AN ACT

 

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 the Vets First Tax Credit Program
11to honor veterans for their service to our country and
12provide incentives for their employment.

13The General Assembly of the Commonwealth of Pennsylvania
14hereby enacts as follows:

15Section 1. Article XVIII-C of the act of March 4, 1971
16(P.L.6, No.2), known as the Tax Reform Code of 1971, added July
179, 2008 (P.L.922, No.66), is amended to read:

18ARTICLE XVIII-C

1[(RESERVED)]

2THE VETS FIRST TAX CREDIT PROGRAM

3Section 1801-C. Definitions.

4The following words and phrases when used in this article
5shall have the meanings given to them in this section unless the
6context clearly indicates otherwise:

7"Department." The Department of Community and Economic
8Development of the Commonwealth.

9"Eligible job." A full-time job in this Commonwealth, the
10annual wage, excluding benefits, for which is at least equal to
11the average annual wage in the county where the job is located
12as posted on the Department of Labor and Industry's publicly
13accessible Internet website. The term does not include a
14temporary or seasonal job.

15"Qualified tax liability." The liability for taxes imposed
16under Article III, IV, VI, VII, VIII, IX or XV. The term shall
17not include liability for any tax withheld or required to be
18withheld by a taxpayer from an employee under Article III.

19"Small business." A for-profit corporation, limited
20liability company, partnership or proprietorship operating in
21this Commonwealth with fewer than 100 employees at the time the
22taxpayer applies for a Vets First tax credit under this article.

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

24"Taxpayer." An individual or small business subject to a tax
25imposed under Article III, IV, VI, VII, VIII, IX or XV. The term
26shall not include an individual or small business that is
27delinquent, at the time the credit is awarded, in the payment of
28any taxes or any other amounts to the Federal Government, the
29Commonwealth or any political subdivision.

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

1(1) Served in the active United States military,
2including service in a reserve component or National Guard.

3(2) Was released or discharged from active military
4service under conditions other than dishonorable, after
5September 30, 2001.

6(3) Has not worked for at least six months prior to
7being hired by a taxpayer in an eligible job or in a job in
8another state that is substantially similar to an eligible
9job.

10"Vets First tax credits." Tax credits for hiring veterans
11authorized under this article.

12"Year one." A one-year period immediately following the
13start date.

14"Year two." A one-year period immediately following the end
15of year one.

16"Year three." A one-year period immediately following the
17end of year two.

18"Year four." A one-year period immediately following the end
19of year three.

20Section 1802-C. Vets First tax credits.

21(a) Criteria.--A taxpayer that employs a veteran in an 
22eligible job shall qualify for a Vets First tax credit against 
23the taxpayer's qualified tax liability as provided in this 
24article. In order to be eligible for a <-Vets First tax credit, 
25the taxpayer shall certify and agree to the following:

26(1) The veteran was hired for a new position in the
27taxpayer's small business or was hired to fill the position
28of another employee who voluntarily separated from employment
29with the taxpayer.

30(2) The taxpayer shall continue the operation of its

1small business for at least five years following the taxable
2year for which the taxpayer first claims a Vets First tax
3credit awarded under this article.

4(b) Amount.--

5(1) The <-Vets First tax credit shall be equal to $4,000 
6for each veteran hired from and after the start date and 
7shall be available annually through the end of year three so 
8long as the veteran has been continuously employed in the 
9eligible job from the date hired until the end of year three. 
10The <-Vets First tax credit shall be available through the end 
11of year four for each veteran who has been continuously 
12employed in the eligible job from the date hired until the 
13end of year four who resides in this Commonwealth and has 
14resided in this Commonwealth since the date the veteran was 
15released or discharged from active military service under 
16conditions other than dishonorable.

17(2) The provisions of this subsection shall be subject
18to the limitations in section 1804-C.

19(c) Eligibility for other tax credits.--A taxpayer that
20claims tax credits under any other Federal or State law shall be
21eligible for a Vets First tax credit so long as the taxpayer
22also meets the applicable requirements of this article.

23Section 1803-C. Application and award.

24(a) Annual application required.--A taxpayer wishing to 
25claim a Vets First tax credit shall apply to the department on a 
26form required by the department. An application shall be 
27submitted for each tax year that the taxpayer desires to claim 
28the <-Vets First tax credit and shall contain such information as 
29the department deems necessary for the department to determine 
30that the taxpayer qualifies for the <-Vets First tax credit or 

1credits for which the taxpayer is applying. The department shall 
2review and approve or disapprove applications in the order in 
3which they are received.

4(b) Award.--Upon determining that the taxpayer qualifies for 
5one or more Vets First tax credits, the department shall award 
6the credits and issue a Vets First tax credit certificate to the 
7taxpayer.

8Section 1804-C. Limitations.

9(a) Use by taxpayer.--A taxpayer may not carry over, carry
10back, assign or obtain a refund of any portion of a Vets First
11tax credit.

12(b) Aggregate amount of awards.--No more than $50,000,000 in
13Vets First tax credits shall be awarded in any fiscal year.

14(c) Length of program.--A taxpayer shall not be eligible to 
15apply for Vets First tax credits after the fourth taxable year 
16following the effective date of this section.

17Section 1805-C. Repayment and penalty.

18(a) Repayment.--A taxpayer who has claimed one or more Vets
19First tax credits and fails to meet any of the criteria required
20under section 1802-C, or a taxpayer who has received a Vets
21First tax credit in error shall repay to the Commonwealth the
22amount of all <-Vets First tax credits claimed.

23(b) Penalty.--If it is determined that the failure or error
24referred to in subsection (a) occurred as a result of fraud
25perpetrated by the taxpayer, the taxpayer, in addition to being
26required to repay the amount of all <-Vets First tax credits
27claimed, shall be subject to such other appropriate penalties
28and remedies as may be provided in this act or in other
29applicable law.

30Section 1806-C. Report.

1The department shall submit an annual report to the Governor,
2the Majority Leader of the Senate, the Minority Leader of the
3Senate, the Majority Leader of the House of Representatives and
4the Minority Leader of the House of Representatives on March 1
5of each year following the effective date of this section. The
6report shall include the following information:

7(1) A description of the Vets First tax credit
8certificates issued by the department during the preceding
9period, including the amount of the <-Vets First tax credits
10awarded to each taxpayer and the taxpayer's name and address.

11(2) The number of veterans who are residents of this 
12Commonwealth and who were hired by each taxpayer to whom a 
13Vets First tax credit certificate has been issued.

14Section 1807-C. Notice to public.

15The department shall, not later than 60 days following the
16effective date of this section, publish notice of the following
17on its publicly accessible Internet website:

18(1) Availability of the Vets First tax credits.

19(2) Guidelines for the awarding of Vets First tax
20credits.

21(3) A downloadable copy of the application form.

22Section 2. This act shall take effect in 30 days.