When seeking a location to expand or move your business, there are a few very important characteristics to keep in mind. Chief among these is the site itself. It must be cost-effective, central to your business operations, and ideal for motivating a diverse and skilled workforce. Fortunately, the Greater Reading community offers all this and more.
Below you’ll find a sampling of available zones & incentives for your business. Greater Reading offers distinct competitive advantages that truly set it apart– and we can work with you to connect you to the resources you need to be successful and stay connected.
Partnering with GRCA opens the door to customized financing and incentive options. To get started today, contact us!
Potential Incentives
County-Wide LERTA – Local Economic Revitalization Tax Abatement: LERTA was established to allow local taxing authorities to exempt new construction and improvements to a commercial, industrial and/or business property if such property is in a deteriorated or underutilized area.
Property improvements eligible for exemption include:
- Repairs
- Construction or reconstruction, including alterations and additions
- Rehabilitating a deteriorated property to make it habitable or to attain a higher standard of safety
- Improvements required to alleviate health concerns
- Economic use or amenity
- Improvements necessary to comply with laws, ordinances or regulations governing such standards
For LERTA to apply to a property, each local taxing authority (County, Municipal and School District) must, by ordinance or resolution, exempt from real property taxes the assessed value of improvements to deteriorated properties and the assessed value of new construction within the designated deteriorated areas.
Job Creation Tax Credit program available to eligible businesses that, within three years from a negotiated start date, create 25 or more jobs. Each new employee must earn an hourly wage of at least 150% of the federal minimum wage ($10.88/hr.), excluding benefits, at the time the certificate is issued.
The Workforce and Economic Development Network of Pennsylvania (WEDnetPA) provides training funds to qualified employers to train new and existing employees. The funding can be used for a wide range of incumbent worker training – categorized as either:
- Essential Skills Training: Up to $450 per trainee, per year
- Advanced Technology Training: Up to $850 per trainee, per year
- Eligibility: Employees to be trained must be residents of and employed in
Pennsylvania. Employees to be trained must earn at least 150% of current federal minimum wage, excluding benefits. Employees to be trained must be permanent, full-time employees and eligible for full-time benefits
Research and Development (R&D) Tax Credit: Tax credits for increased research activities performed in Pennsylvania. Credits can reduce income tax of the entity generating the credit OR can be sold to other businesses if credits exceed the actual tax.
On-the-Job Training (OJT): Businesses may qualify for a training reimbursement amount equal to 50% of the wage of a new hire. The average reimbursement per employee is in the range of $3,000 – $4,000.
Zones
Federal Opportunity Zone
Opportunity Funds are investment vehicles organized as a corporation or partnership for the purpose of investing in Opportunity Zones. Opportunity Funds can self-certify and must invest at least 90% of their capital in qualifying Opportunity Zone investments. Eligible investments in Opportunity Zones may include commercial real estate development and renovation, opening new businesses, and expansion of existing businesses.
Investing realized capital gains into Opportunity Zones has many benefits for individual or corporate taxpayers, including:
- Deferral of federal tax payment on initial capital gain until the earlier of the sale of the Opportunity Fund investment or December 31, 2026.
- Partial exclusion from federal tax of the original capital gain through a step up in basis if the Opportunity Fund investment is held for 5 years (10%) or 7 years (15%).
- Full exclusion from federal tax of any new capital gain if the Opportunity Fund investment is held for 10 years or more.
The Federal Opportunity Zone in Berks County cover a majority of downtown Reading and West Reading – view a map here.
Keystone Opportunity Zones
The Keystone Opportunity Zone (KOZ) Program is an innovative economic and community development programs. This unique program develops a community’s abandoned, unused, underutilized land and buildings into productive properties through the abatement of certain state and local taxes. The majority of the Keystone Opportunity Zone-designated sites are within the City of Reading.
Taxes Eligible To Be Waived:
Through credits, waivers and broad-based tax abatements, total taxes on economic activity in zones are significantly reduced. These benefits affect the following taxes:
- State:
- Corporate Net Income tax
- Personal Income tax
- Sales and Use tax (purchases consumed and used by the qualified business in the zone)
- Local:
- Earned Income/Net Profits tax
- Business Gross Receipts, Business Occupancy, Business Privilege and Mercantile tax
- Sales and Use tax (county/city; purchases exclusively used and consumed by the qualified business in the zone)
- Property tax
Keystone Innovation Zones
The Greater Reading Keystone Innovation Zone (KIZ) is an economic development program funded by the PA Department of Community & Economic Development and other stakeholders in the program. The Greater Reading Chamber Alliance (GRCA) is the designated fiscal agent for the operation of the KIZ. Statement of Purpose The purpose of the Greater Reading KIZ is to:
Drive high value economic development opportunities based on:
- the creation of new, innovative enterprise
- the enhancement of existing businesses
- the development of a tech-ready workforce
- the creation of strong partnerships between the region’s higher education institutions and the business community
Eligibility Requirements:
- Business must be in operation for less than 8 years
- Business must be in a designated target industry for the KIZ program
- Business must be located within a Keystone Innovation Zone designated region
HUBZone
The Historically Underutilized Business Zones (HUBZone) program was enacted into law as part of the Small Business Reauthorization Act of 1997. The program falls under the auspices of the U.S. Small Business Administration (SBA). The program encourages economic development in historically underutilized business zones – “HUBZones” – through the establishment of preferences.
How the HUBZone Program Works:
The SBA regulates and implements the HUBZone program. SBA does the following:
- Determines which businesses are eligible to receive HUBZone contracts
- Maintains a listing of qualified HUBZone small businesses that federal agencies can use to locate vendors
- Adjudicates protests of eligibility to receive HUBZone contracts
- Reports to the Congress on the program’s impact on employment and investment in HUBZone areas
Benefits of the HUBZone Program:
The program’s benefits for HUBZone-certified companies include:
- Competitive and sole source contracting
- 10% price evaluation preference in full and open contract competitions, as well as subcontracting opportunities
The federal government has a goal of awarding 3% of all dollars for federal prime contracts to HUBZone-certified small business concerns.
Eligibility for HUBZone:
To qualify for the program, a business must meet the following criteria:
- It must be a small business by SBA standards
- It must be owned and controlled at least 51% by U.S. citizens, or a Community Development Corporation, an agricultural cooperative, or an Indian tribe
- Its principal office must be located within a “Historically Underutilized Business Zone”
Search the SBA Hubzone map here. - At least 35% of its employees must reside in a HUBZone.
For more information on any of these zones, contact Deb Millman, 610.898.7798.