Kansans have been presented a remarkable opportunity to invest in their own communities and breathe new economic vitality into their hometowns. On behalf of the Kansas Department of Commerce, I want to take this opportunity to fill you in about Opportunity Zones and how both you and your community can benefit.
A key focus of Governor Colyer’s administration has been helping boost urban and rural communities that have struggled with population decline, lack of jobs, and crumbling infrastructure. Now communities across the nation have been given the potential to solve these problems through the new Federal Opportunity Zones program.
Opportunity Zones are a new economic development tool enacted by the Tax Cuts and Jobs Act of 2017 designed to encourage long-term private-sector investments in low-income urban and rural communities. The Opportunity Zone program is a great opportunity for those who want to invest in their communities and be a proactive part of the solution.
Here’s how they work: Opportunity Zones provide a tax incentive for the re-investment of unrealized capital gains into Opportunity Funds. The purpose of these funds is to invest in economically distressed areas designated by the Governor. The program provides deferral and reduction of capital gains taxes when the gain is invested in a Qualified Opportunity Fund and maintained for at least five years. Additional tax incentives are available for investments held for periods of seven and 10 years.
Governor Jeff Colyer nominated 74 low income communities to be designated as Qualified Opportunity Zones in Kansas. The Opportunity Zone program is an additional means of economic development for these areas. It offers Kansas investors the chance to benefit from tax incentives in exchange for investing in businesses in these areas.
You don’t have to live in the areas to take advantage of this program. These tax benefits are available to anyone regardless of where they call home.
To have been eligible for designation as an Opportunity Zone, a community must have either a poverty rate of at least 20 percent or a median family income lower than 80 percent of the median income of the state. Any community that has been designated an Opportunity Zone is in serious need of new economic opportunities. We need investors to breathe new life into these Kansas towns, opening up the potential for new companies and new jobs or creating a better environment for existing companies to grow and expand.
Just having an Opportunity Zone in your area is not enough to produce the kind of results necessary to produce a significant economic impact on your community. To ensure the success of any Opportunity Zone, community leaders in local government, philanthropies, business and educational institutions must work together to identify community priorities, form targeted economic growth strategies, and broadly promote those local investment opportunities.
As Kansans, we all want our communities to be successful. At the Department of Commerce, we know the best path to success for these communities is a strong economy, creating new opportunities for all residents. For more information and to view the Kansas Opportunity Zone map, please visit KansasCommerce.gov/opportunityzones.
Bob North, Interim Secretary
Kansas Department of Commerce