California Bill Would Partially Conform State to IRC for Opportunity Zones
California’s tax code would partially conform to the federal Internal Revenue Code concerning opportunity zones (OZs) under provisions in a draft of a budget trailer bill released today. Under the bill, California would grant the same state tax benefits as federal benefits for OZ investments in affordable housing and housing that meets the requirements of the state’s density bonus law, as well as certain clean energy property. In order to be eligible for the tax benefits, qualified opportunity funds would be required to have 90 percent of their assets in California OZ property. The legislation would cap the aggregate amount of California OZ investment eligible for tax benefits at $5 billion, with a maximum fund size of $100 million. The state Senate and Assembly will both hold hearings on the proposed legislation.