CORRECTIVE REPRINT
PRIOR PRINTER'S NOS. 1310, 1694, 2076,
2088
PRINTER'S NO. 2089
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1219
Session of
2023
INTRODUCED BY BRIGGS, FREEMAN, MADDEN, SCHLOSSBERG, SANCHEZ,
HILL-EVANS, GUENST, HANBIDGE, WEBSTER, NEILSON, SCOTT, GREEN,
PIELLI AND TAKAC, MAY 24, 2023
AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF
REPRESENTATIVES, AS AMENDED, OCTOBER 3, 2023
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," in corporate net income tax, further providing
for definitions, for imposition of tax and for manufacturing
innovation and reinvestment deduction.
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," IN PERSONAL INCOME TAX, FURTHER PROVIDING FOR
CLASSES OF INCOME AND FOR SPECIAL TAX PROVISIONS FOR POVERTY
AND PROVIDING FOR ALTERNATIVE SPECIAL TAX PROVISIONS FOR
POVERTY; IN CORPORATE NET INCOME TAX, FURTHER PROVIDING FOR
DEFINITIONS, FOR IMPOSITION OF TAX, FOR REPORTS AND PAYMENT
OF TAX, FOR CONSOLIDATED REPORTS AND FOR MANUFACTURING
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INNOVATION AND REINVESTMENT DEDUCTION; IN REALTY TRANSFER
TAX, FURTHER PROVIDING FOR TRANSFER OF TAX; IN TAX CREDIT AND
TAX BENEFIT ADMINISTRATION, FURTHER PROVIDING FOR
DEFINITIONS; IN ENTERTAINMENT PRODUCTION TAX CREDIT, FURTHER
PROVIDING FOR DEFINITIONS, FOR CREDIT FOR QUALIFIED FILM
PRODUCTION EXPENSES, FOR CARRYOVER, CARRYBACK AND ASSIGNMENT
OF CREDIT AND FOR LIMITATIONS; IN PENNSYLVANIA ECONOMIC
DEVELOPMENT FOR A GROWING ECONOMY (PA EDGE) TAX CREDITS,
PROVIDING FOR BIOTECHNOLOGY; IN NEIGHBORHOOD ASSISTANCE TAX
CREDIT, FURTHER PROVIDING FOR TAX CREDIT AND FOR GRANT OF TAX
CREDIT; PROVIDING FOR EXPANDED NEIGHBORHOOD IMPROVEMENT
ZONES; IN PENNSYLVANIA CHILD AND DEPENDENT CARE ENHANCEMENT
TAX CREDIT PROGRAM, FURTHER PROVIDING FOR CREDIT FOR CHILD
AND DEPENDENT CARE EMPLOYMENT-RELATED EXPENSES; PROVIDING FOR
PUBLIC TRANSPORTATION TRUST FUND; AND, IN GENERAL PROVISIONS,
FURTHER PROVIDING FOR UNDERPAYMENT OF ESTIMATED TAX, FOR
METHOD OF FILING AND FOR ALLOCATION OF TAX CREDITS.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 401(3)4(c)(1) and (2) of the act of March
4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, are
amended to read:
Section 401. Definitions.--The following words, terms, and
phrases, when used in this article, shall have the meaning
ascribed to them in this section, except where the context
clearly indicates a different meaning:
* * *
(3) "Taxable income." * * *
4. * * *
(c) (1) The net loss deduction shall be the lesser of:
(A) (I) For taxable years beginning before January 1, 2007,
two million dollars ($2,000,000);
(II) For taxable years beginning after December 31, 2006,
the greater of twelve and one-half per cent of taxable income as
determined under subclause 1 or, if applicable, subclause 2 or
three million dollars ($3,000,000);
(III) For taxable years beginning after December 31, 2008,
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the greater of fifteen per cent of taxable income as determined
under subclause 1 or, if applicable, subclause 2 or three
million dollars ($3,000,000);
(IV) For taxable years beginning after December 31, 2009,
the greater of twenty per cent of taxable income as determined
under subclause 1 or, if applicable, subclause 2 or three
million dollars ($3,000,000);
(V) For taxable years beginning after December 31, 2013, the
greater of twenty-five per cent of taxable income as determined
under subclause 1 or, if applicable, subclause 2 or four million
dollars ($4,000,000);
(VI) For taxable years beginning after December 31, 2014,
the greater of thirty per cent of taxable income as determined
under subclause 1 or, if applicable, subclause 2 or five million
dollars ($5,000,000);
(VII) For taxable years beginning after December 31, 2017,
thirty-five per cent of taxable income as determined under
subclause 1 or, if applicable, subclause 2;
(VIII) For taxable years beginning after December 31, 2018,
forty per cent of taxable income as determined under subclause 1
or, if applicable, subclause 2; [or]
(IX) For taxable years beginning after December 31, 2023,
fifty per cent of taxable income as determined under subclause 1
or, if applicable, subclause 2;
(X) For taxable years beginning after December 31, 2024,
sixty per cent of taxable income as determined under subclause 1
or, if applicable, subclause 2;
(XI) For taxable years beginning after December 31, 2025,
seventy per cent of taxable income as determined under subclause
1 or, if applicable, subclause 2; or
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(XII) For taxable years beginning after December 31, 2026,
eighty per cent of taxable income as determined under subclause
1 or, if applicable, subclause 2; or
(B) The amount of the net loss or losses which may be
carried over to the taxable year or taxable income as determined
under subclause 1 or, if applicable, subclause 2.
* * *
(2) (A) A net loss for a taxable year may only be carried
over pursuant to the following schedule:
Taxable Year Carryover
1981 1 taxable year
1982 2 taxable years
1983-1987 3 taxable years
1988 2 taxable years plus
1 taxable year
starting with the
1995 taxable year
1989 1 taxable year plus
2 taxable years
starting with the
1995 taxable year
1990-1993 3 taxable years
starting with the
1995 taxable year
1994 1 taxable year
1995-1997 10 taxable years
1998 and thereafter 20 taxable years
(B) The earliest net loss shall be carried over to the
earliest taxable year to which it may be carried under this
schedule. The total net loss deduction allowed in any taxable
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year shall not exceed:
(I) Two million dollars ($2,000,000) for taxable years
beginning before January 1, 2007.
(II) The greater of twelve and one-half per cent of the
taxable income as determined under subclause 1 or, if
applicable, subclause 2 or three million dollars ($3,000,000)
for taxable years beginning after December 31, 2006.
(III) The greater of fifteen per cent of the taxable income
as determined under subclause 1 or, if applicable, subclause 2
or three million dollars ($3,000,000) for taxable years
beginning after December 31, 2008.
(IV) The greater of twenty per cent of the taxable income as
determined under subclause 1 or, if applicable, subclause 2 or
three million dollars ($3,000,000) for taxable years beginning
after December 31, 2009.
(V) The greater of twenty-five per cent of taxable income as
determined under subclause 1 or, if applicable, subclause 2 or
four million dollars ($4,000,000) for taxable years beginning
after December 31, 2013.
(VI) The greater of thirty per cent of taxable income as
determined under subclause 1 or, if applicable, subclause 2 or
five million dollars ($5,000,000) for taxable years beginning
after December 31, 2014.
(VII) Thirty-five per cent of taxable income as determined
under subclause 1 or, if applicable, subclause 2 for taxable
years beginning after December 31, 2017.
(VIII) Forty per cent of taxable income as determined under
subclause 1 or, if applicable, subclause 2 for taxable years
beginning after December 31, 2018.
(IX) Fifty per cent of taxable income as determined under
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subclause 1 or, if applicable, subclause 2 for taxable years
beginning after December 31, 2023.
(X) Sixty per cent of taxable income as determined under
subclause 1 or, if applicable, subclause 2 for taxable years
beginning after December 31, 2024.
(XI) Seventy per cent of taxable income as determined under
subclause 1 or, if applicable, subclause 2 for taxable years
beginning after December 31, 2025.
(XII) Eighty per cent of taxable income as determined under
subclause 1 or, if applicable, subclause 2 for taxable years
beginning after December 31, 2026.
* * *
Section 2. Section 402(b) of the act, amended July 8, 2022
(P.L.513, No.53), is amended to read:
Section 402. Imposition of Tax.--* * *
(b) The annual rate of tax on corporate net income imposed
by subsection (a) for taxable years beginning for the calendar
year or fiscal year on or after the dates set forth shall be as
follows:
Taxable Year Tax Rate
January 1, 1995,
through December
31, 2022 9.99%
January 1, 2023,
through December
31, 2023 [8.99%] 7.99%
January 1, 2024,
through December
31, 2024 [8.49%] 6.99%
January 1, 2025,
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through December
31, 2025 [7.99%] 5.99%
January 1, 2026,
[through December
31, 2026] and each
taxable year
thereafter
[7.49%] 4.99%
[January 1, 2027,
through December
31, 2027 6.99%
January 1, 2028,
through December
31, 2028 6.49%
January 1, 2029,
through December
31, 2029 5.99%
January 1, 2030,
through December
31, 2030 5.49%
January 1, 2031, and
each taxable year
thereafter 4.99%]
* * *
Section 3. Section 407.7 of the act is amended to read:
Section 407.7. Manufacturing Innovation and Reinvestment
Deduction.--(a) In order to be eligible to receive a
manufacturing innovation and reinvestment deduction, a taxpayer
must demonstrate to the department a private capital investment
in excess of [sixty million dollars ($60,000,000)] fifty million
dollars ($50,000,000) for the creation of new or refurbished
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manufacturing capacity within [three years of a designated start
date] the applicable time period specified in subsection (b).
