Opportunity Zones

The Tax Cuts and Jobs Act of 2017 establishes a new federal tax incentive to encourage long-term investments in certain low-income communities newly designated as Opportunity Zones. Through Opportunity Funds, private investment within a designated Opportunity Zone may earn tax relief on both the capital gains invested in the funds and those generated through the investment by the fund.

What Are Opportunity Zones?

An Opportunity Zone is a low-income community census tract designation made by the U.S. Department of Treasury. Opportunity Zones are designed to drive private sector investment in low-income urban and rural communities.

Each state's Governor may nominate a minimum of 25 total eligible census tracts but no more than 25% of the total number of eligible census tracts based on the 2011-15 ACS census data. Eligible tracts are those that have been already designated as a "Low Income Community" (LIC) by the federal New Market Tax Credit program. Low Income Communities are tracts with a poverty rate of at least 20% or with median family incomes that do not exceed 80% of area median income.

Of Oregon's 366 eligible LICs, the state may nominate no more than 86 to be designated as Opportunity Zones. (Per federal government rules, 86 is based on 25% of the 2011-15 ACS census LIC total of 342; however, Oregon can pick from the 366 LICs as defined by the 2012-2016 ACS census.)

Oregon has created a map to help communities locate LIC census tracts. This map, along with additional Opportunity Zone program resources and information are available in the resource box to the right.

What Are Opportunity Funds?

A qualified Opportunity Fund is the required vehicle to invest into Opportunity Zones. As certified by the U.S. Treasury, at least 90% of an Opportunity Fund's holdings need to take one of two forms:

  1. Direct ownership in business property that the fund essentially runs itself, or
  2. Equity stake (company issued stock or partnership interest) in qualified opportunity zone businesses.

Qualified Opportunity Zone business property needs to be newly acquired from unrelated parties and either used for the first time or substantially improved for use inside an Opportunity Zone.

Nomination Process

The state of Oregon must submit its nominated census tracts to the U. S. Department of the Treasury by March 21, 2018. A thirty day extension may be requested by the Governor, which pushes the deadline to April 20, 2018. The U. S. Department of the Treasury has 30-60 days to approve nominated census tracts.

Public Input

Business Oregon is preparing analysis and assembling data to provide to the Governor that may help in the designation process. Part of that process is collecting input from the general public on whether a community would (or would not) like to see their census tract nominated as a potential Opportunity Zone.

To ensure we met nomination deadlines, all input was due by 5:00 pm on March 14, 2018. Thank you for your input.

The state of Oregon is partnering directly with the Association of Oregon Counties, League of Oregon Cities, and each of Oregon's nine federally-recognized Tribal Governments to solicit local and tribal government feedback.

We will be updating this page with additional information and resources as they become available from the federal government and others.

1 Disclaimer from Business Oregon: The Opportunity Zone Analysis Map is for public education and illustrative purposes only. Every effort has been made to correctly use the best, most up-to-date data, but time constraints, etc., mean the state cannot warrant for complete accuracy, and under no circumstances is this tool warranted for investment, tax planning, or any other reason. The information contained should not be used as the basis of any decision with financial or other consequences. This mapping tool should also not be treated as indicating where any actual opportunity zone is or will be located.