount of recapture or the balance of the tax credit on a notice of recapture.
  • If the taxpayer is a pass-through entity, a notice of recapture shall also be sent to each partner, member, or shareholder showing the amount of recapture or the balance of the tax credit.
Related Documents Form 8874(K)Kentucky 8874(K)-A
Other

$5 Million in New Markets Tax Credit will be available for approval beginning with applications submitted on or after July 15, 2019.

Any application for the credit received prior to July 15, 2019, will be recorded as received on July 15, 2019. Any New Markets Tax Credit approved may be claimed against corporation income tax, individual income tax, limited liability entity tax, and insurance premiums tax.

Any business that derives or expects to derive 15 percent or more of its annual revenue from the rental or sale of real estate is not considered a QALICB, except this restriction does not apply to a business that is controlled by or under common control with another business if the second business does not derive or expects to derive 15 percent or more of its annual revenue from the rental or sale of real estate, and is the primary tenant of the real estate leased from the initial business.

Novogradac Contact

Gregory Clements

State Contact

Cabinet for Economic Development
(800) 626-2930
[email protected]

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Louisiana

Program Louisiana New Markets Jobs Act
Administering Agency Louisiana Department of Revenue
Enacting Legislation H.B. 726
Amending Legislation Not Applicable
Related Statutes Louisiana Code Section 1911, Louisiana Code Section 1912
Expired Legislation Not Applicable
CDE Application Process Must be a CDE for federal purposes and an application must be submitted to the state, along with $500,000 refundable deposit.
Annual State CAP Limits $55 million in authority
 
Transaction CAP Limits  $10 million cap on QEIs to any single QALICB
 
Credit Description 45 percent of the QEI Credits are applied towards premium tax liability not income tax liability.
 
How the Credit is Claimed Years 1-2: 14 percent, Year 3-4: 8.5 percent, Year 5-7: 0 percent
Credit Period (Compliance) 7 years
 
QALICB Requirements Same as federal
Recapture

Recapture will occur if:

  • Any amount of a federal tax credit available with respect to a qualified equity investment that is eligible for a credit under this Section is recaptured under Section 45D of the Internal Revenue Code of 1986, as amended. In such case, the Department of Insurance's recapture shall be proportionate to the federal recapture with respect to such qualified equity investment.
  • The issuer fails to invest an amount equal to one hundred percent of the purchase price of the qualified equity investment in qualified low-income community investments in Louisiana within twelve months of the issuance of the qualified equity investment and maintain such level of investment in qualified low-income community investments in Louisiana until the last credit allowance date for the qualified equity investment. 
Related Documents FAQsFAQs 2Fiscal Note for H.B. 726Revenue Information Bulletin 13-016
Other The credits can be carried forward 10 years and can be transferred.  
Novogradac Contact

Gregory Clements

State Contact

Department of Revenue
Policy Services Division
(225) 219-2780
E-Mail

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Maine

Program Maine New Markets Capital Investment Tax Credit Program
Administering Agency Finance Authority of Maine
Enacting Legislation S.P. 311
Amending Legislation H 1240H.P 1293, P.L. 75
Related Statutes Maine Revised Statutes 10 Section 1100-Z
Expired Legislation Not Applicable
CDE Application Process Needs to be a CDE for federal purposes and an application needs to be submitted to the state.
Annual State CAP Limits Not Applicable
Transaction CAP Limits

$10 million (Title 10, section 1100-Z, subsection 3, paragraph G)

$40 million (A QALICB that is a manufacturing or value-added production enterprise)

Credit Description 39 percent of the QEI
How the Credit is Claimed Years 1-2: 0 percent, Year 3: 7 percent Year 4-7: 8 percent
Credit Period (Compliance) 7 years (Same as federal)
QALICB Requirements Same as federal
Recapture If any federal credits are recaptured, all of the state credits may be recaptured.
Other "Qualified low-income community investment" does not include a capital or equity investment made after Nov. 9, 2015 if more than 5 percent of the investment is used to refinance costs, expenses or investments incurred or paid by the qualified active low-income community business or a party related to the qualified active low-income community business prior to the date of the qualified low-income community investment; make equity distributions from the qualified active low-income community business to its owners; acquire an existing business or enterprise in the State; or pay transaction fees.
Related Documents Certification Application, Program Rule, Factsheet 
Novogradac Contact

