Development Entity (CDE)
In order to receive an allocation under the NMTC Program, an
organization must be certified as a CDE by the CDFI Fund. To
qualify as a CDE, an organization must:
- be a domestic corporation or partnership at the time of the
- demonstrate a primary mission of serving, or providing investment
capital for, low-income communities or low-income persons; and
- maintain accountability to residents of low-income communities
through representation on a governing board of or advisory board
to the entity.
Qualified Equity Investment (QEI)
A taxpayer wishing to receive a New Markets Tax
Credit must make a QEI in a CDE which has been granted an allocation
of NMTCs. A QEI must be:
- a cash investment in the CDE, and
- substantially all of the cash must be used by the CDE to
make Qualified Low Income Community Investments, and
- the CDE must designate the investment as a QEI.
Qualified Low Income Community Investment (QLICI)
A QLICI is any investment (such as a loan or equity investment)
made by a CDE in a Qualified Active Low Income Community Business.
Qualified Active Low Income Community Business (QALICB)
A QALICB is any corporation (including a non-profit
corporation) or partnership engaged in the active conduct of a qualified
business in a low income community meeting standards pertaining
to gross income, use of property, and services performed. In most
cases, an entity formed to own real estate in a low income community
will meet the standards for a QALICB.
Low Income Community (LIC)
A LIC includes any census tract which has a poverty rate
of at least 20% or a median family income which is 80% or less of
the metropolitan area median family income. A map showing eligible
census tracts in downtown Oklahoma City and downtown Tulsa can be
found by clicking here.