August 26, 2019 by Joseph Pimentel

Bisnow Wants To Know Your Thoughts On Qualified Opportunity Zone Businesses

Much has been discussed about how to develop and/or invest in real estate as part of the federal opportunity zone program, which was created to revitalize low-income or distressed neighborhoods. 

But few are discussing the benefits or disadvantages of setting up or operating a qualified opportunity zone business or QOZB.

Bisnow/Joseph Pimentel

A retail building in one of the opportunity zone designated tracts in Long Beach

Under the opportunity zone program that was passed as part of the Tax Cuts and Jobs Act in 2017, and clarified under a pair of more recent regulations, a business owner through a qualified opportunity fund could set up a startup or operate a business as a QOZB in any of the 8,700 designated opportunity zones. 

In exchange, the QOZB could receive a tax benefit, including the deferment, reduction or elimination of capital gains tax upon the sale of the business. A QOZB is designed to increase business activity and economic investment in designated opportunity zones.

A business can qualify as a QOZB by meeting one of three circumstances. For example, you qualify if more than 50% of the company’s operation hours, staff and business are in a qualified opportunity zone, or if your company pays 50% of its total compensation to employees and independent contractors who are based in the qualified opportunity zone.

Bisnow wants to know your thoughts on the qualified opportunity zone business portion of the opportunity zone program.

Will the tax incentives attract more businesses or startups to these designated zones? Will operating a qualified opportunity zone business spur more development in OZs? Are entrepreneurs lining up and learning more about this program? What kind of impact will QOZBs have on the business landscape?

Take this survey, and let us know your thoughts.