With the passing of the Tax Cuts and Jobs Act of 2017, the words “Opportunity Zones” have become very popular and promising in the world of economic development. At Idaho Commerce, we have received a number of questions from investors and communities alike wanting to learn more about the program, better understand how to get involved, and strategize on how to best use the tool to benefit Idaho’s economy.

While there is still quite a bit we don’t know yet, below is a brief update on what we do know about Opportunity Zones and Opportunity Funds at this point. As more information becomes available, Idaho Commerce will be a resource to help communities and investors partner to utilize the program successfully in Idaho.

Idaho Opportunity Zones

Idaho Commerce received 59 applications from Idaho counties, cities and tribes to be designated federal Opportunity Zones. Applications were reviewed by the Idaho Economic Advisory Council (EAC) for recommendation to Governor Otter. On April 9th, 2018, the U.S. Treasury officially certified the Governor’s nomination of the 28 low-income census tracts to become Opportunity Zones in Idaho.

A map of Idaho and other US Opportunity Zones may be found here.

What do we know about Opportunity Zones

Opportunity Zones are a new tax incentive created by the Tax Cuts and Jobs Act of 2017. Investors who invest in Opportunity Zones (designated low-income U.S. Census tracks) may receive deferrals and reductions in federal capital gains taxes.

The longer the Opportunity Zone investment is held, the greater the benefits. Investments must be through a Qualified Opportunity Fund which can be established by individuals, trusts, partnerships and S corporations. At least 90% of an Opportunity Fund investment must be physically located in an Opportunity Zone.

Opportunity Funds are self-certifying, meaning that they do not require the pre-approval of state or federal regulators. Any type of appreciable investment ranging from real estate to venture capital may be eligible for the incentive. 1031 exchanges may be rolled into a Qualified Opportunity Fund provided that the investment substantially improves the Opportunity Zone property within 30 months.

Opportunity Zone benefits may be bundled with other state and federal incentives.

What we don’t know

The U.S. Department of Treasury has not issued final guidelines and forms for Opportunity Zone investors. We anticipate those guidelines will be announced sometime this Fall. Idaho Commerce is working with the Federal Reserve Bank of San Francisco to promote Idaho’s Opportunity Zones and connect communities and investors with the latest information.

Who can I contact to find out more information on Opportunity Zones

Idaho Commerce is closely monitoring the final guidance from the U.S. Department of Treasury and will continue to update our partners throughout the State. Staff has participated in several webinars and meetings regarding other states efforts to better understand what is expected once the guidelines are finalized. Please feel free to contact Jerry Miller (208-287-0780) at Idaho Commerce with any questions related to Opportunity Zones.

For additional Opportunity Zone information, please visit these resources:

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