These 75 struggling NJ towns could get boost under Trump tax law
Parts of 75 different towns in counties across the Garden State have been designated as Opportunity Zones by Gov. Phil Murphy.
The designation will hopefully spur investors to take advantage of a new and relatively unknown federal program that’s designed to attract capital investment in economically struggling communities.
According to Steve Glickman, the CEO of the Economic Innovation Group, a nonpartisan think tank that came up with the idea for Opportunity Zones, this “takes advantage of the enormous wins that many investors have had investing in the economy over the last decade.”
Glickman explained the program allows investors to roll capital gains into investment vehicles called Opportunity Funds.
“They can use that capital to invest in Opportunity Zones in low-income communities and they can be invested in any asset in those communities,” he said.
“We’re talking about real estate, manufacturing rehab, new businesses, growth businesses, infrastructure, or just about anything else you can think of.”
He noted that "there’s about $6 trillion in these unrealized capital gains sitting with investors across the country.”
Glickman said investors would benefit from doing this by delaying paying taxes on the money rolled into Opportunity Funds until 2026. But the really big incentive is “if they hold their investments in these communities for 10 years or more and they make more money, they don’t have to pay any taxes on those new gains.”
He said the idea is if we target growth in communities that have not benefited from the economic recovery over the past decade, “then they’ll start to grow and develop and create a lot more economic activity, and that will create jobs and sustainable enterprises.”
“It becomes a win-win, investors are making money on a new set of investments they were never looking at before, and the local communities see a new flow of capital that they could never capture before.”
He added this will provide “a new lifeline for places like Camden and Newark and Trenton, that have struggled economically over the last 10 years, and gives them a real shot to bring scalable capital to their communities.”
U.S. Sen. Cory Booker, D-N.J., along with Republican South Carolina Sen. Tim Scott, sponsored Opportunity Zone legislation that was included in the federal tax-reform overhaul law approved at the end of last year.
The U.S. Treasury Department and the IRS are still working out of the details of the plan but it should be finalized in the next few months.
The following New Jersey municipalities have been submitted to the U.S. Treasury for the Opportunity Zones program:
Egg Harbor City
Egg Harbor Twp
Cape May County
West New York
The U.S. Department of the Treasury must provide feedback or approve the Governor’s selections by April 22.
You can contact reporter David Matthau at David.Matthau@townsquaremedia.com