The opportunity zone program, authored by N.J. U.S. Senator Cory Booker, was created under the 2017 Tax Cuts and Jobs Act to provide local and national investors with a tax incentive for investments made in economically distressed areas of the country.
Under the federal legislation, eligible Opportunity Zones were low-income census tracts with a poverty rate of 20% or a median family income up to 80% of the area median. Governor Murphy was authorized to designate up to 25% of the state’s eligible low-income census tracts (up to 169 tracts) as Opportunity Zones. A total of 169 tracts were nominated on March 20, 2018, and approved by the US Department of the Treasury on April 9, 2018. (N.J. Department of Community Affairs has posted some Opportunity Zone Information on its website.)
Local leaders in communities with zones should familiarize themselves with how the incentive works and be aware of how the program could influence investment in their communities.
The Internal Revenue Service (IRS) is currently working through the opportunity funds’ rulemaking process in order to address outstanding investor questions. Opportunity fund investment will likely increase once rules are finalized. In the meantime, National League of Cities (NLC) tax and finance experts, Brian Egan, Kyle Funk and Michael Wallace have compiled some frequently asked questions, a map of each designated zone, and a host of other external resources to help local leaders find answers to their questions.
Visit NLC’s resource page to learn more and stay updated on their continuing work on opportunity zones.
Contact: Jon Moran, Senior Legislative Analyst, email@example.com, 609-695-3481, x121.