The Pennsylvania Department of Community and Economic Development (DCED) recently announced approval of nearly $13.7 million through the Keystone Innovation Zone Tax Credit program for 179 companies to support new technology development in the state.
These are companies located within one of the state’s 28 Keystone Innovation Zones (KIZ).
DCED Secretary C. Alan Walker said that their support of early-stage companies is often that last piece of the puzzle needed to take new products to market and create high-paying jobs.
“This innovative tax credit helps build strong relationships between businesses and universities to create good-paying jobs for graduates right here at home,” added Walker.
One example is EcoTech Marine, located in Bethlehem, Northampton County. The company received a $100,000 tax credit from the KIZ Tax Credit program. They manufacture aquarium equipment including LED lighting, pumps, coral glue and accessories for aquariums.
“Our first tax credits helped us overcome a negative cash-flow situation early on giving us enough breathing room to grow and meet customer demand,” said Patrick Clasen, co-founder of EcoTech Marine. “Our second tax credit funded the production inventory for our new product line. The KIZ Tax Credit program has enabled EcoTech to become a viable and successful leader in our industry.”
The KIZ tax credit program offers up to $100,000 per year per recipient, and is funded to award up to $25 million annually. It is available to companies which are less than eight years old and located in one of the KIZs.
Since its inception in 2006, the program has approved more than 975 tax credit applications for early stage technology companies, totaling nearly $62 million in credits awarded. This year, the state received 181 requests, and has approved all but two.
Recipients can sell or reassign unused tax credits, or secure a third-party broker to sell the tax credit on its behalf. This sale and/or assignment of the Tax Credit has generated nearly $48.9 million in new capital for more than 850 applicants.
The companies have used the additional funding for capital expenditures, expansion of their workforce, operational expenses, and to make the companies more attractive to venture investment.
Find out more about the KIZ tax Credit program on newpa.com.