CLARKSVILLE, Tenn. – Four census tracts in the City of Clarksville have been designated as Opportunity Zones, the state Department of Community & Economic Development recently announced.
Opportunity zones are a new community development benefit created by the federal Tax Cuts and Jobs Act of 2017. The tool is designed to drive long-term investment capital to low-income areas. Investors choosing to reinvest capital gains in opportunity zones can earn federal capital gains tax benefits.
The new federal tax law directed local governments to recommend qualifying census tracts to state government for selection as Opportunity Zones. Earlier this year, the U.S. Department of Treasury and the Internal Revenue Service approved Tennessee’s nomination of 176 Opportunity Zones in 75 counties.
The four zones selected in Clarksville are clustered in and around downtown Clarksville. They are census tracts 47125100-100, -200, -800 and -900.
Eligible low-income census tracts have an individual poverty rate of at least 20 percent and median family income no greater than 80 percent of the area median. Up to 5 percent of contiguous tracts could be designated Opportunity Zones if they met income guidelines.
Tennessee’s tract recommendations were determined based on review of City and County mayor feedback in addition to consideration of state priorities, such as business and brownfield development; retail, commercial and tourism development; low-income housing development; and proximity to entrepreneur centers, technology training, colleges and universities.
With the zones selected, the focus will shift to outreach to investors about how to use Opportunity Zone tax benefits. Experts say the program is designed to lure investors to make bets in low-income neighborhoods by reinvesting capital gains in exchanges for tax breaks.