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1 1 (December 12, 2018)

handle is hein.crs/govygm0001 and id is 1 raw text is: Congressional SResearch Service Amazon HQ2 and Federal Opportunity Zone Tax Incentives Updated December 12, 2018 On November 13, 2018, Amazon announced that it would be splitting its second headquarters (HQ2) between Northern Virginia and Long Island City, NY. According to the company, each HQ2 site is expected to add 25,000 jobs over 12 years. Additionally, Amazon announced that it would build an Operations Center of Excellence that is expected to add more than 5,000 jobs in Nashville, TN. State and local governments offered Amazon a range of tax incentives, grants, and other benefits (e.g., a nearby state university innovation campus). Some of these incentives are performance-based and would depend on Amazon's actual decisions to hire and invest its own money into the locations. Federal tax incentives might indirectly benefit investments near the new Amazon sites. In particular, a new set of Opportunity Zones (OZs) tax incentives could boost returns on investments made by Amazon or private investors in residential or commercial developments to support Amazon's workforce and their families. OZs have generated much interest by state and local governments and private investors after being created by the 2017 tax revision (P.L. 115-97). Under part of the statute authorizing OZs, state governors had the discretion to nominate a limited number of census tracts within their states that were either (a) low-income, as defined in statute, or (b) having no more than 125% of the median family income of a contiguous low-income tract. Those designations were finalized in summer 2018. Investors who roll over capital gains from investments (e.g., stock sales, sales of shares in commercial or residential real estate) to purchase a financial interest in a Qualified Opportunity Fund (QOF) may benefit. QOFs are corporations or partnerships that hold at least 90% of their assets in qualified OZ property (tangible business property, stock, or partnership interest in another QOF). QOFs are self- certified entities and do not require advance certification for formation or to begin eligibility for OZ tax incentives. The three OZ tax incentives are all designed to reduce capital gains tax and become available at different increments over a 10-year period: 1. Temporary deferral of capital gains that are reinvested in qualified OZ property. Taxpayers can immediately defer capital gains tax due upon sale or disposition of an asset Congressional Research Service https://crsreports.congress.gov IN11007 CRS INSIGHT Prepared for Members and Committees of Congress

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