(b) (1) A taxpayer must advise the department in advance of
the start date of any project for which the taxpayer may seek a
qualified manufacturing innovation and reinvestment deduction. A
taxpayer must attest the taxpayer's intent to meet the
eligibility criteria and provide relevant information pertinent
to the project's size and scope in a manner as determined by the
department.
(2) For a private capital investment of less than or equal
to one hundred fifty million dollars ($150,000,000), the
following shall apply:
(i) The project must be completed within three years of the
project's start date.
(ii) Within five years of [a] the project's start date, [a]
the taxpayer must complete to the department's satisfaction an
application on a form and in a manner as determined by the
department to attest that the project has been completed and the
eligibility criteria has been satisfied.
(3) For a private capital investment greater than one
hundred fifty million one dollars ($150,000,001) and less than
two hundred fifty million dollars ($250,000,000), the following
shall apply:
(i) The project must be completed within five years of the
project's start date.
(ii) Within seven years of the project's start date, the
taxpayer must complete to the department's satisfaction an
application on a form and in a manner as determined by the
department to attest that the project has been completed and the
eligibility criteria has been satisfied.
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(4) For a private capital investment greater than two
hundred fifty million one dollars ($250,000,001) and less than
three hundred fifty million dollars ($350,000,000), the
following shall apply:
(i) The project must be completed within seven years of the
project's start date.
(ii) Within nine years of the project's start date, the
taxpayer must complete to the department's satisfaction an
application on a form and in a manner as determined by the
department to attest that the project has been completed and the
eligibility criteria has been satisfied.
(5) For a private capital investment greater than three
hundred fifty million one dollars ($350,000,001) , the department
shall establish the time period from the project's start date in
which the project must be completed and the time period in which
the application as described in paragraph (4) must be completed.
(c) Upon the receipt of the taxpayer's application, the
Department of Revenue [must] shall make a finding [that] whether
the applicant has filed all required State tax reports and
returns for all applicable tax years and paid any balance of
State tax due as determined at settlement, assessment or
determination, and the department, then in conjunction with the
Department of Revenue, shall make an eligibility or satisfaction
determination within ninety days of submission. If the
department makes a satisfaction determination, the department
and the taxpayer shall execute a satisfaction commitment letter
containing the following:
(1) The number of new jobs created and their corresponding
description.
(2) The number of new jobs created during construction of
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the project.
(3) The amount of private capital investment in the creation
of new jobs.
(4) The increase in the annual taxable payroll attributable
to new manufacturing jobs.
(5) A determination of the maximum allowable deduction
against a taxpayer's qualified tax liability under this article.
(6) Any other information as the department deems
appropriate.
(d)
(1.1) If the private capital investment is in excess of
sixty million dollars ($60,000,000), but not more than one
hundred million dollars ($100,000,000), the maximum allowable
deduction shall be equal to thirty-seven and one-half per cent
of the private capital investment utilized in the creation of
new or refurbished manufacturing capacity. A taxpayer may
utilize the deduction in an amount not to exceed seven and one-
half per cent of the private capital investment utilized in the
creation of new or refurbished manufacturing capacity in any one
year of the succeeding ten tax years immediately following the
department's satisfaction determination and the execution of a
satisfaction commitment letter, up to the maximum allowable
deduction. This paragraph shall only apply to applications made
prior to January 1, 2024.
(1.2) If [the] a taxpayer's private capital investment for a
project exceeds [one hundred million dollars ($100,000,000)]
fifty million dollars ($50,000,000), the maximum allowable
deduction shall be equal to twenty-five per cent of the private
capital investment utilized in the creation of new or
refurbished manufacturing capacity. A taxpayer may utilize the
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deduction in an amount not to exceed five per cent of the
private capital investment utilized in the creation of new or
refurbished manufacturing capacity in any one year of the
succeeding ten tax years immediately following the department's
satisfaction determination and the execution of a satisfaction
commitment letter, up to the maximum allowable deduction.
(1.3) If a taxpayer executes a satisfaction commitment
letter for more than two concurrent projects with a total
private capital investment exceeding five hundred million
dollars ($500,000,000), the maximum allowable deduction for any
succeeding project shall be equal to twenty-five per cent of the
private capital investment utilized in the creation of new or
refurbished manufacturing capacity. A taxpayer may utilize the
deduction in an amount not to exceed five per cent of the
private capital investment utilized in the creation of new or
refurbished manufacturing capacity in any one year of the
succeeding twenty tax years immediately following the
department's satisfaction determination and the execution of a
satisfaction commitment letter, up to the maximum allowable
deduction.
(3) A taxpayer cannot use the deduction to reduce [its] the
taxpayer's tax liability by more than fifty per cent of the tax
liability under this article for the taxable year. The deduction
is nontransferable and any unused portion in a tax year shall
expire at the end of the corresponding tax year.
Section 4. The amendment of section 407.7 of the act shall
apply to tax years beginning after December 31, 2023.
Section 5. This act shall take effect immediately.
SECTION 1. SECTIONS 303(A.7)(2)(I) AND 304(D) OF THE ACT OF
MARCH 4, 1971 (P.L.6, NO.2), KNOWN AS THE TAX REFORM CODE OF
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1971, ARE AMENDED BY ADDING CLAUSES TO READ:
SECTION 303. CLASSES OF INCOME.--* * *
(A.7) THE FOLLOWING APPLY:
* * *
(2) (I) THE FOLLOWING SHALL NOT BE SUBJECT TO TAX UNDER
THIS ARTICLE:
* * *
(E) AMOUNTS PAID OR INCURRED BY AN EMPLOYER OF AN EMPLOYE
FOR DEPENDENT CARE ASSISTANCE PROVIDED TO THE EMPLOYE THAT ARE
EXCLUDABLE UNDER SECTION 129 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED.
* * *
SECTION 304. SPECIAL TAX PROVISIONS FOR POVERTY.--* * *
(D) ANY CLAIM FOR SPECIAL TAX PROVISIONS HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH THE FOLLOWING:
* * *
(4) THE POVERTY INCOME AMOUNTS UNDER CLAUSE (1) SHALL BE
INCREASED BY AN ANNUAL COST-OF-LIVING ADJUSTMENT CALCULATED BY
APPLYING THE PERCENTAGE CHANGE IN THE CONSUMER PRICE INDEX FOR
ALL URBAN CONSUMERS (CPI-U) FOR THE PENNSYLVANIA, NEW JERSEY,
DELAWARE AND MARYLAND AREA, FOR THE MOST RECENT TWELVE-MONTH
PERIOD FOR WHICH FIGURES HAVE BEEN OFFICIALLY REPORTED BY THE
UNITED STATES DEPARTMENT OF LABOR, BUREAU OF LABOR STATISTICS
IMMEDIATELY PRIOR TO THE DATE THE ADJUSTMENT IS DUE TO TAKE
EFFECT, TO THE THEN CURRENT POVERTY INCOME AMOUNTS. THE
DEPARTMENT SHALL DETERMINE THE PERCENTAGE INCREASE AND THE NEW
POVERTY INCOME AMOUNTS PRIOR TO THE ANNUAL EFFECTIVE DATE OF THE
ADJUSTMENT AND SHALL TRANSMIT NOTICE TO THE LEGISLATIVE
REFERENCE BUREAU FOR PUBLICATION IN THE PENNSYLVANIA BULLETIN
WITHIN TEN DAYS OF THE DATE THE DETERMINATION IS MADE. THE
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POVERTY INCOME AMOUNTS MAY NOT BE DECREASED AS A RESULT OF A
NEGATIVE PERCENTAGE CHANGE IN THE CPI-U FOR THE PENNSYLVANIA,
NEW JERSEY, DELAWARE AND MARYLAND AREA.
SECTION 1.1. THE ACT IS AMENDED BY ADDING A SECTION TO READ:
SECTION 304.3. ALTERNATIVE SPECIAL TAX PROVISIONS FOR
POVERTY.--(A) A CLAIMANT WHO HAS A DEPENDENT SHALL BE ENTITLED
TO A REFUND OR FORGIVENESS OF MONEY THAT HAS BEEN PAID OVER TO,
OR WOULD EXCEPT FOR THE PROVISIONS OF THIS SECTION BE PAYABLE
TO, THE COMMONWEALTH UNDER THE PROVISIONS OF THIS ARTICLE FOR
TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2023, IN THE AMOUNT
BY WHICH TWENTY-FIVE PER CENT OF THE EARNED INCOME CREDIT
ALLOWABLE UNDER 26 U.S.C. § 32 (RELATING TO EARNED INCOME)
EXCEEDS THE TAX IMPOSED UNDER THIS ARTICLE FOR THE TAXABLE YEAR.
(B) A CLAIMANT WHO IS ELIGIBLE FOR THE SPECIAL TAX
PROVISIONS FOR POVERTY UNDER SECTION 304 MAY CLAIM A REFUND OR
FORGIVENESS UNDER SUBSECTION (A) IN LIEU OF UTILIZING THE
SPECIAL TAX PROVISIONS FOR POVERTY.
(C) FOR A CLAIMANT OR CLAIMANT'S SPOUSE WHO FILES SEPARATE
FEDERAL TAX RETURNS, THE CREDIT AUTHORIZED UNDER SUBSECTION (A)
MAY ONLY BE USED BY THE SPOUSE WITH THE GREATER TAX OTHERWISE
DUE, COMPUTED WITHOUT REGARD TO THE CREDIT.
