Is Your Company Located in a HUBZone?
SBA HUBZone Map
Major Disaster Areas will be treated as HUBZones for a period of five years. This applies to census tracts and non-metropolitan counties located in “major disaster” areas, if the census tract or non-metropolitan counties has lost its HUBZone eligibility within the past five years or will lose its HUBZone eligibility within 2 years after the major disaster has been declared.Catastrophic Incident Areas will be treated as HUBZones for a period of 10 years. This applies to census tracts and non-metropolitan counties located in areas where catastrophic incidents occurred, if such census tract or non-metropolitan counties lost its HUBZone eligibility within the past 5 years or will lose its HUBZone eligibility within 2 years after the catastrophic incident has been declared.
HUBZone qualification is generally determined by income levels, unemployment rates,
Difficult Development Area status, base closure status, and/or Indian Land status.
Data that determine whether an area qualifies for HUBZone status include
income and unemployment information from a variety of sources.
Most qualified areas are determined by county (in non-metropolitan areas)
or census tract (usually in metropolitan areas).
NEW RULES IMPACTING THE HUBZONE MAP
SBA has recently approved several new rules that will effectively add new areas
to the HUBZone Map as of October 2016.
A limit on the number of Qualified Census Tracts on a metro area has been lifted,
which has increased the number of HUBZone-qualified census tracts from about 16,000 to 18,000.
Base Relocation & Closure areas (BRACs) now enjoy HUBZone status for eight years, in increase from five years.
In addition, HUBZone status has been granted to adjacent census tracts and non-metropolitan counties.
Some Disaster Areas will become HUBZones:
|HUBZone Map Qualification Data Comes from a Variety of Sources
||Housing & Urban Development (HUD)
||adjusted every 5 years
||Bureau of Labor Statistics (employment)
Census Bureau (income)
HUD (Difficult Development Areas)
||Bureau of Indian Affairs
||adjusted as necessary
|Base Closure Areas
||adjusted as necessary
|Since multiple agencies are responsible for providing updated information concerning the HUBZone Map, updates are often performed multiple times per year. This is particularly the case with non-metropolitan county HUBZones, which have three types of qualification data generated by three different agencies. The Small Business Administration is responsible for consolidating the information and maintaining the accuracy of the HUBZone Map.
As of June 2016, of the 3,243 counties in the
United States and its territories:
• 1,217 (37%) are metropolitan counties that are not
HUBZone-qualified but many of them contain
individual census tracts that are qualified.
• 1,259 (39%) are non-metropolitan counties that
are not HUBZone-qualified.
• 516 (16%) are non-metropolitan counties
that are HUBZone-qualified.
• 251 (8%) are non-metropolitan counties
that are redesignated HUBZones that will expire
within the next few years.
For detailed listings of the
HUBZone status of
counties & census tracts,
SBA HUBZone Map.
As of June 2016, of the 74,130 census tracts
in the United States and its territories:
• 55,917 (75%) are not HUBZone-qualified.
• 16,368 (23%) are HUBZone-qualified.
• 917 (1%) are redesignated HUBZones
that expired on January 1, 2018.
• 928 (1%) are redesignated HUBZones
that will expire on March 1, 2019.
What is a Qualified Census Tract (QCT)?
The US Department of Housing and Urban Development (HUD) designates Qualified Census Tracts (QCTs) for purposes of the Low-Income Housing Tax Credit (LIHTC) program. The LIHTC program is defined in Section 42 of the Internal Revenue Code of 1986. The LIHTC is a tax incentive intended to increase the availability of affordable rental housing.
The LIHTC statute provides two criteria for QCT eligibility. A census tract must have either:
- a poverty rate of at least 25 percent; or
- 50 percent or more of its householders must have incomes below 60 percent of the area median household income. The area corresponds to a metropolitan or a non-metropolitan area.
Further, the LIHTC statute requires that no more than 20 percent of the metropolitan area population reside within designated QCTs. (This limit also applies collectively to the nonmetropolitan counties in each state.) Thus, it is possible for a tract to meet one or both of the above criteria, but not be designated as a QCT.
The Census Bureau defines the boundaries of Census tracts in cooperation with local authorities every ten years for the purposes of the decennial census and, following a public comment period, has completed defining tract boundaries for the 2010 Census. Note that when census tract boundaries are set, they remain unchanged for the next decade. Thus, tract boundaries will not be changed until the 2020 Decennial Census.
A QCT may be located in a non-metropolitan county or a metropolitan area.