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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY BRUBAKER, ERICKSON, ALLOWAY, GREENLEAF, HUGHES, YUDICHAK, SOLOBAY, WAUGH, COSTA, FERLO, KASUNIC, BROWNE, TARTAGLIONE, LEACH, MENSCH, FARNESE, BOSCOLA AND BLAKE, MARCH 23, 2012 |
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| REFERRED TO FINANCE, MARCH 23, 2012 |
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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 industry partnership tax credits. |
11 | The General Assembly of the Commonwealth of Pennsylvania |
12 | hereby enacts as follows: |
13 | Section 1. The act of March 4, 1971 (P.L.6, No.2), known as |
14 | the Tax Reform Code of 1971, is amended by adding an article to |
15 | read: |
16 | ARTICLE XVII-G |
17 | INDUSTRY PARTNERSHIP TAX CREDIT |
18 | Section 1701-G. Scope of article. |
19 | This article relates to industry partnership tax credits. |
20 | Section 1702-G. Definitions. |
21 | The following words and phrases when used in this article |
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1 | shall have the meanings given to them in this section unless the |
2 | context clearly indicates otherwise: |
3 | "Department." The Department of Labor and Industry of the |
4 | Commonwealth. |
5 | "Industry partnership tax credit." The credit provided under |
6 | this article. |
7 | "Pass-through entity." A partnership as defined in section |
8 | 301(n.0) or a Pennsylvania S corporation as defined in section |
9 | 301(n.1). |
10 | "Qualified tax liability." The liability for taxes imposed |
11 | under Article III, IV or VI. The term shall not include any tax |
12 | withheld by an employer from an employee under Article III. |
13 | "Taxpayer." An entity subject to tax under Article III, IV |
14 | or VI. The term shall include the shareholder of a Pennsylvania |
15 | S corporation that receives an industry partnership tax credit. |
16 | Section 1703-G. Industry partnership tax credit for cash |
17 | contributions to industry partnerships. |
18 | (a) Claim.--A taxpayer may claim an industry partnership tax |
19 | credit against any qualified tax liability in an amount equal to |
20 | 75% of any cash contribution to an industry partnership. |
21 | (b) Application.--By September 15, a taxpayer must submit an |
22 | application to the department for an industry partnership tax |
23 | credit incurred in the taxable year that ended in the prior |
24 | calendar year. |
25 | (c) Notification.--By December 15 of the calendar year |
26 | following the close of the taxable year during which the |
27 | contribution was made, the department shall notify the taxpayer |
28 | of the amount of the taxpayer's industry partnership tax credit |
29 | approved by the department. |
30 | (d) Claim prohibited.--A taxpayer may not claim an industry |
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1 | partnership tax credit for any portion of a cash contribution |
2 | provided to satisfy the private sector matching funding |
3 | requirement for State grant funding under section 1304 of the |
4 | act of December 18, 2001 (P.L.949, No.114), known as the |
5 | Workforce Development Act. |
6 | Section 1704-G. Carryover, carryback, refund and assignment. |
7 | (a) General rule.--If the taxpayer cannot use the entire |
8 | amount of the industry partnership tax credit for the taxable |
9 | year in which the industry partnership tax credit is first |
10 | approved, the excess may be carried over to succeeding taxable |
11 | years and used as a credit against the qualified tax liability |
12 | of the taxpayer for those taxable years. Each time that the |
13 | industry partnership tax credit is carried over to a succeeding |
14 | taxable year, it shall be reduced by the amount that was used as |
15 | a credit during the immediately preceding taxable year. The |
16 | industry partnership tax credit may be carried over and applied |
17 | to succeeding taxable years for no more than 15 taxable years |
18 | following the first taxable year for which the taxpayer was |
19 | entitled to claim the industry partnership tax credit. |
20 | (b) Application.--An industry partnership tax credit |
21 | approved by the department in a taxable year first shall be |
22 | applied against the taxpayer's qualified tax liability for the |
23 | current taxable year as of the date on which the industry |
24 | partnership tax credit was approved before the industry |
25 | partnership tax credit is applied against any tax liability |
26 | under subsection (a). |
27 | (c) Prohibition.--A taxpayer shall not be entitled to carry |
28 | back or obtain a refund of an unused industry partnership tax |
29 | credit. |
