Iowa firms receive $100 million share of New Markets Tax Credits
Thursday, June 05, 2014 2:33 PM
Two Iowa-based community development agencies will receive federal tax credits totaling $100 million through a program designed to attract private capital to distressed low-income and rural areas.
The U.S. Treasury’s Community Development Financial Institutions Fund today announced that 87 organizations have received tax credit allocations totaling $3.5 billion. Among the organizations that will receive credits are Johnston-based Iowa Community Development LC, which was allocated $45 million; and Midwest Renewable Capital LC in Grimes, which will receive $55 million in credits.
The New Markets Tax Credit Program, established by Congress in December 2000, permits individual and corporate taxpayers to receive a credit against federal income taxes for making equity investments in vehicles known as Community Development Entities. The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period.
The Community Development Entities in turn use the capital raised to make investments in low-income communities.
The 87 organizations receiving awards were selected from a pool of 310 applicants that requested over $25.9 billion in allocation authority. They are based in 32 different states and the District of Columbia, and they have identified principal service areas that will cover nearly every state in the country and the District of Columbia.
Click here to read a Business Record article about Midwest Renewable Capital, which was established in 2009.