An advance team from the U.S. Small Business Administration recently visited Erie to discuss a new initiative to promote economic growth and job creation in the region.
The team discussed plans to develop Erie’s Opportunity Zones and use incentives provided by a recently enacted change to Pennsylvania’s Tax Code.
The federal Tax Cuts and Jobs Act of 2017 created Qualified Opportunity Zones to encourage long-term investment in low-income communities. Investors will receive federal tax benefits for investing capital gains in low-income community census tracts and certain tracts adjacent to low-income tracts.
“The meeting went very well and the advance team was especially excited that we are actively moving forward to aggressively encourage investment in Erie in the very near future,” Sen. Dan Laughlin (R-Erie) said. “The Opportunity Zone program is another outstanding tool for our local economic development officials to use to attract new businesses to our city. We have a great location and we have a motivated workforce. That’s a good combination, and the tax incentives would only make us more attractive for investment.”
Pennsylvania recently implemented changes through Act 13 of 2019 to bring the state into compliance with standards that provide for federal tax incentives in the zones.
“I was pleased to sponsor legislation (Senate Bill 180) that was included in this year’s tax code that provided the language to conform Pennsylvania’s personal income tax to the Federal Opportunity Zone Program ensuring that Pennsylvania maximizes the impact of this innovative new federal program,” Sen. Pat Browne (R-Lehigh) said. “By allowing for the tax deferral/elimination of only those capital gains associated with the Opportunity Zones Program, we can utilize our Tax Code to direct private investment where it is needed most while being fiscally responsible at the same time.”
Conforming the state’s personal income tax to standards for the Federal Opportunity Zones Program will allow investors in Opportunity Zones to receive federal tax deferrals/eliminations and other benefits on unrealized capital gains associated with their investments.
“I was pleased to work with Senator Browne to get these changes inserted in the tax code,” Laughlin said. “This effort has made Erie’s Opportunity Zones some of the most attractive in the country. We are going to be a national model to show how these zones can work for revitalization.”