Housing Vermont

New Market Tax Credit Program

Congress created the New Market 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. Vermont Rural Ventures will use its New Market Tax Credit resources to support investment in the economic, environmental, and social well-being of Vermont communities. NMTC funds will be 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.

Upon making an investment in a CDE, the NMTC provides a 39% federal income tax credit over seven years. Investors receive a tax credit equal to 5% for each of the first three years and 6% for each of the last four years. Investors can be any taxable entity, individual, corporation or investment fund. Typically investors are banks, insurance companies, venture capital and other investment funds, corporations and individuals.

Prospective NMTC projects generally need to be located in qualified census tracts. In Vermont those areas include much of northern Franklin, Grand Isle, Lamoille, Essex and Orleans counties as well as parts of the towns and cities of St. Albans, Rutland, Bennington, Fair Haven, Burlington, Winooski, Newport, St. Johnsbury and Brattleboro. See the maps for more detail or go to the Novogradac & Company website to look up a specific site.

To see how NMTC have been utilized in Vermont, click here to view the Richford Main Street Mill project and here to learn more about CHT Home Office, located on King Street in Burlington, our newest NMTC property.

VRV will evaluate 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 70% of its NMTC funds to rural areas of Vermont.

For more information, please contact us at vrv@hvt.org.