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Brunswick's Federal Opportunity Zone presents chance for growth

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Washington, June 30, 2018 | comments

For the past five years, Georgia has been named the top state for business. This is certainly something to be proud of, however, as the representative of Southeast Georgia, it is my mission to ensure that this top-rated business climate reaches not only Atlanta, but every corner of our state.

Creating fairness in opportunity for urban and rural areas alike was a major goal in crafting the Tax Cuts and Jobs Act (TCJA) to reform our nation’s tax code. One example of this fairness includes the reduction of the state and local income tax deduction, which previously allowed high tax states, like New York and California, to perpetually increase state and local taxes trusting that citizens could deduct them from federal taxes while low tax states, like Georgia, subsidize them.

The creation of Federal Opportunity Zones in the TCJA is another example of creating this fairness. This program is designed to give preferential tax incentives for struggling, low income areas, regardless of their rural or urban status.

Soon after the TCJA was signed into law, the city of Brunswick and I worked together to designate the city as a Federal Opportunity Zone. We agreed these federal incentives would work to attract investments that would propel Brunswick onto the same playing field as other areas in Georgia that have reaped the benefits of Georgia’s business climate.

As we all know, Brunswick is an area of untapped potential on the Georgia coast, with the Port of Brunswick, the Jobs Corps Center, the Federal Law Enforcement Training Center, nearby historical monuments and more. The designation of an Opportunity Zone will help give Brunswick an economic boost that had previously mainly been focused in larger cities with the seemingly endless education, housing, utility projects and more dedicated to inner city neighborhoods in Atlanta, Chicago or New York.

Now, Brunswick’s designation as a Federal Opportunity Zone allows for companies to invest in the area and defer capital gains taxes on those investments. Specifically, the law allows opportunity funds to be created. For example, partnerships that invest in the stock market could place realized gains into the opportunity fund, then use those gains to build businesses in the Federal Opportunity Zones and defer the capital gains tax. If the investment is held for 10 years, the capital gains tax is completely eliminated.

This creates a private sector incentive to not only encourage investment in the stock market, but encourage the creation of businesses in areas that have lacked jobs, consumer choice, transportation options and more.

This could be the impetus a company like Trader Joe’s needs to open a business in certain neighborhoods here in the First District or across the country, translating to greater food options and jobs for residents. Additionally, local residents of Brunswick may be incentivized to open their own, unique business selling local products creating a whole supply chain with ripple effects throughout the city. Opportunity funds don’t even need to be tangible property, but can include investing in the ownership of a company or a partnership for capital interest.

The TCJA creates a tax code that ensures all areas are given the same opportunities and benefits as the large metropolises. Federal Opportunity Zones represent just one example of the momentum the TCJA will create in our area.

Rep. Earl “Buddy” Carter, R-1, represents much of Coastal Georgia in the U.S. House of Representatives.

The Brunswick News
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