SECTION 2. SECTION 401(3)1(A), (B) AND (T) AND 4(C)(1) AND
(2) AND (5) OF THE ACT ARE AMENDED, (3)2(A)(9)(A) IS AMENDED BY
ADDING A UNIT, (3)1 AND (3)4 ARE AMENDED BY ADDING PHRASES AND
THE SECTION IS AMENDED BY ADDING CLAUSES TO READ:
SECTION 401. DEFINITIONS.--THE FOLLOWING WORDS, TERMS, AND
PHRASES, WHEN USED IN THIS ARTICLE, SHALL HAVE THE MEANING
ASCRIBED TO THEM IN THIS SECTION, EXCEPT WHERE THE CONTEXT
CLEARLY INDICATES A DIFFERENT MEANING:
* * *
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(3) "TAXABLE INCOME." 1. (A) IN CASE THE ENTIRE BUSINESS
OF THE CORPORATION IS TRANSACTED WITHIN THIS COMMONWEALTH, FOR
ANY TAXABLE YEAR WHICH BEGINS ON OR AFTER JANUARY 1, 1971,
TAXABLE INCOME FOR THE CALENDAR YEAR OR FISCAL YEAR AS RETURNED
TO AND ASCERTAINED BY THE FEDERAL GOVERNMENT BEFORE SPECIAL
DEDUCTIONS PROVIDED FOR IN 26 U.S.C. CH. 1 SUBCH. B PT. VIII
(RELATING TO SPECIAL DEDUCTIONS FOR CORPORATIONS), NOT INCLUDING
THE DEDUCTIONS PROVIDED FOR IN 26 U.S.C. § 243 (RELATING TO
DIVIDENDS RECEIVED BY CORPORATIONS), OR IN THE CASE OF A
CORPORATION PARTICIPATING IN THE FILING OF CONSOLIDATED RETURNS
TO THE FEDERAL GOVERNMENT OR THAT IS NOT REQUIRED TO FILE A
RETURN WITH THE FEDERAL GOVERNMENT, THE TAXABLE INCOME WHICH
WOULD HAVE BEEN RETURNED TO AND ASCERTAINED BY THE FEDERAL
GOVERNMENT BEFORE SPECIAL DEDUCTIONS PROVIDED FOR IN 26 U.S.C.
CH. 1 SUBCH. B PT. VIII, NOT INCLUDING THE DEDUCTIONS PROVIDED
FOR IN 26 U.S.C. § 243, IF SEPARATE RETURNS HAD BEEN MADE TO THE
FEDERAL GOVERNMENT FOR THE CURRENT AND PRIOR TAXABLE YEARS,
SUBJECT, HOWEVER, TO ANY CORRECTION THEREOF, FOR FRAUD, EVASION,
OR ERROR AS FINALLY ASCERTAINED BY THE FEDERAL GOVERNMENT.
(B) ADDITIONAL DEDUCTIONS SHALL BE ALLOWED FROM TAXABLE
INCOME ON ACCOUNT OF ANY DIVIDENDS RECEIVED FROM ANY OTHER
CORPORATION BUT ONLY TO THE EXTENT THAT SUCH DIVIDENDS ARE
INCLUDED IN TAXABLE INCOME AS RETURNED TO AND ASCERTAINED BY THE
FEDERAL GOVERNMENT. FOR TAX YEARS BEGINNING ON OR AFTER JANUARY
1, 1991, ADDITIONAL DEDUCTIONS SHALL ONLY BE ALLOWED FOR AMOUNTS
INCLUDED, UNDER [SECTION 78 OF THE INTERNAL REVENUE CODE OF 1986
(PUBLIC LAW 99-514, 26 U.S.C. § 78)] 26 U.S.C. § 78 (RELATING TO
GROSS UP FOR DEEMED PAID FOREIGN TAX CREDIT), IN TAXABLE INCOME
RETURNED TO AND ASCERTAINED BY THE FEDERAL GOVERNMENT AND FOR
THE AMOUNT OF ANY DIVIDENDS RECEIVED FROM A FOREIGN CORPORATION
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INCLUDED IN TAXABLE INCOME TO THE EXTENT SUCH DIVIDENDS WOULD BE
DEDUCTIBLE IN ARRIVING AT FEDERAL TAXABLE INCOME IF RECEIVED
FROM A DOMESTIC CORPORATION. FOR TAXABLE YEARS BEGINNING AFTER
DECEMBER 31, 2024, THE ADDITIONAL DEDUCTION WITH RESPECT TO
DIVIDENDS SHALL NOT BE ALLOWED FOR DIVIDENDS BETWEEN MEMBERS OF
A UNITARY GROUP.
* * *
(B.2) AN ADDITIONAL DEDUCTION SHALL BE ALLOWED FROM THE
TAXABLE INCOME OF A MEDICAL MARIJUANA ORGANIZATION, AS DEFINED
BY THE ACT OF APRIL 17, 2016 (P.L.84, NO.16), KNOWN AS THE
"MEDICAL MARIJUANA ACT," IN THE AMOUNT OF THE ORDINARY AND
NECESSARY EXPENSES PAID OR INCURRED DURING THE TAXABLE YEAR BY
THE MEDICAL MARIJUANA ORGANIZATION WHICH ARE ORDINARILY
DEDUCTIBLE FOR FEDERAL INCOME TAX PURPOSES UNDER 26 U.S.C. § 162
(RELATING TO TRADE OR BUSINESS EXPENSES). THE ADDITIONAL
DEDUCTION SHALL ONLY BE PERMITTED TO THE EXTENT DEDUCTIONS FOR
EXPENSES UNDER 26 U.S.C. § 162 WERE NOT TAKEN BY THE MEDICAL
MARIJUANA ORGANIZATION FOR FEDERAL INCOME TAX PURPOSES FOR THE
TAXABLE YEAR.
* * *
(P.1) FOR TAXABLE YEARS AFTER DECEMBER 31, 2024, IN THE CASE
OF A CORPORATION THAT IS A MEMBER OF A UNITARY BUSINESS, THE
TERM "TAXABLE INCOME" SHALL MEAN THE COMBINED UNITARY INCOME OF
THE UNITARY BUSINESS, AS DETERMINED ON A WATER'S-EDGE BASIS.
* * *
(T) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2), (3) OR (4) FOR
TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2014, AND IN ADDITION
TO ANY AUTHORITY THE DEPARTMENT HAS ON THE EFFECTIVE DATE OF
THIS PARAGRAPH TO DENY A DEDUCTION RELATED TO A FRAUDULENT OR
SHAM TRANSACTION, NO DEDUCTION SHALL BE ALLOWED FOR AN
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INTANGIBLE EXPENSE OR COST, OR AN INTEREST EXPENSE OR COST,
PAID, ACCRUED OR INCURRED DIRECTLY OR INDIRECTLY IN CONNECTION
WITH ONE OR MORE TRANSACTIONS WITH AN AFFILIATED ENTITY. IN
CALCULATING TAXABLE INCOME UNDER THIS PARAGRAPH, WHEN THE
TAXPAYER IS ENGAGED IN ONE OR MORE TRANSACTIONS WITH AN
AFFILIATED ENTITY THAT WAS SUBJECT TO TAX IN THIS COMMONWEALTH
OR ANOTHER STATE OR POSSESSION OF THE UNITED STATES ON A TAX
BASE THAT INCLUDED THE INTANGIBLE EXPENSE OR COST, OR THE
INTEREST EXPENSE OR COST, PAID, ACCRUED OR INCURRED BY THE
TAXPAYER, THE TAXPAYER SHALL RECEIVE A CREDIT AGAINST TAX DUE IN
THIS COMMONWEALTH IN AN AMOUNT EQUAL TO THE APPORTIONMENT FACTOR
OF THE TAXPAYER IN THIS COMMONWEALTH MULTIPLIED BY THE GREATER
OF THE FOLLOWING:
(A) THE TAX LIABILITY OF THE AFFILIATED ENTITY WITH RESPECT
TO THE PORTION OF ITS INCOME REPRESENTING THE INTANGIBLE EXPENSE
OR COST, OR THE INTEREST EXPENSE OR COST, PAID, ACCRUED OR
INCURRED BY THE TAXPAYER; OR
(B) THE TAX LIABILITY THAT WOULD HAVE BEEN PAID BY THE
AFFILIATED ENTITY UNDER SUBPARAGRAPH (A) IF THAT TAX LIABILITY
HAD NOT BEEN OFFSET BY A CREDIT.
THE CREDIT ISSUED UNDER THIS PARAGRAPH SHALL NOT EXCEED THE
TAXPAYER'S LIABILITY IN THIS COMMONWEALTH ATTRIBUTABLE TO THE
NET INCOME TAXED AS A RESULT OF THE ADJUSTMENT REQUIRED BY THIS
PARAGRAPH.
(2) THE ADJUSTMENT REQUIRED BY PARAGRAPH (1) SHALL NOT APPLY
TO A TRANSACTION THAT DID NOT HAVE AS [THE] A PRINCIPAL PURPOSE
THE AVOIDANCE OF TAX DUE UNDER THIS ARTICLE AND WAS DONE AT
ARM'S LENGTH RATES AND TERMS.
