Koiz Benefit
Overview
Keystone Opportunity Improvement Zones are defined, parcel specific areas with greatly reduced or no tax burden for property owners, residents and businesses. Initially begun as Keystone Opportunity Zones (KOZ), a program providing tax relief for 10 years, KOIZ areas are designated by the State and approved by the
local communities by resolution. They are a partnership between each community and region among state and local taxing bodies, school districts, economic development agencies and community-based organizations. Over 10,000 new jobs have been created since the initial KOZ program began in 1999, and the number
is growing rapidly.
For more information visit: http://koz.newpa.com/
To be considered as a Keystone Opportunity Improvement Zone, a site must have:
 Displayed through a vision/strategy statement how this property through targeted growth could impact the aforementioned positively;
Displayed evidence of adverse economic and socio-economic conditions within the proposed zone such as high poverty rates, high unemployment rates, percent-
age of abandoned or underutilized property, and/or population loss;
Passed binding resolutions or ordinances forgoing certain taxes including school districts, county and municipal governments;
Public and private commitment of resources;
Linkages to regional community and economic development activities including Team Pennsylvania and initiatives under the DCED’s Center for Community Building;
A written plan discussing the implementation of quality school improvements
and local crime reduction measures;
And a demonstrated cooperation from surrounding municipalities.
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Tax liability
Binding ordinances and resolutions were passed granting 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 taxes Corporate net income taxes, capital stock & foreign franchise tax, personal income tax, sales & use tax
Local taxes Earned income/net profits tax, business gross receipts, business occupancy, business privilege & mercantile taxes, local real property
tax, sales & use tax
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Length of tax relief
KOIZ status for the USS Fairless Heavy Industrial KOIZ site begins on January 1, 2005 and runs through December 31, 2018, a tax free period of 14 years.
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Impact
Properties selected as KOIZ areas have generated minimal state and local taxable revenue. The KOZ designation is expected to attract development where
little or no activity existed beforehand. This development may produce spin-off taxable activity outside the designated zone. KOIZ properties, along with any development, will become fully taxable after commencing the day after the designation expires January 1, 2019.
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Administration
The Department of Community and Economic Development provides the organizational framework including the certification and operations of KOZ.
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Priority considerations
Projects in Keystone Opportunity Zones shall receive priority consideration for state assistance under state community and economic development programs as well as community building initiatives. Projects in a designated KOZ that are approved for Pennsylvania Industrial Development Authority
(PIDA), or Small Business Financing shall receive the lowest interest rate extended to borrowers.
For more information visit: http://koz.newpa.com/
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