Do my employees also need to be at the same location as my QOZB?
There are tests to determine the sourcing of income. If your QOZB derives more than 50% of its income from activities in Opportunity Zones and owns and uses more than 70% of its Qualified Opportunity Zone Business Property within qualified Opportunity Zones, the location of the independent contractors can be overcome. You will need to look at the safe harbors for each test to determine if your operations qualify and meet the testing requirements set forth in the regulations.
You'll need to make sure you're meeting one of the regulatory safe harbors for satisfying the 50%-of-income requirement. If you can't meet one of the three listed safe harbors, you'll need to be able to prove all the facts and circumstances show your QOZB is deriving at least 50% of its income from an active trade or business conducted inside an OZ.
At least 50% of your contractors and employees' work must be performed in a Qualified Opportunity Zone.
The QOZB must source 50% of its gross receipts in an Opportunity Zone. In order to meet this test, the regulations provide multiple safe harbors that look at the location of employees and/or physical property. Take a look and see which might work best for your facts.
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