Showcase of Undergraduate Research and Creative Endeavors (SOURCE)

Analyzing the Regulations and Statistics for Opportunity Zones

The Tax Cuts and Jobs Act of 2017 (TCJA) was the most significant tax reform since the Tax Reform Act of 1986. TCJA ushered in tax law changes including reforms to stimulate the economy. One such TCJA reform was the enactment of tax incentives called opportunity zones. Opportunity zones were designed to encourage economic development and job creation in “distressed communities,” which are defined by the Internal Revenue Service. There are different views on the effectiveness of the opportunity zones legislation. Some believe the tax incentives are too generous, while others believe the regulations are too lax. Analyzing the success of opportunity zones is very difficult, since qualified opportunity zones, which encompass distressed communities, were not announced until April of 2018. This paper seeks to analyze existing opportunity zone regulations and statistics to explore ways for improving the regulatory guidance. More focused regulatory guidance may allow distressed communities to realize the benefits of economic development and job creation as intended, rather than just tax benefits to investors. Opportunity zones are a brilliant idea, but there needs to be more regulatory guidance to instill greater benefits for distressed communities.