Five Philly-area business tax credits you didn’t know about

If your company is less than eight years old, growing and based in the right geographic location, it could be eligible to receive up to $100,000 in state tax credits.

So says representatives of MVM Associates, a Fort Washington-based company that specializes in sellable Pennsylvania state tax credits.

The organization claims more than $100 million dollars in processed credits, which companies can use against their tax liability or can sell to other companies looking to do the same.

According to Jane Saul, the company’s executive director, “The Center City Zone is pretty large and runs from University City to 9th Street between Locust and Market. The North Philly Zone is pretty much everything North of Girard Avenue into Montgomery and Bucks County. The Navy Yard is also a zone.”

“Last year many companies in the Philadelphia area did not take full advantage of these credits, and they went unused,” Saul says.

After the jump, Saul breaks down some of the available programs.

Pennsylvania Keystone Innovation Zone (KIZ): Is your company a technology related firm that is less than eight years old? Did your company’s revenues increase last year? If so, and you are located in one of the area KIZs, you could qualify for this credit, which is up to $100,000 annually and can be used against your PA tax liabilities and/or sold to another taxpayer to generate cash. Note: Some KIZs are specifically designated for biotechnology related companies while others also allow for information technology related firms. Area KIZs include; (a) University City area and from Market to Locust, from 30th to 9th; (b) The Navy Yard; (c) Most of Philadelphia north of Girard Avenue; (d) Most of Bucks and Montgomery Counties East of Route 202; (e) Portions of Delaware County including parts of the City of Chester Radnor, Ridley, Bethel Township, Chester Township, Eddystone, Tinicum and Lower Chichester; and (f) Portions of Chester County along Route 202.

Pennsylvania Research and Development (R&D): Is your company developing a product? If so, the money you are spending for its development may qualify you for State of Pennsylvania R&D credits. These credits equal up to 20 percent of your year over year increase in spending on Qualified Research Expenditures (QREs). Like the KIZ credits, these R&D credits can be used against your PA tax liabilities and/or sold to generate cash for your business.

Pennsylvania Job Creation Tax Credits (PAJCTC): Is your company adding new jobs? If so, you may be eligible for this credit which provides $1,000 for each new job created over a three year period. These credits can then be used to offset your Pennsylvania Corporate Net Income and/or Franchise Capital Stock Tax. In the case of an S Corp or LLC, they can also be passed through for use against shareholders’ personal PA income tax.

Philadelphia Job Creation Tax Credits (PHJCTC): Like the State PAJCTC, the City of Philadelphia also offers a Job Creation Tax Credit. If your company is adding jobs in Philadelphia, you may be eligible or this credit which provides $1,000 for each new job created. PHJCTC credits can be used to offset your Philadelphia Business Privilege Tax.

Pennsylvania Neighborhood Assistance Program (NAP): Does your company donate goods and/or services to nonprofits? Or, do you provide your goods and/or services to nonprofits at a discounted price. If so, those donations could qualify for Pennsylvania’s NAP credit which equals 55 percent of the value of the donation. The nonprofit that receives the donation must apply to Pennsylvania to be approved for the donation before being able to receive the credit for the donation. NAP credits can be used to offset Pennsylvania tax liabilities and/or sold to another taxpayer to generate cash.

For more information on how you can obtain these tax credits and/or sell them, please contact MVM Associates at 215-540-8463 or visit its website here.