State Legislatures Embracing Opportunity Zone Incentives

State government leaders across the union are embracing the federal Opportunity Zone program in an effort to create a range of new state government incentives designed to jump start this new federal government program in the 8700 federal certified Opportunity Zone sites.

Arkansas S.B. 196. Enacted February 26, 2019. Legislation was passed by both houses of the Legislature in Arkansas that creates a state incentive to match the federal opportunity zones incentive. SB 196 would mirror the federal provisions for capital gains while computing state income tax liability.

California A.B. 742. Introduced February 19, 2019. This bill would enact the Place-Based Economic Strategies Act for the purposes of supporting place-based and other geographically targeted economic development programs, including, but not limited to, federal California Promise and California Opportunity Zones.

Connecticut Proposed Bill 6552. Introduced January 28, 2019. To exempt distressed municipalities that have been unable to alter a historic building for five years or more and individuals who wish to alter a historic building located in an opportunity zone from compliance with the provisions of chapter 97a of the general statutes.

Florida H.B. 481. Introduced January 22, 2019. Legislation introduced in the Florida Legislature this week revives and renames the expired Florida Enterprise Zones Act as the Florida Opportunity Act and links it to the federal opportunity zones (OZ) incentive. HB 481 would change the name of the Florida Enterprise Act, which expired at the end of 2015, and would change the definition of the zones to match federal qualified OZs. The legislation would require projects to indicate how federal and state OZ incentives and resources will be used while applying for the jobs, sales tax and property tax credits and other incentives.

Kentucky HB 203. Introduced February 5, 2019. An act creating the Kentucky Rural and Opportunity Zone Jobs Act creating a state opportunity zone tax credit through a competitive process.

Nebraska L.B. 87. Introduced January 10, 2019. Bill would make OZs a priority in allocating affordable housing trust fund money; Also makes OZs preferred locations for state’s Enterprise Zone Act.

New York S3401. Introduced February 6, 2019. An act to amend the tax law and the administrative code of the city of New York, in relation to investment income to defer state capital gains taxes.

Ohio SB 8. Introduced February 12, 2019. Creates a nonrefundable and transferable state income tax credit of up to 10%, against the aggregate tax liability of a taxpayer that invests equal to 1% of a taxpayer’s investment of at least $250,000 during the taxable year in an Ohio qualified opportunity fund.

Puerto Rico S 1147. Introduced November 7, 2018. To create the “Puerto Rico Economic Development Opportunity Zones Development Act of 2018”

South Carolina H3186. Introduced December 18, 2018. Legislation permits a taxpayer that is a company investing in a designated opportunity zone in South Carolina is allowed a credit against any tax due pursuant to this title equal to twenty-five percent of the total investment costs, not to exceed fifty thousand dollars. The company shall provide a community-benefits agreement with the area in which it is investing in order to qualify for the tax credit. A taxpayer only may claim the credit for investments made during the tax year. If the amount of the credit exceeds the taxpayer’s income tax liability for that taxable year, the taxpayer may carry forward the excess for up to five years. The taxpayer shall claim the credit allowed by this section on the taxpayer’s income tax return in a manner prescribed by the department. The department may require any documentation it considers necessary to implement the provisions of this section.

Texas SB 826. Introduced February 14, 2019. Creates Texas rural and opportunity funds and provides insurance tax credits for certain investments in those funds; imposing a monetary
penalty and authorizing fees.

Texas H.B. 2397. Introduced February 25, 2019. Legislation creates a state sales and use tax refund and franchise tax credit for certain businesses that make investments in qualified opportunity zones.

West Virginia 2828. Introduced January 31, 2019. Relating to promoting investment in a Qualified Opportunity Zone by providing a mechanism to exempt taxable income from corporate net income tax and personal income tax during the first ten (10) years of a Qualified Opportunity Zone Business’s operation within one or more Qualified Opportunity Zones located in West Virginia.