New Markets Tax Credits (NMTCs) are an attractive vehicle for revitalizing urban and rural communities seeking economic development and reinvestment opportunities. NMTCs facilitate partnerships among developers, lenders and equity sponsors, making investing in low-income communities and other qualifying areas economically feasible.
Regulations governing the NMTC program, which is administered by the U.S. Treasury’s Community Development Financial Institutions Fund (CDFI) and the Internal Revenue Service (IRS), can lay traps for the unwary. McGuireWoods’ new markets tax credit practice is experienced in guiding clients through the NMTC process, on a federal and where applicable state level.
Drawing on significant depth of experience from our federal tax, corporate, real estate, debt finance and public finance practices and our broad geographic reach, we represent community development entities (CDEs), investors, lenders, developers and qualified active low-income businesses in the NMTC space. In a variety of NMTC transactions, we have provided the necessary federal and state tax and corporate opinions to CDEs, investors and lenders as to the qualified nature of the investments (the QLICIs) in the QALICBs and the qualified nature of the QALICB. We have helped CDEs with obtaining allocations of NMTCs; represented QALICBs in both state and federal new markets transactions, served as counsel to leverage lenders, assisted developers with obtaining private letter rulings from the IRS; aided in the creation and financing of CDEs, delivered the requisite legal opinions and provided advice on a variety of projects qualified for NMTCs.
We provide tax advice relating to all aspects of NMTC projects, including those related to bond financing, partnership structuring, and qualification requirements.