Three Dozen Startups in University City KIZ Benefiting from Tax Credits
Thirty-six startup companies in University City and Center City have been awarded nearly $2.4 million in tax credits by the Pennsylvania Department of Community and Economic Development in 2016 as part of the Keystone Innovation Zone (KIZ) Tax Credit Program. All 36 companies are located in the University City Keystone Innovation Zone and represent the highest number of awards to the largest number of companies in the 10 years the program has been available for companies in the University City KIZ.
Pennsylvania’s Keystone Innovation Zone Tax Credit is a fundamental component of the KIZ program. A total of up to $15 million in credits are available statewide each year to eligible companies. Companies without tax liabilities can sell their tax credits themselves or secure a third-party, independent broker to sell the credits on their behalf.
Since 2006, over $10.3 million in KIZ Tax Credits have been awarded to 63 companies in the University City KIZ. “The KIZ Tax Credit program has given a major boost to University City and Center City-based companies in the last decade,” says Robert McGrath, Chair of the University City KIZ Executive Committee and Senior Associate Vice Provost at Drexel University. “The impact of these companies on Philadelphia’s economy and entrepreneurial culture has been a real driver in our efforts to attract and retain bright people and next generation technology businesses here in the region.”
Eligible companies can access up to $100,000 in tradable credits each year, and many of the awardees will invest those funds in new employees while others will purchase equipment to further develop and commercialize products and technologies.
“Zivtech’s most recent KIZ Tax Credit will allow us to take more risks around innovative new products and service offerings” says Alex Urevick-Ackelsberg, Cofounder & CEO of University City KIZ-based Zivtech. “We’ll be putting these funds towards the ongoing development of our Continuous Integration product Probo.ci.”
“The KIZ Tax Credit program is extremely beneficial for early-stage technology companies such as Phelix,” comments Doron Greenbaum, Ph.D., CEO of first-time KIZ Tax Credit awardee, Phelix Therapeutics. “In our case, the proceeds from the sale of the tax credits provide an additional financial resource to pursue critical needs that generally are not funded via research grants, such as patent prosecution, and greatly enhance the value of the company.”
The deadline to apply for KIZ Tax Credits is September 15th of each year. Currently, revenue from grants, sales, royalties and other income can be included in tax credit applications, but equity and early-stage venture investments cannot be considered.
UC KIZ companies interested in applying for a tax credit should call 215.966.6156 or email email@example.com for more information.
About the University City Keystone Innovation Zone
The University City Keystone Innovation Zone is a partnership of BioAdvance, Drexel University, Thomas Jefferson University, the University City Science Center, the University of Pennsylvania, the University of the Sciences in Philadelphia and The Wistar Institute. It was established in 2004 by the Commonwealth of Pennsylvania and the Ben Franklin Technology Development Authority as a Keystone Innovation Zone, a geographically designated zone designed to create a “knowledge neighborhood” that develops technology business communities by aligning talent and resources. UC KIZ partners are committed to working together to ensure that life sciences and information technology opportunities are developed and supported to maximize the potential of university research, start-up companies and international companies seeking to locate in the region. The Science Center serves as the administrative and fiscal agent of the UC KIZ.
For more information about the University City Keystone Innovation Zone, call 215.966.6156 or visit http://sciencecenter.org/discover/university-city-kiz.