(3) THE ADJUSTMENT REQUIRED BY PARAGRAPH (1) SHALL NOT APPLY
TO A TRANSACTION BETWEEN A TAXPAYER AND AN AFFILIATED ENTITY
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DOMICILED IN A FOREIGN NATION WHICH HAS IN FORCE A COMPREHENSIVE
INCOME TAX TREATY WITH THE UNITED STATES PROVIDING FOR THE
ALLOCATION OF ALL CATEGORIES OF INCOME SUBJECT TO TAXATION, OR
THE WITHHOLDING OF TAX, ON ROYALTIES, LICENSES, FEES AND
INTEREST FOR THE PREVENTION OF DOUBLE TAXATION OF THE RESPECTIVE
NATIONS' RESIDENTS AND THE SHARING OF INFORMATION.
(4) THE ADJUSTMENT REQUIRED BY PARAGRAPH (1) SHALL NOT APPLY
TO A TRANSACTION WHERE AN AFFILIATED ENTITY DIRECTLY OR
INDIRECTLY PAID, ACCRUED OR INCURRED A PAYMENT TO A PERSON WHO
IS NOT AN AFFILIATED ENTITY, IF THE PAYMENT IS PAID, ACCRUED OR
INCURRED ON THE INTANGIBLE EXPENSE OR COST, OR INTEREST EXPENSE
OR COST, AND IS EQUAL TO OR LESS THAN THE TAXPAYER'S
PROPORTIONAL SHARE OF THE TRANSACTION. THE TAXPAYER'S
PROPORTIONAL SHARE SHALL BE BASED ON RELATIVE SALES, ASSETS,
LIABILITIES OR ANOTHER REASONABLE METHOD.
(5) THE ADJUSTMENT REQUIRED UNDER PARAGRAPH (1) SHALL NOT
APPLY TO A TRANSACTION BETWEEN THE TAXPAYER AND AN AFFILIATED
ENTITY, WHERE THE TAXPAYER AND THE AFFILIATED ENTITY FILE A
COMBINED ANNUAL REPORT IN THIS STATE.
2. IN CASE THE ENTIRE BUSINESS OF ANY CORPORATION, OTHER
THAN A CORPORATION ENGAGED IN DOING BUSINESS AS A REGULATED
INVESTMENT COMPANY AS DEFINED BY THE INTERNAL REVENUE CODE OF
1986, IS NOT TRANSACTED WITHIN THIS COMMONWEALTH, THE TAX
IMPOSED BY THIS ARTICLE SHALL BE BASED UPON SUCH PORTION OF THE
TAXABLE INCOME OF SUCH CORPORATION FOR THE FISCAL OR CALENDAR
YEAR, AS DEFINED IN SUBCLAUSE 1 HEREOF, AND MAY BE DETERMINED AS
FOLLOWS:
(A) DIVISION OF INCOME.
* * *
(9) (A) EXCEPT AS PROVIDED IN SUBPARAGRAPH (B):
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(VI) (A) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31,
2024, ALL BUSINESS INCOME OF A UNITARY BUSINESS SHALL BE
APPORTIONED TO THIS STATE BY MULTIPLYING THE INCOME BY THE
MEMBER'S SALES FACTOR, THE NUMERATOR OF WHICH SHALL BE THE
MEMBER'S TOTAL SALES IN THIS STATE, AND THE DENOMINATOR OF WHICH
SHALL BE THE COMBINED TOTAL SALES OF ALL MEMBERS OF THE UNITARY
BUSINESS EVERYWHERE. IN COMPUTING THE SALES OF EACH MEMBER FOR
PURPOSES OF APPORTIONMENT, THE FOLLOWING SALES ARE EXCLUDED FROM
THE NUMERATOR AND DENOMINATOR:
(I) SALES FROM TRANSACTIONS BETWEEN OR AMONG MEMBERS OF THE
UNITARY BUSINESS THAT ARE DEFERRED UNDER 26 CFR 1.1502-13
(RELATING TO INTERCOMPANY TRANSACTIONS) FOR FEDERAL TAXABLE
INCOME PURPOSES; AND
(II) THE SALES OF EACH MEMBER THAT ARE EXCLUDED FROM THE
UNITARY BUSINESS PURSUANT TO THE DEFINITION OF "WATER'S-EDGE
BASIS."
(B) THE PENNSYLVANIA SALES OF EACH NONTAXABLE MEMBER SHALL
BE DETERMINED BASED UPON THE APPORTIONMENT RULES APPLICABLE TO
THE MEMBER AND SHALL BE AGGREGATED. EACH TAXABLE MEMBER OF THE
GROUP SHALL INCLUDE IN ITS SALES FACTOR NUMERATOR A PORTION OF
THE AGGREGATE PENNSYLVANIA SALES OF NONTAXABLE MEMBERS BASED ON
A RATIO, THE NUMERATOR OF WHICH IS THE TAXABLE MEMBER'S
PENNSYLVANIA SALES AND THE DENOMINATOR OF WHICH IS THE AGGREGATE
PENNSYLVANIA SALES OF ALL THE TAXABLE MEMBERS OF THE GROUP.
(C) NONBUSINESS INCOME OF EACH MEMBER OF A UNITARY BUSINESS
SHALL BE ALLOCATED AS PROVIDED IN PARAGRAPHS (5) THROUGH (8) OF
PHRASE (A) OF SUBCLAUSE 2 OF THIS DEFINITION. A MEMBER OF THE
UNITARY BUSINESS IS SUBJECT TO TAX ON ITS APPORTIONED SHARE OF
ALL BUSINESS INCOME OF THE UNITARY BUSINESS, PLUS ITS
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NONBUSINESS INCOME OR LOSS ALLOCATED TO THIS STATE, MINUS THE
MEMBER'S NET LOSS DEDUCTION.
(D) THE SECRETARY OF REVENUE MAY DISTRIBUTE, APPORTION OR
ALLOCATE GROSS INCOME, DEDUCTIONS, CREDITS OR ALLOWANCES BETWEEN
AND AMONG TWO OR MORE CORPORATIONS, PERSONS, ENTITIES, MEMBERS
OR UNITARY BUSINESSES, WHETHER OR NOT INCORPORATED, WHETHER OR
NOT ORGANIZED IN THE UNITED STATES AND WHETHER OR NOT
AFFILIATED, IF:
(I) THE CORPORATIONS, PERSONS, ENTITIES, MEMBERS OR UNITARY
BUSINESSES ARE OWNED OR CONTROLLED DIRECTLY OR INDIRECTLY BY THE
SAME INTERESTS WITHIN THE MEANING OF 26 U.S.C. § 482 (RELATING
TO ALLOCATION OF INCOME AND DEDUCTIONS AMONG TAXPAYERS); AND
(II) THE SECRETARY OF REVENUE DETERMINES THAT THE
DISTRIBUTION, APPORTIONMENT OR ALLOCATION IS NECESSARY IN ORDER
TO REFLECT AN ARM'S LENGTH STANDARD WITHIN THE MEANING OF 26 CFR
1.482-1 (RELATING TO ALLOCATION OF INCOME AND DEDUCTIONS AMONG
TAXPAYERS) AND TO REFLECT CLEARLY THE INCOME OF THOSE
CORPORATIONS, PERSONS, ENTITIES, MEMBERS OR UNITARY BUSINESSES.
(E) THE SECRETARY OF REVENUE SHALL APPLY THE ADMINISTRATIVE
AND JUDICIAL INTERPRETATIONS OF 26 U.S.C. § 482 IN ADMINISTERING
THIS SECTION.
(F) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2024, ANY
MEMBER OF A UNITARY GROUP THAT WOULD OTHERWISE APPORTION ITS
BUSINESS INCOME UNDER PHRASE (B), (C), (D) OR (E) OF SUBCLAUSE 2
OF THIS DEFINITION SHALL DETERMINE ITS APPORTIONMENT FORMULA
USING A SINGLE SALES FRACTION.
* * *
4. * * *
(C) (1) THE NET LOSS DEDUCTION SHALL BE THE LESSER OF:
(A) (I) FOR TAXABLE YEARS BEGINNING BEFORE JANUARY 1, 2007,
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TWO MILLION DOLLARS ($2,000,000);
(II) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2006,
THE GREATER OF TWELVE AND ONE-HALF PER CENT OF TAXABLE INCOME AS
DETERMINED UNDER SUBCLAUSE 1 OR, IF APPLICABLE, SUBCLAUSE 2 OR
THREE MILLION DOLLARS ($3,000,000);
(III) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2008,
THE GREATER OF FIFTEEN PER CENT OF TAXABLE INCOME AS DETERMINED
UNDER SUBCLAUSE 1 OR, IF APPLICABLE, SUBCLAUSE 2 OR THREE
MILLION DOLLARS ($3,000,000);
(IV) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2009,
THE GREATER OF TWENTY PER CENT OF TAXABLE INCOME AS DETERMINED
UNDER SUBCLAUSE 1 OR, IF APPLICABLE, SUBCLAUSE 2 OR THREE
MILLION DOLLARS ($3,000,000);
(V) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2013, THE
GREATER OF TWENTY-FIVE PER CENT OF TAXABLE INCOME AS DETERMINED
UNDER SUBCLAUSE 1 OR, IF APPLICABLE, SUBCLAUSE 2 OR FOUR MILLION
DOLLARS ($4,000,000);
(VI) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2014,
THE GREATER OF THIRTY PER CENT OF TAXABLE INCOME AS DETERMINED
UNDER SUBCLAUSE 1 OR, IF APPLICABLE, SUBCLAUSE 2 OR FIVE MILLION
DOLLARS ($5,000,000);
(VII) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2017,
THIRTY-FIVE PER CENT OF TAXABLE INCOME AS DETERMINED UNDER
SUBCLAUSE 1 OR, IF APPLICABLE, SUBCLAUSE 2;
(VIII) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2018,
FORTY PER CENT OF TAXABLE INCOME AS DETERMINED UNDER SUBCLAUSE 1
OR, IF APPLICABLE, SUBCLAUSE 2; [OR]
(IX) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2023,
FIFTY PER CENT OF TAXABLE INCOME AS DETERMINED UNDER SUBCLAUSE 1
OR, IF APPLICABLE, SUBCLAUSE 2;
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(X) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2024,
SIXTY PER CENT OF TAXABLE INCOME AS DETERMINED UNDER SUBCLAUSE 1
OR, IF APPLICABLE, SUBCLAUSE 2;
(XI) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2025,
SEVENTY PER CENT OF TAXABLE INCOME AS DETERMINED UNDER SUBCLAUSE
1 OR, IF APPLICABLE, SUBCLAUSE 2; OR
(XII) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2026,
EIGHTY PER CENT OF TAXABLE INCOME AS DETERMINED UNDER SUBCLAUSE
1 OR, IF APPLICABLE, SUBCLAUSE 2; OR
(B) THE AMOUNT OF THE NET LOSS OR LOSSES WHICH MAY BE
CARRIED OVER TO THE TAXABLE YEAR OR TAXABLE INCOME AS DETERMINED
UNDER SUBCLAUSE 1 OR, IF APPLICABLE, SUBCLAUSE 2.
