Senate Finance Committee Taskforce on Expiring/Expired Tax Provisions, Including NMTCs, Releases Final Report
On August 27, the Senate Finance Committee released the final report from the Employment and Community Development (E&CD) Taskforce on temporary tax policy. The taskforce was one of six bipartisan taskforces formed by Senate Finance Committee Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) in May to examine more than 40 temporary tax provisions that expired, or will expire, between December 31, 2017 and December 31, 2019. The E&CD taskforce was specifically charged with examining six tax policies designed to encourage increased participation in the workforce and to expand economic opportunity in low-income communities, including the New Markets Tax Credit (NMTC).
In June, Enterprise both met with and submitted a comment letter to the E&CD taskforce to express its support of the permanent extension of the NMTC program. Enterprise's letter, along with fifteen others relating to NMTCs, are included and summarized within the taskforce’s report. All except one of these letters are in favor of the permanent expansion of the NMTC program.
The taskforce’s report summarizes comments received about the NMTC into six general categories:
- Making the NMTC permanent
- Increasing the NMTC allocation and indexing it to inflation
- Providing relief from the AMT for NMTC investors
- Improving the program’s ability to serve Native American communities
- Improving NMTC administration
- Allowing the credit to expire
Ultimately, the E&CD taskforce did not come to consensus to make recommendations related directly to the NMTC. The E&CD taskforce provided three recommendations reflecting consensus among its members; the first recommendation notably acknowledged the negative effects of temporary, short-term reauthorizations of tax incentives and suggested that where possible, “tax policy should be enacted with long-term time horizons, if not on a permanent basis.” The other two consensus recommendations concerned the Indian employment tax credit and the American Samoa economic development credit.
Enterprise will continue to advocate for the permanent extension of the NMTC, which is currently set to expire at the end of the year. Meanwhile, legislation to permanently extend the NMTC, the New Markets Tax Credit Extension Act of 2019 (S. 750 and H.R. 1680), continues to gain bipartisan support with 97 cosponsors in the House and 31 cosponsors in the Senate to date.
Earlier in August, the Senate Finance Committee released reports from three of the other taskforces: the Energy Taskforce, the Cost Recovery Taskforce, and the Individual, Excise, and Other Temporary Tax Policy Taskforce. The remaining two taskforces, which relate to health tax policies and natural disaster tax relief provisions, are expected to release their final reports in the coming weeks. Each of these reports include the feedback from stakeholder groups and other individuals affected by these temporary tax policies.
To view the E&CD taskforce report, click here.