n-19-42.pdf

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July 15, 2019 352 Bulletin No. 2019–29
Part III.
Amplification of Notice
2018-48 to Include
Additional Puerto Rico
Designated Qualified
Opportunity Zones
Notice 2019-42
PURPOSE
This notice amplifies Notice 2018-48,
2018-28 I.R.B. 9, which lists the popu-
lation census tracts that the Secretary
of the Treasury (Secretary) designated
as qualified opportunity zones (QOZs).
Specifically, this notice adds two addi-
tional census tracts in Puerto Rico that
have been designated as QOZs under
§ 1400Z-1(b)(3) of the Internal Revenue
Code (Code).
BACKGROUND
Section 13823 of the Tax Cuts and Jobs
Act, P.L. 115-97 (TCJA), which was en-
acted December 22, 2017, amended the
Code by adding §§ 1400Z-1 and 1400Z-
2. Section 1400Z–1(b)(1)(A) of the Code
allows the Chief Executive Officer (CEO)
of each State (including the CEOs of the
District of Columbia and of U.S. terri-
tories) to nominate a limited number of
population census tracts to be designated
as QOZs for purposes of §§ 1400Z-1 and
1400Z-2.
Revenue Procedure 2018-16, 2018-9
I.R.B. 383, provided guidance to these
CEOs on the procedure for making the
nominations. Section 1400Z-1(b)(1)(B) of
the Code provides that after the Secretary
receives notice of the nominations, the
Secretary may certify the nominations and
designate the nominated tracts as QOZs.
Notice 2018-48 listed all population cen-
sus tracts that the Secretary designated as
QOZs for purposes of §§ 1400Z-1 and
1400Z-2, and in administering § 1400Z-2
the Internal Revenue Service is governed
by this list.
Section 41115 of the Bipartisan Budget
Act of 2018, P.L. 115-123 (BBA), enacted
on February 9, 2018, added § 1400Z-1(b)
(3) to the Code. Section 1400Z-1(b)(3)
provides that each population census tract
that is a low-income community (LIC) in
Puerto Rico shall be deemed certified and
designated as a QOZ effective on Decem-
ber 22, 2017, the date on which the TCJA
was enacted. Thus, 100 percent of Puerto
Rico’s LICs are deemed certified. The ini-
tial analysis of the Department of the Trea-
sury (Treasury Department) identified 835
LIC tracts in Puerto Rico based on data
from the 2011-2015 American Communi-
ty Survey (ACS), and all of those tracts
were designated as QOZs.
Due to the complexities of incorporat-
ing the most recent census data informa-
tion into the eligibility process, the Trea-
sury Department utilized the 2011-2015
ACS data for initial eligibility determina-
tions. States were permitted, however, to
nominate census tracts not already iden-
tified by the Treasury Department if they
provided evidence of the tract’s eligibility
under the 2012-2016 ACS data. Following
the initial designations, the Treasury De-
partment reviewed and identified two ad-
ditional eligible LIC census tracts in Puer-
to Rico based on the 2012-2016 ACS data.
APPLICATION
Two additional census tracts
(72119130102 and 72137122002) that
are LICs in Puerto Rico are deemed to be
certified and designated as QOZs under
§ 1400Z-1(b)(3). Tracts 72119130102 and
72137122002 are added to the list of pop-
ulation census tracts that are designated as
QOZs under § 1400Z-1, effective on De-
cember 22, 2017.
EFFECT ON OTHER DOCUMENTS
Notice 2018-48 is amplified by ex-
tending its scope to include in the list of
designated QOZs two additional census
tracts in Puerto Rico: 72119130102 and
72137122002.
DRAFTING INFORMATION
The principal author of this notice is
Erika C. Reigle of the Office of Associate
Chief Counsel (Income Tax & Account-
ing). For further information regarding
this notice, contact Ms. Reigle at (202)
317-7006 (not a toll-free number).