Qualified Opportunity Zones and Tax Credit Incentives

The Tax Cuts and Jobs Act (TCJA), passed in December 2017, created among other things, a new economic development tool called “qualified opportunity zones” which allows individual and corporate investors to enhance the depressed business areas of states with designated low-income communities. Investors would be able to defer current capital gains tax on these investments.

Unfortunately, this business opportunity does not include the development of golf courses, which reside on a “sin list” within a long-held tax code that has become known as the “sin tax.” US Tax Code 24 Section 144, Paragraph C.4.6.B: “no portion of the proceeds of such issue is to be used to provide (including the provision of land for) any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, racetrack or other facility used for gambling, or any store the principal business of which is the sale of alcoholic beverages for consumption off premises.”

Why is this issue important to golf course owners and operators?

Golf course investment can be a major part of community redevelopment. Jobs are created, tax revenue is generated and the green space created adds value to the surrounding markets. Many golf course that were built pre-1960 are no longer located in the vibrant, populated areas today. Many of these courses now reside inside the state’s designated Qualified Opportunity Zones. Because of the “sin list”, golf course owners are not eligible to take advantage of the tax incentives of the Opportunity Zone Program as other businesses owners and investors are.

What is the NGCOA doing about this issue?

The NGCOA, along with our allies within WE ARE GOLF, are pressing Congress to eliminate the “sin list” from the tax code and permit golf course investments the same level of incentives enjoyed by other privately owned small businesses.

How you can get involved

We encourage you to speak with your Representatives and Senators to make them aware of the outdated tax policy, and to ask for their support to have it removed from the tax code. Learn more about this issue and discuss it with your peers.