Qualified Opportunity Zone Businesses (QOZBs)

Definition

A qualified opportunity zone business (QOZB) is a trade or business that a qualified opportunity fund invests in through stock or a partnership interest; substantially all of its tangible property must be qualified opportunity zone business property, and it must meet active-business tests and avoid excluded businesses such as golf courses, casinos and liquor stores.^[1] The 2025 amendments added annual reporting from these businesses to their funds and lowered the substantial-improvement threshold to 50 percent of adjusted basis for property in zones comprised entirely of a "rural area" as the law defines it.^[2]

Federal law

1. Tax Cuts and Jobs Act (popular name), Pub. L. 115-97, § 13823, 131 Stat. 2183. Created and defined the qualified opportunity zone business (26 U.S.C. § 1400Z-2(d)(3)). Official text: govinfo.gov, U.S. Government Publishing Office.
2. One Big Beautiful Bill Act (popular name), Pub. L. 119-21, § 70421, 139 Stat. 223. OZ 2.0 amendments: new 26 U.S.C. § 6039L reporting by qualified opportunity zone businesses and the 50 percent improvement rule for zones comprised entirely of a rural area. Official text: govinfo.gov, U.S. Government Publishing Office.