Submit nominations for target areas by March 7
Economic recoveries have a history of skipping America’s low income and rural regions like West Virginia. A new program called Opportunity Zones is designed to change that.
Here’s a basic overview of how it works:
- Part of the 2017 Tax Cuts and Jobs Act, the program gives each governor the authority to designate low-income areas in his or her state as “Opportunity Zones.”
- The areas are eligible to receive private investments through Opportunity Funds.
- Businesses in the area get a much-needed infusion of capital.
- In return, the investors get tax incentives.
Of course, the details get more complicated. The rules for what makes an area eligible to be designated an Opportunity Zone are based on intricacies such as “low-income census tracts where the individual poverty rate is at least 20 percent or median family income is no greater than 80 percent of the area median.” Governors can determine up to 25 percent of the total number of eligible areas to be designated as Opportunity Zones. And so on.
Under the direction of Governor Jim Justice, the West Virginia Department of Commerce will research to evaluate eligible census tracts. Commerce is inviting communities and counties to submit proposals with data that will figure into the recommendations on which areas to nominate. Additionally, Commerce is working with the Federal Reserve, Community Development Financial Institutions, local banks, investors and developers to identify potential projects that could be attractive to Opportunity Funds and investors.
Submit proposal by March 7 deadline
To take part in this program, West Virginia needs to act fast. States must turn in Opportunity Zone nominations by March 21. That means West Virginia areas wanting to be an Opportunity Zone must submit their proposals online by Wednesday, March 7. Details about the Opportunity Zone program and the Public Proposal Application are available at www.westvirginia.gov.
Fund managers and investors may submit letters of interest to the West Virginia Department of Commerce. Contact information and sample letters are available on the Opportunity Zone page of the www.westvirginia.com website.
Tax deferred investment incentives
Lower taxes are the incentive to invest in Opportunities Zones. Investors can defer taxes on capital gains from a qualified Opportunity Fund, the investment vehicle that will drive needed capital into the underserved Opportunity Zone.
Capital gains are what you have when you sell something for more than you paid to get it. The shorter the time you keep your investment, the bigger the tax bite on the capital gain. The longer you hold on to the investment, the lower the tax.
Put your money where our need is
Census data shows that across the nation, poverty is higher and job creation lower in rural areas than in urban.
West Virginia is a mostly rural state. With your help, the Opportunity Zone program will direct investment dollars into our struggling communities where it’s need it most.