Opportunity zones were created in the 2017 Tax Cuts and Jobs Act to help economically distressed communities benefit from a capital gains tax incentive. The Governor from each state nominated economically distressed areas (census tracts) based on the following low-income requirements as defined by U.S. Internal Revenue Code Section 45D(e)
- Poverty Rate < 20%; or
- Median family income of:
- No more than 80% of statewide median family income for census tracts within non-metropolitan areas.
- No more than 80% of the greater statewide median family income of the overall metropolitan median family income for census tracts within metropolitan areas.
Up to 25% of census tracts of each jurisdiction that met this criteria could be nominated. An additional 5% of each jurisdiction could quality if the met additional income and geographic requirements:
- Census tract contiguous with low-income Opportunity Zone and
- Median family income of no more 135% median family income adjacent Qualified Opportunity Zone
On March 21, 2018, Governor Abbott designated 628 census tracts in Texas as Opportunity Zones, which were later certified by the U.S. Department of Treasury on April 18, 2018. Within Amarillo, there is 1 designated tract that covers downtown Amarillo along with part of the Barrio Neighborhood Plan area. Qualified Opportunity Funds can invest in a multitude of eligible real estate and operating business projects. Investors should refer to the IRS Frequently Asked Questions and Department of Treasury regulations for more information.