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 a natural gas vehicle tax credit.

11The General Assembly of the Commonwealth of Pennsylvania
12hereby enacts as follows:

13Section 1. The act of March 4, 1971 (P.L.6, No.2), known as 
14the Tax Reform Code of 1971, is amended by adding an article to
15read:

16ARTICLE XIX-B

17NATURAL GAS VEHICLE TAX CREDIT

18Section 1901-B. Scope of article.

19This article provides for a natural gas vehicle tax credit.

20Section 1902-B. Definitions.

1The following words and phrases when used in this article
2shall have the meanings given to them in this section unless the
3context clearly indicates otherwise:

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

5"Incremental cost." The difference between the cost of a
6natural gas vehicle and the cost of the same or similar motor
7vehicle, manufactured to operate exclusively on gasoline or
8diesel fuel.

9"Internal Revenue Code." The Internal Revenue Code of 1986
10(Public Law 99-514, 26 U.S.C. § 1 et seq.).

11"Natural gas vehicle." A motor vehicle that has a gross
12vehicle weight of at least 33,000 pounds, is produced by an
13original equipment manufacturer and operates:

14(1) on 100% compressed natural gas fuel; or

15(2) on 90% or more liquefied natural gas fuel and 10% or
16less on gasoline or diesel fuel.

17"Original equipment manufacturer." An entity which
18originally manufactures a natural gas vehicle for sale.

19"Pass-through entity." A partnership as defined in section
20301(n.0) or a Pennsylvania S corporation as defined in section
21301(n.1).

22"Qualified expense." The expense paid by a taxpayer for a
23natural gas vehicle.

24"Qualified tax liability." The liability for taxes imposed
25under Article III, IV or VI. The term shall not include any tax
26withheld by an employer from an employee under Article III.

27"Secretary." The Secretary of Revenue of the Commonwealth.

28"Tax credit." The natural gas vehicle tax credit established
29by this article.

30"Taxpayer." An entity subject to tax under Article III, IV

1or VI. The term shall include the shareholder of a Pennsylvania
2S corporation that receives a research and development tax
3credit.

4Section 1903-B. Credit for purchase of natural gas vehicle.

5(a) General rule.--A taxpayer who incurs a qualified expense
6in a taxable year may apply for a tax credit as provided in this
7article. By September 15, a taxpayer must submit an application
8to the department for a qualified expense incurred in the
9taxable year that ended in the prior calendar year.

10(b) Amount.--A taxpayer that is qualified under subsection
11(a) shall receive a tax credit for the taxable year in the
12amount of, for each qualified expense, the lesser of 50% of the
13incremental cost of the natural gas vehicle or $12,500.

14(c) Notification from department.--By December 15 of the
15calendar year following the close of the taxable year during
16which the qualified expense was incurred, the department shall
17notify the taxpayer of the amount of the taxpayer's tax credit
18approved by the department.

19Section 1904-B. Carryover, carryback, refund and assignment of
20credit.

21(a) The following shall apply to tax credits:

22(1) If the taxpayer cannot use the entire amount of the
23tax credit for the taxable year in which the tax credit is
24first approved, then the excess may be carried over to
25succeeding taxable years and used as a credit against the
26qualified tax liability of the taxpayer for those taxable
27years.

28(2) Each time that the tax credit is carried over to a
29succeeding taxable year, it is to be reduced by the amount
30that was used as a credit during the immediately preceding

1taxable year.

2(3) The tax credit may be carried over and applied to
3succeeding taxable years for no more than five taxable years
4following the first taxable year for which the taxpayer was
5entitled to claim the credit.

6(4) A tax credit approved by the department for a
7qualified expense in a taxable year first shall be applied
8against the taxpayer's qualified tax liability for the
9current taxable year as of the date on which the tax credit
10was approved before the tax credit is applied against any tax
11liability under paragraph (1).

12(5) A taxpayer may not carry back or obtain a refund of
13an unused tax credit.

14(6) A taxpayer, upon application to and approval by the
15Department of Community and Economic Development, may sell or
16assign, in whole or in part, a tax credit granted to the
17taxpayer. The Department of Community and Economic
18Development shall establish guidelines for the approval of
19applications under this paragraph.

20(7) The purchaser or assignee of a portion of a tax
21credit under paragraph (6) shall immediately claim the credit
22in the taxable year in which the purchase or assignment is
23made. The amount of the tax credit that a purchaser or
24assignee may use against any one qualified tax liability may
25not exceed 100% of the qualified tax liability for the
26taxable year. The purchaser or assignee may not carry over,
27carry back, obtain a refund of or assign the tax credit. The
28purchaser or assignee shall notify the department of the
29seller or assignor of the tax credit in compliance with
30procedures specified by the department.

1Section 1905-B. Application of Internal Revenue Code.

2The provisions of section 41 of the Internal Revenue Code and
3the regulations promulgated regarding those provisions shall
4apply to the department's interpretation and administration of
5the credit provided by this article. References to the Internal
6Revenue Code shall mean the sections of the Internal Revenue
7Code as existing on any date of interpretation of this article.
8However, if those sections of the Internal Revenue Code
9referenced in this article are repealed or terminated,
10references to the Internal Revenue Code shall mean those
11sections last having full force and effect. If, after repeal or
12termination, the Internal Revenue Code sections are revised or
13reenacted, references in this article to Internal Revenue Code
14sections shall mean those revised or reenacted sections.

15Section 1906-B. (Reserved).

16Section 1907-B. Time limitations.

17A taxpayer is not entitled to a tax credit for qualified
18expenses incurred in taxable years ending after December 31,
192020. The termination date in section 41(h) of the Internal
20Revenue Code does not apply to a taxpayer who is eligible for
21the tax credit under this article for the taxable year in which
22the qualified expense is incurred.

23Section 1908-B. Limitation on credits.

24(a) General rule.--The total amount of credits approved by
25the department shall not exceed:

26(1) In fiscal year 2013-2014, $30,000,000.

27(2) In fiscal year 2014-2015, $30,000,000.

28(3) In fiscal year 2015-2016, $30,000,000.

29(b) Prorata distribution.--If the total amount of tax
30credits applied for by all taxpayers, exceeds the amount

1allocated for those tax credits, then the tax credit to be
2received by each applicant shall be the product of the allocated
3amount multiplied by the quotient of the tax credit applied for
4by the applicant divided by the total of all tax credits applied
5for by all applicants, the algebraic equivalent of which is:

6taxpayer's tax credit = amount allocated for those
7credits X (tax credit applied for by the applicant/total
8of all tax credits applied for by all applicants).

9Section 2. This act shall take effect in 60 days.