Opportunity Zones

Opportunity Zones were enacted as part of the 2017 tax reform package (Tax Cuts and Jobs Act) to address uneven economic recovery and persistent lack of growth that have left many communities across the country behind. The incentive is designed to encourage long-term, private investments in low-income census tracts by providing a federal tax incentive for taxpayers who reinvest unrealized capital gains into Opportunity Zones. The incentive is deferral, reduction, and potential elimination of certain federal capital gains taxes.

Opportunity Zones are specialized tax mechanisms dedicated to low-income areas and aimed at spurring investment and entrepreneurialism that will ultimately result in business creation and economic prosperity in Opportunity Zone areas and may help address a number of challenges, such as:

  • Promoting economic vitality;
  • Funding the development of workforce and affordable housing;
  • Funding new infrastructure to support population and economic growth;
  • Investing in start-up businesses that have potential for rapid increases in scale and the ability to export outside of Maryland;
  • Upgrading the capability of existing underutilized assets through capital improvement investments

WHAT ARE THE INCENTIVES THAT ENCOURAGE LONG-TERM INVESTMENT IN LOW-INCOME COMMUNITIES?

The Opportunity Zones program offers investors the following incentives for putting their capital to work in low-income communities:

  • A temporary tax deferral for capital gains reinvested in an Opportunity Fund. The deferred gain must be recognized on the earlier of the date on which the Opportunity Zone investment is sold or December 31, 2026.
  • A step-up in basis for capital gains reinvested in an Opportunity Fund. The basis of the original investment is increased by 10% if the investment in the qualified Opportunity Fund is held by the taxpayer for at least 5 years, and by an additional 5% if held for at least 7 years, excluding up to 15% of the original gain from taxation.

The Keyser's Ridge Business Park has approximately 240 acres available for development. The Southern Garrett Business & Technology Park has a 4.2-acre site available for development. The County also multiple commercial pads located along Francis Sanders Drive just off Maryland Route 135 in Mountain Lake Park, all of which are available for development.

Resources: