[ business ]
Opportunity
Zones
Impactful Investing
in West Virginia
ALICIA WILLARD
Over the last 100 years, West Virginia’s economy has depended
heavily on its mineral resources. With coal production declining
and energy prices remaining low in recent years, many West
Virginia communities have seen little to no economic growth.
Ripe for investment, many of these same communities are
now targeted for economic revitalization.
Established in the Tax Cuts and Jobs Act of 2017, opportu-
nity zones were created as a way for investors to help econom-
ically distressed communities like those in West Virginia. The
program gives each state’s governor the authority to designate
opportunity zones—areas of population that are eligible to
receive private investments through opportunity funds.
Designed to drive long-lasting investments into rural and
low-income urban communities, opportunity zones provide
substantial tax benefits for the investor. After the passing of
House Bill 113 that further established tax incentives for new
business activity in opportunity zones, the Mountain State’s
program is now the most competitive in the nation. thought possible. If successful, communities in opportunity zones
should see new business startups; increased job opportunities;
development, reuse and rehabilitation of distressed buildings
and vacant lands; improved community development; and an
enhanced tax base as property values increase.
Endless Opportunities Opportunity Zones in Action
Opportunity zones are virtually limitless for entrepreneurs and
investors, according to Josh Jarrell, attorney and opportunity
zones work group lead for Steptoe & Johnson PLLC. “Com-
munities that have suffered from years of outward migration
and structural decline find it difficult to secure new investments
in these struggling areas. It’s a vicious cycle,” he says. “The
opportunity zones program is trying to reverse that cycle so local
businesses can access new sources of capital and the communities
where those businesses are located can begin to rebuild.”
With the biggest challenge—gaining access to funding—
solved, entrepreneurs can walk through doors they never At the program’s onset, governors around the country were
able to nominate up to 25 percent of their state’s low-income
community census tracts. In West Virginia, there are 220 eligible
census tracts, and 55 of those were nominated and certified as
opportunity zones by the Secretary of the Treasury. Each zone
has its own strengths and opportunities, which community
leaders are quick to point out as they search for investors.
For instance, the zone in Boone County, WV, holds great
potential for meeting a common need of businesses in Southern
West Virginia: flat, developable land. During the coal industry’s
decline, Boone County lost thousands of direct and indirect
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WEST VIRGINIA EXECUTIVE
Investment Benefits
For investors, opportunity zones provide an opportunity to
diversify their investments, grow wealth and preserve capital
through three primary income tax incentives. First, instead of
recognizing capital gains in the year they are incurred, eligible
taxpayers may temporarily defer recognizing that gain until as
late as December 31, 2026, by timely investing in a qualified
opportunity fund. Second, tax owed by the taxpayer on the
amount of gain invested in a qualified opportunity fund is
reduced by up to 15 percent if certain requirements are met.
Lastly, taxpayers can exclude from gross income any appreci-
ation on their investment if it is held at least 10 years.