Wolf Administration Announces Approval of Nominated Economic Opportunity Zones
Harrisburg, PA – Today, Department of Community and Economic Development (DCED) Secretary Dennis Davin announced that the U.S. Department of the Treasury has approved the commonwealth’s nominations for designation of 300 census tracts across Pennsylvania as Qualified Opportunity Zones.
“Approval of our nominated tracts is an important step in the process of bringing critical investment and development to these areas,” said Governor Tom Wolf. “Designation as an opportunity zone is one piece of the puzzle that can help many of our distressed communities across the commonwealth.”
The list of approved tracts, an interactive map, and additional information about the opportunity zone program can be found at DCED’s Qualified Opportunity Zones website. The U.S. Department of the Treasury is still in the process of developing the Opportunity Zones program, and the IRS is expected to provide further information regarding opportunities for investment in zones in the coming months.
The Federal Tax Cuts and Jobs Act created the Qualified Opportunity Zones as a tool for promoting long-term investment in low-income communities. Through this program, investors are provided tax benefits for investing capital gains in low-income community census tracts, as well as certain tracts adjacent to low-income tracts. The new tax incentive is for private investors making private equity investments in funds that will then invest in businesses, real estate, and other ventures in low-income communities. The incentive offers deferral, reduction, and potential elimination of certain federal capital gains taxes.
U.S. investors currently hold trillions of dollars in unrealized capital gains in stocks and mutual funds alone, making it a potentially significant untapped resource for economic development. Opportunity funds that invest in Qualified Opportunity Zones provide investors the chance to put that money to work rebuilding the nation’s distressed communities. The fund model will enable a broad array of private equity fund managers and investors to pool their resources, increasing the scale of investments going to under-served areas.
Michael Gerber, DCED, 717.783.1132