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Opportunity Zones

The Opportunity Zones program is a federal program designed to spur community investment by providing tax benefits to investors. The City of Mesa has 11 census tracts that have been designated Opportunity Zones by the U.S. Department of the Treasury. The map below highlights these tracts within the city boundaries.

The Arizona Governor’s Office and the Arizona Commerce Authority worked with local governments, tribal communities, and counties to decide which census tracts would be submitted for consideration by the federal government. As of April 9, 2018, all of Arizona’s 168 submitted tracts became officially designated as Opportunity Zones.

Mesa’s designated Opportunity Zones are anchored by our four central business districts: Downtown Mesa, the Fiesta District, the Falcon District, and the Gateway Area. The Aerial Mesa tool showcases what makes each district an ideal place to locate and grow a business, including the location of Opportunity Zones, Major Employers and Assets, New Development and Investments, and Development Opportunities.

To visit the Aerial Mesa tool and explore Mesa’s Opportunity Zones visit the links below.

To have a qualified investment in an Opportunity Zone eligible for the tax incentives two qualifications must be met:

  • The investment must be made via a Qualified Opportunity Fund. An Opportunity Fund is a privately managed investment vehicle organized as a corporation or a partnership for the purpose of investing in qualified Opportunity Zone Businesses. The fund must hold at least 90 percent of its assets in such property.
  • The investment must be derived from a gain in another investment and transferred into an Opportunity Fund within 180 days of realizing the gain.

If these qualifications are met, investors can receive reductions on capital gains taxes relative to the years of their investment in an Opportunity Fund after 5 years.

  • If the investment is held for a minimum of five years, the taxable amount of the capital gains reinvested is reduced by 10%.
  • If the investment is held for seven years, the taxable amount of capital gains reinvested is reduced by an additional 5%, bringing the total reduction to 15%.
  • After holding for ten years, there is a permanent exclusion from taxable income on the capital gains from the investment in the Opportunity Fund.

What is a qualified Opportunity Zone Business?

  • A business in which substantially all of the tangible property owned or leased by the business is used in an opportunity zone, with at least 50% of the gross income earned by the business coming from the active conduct of business with an Opportunity Zone.

Examples of Qualified Opportunity Zone Businesses:

  • Mixed use developments
  • Market rate rental housing
  • Strip centers
  • Parking facilities
  • Retail/grocery stores
  • Hotels
  • Restaurants
  • Sports facilities
  • Health clinics
  • Offices
  • Manufacturing

Examples of businesses that do not qualify include:

  • Private or Commercial Golf Course
  • Country Club
  • Massage Parlor
  • Suntan or Hot Tub Facility
  • Racetrack or other establishment used for gambling
  • Any store whose principal purpose of which is the sale of alcoholic beverages for consumption off the premises.

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