Tax Credit Finance

Navigating federal and state tax credits for individual and project funding can be a complex and daunting task. Our team has extensive knowledge and experience in helping our clients realize available funding and government incentives to help them achieve their financial goals.

Taft attorneys have experience advising clients in all aspects of the process to obtaining tax credits, including analysis as to eligibility for credits; analyzing and recommending optimal transaction structures; preparing organizational, syndication, loan, acquisition, and related documents; providing tax advice as to qualifying, retaining, optimizing and monetizing tax credits. We represent sponsors, developers, tax equity investors, and operating businesses in transactions that span across industries and capitalization and covering tax credits, including:

• Advanced manufacturing tax credits.
• Historic rehabilitation tax credits.
• Investment tax credits and production tax credits for renewable energy projects.
• Low-income housing tax credits.
• New markets tax credits.
• State tax credits.

As emerging opportunities and changes in state and federal laws arise, our team regularly monitors and researches regulations to maximize our clients’ tax benefits and investment returns.

Energy Tax Credits

• Advised client with respect to all elements of tax credit financing the development of a solar panel production facility, residential grade battery storage production facility, and an EV vehicle charger facility, including analysis of Advanced Manufacturing Tax Credits, Clean Electricity Investment Credits and Production Tax Credits.
• Represented a 200 MW Big Star solar project located in Bastrop County, Texas (including tax equity financing structuring advice and negotiation of county-level tax incentives).
• Represented client with respect to issuing tax insurance covering all elements of the tax equity financing of a portfolio of utility-scale, stand-alone battery energy storage systems (including tax credit eligibility, recapture risk, the accuracy of property appraisal and cost segregation, qualification for Section 6418 tax credit transfer; and eligibility investment tax credit rate “adders”).
• Advised nonprofit client on obtaining energy tax credits for a rooftop/carport solar project and monetizing credits via the Code Section 6417 “direct pay” option.
• Advised client negotiating with tax equity partners/investors in the formation of for-profit subsidiaries to enter into special allocation partnerships for the financing of energy projects and negotiating tax credit issues for solar facility installation and structuring.

Historic Rehabilitation Tax Credits (HRTC)

• Structured, negotiated, documented, and closed a $9.4 million “twin” New Markets Tax Credit (NMTC) and Historic Rehabilitation Tax Credit (HRTC) “combined” financing of mixed-use facilities for two separate borrowers in two separate towns.
• Served as tax credit equity investor’s counsel for lower-tier investments for more than 125 affordable housing tax credit and historic rehabilitation tax credit projects.

Low-Income Housing Tax Credits (LIHTC)

• Representation of developers of multi-family housing, hotels, and operating businesses in the pharmaceutical and food product industries to structure qualified opportunity zone investments.
• Represented tax credit investor in CReED tax credit financing for mixed-use facility.
• Acquisition of “pay as you go” tax increment financing for national affordable housing developer for a Rock Island County, Illinois project.
• Acquisition of “pay as you go” tax increment financing from a municipality and pledge of note as security for Public Finance Authority (PFA) tax-exempt bond financing on behalf of the developer for an industrial project located in Kane County, Illinois.

New Market Tax Credits (NMTC)

• Undertook the joint representation of a statewide Community Development Entity (CDE) and a national CDE in structuring, documenting, and closing the first-ever leveraging of the Indiana Industrial Recovery Tax Credit (DINO) through the New Markets Tax Credit (NMTC) structure, resulting in an $18 million redevelopment of an abandoned rail facility into a state-of-the-art railcar repair facility in rural Indiana.
• Represented a developer in connection with acquiring and redeveloping an existing inner city building for a $16 million mixed-use retail, office, and residential development with financing partially obtained through a New Market Tax Credit (NMTC) loan and federal and state historic tax credits.
• Represented Guam Community Development Entity in connection with financing a charter school in Guam using a combination of New Market Tax Credits (NMTC) and HUD 108 financing.
• Represented a Community Development Entity (CDE) in successfully obtaining a $50 million allocation of New Markets Tax Credits (NMTC) for use in rural projects in Southern Indiana, as well as a second $45 million allocation and a third $15 million allocation, also for use in rural projects throughout the State of Indiana.
• Represented a manufacturing company in a $10 million New Markets Tax Credit (NMTC) financing of a new production line in upstate New York.
• Represented a Community Development Entity (CDE) in structuring and closing a $40 million mixed-use facility in Louisville, Kentucky, which was financed with a combination of New Markets Tax Credit (NMTC) equity from three local and national CDEs, Recovery Zone Facility Bonds, and private bridge equity.