Investors that choose to spend their capital gains in Haines stand to reap significant tax breaks, while also potentially benefitting the Haines community, based on incentives offered by the federal Opportunity Zone Project.
In 2018, U.S. Congress established the program as an investment tool for low-income and rural communities nationally as a way to drive long-term growth. Alaska Gov. Bill Walker selected Haines among 25 communities that now provide tax incentives for individuals or businesses to re-invest capital gains.
In June, the U.S. Economic Development Administration added opportunity zones as an investment priority, meaning it will count for additional points in federal grant applications.
Haines Economic Development Council has taken on the role of identifying and attracting potential investment to Haines as an opportunity zone.
“Three primary benefits to investors are deferral of capital gains taxes, reduction of capital gains taxes if they hold the investment for a certain amount of time, and elimination of taxes on future gains,” HEDC director Margaret Friedenauer said.
In addition to private investment, Friedenauer said the designation will also affect public projects.
“If we’re looking for funding for a public project, now being an opportunity zone will also help with our scoring when we go after that type of funding,” Friedenauer said.
Potential areas of investment are: the Palmer Project exploration site for copper and zinc; the Lutak dock for potential export of timber or minerals; purchase the Laperyri dock property at Lutak; or the biomass initiative to convert borough buildings from burning diesel, Friedenauer said.
Next month, HEDC will publish an investment prospectus for Haines that outlines opportunity zone benefits, potential investment opportunities, and other information about Haines to attract and inform investors.