Advocates Want New Markets Tax Credit to Be Permanent
Monday, July 3, 2023
Advocates want to extend the New Markets Tax Credit, which has aided several Colorado developments.
This tax credit incentivizes community development and economic growth by attracting private investors to distressed communities.
In Colorado, this tax credit has led to the development of numerous projects, such as the Urban Peak Youth Shelter and the Tepeyac Community Health Center.
This year, lawmakers are seeking to make the tax credit permanent, rather than have it exist on a series of multi-year extensions.
Chris Huang, senior director of the Action Opportunity Fund's New Markets Tax Credits Program, described some challenges this lack of permanence poses.
"Because the program is not permanent this causes a lot of challenges," said Huang. "Now, I mean if you can imagine trying to run a business - but then not knowing if the program that you're in or the type of industry that you're in is only kind of there for five years or something."
In Congress, lawmakers introduced the New Markets Tax Credit Extension Act, which has a swath of bipartisan support.
Huang noted the challenge to passing it will be competing priorities, noting how the recent debt ceiling increase took precedence. The bill has been referred to its respective committees in the House and the Senate.
Huang said the tax credit has had many positive impacts, such as creating more than one million jobs across the U.S.
He described what comes next if the latest bill to establish permanency isn't passed.
"We're going to do what we can to continue to push out as much of this New Markets Tax Credit financing to communities that need it," said Huang, "and to organization, nonprofits who are providing critically needed services to communities that need it the most. "
Advocates will also be working to ensure the tax credit is made permanent.
If the latest bill isn't passed, they'll be seeking a shorter term extension to ensure the developments made through the New Markets Tax Credit don't end when the latest extension expires in 2025.
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