Gov. Ralph DLG Torres announced Thursday that the U.S. Department of the Treasury and the Internal Revenue Service have approved all of the CNMI’s nominations for “qualified opportunity zones.”
The “qualified opportunity zones” designation was created by the Tax Cuts and Jobs Act, which was signed into law in December 2017 to spur economic growth in low-income communities.
“We have put great effort into rebuilding our economy and have seen incredible amounts of economic growth throughout our islands and this designation offers us the opportunity to build upon our success and create a stable, diversified economy fostered by U.S. investments.” Torres said.
“By attracting more U.S. private investment to underserved areas in our islands, the tax incentives for qualified opportunity zones will further encourage businesses to invest in the communities that need it most, while also creating meaningful employment opportunities for our U.S. workers. I nominated 20 of our census tracts, which includes Saipan, Tinian, and Rota, and I’m happy to report that all of our nominations were approved. This represents another step forward in our economic revitalization. We look forward to working with the Department of the Treasury, the IRS, and our private sector partners to fully take advantage of this program and boost economic growth for our islands.”
The CNMI submitted 20 nominations from all three major islands and all were approved by the Department of Treasury.
Qualified opportunity zones are intended to facilitate investment in areas seeking economic growth and revitalization.
“In the years ahead, we are aiming toward securing a lasting and strong economy, and I look forward to working toward building connections with businesses across the United States, providing greater opportunities for our people, and making the CNMI economy a strong partner in the larger American economy,” Torres said.
Qualified opportunity zones retain this designation for 10 years. Investors can defer tax on any prior gains until no later than Dec. 31, 2026, as long as the gains are reinvested in a qualified opportunity fund, a vehicle for investment in qualified opportunity zones. In addition, if an investor holds the investment in the opportunity fund for at least 10 years, the investor would be eligible for an increase in its basis equal to the fair market value of the investment on the date that it is sold. (PR)