Pennsylvania organizations hoping to increase development of public amenities and parks along Pennsylvania's waterfronts may soon benefit from the new "Waterfront Development Tax Credit" enacted as part of Act 84, and signed into law by Governor Wolf on July 13, 2016. Intended to "encourage private investment in waterfront property", the new law grants tax credits in exchange for contributions made towards approved "waterfront development projects." Under the new legislation, qualifying non-profit entities and authorities will soon be able submit applications and become "waterfront development organizations". After being designated as a waterfront development organization, an entity may submit waterfront development plans and projects to the Pennsylvania Department of Community and Economic Development for approval. Such organizations will administrator and oversee completion of approved waterfront development projects.
The law provides tax credits valued at up to 75% of contributions made towards qualifying waterfront development projects. The tax credits may be applied towards personal income taxes, corporate net income taxes, capital stock – franchise taxes, certain taxes on insurance premiums, and other selected taxes. The total amount of tax credits in a single year cannot exceed $1.5 million, and the overall amount of tax credits awarded for a single project cannot exceed the costs of the applicable waterfront development project.
The new legislation signals a commitment on the part of Pennsylvania to transform its waterfronts from industrial dumping grounds into vibrant places where people work, live and play. In time, legislators might be convinced to expand the tax credit beyond the initial $1.5 million, which would greatly "encourage private investment in waterfront property" by a broad spectrum of Pennsylvania tax payers. For now, the tax benefits, although limited in amount, are a promising incentive and an important step in waterfront development.
This article is presented for informational purposes only and is not intended to constitute legal advice.
