Bill Text: PA HB667 | 2011-2012 | Regular Session | Introduced

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Bill Title: Providing for an information technology services tax credit; and further providing for new job tax credits.

Spectrum: Slight Partisan Bill (Republican 9-3)

Status: (Introduced - Dead) 2011-02-14 - Referred to FINANCE [HB667 Detail]

Download: Pennsylvania-2011-HB667-Introduced.html

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PRINTER'S NO. 667
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 667 Session of2011
INTRODUCED BY REICHLEY, CALTAGIRONE, EVERETT, HARHART, KILLION, MAJOR, MARSICO, READSHAW AND THOMAS, FEBRUARY 14, 2011
REFERRED TO COMMITTEE ON FINANCE, FEBRUARY 14, 2011
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," providing for an information technology services
tax credit; and further providing for new job tax credits.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971, is amended by adding an article to
read:
ARTICLE XVII-G
INFORMATION TECHNOLOGY SERVICES TAX CREDIT
Section 1701-G. Scope of article.
This article relates to information technology services tax
credits.
Section 1702-G. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Department." The Department of Revenue of the Commonwealth.
"Information technology services." An organization or
business that uses electronic computers and computer software in
the study, design, development, implementation, support or
management to convert, store, protect, process, transmit and
receive information.
"Qualified information technology services expense." Any
costs or expenses incurred by a business or organization in the
information technology services industry as a result of
relocating in this Commonwealth or establishing a presence in
this Commonwealth.
"Qualified tax liability." The liability for taxes imposed
under Article III, IV or VI. The term shall include the
liability for taxes imposed under Article III on an owner of a
pass-through entity.
"Pass-through entity." Any of the following:
(1) A partnership, limited partnership, limited
liability company, business trust or other unincorporated
entity that for Federal income tax purposes is taxable as a
partnership.
(2) A Pennsylvania S corporation.
"Secretary." The Secretary of Revenue of the Commonwealth.
"Tax credit." The information technology services tax credit
authorized under this article.
"Taxpayer." An entity subject to tax under Article III, IV
or VI. The term shall include the shareholder, owner or member
of a pass-through entity that receives a tax credit.
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Section 1703-G. Credit.
(a) Application.--A taxpayer who incurs a qualified
information technology services expense in a taxable year may
apply for a tax credit as provided under this article. By
September 15, a taxpayer must submit an application to the
department for the qualified information technology services
expense incurred in the taxable year that ended in the prior
calendar year.
(b) Amount.--A taxpayer that is qualified under subsection
(a) shall receive a tax credit for the taxable year in the
amount of 30% of the qualified information technology services
expense.
(c) Notification.--By December 15 of the calendar year
following the close of the taxable year during which the
qualified information technology services expense was incurred,
the department shall notify the taxpayer of the amount of the
taxpayer's tax credit approved by the department.
Section 1704-G. Carryover, carryback, refund and assignment.
(a) Carryover.--If the taxpayer cannot use the entire amount
of the tax credit for the taxable year in which the tax credit
is first approved, then the excess may be carried over to the
succeeding taxable years and used as a credit against the
qualified tax liability of the taxpayer for those taxable years.
Each time that the tax credit is carried over to a succeeding
taxable year, it is to be reduced by the amount that was used as
a credit during the immediately preceding taxable year. The tax
credit may be carried over and applied to succeeding taxable
years for no more than 15 taxable years following the first
taxable year for which the taxpayer was entitled to claim the
credit.
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(b) Application.--A tax credit approved by the department
for a qualified information technology services expense in a
taxable year first shall be applied against the taxpayer's
qualified tax liability for the current taxable year as of the
date on which the credit was approved before the tax credit is
applied against any tax liability under subsection (a).
(c) Unused credit.--A taxpayer is not entitled to assign,
carry back or obtain a refund of an unused tax credit.
Section 1705-G. Time limitations.
A taxpayer shall not be entitled to a tax credit for a
qualified information technology service expense incurred in
taxable years ending after December 31, 2013.
Section 1706-G. Limitation on credits.
(a) Total amount.--The total amount of tax credits approved
by the department shall not exceed $40,000,000 in any fiscal
year.
(b) Proration.--If the total amount of tax credits applied
