Infra Insight Blog

The COVID-19 pandemic and resulting lockdowns and economic disruptions have severely affected the usual revenue sources that local governments have used to fund public improvements and transportation services – e.g., distributions of state and federal gas tax revenue, local sales taxes and property taxes. Local governments might consider creating parking benefit districts (“PBDs”), which can provide modest amounts of revenue. PBDs, along with other creative ways to raise revenue, can help fill in funding gaps for local improvements and services. ...

Last December we told you about favorable IRS guidance letting P3 contractors and investors keep full tax deductions for interest on debt.[1] The IRS kept a P3-friendly approach in last week’s proposed regulations on qualified opportunity zones – which, like the interest limitations in our December post, come from the 2017 Tax Cuts and Jobs Act (TCJA).[2]  The qualified opportunity zone legislation promotes a broad range of real estate and business development in distressed areas, and these proposed regulations are particularly helpful to private parties contracting for and ...

Contractors and investors in P3s can continue taking a full tax deduction for interest on debt under recent IRS guidance (Revenue Procedure 2018-59, issued November 26). Many P3s are highly leveraged, and the interest deduction is a valuable tax benefit for developers. Were this deduction restricted, P3 developers’ (and by extension governments’) costs would rise; potential investors would demand higher rates of return; and infrastructure projects would be more costly.  Without this guidance, the 2017  tax law would otherwise severely restrict the interest deduction for ...