Through the federal Opportunity Zones Program, banks, communities and others may create Opportunity Funds to direct tax-advantaged investments to 150 federally designated Opportunity Zones in Louisiana.
Click here for a map of Opportunity Zones eligible for equity investments in Louisiana.
Louisiana secured U.S. Department of the Treasury certification for 150 lower-income census tracts to be Opportunity Zones. To attract new investment to underdeveloped areas, the federal government created the Opportunity Zones Program as part of the Tax Cuts and Jobs Act of 2017.
With a public comment period in March 2018 and collaboration with local, parish and state partners, Gov. John Bel Edwards nominated 150 Louisiana census tracts, with representation in every region of the state. Eligible census tracts were those with poverty rates of at least 20 percent, or those with median family incomes of no more than 80 percent of statewide or metro area family income.
Investors and Opportunity Funds will qualify for favorable federal tax treatment through the U.S. Treasury Department, which will certify Opportunity Funds and their investments. Eligible investments will be those made for ownership of business real estate, capital and other assets by a partnership or a corporation formed for the purpose of investing in qualified Opportunity Zones property.
The primary attraction for investing in Opportunity Zones is deferring and lowering federal taxes on capital gains. For a qualified Opportunity Zones investment, capital gains taxes may be deferred the first five years; after Year 5, taxes may be cancelled on 10 percent of the original capital gains investment and deferred for the remainder; in Year 7 through Year 10, taxes may be cancelled on 15 percent of the original capital gains investment, and the remainder may be deferred through 2026; for Opportunity Zones investments lasting longer than 10 years, investors are exempt from capital gains taxes on the Opportunity Zones investment itself, in addition to the other benefits for capital gains carried into the investment.
The IRS is currently working on guidelines for the program.