South Carolina Treasurer Curtis Loftis is encouraging companies to invest in the state’s new Opportunity Zones.
Opportunity Zones are designed to encourage investment in rural areas lacking business and employment opportunities. It offers federal tax incentives for companies that invest in opportunity zones as part of the Tax Cuts and Jobs Act of December 2017.
Loftis said the program introduced and championed by U.S. Sen. Tim Scott will help the entire state.
“We know how Tim was raised,” he said. “He was raised by a single mother who worked 16 hours a day. And you know that when Tim was doing this he was working for the disadvantaged people. He was working for the people who were forgotten. The marginalized. And those are those areas.”
Loftis spoke at the 38th Annual Economic Outlook Conference in Columbia on Tuesday, encouraging potential investors to consider Opportunity Zones.
“It’s one of the best investments you’ll make,” he told them. “We need jobs. We need investment in areas where we’re not going to get them otherwise and this legislation was specifically designed to bring money to those marginalized areas.”
The tax regulations would allow investors to use capital gains returns to reinvest towards a business in one of the designated “distressed” or “severely distressed” low-income Census tracts. The investor would have any taxes on those capital gains deferred for at least seven years if they a stake in the business for that time.
“We have whole counties that are like that and in every county in the state we have areas like that,” Loftis said. “And so this legislation is brilliant because it allows people to do well and to invest their money productively and to make a good profit.”
The Department of the Treasury says nearly half of South Carolina’s 1,097 Census tracts meet the required poverty levels to qualify. However, the law only allows a governor to designate 25 percent of those areas as Opportunity Zones. Gov. Henry McMaster has done so for 135 tracts across the state.
“For the first time in history in America, more people live in urban areas than they do in suburban or rural areas,” Loftis said. “And those areas are becoming even more blighted than they were.”