Tony Grappone

State Contact

FAME General Counsel Christopher Roney
Christopher Roney
(207) 620-3520

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Minnesota (Proposed)

Program Minnesota New Markets Tax Credit
Administering Agency Not Available
Enacting Legislation H.F. 1303
Amending Legislation  
Related Statutes  
Expired Legislation  
CDE Application Process Not Available
Annual State CAP Limits A $300 million cumulative allocation authority over the 2017-2019 duration of credit.
Transaction CAP Limits

Not Available

Credit Description Parallels federal NMTC in tax credit amount (39 percent) and seven-year credit period. Tax credit is not transferrable.
How the Credit is Claimed Not Available
Credit Period (Compliance) Seven years
QALICB Requirements Not Available
Recapture Seven years (same as federal)
Related Documents Not Available
Other  
Novogradac Contact

 

State Contact

Not Available

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Mississippi

Program Equity Investment Tax Credit Program
Administering Agency Mississippi Development Authority
Enacting Legislation Mississippi Code §57-105-1
Amending Legislation SB 2598S.B. 2373; H.B. 710
Related Statutes Not Available
Expired Legislation S.B. 2587; S.B. 2706 
CDE Application Process
  • The qualified community development entity shall apply for credits with the Mississippi Development Authority on forms prescribed by the Mississippi Development Authority.
  • The qualified community development entity must pay an application fee of One Thousand Dollars ($1,000.00) to the Mississippi Development Authority at the time the application is submitted.
  • In the application the qualified community development entity shall certify to the Mississippi Development Authority the dollar amount of the qualified equity investments made or to be made in this state, including in any federal Indian reservation located within the state's geographical boundary, during the first twelve-month period following the initial credit allowance date.
  • The Mississippi Development Authority shall allocate credits based on the dollar amount of qualified equity investments as certified in the application.
Annual State CAP Limits $15 million
Transaction CAP Limits $10 million
Credit Description
  • Equity Investment Credits are calculated as 8% of the QEI, and are available as of the Mississippi Credit Allowance Date, and annually for two additional years.
  • Credits are based on a Mississippi investment being maintained for a minimum of seven years, as required under the federal program. If all state and federal program requirements are not met, all credits may be recaptured by the Mississippi Department of Revenue. Annual program reporting requirements must be maintained as well.
How the Credit is Claimed
  • A CDE must apply to MDA certifying the dollar amount of QEIs that it anticipates it will make in Mississippi from the credit allowance date through the following twelve months.
  • The application must be accompanied by payment of a $1,000 fee.
  • Upon approval, MDA will issue to the CDE a Tax Credit Incentive Certificate allocating credits based on the anticipated investment amount certified in its application, and the CDE will have sixty (60) days from the allocation date to issue the QEIs.
  • Failure to timely issue the QEIs will result in cancellation of the allocation, which must be returned to MDA.
Credit Period (Compliance) 7 years (same as federal)
QALICB Requirements

Same as federal

Recapture
  • The Department of Revenue may recapture all of the credit allowed under this section if:
  • (a) Any amount of federal tax credits available with respect to a qualified equity investment that is eligible for a tax credit under this section is recaptured under Section 45D of the Internal Revenue Code of 1986, as amended; or
  • (b) The qualified community development entity redeems or makes any principal repayment with respect to a qualified equity investment prior to the seventh anniversary of the issuance of the qualified equity investment; or
  • (c) The qualified community development entity fails to maintain at least eighty-five percent (85%) of the proceeds of the qualified equity investment in qualified low-income community investments in Mississippi at any time prior to the seventh anniversary of the issuance of the qualified equity investment.
  • Any credits that are subject to recapture under this subsection shall be recaptured from the taxpayer that actually claimed the credit.
Related Documents Not Available
Other

Sunsets Jan. 1, 2020

Mississippi Equity Investment Tax Credits must be awarded and certified by the Mississippi Development Authority prior to funding. Usage of credits is administered by the Mississippi Department of Revenue.

