Congress shouldn't just save the New Market Tax Credit program (NMTC), according to advocates. An expanded NMTC should become a permanent part of the tax code.
“The New Markets Tax Credit has leveraged billions of dollars in private investments,” said Bob Rapoza, a spokesman for the New Markets Tax Credit Coalition. On Sept. 17, the NMTC Coalition delivered a letter to Congress signed by more than 1,200 business and community leaders.
Program advocates like Rapoza are going on the offensive as they press legislators to expand programs like NMTCs, not just preserve them.
In June, Sens. Jay Rockefeller (D-W.Va.) and Roy Blunt (R-Mo.) introduced the New Markets Tax Credit Act of 2013 (S. 1133). This legislation would extend the program indefinitely by making it a permanent part of the Internal Revenue Code and enhance the potential impact of the credit by increasing the annual NMTC allocation. The current authorization for the NMTC expires on Dec. 31.
Right now, Congress is locked into a showdown over a potential government shutdown, as the federal fiscal year ends Oct. 1 and the national debt grows past the debt limit the U.S. sets for itself. If Democrats don't agree to delay or repeal health reform, several dozen conservative legislators threaten to purposely miss both deadlines, shutting down the government and defaulting on the debt.
It looks unlikely that an angry Congress will quickly come to consensus on comprehensive tax reform, which could easily sweep up programs such as NMTCs and the low-income housing tax credit. But looks can be deceiving. Much of the groundwork for comprehensive tax reform has been laid. This summer, legislators and Congressional staffers engaged in serious negotiations in the House Ways and Means Committee led by Rep. David Camp (R-Mich.) The top legislators on the Senator Finance Committee, Max Baucus (D-Mont.) and Orrin Hatch (R-Utah) called for a "blank slate approach" to tax reform.
That's why advocates like the NMTC Coalition are reaching out to Congress now.