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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY WILLIAMS, RAFFERTY, COSTA, FONTANA, HUGHES, SOLOBAY, ERICKSON, BREWSTER, STACK AND BROWNE, OCTOBER 17, 2011 |
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| REFERRED TO FINANCE, OCTOBER 17, 2011 |
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| AN ACT |
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1 | Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An |
2 | act relating to tax reform and State taxation by codifying |
3 | and enumerating certain subjects of taxation and imposing |
4 | taxes thereon; providing procedures for the payment, |
5 | collection, administration and enforcement thereof; providing |
6 | for tax credits in certain cases; conferring powers and |
7 | imposing duties upon the Department of Revenue, certain |
8 | employers, fiduciaries, individuals, persons, corporations |
9 | and other entities; prescribing crimes, offenses and |
10 | penalties," providing for a tax credit for new jobs for |
11 | unemployed veterans. |
12 | The General Assembly of the Commonwealth of Pennsylvania |
13 | hereby enacts as follows: |
14 | Section 1. Article XVIII-C of the act of March 4, 1971 |
15 | (P.L.6, No.2), known as the Tax Reform Code of 1971, is amended |
16 | to read: |
17 | ARTICLE XVIII-C |
18 | [(RESERVED)] |
19 | TAX CREDIT FOR NEW JOBS FOR UNEMPLOYED VETERANS |
20 | Section 1801-C. Definitions. |
21 | The following words and phrases when used in this article |
22 | shall have the meanings given to them in this section unless the |
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1 | context clearly indicates otherwise: |
2 | "Department." The Department of Community and Economic |
3 | Development of the Commonwealth. |
4 | "Disabled veteran." Any of the following: |
5 | (1) An unemployed veteran who is entitled to |
6 | compensation or who, except for the receipt of military |
7 | retired pay, would be entitled to compensation, under laws |
8 | administered by the Secretary of Veterans Affairs. |
9 | (2) An unemployed person who was discharged or released |
10 | from active duty because of a service-connected disability. |
11 | "Full-time employment." Employment in which an individual is |
12 | employed by a recipient corporation for at least 35 hours per |
13 | week. |
14 | "Long term." A period of at least six months. |
15 | "New job." A full-time job, the average hourly rate, |
16 | excluding benefits, for which must be at least 150% of the |
17 | Federal minimum wage, created within a municipality located in |
18 | this Commonwealth by a company. |
19 | "Short term." A period of less than six months. |
20 | "Start date." January 1, 2012. |
21 | "Tax credit." A tax credit applied for or granted under this |
22 | article. |
23 | "Unemployed person." An individual who has not held any type |
24 | of full-time employment prior to being hired by a company |
25 | seeking a tax credit under this article. |
26 | "Unemployed veteran." An individual that meets all of the |
27 | following: |
28 | (1) Has performed active service in the armed forces of |
29 | the United States, including the reserve components and the |
30 | National Guard, who was discharged from the active service |
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1 | under honorable conditions. |
2 | (2) Has not held any type of full-time employment prior |
3 | to being hired by a company seeking a tax credit under this |
4 | article. |
5 | Section 1802-C. Application. |
6 | (a) Application to department.--A company may submit an |
7 | application for a tax credit under this article in a manner |
8 | required by the department. |
9 | (b) Procedure.--The application shall be attached to the |
10 | company's annual tax return required to be filed under this act. |
11 | Section 1803-C. Tax credits. |
12 | (a) Amount.--A company may claim the following tax credits |
13 | per new job created: |
14 | (1) A $1,200 tax credit for each short-term unemployed |
15 | veteran hired. |
16 | (2) A $2,400 tax credit for each long-term unemployed |
17 | veteran hired. |
18 | (3) A $2,400 tax credit for each disabled veteran hired. |
19 | (b) Maximum amount.--A company may combine tax credits under |
20 | subsection (a) for each unemployed veteran hired but not to |
21 | exceed $4,800. |
22 | (c) Determination of new jobs created.--New jobs shall be |
23 | deemed created to the extent that the company's average |
24 | employment by quarter during the year in which an unemployed |
25 | veteran is hired exceeds the company's average employment level |
26 | by quarter during the previous year. |
27 | (d) Applicable taxes.--A company may apply the tax credit to |
28 | 100% of the company's State corporate net income tax, capital |
29 | stock and franchise tax or the capital stock and franchise tax |
30 | of a shareholder of the company, if the company is a |
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1 | Pennsylvania S corporation, gross premiums tax, gross receipts |
2 | tax, bank and trust company shares tax, mutual thrift |
3 | institution tax, title insurance company shares tax, personal |
4 | income tax or the personal income tax of shareholders of a |
5 | Pennsylvania S corporation or any combination thereof. |
6 | (e) Availability of tax credits.-- |
7 | (1) Each fiscal year, $1,200,000 in tax credits shall be |
8 | made available to the department and may be awarded by the |
9 | department in accordance with this article. |
10 | (2) In addition to the tax credits under paragraph (1), |
11 | in any fiscal year, the department may reissue or assign |
12 | prior fiscal year tax credits which have been recaptured |
13 | under section 1805-C(a) and may award prior fiscal year |
14 | credits not previously issued. |
15 | Section 1804-C. Prohibitions. |
16 | The following actions with regard to job creation tax credits |
17 | are prohibited: |
18 | (1) Approval of jobs that have been created prior to the |
19 | start date. |
20 | (2) Approval for tax credits for a company which is |
21 | relocating operations from one municipality in this |
22 | Commonwealth to another unless special circumstances exist |
23 | and the municipality that is losing the existing jobs has an |
24 | opportunity to submit comments prior to action by the |
25 | department. If the department approves the tax credits, the |
26 | company must commit to preserving the existing employees, and |
27 | the credit shall apply only to the new jobs. |
28 | (3) The assignment, transfer or use of credits by any |
29 | other company, except that tax credits may be assigned in |
30 | whole or in part to an affiliated entity. As used in this |
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1 | paragraph, the term "affiliated entity" means an entity which |
2 | is part of the same "affiliated group," as defined by section |
3 | 1504(a)(1) of the Internal Revenue Code of 1986 (Public Law |
4 | 99-514, 26 U.S.C. § 1504(a)(1)), as the company awarded the |
5 | credit. |
6 | Section 1805-C. Penalties. |
7 | (a) Failure to maintain operations.--A company which |
8 | receives tax credits and fails to substantially maintain |
9 | existing operations and the operations related to the tax |
10 | credits in this Commonwealth for a period of five years from the |
11 | date the company first receives a tax credit shall be required |
12 | to refund to the Commonwealth the total amount of credits |
13 | granted. |
14 | (b) Waiver.--The department may waive the penalties outlined |
15 | in subsection (a) if it is determined that a company's |
16 | operations were not maintained or the new jobs were not created |
17 | because of circumstances beyond the company's control. Such |
18 | circumstances include natural disasters, unforeseen industry |
19 | trends or a loss of a major supplier or market. |
20 | Section 2. This act shall take effect in 60 days. |
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