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Senate of Pennsylvania
Session of 2019 - 2020 Regular Session


Posted: January 15, 2019 04:21 PM
From: Senator Vincent J. Hughes and Sen. John T. Yudichak, Sen. James R. Brewster
To: All Senate members
Subject: Maximizing the Manufacturing Tax Credit
In the near future, we plan to reintroduce Senate Bill 925 which increases the cap on the manufacturing tax credit and makes other revisions to maximize the credit’s impact. This legislation is part of a package of legislation designed to aid our manufacturers, workers and small businesses, and rebuild our manufacturing base.

A thriving manufacturing sector is vital to Pennsylvania’s economic health. According to the Center for Manufacturing Research, manufacturing accounts for 12 percent of the total gross domestic product output in this Commonwealth and over $85.15 billion in economic output. More than 9 percent of our workforce is employed in the manufacturing sector.

The manufacturing tax credit was enacted as part of the FY 2016-17 budget and capped at $4 million. Our legislation would increase the cap to $12.5 million per year to further incentivize investment in the sector.

In addition, to ensure all manufacturers have access to the program, our bill does two things:
  1. Earmarks $2.5 million of the $12 million tax credit for MBE/WBE and veteran-owned manufacturers and manufacturers located in distressed communities.
  2. Allows small manufacturers, who may not meet the requirements of the credit on their own, to join with other small manufacturers to apply for the tax credit to meet the statutory requirements.
Finally, to ensure we have a manufacturing sector with a properly trained workforce, our bill would expand eligible uses of the tax credit to include job training costs.

With the right tools, our manufacturing sector can continue to grow and create a world-class workforce. We believe this legislation will help further those goals. We hope you will join us in sponsoring this legislation.

If you have any questions, please contact Senator Hughes’ office at 717-787-7112.

Introduced as SB266