Washington Opportunity Zones – Washington State Department of Commerce
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    • Opportunity Zones (OZs) are federally designated tracts meant to spur investment in undercapitalized communities. A revised program is being rolled out, designating new opportunity zones, referred to as Opportunity Zones 2.0 (OZ 2.0). Commerce is hosting a multi-month process to support Governor Ferguson in nominating up to 25% of Washington’s eligible low-income census tracts to be opportunity zones. OZs have shown they spark private investment across an array of low-income communities – more than any previous policy over such a short period of time.

    What’s new with OZ 2.0

    April 28, 2026

    OZ 2.0 census tract designation nomination form applications accepted until May 28

    Opportunity Zones (OZs) are federally designated tracts meant to spur investment in undercapitalized communities. A revised program is being rolled out, and Commerce is accepting […]

    Application and scoring criteria

    Commerce has final versions of the application and scoring criteria available as reference to help you prepare your community’s OZ 2.0 nomination application when the platform to submit your application opens on April 28. 

    Washington Opportunity Zones 2.0 interactive map and dashboard

    This is a US Census map showing spatial data of the rural and non-rural opportunity zone eligible census tracts in Washington state by county and on tribal lands.

    The exact timing of Washington’s OZ selection process depends on the U.S. Treasury’s release of the official list of eligible low-income tracts. Below you will find a tentative timeline for Washington state’s activities related to the selection process:

    • January-February 2026: Commerce hosted community meetings and educational webinars to inform communities and encourage local feedback on OZ 2.0 census tract designation criteria
    • April 6: U.S. Treasury released the official list of OZ-eligible census tracts
    • April 28: Application window opens, view the funding opportunity landing page
    • May 21: Question and answer period closes
    • May 28: Application window closes
    • July 1: The 90-day nomination window opens for Governor Bob Ferguson to submit new Washington Opportunity Zone tracts to the Treasury
    • September 28: Initial 90-day nomination window closes, with optional extensions until October 28.
    • January 1, 2027: New OZs made official

    Commerce recognizes the importance of meaningful engagement with the 29 federally-recognized tribes in Washington throughout the Opportunity Zones 2.0 designation process. Consistent with Governor Ferguson’s Executive Order 25-10, the Centennial Accord, and RCW 43.376, Commerce will hold formal tribal consultation as part of developing our OZ 2.0 designation recommendations. This consultation will be separate from and in addition to general public engagement opportunities.

    The enhanced benefits for rural areas under the OZ 2.0 program may present significant opportunities for tribal economic development. Tribal governments interested in engagement on the OZ designation process, please visit the Office of Tribal Relations landing page and/or email the Community Outreach and Engagement team at Community.Engagement@Commerce.wa.gov.

    Our updated timeline includes helpful tribal-specific informational webinars. These include:

    The new program features permanent changes to the policy’s geographic targeting criteria, incentive structure and reporting requirements. The new program also tightens eligibility requirements, reducing the expected qualified OZ tracts by roughly 20%. Washington currently has 139 OZs across 36 counties and that number will narrow to 99 OZs designated across the state. Other changes include the following:

    • Defines low-income communities as census tracts that have either
    • Eliminates the “contiguous tracts” exception from the first round of the program
      • It narrows future OZs to more distressed communities, to direct capital into truly underserved areas
    • Enhances the incentive for investment in rural OZs
      • Defines a “rural area” as any area with fewer than 50,000 people, excluding tracts adjacent to a city or town with a population of greater than 50,000
      • Provides a 30% step-up benefit for investments in a rural OZ
      • Reduces the “substantial improvement” threshold for qualifying projects in rural OZs from 100% to 50%

    This could be an opportunity to spark private investment into your community.

    • At the end of January, the U.S. Census Bureau will issue guidance for designating eligible opportunity zones
    • Communities with existing OZs may be eligible to apply for OZ 2.0 and newly identified eligible census tracts will also be eligible to apply
    • Informational briefings will be held in February
    • Applications will be submitted through Commerce

    Education and engagement

    To help with educating communities and current OZ partners, Commerce is hosting a multi-month process to support Governor Ferguson in nominating Washington’s eligible census tracts to be opportunity zones. We are working with local governments, economic development entities (associate development organizations/ADOs), and other community leaders and interested parties to ensure the State’s nominations match local priorities.

    Members of the Commerce Opportunity Zone program are available to attend your community meeting and provide updates as well as answer your questions. Email us at Community.Engagement@Commerce.wa.gov for more information and to request our participation in your upcoming meeting.

    Our team offers helpful informational webinars to support your community as you prepare your OZ 2.0 nomination application.

    Pre-proposal conference and slide presentation.

    Demonstration of the OZ 2.0 nomination application portal:

    Review information shared in previous case study review sessions

    Wednesday, April 22: Webinar with HUD featuring OZ 1.0 community case studies. View a recording of the April 22 webinar.

    Review information shared in previous general criteria and application input sessions

    View and download a copy of the February slide presentations (PDF).

    Resources

    We welcome your questions about the Opportunity Zone program. As we work through your questions and provide answers, we will develop a “Frequently Asked Questions” document for easy reference. We encourage you to email us at Community.Engagement@commerce.wa.gov.

    View and download our most recent Opportunity Zones Frequently Asked Questions (PDF).

    Learn more about the changes and impacts of H.R. 1 from the Economic Innovation Group’s in-depth review by reading Opportunity Zones 2.0: Where Things Stand After the One Big Beautiful Bill Act (on EIG.org).

    Opportunity zones (OZs) were established with the 2017 Tax Cuts and Jobs Act (TCJA) and are a federal tax incentive program providing capital gains tax benefits to investors in designated census tracts. Investors defer/reduce capital gains taxes by investing in Qualified Opportunity Funds (QOFs). Washington currently has 139 designated OZs across 36 counties, and with the new program that will narrow to 99 OZs designated across the state.

    Federal bill H.R. 1 was signed into Public Law 119-21 in July 2025, making OZs permanent, with designation cycles now set in place every ten years. Also known as the One Big Beautiful Bill Act (OBBBA) and the “2025 Budget Reconciliation Act,” Governors must designate OZs to U.S. Treasury in a 90-day window that opens July 1, 2026. Commerce is leading a project to develop recommendations for Governor Ferguson by June 30, 2026.

    It’s estimated that investments across this first round of designations are a staggering $90-100 billion across 5,600 low-income neighborhoods in the U.S. The original legislation was designed for the program to sunset in December 2028. The new program launches in January of 2027. The programs will overlap for two years, from January 2027 to December 2028.

    Commerce continues to be available to answer questions and provide information to support Washington communities, project sponsors and investors to help take best advantage of this program, now and in the future.

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    Contact

    We encourage you to email us at Community.Engagement@commerce.wa.gov.