Texarkana is one of 85 Arkansas areas Gov. Asa Hutchinson has nominated to become part of a new, federal economic development program.
Hutchinson tapped Texarkana to become one of the state's Opportunity Zones. The program encourages investment in low-income areas by providing certain tax incentives.
Hutchinson also nominated Southwest Arkansas cities Buckner and Ogden to become Opportunity Zones.
"I'm excited about the potential investment that will be encouraged in low-economic areas of our state. One of my goals as governor from day one has been to increase economic opportunities for all Arkansans. By investing in these high-potential areas, we will be able to breathe new life into communities and ensure our state remains economically diverse and healthy," Hutchinson said in a news release.
Congress established the program in the Tax Cuts and Jobs Act of 2017. Next, the Treasury Department will approve about 8,700 Opportunity Zones from those nominated nationwide.
Eligible zones are based on U.S. Census tracts, and governors of each state may nominate up to 25 percent of eligible tracts for approval.
Arkansas has 337 qualified tracts, and Arkansas Economic Development Commission officials said those nominated were chosen based on their potential for economic success and ability to attract investment.
Benefits for investors include a temporary tax deferral for capital gains, a step-up basis for capital gains invested, and a permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in a qualified Opportunity Fund if the investment is held for at least 10 years.
It is estimated that potential capital eligible for reinvestment in the zones will total $6.1 trillion.
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