|Posted:||January 26, 2021 12:59 PM|
|From:||Representative Karen Boback and Rep. Mike Zabel|
|To:||All House members|
|Subject:||Prohibit Keystone Opportunity Zone (KOZ) Zone-Hopping|
|As you may know, the Keystone Opportunity Zone (KOZ) Program was originally created to utilize communities’ unused, abandoned land and buildings and revitalize them into areas that will benefit and add value to each community. Any eligible business or resident within a zone may apply for tax credits toward state and local taxes. However, there is no provision that would prohibit qualified businesses from moving from an expired KOZ to a new one and thus receiving a second round of tax breaks.
Because of this lack of a provision, the Commonwealth Court of Philadelphia ruled that Dechert LLP (considered to be one of the richest law firm in Philadelphia) would be allowed to collect a second round of KOZ tax breaks when they move from their current KOZ to a new one. The tax breaks in their current KOZ in Cira Centre expired in 2018; before that, the city provided an estimated $400 million in tax breaks to firms in the Cira Centre since its conception in 2005.
To continue the good work of the KOZ program and prevent businesses from taking advantage of current provisions, we are introducing legislation that would prohibit qualified businesses from essentially “zone-hopping” from one KOZ to another and receiving multiple tax breaks from that new KOZ.
Please join us in cosponsoring this legislation to prohibit ‘zone hopping’ and maintain the integrity of the KOZ program.
Introduced as HB1377