The New Markets Tax Credit ("NMTC") program provides federal income tax credits to for-profit entities that make qualified investments in low-income communities. Charter schools and other non-profit entities can benefit from NMTCs even though such entities are exempt from federal income tax and cannot directly benefit from federal tax credits. Typically, the NMTCs are "sold" to for-profit investors and the sales proceeds create a subsidy that can be used by a non-profit entity to write-down the cost of its facility acquisition or facility financing. NMTC financing can provide a subsidy of 20%-60% of the cost of a facility project, depending on the specific circumstances. Public Economics has helped its tax exempt clients raise over $100,000,000 of equity from New Markets Tax Credits and Qualified Zone Academy Bonds (school renovation tax credits).
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Community Development Insights