* * *
(2) (A) A NET LOSS FOR A TAXABLE YEAR MAY ONLY BE CARRIED
OVER PURSUANT TO THE FOLLOWING SCHEDULE:
TAXABLE YEAR CARRYOVER
1981 1 TAXABLE YEAR
1982 2 TAXABLE YEARS
1983-1987 3 TAXABLE YEARS
1988 2 TAXABLE YEARS PLUS
1 TAXABLE YEAR
STARTING WITH THE
1995 TAXABLE YEAR
1989 1 TAXABLE YEAR PLUS
2 TAXABLE YEARS
STARTING WITH THE
1995 TAXABLE YEAR
1990-1993 3 TAXABLE YEARS
STARTING WITH THE
1995 TAXABLE YEAR
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1994 1 TAXABLE YEAR
1995-1997 10 TAXABLE YEARS
1998 AND THEREAFTER 20 TAXABLE YEARS
(B) THE EARLIEST NET LOSS SHALL BE CARRIED OVER TO THE
EARLIEST TAXABLE YEAR TO WHICH IT MAY BE CARRIED UNDER THIS
SCHEDULE. THE TOTAL NET LOSS DEDUCTION ALLOWED IN ANY TAXABLE
YEAR SHALL NOT EXCEED:
(I) TWO MILLION DOLLARS ($2,000,000) FOR TAXABLE YEARS
BEGINNING BEFORE JANUARY 1, 2007.
(II) THE GREATER OF TWELVE AND ONE-HALF PER CENT OF THE
TAXABLE INCOME AS DETERMINED UNDER SUBCLAUSE 1 OR, IF
APPLICABLE, SUBCLAUSE 2 OR THREE MILLION DOLLARS ($3,000,000)
FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2006.
(III) THE GREATER OF FIFTEEN PER CENT OF THE TAXABLE INCOME
AS DETERMINED UNDER SUBCLAUSE 1 OR, IF APPLICABLE, SUBCLAUSE 2
OR THREE MILLION DOLLARS ($3,000,000) FOR TAXABLE YEARS
BEGINNING AFTER DECEMBER 31, 2008.
(IV) THE GREATER OF TWENTY PER CENT OF THE TAXABLE INCOME AS
DETERMINED UNDER SUBCLAUSE 1 OR, IF APPLICABLE, SUBCLAUSE 2 OR
THREE MILLION DOLLARS ($3,000,000) FOR TAXABLE YEARS BEGINNING
AFTER DECEMBER 31, 2009.
(V) THE GREATER OF TWENTY-FIVE PER CENT OF TAXABLE INCOME AS
DETERMINED UNDER SUBCLAUSE 1 OR, IF APPLICABLE, SUBCLAUSE 2 OR
FOUR MILLION DOLLARS ($4,000,000) FOR TAXABLE YEARS BEGINNING
AFTER DECEMBER 31, 2013.
(VI) THE GREATER OF THIRTY PER CENT OF TAXABLE INCOME AS
DETERMINED UNDER SUBCLAUSE 1 OR, IF APPLICABLE, SUBCLAUSE 2 OR
FIVE MILLION DOLLARS ($5,000,000) FOR TAXABLE YEARS BEGINNING
AFTER DECEMBER 31, 2014.
(VII) THIRTY-FIVE PER CENT OF TAXABLE INCOME AS DETERMINED
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UNDER SUBCLAUSE 1 OR, IF APPLICABLE, SUBCLAUSE 2 FOR TAXABLE
YEARS BEGINNING AFTER DECEMBER 31, 2017.
(VIII) FORTY PER CENT OF TAXABLE INCOME AS DETERMINED UNDER
SUBCLAUSE 1 OR, IF APPLICABLE, SUBCLAUSE 2 FOR TAXABLE YEARS
BEGINNING AFTER DECEMBER 31, 2018.
(IX) FIFTY PER CENT OF TAXABLE INCOME AS DETERMINED UNDER
SUBCLAUSE 1 OR, IF APPLICABLE, SUBCLAUSE 2 FOR TAXABLE YEARS
BEGINNING AFTER DECEMBER 31, 2023.
(X) SIXTY PER CENT OF TAXABLE INCOME AS DETERMINED UNDER
SUBCLAUSE 1 OR, IF APPLICABLE, SUBCLAUSE 2 FOR TAXABLE YEARS
BEGINNING AFTER DECEMBER 31, 2024.
(XI) SEVENTY PER CENT OF TAXABLE INCOME AS DETERMINED UNDER
SUBCLAUSE 1 OR, IF APPLICABLE, SUBCLAUSE 2 FOR TAXABLE YEARS
BEGINNING AFTER DECEMBER 31, 2025.
(XII) EIGHTY PER CENT OF TAXABLE INCOME AS DETERMINED UNDER
SUBCLAUSE 1 OR, IF APPLICABLE, SUBCLAUSE 2 FOR TAXABLE YEARS
BEGINNING AFTER DECEMBER 31, 2026.
* * *
(H) SUBJECT TO THE LIMITATIONS OF THIS SUBCLAUSE, ANY MEMBER
OF A UNITARY BUSINESS THAT HAS UNUSED NET LOSS FROM TAXABLE
YEARS THAT BEGAN PRIOR TO JANUARY 1, 2025, OR THAT GENERATES NET
LOSSES WHILE A MEMBER OF A UNITARY BUSINESS MAY ONLY TAKE THE
NET LOSS DEDUCTION FOR TAXABLE YEARS BEGINNING AFTER DECEMBER
31, 2023, TO THE EXTENT OF THE MEMBER'S SHARE OF COMBINED
UNITARY INCOME AFTER APPORTIONMENT AND THE NET LOSSES MAY NOT BE
USED BY OTHER MEMBERS OF THE SAME UNITARY BUSINESS.
(I) ANY NET LOSS REALIZED FOR A TAXABLE YEAR UNUSED BY A
CORPORATION WHICH SUBSEQUENTLY BECOMES A MEMBER OF ANOTHER
UNITARY BUSINESS, MAY ONLY BE USED BY THAT CORPORATION.
* * *
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(5) "TAXABLE YEAR." [THE TAXABLE YEAR WHICH THE
CORPORATION, OR ANY CONSOLIDATED GROUP WITH WHICH THE
CORPORATION PARTICIPATES IN THE FILING OF CONSOLIDATED RETURNS,
ACTUALLY USES IN REPORTING TAXABLE INCOME TO THE FEDERAL
GOVERNMENT. WITH REGARD TO THE TAX IMPOSED BY ARTICLE IV OF THIS
ACT (RELATING TO THE CORPORATE NET INCOME TAX), THE TERMS
"ANNUAL YEAR," "FISCAL YEAR," "ANNUAL OR FISCAL YEAR," "TAX
YEAR" AND "TAX PERIOD" SHALL BE THE SAME AS THE CORPORATION'S
TAXABLE YEAR, AS DEFINED IN THIS PARAGRAPH.]
1. EXCEPT AS SET FORTH IN SUBCLAUSE 2, THE TAXABLE YEAR
WHICH THE CORPORATION, OR ANY CONSOLIDATED GROUP WITH WHICH THE
CORPORATION PARTICIPATES IN THE FILING OF CONSOLIDATED RETURNS,
ACTUALLY USES IN REPORTING TAXABLE INCOME TO THE FEDERAL
GOVERNMENT, OR WHICH THE CORPORATION WOULD HAVE USED IN
REPORTING TAXABLE INCOME TO THE FEDERAL GOVERNMENT HAD IT BEEN
REQUIRED TO REPORT ITS TAXABLE INCOME TO THE FEDERAL GOVERNMENT.
WITH REGARD TO THE TAX IMPOSED BY ARTICLE IV, THE TERMS "ANNUAL
YEAR," "FISCAL YEAR," "ANNUAL OR FISCAL YEAR," "TAX YEAR" AND
"TAX PERIOD" SHALL BE THE SAME AS THE CORPORATION'S TAXABLE
YEAR, AS DEFINED IN THIS SUBCLAUSE OR SUBCLAUSE 2.
