Mid Mon Valley Cultural Trust to seek designation

The Mid Mon Valley Cultural Trust will be seeking Special Program Priorities status for the Coyle Theater project.  This would entitle them to secure a 75% tax credit for corporate contributions

The Pennsylvania Department of Community and Economic Development (the “Department” or “DCED”) is authorized to administer the Neighborhood Assistance Program (NAP) under Article XIX-A of the Tax Reform Code of 1971, known as the Neighborhood Assistance Act (Act 48-1994) (72 P.S. §8901-A, et. seq.), as amended. There are five components to this program: the Neighborhood Assistance Program Regular Tax Credit (NAP Regular), the Special Program Priorities (SPP), the Neighborhood Partnership Program (NPP), the Enterprise Zone Program Tax Credit (EZP), and the Charitable Food Program (CFP).

The goal of the Neighborhood Assistance Program is to improve distressed neighborhoods throughout the state by using tax credits as an incentive to forge partnerships between community-based organizations and the business community. Started in 1967, NAP was the first program of its kind in the United States and became a national model, with 10 other states implementing a similar state program. NAP uses the funds invested by the private sector for a wide range of programs and projects that improve conditions in communities, making them better places to live.

Amendments to the Tax Reform Code, also known as Act 55 which passed in 2007, made several changes to the program, not the least of which was highlighting the original legislative intent that NAP assistance be used for place-based approaches and community development efforts. The NAP-supported activities should target a geographically-defined distressed area within a city or an entire community. Those activities should have measurable impact or outcomes that improve the physical and/or economic conditions of that targeted place. While the activities supported may include a variety of human/social services, those activities must demonstrate that a targeted distressed place (neighborhood or community) will experience improvements that make for a better place to live. Additionally, Act 55 made other key improvements:

·     Increased the tax credit percentages

·     Raised the tax credit limit on the maximum amount of credits a firm can receive

·     Expanded eligibility to subchapter S corporations, limited liability corporations and partnerships

·     Authorized the sale or transfer of unused credits

The purpose of these guidelines is to define the eligibility requirements and procedures necessary for neighborhood organizations and business firms to utilize or obtain tax credits for approved projects that will improve distressed areas under the NAP Regular and SPP tax credit components. Separate guidelines are issued for the NPP, EZP, and CFP components of NAP. Check those guidelines for specifics and program requirements for those components.

NAP tax credits can be used in support of projects approved by the Department when a business firm makes a contribution to a neighborhood organization for such an approved project. The tax credits awarded to a business firm are up to 55% for NAP Regular (or up to 75% for SPP) of the amount of a business firm’s contribution to the project. To receive the credits the business firm must also file a separate application with the Department that is then forwarded to the PA Department of Revenue. Contributions that are eligible for a tax credit include contributions undertaking an approved project for Affordable Housing, Community Economic Development, Community Services, Education, Neighborhood Assistance, Neighborhood Conservation, Crime Prevention or Job Training.