The U.S. Department of the Treasury (DoT) recently approved Pennsylvania’s nominations for designation of 300 census tracts across the state 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,” Gov. Tom Wolf said. “Designation as an opportunity zone is one piece of the puzzle that can help many of our distressed communities across the commonwealth.”
The Qualified Opportunity Zone, which was created through the Federal Tax Cuts and Jobs Act, is designed to promote long-term investment in low-income communities. The program provides investors with tax benefits for making private equity investments in funds that will invest in businesses, real estate and other ventures in low-income community census tracts. Incentives include deferral, reduction and potential elimination of some federal capital gains taxes.
The program aims to enable private equity fund managers and investors to pool resources and increase the scale of investments going to low-income areas.
DoT is still developing the Opportunity Zones program. The Internal Revenue Service (IRS) is expected to announce further information related to opportunities for investment in zones in the coming months.
The Pennsylvania Department of Community and Economic Development (DCED) provides a list of approved tracts, an interactive map and other information about the opportunity zone program on its Qualified Opportunity Zones website.