Nevada New Markets Jobs Act (NMJA) Program Overview
Enacted
by the Nevada Legislature in 2013, the Nevada NMJA program (NRS 231A) represents a
public-private partnership to attract private investment to economically
distressed parts of the state and provide low-cost capital to small businesses
located in those areas. The program is
like a state-level version of the federal New Markets Tax Credit (NMTC) Program
(26 USC § 45D) and its goal is to create jobs and stimulate economic growth in
underserved or disadvantaged communities.
For
the federal NMTC program, the U.S. Department of the Treasury 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. In return for their investment, the private investors
receive a tax credit against their federal income tax liability through the
IRS.
For
the Nevada NMJA program, the state allows insurance companies to receive a
credit against Nevada’s insurance premium tax in exchange for investing in a
CDE or similar entity authorized by statute.
That entity, in turn, must use the investment to make capital or equity
investments in Nevada businesses that satisfy certain criteria related to
conducting business in a low-income community.
It is
important to note that 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. The funding currently available to
organizations in Nevada includes:
- Federal
NMTC – This program funds projects requiring over $5,000,000 in total equity
and funding. In September 2024, the U.S. Treasury allocated an additional $5 billion in investment authority to 104 CDEs to support this program.
- Nevada NMJA –During the 2023 Legislative session, lawmakers approved $170 million in investment authority for qualified equity investments (which usually fund projects requiring from $300,000 to $3 million and up),and $30 million in investment authority for impact qualified equity investments (which are intended to fund manufacturing, retail trade, or minority owned projects requiring smaller amounts of capital). Allocation and investor funding of this authority was completed in October 2024. Qualified and impact qualified CDEs in the NMJA program ("NMJA allocatees") are tasked to deploy this capital from late 2024 on. These funds are in addition to $200 million previously authorized by the Nevada Legislature in 2019 for qualified equity investments.
- City of Las Vegas NMTC - The City of Las Vegas has its own CDFI with a federal NMTC allocation. Visit www.lasvegasnevada.gov/Business/Economic-Development/Business-Incentives and click on "New Markets Tax Credits" under the "Tax Incentives" header for more information.
Eligibility
To be eligible to apply for Nevada NMJA funding, a business must meet the following criteria:
- Be located in a designated low-income community. Click here to check if your current or prospective location will qualify.
- Meet the SBA small business size standards.
- Have a substantial proportion of its business activity contained within a low-income zone.
- Cannot be engaged in the following business activities: 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.
- Cannot generate more than the 15% of its business revenue through retail or housing rental.
To learn more, please review the standards for a "qualified active low-income community business" described in NRS 231A.110 and the standards for an "impact qualified low-income community business" described in NRS 231A.0753.
If you are you ready to discuss your project with a Nevada NMJA allocatee, click "Contact Information for CDEs with Nevada allocation" on the right-hand side of this page under "NMJA and NMTC Funding Resources." You will be taken to a list of current allocatees you can review and contact directly.