The Obama administration recently revealed its proposed $3.9 trillion federal budget for fiscal year 2015. Like Chairman Camp’s tax reform proposal and the proposed EXPIRE Act tax extenders package discussed in previous blog posts, the Obama administration’s budget includes a number of interesting tax credit-related proposals. Highlights include:
- Permanently extending the New Markets Tax Credit (NMTC) with a $5 billion annual allocation
- Authorizing States to convert a portion of their private activity bond volume cap into additional low-income housing tax credit (LIHTC) allocating authority
- Allowing LIHTC development owner’s to elect a third possible low-income set aside in which at least 40% of a project’s units must be occupied by tenants whose incomes average no more than 60% of area media gross income (with the caveat that no low-income unit could be occupied by a tenant with income over 80% of AMI)
- Increasing the discount rate used in calculating LIHTCs for non-bond financed projects
The U.S. Department of the Treasury’s General Explanation of the Administration’s Fiscal Year 2015 Revenue Proposals (the “Greenbook”) can be found here.
Versions of many of the FY 2015 budget proposals were included in previous budgets, and in general the FY 2015 budget seems to be getting less buzz in tax reform circles than either Chairman Camp’s proposal or the EXPIRE Act, which is actually moving through Congress. In any event, the FY 2015 budget is significant in that it adds another voice to the tax reform debate, and signals Presidential support for the renewal of the NMTC program.