U.S. Sens. Roger Wicker, (R-MS), Cindy Hyde-Smith, (R-MS), Mark Warner (D-VA), and Chris Van Hollen (D-MD) recently introduced legislation that would promote economic development in underserved communities through tax credits.

© Shutterstock

The Community Development Investment Tax Credit Act (S.4418) creates a new tax credit for private investments in qualified community development financial institutions (CDFIs), aiding rural, minority, and low-income communities.

“Small businesses, including those in low-income and minority communities, are a pillar of the economy in Mississippi and across the nation,” Wicker said. “CDFIs support businesses, individuals, and entrepreneurs by providing access to capital and alternatives to predatory loans in low-access areas. I am glad to join my colleagues on this bipartisan measure to create an additional tax credit to support and expand this private-sector investment.”

The senators maintain additional private sector investment unlocks more equity and long-term financial capital for small businesses and individuals in areas with less access to traditional banks or loans.

“CDFI investments are a critical source of capital for small business growth in many Mississippi communities and around the country,” Hyde-Smith said. “This bill would create a tax credit structure to attract greater private-sector investments in CDFIs, which would increase their ability to spur more long-term growth in disadvantaged areas.”

Per the measure, CDFIs of all types would benefit from the bill, providing institutions with the maximum flexibility and financial support they need to increase wealth in low- and moderate-income communities.