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The credit provides an incentive for investment in low-income communities. The U.S. Department of the Treasury competitively allocates tax credit authority to intermediaries that select investment projects. Investors receive a tax credit against their federal income tax. NMTC investors provide capital to community development entities (CDEs), and in exchange are awarded credits against their federal tax obligations.
Investors can claim their allotted tax credits in as little as seven years - 5% of the investment for each of the first three years and 6% of the project for the remaining four years - for a total of 39% of the NMTC project. A CDE can be its own investor or find an outside investor. Investors are primarily corporate entities-often large international banks or other regulated financial institutions-but any entity or person is eligible to claim NMTCs.
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The best way to explain the General Income Tax Credit for hiring new employees is by highlighting how the General Income Tax Credit works in the following:
The following is an illustration of how the Large State Income Tax Credit for hiring economically disadvantaged employees works:
The following is an illustration of how the New Job Creation Tax Credit for hiring economically disadvantaged employees works:
Any new or existing businesses investing in new plants and equipment in the City of Seat Pleasant may claim a business personal property tax credit entitling them, over a 10-year period, to an 80% reduction in their taxes on these investments in new fixed assets over a 10-year period. An illustration is highlighted in the following depicting how the Business Property Tax Credit operates:
Any real estate developer owning real property in the City of Seat Pleasant and that expends funds on any new construction or improvement to nonresidential units in the City of Seat Pleasant may claim a 10 year Real Property Tax Credit of 80% to reduce his or her real property taxes resulting from this investment in new construction or improvement to his or her real property. To qualify, an entity must:
The City of Seat Pleasant was designated as an Opportunity Zone by the United States Treasury Department and the Governor of Maryland as of June 2018. This entitles investors with high unrealized capital gains to cash in the appreciation of their gains while deferring the taxes on the gains if they redirect these gains into properties located in areas approved as Opportunity Zones. The City of Seat Pleasant was designed as Opportunity Zones to spur economic development by providing tax benefits to investors:
The purpose of the HEZ Investment Initiatives is to:
Under the Sustainable Community Designation, the City of Seat Pleasant may apply for funding to cover a developer's soft costs for marketing studies, architectural drawings or renderings.
A Qualified Opportunity Fund is an investment vehicle that is set up as either a partnership or corporation for investing in eligible property that is located in a Qualified Opportunity Zone.
No, you can get the tax benefits even if you don't live, work or have a business in an Opportunity Zone. All you need to do is invest a recognized gain in a Qualified Opportunity Fund and elect to defer the tax on that gain. Along with the tax benefit associated with the Opportunity Zones program outlined about the City can also use New Market Tax Credit to attract high net worth investors looking for tax concessions.
The City of Seat Pleasant is in a qualified HUB Zone and any business located in the city that is minority owned and whose owners live in the city can apply to become a HUB Zone certified business. The HUB Zone program has three mechanisms for targeting contracts to HUB Zone certified businesses:
In the eight-year period from Fiscal Year (FY) 2000 through FY 2007, there have been about 21,350 contracts totaling $6.28 billion awarded through the three HUB Zone mechanisms.
All investors are vetted for consistency with statutory goals and purposes of the program, with an independent review of credit and financial soundness of the borrower, and projections
To apply for a business license please visit our Business License Application page.
The purpose of the ED-RLF is to assist with business financial needs that will create and retain employment opportunities in the City of Seat Pleasant, with major emphasis on employment for persons from low-to-moderate income households. For application and eligibility information please visit the Economic Development section.
The United States EB-5 Visa, Employment-Based Fifth Preference Category or EB-5 Immigrant Investor Visa Program, created in 1990 by the Immigration Act of 1990, provides a method for eligible Immigrant Investors to become lawful permanent residents - informally known as "green card" holders - by investing at least $1,000,000 to finance a business in the City of Seat Pleasant that will employ at least 10 American workers.
Most immigrant investors who use the EB-5 program can invest in a targeted employment area (TEA) such as the City of Seat Pleasant an area of high unemployment. The investment threshold has been lowered to $500,000. The EB-5 program is intended to encourage both "foreign investments and economic growth. The EB-5 program is intended to encourage both "foreign investments and economic growth.
The EB-5 Immigrant Investor Visa Program is one of five employment-based (EB) preference programs in the United States. Immigrant investors have the choice of investing individually in target areas such as City of Seat Pleasant or they can choose to work through a larger investor pool via regional centers. Regional centers are federally approved third-party intermediaries that "connect foreign investors with developers in need of funding, and channel these investment into target areas such as the City of Seat Pleasant.
By clicking this module, an illustration of the tax saving on a capital gain investment of $100,000 into an opportunity fund for properties in an opportunity zone investment versus cashing in the gains now and paying the taxes and place the balance into a non-opportunity zone asset yielding 15% over a ten-year period. The illustration assumes a 15% annual return and 37% combined income tax bracket.