Keystone Opportunity Zones (KOZs)
Where can you find more than 46,000 acres of developable land, free of specific state and local taxes?
Right here in Pennsylvania, where the Keystone Opportunity Zone (KOZ) program is providing a once-in-a-lifetime opportunity to develop land with greatly reduced state and local taxes. KOZs reflect a true sense of partnership among state and local taxing bodies, school districts, economic development agencies and community-based organizations.
The Number One Economic Development Strategy in the Nation
Keystone Opportunity Zones are such a breakthrough idea that Business Facilities magazine calls them the number one economic development strategy in the nation. By eliminating specific state and local taxes within specific underdeveloped and underutilized areas, communities within Pennsylvania are experiencing economic growth and investment. Since the KOZ program's inception in 1999, it has led to the creation of new jobs and produced capital investment in real estate. Due to the tremendous success of the KOZ initiative, there have been multiple opportunities for local communities to designate additional subzones, the most recent being in 2012, where legislation enables DCED to grant extensions on an "as applied/needed" basis.
Find a KOZ
Keystone Opportunity Zone sites exist throughout the Commonwealth of Pennsylvania in 12 regions, and offer developable sites with either greatly reduced or eliminated state and local taxes. Contact a KOZ Coordinator in your region to find a location. A list of KOZ Coordinators is found on the last page of the guidelines.
Printable Version - Pennsylvania Keystone Opportunity Zone | An Overview 2008-2010
Zone Size Requirements
Each Zone is comprised of parcel-specific sub-zones in various sizes. Sub-zones must be at least 10 acres in rural areas, or 20 acres in urban areas.
Binding ordinances and resolutions are passed granting the waiver, abatement or exemption of certain state and local taxes. Depending on the situation, the tax burden maybe 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, Bank Shares and Trust Company Shares Tax, Alternative Bank and Trust Company Shares Tax, Mutual Thrift Institutions Tax, Insurance Premiums Tax
- Local Taxes: Earned Income/Net Profits Tax, Business Gross Receipts, Business Occupancy, Business Privilege and Mercantile Taxes, Local Real Property Tax, Sales and Use Tax
Length of Tax Relief
Zones expire at various times. Please check with the specific Zone Coordinator for each property deadline. Subzones expire at various times.
Number of Zones
There are 12 regional Keystone Opportunity Zones. Each KOZ is administered through the same local community or economic development agency.
- Properties selected as KOZs 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.
- Future taxes are anticipated in addition to job growth and development.
- At the onset, KOZ properties generated little to no state and local taxable revenue.
The Department of Community and Economic Development provides the organizational framework, including the certification and operations of KOZs. Local jurisdictions designate coordinators as a single point of contact for zone facilitation.
Projects in Keystone Opportunity Zones receive priority consideration for assistance under state community and economic development programs as well as community building initiatives. Projects in designated KOZs that are approved for Pennsylvania Industrial Development Authority (PIDA) or Small Business Financing shall receive the lowest interest rate extended to borrowers.
Application & Tools
- Keystone Opportunity Zone (KOZ) Online Application
- KOZ Designation, Expansion and Extension Application
- KOZ Change of Status Notification
- KOZ Guidelines and Application