New Market Tax Credit (NMTC) Overview
A little known source of funds, the NMTC program can help
Nevada businesses- or businesses relocating to Nevada- gain access to gap
funding to support businesses located in
economically distressed communities. The
NMTC program has developed a public-private partnership to attract private
investment on terms that may otherwise be unavailable to these communities.
How does the program work? The U.S. Department of the
Treasury, through the Federal Community Development Financial Institution Fund (CDFI),
certifies specialized financial intermediaries called Community Development
Entities (CDEs). These entities are
allocated federal tax credits to incentivize private capital to invest in
ventures in distressed or disadvantaged communities. For their investment, the private investors
receive a tax credit against their federal income tax liability through the
It is important to note that, despite the implication of the
name, the businesses receiving the investment do NOT receive tax credits;
however, they do receive favorable terms and potential benefits that help their
business acquire the necessary cash to thrive and grow in otherwise challenging
locations. Generally speaking, NMTC funds
fill the gap by contributing approximately 30% of a project’s total funding
There are two NMTC programs available in Nevada:
NMTC – This program funds projects requiring over $5,000,000 in total equity
and funding. The CDFI recently allocated
an additional $7,000,000,000 to support
- Nevada NMTC
– This program funds projects from $200,000 to $2,000,000. The Nevada allocation has been almost fully
subscribed, with approximately $12,000,000 in investment funds remaining
through the CDEs already selected in the Nevada program.
1. To be eligible to apply for NMTC, the
business must be located in a designated low income community. Check your address at this website to see if
your current or prospective location will qualify: https://www.cims.cdfifund.gov/preparation/?config=config_nmtc.xml
2. A substantial proportion of the business activity
must be contained within this low income zone.
3. The funds cannot be invested in the following
business activities: a massage
parlor, bath house or hot tub facility, tanning salon, country club, liquor
store, golf course, gambling facility, holding of intangibles for sale, or
certain farming businesses.
4. If you're ready to discuss your project with a NMTC investor, complete and return the NMTC Referral Form.