ABA Backs Legislation to Extend New Markets Tax Credit

The American Bankers Association today expressed its support for the bipartisan New Markets Tax Credit Extension Act (H.R. 1321/S. 456) sponsored by Reps. Terri Sewell (D-Ala.) and Tom Reed (R-N.Y.) and Sens. Ben Cardin (D-Md.) and Roy Blunt (R-Mo.).

“By making NMTC permanent, our nation’s small businesses, investors and community development professionals will have access to the vital resources needed to improve our nation’s communities while generating long-term economic growth,” ABA said. “NMTC allocates meaningful investment in childcare facilities, small business incubators and provides a set-aside for community development financial institutions and community development entities owned or controlled by people of color.”

Scheduled to expire this year, NMTC was enacted in 2000 to provide incentive for investment in low-income communities. According to the Urban Institute’s Tax Policy Center, the program provided credits worth $26 billion from 2003 to 2020 and supported more than 5,300 projects in all 50 states, the District of Columbia and Puerto Rico through 2016. “NMTC has a 20-year track record of providing flexible incentives for economic development,” ABA concluded, noting that the extension would “deliver substantial investment … in economically distressed rural, urban and tribal communities.”