Novogradac Contact Rebecca Darling
State Contact

Mississippi Development Authority
601.359.3449

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Nebraska

Program Nebraska New Markets Job Growth Investment Tax Credit Program
Administering Agency Nebraska Department of Revenue
Enacting Legislation L.B. 1128
Amending Legislation L.B. 599L.B. 1022L.B. 1048
Related Statutes Nebraska Revenue Statutes Section 77-1101 to 77-1119;
Expired Legislation Not Applicable
CDE Application Process

A CDE must file a Nebraska Application for Certification of Qualified Equity Investments Eligible for the New Markets Job Growth Investment Tax Credit (application) with the Department to receive cash investments that qualify for the NMTC.  The application must include the following:

  • Evidence of the entity’s certification as a CDE
  • Evidence that the service area of the CDE includes Nebraska; 
  • A copy of an allocation agreement between the CDE or its controlling entity and the CDFI Fund;
  • A certificate completed by an executive officer of the CDE stating that the federal allocation agreement has not been revoked or cancelled
  • A description of the proposed amount, structure, and purchaser of the equity investment or long-term debt security; 
  • Information identifying all taxpayers eligible to utilize the NMTC; 
  • Identification of the proposed use of the proceeds from the qualified equity investment; and 
  • A $5,000 nonrefundable application fee.
Annual State CAP Limits $15 Million in QEI
Transaction CAP Limits Not Applicable
Credit Description
  • On each credit allowance date of such qualified equity investment such acquirer, or subsequent holder of the qualified equity investment, shall be entitled to utilize a portion of such tax credit during the taxable year that includes such credit allowance date;
  • The tax credit amount shall be equal to the applicable percentage for such credit allowance date multiplied by the purchase price paid to the issuer of such qualified equity investment; and
  • The amount of the tax credit claimed shall not exceed the amount of the taxpayer's tax liability for the tax year for which the tax credit is claimed.
How the Credit is Claimed

The NMTC is computed by multiplying the cash purchase price of the investment by the allocable percentage at each credit allowance date. The credit allowance dates and percentages are:

Credit Allowance Date                                             Credit Allowance Percentage

1st credit allowance date (date of investment)                                 0 percent
2nd credit allowance date (1 year after date of investment)    0 percent
3rd credit allowance date (2 years after date of investment)   7 percent
4th – 7th credit allowance dates                                                                8 percent
(3rd through 6th year after date of investment) 

The credit may be taken for the taxable year that includes the applicable credit allowance date.  For example, a corporation that files its tax return on a calendar year basis makes an initial $100,000 cash investment on Feb. 1, 2012 that qualifies for the NMTC. The corporation may take nonrefundable tax credits as follows:

Tax Year                                                 Investment    Credit    Nonrefundable NMTC

2012 (Year of investment)                 100,00000
2013 (1 year after investment)       100,00000
2014 (2 years after investment)     100,000          7percent          7,000
2015 (3 years after investment)     100,000          8 percent          8,000
2016 (4 years after investment)     100,000          8 percent          8,000
2017 (5 years after investment)     100,000          8 percent          8,000
2018 (6 years after investment)     100,000          8 percent          8,000
Total Credits                                                                                         $39,000

Any taxpayer that claims a tax credit shall not be required to pay any additional retaliatory tax under section 44-150 as a result of claiming such tax credit. Any tax credit claimed under this section shall be considered a payment of tax for purposes of subsection (1) of section 77-2734.03. Sec. 2. 

Credit Period (Compliance) 7 years (Same as federal)
QALICB Requirements

Use at least 85 percent of the proceeds from QEI to make QLICIs in a QALICB in Nebraska.

Recapture

Credits used will be recaptured from the taxpayer that claimed the NMTC if:

  • Any amount of the federal qualified equity investment credit is recaptured;
  • The amount recaptured will be proportionate to the federal recapture. 
  • The CDE redeems or repays some or all the principal of the qualified equity investment prior to the last credit allowance date; or 
  • The amount recaptured will be proportionate to the amount of redemption or repayment of the qualified equity investment. 
  • The CDE fails to invest and satisfy the requirements of Neb. Rev. Stat. Section 77-1110(1)(b) and maintain its investment in a qualified low-income community investment in Nebraska until the last credit allowance date. 
  • In this case, the entire amount of the NMTC will be recaptured.
  • The CDE must inform the Department and investors that a recapture event has occurred. 
Related Documents Application for Certification of QEI Eligible for the NMTC
Other L.B. 1022: A qualified community development entity that seeks to have an equity investment or long-term debt security designated as a qualified equity investment and eligible for tax credits under the New Markets Job Growth Investment Act shall apply to the Tax Commissioner. There shall be no new applications for such designation filed under this section after Dec. 31, 2022. 
Novogradac Contact Brad Elphick
State Contact

