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Tax Credit Finance

Client and Industry Challenges

While tax credit financing serves as a viable alternative to conventional financing, tax credit structures typically involve multiple layers of debt and equity that can give rise to complicated business, tax and regulatory challenges.

Snell & Wilmer’s tax credit finance practice is one of the largest in the Southwest. We have experience in representing all of the parties involved in tax credit finance transactions, and have developed vast networks to assist clients in maneuvering within this highly specialized area. Our group has closed transactions involving Low-Income Housing Tax Credits, Historic Tax Credits, New Markets Tax Credits and Renewable Energy Tax Credits, among other credit programs.

Clients We Serve

Our tax credit and finance clients include developers, syndicators, public housing authorities, lenders, broker-dealers, credit enhancers, direct investors and end users. We have structured and closed transactions throughout the country in urban, suburban and rural locations.

Why Clients Select Us

Invested and Involved: Our tax credit finance group is at the forefront of new and developing areas involving the use of tax credits. We regularly host, speak at and attend tax credit seminars, and periodically publish articles and legal alerts with the goal of keeping our clients and communities abreast of upcoming deadlines and new legislation involving tax credit programs.

Dynamic Approach: Our team is comprised of attorneys from a number of different disciplines including tax, commercial finance, real estate, environmental, securities, construction, public policy and renewable energy. Our range of experience in, and perspectives on, the tax credit industry allows us to deliver innovative and strategic legal advice to our clients.

Experience

Examples of our areas of service include:

Low-Income Housing Tax Credits: The Low-Income Housing Tax Credit program is designed to facilitate the financing of residential rental housing within the United States for individual low-income tenants. Our attorneys have represented investors, syndicators, developers and lenders with respect to Low-Income Housing Tax Credit transactions including structures that involve a Historic Tax Credit component. We regularly advise clients regarding Year 15 exit strategies as well as the tax credit application process. We work closely with attorneys from our affordable housing and community development and government relations groups to assist our clients in shaping public policy in this area.

New Markets Tax Credits: The New Markets Tax Credits program provides financing for real estate projects and businesses located in certain designated areas within the United States. Our attorneys have represented lenders with respect to making leverage loans and community development entities with respect to obtaining allocations of income tax credits. The Snell & Wilmer tax credit finance group has represented numerous real estate developers in obtaining New Markets Tax Credit financing for their real estate projects and is currently working with renewable energy developers in utilizing New Markets Tax Credit financing by "twinning" the New Markets Tax Credit and the Investment Tax Credit.

Renewable Energy Tax Credits: Tax credit financing and the monetization of tax benefits are significant sources of financing for renewable energy projects. Our group advises renewable energy developers and investors with respect to structuring transactions that utilize Investment Tax Credits, Production Tax Credits and the Section 1603 Cash Grant. Our attorneys are well-versed in structuring projects employing partnership flip, sale-leaseback and lease pass-through structures, and have worked on transactions involving solar, wind, biomass, landfill gas and geothermal renewable sources. Our group works directly with attorneys from the renewable energy group to counsel renewable energy developers with respect to project finance including the structuring of debt financing.

Other Income Tax Credits: In addition to the income tax credits mentioned above, we have experience advising clients with respect to other income tax credits such as the Qualifying Advanced Energy Project Credit described in Section 48C of the Internal Revenue Code and the Qualifying Therapeutic Discovery Project Credit described in Code Section 48D.

Representative Matters:

  • Served as lead tax counsel to a large residential solar integrator in obtaining groundbreaking IRS private letter ruling regarding the tax treatment of the sale of renewable energy credits (RECs)
  • Served as lead tax counsel to Low-Income Housing Tax Credit developer with respect to a transaction involving grant proceeds from Section 1602 of the ARRA and the monetization of the income tax losses to an investor
  • Served as tax and corporate counsel to developer using New Markets Tax Credit and Historic Tax Credit financing to develop and operate hotel
  • Served as lead tax counsel to developer obtaining New Markets Tax Credit financing to finance the commercial portion of a vertical mixed-use structure whereby the residential units involved financing from Low-Income Housing Tax Credits
  • Served as lead tax counsel to solar project developer in its construction of utility-scale solar plant using New Markets Tax Credit financing and the monetization of Investment Tax Credits
  • Served as tax counsel for CDE that requested private letter ruling from the Internal Revenue Service for special allocation by a partnership of the New Markets Tax Credit (and cited in the Novogradac New Markets Tax Credit Handbook)
  • Represented QALICB with respect to a New Markets Tax Credit and Historic Tax Credit Transaction
  • Represented large national tax credit syndicator with respect to the syndication of Low-Income Housing Tax Credits and Historic Tax Credits
  • Served as tax counsel to numerous publicly traded companies with respect to their acquisition of limited partnership interests in order to obtain Low-Income Housing Tax Credits
  • Represented southwest solar company on photovoltaic solar facilities throughout southwest including formation of entities and use of New Market Tax Credit (NMTC) and BIA loan guaranty program to finance the projects