Keystone Opportunity Zones (KOZs)
Keystone Opportunity Zones were created in 1999 by the Commonwealth of Pennsylvania to cultivate community and economic development. That mission has been accomplished by serving as a platform to encourage business attraction and retention, promote reinvestment in housing, improve educational opportunities, implement crime prevention strategies and improve the overall quality of life in these areas. Over the last 13 years, the program has spurred the creation of more than 34,000 jobs and about $10.7 billion in business development.
LVEDC administers the program on behalf of the Pennsylvania Department of Community and Economic Development.
Businesses looking to relocate from outside of Pennsylvania to a KOZ need to own or lease property within the zone for at least half the tax year to claim an exemption from state and local taxes.
Businesses looking to relocate from out of state into a KOZ simply need to own or lease property within the zone for at least half the tax year to claim an exemption from state and local taxes.
Businesses already in Pennsylvania can also move into a KOZ and be exempt from taxes, provided they either increase full-time employment by at least 20 percent in their first full year in the zone or make a capital investment equal to 10 percent of their previous years gross revenues.
The Greater Lehigh Valley and Pocono regions KOZ contains land within Lehigh, Northampton and Monroe counties. This zone contains a technology-ready corridor in downtown Allentown.
To learn more about how Lehigh Valley KOZ’s can help your company thrive contact
Laurie Demko at 610.266.2218 or gro.yellavhgihelnull@okmedl.
Benefits of Keystone Opportunity Zones (KOZs)
Businesses that locate within a KOZ enjoy the waiver, abatement or exemption of certain state and local taxes.
Depending on the situation, the tax burden may be reduced to zero through exemptions, deductions, abatements and credits for the following:
State
- Corporate net income tax
- Capital stock and foreign franchise tax
- Personal income tax
- Sales and use tax on purchases consumed and used by a business in the Zone
- Mutual thrift institution tax
- Bank and trust company shares tax
- Insurance premiums tax
- Earned income/net profits tax
- Business gross receipts, business occupancy, business privileged and mercantile tax
- Sales and use tax on purchases consumed and used by a business in the Zone
- Property taxes – including school district
Local
- Earned income/net profits tax
- Business gross receipts, business occupancy, business privileged and mercantile tax
- Sales and use tax on purchases consumed and used by a business in the Zone
- Property taxes – including school district
Eligibility
You are eligible if:
- You are a real property owner, business or resident who is located or has relocated into a Zone and has resided there for 184 consecutive days.
- You are a business relocating into a Zone you must either increase your full-time employment by 20 percent within the first year of operation or make a 10 percent capital investment in the property based on the prior year’s gross revenues.
- You are a resident or business and are compliant with all local and state taxes and building and zoning codes.
- You are a real property owner and are compliant with all local and state taxes and building and zoning codes.
- You make your annual application to the Pennsylvania Department of Community and Economic Development to receive these benefits.
