The Opportunity Zones program is a federal program designed to spur community investment by providing tax benefits to investors. The Kingman region is made up of two very large census tracts that have been designated Opportunity Zones by the U.S. Department of the Treasury. The link to the Opportunity Zone Map highlights these tracts within the region.
The Arizona Governor’s Office and the Arizona Commerce Authority worked with local governments, tribal communities, and counties to decide which census tracts would be submitted for consideration by the federal government. As of April 9, 2018, all of Arizona’s 168 submitted tracts became officially designated as Opportunity Zones. The Kingman Industrial Park was one of seven, adjacent to qualifying tracks that the Governor’s office chose to include into the Opportunity Zone Program.
The Kingman Region’s designated Opportunity Zones provide an excess of land and buildings for potential development.
To view the interactive Kingman Region Opportunity Zones tool and explore Kingman’s Opportunity Zones visit the links below:
To have a qualified investment in an Opportunity Zone eligible for the tax incentives two qualifications must be met:
- The investment must be made via a Qualified Opportunity Fund. An Opportunity Fund is a privately managed investment vehicle organized as a corporation or a partnership for the purpose of investing in qualified Opportunity Zone Businesses. The fund must hold at least 90 percent of its assets in such property.
- The investment must be derived from a gain in another investment and transferred into an Opportunity Fund within 180 days of realizing the gain.
If these qualifications are met, investors can receive reductions on capital gains taxes relative to the years of their investment in an Opportunity Fund after 5 years.
- If the investment is held for a minimum of five years, the taxable amount of the capital gains reinvested is reduced by 10 percent.
- If the investment is held for seven years, the taxable amount of capital gains reinvested is reduced by an additional 5 percent, bringing the total reduction to 15 percent.
- After holding for ten years, there is a permanent exclusion from taxable income on the capital gains from the investment in the Opportunity Fund.
What is a qualified Opportunity Zone Business?
- A business in which substantially all of the tangible property owned or leased by the business is used in an opportunity zone, with at least 50 percent of the gross income earned by the business coming from the active conduct of business with an Opportunity Zone.
Examples of Qualified Opportunity Zone Businesses:
- Mixed-use developments
- Market rate rental housing
- Strip centers
- Parking facilities
- Retail/grocery stores
- Sports facilities
- Health clinics
Examples of businesses that do not qualify include:
- Private or Commercial Golf Course
- Country Club
- Massage Parlor
- Suntan or Hot Tub Facility
- Racetrack or other establishment used for gambling
- Any store whose principal purpose of which is the sale of alcoholic beverages for consumption off the premises.