Dudley Ventures

• Jazz @ Walter Circle East St. Louis, Illinois
• Westin Beale Hotel Memphis, Tennessee
• Historic Crispus Attucks Theatre Norfolk, Virginia
• Kress at 3rd & Main Baton Rouge, Louisiana
• Holy Cross School New Orleans, Louisiana

New Markets Tax Credits

The New Markets Tax Credit Program is a $33 billion federal statutory program created in 2000 pursuant to Section 45(D) of the Internal Revenue Code to encourage investment in low income communities. The NMTC Program provides a dollar-for-dollar reduction of tax liability to expand the capacity of financial institutions to provide capital, credit and financial services in underserved markets. Additional tax savings are provided through passive losses generated by qualified equity investments made pursuant to the Program. Section 45(D) credits are a permanent reduction of current and future tax liability, not a deferral of tax liability.

The Program is administered by the Community Development Financial Institutions Fund (“CDFI Fund”), a branch of the U.S. Department of the Treasury, and permits taxpayers to receive a credit against federal income taxes. The New Markets Tax Credit is 39% of the investment amount. The credit is claimed over a seven-year period, with 5% percent taken in each of the first three years and 6% taken in each of the next four years.

An allocation of credits is awarded to Community Development Entities by the CDFI Fund and then allocated to qualifying projects. To qualify as a CDE, an entity must be a domestic corporation or partnership that: (1) has a primary mission of serving, or providing investment capital for, low-income communities or low-income persons; (2) maintains accountability to residents of low-income communities through their representation on a governing board of or advisory board to the entity; and (3) has been certified as a CDE by the CDFI Fund.

Qualified CDEs apply to the CDFI Fund for tax credit allocations that are awarded annually through a competitive application process. Upon receiving an allocation of New Markets Tax Credits, CDEs have five years to utilize the allocation. In order for an investment to qualify for the NMTCs, the investment must be made through a CDE to either a business or a non-residential, commercial property that is located in a designated low-income community.

We work in all areas of the NMTC Program, including investment (debt & equity), acquiring tax credits for project development, fund reporting and asset management.