WASHINGTON, D.C. – Improvements to the Opportunity Zone (OZ) program, which encourages greater investment in distressed communities, will result in more investments targeted to parts of rural America and greater transparency in the successes of the program. As Bloomberg Tax reports, states had “long wanted access to the more detailed data required under the new bill to better assess the program’s benefits.” Critics who were concerned that investments weren’t flowing to those in need are likely to be pleased as well.

Ways and Means Committee Chairman Jason Smith (MO-08) said:

“Rural America is a great place to build a new business but has too-often been overlooked and misunderstood by Washington. This is why The One, Big, Beautiful Bill provided crucial updates to the Opportunity Zone program – originally established under the 2017 Trump tax cuts – to ensure more investment is driven into these communities. Last year, the Ways and Means Committee held a field hearing on the effectiveness of Opportunity Zones in Erie, Pennsylvania. We heard stories from folks in the community about how Opportunity Zones revitalized downtown Erie and neighborhoods with new businesses, homes, and jobs after decades of decline and neglect. We also heard about how the OZ program could be improved and put those ideas to work. 

“Opportunity Zones are an innovative way to help working class families and the communities they call home all across this country. Extending this program while making modest reforms to increase transparency and drive new rounds of investment, expecially to truly rural areas, we will be making sure even more small towns and communities can benefit from the economic driver that is the OZ program. Coupled with permanently extending the Trump tax cuts, we are breathing new life and prosperity into all kinds of distressed areas, including rural America.”  

The Bloomberg Tax report mentions Jason Watkins, partner in the metro Atlanta office of Novogradac saying that: “We think it’s going to help to increase the transparency and show where the investment dollars are going.” 

Key Highlights:

• Reforms to Program Result in Greater Transparency: “The law Trump signed Friday requires the Treasury Department to issue an annual public report on the Opportunity Zones program with information ranging from the number of investment funds and assets in each, to a breakdown of the percentage of total investments in real estate or other property and the number of residential units affected. Starting in six years the report also must include ‘impacts and outcomes of a designation of a population census tract as a qualified opportunity zone as measured by economic indicators, such as job creation, poverty reduction, new business starts, and other metrics.’”
  
• New Focus on Small Communities and Rural Areas: “The transparency language is part of a broader agenda that permanently extends the program, which was created in 2017 as part of Trump’s first-term tax law and was set to expire in 2026. The new law also changes the timing of the program’s capital gains tax breaks and sets up a new category of funds focused on small communities and rural areas … The most recent available data analyzed by Congress’ Joint Committee on Taxation show that Opportunity Zone investments have been concentrated in states with large populations like Texas, Florida, California, and New York. The latter two are among the states that have decoupled from IRS’s treatment of capital gains.”
  
• States Better Able to Participate in Program: “Detailed data on Opportunity Zone funds was previously reported to the IRS for tax purposes, but due to privacy concerns was not shared publicly. This meant states that were responsible for identifying economically distressed census tracts to participate in the program and deciding whether to supplement it with their own tax benefits had little way to track or quantify whether or not the program was improving communities as intended.”