for by all taxpayers exceeds the amount allocated for those
credits, the tax credit to be received by each applicant shall
be prorated by the department among all applicants who have
qualified for the credit.
Section 1707-G. Shareholder, owner or member pass-through.
(a) Shareholder.--If a Pennsylvania S corporation does not
have an eligible tax liability against which the tax credit may
be applied, a shareholder of the Pennsylvania S corporation is
entitled to a tax credit equal to the tax credit determined for
the Pennsylvania S corporation for the taxable year multiplied
by the percentage of the Pennsylvania S corporation's
distributive income to which the shareholder is entitled.
(b) Pass-through.--If a pass-through entity other than a
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Pennsylvania S corporation does not have an eligible tax
liability against which the tax credit may be applied, an owner
or member of the pass-through entity is entitled to a tax credit
equal to the tax credit determined for the pass-through entity
for the taxable year multiplied by the percentage of the pass-
through entity's distributive income to which the owner or
member is entitled.
(c) Additional credit.--The credit provided under subsection
(a) or (b) shall be in addition to any other tax credit to which
a shareholder, owner or member of a pass-through entity is
entitled under this article, except that a pass-through entity
and a shareholder, owner or member of a pass-through entity may
not claim a credit under this article for the same qualified
information technology service expense.
Section 1708-G. Report.
The secretary shall submit an annual report to the General
Assembly indicating the effectiveness of the credit provided
under this article no later than March 15 following the year in
which the credits were approved. The report shall include the
names of all taxpayers utilizing the credit as of the date of
the report and the amount of credits approved and utilized by
each taxpayer. Notwithstanding any law providing for the
confidentiality of tax records, the information contained in the
report shall be public information. The report may also include
any recommendations for changes in the calculation or
administration of the credit.
Section 1709-G. Termination.
The department shall not approve a tax credit under this
article for taxable years ending after December 31, 2013.
Section 1710-G. Regulations.
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The secretary shall promulgate regulations necessary for the
implementation and administration of this article.
Section 2. Section 1804-B of the act, added June 22, 2001
(P.L.353, No.23), is amended to read:
Section 1804-B. Tax credits.
(a) Maximum amount.--A company may claim a tax credit of
$1,000 per new job created up to the maximum job creation tax
credit amount specified in the commitment letter.
(b) Determination of new jobs created.--
(1) New jobs shall be deemed created in year one to the
extent that the company's average employment by quarter
during year one exceeds the company's average employment
level during the company's base period.
(2) New jobs shall be deemed created in year two to the
extent that the company's average employment by quarter
during year two exceeds the company's average employment by
quarter during year one.
(3) New jobs shall be deemed created in year three to
the extent that the company's average employment by quarter
during year three exceeds the company's average employment by
quarter during year two.
(c) Applicable taxes.--A company may apply the tax credit to
100% of the company's State corporate net income tax, capital
stock and franchise tax or the capital stock and franchise tax
of a shareholder of the company if the company is a Pennsylvania
S corporation, gross premiums tax, gross receipts tax, bank and
trust company shares tax, mutual thrift institution tax, title
insurance company shares tax, personal income tax or the
personal income tax of shareholders of a Pennsylvania S
corporation or any combination thereof.
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(d) Tax credit term.--A company may claim the job creation
tax credit for each new job created, as approved by the
department, for a period determined by the department but not to
exceed five years from the date the company first submits a job
creation tax credit certificate.
[(e) Availability of tax credits.--Each fiscal year,
$22,500,000 in tax credits shall be made available to the
department and may be awarded by the department in accordance
with this article. In addition, in any fiscal year, the
department may reissue or assign prior fiscal year tax credits
which have been recaptured under section 1806-B(a) or (b) and
may award prior fiscal year credits not previously issued. Prior
fiscal year credits may be reissued, assigned or awarded by the
department without limitation by section 1805-B(b).]
Section 3. The addition of Article XVII-G of the act shall
apply to tax years beginning after December 31, 2011.
Section 4. This act shall take effect immediately.
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