Governor Inslee uses Trump tax-cut law to designate 139 Opportunity Zones in economically-depressed communities

By JASON MERCIER  | 
POLICY NOTES
|
Jul 18, 2018

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Key Findings

  1. Governor Inslee nominated 139 areas in 36 counties (none in San Juan, Wahkiakum or Whitman counties) across the state to be designated as Opportunity Zones. 
     
  2. Opportunity Zones help encourage job creation and private economic investment in economically-distressed areas.
     
  3.  Opportunity Zones are authorized under a provision of the 2017 Federal Tax Cuts and Jobs Act adopted by Congress and signed by President Trump.
     
  4.  Washington’s Opportunity Zones received final approval by the federal government on May 18, 2018.

Introduction

On April 20, 2018 Governor Inslee nominated 139 areas in 36 counties (none in San Juan, Wahkiakum or Whitman counties) across the state to be designated as Opportunity Zones to encourage job creation and private economic investment. These Opportunity Zones are authorized under a provision of the 2017 Federal Tax Cuts and Jobs Act adopted by Congress and signed by President Trump. The U.S. Treasury Department granted final approval to the governor’s recommendations on May 18, 2018.

What are Opportunity Zones?

Opportunity Zones are a new tool for economically-distressed areas to receive investments from individuals, facilitated with favorable tax treatment for the investments. 

Investors in an Opportunity Zone are able to defer tax on capital gains for a set period as long as the gains are reinvested in a Qualified Opportunity fund. This new economic development tool was authorized by the 2017 Federal Tax Cuts and Jobs Act. 

This concept was pulled from the bipartisan “Investing in Opportunity Act” sponsored by U.S. Senators Tim Scott (R-SC) and Cory Booker (D-NJ) and Representatives Pat Tiberi (R-OH) and Ron Kind (D-WI). Among the co-sponsors were Washington State Representatives Suzan DelBene (D), Derek Kilmer (D) and David Reichert (R). 

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