THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY BARBIN, HORNAMAN, MURT, KAVULICH, BISHOP, BOYD, B. BOYLE, K. BOYLE, BRADFORD, BRENNAN, BRIGGS, BROWNLEE, BURNS, BUXTON, CALTAGIRONE, CARROLL, COHEN, CONKLIN, D. COSTA, P. COSTA, CREIGHTON, CRUZ, CURRY, DALEY, DAVIS, DAVIDSON, DEASY, DELISSIO, DeLUCA, DePASQUALE, DERMODY, DeWEESE, DONATUCCI, D. EVANS, FABRIZIO, FRANKEL, FREEMAN, GALLOWAY, GERBER, GEORGE, GERGELY, GIBBONS, GOODMAN, HALUSKA, HANNA, HARHAI, HARKINS, JOHNSON, JOSEPHS, W. KELLER, KIRKLAND, KORTZ, KOTIK, KULA, LONGIETTI, MAHONEY, MALONEY, MANN, MARKOSEK, MATZIE, McGEEHAN, MILLARD, MIRABITO, MUNDY, MURPHY, NEUMAN, M. O'BRIEN, PARKER, PASHINSKI, PAYTON, PETRARCA, PRESTON, RAVENSTAHL, READSHAW, REICHLEY, SABATINA, SAINATO, SAMUELSON, SANTARSIERO, SANTONI, SHAPIRO, SIMMONS, K. SMITH, M. SMITH, STABACK, STEPHENS, STERN, STURLA, SWANGER, WILLIAMS, YOUNGBLOOD, CUTLER, THOMAS, WATERS, WHEATLEY, WHITE, CAUSER, SACCONE, VULAKOVICH, MICCARELLI, MULLERY, O'NEILL, STEVENSON, HESS, V. BROWN, FARRY, BOBACK, QUINN, SONNEY, SCAVELLO AND R. BROWN, DECEMBER 7, 2011

AS REPORTED FROM COMMITTEE ON FINANCE, HOUSE OF REPRESENTATIVES, AS AMENDED, JUNE 11, 2012   

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 the Vets First Tax Credit Program

to honor veterans for their service to our country and

provide incentives for their employment.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Article XVIII-C of the act of March 4, 1971

(P.L.6, No.2), known as the Tax Reform Code of 1971, added July

9, 2008 (P.L.922, No.66), is amended to read:

ARTICLE XVIII-C

[(RESERVED)]

THE VETS FIRST TAX CREDIT PROGRAM

Section 1801-C.  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 Community and Economic

Development of the Commonwealth.

"Eligible job."  A full-time job in this Commonwealth, the

annual wage, excluding benefits, for which is at least equal to

the average annual wage in the county where the job is located

as posted on the Department of Labor and Industry's publicly

accessible Internet website. The term does not include a

temporary or seasonal job.

"Qualified tax liability."  The liability for taxes imposed

under Article III, IV, VI, VII, VIII, IX or XV. The term shall

not include liability for any tax withheld or required to be

withheld by a taxpayer from an employee under Article III.

"Small business."  A for-profit corporation, limited

liability company, partnership or proprietorship operating in

this Commonwealth with fewer than 100 employees at the time the

taxpayer applies for a Vets First tax credit under this article.

"Start date."  The effective date of this section.

"Taxpayer."  An individual or small business subject to a tax

imposed under Article III, IV, VI, VII, VIII, IX or XV. The term

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shall not include a small business that does not file combined

income tax returns with the Department of Revenue with its in-

State or out-of-State subsidiaries and other affiliates.

"Veteran."  An individual who meets all of the following:

(1)  Served in the active United States military,

including service in a reserve component or National Guard.

(2)  Was released or discharged from active military

service under conditions other than dishonorable, after

September 30, 2001.

(3)  Has not worked in an eligible job for at least six

months prior to being hired by a taxpayer.

"Vets First tax credits."  Tax credits for hiring veterans

authorized under this article.

"Year one."  A one-year period immediately following the

start date.

"Year two."  A one-year period immediately following the end

of year one.

"Year three."  A one-year period immediately following the

end of year two.

"Year four."  A one-year period immediately following the end

of year three.

Section 1802-C.  Vets First tax credits.

