Regular Session 2015-2016 House Bill 0784 P.N. 1834

PRIOR PRINTER'S NO. 927

PRINTER'S NO. 1834

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

784

Session of

2015

INTRODUCED BY BARBIN, SAINATO, BARRAR, SIMS, KINSEY, SCHWEYER,

ENGLISH, BROWNLEE, YOUNGBLOOD, SCHREIBER, BURNS, V. BROWN,

FARINA, D. COSTA, STEPHENS, DAVIS, BAKER, DeLUCA, PASHINSKI,

DRISCOLL, READSHAW, ROZZI, GOODMAN, HARHAI, McNEILL,

A. HARRIS, DEASY, BOBACK, COHEN, FRANKEL, MAHONEY, GILLEN,

MURT, SAMUELSON, SAYLOR, DONATUCCI, GIBBONS AND SABATINA,

MARCH 13, 2015

AS REPORTED FROM COMMITTEE ON VETERANS AFFAIRS AND EMERGENCY

PREPAREDNESS, HOUSE OF REPRESENTATIVES, AS AMENDED,

JUNE 17, 2015

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 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. The act of March 4, 1971 (P.L.6, No.2), known as

the Tax Reform Code of 1971, is amended by adding an article to

read:

ARTICLE XVIII-G

THE VETS FIRST TAX CREDIT

Section 1801-G. 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 article.

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

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

shall not include an individual or small business that is

delinquent, at the time the credit is awarded, in the payment of

any taxes or any other amounts to the Federal Government, the

Commonwealth or any political subdivision.

"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.

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(2) Was released or discharged from active military

service under conditions other than dishonorable, after

September 30, 2001.

(3) Has not worked for at least six months prior to

being hired by a taxpayer in an eligible job or in a job in

another state that is substantially similar to an eligible

job. SERVED IN THE UNITED STATES ARMED FORCES, INCLUDING A

RESERVE COMPONENT OR NATIONAL GUARD, AND WHO WAS RELEASED OR

DISCHARGED FROM SUCH SERVICE UNDER CONDITIONS OTHER THAN

DISHONORABLE.

"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-G. Vets First tax credits.

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

eligible job shall qualify for a Vets First tax credit against

the taxpayer's qualified tax liability as provided in this

article. In order to be eligible for a Vets First 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.

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(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.--

(1) The Vets First tax credit shall be equal to $1,000

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

BEGINNING ON OR AFTER THE EFFECTIVE DATE OF THIS SECTION AND

SHALL BE AVAILABLE ANNUALLY THROUGH THE END OF YEAR THREE.

THE VETERAN MUST BE CONTINUOUSLY EMPLOYED IN THE eligible job

from the date hired until the end of year three. The Vets

First 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 if the veteran 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. . FOR THE PURPOSES OF THIS

SECTION, A VETERAN MUST RESIDE IN THIS COMMONWEALTH SINCE THE

DATE THE VETERAN WAS RELEASED OR DISCHARGED FROM THE UNITED

STATES ARMED FORCES.

(2) The provisions of this subsection shall be subject

to the limitations in section 1804-G.

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-G. Application and award.

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(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 Vets First tax credit and shall contain information as the

department deems necessary for the department to determine that

the taxpayer qualifies for the Vets First tax credit or 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 qualifies for

one or more Vets First tax credits, the department shall award

the credits and issue a Vets First tax credit certificate to the

taxpayer.

Section 1804-G. Limitations.

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

back or obtain a refund of any portion of a Vets First tax

credit.

(b) Aggregate amount of awards.--No more than $12,500,000 in

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

apply for Vets First tax credits after the fourth taxable year

following the effective date of this section .

Section 1805-G. Sale or assignment.

(a) Sale or assignment.--A taxpayer, upon application to and

approval by the department, may sell or assign, in whole or in

part, a Vets First tax credit granted to the taxpayer under this

article. The department shall establish guidelines for the

approval OR DISAPPROVAL of applications under this subsection.

(b) Claim and use.--The purchaser or assignee of a portion

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of a Vets First tax credit under subsection (a) shall

immediately claim the credit in the taxable year in which the

purchase or assignment is made. The amount of the Vets First

credit that a purchaser or assignee may use against any one

qualified tax liability may not exceed 75% of such qualified tax

liability for the taxable year. The purchaser or assignee may

not carry over, carry back, obtain a refund of or assign the

Vets First tax credit. The purchaser or assignee shall notify

the department of the seller or assignor of the Vets First tax

credit in compliance with procedures specified by the

department.

Section 1806-G . 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-G, or a taxpayer who has received a Vets

First tax credit in error shall repay to the Commonwealth the

amount of all Vets First 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 Vets First tax credits

claimed, shall be subject to other appropriate penalties and

remedies as may be provided in FOR UNDER this act or in other

applicable law.

Section 1807-G . 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

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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 Vets First tax credits

awarded to each taxpayer and the taxpayer's name and address.

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

Commonwealth and who were hired by each taxpayer to whom a

Vets First tax credit certificate has been issued.

Section 1808-G . 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 AS PROVIDED FOR UNDER THIS ARTICLE AND

for the awarding of Vets First tax credits.

(3) A downloadable copy of the application form.

SECTION 1809-G. APPLICABILITY.

THIS ARTICLE SHALL APPLY TO A VETERAN WHOSE SERVICE IN THE

ARMED FORCES BEGAN ON OR AFTER OCTOBER 1, 2001, AND WHO HAS NOT

WORKED FOR AT LEAST SIX MONTHS BEFORE BEING HIRED BY A TAXPAYER

IN AN ELIGIBLE JOB OR IN A JOB IN ANOTHER STATE THAT IS

SUBSTANTIALLY SIMILAR TO AN ELIGIBLE JOB.

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

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