Are you a young company located within a KIZ Zone?
Are you ready to start a business and currently evaluating locations for your start-up business?
Is your start-up company a diversified manufacturer or information technology business?
One of the benefits provided by DCED to qualified KIZ companies located in a designated zone is the KIZ Tax Credit Program.
The KIZ Tax Credit program is a key component of the Keystone Innovation Zone program and offers a maximum of $100,000 to companies in tax credits annually. The state is able to grant $25 million in tax credits each year to KIZ Companies. Companies must qualify for the KIZ program, and must be increasing gross revenues annually to apply for the credits. The unique KIZ Tax Credit program can contribute significantly to a start-up business’s needs for tax relief.
Another unique feature of the Tax Credit program, if eligible, is the ability of a KIZ company to sell their Tax Credits to another company.
Three KIZ Companies in the Williamsport/Lycoming KIZ were able to receive $100,000 each in tax credits in 2007. These companies were able to sell their tax credits for cash to interested parties, in the range of 85-90 cents on the dollar, which amounted to $85,000-90,000 direct cash injection back into their businesses. Since 2007, KIZ companies in Williamsport alone have received over $1.7 million in KIZ Tax Credits!
The Williamsport Sun-Gazette published a nice article about the KIZ Tax Credit program, which paints a great picture for how it is helping start-up companies right here in Williamsport. Read it here.
A company must meet the following requirements in order to apply for KIZ Tax Credits. A company or entrepreneur must:
- Complete and return the Williamsport/Lycoming KIZ Company Eligibility Questionnaire for review.
- Operate within the designated KIZ geographical area.
- Work within a targeted industry segment for that particular KIZ.
- Be in operation for less than eight years.
- The KIZ Company must meet all of the other requirements for application, which currently includes a semi-annual reporting requirement for the KIZ program, obtaining a DUNS number from Dun & Bradstreet, and reporting the impact of KIZ Tax Credit projects and services to IMC’s sponsors annually.
- For more information on the WLKIZ’s requirements please click here.
Once a company/entrepreneur meets all KIZ requirements, they can apply for the tax credits with the approval of the KIZ Coordinator. A company may claim a tax credit equal to 50% of the increase the company earns in gross revenues over a two-year period, up to $100,000 per year.
This is just a brief summary of some of the guidelines of the KIZ Tax Credit program. To learn more about this unique benefit to qualified start-up companies in PA, click here. If you have any further questions concerning these guidelines, please contact the Williamsport/Lycoming KIZ at info at wlkiz dot com or 570-329-3200 x8083.