Qualified Opportunity Zones
On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) created Qualified Opportunity Zones, a tool for promoting long-term investment in low-income communities.
The federal tax bill passed at the end of December 2017 enables the governor to designate certain census tracts as Opportunity Zones. Investments made by individuals through special funds in these zones would be allowed to defer or eliminate federal taxes on capital gains. The governor was given the opportunity to designate up to 25 percent of census tracts that either have poverty rates of at least 20 percent or median family incomes of no more than 80 percent of statewide or metropolitan area family income. There are nearly 1,200 eligible census tracts and the governor designated 300 tracts based on economic data, recommendations from local partners, and the likelihood of private-sector investment in those tracts.
Collection of Recommendations
DCED received robust feedback following the posting of the Opportunity Zones web page.
Comments and recommendations were received from a total of 132 individuals, cities, counties, legislators, and organizations. A total of 734 eligible low-income census tracts were recommended to the state for designation, which is 61% of the entire eligible pool.
Tracts were Recommended Based Primarily on the Following
On June 14, 2018 , 300 tracts were designated as Opportunity Zones.
Timeline for Qualified Opportunity Zones for 2018
- March 30 – Deadline for Public Recommendations
- April 20 – Governor’s Submission of Tracts to U.S. Department of Treasury
- June 14th – Federal Approval of Designations
- October 2018 - Guidance Issued by U.S. Department of Treasury
- January 2019 - Public Hearing on Regulations
- April 2019 - Second round of guidance issued by U.S. Department of Treasury