The American Bankers Association this week signed a coalition letter urging Congress to make the New Markets Tax Credit program permanent, and it is encouraging banks to do the same by signing the letter by the end of the month. The NMTC program incentivizes community development and economic growth through tax credits that attract private investment to distressed communities, according to the Community Development Financial Institutions Fund. The credit has helped create 239 million square feet of manufacturing, office, and retail space and financed more than 10,800 businesses, but it is set to expire in 2025.
The letter by the NMTC Coalition urges lawmakers to make the program a permanent part of the federal tax code through the passage of the bipartisan NMTC Extension Act. In addition to extending the program at $5 billion in allocation per year, the bill would provide an inflation adjustment for future years, according to the coalition.
“The NMTC has a 20-year track record of financing small businesses, daycare centers, health clinics, manufacturing expansions, workforce training programs, broadband expansions, schools, recreational facilities, clean energy projects and other revitalization projects that strengthen communities and generate long-term economic growth,” the letter states. “These new investments have created over one million jobs in distressed communities across America.”