New Markets Tax Credit Law

Attorneys who know how to leverage New Markets Tax Credits.

Downs Rachlin’s experienced business and tax attorneys provide legal advice for clients using the New Markets Tax Credits (NMTC) Program to finance commercial and mixed-use real estate developments and historic rehabilitations. We have assisted manufacturers, dairy processing companies, community service organizations, and real estate developers in closing NMTC deals worth over $100 million. Our interdisciplinary team provides advice regarding:

• business organization and tax structuring,
• negotiation and drafting of transaction documents
• corporate and tax opinions, and
• compliance and due diligence.

Our tax credit legal experience is your key to success.

Leveraging New Markets Tax Credits can be complex, intimidating, and time-sensitive; our clients’ projects succeeded largely due to the experience and creativity of Downs Rachlin’s team.

New Markets Tax Credits attract critical investment capital to low-income communities. The NMTC Program was established by Congress in 2000, and last extended by the American Taxpayer Relief Act of 2012, to spur new or increased investments into operating businesses and real estate projects located in low-income communities. In Vermont, these special census tracts include much of northern Franklin, Lamoille, Essex, and Orleans counties as well as parts of the towns and cities of St. Albans, Rutland, Bennington, Springfield, Rockingham, Fair Haven, Burlington, Winooski, Newport, St. Johnsbury and Brattleboro.

The NMTC Program attracts investment capital to low-income communities by permitting individual and corporate investors to receive a tax credit against their Federal income tax return in exchange for making equity investments in specialized financial institutions called Community Development Entities. The credit totals 39 percent of the original investment amount and is recovered over a period of seven years (five percent for each of the first three years, and six percent for each of the remaining four years). The effect of the NMTC Program is to significantly lower the cost of capital, and thereby lower overall project costs.

Legal ingenuity in support of your entrepreneurial vision.

Downs Rachlin’s attorneys combine practical business experience with sophisticated commercial financing and tax counsel to assist clients in securing appropriate financing and optimal tax treatment for commercial development projects.