What is a New Market Tax Credit?
A New Market Tax Credit is part of the Community Renewal Tax Relief Act of 2000. The New Markets Tax Credit Program is intended to direct approximately $15 billion in investments into privately managed investment institutions. As a result, these privately managed investment institutions, (Community Development Entities or CDEs), will make loans and capital investments to businesses in low-income communities. By making an investment in a CDE, a credit is provided to the investor worth 39 percent of the cost of the investment, which will be distributed over 7 years, along with any anticipated return on their investment in the CDE. Successful applicants are selected only after submission of a competitive application and rigorous review process that is administered by the CDFI Fund.
Cherrytree Group LLC can help you structure your transaction, analyze your financial projections and development costs, assist with a determination of your eligibility for these credits as well as guide you through the process of applying for and securing tax credits. Businesses eligible to receive NMTC financing are corporations, partnerships, sole-proprietorships and non-profits that are active and located in a low-income community, as defined by the NMTC regulations. In general, a Low-Income Community is defined as a Census tract with a poverty rate of at least 20%, or with median income of up to 80% of the area or statewide median, whichever is greater. For a non-metropolitan census tract, 80% of the statewide median is acceptable. Cherrytree Group works with attorneys when necessary to deliver to our client a full range of services.
Cherrytree Group, LLC
Address:
233 Needham Street
Suite 402
Newton, MA 02464
Tel: (781) 325-8485
Fax: (617) 431-2270
E-Mail:
info@cherrytree-group.com