South Carolina has submitted its recommended Opportunity Zone census tracts to the U.S. Treasury, completing the state’s part of a federal redesignation that will determine where a permanent capital-gains incentive applies beginning Jan. 1, 2027.
Gov. Henry McMaster sent the nominations on Sept. 23 after a statewide review led by the Department of Commerce. The governor’s announcement said local governments, economic-development organizations, community leaders and members of the public helped shape the recommendations. Treasury must still review the tracts before they receive federal designation, so submission does not by itself make any location a new Opportunity Zone.
The 2027 map starts a different phase of the program created in 2017. Federal changes enacted in 2025 made Opportunity Zones permanent and require states to choose a new set of tracts every 10 years. Governors may nominate no more than 25% of their states’ eligible tracts. The federal government’s overview says the new map will operate through 2036, giving communities and investors a long planning horizon but also fixing the geography for a decade.
South Carolina’s program page says the new eligibility test is narrower than the original one. A low-income tract generally must have median family income below 70% of the applicable state or metropolitan median, or meet both a poverty-rate threshold of at least 20% and an income ceiling. The former exception for some higher-income tracts adjacent to qualifying areas has been eliminated. As a result, an existing zone is not automatically carried into the new cycle.
The program works through Qualified Opportunity Funds, which pool private capital for qualifying businesses and property in designated tracts. South Carolina says the updated rules retain a 10% basis increase for eligible investments held at least five years and provide a larger 30% increase for investments in rural Opportunity Zones. Rural projects also face a lower substantial-improvement threshold. Those incentives can make the final tract list consequential for developers, property owners and communities seeking long-term investment.
The nomination process began publicly in April, when Commerce requested input from local officials and other stakeholders by June 1. Treasury and IRS procedures then set the technical path for governors to submit eligible census tracts; the operative guidance is Revenue Procedure 2026-14. Commerce now displays the nominated geography while federal review proceeds.
McMaster also asked the General Assembly to conform South Carolina’s tax code to the revised federal provisions. That is a separate state-policy decision: federal approval of the map would establish where the federal incentive applies, but it would not automatically resolve how South Carolina treats the updated program for state tax purposes.
For communities, the next practical step is to verify whether a nominated tract survives Treasury review and then align projects with the program’s business, property and holding-period rules. For investors, the state’s submission narrows the places under consideration, but final federal designation remains the key legal milestone before the 2027 cycle begins.
