Opportunity Zone Investment Incentives

Alabama Department of Economic and Community Affairs

Program Type:

Tax Incentive

Eligible Geography:

Alabama

Eligibility Map:

Map of Opportunity Zones

Program URL:

https://revenue.alabama.gov/tax-incentives/about/income-tax-incentives/

Summary:

The Alabama Incentives and Modernization Act provides Alabama taxpayers the same tax benefits available under federal law when they invest in an approved opportunity fund for qualified projects in low income areas in Alabama that are designated as "Opportunity Zones". The objective of the act is to encourage investment in opportunity funds. Under this Act, the Alabama Department of Economic and Community Affairs is authorized to enter into project agreements with "approved" opportunity funds to invest the state funds into the OZ projects. In addition to providing for investments, the project agreements may provide the funds' investors with a tax credit, the Impact Investment Credit, against state income taxes or financial institution excise taxes if the investment does not meet an agreed-upon rate of return. The program cap is $50 million.

Eligible Recipients:

For-Profit Business; Financial Institution

Eligible Recipients Detail:

Corporations and partnerships must organize each fund. Investors can do this by filing Form 8996.

Eligible Purpose:

Building Infrastructure; Last Mile Infrastructure; Broadband Enabled Devices; Anchor Institution Infrastructure

Eligible Purpose Detail:

Opportunity Zone regulations permit all capitalized improvements that increase the value of residential or commercial property to count towards substantial improvement requirement for Qualified Opportunity Fund Zone investment.

Other Eligibility Criteria:

Designated Low-Income Communities, which are Census Tracts, where:

-The poverty rate is at least 20%
-The median family income does not exceed 80% of the area median family income, or 85% in high migration rural counties
-The Census tract has a population less than 2,000 and is within a Federally Designated Empowerment Zone and is contiguoius to at least one other LIC.