1Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2act relating to tax reform and State taxation by codifying
3and enumerating certain subjects of taxation and imposing
4taxes thereon; providing procedures for the payment,
5collection, administration and enforcement thereof; providing
6for tax credits in certain cases; conferring powers and
7imposing duties upon the Department of Revenue, certain
8employers, fiduciaries, individuals, persons, corporations
9and other entities; prescribing crimes, offenses and
10penalties," providing for a hotel and resort property
11construction and renovation tax credit.

12The General Assembly of the Commonwealth of Pennsylvania
13hereby enacts as follows:

14Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
15the Tax Reform Code of 1971, is amended by adding an article to
16read:

17ARTICLE XVIII-E

18HOTEL AND RESORT PROPERTY CONSTRUCTION

19AND RENOVATION TAX CREDIT

20Section 1801-E. Definitions.

21The following words and phrases when used in this article

1shall have the meanings given to them in this section unless the
2context clearly indicates otherwise:

3"Construction or renovation cost." Costs incurred for
4construction, remodeling or modification to a qualified hotel
5facility, including the costs of labor, materials and supplies.
6The term does not include the costs for plans, designs and
7permits.

8"Department." The Department of Revenue of the Commonwealth.

9"Qualified hotel facility." Any of the following:

10(1) A hotel.

11(2) A timeshare facility or project.

12(3) A commercial building or facility located within a
13qualified resort area.

14"Qualified resort area." An area designated for hotel use,
15resort use or transient vacation rentals by the governing body
16of a county.

17"Tax credit." The Hotel and Resort Property Construction and
18Renovation Tax Credit established under this article.

19Section 1802-E. Tax credit.

20(a) Eligibility.--A taxpayer shall be eligible for a tax
21credit for construction or renovation of a qualified hotel
22facility within this Commonwealth. The amount of the annual
23credit shall be 10% of the construction or renovation costs
24incurred on each qualified hotel facility.

25(b) Costs.--To qualify for the tax credit provided in
26subsection (a), a taxpayer shall demonstrate that the aggregate
27construction or renovation costs for a qualified hotel facility
28are:

29(1) a minimum of $10,000,000; and

30(2) a maximum of $100,000,000.

1(c) Amount of credit and carryover.--The amount of the
2credit may not exceed the total tax liability of the taxpayer
3for the applicable taxes under subsection (d) for the taxable
4year in which the construction or renovation cost was incurred.
5If the amount of credit allowed exceeds the taxpayer's tax
6liability for the taxable year, the amount that exceeds the tax
7liability may be carried over for credit against the income
8taxes of the taxpayer in the next three taxable years or until
9the total amount of the tax credit has been taken, whichever is
10earlier.

11(d) Applicable taxes.--A taxpayer may apply the tax credit
12to 100% of the taxpayer's State corporate net income tax,
13capital stock and franchise tax or the capital stock and
14franchise tax of a shareholder of the taxpayer if the taxpayer
15is a Pennsylvania S corporation, gross premiums tax, gross
16receipts tax, bank and trust company shares tax, mutual thrift
17institution tax, title insurance company shares tax, personal
18income tax or the personal income tax of shareholders of a
19Pennsylvania S corporation or a combination of the taxes.

20Section 1803-E. Adjustments.

21A taxpayer claiming a tax credit under this article shall:

22(1) for depreciation or accelerated cost recovery system
23purposes, reduce the basis of eligible property by the amount
24of credit allowable and claimed; or

25(2) treat the tax credit as taxable income for the
26taxable year in which it is recognized under the applicable
27method of accounting.

28Section 1804-E. Limitations.

29(a) Federal tax credit.--A taxpayer may not be allowed a tax
30credit under this article for a construction or renovation cost

1for which the taxpayer is allowed a Federal tax credit.

2(b) Deduction.--A taxpayer may not be allowed a tax credit
3under this article for a construction or renovation cost for
4which a deduction is taken under section 179 of the Internal
5Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 179).

6(c) Financing.--If a renovation or construction cost is
7financed in whole or in part by a Federal or State Government
8grant or loan or by clean energy financing, a taxpayer shall not
9be allowed a tax credit under this article for the construction
10or renovation cost.

11Section 1805-E. Total annual limit.

12There shall be a total annual cap on tax credits granted
13under this article of $50,000,000.

14Section 1806-E. Regulations.

15The department shall promulgate regulations with regard to
16application for and enforcement of this article.

17Section 1807-E. Applicability.

18This article shall apply to taxable years beginning on or
19after January 1, 2013, and ending before January 1, 2016.

20Section 2. This act shall take effect immediately.