WASHINGTON, D.C. – Newly created Qualified Rural Opportunity Funds (RQOFs) will target rural communities – along with various other pro-growth tax tools – and support a massive wave of private investment in the American heartland. All thanks to The One, Big, Beautiful Bill, the Opportunity Zone program, originally established under the 2017 Trump tax cuts, is renewed and revamped to better incentivize and target investment in rural areas across our country. As Bloomberg Tax reports, the reimagined program includes an enhanced 30 percent basis step-up after five years and a lower substantial-improvement threshold, which offer strong advantages for rural communities that will help steer capital toward agriculture and water infrastructure, and incentivize on-shoring of manufacturing.
“Thanks to The One, Big, Beautiful Bill, small town America is poised for an economic rebound,” said Ways and Means Committee Chair Jason Smith (MO-08). “President Trump has made the American heartland a top priority of his administration, and these new tools will unlock private investment for farms, Main Street businesses, and critical infrastructure that will bring jobs home, strengthen supply chains, and modernize our agriculture sector. For the sixty million Americans who live in rural America, The One, Big, Beautiful Bill is a generational opportunity that gives workers, farmers, and families real incentives to stay, build, and thrive.”
Highlights:
- Rural Opportunity Zones: “The new tax law also introduces qualified rural opportunity funds, or RQOFs, which offer enhanced benefits—including a 30% basis step-up after five years and a reduced 50% substantial improvement requirement, meaning fewer dollars must be spent improving assets compared with standard QOFs. These changes reflect a clear policy shift toward encouraging rural investment through the QOZ program.”
- Attracting New Investment: “The new law’s enhancements for RQOFs may significantly lower barriers for large-scale, capital-intensive projects in rural areas—most notably hyperscale data centers…With the new 30% basis step-up after five years—available only to RQOFs—along with the permanent, rolling five-year deferral of capital gains, the economic case for building data centers in designated rural opportunity zones becomes far more compelling.”
- Securing Domestic Supply Chains: “These same incentives can drive the onshoring of advanced manufacturing into rural communities. Facilities such as semiconductor fabrication plants, precision-machining centers, and next-generation battery or electric vehicle component factories often require years of planning and billions of dollars in capital.”
- Modernizing U.S. Agriculture Infrastructure: “Beyond heavy industry, the revised QOZ program also opens new avenues for investment in rural agriculture and critical infrastructure.”
- Improved efficiency: “The more favorable tax treatment may now encourage investors to fund modern irrigation systems, large-scale cold-storage distribution hubs, and on-farm renewable energy assets such as solar panels, anaerobic digesters, or small-scale wind turbines. These improvements make agricultural operations more efficient and resilient…”
- Higher Productivity: “The RQOF framework also supports investments in regenerative farming practices, which promote soil health and long-term sustainability. Examples include cover-crop rotation systems, no-till farming equipment, carbon sequestration protocols, and composting facilities—all of which reduce environmental impact while enhancing yields over time.”
- Incentivizing Infrastructure Upgrades: “Some rural opportunity zones also may allow for investments in water infrastructure—including irrigation canals, water reuse systems, and stormwater runoff mitigation—which have traditionally fallen outside the purview of private investment. By treating such infrastructure as investable assets under the QOZ rules, the new law could catalyze upgrades to water systems that are vital to both agriculture and rural population centers.”