Fresh off of his appointment to the state’s Public Authorities Control Board — which could hold a veto over the proposed Amazon HQ2 deal — Queens state Senator Michael Gianaris continues to flex his muscles by going after federal Qualified Opportunity Zones (QOZ).
Gianaris announced he will introduce legislation to eliminate tax breaks for capital gains while investing in QOZ’s.
“The Opportunity Zone program was intended to help economically distressed areas but is being abused to grant tax breaks to already overdeveloped neighborhoods,” Gianaris said. “The state should not be made to suffer due to the misuse of this program.”
The federal tax overhaul passed in 2017 included a provision aimed at incentivizing investment in economically distressed areas. In 2018, the state was supposed to designate census tracts that qualified as “Opportunity Zones” but also included other areas already suffering from overdevelopment and gentrification. Among these areas are wealthy parts of Long Island City and Astoria, among the fastest growing neighborhoods in the United States.
Investors who create opportunity funds to invest in these census tracts are able to defer large capital gains on their federal taxes. Much of New York’s tax code is linked to the federal tax code and Gianaris’ legislation would prevent a massive and unjust giveaway of state resources to the wealthy.
Gianaris began drafting the legislation when he learned the Amazon HQ2 campus would be located in an Opportunity Zone. Amazon declared it would not pursue Opportunity Zone incentives last month.
Gianaris has been at the forefront of the opposition movement against the state and city’s deal to bring Amazon to Long Island City for an incentive package worth nearly $3 billion in taxpayer funds which Gianaris and others say should go to affordable housing, crumbling transit and schools.
In December, Gianaris announced legislation aimed at curbing insider dealing in real estate deals after Amazon employees reportedly purchased condominiums in Long Island City in advance of the company’s decision to locate it HQ2 campus along the Anable Basin on the East River.
Gianaris continues to stand against the Amazon deal despite the release of a HarrisX poll that shows 77 percent of registered voters in his 12th State Senate District approve of Amazon’s planned HQ2 campus.