An Opportunity Zone is an area where preferential tax treatment can be conveyed upon certain investments that spur Economic Development. The areas coincide with a census tract wherein a large proportion of its population can be considered economically distressed.
How were these areas in Kennewick selected for designation?
Early in 2018, the U.S. Department of the Treasury called upon the Governor's of each State to select and nominate qualified census tracts within their State for certification. Each state was able to nominate 25% of their low-income community (LIC) designated census tracts. To distribute these nominations equitably, the Associate Development Organization (Tri-City Development Council TRIDEC for Benton County) of each county was allotted a certain number of tracts they could refer to the Governor for selection.
The City and several partners sent letters of support through TRIDEC to seek nomination of two identified redevelopment tracts as Opportunity Zones.
How do I take advantage of the benefits of a Opportunity Zone?
When you sell an investment you can take the proceeds and invest them in a business or property within Kennewick's Opportunity Zone. This investment allows you to defer paying tax on the proceeds of your gain by reinvesting it in Opportunity Zone property. If you keep your investment in the Opportunity Zone property or businesses for ten years, you would become eligible for an increase in basis equal to the fair market value of the investment when you sell or exchange it.
Where do I find more information?
Follow the Quick Links below for more information from the State Department of Commerce and the Internal Revenue Service. Additional information will be released by the IRS in Fall 2018.