Mayor Jim Kenney announced today that the University City Keystone Innovation Zone (KIZ) received state approval to expand its existing boundaries to include the burgeoning tech community in Old City, including the area along N. 3rd Street known as “N3rd Street.”

The development is expected to bolster the growth of tech companies in Old City. The expansion would enable a new swath of startups to access up to $100,000 annually in sellable  tax credits. The state could award as much as $1.2 million in credits to newly eligible companies within the expanded zone in 2017.

According to StartupPHL, many companies who’ve been awarded the tax credits invest the funds in new workers while others purchase equipment to further develop and commercialize products and technologies.

“Thanks to this expansion, the University City KIZ will be better equipped to accommodate and support the cluster of tech startups in Old City while helping to attract and retain even more early-stage companies in Philadelphia,” said Stephen S. Tang, president & CEO of the University City Science Center.

The University City KIZ was established in 2004 by the state and the Ben Franklin Technology Development Authority. The geographically-designated zone was designed to create a “knowledge neighborhood” that develops tech-friendly business communities. Over the last 10 years, 48 University City KIZ companies have benefitted from about $8 million in KIZ tax credits. The University City KIZ is a partnership of local unviersities and private organizations.

Today’s development  is the latest in a series of steps recently announced by Hizzoner to bolster small business in the city.

During his budget address to City Council on March 3, Kenney’s proposed 5-year plan includes a reduction in the Business Income and Receipts Tax to 6.15% and including the exemption of a business’s first $100,000 in gross receipts. (The current rate is 6.39% and the exemption is $75,000.)

Kenney also proposed reducing the wage tax to 3.33% for non-residents and 3.73% for residents by fiscal year 2021, bringing it to its lowest rate since 1975. The mayor also proposed a $1-million increase in the Commerce Department’s Economic Stimulus Program.

The mayor said the tax reductions and additional stimulus funding would not happen unless Council passed a proposed soda tax. (More on that in a subsequent post.)

 

 

The National Small Business Association recently conducted a survey in which owners reported having to spend an average of 40 hours preparing and filing their taxes. About 25 percent of those surveyed said they spent at least three weeks per year on tax preparation.

The time and paperwork occupied with taxes means less time is devoted to the actual running of these businesses.

National Funding, one of the largest private lenders of small-business loans, has created a free tax e-book for small business owners. The company, which has provided more than $1 billion in capital for over 20,000 businesses nationwide, said its goal is to equip owners with information that helps them prepare their financial documents prior to filing their federal tax return.

“National Funding created the online tax guide to empower and educate small-business owners about their taxes,” said David Gilbert, founder & CEO of National Funding. “Many of our customers reach out to us about needing funding for tax payments this time of the year, so we hope this book helps them save money and clear up confusion about the complex and ever-changing tax regulations.”

The 23-page e-book includes helpful tips and real-life examples such as:

• Checklist–documents needed prior to filling out a tax return or meeting with a tax professional
• Tax form chart–shows what tax forms are required for the four types of small businesses (Sole Proprietor, Partnership, S Corporation and C Corporation)
• Deductions–shows what business expenses can and cannot be deducted
• Explanation of Section 179–this section became a permanent tax rule this year that allows business owners to deduct the cost of equipment purchases or leasing payments up to $500,000.

To view or download the e-book, visit http://www.nationalfunding.com/landing/small-business-tax-prep-guide.

I’m still fuming about how Philadelphia managed to lose the annual four-day millennial entrepreneur-fest last week after hosting it the previous two years. Organizers said they were decamping to Boston in October after they were unable to reach an agreement with the city to commit $2 million in private sponsorship to the event.

A spokeswoman for Mayor Kenney told The Philadelphia Inquirer that the fundraising potential for the Forbes’ event looked difficult because a lot of would-be donors were already being “tapped” to help support the Democratic National Convention here this summer.

The Greater Philadelphia Chamber of Commerce said the Kenney administration did not reach out to it, according to the Inquirer.

In any case, the ball got dropped. Do you mean to tell me that Comcast, venture-capital firms and other tech-centric businesses in the region couldn’t have come up with $2 million? Seriously? Are we that lame we can’t support a political convention and the Under 30 Summit in the same year?

So, now Boston will get to host the summit, which will bring together more than 1,000 of the country’s most important young entrepreneurs and game-changers. “The collaboration of the Mayor, the Governor, Boston’s business and tech community, as well as our distinguished academic institutions, made this possible,” said David Fialkow, managing director of General Catalyst Partners, is a Forbes’ press release.

While Philly dithered, Boston collaborated. At a time when Philadelphia’s startup community is taking root and millennials are repopulating the city, the summit–which features an agenda of panels, TED-style presentations, keynotes and a global competition for young entrepreneurs–would have been really valuable exposure.

Consider the 2014 Under 30 Summit in Philadelphia, where Peter Thiel and Sara Blakely gave speeches. Thiel is arguably the most disruptive thinker in America who co-founded Paypal and was the first investor in Facebook. Blakely is the founder of Spanx and became a billionaire by age 40.

You can’t quantify the value of hearing directly from people like that, and I doubt that Thiel or Blakely spend much, if any, time in Philadelphia.

I mean, why would you want to attract the young, brightest entrepreneurs to your city from all over the country to hear from the likes of Peter Thiel and Sara Blakely. Philadelphia isn’t on the radar screen of national tech media that follow tech-savvy cities such as Boston which, by the way, has a much more robust and significantly better funded startup scene than Philadelphia.

So, yeah, I think losing the Under 30 Summit is a big deal. Boston ate our lunch, goddamnit!

It speaks volumes that Philadelphia still needs to change perceptions about itself. The summit helped to do that. The Forbes’ brand reaches more than 80 million people worldwide with its business message, which could have helped raise more awareness and buzz about the tech/startup scene in Philadelphia. After being the Summit’s inaugural host in 2014 and again in 2015,  Philadelphia should have “owned” it for years. Such things can be hard to measure but are often invaluable in the long term and probably worth far more than $2 million.