PRINTER'S NO. 78
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
104
Session of
2017
INTRODUCED BY BOSCOLA, COSTA, HUGHES, FONTANA, BREWSTER,
TARTAGLIONE AND RAFFERTY, JANUARY 13, 2017
REFERRED TO FINANCE, JANUARY 13, 2017
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 a school-to-work tax credit.
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 XVII-L
SCHOOL-TO-WORK TAX CREDIT
Section 1701-L. Scope of article.
This article relates to school-to-work tax credits.
Section 1702-L. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
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context clearly indicates otherwise:
"Department." The Department of Revenue of the Commonwealth.
"Pass-through entity." Any of the following:
(1) A partnership, limited partnership, limited
liability company, business trust or other unincorporated
entity that for Federal income tax purposes is taxable as a
partnership.
(2) A Pennsylvania S corporation.
"Qualified intern." An individual who is:
(1) enrolled and in good standing at a four-year
institution of higher education, a community college or an
accredited postsecondary business, technical, trade or
vocational school located in this Commonwealth;
(2) employed and supervised in this Commonwealth in a
position that provides training and experience to the
individual in the chosen field of study; and
(3) paid a wage of no less than $8 per hour by the
taxpayer during a term of employment that lasts at least 12
weeks and includes a minimum of 14 hours of service per week.
"Qualified tax liability." The liability for taxes imposed
under Article III, IV or VI. The term shall include the
liability for taxes imposed under Article III on an owner of a
pass-through entity.
"Secretary." The Secretary of Revenue of the Commonwealth.
"Small business." An employer who employs 50 or fewer
individuals.
"Tax credit." The school-to-work tax credit authorized under
this article.
"Taxpayer." A business subject to tax under Article III, IV
or VI. The term shall include the shareholder, owner or member
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of a pass-through entity that receives a tax credit.
Section 1703-L. Employer credit for employing qualified
interns.
(a) Application.--A taxpayer who employs a qualified intern
in a taxable year may apply for a tax credit as provided under
this article. By September 15 of each year, a taxpayer must
submit an application for the tax credit to the department,
which shall include the following certifications by the
taxpayer:
(1) the qualified intern was employed and supervised in
this Commonwealth in a position that provides training and
experience to the individual in the chosen field of study;
(2) the qualified intern was paid a wage of no less than
$8 per hour for a term of employment that lasts at least 12
weeks and includes a minimum of 14 hours of service per week;
(3) the total hours and weeks worked by the qualified
intern for the taxable year; and
(4) the total compensation paid to the qualified intern
for the taxable year.
(b) Amount.--A taxpayer that is qualified under subsection
(a) shall receive a tax credit for the taxable year in the
amount of 50% of the value of the salaries, wages or other
remuneration for services paid to a qualified intern, or $1,000,
whichever is less.
(c) Notification.--By December 15 of the calendar year
following the close of the taxable year during which the
qualified intern was employed, the department shall notify the
taxpayer of the amount of the taxpayer's tax credit approved by
the department.
Section 1704-L. Carryover, carryback, refund and assignment of
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tax credit.
(a) Carryover.--If the taxpayer cannot use the entire amount
of the tax credit for the taxable year in which the tax credit
is first approved, the excess may be carried over to succeeding
taxable years and used as a tax credit against the qualified tax
liability of the taxpayer for those taxable years. Each time
that the tax credit is carried over to a succeeding taxable
year, the tax credit shall be reduced by the amount that was
used as a tax credit during the immediately preceding taxable
year. The tax credit may be carried over and applied to
succeeding taxable years for no more than 15 taxable years
following the first taxable year for which the taxpayer was
entitled to claim the tax credit.
(b) Application.--A tax credit approved by the department
for employing qualified interns in a taxable year first shall be
applied against the taxpayer's qualified tax liability for the
current taxable year as of the date on which the credit was
approved before the tax credit is applied against any tax
liability under subsection (a).
(c) Unused tax credit.--A taxpayer shall not be entitled to
assign, carry back or obtain a refund of an unused tax credit.
Section 1705-L. Limitation on tax credits.
(a) Total amount.--The total amount of tax credits approved
by the department shall not exceed $10,000,000 in any fiscal
year, except that the sum of $2,500,000 shall be used
exclusively for tax credits for small businesses.
(b) Proration among applicants.--If the total amount of tax
credits applied for by all taxpayers exceeds the amount
allocated for those tax credits, the tax credit to be received
by each applicant shall be prorated by the department among all
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applicants who have qualified for the tax credit.
Section 1706-L. Shareholder, owner or member pass-through.
(a) Shareholder tax credit.--If a Pennsylvania S corporation
does not have an eligible tax liability against which the tax
credit may be applied, a shareholder of the Pennsylvania S
corporation is entitled to a tax credit equal to the tax credit
determined for the Pennsylvania S corporation for the taxable
year multiplied by the percentage of the Pennsylvania S
corporation's distributive income to which the shareholder is
entitled.
(b) Pass-through entity tax credit.--If a pass-through
entity other than a Pennsylvania S corporation does not have an
eligible tax liability against which the tax credit may be
applied, an owner or member of the pass-through entity is
entitled to a tax credit equal to the tax credit determined for
the pass-through entity for the taxable year multiplied by the
percentage of the pass-through entity's distributive income to
which the owner or member is entitled.
(c) Tax credit cumulation.--The tax credit provided under
subsection (a) or (b) shall be in addition to any tax credit to
which a shareholder, owner or member of a pass-through entity is
otherwise entitled under this article, except that a pass-
through entity and a shareholder, owner or member of a pass-
through entity may not claim a tax credit under this article for
the same expense.
Section 1707-L. Report to General Assembly.
The secretary shall submit an annual report to the General
Assembly indicating the effectiveness of the tax credit provided
under this article no later than March 15 following the year in
which the tax credits were approved. The report shall include
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the names of all taxpayers utilizing the tax credit as of the
date of the report and the amount of tax credits approved and
utilized by each taxpayer. Notwithstanding any law providing for
the confidentiality of tax records, the information contained in
the report shall be public information. The report may include
any recommendations for changes in the calculation or
administration of the tax credit.
Section 1708-L. Regulations.
The secretary shall promulgate regulations necessary for the
implementation and administration of this article.
Section 2. The addition of Article XVII-L of the act shall
apply to taxable years beginning after December 31, 2017.
Section 3. This act shall take effect in 60 days.
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