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Dinniman: Coatesville Nominated as Qualified Opportunity Zone
On April 20, 2018
HARRISBURG – April 20, 2018 – State Senator Andy Dinniman announced today that four census tracts making up the majority of the City of Coatesville have been nominated by the governor as Pennsylvania’s Qualified Opportunity Zones.
Under the federal Tax Cuts and Jobs Act (TCJA) passed in December 2017, the Commonwealth was allotted 300 census tracts or neighborhoods across the state to submit for nominations as Qualified Opportunity Zones, a tool for promoting long-term investment in low-income communities.
The U.S. Treasury Department is in the process of developing the Opportunity Zones program, and the IRS is expected to provide further information regarding opportunities for investment in zones in the coming months.
“With new development projects on the horizon and a new train station on the way, Coatesville is ripe for further investment to spur and grow its downtown revitalization,” Dinniman said. “I am hopeful this new program will help build on the progress we’re already making to bring sustainable development to the city, along with permanent jobs and career opportunities for city residents.”
Through Qualified Opportunity Zones program, investors are provided tax benefits for investing capital gains in low-income community census tracts, as well as certain tracts adjacent to low-income tracts. The new tax incentive is for private investors making private equity investments in funds that will then invest in businesses, real estate, and other ventures in low-income communities. The incentive offers deferral, reduction, and potential elimination of certain federal capital gains taxes.
According to the governor’s office, U.S. investors currently hold trillions of dollars in unrealized capital gains in stocks and mutual funds alone, making it a potentially significant untapped resource for economic development. Opportunity funds that invest in Qualified Opportunity Zones provide investors the chance to put that money to work rebuilding the nation’s distressed communities. The fund model will enable a broad array of private equity fund managers and investors to pool their resources, increasing the scale of investments going to under-served areas.
Pennsylvania had 1,197 census tracts eligible for Qualified Opportunity Zone status, and was given the opportunity to designate 25 percent or a maximum 300 low-income community tracts as zones.
The list of nominated tracts, additional data, evaluation criteria, and an interactive map can be found at DCED’s Qualified Opportunity Zones website. Final approval from the Department of Treasury is expected in May.