Keystone Opportunity Zones

KOZs are designated by the local communities and approved by the State. The Keystone Opportunity Improvement Zones were designated by Executive Order, of the Governor, and approved by the local communities. All Keystone Opportunity Zones are virtually tax free. Keystone Opportunity Zones entitle businesses and residents to certain tax benefits when they locate in a Keystone Opportunity Zone.

For a business to qualify for the KOZ program:

“A business must own or lease real property in a KOZ and actively conduct a trade, profession or business from the property and remain compliant with state and local tax laws and building codes. Existing businesses that are expanding, new businesses and out-of-state businesses moving into Pennsylvania need only move into a KOZ, file a one page annual application for benefits and submit the application with a synopsis of the business, which contains a description of the business, job creation potential and the anticipated capital investment.” (p.1, KOZ Guidelines, DCED, 2004)

Taxes Eligible to Be Waived

Through credits, waivers and broad-based abatements, total taxes on economic activity in Keystone Opportunity Zones are reduced to almost zero.

State

1. Corporate Net Income tax
2. Capital Stock and Foreign Franchise tax
3. Personal Income tax
4. Sales and Use tax (purchases consumed and used by business in the Zone)
5. Mutual Thrift Institution tax
6. Bank and Trust Company Shares tax
7. Insurance Premiums tax

Local

1. Earned Income/Net Profits tax
2. Business Gross Receipts, Business Occupancy, Business Privilege and Mercantile tax
3. Sales and Use tax (county/city; purchases used and consumed by business in the Keystone Opportunity Zone)