From the NC Department of Commerce:
Comment Period Extended to Recommend Communities for Investment
Deadline for Opportunity Zone recommendations extended to March 27
Raleigh, N.C. – The comment period has been extended for local communities to recommend areas for new federal legislation that could bring investment to economic development where it is most needed. These areas will be designated as North Carolina Opportunity Zones, and communities can submit comments and recommendations to the North Carolina Department of Commerce until Tuesday, March 27.
This new tool for community and economic development is designed to provide tax incentives to qualified investors when they reinvest unrealized capital gains into low-income communities.
“The Opportunity Zones program could bring a needed infusion of investment to our most distressed rural and urban areas,” said N.C. Commerce Secretary Anthony M. Copeland. “We are soliciting recommendations from local governments, businesses, nonprofits and anyone interested in making their community a better one. Many communities across the state have provided recommendations, and we hope to get more with this extended deadline.”
Recently passed federal legislation, known as The Tax Cuts and Jobs Act (H.R.1), authorizes each state to designate up to 25 percent of its total low-income census tracts as qualified Opportunity Zones. Low-income census tracks are areas where the poverty rate is 20 percent or greater and/or family income is less than 80 percent of the area’s median income.
North Carolina has just over 1,000 qualifying low-income census tracts. The state is authorized to designate up to 252 census tracts as Opportunity Zones. N.C. Commerce is responsible for developing a list of recommended census tracts, and is looking to local communities to make recommendations by March 26 for N.C. Commerce to report to the U.S. Department of the Treasury by April 20, 2018.
The Department of Commerce has published a website, http://public.nccommerce.com/oz/ with more information and a form for submitting recommendations. Interested parties can also contact Business Link North Carolina (BLNC) at (800) 228-8443. All public comments are due by March 27, 2018.
The U.S. Department of the Treasury is still in the process of developing criteria to determine how qualified Opportunity Funds will be certified, and the process they will follow to certify those funds. The U.S. Department of the Treasury has not released a timeline for when capital may begin to flow, but earliest estimates point to late 2018 or early 2019.
The tax advantages for investors are expected to draw significant interest in the program. Qualified investments made by designated Opportunity Funds into Opportunity Zones will receive three key federal tax incentives to encourage investment in low-income communities including:
• A temporary tax deferral for capital gains reinvested in an Opportunity Fund
• A step-up in basis for capital gains reinvested in an Opportunity Fund
• A permanent exclusion from taxable income of long-term capital gains
For more information about the Opportunity Zones Program and related legislation, visit http://public.nccommerce.com/oz/.