Harrisburg – Senator Jake Corman said today said he was pleased that Phillipsburg, Rush Township and Bellefonte were submitted to the U.S. Treasury for inclusion in the Qualified Opportunity Zone program.
“I am encouraged to see the Governor Wolf submit these municipalities for consideration in the Qualified Opportunity Zone program,” said Corman. “The key word is ‘opportunity,’ and every community in Pennsylvania deserves an opportunity to attract economic development and good-paying jobs.”
The federal Qualified Opportunity Zone program provides a tax incentive for investors to reinvest unrealized capital gains into funds that will invest in low-income communities to help address local challenges.
The program was created through the federal Tax Cuts and Jobs Act signed into law last year. Benefits for chosen communities include:
- Funding of the development of workforce and affordable housing in areas with escalating prices and inventory shortages.
- Funding of new infrastructure to support population and economic growth.
- Investment in startup businesses that have the potential for rapid increases in scale and the ability to “export” outside of Pennsylvania.
Qualified Opportunity Zones retain this designation for 10 years. Investors can defer tax on any prior gains until no later than December 31, 2026, so long as the gain is reinvested in a Qualified Opportunity Fund, an investment vehicle organized to make investments in Qualified Opportunity Zones. In addition, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor would be eligible for an increase in its basis equal to the fair market value of the investment on the date that it is sold.
The U.S. Department of the Treasury has 30 days to certify Pennsylvania’s recommendations. After the Zones are approved, the federal government will begin the rulemaking process to designate how Opportunity Funds are created and how businesses, developers and financial institutions can invest in qualified Zones.