Opportunity Zones

The U.S. Department of Treasury has officially certified Governor Jeff Colyer’s nomination of 74 census tracts to be designated as Qualified Opportunity Zones and has designated those tracts as such.  

The approved Opportunity Zones, a new economic development tool enacted by the Federal Tax Cuts and Jobs Act of 2017, will offer local citizens the opportunity to invest back into their communities and proactively be a part of the solution to problems such as population decline, lack of jobs, and crumbling infrastructure.

For the investor, the Opportunity Zone program offers tax incentives to citizens who re-invest their unrealized capital gains into Opportunity Funds dedicated to investing in designated census tracts. 

The program provides deferral and reduction of capital gains taxes when the gain is invested in a Qualified Opportunity Fund and maintained for at least five years. Additional tax incentives are available for investments held for periods of seven and 10 years.The Internal Revenue Services is expected to issue guidance on Opportunity Funds this summer.

The specific census tracts and their counties to be included in the governor’s nominations for designation as Opportunity Zones are:

20001952900  Allen
20003953600  Anderson
20005081900  Atchison
20009971400  Barton
20009971700  Barton
20015020400  Butler
20029977200  Cloud
20035493700  Cowley
20035493800  Cowley
20037956600  Crawford
20037956900  Crawford
20037957500  Crawford
20037957600  Crawford
20045000200  Douglas
20045000400  Douglas
20055960501  Finney
20055960600  Finney
20057961800  Ford
20057962101  Ford
20059954200  Franklin
20059954400  Franklin
20063955100  Gove
20063955200  Gove
20065952100  Graham
20071958100  Greeley
20089576100  Jewell
20089576200  Jewell
20091052102  Johnson
20091052417  Johnson
20091053555  Johnson
20091053557  Johnson
20091053601  Johnson
20099950400  Labette
20101956600  Lane
20103070100  Leavenworth
20111000500  Lyon
20121100700  Miami
20125950200  Montgomery
20125951200  Montgomery
20125951300  Montgomery
20137951700  Norton
20139010400  Osage
20155000600  Reno
20155000700  Reno
20155001000  Reno
20155001300  Reno
20157978300  Republic
20161000500  Riley
20161000801  Riley
20161001100  Riley
20163974600  Rooks
20163974700  Rooks
20169000100  Saline
20169000600  Saline
20173000400  Sedgwick
20173000900  Sedgwick
20173001100  Sedgwick
20173002600  Sedgwick
20173003200  Sedgwick
20173003700  Sedgwick
20173003800  Sedgwick
20173004300  Sedgwick
20173006300  Sedgwick
20177000700  Shawnee
20177000800  Shawnee
20177004000  Shawnee
20181453700  Sherman
20185470600  Stafford
20209041800  Wyandotte
20209042200  Wyandotte
20209043905  Wyandotte
20209044101  Wyandotte
20209045100  Wyandotte
20209045200  Wyandotte

In February, the Kansas Department of Commerce announced it would begin accepting Letters of Interest from communities to have their eligible low-income census tracts designated as Opportunity Zones. Following the review of submissions, Gov. Colyer determined that each community who submitted an eligible census tract would be nominated for at least one Opportunity Zone designation. 

— — — — — — — — —

Opportunity Zones are an economic development tool enacted by the Tax Cuts and Jobs Act of 2017 designed to encourage long-term investments in low-income urban and rural communities. 

This provides incentives to investors to move capital off the sidelines and into projects which will stimulate the Kansas economy. 

This program provides a tax incentive for investors to re-invest their unrealized capital gains into Opportunity Funds that are dedicated to investing in economically distressed areas designated as Opportunity Zones by the Governor. 

The program provides deferral and reduction of capital gains taxes when the gain is invested in a Qualified Opportunity Fund and maintained for at least 5 years. Additional tax incentives are available for investments held for periods of seven years and 10 years.

Based upon the number of low-income communities identified by the Federal Census, the Governor can designate 74 census tracts in Kansas communities as Opportunity Zones. Census tract eligibility is based upon population and income. 

Eligible low-income communities are defined as:

  • Tracts in which the poverty rate is at least 20 percent, or
  • Tracts in which the median family income does not exceed 80 percent of the statewide median family income if located outside of a metropolitan area, or
  • Tracts in which the median family income does not exceed 80 percent of the statewide median family income or the metropolitan area median family income, whichever is higher.

In addition to the federal eligibility criteria, the State considered several other factors in determining which census tracts to designate as Opportunity Zones. 

These factors included an indication of community interest and support for additional investment, the potential of at least one “ready to go” or otherwise identifiable project, and that the identified project addressed one of the following target uses: industrial/business development, housing, or agriculture. 

Other links of interest: