What Happened?
The city of Beachwood, Ohio, recently launched a grant program to encourage businesses to open new locations or expand existing operations and create jobs in the community.
So What?
The Beachwood Job Creation Incentive Grant Program is offering financial assistance to companies that open up 30 full-time jobs or add at least $1 million to the annual payroll within the next three years within city limits. The goal of the program is to increase the city’s competitive edge over other local communities looking to acquire new economic opportunities and employment options for residents. Portions of the grant will be awarded according to this schedule:
- Adding $1 million to $3 million to the payroll by the end of three years = 30 percent of the grant awarded for three years
- $3 million to $6 million = 35 percent of the grant awarded for four years
- $6 million to $8 million = 40 percent of the grant awarded for four years
- $8 million and above = 50 percent of the grant awarded for five years
However, if the company fails to meet 90 to 100 percent of its payroll projections during the three years after application, the award will be reduced by 5, 10 and 15 percent. If payroll projections fall below 75 percent met, the grant will be revoked for the year.
The financial assistance provided to participating, eligible businesses will not be taken from tax revenues, but used to boost economic activity with a stronger business sector. How much a company is offered is based on percentage of the annual payroll withholding taxes generated by the jobs created.
Philly Tax Credit
Also incentivizing job creation by local businesses in the community, the city of Philadelphia has increased its Job Creation Tax Credit so eligible companies receive a credit of $5,000 or 2 percent of annual wages paid, whichever is higher. The credit can be applied against the Philadelphia business income and receipts tax liability. To qualify for the tax credit, local businesses must:
- Be able to create 25 new full-time jobs in a five-year period or
- Increase full-time workforce by 20 percent in a five-year period
- Demonstrate financial stability and intent to stay in Philadelphia for at least five years
- Create jobs that have an average hourly wage at least 150 percent of the federal minimum wage
The tax credit is available for use for five years after a business is certified for the incentive, but may be revoked if the company fails to maintain the proper staff or payroll levels.
Other Philly Perks
Philadelphia offers entrepreneurs and small businesses with several tax credits, grants and incentive programs to supplement business loans and encourage economic activity in the city. Along with the Job Creation Tax Credit, the city also sponsors:
- Sustainable business tax credit: $4,000 to certified companies demonstrating high social and environmental standards
- Green roofs tax credit: Credits 25% of all costs up to $100,000 for eco-friendly roofing
- New markets tax credit: Credit for federal income tax when qualified equity investments in low-income areas are made to stimulate growth and development
- Jump start Philly: Exempts businesses from paying business income and receipts tax during the first two years of operations, while waiving license and registration fees to boost startup activity
- Small business energy efficiency grant program: Reimburse companies up to $250,000 from the PA Department of Environmental Protection for investing in energy efficient technology
- Keystone innovation and opportunity zone programs: Connect young businesses with local resources in the education community to set up internships in exchange for tax credits and other benefits
- Storefront improvement program: Reimburse businesses up to 50 percent of costs for improving storefronts to commercial buildings, with a maximum of $8,000 for a single property and $12,000 for multiple address property
Economic Drivers
Gov1 is following trends in increasing retail opportunities and revamping downtown neighborhoods to spur revenue generation and growth.