Will Congress Finally Reform Opportunity Zones?
It’s spring-cleaning time, and this year Congress’s efforts could include tidying up the Opportunity Zone program. The discussion over how best to do that got a fresh injection of energy recently.
The Opportunity Zones Transparency, Extension, and Improvement Act was introduced on April 7, and it proposes significant changes to sections 1400Z-1 and -2. Like all the attempts to update the Opportunity Zone program since its passage as part of the Tax Cuts and Jobs Act, the Transparency, Extension, and Improvement Act would add reporting requirements. It includes an early sunset for zones with a high median family income, coupled with a mechanism for states to designate other qualifying census tracts as Opportunity Zones. And, as the title suggests, it would extend the deferral period from December 31, 2026, to December 31, 2028, and lower the requirement to receive a 5 percent step-up in basis from holding the investment in the qualified Opportunity Zone fund from seven to six years.
The new bill notably has the support of both the original sponsors of the legislation that was the genesis of sections 1400Z-1 and -2 — Sens. Cory A. Booker, D-N.J., and Tim Scott, R-S.C. — as well as a collection of Democrats and Republicans in both the Senate and House. Bipartisan support is probably necessary for the…