Tom Milburn
Revenue Tax Specialist, Policy Section
(402) 471-5814 

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Nevada

Program Nevada New Markets Tax Credit Program
Administering Agency Nevada Department of Business and Industry
Enacting Legislation S.B. 357
Amending Legislation Nevada A.B. 446, revising the Nevada New Markets Jobs Act
Introduced March 25, 2019
Related Statutes Nevada Revised Statutes Section 231A 
Expired Legislation Not Applicable
CDE Application Process
  • The CDEs that have been certified by the federal NMTC program and Nevada is in their certified area are eligible to apply for the state NMTC program. The state application will be a two part process:
    • The CDE submits an application to the Department of Business and Industry.
    • Once eligibility is determined, B&I will send a written notice of certification to the applicant CDE, which will include an allocated amount of NMTC contingent upon qualified investments being made within 30 days of the date of the preliminary approval letter.
    • If an approved CDE is not successful in gaining proof of the investment, the CDE will be required to reapply and will be required to obtain a commitment that secures the investment in the amount of the application to accompany the new submittal.
Annual State CAP Limits $200 Million in QEI
Transaction CAP Limits $50 Million in QEI
Credit Description 58 percent of the QEI
How the Credit is Claimed

Years 1-2: 0 percent Years 3-5: 12 percent Years 6-7: 11 percent

Credit Period (Compliance) 7 years (Same as federal)
QALICB Requirements
  • A CDE may make an investment (loan or equity) into a Qualified Active Low-Income Community Business (QALICB), which is any corporation, including a nonprofit corporation, or partnership which meets the following criteria for any taxable year:
  • At least 50 percent of total gross income of the QALICB is derived within any low-income community.
  • A substantial portion of the use of the tangible property of the QALICB by its employees are performed in any low-income community.
  • A substantial portion of the use of the tangible property of the QALICB (whether owned or leased) is within any low-income community
  • Less than 5 percent of the average of the aggregate unadjusted basis of the property of the QALICB is attributable to collectibles, other than collectibles that are held primarily for sale to customers in the ordinary course of such business and;
  • Less than 5 percent of the average of the aggregate unadjusted basis of the property of the QALICB is attributed to nonqualified financial property. Any business that projects to derive 15 percent or more of its annual revenue from the rental or sale of real estate shall not be considered a QALICB.
Recapture

The following events cause recapture:

  • The issuer redeems or makes principal repayments with respect to a QEI prior to the seventh anniversary
  • The federal new markets tax credits get recaptured
  • The CDE fails to invest in a QALICB in Nevada
Related Documents

 Program Overview 

Other Not Applicable
Novogradac Contact Brad Elphick
State Contact [email protected]

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Ohio

Program Ohio New Markets Tax Credit Program
Administering Agency Ohio develpoment Services Agency
Enacting Legislation H.B. 1 Section 101.01
Amending Legislation H.B. 182
Related Statutes Ohio Revised Statutes Section 5725.33Ohio Administrative Code Chapter 122:22
Expired Legislation Not Applicable
CDE Application Process Needs to be a CDE for federal purposes with a service area including any portion of the State of Ohio.
Annual State CAP Limits $10 Million
Transaction CAP Limits $1 Million
Credit Description 39 percent of the QEI
How the Credit is Claimed Years 1-2: 0 percent Years 3: 7 percent Years 4-7: 8 percent
Credit Period (Compliance) 7 years (same as federal)
QALICB Requirements Similar to federal. 
Recapture The following events cause recapture:
• The same events that trigger federal recapture
• The Ohio Director of Development determines that an investment is not a QEI or that the proceeds of an investment for which tax credit is claimed are used to make QLICIs other than in QALICBs
Related Documents

Overview, Introduction to Ohio New Markets Tax Credits

Other
  • Tax credits can be carried forward four years. Tax credits can be transferred.
  • The credit can only apply against state franchise taxes paid by domestic companies, as well as some taxes imposed on foreign insurance companies.
  • Amending legislation H.B. 182, effective Sep. 13, 2016, no longer excludes businesses that that derives or expects to derive 15 percent or more of its annual revenue from rental or sale of real property.

