Opportunity Zones
The U.S. Department of Treasury has officially certified Governor Jeff Colyer’s nomination of 74 census tracts to be designated as Qualified Opportunity Zones and has designated those tracts as such.
The approved Opportunity Zones, a new economic development tool enacted by the Federal Tax Cuts and Jobs Act of 2017, will offer local citizens the opportunity to invest back into their communities and proactively be a part of the solution to problems such as population decline, lack of jobs, and crumbling infrastructure.
For the investor, the Opportunity Zone program offers tax incentives to citizens who re-invest their unrealized capital gains into Opportunity Funds dedicated to investing in designated census tracts.
The program provides deferral and reduction of capital gains taxes when the gain is invested in a Qualified Opportunity Fund and maintained for at least five years. Additional tax incentives are available for investments held for periods of seven and 10 years. The Internal Revenue Services is expected to issue guidance on Opportunity Funds this Fall.
The specific census tracts and their counties to be included in the governor’s nominations for designation as Opportunity Zones are:
20001952900 Allen
20003953600 Anderson
20005081900 Atchison
20009971400 Barton
20009971700 Barton
20015020400 Butler
20029977200 Cloud
20035493700 Cowley
20035493800 Cowley
20037956600 Crawford
20037956900 Crawford
20037957500 Crawford
20037957600 Crawford
20045000200 Douglas
20045000400 Douglas
20055960501 Finney
20055960600 Finney
20057961800 Ford
20057962101 Ford
20059954200 Franklin
20059954400 Franklin
20063955100 Gove
20063955200 Gove
20065952100 Graham
20071958100 Greeley
20089576100 Jewell
20089576200 Jewell
20091052102 Johnson
20091052417 Johnson
20091053555 Johnson
20091053557 Johnson
20091053601 Johnson
20099950400 Labette
20101956600 Lane
20103070100 Leavenworth
20111000500 Lyon
20121100700 Miami
20125950200 Montgomery
20125951200 Montgomery
20125951300 Montgomery
20137951700 Norton
20139010400 Osage
20155000600 Reno
20155000700 Reno
20155001000 Reno
20155001300 Reno
20157978300 Republic
20161000500 Riley
20161000801 Riley
20161001100 Riley
20163974600 Rooks
20163974700 Rooks
20169000100 Saline
20169000600 Saline
20173000400 Sedgwick
20173000900 Sedgwick
20173001100 Sedgwick
20173002600 Sedgwick
20173003200 Sedgwick
20173003700 Sedgwick
20173003800 Sedgwick
20173004300 Sedgwick
20173006300 Sedgwick
20177000700 Shawnee
20177000800 Shawnee
20177004000 Shawnee
20181453700 Sherman
20185470600 Stafford
20209041800 Wyandotte
20209042200 Wyandotte
20209043905 Wyandotte
20209044101 Wyandotte
20209045100 Wyandotte
20209045200 Wyandotte
In February, the Kansas Department of Commerce announced it would begin accepting Letters of Interest from communities to have their eligible low-income census tracts designated as Opportunity Zones. Following the review of submissions, Gov. Colyer determined that each community who submitted an eligible census tract would be nominated for at least one Opportunity Zone designation.
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Opportunity Zones are an economic development tool enacted by the Tax Cuts and Jobs Act of 2017 designed to encourage long-term investments in low-income urban and rural communities.
This provides incentives to investors to move capital off the sidelines and into projects which will stimulate the Kansas economy.
This program provides a tax incentive for investors to re-invest their unrealized capital gains into Opportunity Funds that are dedicated to investing in economically distressed areas designated as Opportunity Zones by the Governor.
The program provides deferral and reduction of capital gains taxes when the gain is invested in a Qualified Opportunity Fund and maintained for at least 5 years. Additional tax incentives are available for investments held for periods of seven years and 10 years.
Based upon the number of low-income communities identified by the Federal Census, the Governor can designate 74 census tracts in Kansas communities as Opportunity Zones. Census tract eligibility is based upon population and income.
Eligible low-income communities are defined as:
- Tracts in which the poverty rate is at least 20 percent, or
- Tracts in which the median family income does not exceed 80 percent of the statewide median family income if located outside of a metropolitan area, or
- Tracts in which the median family income does not exceed 80 percent of the statewide median family income or the metropolitan area median family income, whichever is higher.
In addition to the federal eligibility criteria, the State considered several other factors in determining which census tracts to designate as Opportunity Zones.
These factors included an indication of community interest and support for additional investment, the potential of at least one “ready to go” or otherwise identifiable project, and that the identified project addressed one of the following target uses: industrial/business development, housing, or agriculture.
Other links of interest: