Ohio, as the seventh largest state in the U.S., contains many extremely promising areas for Opportunity Zones investing, and, as there are a substantial 320 Opportunity Zones distributed througout the state, investors have quite a few areas to chose from. Today, Ohio is known for industries including fuel cell and solar energy development, medical research, aerospace and defense, rubber and industrial products, and tech research and development, which are all contributing to the state’s healthy rate of economic development.
In 2018, Governor Rick Scott announced the designation of 427 Qualified Opportunity Zones (QOZs) througout the state of Florida. These O-Zones are spread througout the state, however, they are concentrated in some of the state’s most populous areas; 68 Opportunity Zones are in the state’s most heavily populated county, Miami-Dade, while 34 Opportunity Zones are located in Duval County, home of Jacksonville, Florida’s most populous city. There are approximately 350,000 commercial properties located inside the state’s O-Zones, about 12% of all commercial properties in the state.
Texas, the second largest state in the U.S., has 628 designated Opportunity Zones, making it one of the most promising areas for Opportunity Fund investing in the entire country. Texas has O-Zones located in or near all of its major urban areas, including Austin, Houston, Dallas, and San Antonio. The median household income of Texas’s Opportunity Zones is $36,268, compared to the median income of $57,547 for all census tracts in the state. In addition, 70.22% of Texas’s Opportunity Zones are located in a metro area, compared to 85.58% of all census tracts statewide.
The Historic Tax Credit (HTC) program is offers a federal tax credit to investors who rehabilitate and re-purpose historic buildings. To encourage investment, the program allows participants to take 20% of a project’s eligible rehab expenses as a credit against their federal income taxes. The program, which began in 1976, has been utilized for the rehabilitation of over 40,000 historic buildings. In contrast, the Opportunity Zones program offers investors a way to defer and/or reduce their capital gains tax liability by investing in properties and businesses located in Qualified Opportunity Zones (QOZs), economically disadvantaged areas certified by the U.S. Department of the Treasury.
The Low Income Housing Tax Credit (LIHTC) program is the federal government’s primary incentive program to encourage investors and developers to create more affordable housing around the U.S. To do so, the program offers investors in affordable housing a dollar-for-dollar reduction on their federal income taxes. In contrast, Opportunity Zones program allows investors who put sell their investments and re-invest their money into qualified Opportunity Funds to defer their capital gains taxes until 2026, and, if they keep their money in the fund for at last 10 years, they pay no capital gains taxes on any new gains that their investment makes.