New Markets Tax Credits

Funding development projects to enhance communities
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New Market Tax Credit

New Markets Tax Credits Benefits

The New Markets Tax Credits (NMTC) Program incentivizes community development and economic growth by using tax credits that attract private investment to distressed communities.

According to Community Development Financial Institutions Fund, low-income communities, have historically, experienced a lack of investment, as evidenced by vacant commercial properties, outdated manufacturing facilities, and inadequate access to education and healthcare service providers. The New Markets Tax Credits Program (NMTC) aims to break this cycle of disinvestment by attracting the private investment necessary to reinvigorate struggling local economies.

The NMTC Program attracts private capital into low-income communities by permitting individual and corporate investors to receive a tax credit against their federal income tax in exchange for making equity investments in specialized financial intermediaries called Community Development Entities (CDE).  The credit totals 39% of the original investment amount and is claimed over a period of seven years.  

Press Release: U.S Treasury Announces New Market Tax Credit Awards - September 22, 2023

How it Works:

  • Tax credits awarded by the US Department of Treasury to CDE.
  • Colorado Enterprise Fund works as a CDE, with investors, typically large banks, to provide funding towards the project.
  • Investors are awarded credits against their federal tax obligations.
  • Investors lend capital to businesses, developers, or non-profits at preferential rates and terms to complete the project.

Types of NMTC projects include:

  • Manufacturing
  • Hospitality
  • Community Services
  • Retail
  • Healthy Food Access
  • Technology 

Criteria for NMTC projects:

  • Project will create quality jobs.
  • Project will impact the community via development, economic growth, or positive environmental impact.
  • Priority is given to projects located in underserved or distressed communities.
  •  Community poverty rate exceeds 20% or median family income is below 80% of state median income.

 

To date, CEF has allocated $110 M in NMTCs to the Colorado businesses below.  
 
Valley-Wide Health Systems- Rocky Ford Clinic

2024

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Habitat for Humanity of Metro Denver

2024

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Food Bank of the Rockies - Aurora

2024

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Food Bank of the Rockies

2023

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Vail Health Services

2023

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Hotel St. Cloud

2022

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Clifton Community Resource Campus

2022

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TruStile Doors

2020

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