2. ALL MEMBERS OF A UNITARY BUSINESS SHALL HAVE A COMMON
TAXABLE YEAR FOR PURPOSES OF COMPUTING TAX DUE UNDER THIS
ARTICLE. THE TAXABLE YEAR FOR SUCH PURPOSES IS THE COMMON
TAXABLE YEAR ADOPTED, IN A MANNER PRESCRIBED BY THE DEPARTMENT,
BY ALL MEMBERS OF THE UNITARY BUSINESS. THE COMMON TAXABLE YEAR
MUST BE USED BY ALL MEMBERS OF THE UNITARY BUSINESS IN THE YEAR
OF ADOPTION AND ALL FUTURE YEARS UNLESS OTHERWISE PERMITTED BY
THE DEPARTMENT.
* * *
(12) "TAX HAVEN." ANY OF THE FOLLOWING:
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(A) ANDORRA.
(B) ANGUILLA.
(C) ANTIGUA AND BARBUDA.
(D) ARUBA.
(E) THE BAHAMAS.
(F) BAHRAIN.
(G) BARBADOS.
(H) BELIZE.
(I) BERMUDA.
(J) BONAIRE.
(K) THE BRITISH VIRGIN ISLANDS.
(L) THE CAYMAN ISLANDS.
(M) THE COOK ISLANDS.
(N) CURACAO.
(O) CYPRUS.
(P) DOMINICA.
(Q) GIBRALTAR.
(R) GRENADA.
(S) GUERNSEY-SARK-ALDERNEY.
(T) IRELAND.
(U) THE ISLE OF MAN.
(V) JERSEY.
(W) LIBERIA.
(X) LIECHTENSTEIN.
(Y) LUXEMBOURG.
(Z) MALTA.
(AA) THE MARSHALL ISLANDS.
(BB) MAURITIUS.
(CC) MONACO.
(DD) MONTSERRAT.
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(EE) NAURU.
(FF) THE NETHERLANDS.
(GG) NIUE.
(HH) PANAMA.
(II) SABA.
(JJ) SAMOA.
(KK) SAN MARINO.
(LL) SEYCHELLES.
(MM) SINGAPORE.
(NN) ST. EUSTATIUS.
(OO) ST. KITTS AND NEVIS.
(PP) ST. LUCIA.
(QQ) ST. MAARTEN.
(RR) ST. VINCENT AND THE GRENADINES.
(SS) SWITZERLAND.
(TT) TURKS AND CAICOS ISLANDS.
(UU) VANUATU.
(VV) A JURISDICTION THAT IS IDENTIFIED AS A TAX HAVEN BY THE
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT.
(13) "UNITARY BUSINESS." A SINGLE ECONOMIC ENTERPRISE THAT
IS MADE UP OF SEPARATE PARTS OF A SINGLE CORPORATION, OF A
COMMONLY CONTROLLED GROUP OF CORPORATIONS, OR BOTH, THAT ARE
SUFFICIENTLY INTERDEPENDENT, INTEGRATED AND INTERRELATED THROUGH
THEIR ACTIVITIES SO AS TO PROVIDE A SYNERGY AND MUTUAL BENEFIT
THAT PRODUCES A SHARING OR EXCHANGE OF VALUE AMONG THEM AND A
FLOW OF VALUE TO THE SEPARATE PARTS. A UNITARY BUSINESS INCLUDES
ALL THOSE PARTS AND CORPORATIONS THAT ARE INCLUDED IN A UNITARY
BUSINESS UNDER THE CONSTITUTION OF THE UNITED STATES.
(14) "WATER'S-EDGE BASIS." A SYSTEM OF REPORTING THAT
INCLUDES THE INCOME AND APPORTIONMENT FACTORS OF CERTAIN MEMBERS
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OF A UNITARY BUSINESS, DESCRIBED AS FOLLOWS:
(A) ANY MEMBER INCORPORATED IN THE UNITED STATES OR FORMED
UNDER THE LAWS OF ANY STATE OF THE UNITED STATES, THE DISTRICT
OF COLUMBIA, ANY TERRITORY OR POSSESSION OF THE UNITED STATES OR
THE COMMONWEALTH OF PUERTO RICO.
(B) ANY MEMBER, REGARDLESS OF THE PLACE INCORPORATED OR
FORMED, IF AT LEAST TWENTY PER CENT OF THE MEMBER'S SALES FACTOR
IS WITHIN THE UNITED STATES, AND THE FOLLOWING SHALL APPLY:
(I) FOR PURPOSES OF DETERMINING WHETHER AT LEAST TWENTY PER
CENT OF A MEMBER'S SALES FACTOR IS WITHIN THE UNITED STATES, THE
CALCULATION MUST BE PERFORMED ON A STAND-ALONE BASIS. SALES
SHALL BE GROSS FIGURES WITHOUT ELIMINATIONS FOR TRANSACTIONS
WITH OTHER MEMBERS OF ANY UNITARY BUSINESS.
(II) WHETHER SALES ARE WITHIN THE UNITED STATES IS BASED ON
THE SALES FACTOR SOURCING RULES CONTAINED IN SECTION 401(3).
(C) ANY MEMBER WHICH IS ONE OF THE FOLLOWING:
(I) A DOMESTIC INTERNATIONAL SALES CORPORATION AS DESCRIBED
IN 26 U.S.C. CH. 1 SUBCH. N PT. IV SUBPT. A (RELATING TO
TREATMENT OF QUALIFYING CORPORATIONS).
(II) A FOREIGN SALES CORPORATION AS DESCRIBED IN 26 U.S.C.
CH. 1 SUBCH. N PT. IV SUBPTS. A AND B (RELATING TO TREATMENT OF
DISTRIBUTIONS TO SHAREHOLDERS).
(III) AN EXPORT TRADE CORPORATION AS DESCRIBED IN 26 U.S.C.
§§ 970 (RELATING TO REDUCTION OF SUBPART F INCOME OF EXPORT
TRADE CORPORATIONS) AND 971 (RELATING TO DEFINITIONS).
(D) ANY MEMBER NOT DESCRIBED IN SUBPARAGRAPH (A), (B) OR (C)
SHALL INCLUDE THE PORTION OF THE MEMBER'S TAXABLE INCOME DERIVED
FROM OR ATTRIBUTABLE TO SOURCES WITHIN THE UNITED STATES, AS
DETERMINED UNDER 26 U.S.C. (RELATING TO INTERNAL REVENUE CODE)
WITHOUT REGARD TO FEDERAL TREATIES, AND ITS APPORTIONMENT
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FACTORS RELATED THERETO.
(E) ANY MEMBER THAT IS A "CONTROLLED FOREIGN CORPORATION" AS
DEFINED IN 26 U.S.C. § 957 (RELATING TO CONTROLLED FOREIGN
CORPORATIONS; UNITED STATES PERSONS), TO THE EXTENT THE INCOME
OF THAT MEMBER IS INCOME DEFINED IN 26 U.S.C. § 952 (RELATING TO
SUBPART F INCOME DEFINED) AS SUBPART F INCOME, NOT EXCLUDING
LOWER-TIER SUBSIDIARIES' DISTRIBUTIONS OF SUCH INCOME WHICH WERE
PREVIOUSLY TAXED, DETERMINED WITHOUT REGARD TO FEDERAL TREATIES,
AND THE APPORTIONMENT FACTORS RELATED TO THAT INCOME; ANY ITEM
OF INCOME RECEIVED BY A CONTROLLED FOREIGN CORPORATION AND THE
APPORTIONMENT FACTORS RELATED TO SUCH INCOME SHALL BE EXCLUDED
IF THE CORPORATION ESTABLISHES TO THE SATISFACTION OF THE
SECRETARY OF REVENUE THAT SUCH INCOME WAS SUBJECT TO AN
EFFECTIVE RATE OF INCOME TAX IMPOSED BY A FOREIGN COUNTRY
GREATER THAN NINETY PER CENT OF THE MAXIMUM RATE OF TAX
SPECIFIED IN 26 U.S.C. § 11 (RELATING TO TAX IMPOSED). THE
EFFECTIVE RATE OF INCOME TAX DETERMINATION SHALL BE BASED UPON
THE METHODOLOGY SET FORTH UNDER 26 CFR 1.954-1 (RELATING TO
FOREIGN BASE COMPANY INCOME).
(F) ANY MEMBER THAT IS INCORPORATED IN OR IS DOING BUSINESS
IN A TAX HAVEN. THE INCOME AND APPORTIONMENT FACTORS OF A MEMBER
DOING BUSINESS IN A TAX HAVEN SHALL BE EXCLUDED IF THE MEMBER
ESTABLISHES TO THE SATISFACTION OF THE SECRETARY OF REVENUE THAT
THE MEMBER'S INCOME WAS SUBJECT TO AN EFFECTIVE RATE OF INCOME
TAX IMPOSED BY A COUNTRY GREATER THAN NINETY PER CENT OF THE
MAXIMUM RATE OF TAX SPECIFIED IN 26 U.S.C. § 11.