(a)  Criteria.--A taxpayer that employs a veteran in an

eligible job shall be entitled to qualify for a Vets First tax

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credit against the taxpayer's qualified tax liability as

provided in this article. In order to be eligible for a tax

credit, the taxpayer shall certify and agree to the following:

(1)  The veteran was hired for a new position in the

taxpayer's small business or was hired to fill the position

of another employee who voluntarily separated from employment

with the taxpayer.

(2)  The taxpayer shall continue the operation of its

small business for at least five years following the taxable

year for which the taxpayer first claims a Vets First tax

credit awarded under this article.

(b)  Amount.--The tax credit shall be equal to $4,000 for

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(b)  Amount.--

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(1)  The tax credit shall be equal to $4,000 for each

veteran hired from and after the start date and shall be

available annually through the end of year three so long as

the veteran has been continuously employed in the eligible

job from the date hired until the end of year three. The tax

credit shall be available through the end of year four for

each veteran who has been continuously employed in the

eligible job from the date hired until the end of year four

who resides in this Commonwealth and has resided in this

Commonwealth since the date the veteran was released or

discharged from active military service under conditions

other than dishonorable.

(2)  The provisions of this subsection shall be subject

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to the limitations in section 1804-C.

(c)  Eligibility for other tax credits.--A taxpayer that

claims tax credits under any other Federal or State law shall be

eligible for a Vets First tax credit so long as the taxpayer

also meets the applicable requirements of this article.

Section 1803-C.  Application and award.

(a)  Annual application required.--A taxpayer wishing to

claim a Vets First tax credit shall apply to the department on a

form required by the department. An application shall be

submitted for each tax year that the taxpayer desires to claim

the tax credit and shall contain such information as the

department deems necessary for the department to determine that

the taxpayer is entitled to qualifies for the tax credit or

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credits for which the taxpayer is applying. The department shall

review and approve or disapprove applications in the order in

which they are received.

(b)  Award.--Upon determining that the taxpayer is entitled

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to qualifies for one or more Vets First tax credits, the

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department shall award the credits and issue a Vets First tax

credit certificate to the taxpayer.

Section 1804-C.  Limitations.

(a)  Use by taxpayer.--A taxpayer may not carry over, carry

back, assign or obtain a refund of any portion of a Vets First

tax credit.

(b)  Aggregate amount of awards.--No more than $50,000,000 in

Vets First tax credits shall be awarded in any fiscal year.

(c)  Length of program.--A taxpayer is not entitled to a Vets

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First tax credit in taxable years ending December 31 of the year

in which the end of year four occurs and beyond shall not be

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eligible to apply for Vets First tax credits after the fourth

taxable year following the effective date of this section.

Section 1805-C.  Repayment and penalty.

(a)  Repayment.--A taxpayer who has claimed one or more Vets

First tax credits and fails to meet any of the criteria required

under section 1802-C, or a taxpayer who has received a Vets

First tax credit in error shall repay to the Commonwealth the

amount of all tax credits claimed.

(b)  Penalty.--If it is determined that the failure or error

referred to in subsection (a) occurred as a result of fraud

perpetrated by the taxpayer, the taxpayer, in addition to being

required to repay the amount of all tax credits claimed, shall

be subject to such other appropriate penalties and remedies as

may be provided in this act or in other applicable law.

Section 1806-C.  Report.

The department shall submit an annual report to the Governor,

the Majority Leader of the Senate, the Minority Leader of the

Senate, the Majority Leader of the House of Representatives and

the Minority Leader of the House of Representatives on March 1

of each year following the effective date of this section. The

report shall include the following information:

(1)  A description of the Vets First tax credit

certificates issued by the department during the preceding

period, including the amount of the credits awarded to each

taxpayer and the taxpayer's name and address.

(2)  The number of veterans who are residents of this

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Commonwealth and who were hired by each taxpayer to whom a

Vets First tax credit certificate has been issued and who are

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residents of the Commonwealth.

Section 1807-C.  Notice to public.

The department shall, not later than 60 days following the

effective date of this section, publish notice of the following

on its publicly accessible Internet website:

(1)  Availability of the Vets First tax credits.

(2)  Guidelines for the awarding of Vets First tax

credits.

(3)  A downloadable copy of the application form.

Section 2.  This act shall take effect in 30 days.