HB1103, the New Markets Tax Credit Extension Act of 2025, would permanently extend the federal New Markets Tax Credit (NMTC) under section 45D of the Internal Revenue Code. The bill changes the current sunset so that the credit, which had been authorized through calendar year 2025, would continue for calendar year 2020 and each year thereafter, effectively making the program permanent for future tax years. It also removes a now-unneeded conforming sentence tied to the prior expiration date.
In addition to making the credit permanent, the bill adds an inflation adjustment to the annual dollar amount used in the NMTC allocation formula for years beginning after 2025, with increases rounded to the nearest $1 million. The bill also provides alternative minimum tax relief by allowing the NMTC to count against the AMT for credits tied to qualified equity investments made after December 31, 2024. The effective date generally applies to taxable years beginning after December 31, 2024, with the AMT-related change applying to qualifying investments made after that date.
Impact
The bill would amend Internal Revenue Code section 45D to remove the program’s scheduled expiration, index the credit allocation amount for inflation, and expand usability of the credit by ensuring it can offset alternative minimum tax liability for new qualified equity investments. Its practical effect would be to preserve and potentially increase the availability of NMTC financing for community development projects in low-income areas, affecting investors, community development entities, and businesses seeking capital in underserved neighborhoods.
Sentiment
The bill appears to have broadly supportive, bipartisan sponsorship, with a large group of House members from both parties listed as cosponsors. No committee transcript or vote record is provided, so there is no recorded floor debate or formal vote sentiment in the materials supplied. Based on the sponsorship pattern and the nature of the proposal, the bill is presented as a continuation and strengthening of an existing economic development incentive rather than a controversial policy change.
Contention
No specific points of contention are documented in the provided materials because there are no committee transcripts or votes. Potential areas of debate, based on the bill’s substance, would likely include the cost of making the credit permanent, whether the NMTC effectively targets investment to distressed communities, and whether extending AMT relief and inflation indexing would expand the program beyond its intended scope. However, these concerns are not attributed to any named members or groups in the record provided.