Pennsylvania Credits and Incentives

As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.

One of our clients recently asked about credits and incentives for their location in Pennsylvania. I was able to speak with some Pennsylvania economic development professionals and learned some of their details (Pennsylvania’s Department of Community and Economic Development (DCED)site click here).

A big difference between Pennsylvania and most other states is that they have fairly high corporate tax rates.  Pennsylvania ranks 24th in the The Tax Foundation’s 2014 Business Tax Climate Index (click here).

Pennsylvania offers a wide array of incentives, credits, and funding programs to assist businesses in locating or expanding in Pennsylvania jobs and development.  DCED’s Single Application for Assistance enables companies to apply for most credits and incentive programs using one form.   The Governor’s Action Team (GAT) is the single point of contact for for new and expanding businesses planning significant growth or investments in PA (click here).  Keystone Opportunity Zones (KOZs, click here) provide special zones with reduced or eliminated state and local taxes.

One consideration — an application and approval process is required for all of Pennsylvania’s primary incentives.  And, Pennsylvania’s credits and incentives can be more complicated than other competitive states.

Compared to Georgia, Pennsylvania has:

  • Higher taxes:  Far higher corporate income taxes.  Similar personal income taxes.  Higher sales taxes and higher property taxes.
  • narrower range of industries eligible for incentives if adding jobs, a narrower range for capital investments, and a far narrower range for training incentives.
  • NO opportunities for incentives unless pre-approved by state and/or regional council officials.
  • Location, location, location — if that’s what is important to the business

To summarize, Pennsylvania is not highly competitive for new and expanding businesses, unless those businesses really need Pennsylvania’s prime location for global commerce, corporate headquarters, transportation and culture.

Do any of your clients have Pennsylvania connections?  Make sure you review their potential qualifying activities early to maximize their $$ benefits!!

DaleSig

Pennsylvania Credits and Incentives

As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.

 We were recently asked about credits and incentives in Pennsylvania. I was able to speak with some Pennsylvania economic development professionals and learned some of their details (Pennsylvania Department of Community and Economic Development (DCED) click here).

 Pennsylvania is in the middle range for corporate tax burdens and incentives when compared with other states.  Pennsylvania ranks 24th in the The Tax Foundation’s 2014 Business Tax Climate Index (click here).

It takes a while to sort through them, but Pennsylvania has a wide selection (ok, hodgepodge) of incentives, credits, loans, and programs to assist businesses for increasing and retaining Pennsylvania jobs and increasing business investments.  Job Creation Tax Credits (JCTC) provide a$1,000-per-job tax credit to create new jobs in the state within three years (click here).  Several Keystone Innovation Zone programs provide tax credits to certain businesses in specific geographic zones.  Other incentives include R&D credits and various sales tax and energy tax exemptions.  The Pennsylvania First program (PA First) provides comprehensive discretionary assistance to businesses (click here). Specific requirements depend on business type, size, wages, location, and other factors.

Another big consideration — an application and approval process is required for all of Pennsylvania’s DCED incentives.  And, Pennsylvania’s credits and incentives are somewhat more complicated than other states. 
 
Compared to Georgia, Pennsylvania has:

  • Higher and lower taxes:  Much higher corporate income tax rate. Lower personal income tax rate.  Similar sales taxes and higher property taxes.
  • A similar range of industries eligible for incentives if adding jobs and capital investments, and a far narrower range for training incentives.
  • NO opportunities for incentives unless pre-approved.
  • Location, location, location — if that’s what is important to the business

To summarize, Pennsylvania is not as competitive as leading states for new and expanding businesses, unless those businesses really need Pennsylvania’s prime East Coast location.
 
Do any of your clients have Pennsylvania connections?  Make sure you review their potential qualifying activities early to maximize their $$ benefits!!

 
DaleSig