Areas near and within the city limits of Bluffton, Indiana provide numerous opportunities for investment assistance. Investment assistance is available through a Opportunity Zone designation, HUB Zone designation, and New Market Tax Credit Program. Each of these areas offer unique opportunities to develop, grow, and investment in a business in Wells County, Indiana.
Bluffton Opportunity Zone Characteristics
Governor Holcomb nominated 156 census tracts with the help of a group of advisors from around the State of Indiana, including Wells County Census Tract 18179040600 in Bluffton, Indiana. The Bluffton Opportunity Zone ecompasses downtown, industrial, residential, and commercial areas within Bluffton. These areas lend many opportunities for investment within the community. Additional areas are also available for commercial development, industrial development, and residential development within close proximity of the Bluffton Opportunity Zone.
An Opportunity Zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones if they have been nominated for that designation by the state and that nomination has been certified by the Secretary of the U.S. Treasury via his delegation of authority to the Internal Revenue Service.
- Opportunity Zones are a bipartisan provision of the Tax Cuts and Jobs Act of 2017
- The legislation is designed to encourage and incentivize investors to redeploy and invest capital into low-income communities
- "Opportunity Funds" managed by professionals are currently being formed for the purpose of investing directly into low-income communities designated Opportunity Zones. Individuals may also form, fund, and self-manage an Opportunity Fund via a straightforward "self-certification" process.
- Opportunity Zones have no detrimental effect upon state or local tax revenue. The goal is to increase investment in low-income communities to solidify and strengthen the state and local tax base.
The tax provision provides three main benefits to an investor in an Opportunity Zone. The tax benefits include the following:
- Temporary Tax Deferral - An investor may defer recognition of income associated with any current capital gains (not yet recognized for federal tax purposes) realized that are reinvested into an Opportunity Fund.
- Basis "Step-Up" - An investor is granted a step-up in the basis of any current capital gains reinvested into an Opportunity Fund. The private investor's basis in his or her original investment is increased by ten percent (10%) of the amount of the unrecognized capital gain if the Opportunity Fund investment is held for a minimum of five (5) years, and fifteen percent (15%) if the investment is held for a minimum of seven (7) years. The effect of the step-up in basis is to reduce the amount of the re-invested capital gain that is subject to tax.
- Permanent Exclusion of Gain - Long term investments in Opportunity Funds are encouraged because private investors are granted a permanent exclusion of any future capital gain income realized upon the sale or exchange of an investment in an Opportunity Fund if the investment is held for at least ten (10) years. Thus, in such a case, a private investor would be permitted to exclude the entire amount of gain an investment accrues after the initial investment is made into the Opportunity Fund.
The government limits competition for certain contracts to businesses in historically underutilized business zones. It also gives preferential consideration to those businesses in full and open competition. Joining the HUBZone program makes your business eligible to compete for the program’s set-aside contracts. HUBZone-certified businesses also get a 10 percent price evaluation preference in full and open contract competitions.
To qualify for the HUBZone program, your business must:
- Be a small business
- Be at least 51 percent owned and controlled by U.S. citizens, a Community Development Corporation, an agricultural cooperative, a Native Hawaiian organization, or an Indian tribe
- Have its principal office located in a HUBZone
- Have at least 35 percent of its employees live in a HUBZone
You can find the full qualification criteria in Title 13 Part 126 Subpart B of the Code of Federal Regulations (CFR). You can also get a preliminary assessment of whether you qualify at the SBA’s Certify website.