Vote Smart's Synopsis:

Vote to pass a bill that extends the New Markets Tax Credit program for an additional 6 years, effective immediately.

Highlights:

• Extends the New Markets Tax Credit program for an additional 6 years, beginning on the effective date of this bill (Sec. A).

• Reduces the tax credit amount the Missouri Department of Economic Development can grant for use from $25 million to $15 million per fiscal year (Sec. A).

• Authorizes an individual or entity that makes a “qualified equity investment” to receive a tax credit during the taxable year (Sec. A).

• Defines a “qualified equity investment” as any equity investment in a “qualified low-income community business” that (Sec. A):
• Is acquired in exchange for cash after the effective date of this bill;
• Has at least 85 percent of its cash purchase price used by the issuer to make low-income community investments by the first anniversary of the initial investment date; and
• Is designated by the issuer as a qualified community investment under the provisions of this bill.

• Defines a “qualified active low-income community business” as an entity that meets federal size eligibility standards and derives less than 15 percent of annual revenue from the rental or sale of real estate (Sec. A).

• Increases the total tax credit amount that an individual or entity can claim over a 7 year period as follows (Sec. A):
• 7 percent to 11 percent for the third year;
• 8 percent to 11 percent for the fourth year; and
• 8 percent to 12 percent for the fifth, sixth, and seventh years;

• Prohibits an individual from being eligible for a tax credit in the first and second years of an investment (Sec. A).

• Establishes the “New Markets Performance Guarantee Fund” that is used solely for the administration of the provisions of this bill (Sec. A).

• Establishes a fee of 0.5 percent of a qualified equity investment made by a qualified community development entity that is to be deposited into the fund (Sec. A).

Full Bill Text