Vermont Rural Ventures
New Markets Tax Credit Program
Congress created the New Markets Tax Credit (NMTC) program in 2000 to spur investment of private capital for economic development in both rural and urban low-income communities. Individuals and corporations receive a tax credit against federal income taxes for making investments in certain low-income properties or businesses when those investments are made through a "community development entity" (CDE).
Vermont Rural Ventures (VRV), a qualified CDE operated by Housing Vermont, secured its first allocation of NMTC in the spring of 2009 and a second in 2012. Vermont Rural Ventures is deploying its New Markets Tax Credit resources to support investment in the economic, environmental, and social well-being of Vermont communities. NMTC funds are used to retain and create jobs for Vermonters by financing key community developments in downtown and village centers and in other concerted community efforts which demonstrate positive impacts on Vermont's economic, health care, energy and food systems.
Under the terms of the NMTC program, an investor making a seven-year investment receives NMTCs equal to 39% of the cash equity investment amount over the investment period (5% in years 1-3 and 6% in years 4-7). In addition, the investor may receive economic benefits from the project. During the seven-year investment period, these economic benefits are some portion of the return on the capital invested. After seven years, they can include the return of capital as well as the return on capital.
Prospective NMTC projects generally need to be located in qualified census tracts. In Vermont those areas include much of northern Franklin, Lamoille, Essex and Orleans counties as well as parts Burlington, St. Albans, Newport, Bennington, Rutland, Springfield, Montpelier, Barre, St. Johnsbury, Brattleboro, and Bellows Falls. See the maps for more detail or to look up a specific site.
To see how NMTCs are being utilized in Vermont, view the Weidmann Company's expansion of its St. Johnsbury facility, learn more about the construction of a new building for the Community College of Vermont located in downtown Rutland, read a description of a new campus for Laraway Youth and Family Services and see how NMTC helped Commonwealth Dairy expand their operations.
VRV evaluates NMTC investments for retail and office space, health care projects, downtown housing over commercial space, manufacturing, community centers, farm, forest, and food processing, and energy projects and will invest in both new construction and historic renovation. VRV is targeting 65% of its NMTC funds to rural areas of Vermont.
For more information about Vermont Rural Ventures and the New Markets Tax Credit Program please email Beth Boutin or call her at (802) 863-8424.