Federal program encourages long-term investment in low-income areas.
LITTLE ROCK – Governor Asa Hutchinson received word Friday that the U.S. Treasury Department has approved his nominations of Booneville and 84 other Arkansas Opportunity Zones, a program that Congress established in the Tax Cuts and Jobs Act of 2017.
Hutchinson submitted the nominatoins for the Opportunity Zones in April.
“Treasury’s approval means that some of our communities that are struggling economically will have the chance to enjoy the new opportunities that come with fresh thinking and new investment,” Governor Hutchinson said. “This money is a down-payment on a better quality of life for many Arkansans.”
Opportunity Zones is an incentive program that allows private investors to defer payment of taxes on capital gains on profits they earn on investments in the certified zones. They must invest the money through a corporation or partnership that was organized for the specific purpose of investing in Opportunity Zones.
The investor’s fund must hold at least 90 percent of its assets in qualifying property. The eligible zones are based on U.S. Census tracts, and governors of each state were allowed to nominate up to 25 percent of eligible tracts.
Arkansas has 337 qualified tracts, and Arkansas Economic Development Commission (AEDC) officials said the nominations were based on the potential to attract investment and the likelihood of economic success.
The Arkansas Economic Development Commission will work closely with communities to find the right investment opportunities, AEDC Executive Director Mike Preston said.
The next step in the process is for the IRS to issue the rules and regulations.