Rural Jobs and Investment Tax Credit Program (RJTC)
The Rural Jobs and Investment Tax Credit Program (“Program”) is an investment tool designed to offer rural business owners access to capital for business development in rural areas. The capital is sourced to Rural Growth Funds, designated to receive up to $100 million dollars in capital contributions from investors. The Commonwealth of Pennsylvania is using this investment tool to attract and retain rural businesses to the commonwealth, create family sustaining jobs, and to stimulate economic growth in rural businesses.
Designated Rural Growth Funds are authorized to receive both capital contributions and credit-eligible capital contributions. The Department may not approve more than $30M in credit-eligible contributions. The contributions will be utilized by the designated Rural Growth Fund’s to make Rural Growth Investments into qualified Rural Businesses.
To qualify for a tax credit, credit-eligible capital contributions made by a Business Firm to a Rural Growth Fund must be used by the Rural Growth Fund for rural growth investments in a rural business. Business Firms that make a credit-eligible capital contribution to a designated Rural Growth Fund are eligible to receive a tax credit equal to the credit-eligible capital contribution.
Eligible applicants (or Affiliates of the Applicant) requesting a Rural Growth Fund designation must:
- Be a licensed rural business investment company under the Consolidated Farm and Rural Development Act or a small business investment company under the Small Business Investment Act
- Have invested at least $100 million in nonpublic companies located in rural areas of the commonwealth or other states
- Be registered to do business in the commonwealth
- Have at least one principal who has been an officer or employee of the applicant for at least four years prior to the date of application under this program
Subject to the investment authority cap, the Department will make allocations of investment authority for approved applications in the order in which the applications are received. Applications received on the same day are treated as if they were received simultaneously. Applications are deemed to be received based on the date/time stamp generated by the Department.
The total allocation of tax credit certificates that may be awarded for this Program is $30 million dollars. The Department may not issue tax credit certificates that would exceed $6 million dollars in utilization in any fiscal year, excluding carried forward tax credits or amounts reallocated.
Information regarding the tax credit application process can be found in the Program Guidelines.
Business firms may apply the credit against the following:
- Bank and Trust Company Shares Tax
- Title Insurance Company Shares Tax
- Insurance Premiums Tax (excluding unauthorized, domestic/foreign marine)
- Mutual Thrift Tax
- Surplus Lines Tax
- Retaliatory Tax
A completed tax report must be filed for the period in which the tax credit was approved before the tax credit may be passed through, carried forward, or assigned to an affiliated entity. The tax credit is non-refundable. The tax credit may be used to offset 100% of the entities liability or 100% of the shareholder, member, or partner’s liability if the entity is a pass-through entity. Tax credits passed through must be in proportion to the pro rata share of ownership in the pass-through entity.
How to Apply
The application requirements to become a designated Rural Growth Fund can be found in the Program Guidelines.
Applications should be submitted in hard copy and emailed to the following:
Diane Sterthous, Venture Capital Advisor
PA Department of Community and Economic Development
400 North Street, 4th Floor
Harrisburg, PA 17120-0225
For specific questions on this program, contact DCED’s Tax Credit Division at 717.787.7120.
The Department will utilize the United States Department of Agriculture (USDA) Rural Development’s rural business eligibility map for purposes of determining what is considered a Rural Area in the commonwealth. The interactive map can be found on the USDA website.
Please note: For the purposes of this Program, the Department of Community & Economic Development will make the final determination on Rural Area eligibility. The USDA Rural Business eligibility map is a reference tool and does not constitute a final determination.