• The Gulf
  Opportunity Act
• Part I:
  Tax Exempt Bond Provisions
• Part II:
  Low Income (as redefined) Housing Credit & the Rehabilitation Tax Credit
• Part III:
  Bonus Depreciation & Expensing
• Gulf Opportunity Act Top 12 Tax Incentives

 

The Gulf Opportunity Act

Following the worst natural disaster of recent American history, legislation was enacted to provide tax incentives for the redevelopment/development of the areas of Alabama, Louisiana and Mississippi devastated by Hurricane Katrina. The Gulf Opportunity Zone Act of 2005 provides unique federal “economic development” incentives for companies to rebuild in or expand within the Gulf Opportunity Zone or GO Zone. Particularly if combined with state economic incentives, the opportunities for companies to develop facilities in the GO Zone are very attractive.
The federal tax legislation is designed to reduce a company’s cost of capital through significant tax incentives for the development of buildings (non-residential and residential) and the acquisition of equipment to engage in business in the GO Zone. The majority of tax benefits in the GO Zone will emanate from two incentives, which may not be used together:

1. The ability to utilize low interest tax-exempt bonds to fund the construction of new facilities
2. The ability to treat 50 percent of new construction costs and equipment expenses as immediately deductible.

Congress has provided companies located or doing business in the GO Zone with substantial financial development and reconstruction tools. Additionally, the states of Louisiana, Mississippi and Alabama now have very powerful industrial and business recruiting incentives. These financial tools and incentives substantially assist in the financing of facilities.



The Opportunity Act is presented here in 3 parts.

• Part I: Tax Exempt Bond Provisions
• Part II: Low Income (as redefined) Housing Credit & the Rehabilitation Tax Credit
• Part III: Bonus Depreciation & Expensing

The federal economic development tax benefits are presented here as the Top 12 Tax Incentives.

• Gulf Opportunity Act Top 12 Tax Incentives