Alabama Gov. Kay Ivey signed a bill on June 5, 2019 giving state taxpayers a capital gains tax reduction for opportunity zones (OZ) investments, conforming the Alabama tax code to the Internal Revenue Code on OZs. H.B. 540 also allows the state’s Department of Economic and Community Affairs to reach agreements with qualified opportunity funds (QOFs) to offer impact investment tax credits to investors in case the projects undertaken by the QOF don’t produce expected returns by the fifth year, with the provision that “extraordinary returns” are allocated back to the state. There is a $50 million annual cap on the credits.
Minnesota is the latest to state that has passed a bill that conforms their Internal Revenue Code (IRC) to match the provisions of the federal opportunity zones (OZ) incentive. There are still six states who are considered “Nonconforming” states (California, Arizona, Mississippi, North Carolina, Pennsylvania and Massachusetts)
The California State Senate last week passed S.B. 25, a bill that would streamline environmental review and approval for developments, including those funded by qualified opportunity funds. The Senate advanced the legislation to the Assembly on a vote of 28-6, with four senators not voting.
Alabama legislation to give state taxpayers a capital gains tax reduction for certain opportunity zones (OZ) investments passed the state Senate and House of Representatives this week and is on the desk of Gov. Kay Ivey. H.B. 540 would allow a state capital gains tax reduction if the gains are invested in a qualified opportunity fund (QOF) that has at least 75 percent of its qualified OZ property in the state. The bill also includes a provision to allow the Alabama Department of Economic and Community Affairs to enter into agreements with QOFs to offer impact investment tax credits to investors in case the projects undertaken by the QOF don’t produce returns by the fifth year that were expected in the project agreement. There is a statewide cap of $50 million for credits, with a requirement that “extraordinary returns” are allocated back to the state