A new initiative to promote economic growth and job creation moved forward this week as federal officials visited Erie to plan ways to develop its Opportunity Zones and use the incentives provided by a recently enacted change to Pennsylvania’s Tax Code, according to Senators Dan Laughlin (R-Erie) and Pat Browne (R-Lehigh).
The federal Tax Cuts and Jobs Act of 2017 created Qualified Opportunity Zones as a tool to encourage long-term investment in low-income communities. Investors will be provided federal tax benefits for investing capital gains in low-income community census tracts – and certain tracts adjacent to low-income tracts.
In Erie, the tracts designated as Opportunity Zones include a substantial portion of the downtown area. A statewide map of Opportunity Zone tracts is available at: https://www.arcgis.com/home/webmap/viewer.html?webmap=bcd443cbdcc94547bcc3fe72fd9a69ae
On Thursday, an advance team from the US Small Business Administration visited Erie to meet with local officials and business leaders to discuss strategies to spur private investment in projects within the city’s Opportunity Zones, according to Senator Laughlin
“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,” said Senator Laughlin. “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.”
Senator Laughlin added that the officials were also encouraged by the state’s efforts to bring Pennsylvania into compliance with standards that provide for federal tax incentives in the zones. Those changes were implemented in Act 13 of 2019 (Tax Code Reform) through language drafted by Senator Browne, Chairman of the Senate Appropriations Committee.
“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. 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,” Senator Browne said.
“I strongly believe that the Commonwealth, by expanding the federal program to provide similar tax benefits at the state level, will boost the attractiveness of the program and foster even greater economic growth and opportunity in our low-income communities. It was key that Senator Laughlin shared this vision and I was proud to work with him on this important legislative change for the betterment of communities across Pennsylvania.”
Conforming Pennsylvania’s personal income tax to standards for the Federal Opportunity Zones Program will allow investors in Opportunity Zone to receive federal tax deferrals/eliminations and other tax benefits on unrealized capital gains associated with these investments.
In addition, modifying the state’s personal income tax to meet federal rules will allow for the tax deferral/elimination of capital gains associated with the Opportunity Zones as an incentive for private investment not only in Erie, but in low-income urban and rural communities throughout the state.
“I was pleased to work with Senator Browne to get these changes inserted in the tax code,” Senator 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.”
Contact: Matt Azeles email@example.com