PRINTER'S NO. 1640
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
1113
Session of
2020
INTRODUCED BY BLAKE, HUGHES, FARNESE, COLLETT, FONTANA,
SANTARSIERO, SCHWANK, BREWSTER, GORDNER, A. WILLIAMS,
DINNIMAN AND COSTA, APRIL 15, 2020
REFERRED TO FINANCE, APRIL 15, 2020
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," in manufacturing and investment tax credit,
providing for personal protective equipment retrofitting tax
credit.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Article XVIII-G of the act of March 4, 1971
(P.L.6, No.2), known as the Tax Reform Code of 1971, is amended
by adding a part to read:
PART III
PERSONAL PROTECTIVE EQUIPMENT RETROFITTING TAX CREDIT
Section 1841-G. Definitions.
The following words and phrases when used in this part shall
have the meanings given to them in this section unless the
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context clearly indicates otherwise:
"COVID-19 pandemic of 2020." The outbreak of the novel
coronavirus that was declared a pandemic by the World Health
Organization.
"Department." The Department of Community and Economic
Development of the Commonwealth.
"Pass-through entity." Any of the following:
(1) A partnership as defined in section 301(n.0).
(2) A Pennsylvania S corporation as defined in section
301(n.1).
(3) An unincorporated entity subject to section 307.21.
"Qualified tax liability." A taxpayer's liability for taxes
imposed under Article III, IV, VI, VII, VIII, IX, XI or XV.
"Tax credit." The personal protective equipment retrofitting
tax credit provided under this part.
"Taxpayer." An owner and operator of a business located in
this Commonwealth that specializes in manufacturing any item
other than personal protective equipment.
Section 1842-G. Eligibility.
In order to be eligible to receive a personal protective
equipment retrofitting tax credit, a taxpayer must demonstrate
to the department the following:
(1) The taxpayer has converted or retrofitted the
taxpayer's existing business facility in order to manufacture
personal protective equipment.
(2) The personal protective equipment is to be used for
this Commonwealth's response to the COVID-19 pandemic of
2020.
Section 1843-G. Procedure.
(a) Application.--A taxpayer applying to claim tax credit
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must complete and submit to the department a tax credit
application on a form and in a manner as determined by the
department.
(b) Approval.-- If the department approves the taxpayer's
application, the department and the taxpayer shall execute a
commitment letter containing the following:
(1) The taxpayer is the owner and operator of the
business.
(2) The taxpayer has expended funds to convert or
retrofit the taxpayer's existing business facility in order
to manufacture personal protective equipment.
(3) The personal protective equipment is to be used for
this Commonwealth's response to the COVID-19 pandemic of
2020.
(4) Any other information the department deems
appropriate.
Section 1844-G. Personal protective equipment retrofitting tax
credit.
(a) Maximum amount.--The department may award a tax credit
of up to 100% of the taxpayer's costs relating to the converting
or retrofitting of the taxpayer's existing business facility in
order to manufacture personal protective equipment.
(b) Applicable taxes.--A taxpayer may apply the tax credit
to 100% of the taxpayer's qualified tax liability.
(c) Term.--A taxpayer may claim the tax credit for a period
determined by the department, not to exceed the earlier of:
(1) five years from the date the taxpayer receives the
tax credit certificate; or
(2) six years from the start date.
(d) Availability.--A tax credit shall be made available by
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the department on a first-come, first-served basis.
(e) Limitation.--For the 2020 tax year, $50,000,000 in tax
credits shall be made available to the department and may be
awarded by the department in accordance with this part.
Section 1845-G. Limitations.
The following shall apply:
(1) If the taxpayer cannot use the entire amount of the
tax credit for the taxable year in which the tax credit is
first approved, the excess may be carried over to succeeding
taxable years and used as a credit against the qualified tax
liability of the taxpayer for the taxable years. Each time
the tax credit is carried over to a succeeding taxable year,
the tax credit shall be reduced by the amount of the tax
credit 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 three taxable
years following the first taxable year for which the taxpayer
was entitled to claim the credit.
(2) A tax credit approved by the department 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 can be
applied against any tax liability under paragraph (1).
(3) A taxpayer shall not be entitled to carry back or
obtain a refund of all or any portion of an unused tax credit
granted to the taxpayer under this part.
Section 1846-G. Sale or assignment.
(a) Application.--A taxpayer, upon application to and
approval by the department, may sell or assign, in whole or in
part, a tax credit granted to the taxpayer. The following shall
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apply:
(1) The department and the Department of Revenue shall
jointly issue guidelines for the approval of applications
under this paragraph.
(2) Before an application is approved, the Department of
Revenue must make a finding that the applicant has filed all
required State tax reports and returns for all applicable
taxable years and paid any balance of State tax due as
determined at settlement, assessment or determination by the
Department of Revenue.
(3) Notwithstanding any other provision of law, the
Department of Revenue must settle, assess or determine the
tax of an applicant under this paragraph within 90 days of
the filing of each required final return or report in
accordance with section 806.1(a)(5) of the act of April 9,
1929 (P.L.343, No.176), known as The Fiscal Code.
(b) Use by purchaser or assignee.--The purchaser or assignee
of all or a portion of a tax credit under subsection (a) must
immediately claim the credit in the taxable year in which the
purchase or assignment is made.
(1) The amount of the tax credit that a purchaser or
assignee may use against any one qualified tax liability may
not exceed 50% of the qualified tax liability for the taxable
year.
(2) The purchaser or assignee may not carry forward,
carry back or obtain a refund of or sell or assign the
manufacturing tax credit.
(3) The purchaser or assignee shall notify the
Department of Revenue of the seller or assignor of the
manufacturing tax credit in compliance with procedures
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specified by the Department of Revenue.
Section 1847-G. Pass-through entity.
(a) General rule.--If a pass-through entity has any unused
tax credits under section 1845-G, the entity may elect in
writing according to procedures established by the Department of
Revenue, to transfer all or a portion of the credit to
shareholders, members or partners in proportion or the share of
the entity's distributive income to which the shareholder,
member or partner is entitled.
(b) Application.--A shareholder, member or partner of a
pass-through entity to whom a credit is transferred under
subsection (a) shall immediately claim the credit in the taxable
year in which the transfer is made. The shareholder, member or
partner may not carry forward, carry back, obtain a refund of or
sell or assign the credit.
Section 1848-G. Guidelines.
The department shall develop and publish guidelines necessary
to implement this part.
Section 2. This act shall take effect immediately.
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