Opportunity Zones 2.0 is moving from legislation to geography. The initial 90-day period for governors to nominate census tracts for the next generation of Qualified Opportunity Zones began July 1 and concluded September 28, although states may receive a single 30-day extension. Treasury will certify the nominated tracts following the designation process, with the new Opportunity Zones scheduled to become effective January 1, 2027.

State selections are already providing the first look at the new investment landscape. Texas, for example, nominated 608 census tracts in 106 counties, while Utah recommended the maximum 37 tracts from 147 eligible census tracts. The new program permits states to nominate no more than 25% of their eligible low-income communities. Nationwide, the IRS identified 25,332 census tracts eligible for consideration, including 8,334 located entirely in rural areas.

For advisors, the emerging map represents the next important phase of QOZ 2.0. As Treasury certifies the new zones, attention can shift from the rules themselves to where investment opportunities may develop, which sponsors begin launching Qualified Opportunity Funds, and how strategies differ among urban and rural zones. The permanent program also provides enhanced incentives for qualifying rural investments, making geography particularly relevant to future due diligence. With the first QOZ 2.0 designations taking effect January 1, advisors evaluating future offerings will increasingly need to assess not only a fund’s tax benefits but the economics of the underlying location, project, sponsor, and investment strategy.

Sources

• Internal Revenue Service, Treasury, IRS Provide Guidance to States for Nominating Census Tracts as Qualified Opportunity Zones, 2026.
• Texas Economic Development & Tourism Office, Federal Opportunity Zones in Texas.
• Utah Governor’s Office of Economic Opportunity, Utah Recommends 37 Census Tracts for Opportunity Zone Designation, September 24, 2026.