April 9, 2018 (Flint, Mich)– The City of Flint is excited to announce that the U.S. Treasury and Internal Revenue Services has revealed the First Round Of Opportunity Zones Designations. The Tax Cuts and Jobs Act created Opportunity Zones to spur investment in distressed communities throughout the country. New investments in Opportunity Zones can receive preferential tax treatment.
Under the Tax Cuts and Jobs Act, the State of Michigan nominated low-income communities to be designated as Qualified Opportunity Zones, which are eligible for the tax benefit. The City of Flint submitted its nomination to the state and the state of Michigan selected all 9 census tracts. The Treasury Department yesterday designated the nominations of all States that submitted by the March 21st deadline.
“I am very excited about the prospects for Opportunity Zones. Attracting needed private investment into these low-income communities will lead to their economic revitalization, and ensure economic growth is experienced throughout the City,” said Flint Mayor, Dr. Karen W. Weaver. “We were thoughtful about the selection of census tracts in order to ensure that areas historically disinvested in have competitive advantages that in the past have not been available to them. This is another tool in our ever-growing tool kit to encourage investment and development in all areas of the City of Flint to boost economic growth and job creation. “
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 City of Flint looks forward to additional guidance from the U.S. Treasury and the IRS on Qualified Opportunity Funds. The additional guidance will address the certification of Opportunity Funds, which are required to have at least 90 percent of fund assets invested in Opportunity Zones.