Keystone Innovation Zone Tax Credit Program
The Keystone Innovation Zone Program was established to create designated geographic zones to foster innovation and create entrepreneurial opportunities.
- $25 million in tax credits available each year
- Operate within designated KIZ geographical zone*.
(*This link will open a Microsoft Excel Spreadsheet in a new window.)
- Operate in one of the targeted industries.
- Operate business for less than 8 years.
Credits are equal to 50% of the increase in a company’s gross revenues in the preceding year from the gross revenues of two years back.
HappyValley KIZ is created in January 2005. ABC, Inc. is created in June 2005, and moves into the KIZ in November 2005. Any revenue earned outside the KIZ is not used for the calculation of the tax credit. ABC, Inc. earns $10,000 during its time in the KIZ in 2005.ABC earns $210,000 in 2006, having spent the whole year in the KIZ. ABC applies for credits before September 15, 2007, and is awarded a $100,000 credit on December 15, 2007. ABC uses $5,000 of the credit for taxes due to the state, and sells the remaining $95,000 to BIG Corp. for a rate of .90 cents on the dollar. After the state tax returns have been filed for 2007, and the DCED has been approved, BIG gives ABC a check for $85,500.
ABC, Inc. has just received $85,500 to use for its company in any way. BIG Corp. has just saved $95,000 in taxes. ABC can continue to apply for tax credits as long as its revenue increases from year to year, within the eight-year window.
Applications are due September 15 of each year
Sell beginning May 15 of following year