How Do Place-Based Investment Tax Incentives Target Low-Income Communities? A Multi-State Survey of Enterprise Zone Tax Incentives

Abstract

Place-based investment tax incentives known as enterprise zone laws have historically been used as a method for subsidizing investment in low-income communities. Scholarly and policy treatments of enterprise zone laws commonly discuss them as if there is a unified approach to designing these programs. This report finds, however, that although most (33/50) states have enterprise zone laws, these programs vary significantly in important respects — including zone eligibility requirements; eligible investment types; incentives to invest in human capital or affordable housing; and taxpayer eligibility. Understanding these variations is particularly important to understanding how past experience with enterprise zones can inform new place-based incentives, such as those that have been introduced in the federal Opportunity Zones program.