KOZ/KOEZ
PURPOSE
The Keystone Opportunity Zone (KOZ) and Keystone Opportunity Expansion Zone (KOEZ) programs are designed to stimulate economic growth by attracting industries to areas that are designated to be free from all state and local taxes for a period of up to 12 years. Keystone Opportunity Zones are defined, parcel-specific areas with greatly reduced or no tax burden for property owners, residents and businesses.
Keystone Opportunity Zones have been designated by local communities and approved by the state. They represent a partnership between each community and region among state and local taxing bodies, school districts, economic development agencies and community-based organizations. In a KOZ, state corporate net income, capital stock and franchise, and personal income taxes for companies that are not incorporated are waived for up to 12 years for employers and residents doing business or living in KOZs. Local governments agreed to waive local real estate, earned income/net profits, and business gross receipts taxes. Tax Relief 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 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.
LENGTH OF TAX RELIEF
KOZ status for most zones is retained until December 31, 2010. Afterwards, the KOZ preferential tax treatment will expire. KOEZ status for most zones is retained until December 31, 2013. Afterwards, the KOEZ preferential tax treatment will expire.
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