Pulaski County is among a list of counties/cities in Missouri that have been approved for Opportunity Zones, low -income areas that will see add incentives for investment. Opportunity Zones are a new economic development tool aimed at areas with high poverty rates and slow job growth.
Areas within the boundaries of designated opportunity zones will get a boost as they compete for jobs, with additional state and federal tax incentives for business that invest in those places.
The designation was announced earlier this week by Missouri Governor Eric Greitens and Senator Roy Blunt.
“We’ve already seen jobs coming back to Missouri as a result of strong conservative reforms. Now I’m proud to share that, because of tax reform, we have a new tool to bring businesses back to the areas that need it most. The communities that need quality jobs—areas with a lot of poverty and not a lot of opportunity--will get a leg up as they compete for jobs.” Greitens said.
The Opportunity Zones program will help spur new investments in communities where they’re needed most, according to Blunt.
“By bringing investment incentives to underserved areas, the program will help create more jobs, drive economic growth, and improve the quality of life for families across our state. The Opportunity Zones program is another example of how tax reform is directly benefitting Missourians, and turning the page on years of slow growth and stagnant wages,” he said.
Created by the Tax Cuts and Jobs Act of 2017, the Opportunity Zones program provides investors with a treasury-certified capital-gains tax deferral, based on their investment in the designated areas. The program seeks to revitalize and create jobs in areas that otherwise may not be considered by investors.
Under the law, each state could nominate up to 25 percent of census tracks that met the eligibility requirements for the program, to be designated by the Secretary of the Treasury. In Missouri, the state could nominate up to 161 census tracks to be designated as Opportunity Zones.
To determine which zones were chosen, Missouri relied extensively on local input. Local governments were asked to nominate areas for inclusion in the program by sending a written proposal to the Missouri Department of Economic Development (DED).
The communities prioritized their selections and provided DED with information about development plans, and descriptions of recent and future investments. In addition to local recommendations, the state considered the Opportunity Zone’s potential to address need and generate investment impact.
The opportunity zones are located in Bolivar, Branson, Butler County, Cameron, Cape Girardeau, Columbia, Dallas County, Excelsior Springs, Hannibal, Independence, Jackson County, Jefferson City, Jennings, Joplin, Kansas City, Kennett, Kirksville, Laclede County, Lafayette County, Lebanon, Maryville, Mexico, Monett, Montgomery County, Neosho, New Madrid County, Newton County, Pemiscot County, Potosi, Pulaski County, Randolph County, Ripley County, Saline County, Sikeston, Springfield, St. Joseph, St. Louis, St. Louis County, Sugar Creek, Sullivan County, Sunrise Beach, Warren County, Warrensburg, Warsaw, Wayne County, and West Plains.
About Opportunity Zones:
According to the Missouri Department of Economic Development (MDED) which with the US Treasury will help administer the program, the federal Tax Cuts and Jobs Act of 2017 allows the governor of each state to nominate certain census tracts for this designation which provides special federal tax treatment for capital gains invested in the zone. The designation allows investors to defer paying taxes on capital gains if they are invested in funds that invest in zones with the amount of deferral increasing with the amount of time the investment stays in the Fund, up to 10 years.
The number of opportunity zones in each state is limited and is based on the poverty rate of median family income of the census tract.
In non-metropolitan areas of the state, eligible tracts must have a poverty rate of at least 20 percent or the tract’s median family income does not exceed 80 percent of the statewide median family income, with the exception of high out-migration rural counties.
Only 25 percent of eligible communities may be designated though.
According to MDED, an investment vehicle organized as a corporation or partnership for the purpose of investing in an Opportunity Zone property and holds at least 90 percent of its assets in qualified Opportunity Zone property qualify as an Opportunity Fund that receives the special deferment on capital gains.
While it would be allowed under federal law, in Missouri, there are currently no state tax deferments attached to this zone. All local and state tax incentives — outside of grandfathered enterprise zones — are handled through the Missouri Works program under the MDED.