Federal Opportunity Zone - Soldier Creek Industrial Park

Federal Opportunity Zone - Solider Creek Industrial Park

The Federal Tax Cuts and Jobs Act was signed into law in late 2017, which contained a provision to create Opportunity Zones in each state. Federal Opportunity Zones are a new community development program intended to spur investment in impoverished and economically distressed areas. Oklahoma was one of the first 15 states to designate Opportunity Zones.  There were a total of 117 Oklahoma census tracts approved for this designation including one that encompasses the Soldier Creek Industrial Park ("SCIP"). 

This federal incentive benefits investors who choose to invest in the Opportunity Zone, via a qualifying Opportunity Fund.  By doing so they may significantly defer and/or reduce their federal capital gains tax liabilities. If an investor’s capital is left in a qualifying fund for 5 years, the investor will defer their federal capital gains taxes. In the fifth year they investor can reduce their capital gains tax. There is an additional reduction in year 7. If they leave the money in the fund for a decade, then any appreciation in the asset from the time they invest through year 10 is not subject to any additional capital gains tax. This deferral and/or reduction on federal capital gains taxes will improve return on investment and also direct capital to areas that need investment.

Participating in the Opportunity Zone program does not preclude investors and developers from taking advantage of other incentives available in SCIP.  It is important to remember that SCIP is located in a U.S. SBA Hub Zone, it is in an area where new market tax credits may be available, and  it may be possible to utilize a Tax Increment Finance district to offset some development costs.  This is in addition to other potential incentives offered by the City of Midwest City and the Oklahoma Department of Commerce.

Latest U.S. Treasury/IRS information on Opportunity Zone regulations.