Recent News
Rep. Jason Smith, R-Missouri, on Friday introduced the Small Business Jobs Act, which would introduce reporting requirements for qualified opportunity funds (QOFs) and create qualified rural opportunity zones.
The Financial Accounting Standards Board (FASB) today published Accounting Standards Update (ASU) 2023-02, which expands the proportional amortization method to account for investments in all tax credit structures. That accounting method was previously allowed only for low-income housing tax credit (LIHTC) investments, but now is available, by election, to all community development tax credit investment reporting that meets five conditions. Under the new guidance, reporting entities can make accounting policy elections on a tax-credit-program-by-tax-credit-program basis, rather than for individual investments or at the reporting entity level. For public business entities, the new amendments are effective for fiscal years beginning after Dec. 15, 2023. For all other entities, the amendments are effective for fiscal years beginning after Dec. 15, 2024. Early adoption is permitted for all entities in any interim period. For calendar-year-end entities, this would include the first quarter ending March 31, 2023.
Legislation introduced in the Rhode Island House of Representatives would exempt certain properties from the requirement to pay prevailing wages to receive the Rebuild Rhode Island Tax Credit. H.B. 6186 would allow taxpayers that applied for the tax credit before Jan. 1, 2023, an exemption from the prevailing wage requirement for construction projects that have more than $10 million in expenditures. The Rebuild Rhode Island tax credit goes to manufacturing projects, historic rehabilitation properties and mixed-use developments in opportunity zones (OZs) that support affordable housing.
A special report released today by the Economic Innovation Group says that investment through the opportunity zones (OZ) incentive had reached nearly half of OZs by the end of 2020 and that communities receiving OZ investment were significantly more economically distressed than the rest of the country. Examining the Latest Multi-Year Evidence on the Scale and Effects of Opportunity Zones Investment provides information through 2020 and also highlights the positive economic spillovers for neighboring communities and that home values in OZs have increased with development, while rents have remained stable.
Qualified opportunity funds (QOFs) tracked by Novogradac reported nearly $10 billion in equity investment in 2022, the biggest year since the opportunity zones (OZ) incentive was enacted at the end of 2017. The 1,661 QOFs tracked by Novogradac (1,274 of which report a specific equity amount) raised $9.68 billion last year, bringing the cumulative amount to $34.09 billion. That was despite a slowing in investment during the fourth quarter. Novogradac tracks QOFs based on voluntarily provided information as well as public information. Proprietary and private funds that are owned and operated by their principal investors are not included. Two blog posts by Novogradac provide details–the first with overall information, the second with information on the focus of investments. Future blog posts will address the cities and states with the most planned investments and the sizes of QOFs and the amount of equity overseen by different QOF managers.
