What has state governments, both houses of Congress and the White House unified in action? Opportunity zones.
Opportunity zones are a new, innovative initiative aimed at spurring business development, boosting local economies and transforming communities around the country. The executive branch, both chambers of Congress and our very own state Legislature have stepped up and established opportunity zones across our state. Now, they’re looking to Arkansas communities, businesses and investors to create a plan to take full advantage of this opportunity.
Here’s how it works: Opportunity zones incentivize private investment through capital gains tax relief such as deferral, reduction and tax-free growth of proceeds. In conjunction with a cohesive plan, these investments stimulate distressed local economies and lead to the development of new and existing businesses. When executed correctly, the program rebuilds previously neglected communities across the nation.
After Congress supported, on a bipartisan basis, the establishment of opportunity zones, an executive order was then signed that created a prestigious council on the matter. The formation of the White House Opportunity & Revitalization Council, which includes the attorney general, secretary of labor, secretary of the treasury and a dozen other key federal agencies, demonstrates the administration’s commitment to promoting opportunity zones. And it further illustrates the governmental effort to bring about massive transformation through investment in them.
The aggressive timetable set forth by the council suggests an expedited effort from the federal government to work alongside businesses and investors to target certain areas for federal grants, partnerships and special programs.
From California to Alabama, Maryland to Colorado, the coordinated effort to spur investment in opportunity zones across the country is also being embraced by states and their leaders. Arkansas is no different.
Just this year, our state aligned its tax laws to reflect the federal code and establish these opportunity zones around the state. Now, they’re looking for investors.
There are 85 opportunity zones right here in Arkansas that have been designated by Gov. Asa Hutchinson and that are primed and ready for investment. Each of these 85 zones represents an opportunity for philanthropists, investors and community and business leaders to come together with a vision and plan to improve their economies and the lives of their residents.
By passing such impactful legislation and forming the Opportunity Council, our nation’s lawmakers are signaling to investors the benefits waiting to be reaped with long-term investments in opportunity zones. Investors who fund projects in these areas can reduce and even eliminate taxes on investment gains. And it is estimated that there could be as much as $6 trillion across the country ready to be unleashed to do so.
Investing in opportunity zones means investing in communities around Arkansas and joining the broader effort to combat poverty and geographic inequality. Whether it’s increasing our state’s broadband capabilities, funding innovative startups or revitalizing Main Street, projects in opportunity zones can pave a path forward for economies across Arkansas.
Businesses will be started, jobs created, and many communities can thrive once again. The scope of our investment will determine the scope of our success in this endeavor.
Lisa Ferrell, CEO of North Bluffs Development Corp. of Little Rock, is the founder of Southern Cap Opportunity Zone Fund LLC, a team of tax, legal and fund professionals connecting investors with eligible opportunity zone projects. Email her at LisaFerrell@SBCGlobal.net.