BY TIMOTHY LAROCHE
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CLAREMONT — Under the guidelines of a new federal program, businesses looking to invest in Claremont will be able to receive additional tax incentives.
In a bid to drive business development, Gov. Chris Sununu announced on Wednesday that Claremont and Newport will join 25 other communities around the state in receiving eligibility under a new tax program aimed at incentivizing economic growth in low-income areas.
The Opportunity Zone program, which was authorized under the Tax Cuts and Jobs Act of 2017, allows businesses to place the unrealized profits from investments into an Opportunity Fund, where they will be eligible for tax deductions. The fund is designed to reduce the risk of investing money in low-income communities.
Sununu is slated to announce the specific census tracts in the city that will receive the designation today at a press conference in Franklin. City administrators have applied for Claremont’s downtown district and Charlestown Road to be eligible under the fund.
“This program just creates another incentive that reduces the uncalculated risk on investing in an area,” City Manager Ryan McNutt said on Wednesday. “We want people to make investments in the downtown.”
According to McNutt, both the city center and Charlestown Road are areas of the city that hold unrealized development potential. While parking issues have posed the largest barrier to the recovering downtown mixed-use district, development opportunities on Charlestown Road are limited by the city’s limited sewer infrastructure in the area, he said.
Regardless of which area receives the Opportunity Zone designation, McNutt said he hopes the program will lessen some of the risk for investors, unlocking the city’s economic potential.
The program was signed into law Dec. 22, 2017. Through the program, businesses can reinvest unrealized capital gains in an Opportunity Fund. After seven years of holding the investment in the fund, up to 15 percent of the investment’s value can be excluded from taxation. After holding the investment for 10 years, businesses can be eligible to exclude the entire investment from taxation.
The funds can be used for investments in certain infrastructure and real estate. Funds can also be applied to certain stock purchases for companies in which nearly all of their physical property lies within an Opportunity Zone.
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