Key Tax Reform Provision Known as Investing in Opportunity Act Highlighted In Letter to Alaska Governor
March 18, 2018
In his letter Sullivan wrote,“… part of the tax bill creates what is called ‘Opportunity Zones,’ which will further promote economic investment in underserved, rural and impoverished areas. This program has received less attention than the overall tax bill, but has significant potential to spur economic growth in our state."
The Investing in Opportunity Act, a bipartisan measure championed by Senator Tim Scott of South Carolina, was one of the many measures – in addition to the historic opening of ANWR’s 1002 to resource development – included in H.R. 1 to encourage growth and investment in the American economy. The provision arose from a group of Congressional members – including Senator Sullivan – convened by Senator Scott called the Opportunity Coalition. The provision works to incentivize investment by temporarily deferring, or in some cases reducing or excluding, certain capital gains taxes for investing in new Opportunity Zones located in “low-income community” census tracts.
“Opportunity Zones are areas that are in qualifying census tracks based on average income of residents living in those tracts. Alaska has approximately 68 such tracks, encompassing a huge swath of our state. Your office will designate 25 of these tracks as Opportunity Zones. Investors can then establish Opportunity Funds to invest in projects within these zones,” Sullivan's letter stated.
The Tax Cuts and Jobs Act calls for the establishment of Opportunity Zones by state Governors by March 21st, 2018 but includes language allowing for a 30-day extension from the U.S. Treasury.
“No doubt, choosing which zones will qualify will be a complicated process and I’m confident that you’ll reach out to communities and businesses across Alaska to ensure that the Opportunity Funds are used to promote economic growth in our underserved communities. I’m also confident that you will pay attention to zones which will have the potential to develop projects that could benefit the state as a whole, particularly as we struck with an extended recession,” wrote Sullivan.
The Investing in Opportunity section of the tax bill facilitates private investment in the following ways:
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Editing by Mary Kauffman, SitNews
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