The designated Opportunity Zone boundaries will remain unaffected by changes in the 2020 decennial census, the Internal Revenue Service (IRS) confirmed today.
The boundaries of the designated QOZs are based on tracts that were designated in 2018. These boundaries will remain unchanged even if an individual census tract has been redefined in the new census, according to IRS.
The IRS announcement came in response to questions from the public about the impact of the new decennial census on the boundaries of QOZ.
The statement clarifies that no boundary would change following the release of the decennial census.
“The boundaries of the designated QOZs were established at the time they were designated and are not subject to change. Accordingly, boundaries of a designated QOZ do not shrink or expand if the 2020 decennial census results in a change to the boundaries of a census tract,” it said.
It added that the 2010 census tract designation would override the 2020 one.
“Similarly, if the 2020 decennial census results in a change to a 2010 census tract number…the 2010 census tract number continues to apply for purposes of identifying the designated QOZ,” it said.
The latest IRS announcement is expected to bring relief to all OZ stakeholders, including developers and investors who were faced with uncertainty following the release of the 2020 census and its impact on QOZs. Even though in the past the Treasury Department had indicated that the boundaries of QOZs would remain unchanged following the new census, industry stakeholders decried the need for additional clarifications on the issue.
The uncertainty had stemmed from the fact that the U.S. carries out census every 10 years in the country while the QOZs were designated based on tracts from previous census results, which then raised the questions of what would happen to the boundaries of the QOZs after each new census. Today’s IRS announcement has set an important precedent for such cases in the future.
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