30 | Section 1705-G. Guidelines for industry partnership tax |
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1 | credits. |
2 | The department, in consultation with the Department of |
3 | Revenue, shall prescribe guidelines for determining whether |
4 | contributions qualify for industry partnership tax credits. The |
5 | department may deem contributions that fund any activity of an |
6 | industry partnership authorized under section 1303(b) of the act |
7 | of December 18, 2001 (P.L.949, No.114), known as the Workforce |
8 | Development Act, as qualifying for an industry partnership tax |
9 | credit. |
10 | Section 1706-G. Time limitations. |
11 | A taxpayer shall not be entitled to an industry partnership |
12 | tax credit for contribution made in taxable years ending after |
13 | December 31, 2016. |
14 | Section 1707-G. Limitations. |
15 | (a) Total.--The total amount of industry partnership tax |
16 | credits approved by the department may not exceed $7,500,000 in |
17 | any taxable year. |
18 | (b) Individual taxpayer.--No taxpayer may receive more than |
19 | $37,500 in industry partnership tax credits for any taxable |
20 | year. |
21 | (c) Industry partnership.--The total amount of industry |
22 | partnership tax credits resulting from contributions to certain |
23 | industry partnerships shall be limited to $375,000 per industry |
24 | partnership in any taxable year. |
25 | (d) Allocation.--If the total amount of industry partnership |
26 | tax credits applied for by all taxpayers exceeds the amount |
27 | allocated for those credits, the industry partnership tax credit |
28 | to be received by each applicant shall be the product of the |
29 | allocated amount multiplied by the quotient of the industry |
30 | partnership tax credit applied for by the applicant divided by |
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1 | the total of all industry partnership tax credits applied for by |
2 | all applicants, the algebraic equivalent of which is: |
3 | taxpayer's industry partnership tax credit=amount allocated |
4 | for those credits X (industry partnership tax credit applied |
5 | for by the applicant/total of all industry partnership tax |
6 | credits applied for by all applicants). |
7 | Section 1708-G. Pass-through entity. |
8 | (a) Transfer.--If a pass-through entity has any unused |
9 | industry partnership tax credit under section 1704-G, the entity |
10 | may elect, in writing, according to the department's procedures, |
11 | to transfer all or a portion of the industry partnership tax |
12 | credit to shareholders, members or partners in proportion to the |
13 | share of the entity's distributive income to which the |
14 | shareholder, member or partner is entitled. |
15 | (b) Additional credit.--The industry partnership tax credit |
16 | provided under subsection (a) shall be in addition to any |
17 | industry partnership tax credit to which a shareholder, member |
18 | or partner of a pass-through entity is otherwise entitled under |
19 | this article. |
20 | (c) Claim.--A shareholder, member or partner of a pass- |
21 | through entity to whom an industry partnership tax credit is |
22 | transferred under subsection (a) must immediately claim the |
23 | industry partnership tax credit in the taxable year in which the |
24 | transfer is made. The shareholder, member or partner may not |
25 | carry forward, carry back, obtain a refund of or sell or assign |
26 | the industry partnership tax credit. |
27 | Section 1709-G. Report to General Assembly. |
28 | The Secretary of Labor and Industry shall submit an annual |
29 | report to the General Assembly indicating the effectiveness of |
30 | the industry partnership tax credit no later than March 15 |
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1 | following the year in which the industry partnership tax credits |
2 | were approved. The report shall include the names of all |
3 | taxpayers utilizing the industry partnership tax credit as of |
4 | the date of the report and the amount of industry partnership |
5 | tax credits approved and utilized by each taxpayer. |
6 | Notwithstanding any law providing for the confidentiality of tax |
7 | records, the information contained in the report shall be public |
8 | information. The report may also include any recommendations for |
9 | changes in the calculation or administration of the industry |
10 | partnership tax credit. |
11 | Section 1710-G. Termination. |
12 | The department shall not approve an industry partnership tax |
13 | credit under this article for taxable years ending after |
14 | December 31, 2016. |
15 | Section 2. This act shall take effect immediately. |
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