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US Treasury Unveils Gulf Coast Tax Credit Programs

by Mike Godfrey, Tax-News.com, Washington

08 June 2006

US Treasury Community Development Financial Institutions Fund Director, Art Garcia on Tuesday highlighted tax credit awards to 17 organizations serving the Gulf Coast region with more than $850 million in investment in low-income communities, under the 2006 round of the New Markets Tax Credit (NMTC) Program.

Events in New Orleans and Biloxi were part of a series of Treasury announcements this week in the Gulf Coast region.

Last week, Treasury Secretary John Snow announced the 63 organizations selected nationally to receive tax credits for $4.1 billion in investment under the fourth round of the NMTC Program.

"The economic investment and jobs the New Markets program encourages are exactly what the Gulf Coast region needs to get back on its feet and running," Secretary Snow said. "I was pleased to announce last week's awards for the neediest communities across the country, but I am especially proud of the hope this program offers to Gulf."

On Tuesday, thirteen organizations in the Gulf region and across the nation received tax credit awards from the additional $600 million in NMTC allocation authority made possible by GO Zone legislation following Hurricane Katrina. Four other organizations headquartered in the Gulf area received allocations from the $3.5 billion in NMTC allocations initially available this round.

The NMTC Program, established by Congress in December 2000, permits individual and corporate taxpayers to receive a credit against federal income taxes for making qualified equity investments in investment vehicles known as Community Development Entities (CDEs). The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period.

Substantially all of the taxpayer's investment must in turn be used by the CDE to make qualified investments in low-income communities. The 63 organizations were selected through a competitive application and rigorous review process.

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