(15) "COMMONLY CONTROLLED GROUP." FOR A CORPORATION, THE
CORPORATION IS A MEMBER OF A GROUP OF TWO OR MORE CORPORATIONS
AND MORE THAN FIFTY PER CENT OF THE VOTING STOCK OR CONTROLLING
INTEREST OF EACH MEMBER OF THE GROUP IS DIRECTLY OR INDIRECTLY
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OWNED BY A COMMON OWNER OR BY COMMON OWNERS, EITHER CORPORATE OR
NONCORPORATE, OR BY ONE OR MORE OF THE MEMBER CORPORATIONS OF
THE GROUP.
(16) "COMBINED UNITARY INCOME." THE AGGREGATE TAXABLE
INCOME OR LOSS OF ALL MEMBERS OF A UNITARY BUSINESS, SUBJECT TO
APPORTIONMENT, EXCEPT:
(A) INCOME FROM AN INTERCOMPANY TRANSACTION BETWEEN MEMBERS
OF A UNITARY BUSINESS SHALL BE DEFERRED IN A MANNER SIMILAR TO
26 CFR 1.1502-13 (RELATING TO INTERCOMPANY TRANSACTIONS) FOR
FEDERAL TAXABLE INCOME PURPOSES.
(B) DIVIDENDS PAID BY ONE MEMBER OF A UNITARY BUSINESS TO
ANOTHER.
(C) INCOME OF THE FOLLOWING MEMBERS IS NOT INCLUDED IN THE
DETERMINATION OF COMBINED UNITARY INCOME:
(I) ANY MEMBER SUBJECT TO TAXATION UNDER ARTICLE VII, VIII,
IX OR XV;
(II) ANY MEMBER SPECIFIED IN THE DEFINITION OF "INSTITUTION"
IN SECTION 701.5 THAT WOULD BE SUBJECT TO TAXATION UNDER ARTICLE
VII, WERE IT DOING BUSINESS IN THIS STATE, AS DEFINED IN SECTION
701.5;
(III) ANY MEMBER COMMONLY KNOWN AS A TITLE INSURANCE COMPANY
THAT WOULD BE SUBJECT TO TAXATION UNDER ARTICLE VIII, WERE IT
INCORPORATED IN THIS STATE;
(IV) ANY MEMBER SPECIFIED AS AN INSURANCE COMPANY,
ASSOCIATION OR EXCHANGE IN ARTICLE IX THAT WOULD BE SUBJECT TO
TAXATION UNDER ARTICLE IX, WERE IT TRANSACTING INSURANCE
BUSINESS IN THIS STATE;
(V) ANY MEMBER SPECIFIED IN THE DEFINITION OF "INSTITUTION"
IN SECTION 1501 THAT WOULD BE SUBJECT TO TAXATION UNDER ARTICLE
XV, WERE IT LOCATED, AS DEFINED IN SECTION 1501, IN THIS STATE;
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OR
(VI) ANY MEMBER THAT IS A SMALL CORPORATION AS DEFINED IN
SECTION 301(S.2) EXCEPT TO THE EXTENT OF SUCH SMALL
CORPORATION'S NET RECOGNIZED BUILT-IN GAIN TO THE EXTENT OF AND
AS DETERMINED FOR FEDERAL INCOME TAX PURPOSES UNDER 26 U.S.C. §
1374(D)(2) (RELATING TO TAX IMPOSED ON CERTAIN BUILT-IN GAINS).
(17) "MEMBER." A CORPORATION THAT IS A MEMBER OF A UNITARY
BUSINESS. THE TERM DOES NOT INCLUDE A CORPORATION LISTED IN
CLAUSE (15)(C).
SECTION 3. SECTION 402(B) OF THE ACT, AMENDED JULY 8, 2022
(P.L.513, NO.53), IS AMENDED TO READ:
SECTION 402. IMPOSITION OF TAX.--* * *
(B) THE ANNUAL RATE OF TAX ON CORPORATE NET INCOME IMPOSED
BY SUBSECTION (A) FOR TAXABLE YEARS BEGINNING FOR THE CALENDAR
YEAR OR FISCAL YEAR ON OR AFTER THE DATES SET FORTH SHALL BE AS
FOLLOWS:
TAXABLE YEAR TAX RATE
JANUARY 1, 1995,
THROUGH DECEMBER
31, 2022 9.99%
JANUARY 1, 2023,
THROUGH DECEMBER
31, 2023 [8.99%] 7.99%
JANUARY 1, 2024,
THROUGH DECEMBER
31, 2024 [8.49%] 6.99%
JANUARY 1, 2025,
THROUGH DECEMBER
31, 2025 [7.99%] 5.99%
JANUARY 1, 2026,
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[THROUGH DECEMBER
31, 2026] AND EACH
TAXABLE YEAR
THEREAFTER
[7.49%] 4.99%
[JANUARY 1, 2027,
THROUGH DECEMBER
31, 2027 6.99%
JANUARY 1, 2028,
THROUGH DECEMBER
31, 2028 6.49%
JANUARY 1, 2029,
THROUGH DECEMBER
31, 2029 5.99%
JANUARY 1, 2030,
THROUGH DECEMBER
31, 2030 5.49%
JANUARY 1, 2031, AND
EACH TAXABLE YEAR
THEREAFTER 4.99%]
* * *
SECTION 4. SECTION 403 OF THE ACT IS AMENDED BY ADDING
SUBSECTIONS TO READ:
SECTION 403. REPORTS AND PAYMENT OF TAX.--* * *
(A.1) (1) EACH CORPORATION THAT IS A MEMBER OF A UNITARY
BUSINESS THAT CONSISTS OF TWO OR MORE CORPORATIONS, UNLESS
EXCLUDED BY THE PROVISIONS OF THIS ARTICLE, SHALL FILE AS PART
OF A COMBINED ANNUAL REPORT. THE MEMBER OF THE UNITARY BUSINESS
SHALL DESIGNATE ONE MEMBER THAT IS SUBJECT TO TAX UNDER THIS
ARTICLE TO FILE THE COMBINED ANNUAL REPORT AND TO ACT AS AGENT
ON BEHALF OF ALL OTHER MEMBERS OF THE UNITARY BUSINESS. EACH
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CORPORATION THAT IS A MEMBER OF A UNITARY BUSINESS IS LIABLE FOR
ITS TAX LIABILITY UNDER THIS ARTICLE. THE AGENT IS ALSO LIABLE
FOR THE AGGREGATE AMOUNT OF THE UNITARY BUSINESS' TAX LIABILITY
PURSUANT TO THIS ARTICLE.
(2) THE OATH OR AFFIRMATION OF THE DESIGNATED MEMBER'S
PRESIDENT, VICE PRESIDENT, TREASURER, ASSISTANT TREASURER OR
OTHER AUTHORIZED OFFICER SHALL CONSTITUTE THE OATH OR
AFFIRMATION OF EACH CORPORATION THAT IS A MEMBER OF THAT UNITARY
BUSINESS.
(3) THE DESIGNATED MEMBER SHALL TRANSMIT TO THE DEPARTMENT
UPON A FORM PRESCRIBED BY THE DEPARTMENT A COMBINED ANNUAL
REPORT UNDER OATH OR AFFIRMATION OF THE MEMBER'S PRESIDENT, VICE
PRESIDENT, TREASURER, ASSISTANT TREASURER OR OTHER AUTHORIZED
OFFICER.
(4) IN ADDITION TO THE INFORMATION REQUIRED IN SUBSECTION
(A), THE COMBINED ANNUAL REPORT SHALL SET FORTH:
(I) ALL MEMBERS INCLUDED IN THE UNITARY BUSINESS.
(II) ALL NECESSARY DATA, BOTH IN THE AGGREGATE AND FOR EACH
MEMBER OF THE UNITARY BUSINESS, THAT SETS FORTH THE
DETERMINATION OF TAX LIABILITY FOR EACH MEMBER OF THE UNITARY
BUSINESS.
(III) ANY OTHER INFORMATION THAT THE DEPARTMENT MAY REQUIRE.
(A.2) A MEMBER OF A UNITARY BUSINESS OF TWO OR MORE
CORPORATIONS MUST DETERMINE THE MEMBER'S INCOME AND
APPORTIONMENT FACTORS ON A WATER'S-EDGE BASIS.
* * *
SECTION 5. SECTIONS 404 AND 407.7 OF THE ACT ARE AMENDED TO
READ:
SECTION 404. CONSOLIDATED REPORTS.--THE DEPARTMENT SHALL NOT
PERMIT ANY CORPORATION OWNING OR CONTROLLING, DIRECTLY OR
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INDIRECTLY, ANY OF THE VOTING CAPITAL STOCK OF ANOTHER
CORPORATION OR OF OTHER CORPORATIONS, SUBJECT TO THE PROVISIONS
OF THIS ARTICLE, TO MAKE A CONSOLIDATED REPORT[, SHOWING THE
COMBINED NET INCOME].
SECTION 407.7. MANUFACTURING INNOVATION AND REINVESTMENT
DEDUCTION.--(A) IN ORDER TO BE ELIGIBLE TO RECEIVE A
MANUFACTURING INNOVATION AND REINVESTMENT DEDUCTION, A TAXPAYER
MUST DEMONSTRATE TO THE DEPARTMENT A PRIVATE CAPITAL INVESTMENT
IN EXCESS OF [SIXTY MILLION DOLLARS ($60,000,000)] FIFTY MILLION
DOLLARS ($50,000,000) FOR THE CREATION OF NEW OR REFURBISHED
MANUFACTURING CAPACITY WITHIN [THREE YEARS OF A DESIGNATED START
DATE] THE APPLICABLE TIME PERIOD SPECIFIED IN SUBSECTION (B).
