New tax break program could spur development in San Juan County
Five 'opportunity zones' designated in San Juan County
AZTEC — A new federal incentive program designed to spur development in low-income areas could benefit the city of Farmington and other parts of San Juan County.
Representatives from the New Mexico Economic Development Department attended the San Juan County Commission meeting on Thursday to present information about so-called "opportunity zones."
“It’s going to be one of the most drastic changes to the economic development world that we’ve seen in recent years,” said Juan Torres, finance development director for New Mexico Economic Development Department, a state agency focused on promoting economic growth.
Torres said the idea is to allow capital assets to flow into the opportunity zones with little regulation to promote as much growth as possible.
The zones are areas selected by the governor from a list of qualified census tracts. The governor can only designate 25 percent of those qualified tracts as opportunity zones. Gov. Susana Martinez has designated 63 such opportunity zones, including five in San Juan County. There was a total of 249 qualified tracts in New Mexico.
The five zones in San Juan County include downtown Farmington and the Animas District, as well as the area north of the Four Corners Regional Airport. The other two include an area near Bloomfield and an area south of Farmington, including Upper Fruitland. A map of opportunity zones can be found at gonm.biz.
In addition to the existing map, the economic development department is preparing to launch an interactive map that will allow people to access information about each opportunity zone.
The ability to designate opportunity zones was created when President Donald Trump signed the Tax Cuts and Jobs Act of 2017.
Taxpayers who place capital gains profits in an opportunity fund can defer taxes on those profits until 2026 and, if they keep the investment for 10 years, they can permanently defer paying those taxes.
While the law was passed in 2017, the rules weren't released until a couple of weeks ago, according to Ryan Eustice, an economist with the New Mexico Economic Development Department. Eustice said the rules are currently in a public comment period, but he does not anticipate that many changes will be made.
He said casinos, liquor stores and massage parlors are not eligible for the tax incentives in the opportunity zones.
“The idea was that if you gave investors an incentive to realize unrealized capital gain, and if you deploy those funds in areas that had a great need, then you would be able to do two for one,” Torres said. “You would get capital into the market, and you would get some of these funds actively developing the opportunity zones.”
Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at email@example.com.