Bill To End OZ Tax Breaks Passes New York Senate
New York Sen. Michael Gianaris is continuing his efforts to extinguish the use of the opportunity zone tax break in the state, and a bill he is pushing to end the break has now advanced to the New York Assembly.
“There is too much power and wealth concentrated in too few hands and they have abused our outdated laws for too long,” Gianaris said in a statement to Commercial Observer.
“The opportunity zone program was intended to help economically distressed areas but is being abused to grant tax breaks to already overdeveloped neighborhoods.”
The legislation passed the Senate 44-17 Thursday. It would allow federal tax breaks to remain in place but would eliminate state tax breaks on funds that have remained in the zone for a decade. Last year, New York state’s capital gains tax code was separated from the federal program. North Carolina, California, Massachusetts and Mississippi had already taken similar measures.
Real Estate Board of New York President James Whelan described the proposed law — which would still need the sign-off of Assembly members and Gov. Kathy Hochul’s signature — as “yet another move” to push investment away from the state. The opportunity zone program, established in 2017, was pitched as a way to drive hundreds of billions of dollars of investment into underserved communities.
Critics have described it as a tax dodge that would only help projects that were already in the works. In April, a bill to make changes to the program was introduced in both the U.S. Senate and House of Representatives, with sponsors that include both Democratic and Republican lawmakers. That bill would reinstate and expand reporting requirements for OZs that were included in the original 2016 version of the bill, but didn’t make the final version.