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U.S. Treasury approves state's Opportunity Zones application
April 09, 2018
Media Contact: Katie Bach
517-335-4786 | firstname.lastname@example.org
Lansing, MICH. – The U.S. Department of the Treasury and Internal Revenue Service (IRS) approved Michigan’s application for Opportunity Zones -- areas eligible for tax benefits aimed at spurring private investment, economic growth and jobs in the state’s distressed communities.
The recent Tax Cuts and Jobs Act established Opportunity Zones, and last month Gov. Rick Snyder nominated the state’s 288 eligible census tracts zones for U.S. Treasury’s consideration and approval.
“These zones have the potential to help Michiganders take advantage of the full economic development potential in all corners of the state,” Gov. Snyder said. “This is a unique opportunity for investors and promising news for eligible communities.”
The preferential tax treatment is connected to the longevity of an investor’s stake in a qualified Opportunity Fund and provide the most upside to those who hold their investment for 10 years or more. The fund can be used as a primary investment in a variety of activities, such as creating a new business, new commercial or residential real estate, or infrastructure. They also can be used to invest in existing businesses if it doubles the investment basis over 30 months.
The Michigan State Housing Development Authority (MSHDA), which along with MEDC presented the census data to Gov. Snyder for consideration of the state’s application, is excited about what Opportunity Funds could mean for the provision of affordable housing in some communities.
“The benefits can be combined with other incentives such as New Market Tax Credits (NMTC), Low-Income Housing Tax Credit (LIHTC) and historic rehabilitation tax credit, adding a valuable tool for economic and community development,” said MSHDA Executive Director Earl Poleski.
Michigan was one of 18 states approved in the first round of designations. Interested entities will have to apply to U.S. Treasury to establish an Opportunity Fund, and Michigan is awaiting guidance from the department on how that process will work.
To learn more about Opportunity Zones, visit Michigan.gov/MSHDA and search Opportunity Zones or click here.
The Michigan State Housing Development Authority (MSHDA) provides financial and technical assistance through public and private partnerships to create and preserve decent, affordable housing for low- and moderate-income residents and to engage in community economic development activities to revitalize urban and rural communities.*
*MSHDA's loans and operating expenses are financed through the sale of tax-exempt and taxable bonds as well as notes to private investors, not from state tax revenues. Proceeds are loaned at below-market interest rates to developers of rental housing, and help fund mortgages and home improvement loans. MSHDA also administers several federal housing programs. For more information, visit www.michigan.gov/mshda.