Renewal Communities

Overview

Areas designated as Renewal Communities (RCs), are distressed areas in urban and rural communities that receive special federal income tax treatment and other incentives, totaling more than $5 billion in tax credits.

Through this initiative, HUD designated 40 of the most distressed communities as Renewal Communities and will provide them with specific tax incentives that will last from January 2002 through December 31, 2009.

North Louisiana and Central Louisiana were selected as two rural RCs.
Orleans Parish and Ouachita Parish were selected as two urban RCs.
A total of 29 Louisiana parishes are part of the RC Initiative.

Benefits

Wage Credit
Up to $1,500 or 15% of an employee's salary up to $10,000 for each employee who lives and works in the Renewal Community.

Work Opportunity Credit*
Up to $2,400 for employees hired from groups that have high unemployment rates or other special employment needs, including those from ages 18 to 39 who live in the Renewal Community. Other qualified groups include veterans, ex-felons, supplemental nutritional assistance program recipients, vocational rehabilitation referrals and summer youth.

Welfare to Work Credit*
Up to $3,500 for the first year and $5,000 for the second year for each new hire on long-term family assistance.

Increased Section 179 Deduction
Allows businesses to take a deduction of up to $35,000 on equipment purchases. Also allows businesses to deduct all or part of the equipment cost the year purchased instead of deducting the expense over time.

Commercial Revitalization Deduction
Allows businesses that construct or rehabilitate commercial property to deduct a portion of the cost over a shorter period of time than permitted under standard depreciation rules.

Environmental Cleanup Cost Reduction*
Allows businesses looking for land to deduct cleanup cost of hazardous substances in qualified areas. Must be the same year the cost incurred.

Qualified Zone Academy Bonds*
State or local governments can issue bonds at no interest to finance certain public school programs in schools that have at least 35% of students eligible for free or reduced-cost lunch program. Private businesses must contribute money, equipment or services equal to 10% of bond proceeds. The federal government pays the interest in the form of federal tax credits.

New Market Tax Credit
Investors in qualified projects can obtain a federal income tax credit of 5% to 6% of the amount invested for each of the years the investment is held, for up to seven years of the credit period.

Zero Percent Capital Gains Rate
A business that holds an asset for at least five years does not have to pay taxes on the profit of its sale.

Low Income Housing Credit*
Ten-year credit for owners of newly constructed or renovated rental housing who set aside a number of units for lower income residents for a minimum of 15 years. The state must allocate a portion of its annual cap.

*Also available outside Renewal Communities

Eligibility

To determine if your business is located in a RC and/or if you are eligible for tax benefits, visit RenewalLa.com.

How to Apply

For application information on Renewal Communities Incentives, visit RenewalLa.com.

Administration

For more information on Renewal Communities Incentives, contact Northeast Louisiana Economic Alliance at 318.757.3033 or visit RenewalLa.com.