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April 20, 2018
Special designation provides federal tax incentives for development in
low-income areas
OLYMPIA, Wash. – Gov. Jay Inslee today approved 139 census
tracts in 36 counties for “Opportunity Zone” status, enabling them to offer
special federal tax breaks to encourage development and job creation. See a
map and list of Washington's newly designated Opportunity Zones.
“Opportunity Zones have the potential to provide a
much-needed boost to communities and target development projects, strengthening
the local economies and creating jobs,” said Gov. Inslee.
“Opportunity Zone status could be a useful
tool to help strengthen these communities by encouraging capital investment,”
said Commerce Director Brian Bonlender. “While we had many more requests than
available tracts, I believe we ended up with a good balance of urban-rural and
economic development and housing opportunities.”
The Opportunity Zone program was a bipartisan proposal in
Congress incorporated into in the U.S. Tax Cuts and Jobs act, allowing the governor of every state
to designate up to 25 percent of eligible census tracts as Opportunity Zones. Investments
made through special funds in these zones will be able to defer or eliminate
federal taxes on capital gains.
To qualify for
Opportunity Zone status, a census tract must have an
individual poverty rate of at least 20 percent and median family income up to
80 percent of the area median. A total of 555 census tracts in
Washington met the eligibility criteria, though only 139 could receive the
designation. View
the U.S. Treasury
Department list of eligible tracts.
Commerce engaged stakeholders throughout the state to
allocate designation of some tracts to counties and tribes, and develop an
impartial competitive process for nominating other tracts. As part of
this process, the governor asked Director Bonlender to work with Lt. Governor
Cyrus Habib and Treasurer Duane Davidson to develop a recommendation for a small
portion of the tracts to help achieve the greatest possible economic impact and
positive investment outcomes to strengthen communities.
“As strong as Washington’s
economy is, there are still many communities that aren’t seeing the benefits of
economic growth,” Habib said. “This federal designation will help drive private
investments to regions across our state, enabling communities to leverage their
untapped resources to bring jobs, housing, and critical development to every
corner of Washington.”
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Contacts: Penny Thomas, Commerce Press Office, (206) 256-6106
Twitter: @WAStateCommerce
Facebook: facebook.com/wastatecommerce
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