Novogradac Contact

Annette Stevenson
State Contact

John Werkman
Tax Incentives Manager
Office of Strategic Business Investments
(614) 466-6791

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Utah

Program Utah Small Business Jobs Act
Administering Agency Utah Governor's Office of Economic Development
Enacting Legislation S.B. 233
Amending Legislation Not Applicable
Related Statutes Not Applicable
Expired Legislation Not Applicable
CDE Application Process
  • A CDE must submit an application to the Utah Governor's Office of Economic Development seeking certification of the propsedproposed qualified equity investment (QEI) or long term debt security.
  • Applicants must also submit a deposit equal 0.5 percent of the QEI with their application, which is refunded at the end of the compliance period, if the CDE does not initiate recapture during the compliance period.
  • Within 30 days of receipt of a completed application, the office shall grant or deny the application in full or in part.
  • If the application is denied in any part, the applicant may provide additional information and documentation to correct or complete its application within 15 days of the notice of denial, the application shall be considered completed as the original date of submission. If the applicant fails to do so, the application is denied, and the applicant may reapply with a full application and a new submission date
Annual State CAP Limits $50 million in QEI
Transaction CAP Limits

$4 million

Credit Description

The office shall calculate the tax credit amount and the tax credit amount shall be equal to the applicable percentage for the credit allowance date multiplied by the purchase price paid to the qualified community development entity for the qualified equity investment.

How the Credit is Claimed

Year 0-2: 0 percent, Year 3-5: 12 percent, Year 6-7: 11 percent

Credit Period (Compliance) 7 Years
QALICB Requirements Same as federal, with additional requirement that business must meet size eligibility established by the United States Small Business Administration as defined in 13 C.F.R. Sec.121.101-201
Recapture

For the purposes of Recapture, the Office interprets the requirement to invest 85 percent of the purchase price of the qualified equity investment as follows:

  • If the qualified community development entity does not transfer or assign any of its certification, then the qualified community development entity must invest and maintain invested an amount equal to 85 percent or more of the original amount of the qualified equity investment certified by the Office and for which cash was received within 45 days.
  • If the qualified community development entity transfers all or a portion of its certified qualified equity investment authority to a controlling entity or subsidiary, then:
  • The qualified community development entity (the transferor) must invest and maintain invested an amount equal to or greater than 85 percent of the portion of the certified qualified equity investment authority it retained, and for which it received cash investment within 45 days, AND
  • The controlling entity or subsidiary (the transferee) must invest and maintain invested and amount equal to or greater than 85 percent of the portion of the certified qualified equity investment authority it received, and for which it received cash investment within 45 days.
  • The 85 percent investment requirement shall be defined in a manner consistent with the "Substantially-All" standard set forth in IRC Section 45D and the rules and regulations promulgated thereunder. The Department shall be notified of any transaction fees paid by the qualified active low-income community business that are in excess of a total of $50,000 for the entire time period of the investment, up to seven years.
  • Notice of transaction fees that are in excess of $50,000 to be paid by the qualified active low-income community business must be requested in writing within 15 days of closing the investment with the qualified active low-income community business and must include an explanation for the necessity of the excess fees including highlighting the impact to the state and how the fees and impact for the particular deal compares to the customary industry practice across both the federal NMTC program and other States' New Market Tax Credit programs.
  • If after the six month cure period, the action or omission upon which the recapture is based is not cured, the Office shall issue a final notice of Agency Action for Recapture.
  • The Final Notice of Agency Action for Recapture shall also be sent to the Utah Tax Commission.
Other
  • New capital requirement: QALICB cannot own, or have the right to acquire ownership in the CDE issuing the QEIs. Additionally the QALICB cannot loan or invest the QEI back into the CDE issuing the QEIs.
  • 150 percent percent investment requirement: A QEI is certified until the seventh credit allowance date, or when the CDE has used the proceeds from the initial QEI to invest in QALICBs such that the new QEIs exceed 150 percent percent of the original QEI.
Related Documents New capital requirement: QALICB cannot own, or have the right to acquire ownership in the CDE issuing the QEIs. Additionally the QALICB cannot loan or invest the QEI back into the CDE issuing the QEIs. 150 percent percent investment requirement: A QEI is certified until the seventh credit allowance date, or when the CDE has used the proceeds from the initial QEI to invest in QALICBs such that the new QEIs exceed 150 percent percent of the original QEI.
Novogradac Contact

Brad Elphick

State Contact

Governor's Office of Economic Development
60 East South Temple, 3rd Floor
Salt Lake City, UT 84111
Phone: 801-538-8680
Toll Free: 855-204-9046

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