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In Tennessee, Great Opportunities Await

Throughout the great state of Tennessee, you'll find 176 tracts of qualified Opportunity Zones. These areas not only offer ideal opportunities for funds, community leaders and real estate developers, but it encourages investment in low-income communities that may benefit the most from capital investment.

ABOUT OPPORTUNITY ZONES

 

Opportunity Zones are an economic and community development tool established by the Tax Cuts and Jobs Act of 2017. This new tool is designed to drive long-term capital to low-income communities. The new law provides a federal tax incentive for investors to re-invest their capital gains into Opportunity Funds, which are specialized vehicles dedicated to investing in designated in specific communities.

There are 176 census tracts in Tennessee that are qualified opportunity zones. These tracts reflect recommendations from a strategic and data-driven review of feedback from county officials in addition to state priorities and initiatives including:

  • Brownfield redevelopment opportunities
  • Retail, commercial and tourism development opportunities
  • Community and rural development initiatives
  • Low-income housing development opportunities
  • Proximity to entrepreneur centers and post-secondary institutions
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TENNESSEE AT A GLANCE

176

OPPORTUNITY ZONE TRACTS

54,000+

BUSINESSES OPERATE WITHIN OPPORTUNITY ZONES

700,000+

TENNESSEANS LIVE WITHIN OPPORTUNITY ZONES

75 of 95

TENNESSEE COUNTIES CONTAIN AN OPPORTUNITY ZONE
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EXPERIENCE THE #1 BUSINESS CLIMATE IN THE U.S.

It’s no accident that many of the most respected businesses in the world call Tennessee home. Our pro-business regulatory environment, sound fiscal management and some of the lowest tax burdens in the nation have allowed us to make significant investments in public education, workforce development and infrastructure improvements.

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Business Advantages

#1

Lowest state debt per capita in the country

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No

State income tax on personal incomes and salaries

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LOW

Business taxes

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FAQs


  • What is an Opportunity Zone?

    Opportunity Zones are a new economic development initiative established by Congress in the Tax Cuts and Jobs Act of 2017. This new federal capital gains tax incentive program is designed to drive long-term investments to low-income communities. Localities qualify as opportunity zones if they have been nominated for that designation by the state and that nomination has been certified by the Secretary of the U.S. Treasury via his delegation of authority to the Internal Revenue Service.

  • Where are Tennessee’s Opportunity Zones?

    A mapping tool is available via the EIG website or via the TNECD projects directory. Zone designations were certified in Spring 2018 and will remain in effect until December 31, 2028. Any qualifying investment made through a qualifying Opportunity Fund into a qualifying Opportunity Zone will be eligible for the applicable tax benefits through that date.

  • What are the incentives for investing in Opportunity Zones? *

    Opportunity Zones are designed to incentivize new equity investments in low-income communities nationwide. All of the underlying incentives relate to the tax treatment of capital gains, and all are tied to the longevity of an investor’s stake in a qualified Opportunity Fund. There are three separate tax incentives:

    Temporary deferral: A temporary deferral of inclusion in taxable income for capital gains reinvested into an Opportunity Fund. The deferred gain must be recognized on the earlier of the date on which the Opportunity Zone investment is disposed of or December 31, 2026.

    Step-up in basis: A step-up in basis for the deferred capital gains reinvested in an Opportunity Fund. The basis is increased by 10% if the investment in the Opportunity Fund is held by the taxpayer for at least 5 years and by an additional 5% if held for at least 7 years, thereby excluding up to 15% of the original deferred gain from taxation.

    Permanent exclusion: A permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in an Opportunity Fund if the investment is held for at least 10 years. This exclusion only applies to gains accrued on investments made through an Opportunity Fund. There is no permanent exclusion possible for the initially deferred gain.

     

    *Source: EIG

  • What is the purpose of Opportunity Zones?

    Opportunity zones are designed to spur economic development by providing tax benefits to investors. First, investors can defer tax on any prior gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in a QOF is sold or exchanged, or December 31, 2026. If the QOF investment is held for longer than 5 years, there is a 10% exclusion of the deferred gain. If held for more than 7 years, the 10% becomes 15%. Second, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged.

  • What is a Qualified Opportunity Zone Fund (QOF)?

    A QOF is any investment vehicle organized as either a partnership (including an LLC treated as a partnership for tax purposes) or corporation that was formed for the purpose of investing in qualified opportunity zone property (“QOZ Property”).  A QOF self-certifies with IRS filing Form 8996. QOF not required to seek pre-approval or related action to operate as a Fund.  The private sector is responsible for establishing Opportunity Funds. Guidelines to set up an Opportunity Fund or other Opportunity Zone FAQs can be found here.

  • What can a Qualified Opportunity Zone Fund (QOF) invest in?

    The policy enables funds to be responsive to the needs of different communities, allowing for investment in operating businesses, equipment, and real property. For example, funds can make equity investments in new or expanding businesses by purchasing original-issue stock of the company if substantially all of the company’s tangible property is and remains located in an Opportunity Zone. Funds can take original interests in partnerships that meet the same criteria. Funds can also invest directly in qualifying property, such as real estate or infrastructure, if the property is used in the active conduct of a business, and if either the original use of the property commences with the fund or the fund substantially improves the property by investing at least as much as the investor’s basis in refurbishments.

Featured Projects

Sterick Building

Type: Real Estate

Location: Shelby County

Project Size: Contact Project Owner

1660 Middle Tennessee Boulevard

Type: Operating Business

Location: Rutherford County

Project Size: Contact Project Owner

Town Park Lofts

Type: Real Estate

Location: Sullivan County

Project Size: $39,400,000

Bridging Urban Community Capital with Corporate Partnerships

Type: Operating Business

Location: Shelby County

Project Size: Contact Project Owner

Memphis Cycle & Supply Co.

Type: Real Estate

Location: Shelby County

Project Size: Contact Project Owner

714 West Main Street

Type: Operating Business

Location: Rutherford County

Project Size: Contact Project Owner

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Submit A Fund

Submit your qualified fund and make your information available to communities seeking to attract funding sources for their projects.

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View Projects

View the interactive directory of qualified projects within Tennessee's Opportunity Zones that are seeking funding.

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