The Maine New Markets Capital Investment Program attracts investment capital to low-income communities by allowing investors to receive a state tax credit on equity investments they make in Community Development Entities (CDE).
This program is modeled after the federal New Markets Tax Credit Program.
Funded in cooperation with Maine Revenue Services and the Maine Department of Economic and Community Development. Administered by FAME.
In order to be eligible to participate in the program, a CDE must be certified as a qualified Community Development Entity by the Secretary of the United States Treasury, and be a party to an existing allocation agreement with the Department of Treasury’s Community Financial Institution (CDFI) Fund that is in effect and not subject to revocation or cancellation. The allocation agreement must have Maine in its service area. In addition, the CDE must be able to answer four of the following five questions affirmatively:
- Has the CDFI Fund been awarded multiple rounds of federal New Markets Tax Credit allocation to the CDE, its controlling entity or other entity controlled by the same controlling entity?
- Has the CDE, its controlling entity or other entity controlled by the same controlling entity, participated as a qualified community development entity in a state New Markets Tax Credit program or made an investment in this state that qualifies for federal New Markets Tax Credits?
- Has the CDE, its controlling entity or other entity controlled by the same controlling entity, made an investment qualified for tax credits in a business located in a nonmetropolitan census tract?
- Has the CDE, its controlling entity or other entity controlled by the same controlling entity, made an investment qualified for tax credits in a state where it did not previously have substantial operations?
- Has the CDE, its controlling entity or other entity controlled by the same controlling entity, explored potential investment opportunities in Maine that would qualify for credits under the program?
- A CDE may seek an allocation of tax credit authority, reserving tax credit eligibility for later qualified equity investments, by filing an allocation application with FAME.
- An approved allocation of tax credit authority shall be valid for up to two years.
- Upon receipt of qualified equity investments under the approved allocation, and reinvestment in a qualified active low-income community business for use in a low-income community in the state, the CDE must file a certification application with FAME providing the details of the transaction.
- FAME will review the certification application to determine if the qualified equity investment is eligible for program tax credits, and if approved provides notice to the CDE and to Maine Revenue Services of the persons eligible for credits and the amount thereof. Maximum eligible investment per qualified active low-income community business is $40,000,000.
- Eligible tax credit recipients may receive refundable state income tax credits of up to 39% of their eligible investment, which may be taken in increments over seven years (0%, 0%, 7%, 8%, 8%, 8%, 8%).
A CDE that has been awarded tax credit allocation authority must file an annual report with FAME. See program rule for reporting requirements.
If a CDE violates the Rule or provisions of relevant statutes, the tax credits may be subject to recapture pursuant to 36 M.R.S.A. Section 5219-HH.
Click here to view Allocation Application.
Click here to view Certification Application.
For best results, please download .pdf forms locally, then open and complete them with Adobe Acrobat. If you don’t have Acrobat, you can download a free version of Adobe Acrobat Reader here. Save and print your completed forms, then mail to FAME.