(B) (1) A TAXPAYER MUST ADVISE THE DEPARTMENT IN ADVANCE OF
THE START DATE OF ANY PROJECT FOR WHICH THE TAXPAYER MAY SEEK A
QUALIFIED MANUFACTURING INNOVATION AND REINVESTMENT DEDUCTION. A
TAXPAYER MUST ATTEST THE TAXPAYER'S INTENT TO MEET THE
ELIGIBILITY CRITERIA AND PROVIDE RELEVANT INFORMATION PERTINENT
TO THE PROJECT'S SIZE AND SCOPE IN A MANNER AS DETERMINED BY THE
DEPARTMENT.
(2) FOR A PRIVATE CAPITAL INVESTMENT OF LESS THAN OR EQUAL
TO ONE HUNDRED FIFTY MILLION DOLLARS ($150,000,000), THE
FOLLOWING SHALL APPLY:
(I) THE PROJECT MUST BE COMPLETED WITHIN THREE YEARS OF THE
PROJECT'S START DATE.
(II) WITHIN FIVE YEARS OF [A] THE PROJECT'S START DATE, [A]
THE TAXPAYER MUST COMPLETE TO THE DEPARTMENT'S SATISFACTION AN
APPLICATION ON A FORM AND IN A MANNER AS DETERMINED BY THE
DEPARTMENT TO ATTEST THAT THE PROJECT HAS BEEN COMPLETED AND THE
ELIGIBILITY CRITERIA HAS BEEN SATISFIED.
(3) FOR A PRIVATE CAPITAL INVESTMENT GREATER THAN ONE
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HUNDRED FIFTY MILLION ONE DOLLARS ($150,000,001) AND LESS THAN
TWO HUNDRED FIFTY MILLION DOLLARS ($250,000,000), THE FOLLOWING
SHALL APPLY:
(I) THE PROJECT MUST BE COMPLETED WITHIN FIVE YEARS OF THE
PROJECT'S START DATE.
(II) WITHIN SEVEN YEARS OF THE PROJECT'S START DATE, THE
TAXPAYER MUST COMPLETE TO THE DEPARTMENT'S SATISFACTION AN
APPLICATION ON A FORM AND IN A MANNER AS DETERMINED BY THE
DEPARTMENT TO ATTEST THAT THE PROJECT HAS BEEN COMPLETED AND THE
ELIGIBILITY CRITERIA HAS BEEN SATISFIED.
(4) FOR A PRIVATE CAPITAL INVESTMENT GREATER THAN TWO
HUNDRED FIFTY MILLION ONE DOLLARS ($250,000,001) AND LESS THAN
THREE HUNDRED FIFTY MILLION DOLLARS ($350,000,000), THE
FOLLOWING SHALL APPLY:
(I) THE PROJECT MUST BE COMPLETED WITHIN SEVEN YEARS OF THE
PROJECT'S START DATE.
(II) WITHIN NINE YEARS OF THE PROJECT'S START DATE, THE
TAXPAYER MUST COMPLETE TO THE DEPARTMENT'S SATISFACTION AN
APPLICATION ON A FORM AND IN A MANNER AS DETERMINED BY THE
DEPARTMENT TO ATTEST THAT THE PROJECT HAS BEEN COMPLETED AND THE
ELIGIBILITY CRITERIA HAS BEEN SATISFIED.
(5) FOR A PRIVATE CAPITAL INVESTMENT GREATER THAN THREE
HUNDRED FIFTY MILLION ONE DOLLARS ($350,000,001), THE DEPARTMENT
SHALL ESTABLISH THE TIME PERIOD FROM THE PROJECT'S START DATE IN
WHICH THE PROJECT MUST BE COMPLETED AND THE TIME PERIOD IN WHICH
THE APPLICATION AS DESCRIBED IN PARAGRAPH (4) MUST BE COMPLETED.
(C) UPON THE RECEIPT OF THE TAXPAYER'S APPLICATION, THE
DEPARTMENT OF REVENUE [MUST] SHALL MAKE A FINDING [THAT] WHETHER
THE APPLICANT HAS FILED ALL REQUIRED STATE TAX REPORTS AND
RETURNS FOR ALL APPLICABLE TAX YEARS AND PAID ANY BALANCE OF
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STATE TAX DUE AS DETERMINED AT SETTLEMENT, ASSESSMENT OR
DETERMINATION, AND THE DEPARTMENT, THEN IN CONJUNCTION WITH THE
DEPARTMENT OF REVENUE, SHALL MAKE AN ELIGIBILITY OR SATISFACTION
DETERMINATION WITHIN NINETY DAYS OF SUBMISSION. IF THE
DEPARTMENT MAKES A SATISFACTION DETERMINATION, THE DEPARTMENT
AND THE TAXPAYER SHALL EXECUTE A SATISFACTION COMMITMENT LETTER
CONTAINING THE FOLLOWING:
(1) THE NUMBER OF NEW JOBS CREATED AND THEIR CORRESPONDING
DESCRIPTION.
(2) THE NUMBER OF NEW JOBS CREATED DURING CONSTRUCTION OF
THE PROJECT.
(3) THE AMOUNT OF PRIVATE CAPITAL INVESTMENT IN THE CREATION
OF NEW JOBS.
(4) THE INCREASE IN THE ANNUAL TAXABLE PAYROLL ATTRIBUTABLE
TO NEW MANUFACTURING JOBS.
(5) A DETERMINATION OF THE MAXIMUM ALLOWABLE DEDUCTION
AGAINST A TAXPAYER'S QUALIFIED TAX LIABILITY UNDER THIS ARTICLE.
(6) ANY OTHER INFORMATION AS THE DEPARTMENT DEEMS
APPROPRIATE.
(D) (1.1) IF THE PRIVATE CAPITAL INVESTMENT IS IN EXCESS OF
SIXTY MILLION DOLLARS ($60,000,000), BUT NOT MORE THAN ONE
HUNDRED MILLION DOLLARS ($100,000,000), THE MAXIMUM ALLOWABLE
DEDUCTION SHALL BE EQUAL TO THIRTY-SEVEN AND ONE-HALF PER CENT
OF THE PRIVATE CAPITAL INVESTMENT UTILIZED IN THE CREATION OF
NEW OR REFURBISHED MANUFACTURING CAPACITY. A TAXPAYER MAY
UTILIZE THE DEDUCTION IN AN AMOUNT NOT TO EXCEED SEVEN AND ONE-
HALF PER CENT OF THE PRIVATE CAPITAL INVESTMENT UTILIZED IN THE
CREATION OF NEW OR REFURBISHED MANUFACTURING CAPACITY IN ANY ONE
YEAR OF THE SUCCEEDING TEN TAX YEARS IMMEDIATELY FOLLOWING THE
DEPARTMENT'S SATISFACTION DETERMINATION AND THE EXECUTION OF A
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SATISFACTION COMMITMENT LETTER, UP TO THE MAXIMUM ALLOWABLE
DEDUCTION. THIS PARAGRAPH SHALL ONLY APPLY TO APPLICATIONS MADE
PRIOR TO JANUARY 1, 2024.
(1.2) IF [THE] A TAXPAYER'S PRIVATE CAPITAL INVESTMENT FOR A
PROJECT EXCEEDS [ONE HUNDRED MILLION DOLLARS ($100,000,000)]
FIFTY MILLION DOLLARS ($50,000,000), THE MAXIMUM ALLOWABLE
DEDUCTION SHALL BE EQUAL TO TWENTY-FIVE PER CENT OF THE PRIVATE
CAPITAL INVESTMENT UTILIZED IN THE CREATION OF NEW OR
REFURBISHED MANUFACTURING CAPACITY. A TAXPAYER MAY UTILIZE THE
DEDUCTION IN AN AMOUNT NOT TO EXCEED FIVE PER CENT OF THE
PRIVATE CAPITAL INVESTMENT UTILIZED IN THE CREATION OF NEW OR
REFURBISHED MANUFACTURING CAPACITY IN ANY ONE YEAR OF THE
SUCCEEDING TEN TAX YEARS IMMEDIATELY FOLLOWING THE DEPARTMENT'S
SATISFACTION DETERMINATION AND THE EXECUTION OF A SATISFACTION
COMMITMENT LETTER, UP TO THE MAXIMUM ALLOWABLE DEDUCTION.
(1.3) IF A TAXPAYER EXECUTES A SATISFACTION COMMITMENT
LETTER FOR MORE THAN TWO CONCURRENT PROJECTS WITH A TOTAL
PRIVATE CAPITAL INVESTMENT EXCEEDING FIVE HUNDRED MILLION
DOLLARS ($500,000,000), THE MAXIMUM ALLOWABLE DEDUCTION FOR ANY
SUCCEEDING PROJECT SHALL BE EQUAL TO TWENTY-FIVE PER CENT OF THE
PRIVATE CAPITAL INVESTMENT UTILIZED IN THE CREATION OF NEW OR
REFURBISHED MANUFACTURING CAPACITY. A TAXPAYER MAY UTILIZE THE
DEDUCTION IN AN AMOUNT NOT TO EXCEED FIVE PER CENT OF THE
PRIVATE CAPITAL INVESTMENT UTILIZED IN THE CREATION OF NEW OR
REFURBISHED MANUFACTURING CAPACITY IN ANY ONE YEAR OF THE
SUCCEEDING TWENTY TAX YEARS IMMEDIATELY FOLLOWING THE