Opportunity Zones Update - Commentary from Engineered Tax Services

 

As Opportunity Zones continues to be discussed in Washington, D.C - I wanted to keep everyone posted on the latest updates.

Last week, The Move America Act of 2019 (H.R. 1508) was re-introduced yesterday by Reps. Jackie Walorski, R-Ind. and Earl Blumenauer, D-Ore.

The Bill attempts to spur investment in infrastructure improvements through the issuance of Move America Bonds and Move America Credits. The proposed bill would expand tax-exempt private activity bonds for infrastructure and create a federal tax credit to fund infrastructure projects through public-private partnerships (P-3s). Sens. John Hoeven, R-N.D., and Ron Wyden, D-Ore., introduced the Senate companion bill (S. 146) in January.

Previous versions of the Move America Act were introduced in the Senate in 2015, as well as in 2017 to the House and Senate.

The House Ways and Means Committee is holding a hearing today on infrastructure reform. House leadership has tentatively targeted late spring for major infrastructure legislation on the House floor, which could include the Move America Act and other tax credit provisions from the Affordable Housing Credit Improvement Act and the New Markets Tax Credit Extension Act.

States incentivizing investments in their designated Federal Opportunity Zones.

Maryland – The Maryland legislature introduced HB 1141 this past week.  This bill would enable the creation of a state affordable housing tax credit effective in 2020. It would also create a “Qualified Maryland Housing Tax Credit” for properties that qualify for the federal low-income housing tax credit (LIHTC) and are in areas designated as “community revitalization areas.”  These community revitalization areas are areas that include Opportunity Zones. The bill sets an annual statewide cap of $10 Million and no requirement that the development also receive federal LIHTCs.

Rhode Island - A bill in the Rhode Island House of Representatives (HB 5808) would create a tax credit for 10% of a taxpayer’s opportunity zones (OZ) investment in Pawtucket and Central Falls, R.I. Per the draft bill, a qualified opportunity fund would be required to invest at least $250,000 in the OZ for the participants to receive the credit. The tax credit could be taken in the year in which a qualified OZ business is placed in service.

Julio Gonzalez, CEO & Founder of Engineered Tax Services and the Gonzalez Family Office