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The Tax Foundation is the nation’s
leading independent tax policy
research organization. Since 1937,
our research, analysis, and experts
have informed smarter tax policy at
the federal, state, local, and global
levels. We are a 501(c)(3) nonprofit
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Measuring Opportunity Zone
• The Tax Cuts and Jobs Act (TCJA) established the Opportunity Zones
program to increase investment in economically distressed communities. This
place-based incentive program provides capital gains tax incentives for those
who reinvest capital gains into qualified opportunity funds (QOF).
• To establish that Opportunity Zones are effective, evaluators would need to
show that opportunity zones created economic benefits, such as increased
employment opportunities for residents within distressed communities over
the long term, that would not have occurred without the program.
• The opportunity zone designation process generally allowed for no more than
25 percent of a state’s low-income census tracts to be designated, leaving a
set of low-income census tracts that were eligible to be opportunity zones,
but not chosen. These census tracts provide program evaluators with a set of
comparison groups to assess the impact of opportunity zones.
• The Department of the Treasury currently cannot connect opportunity zone
data—such as the number of QOFs and amounts invested by QOFs and
qualifying opportunity zone businesses—to specific census tracts. Tying data
reported by QOF investors to specific census tracts would allow evaluators to
better measure the effects of opportunity zones.
Federal Research Manager
TAX FOUNDATION | 2
The Tax Cuts and Jobs Act (TCJA) established the Opportunity Zones program to increase investment