Opportunity Zones (OZ)
Share your recommendations by June 23, 2026, through this form for the next round of Opportunity Zones!
OZ Background
Federal Opportunity Zones are an economic development tool for designated Rhode Island communities to attract private investment. Opportunity Zones in Rhode Island have the potential to attract private investment for business expansion, startup creation and real estate development; promote synergy with state and local efforts; and support the needs of local communities.
The program provides federal capital gains tax incentives designed to steer private capital into low-income census tracts for long-term investment and economic revitalization. Opportunity Zone investors can potentially receive the following capital gains tax incentives: deferral of capital gains tax, a step up in basis on their investment, and tax exclusion.
New Round of OZs
Passed into law in July, 2025, Public Law 119-21 made Opportunity Zones permanent but resets the map. Starting July 1, 2026, Rhode Island Governor Daniel J. McKee will nominate 25 eligible census tracts to become the next round of Opportunity Zones. Nominations will be submitted to the U.S. Department of Treasury to be officially designated as the Opportunity Zones for the 10-year period beginning on January 1, 2027 and running through December 31, 2036.
Call for Public Input
Rhode Island Commerce is soliciting input for the next round of Opportunity Zones. Municipalities, community leaders, investors, developers, trade and building associations, and members of the public are invited to submit input through June 23, 2026.
Current Round of Rhode Island OZs
The current/first round of Rhode Island Opportunity Zones were designated in 2018 and will expire on December 31, 2028. They are located in 25 census tracts spread across the following fifteen municipalities: Bristol, Central Falls, Cranston, Cumberland, East Providence, Narragansett, Newport, North Providence, Pawtucket, Providence, South Kingstown, Warren, West Warwick, Westerly and Woonsocket.
How Do Opportunity Zones Work?
Investors invest in Opportunity Zones through Qualified Opportunity Funds. Under the 2025 legislation, investors are eligible to take advantage of certain benefits on the taxation of their capital gains to include:
- Deferral: Capital gains that are invested in Qualified Opportunity Funds may temporarily defer capital gains taxation for five years.
- Reduction in capital gains tax for long-term investments: Capital gains that are invested in Qualified Opportunity Funds for at least five years may step up its basis by 10%.
- Exclusion of capital gains tax on appreciation of investments: Capital gains resulting from appreciation of Opportunity Fund investments are excluded from taxation if the original investment is held for at least ten years.
*For more information about the benefits of this investment, please consult a tax professional.