A01050
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
288
Session of
2021
INTRODUCED BY MENSCH, BARTOLOTTA, REGAN, STEFANO, J. WARD AND
BOSCOLA, FEBRUARY 26, 2021
REFERRED TO FINANCE, FEBRUARY 26, 2021
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 manufacturing innovation and reinvestment deduction.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 407.7(a) and (d)(1.1) and (1.2) of the
act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
of 1971, amended or added June 28, 2019 (P.L.50, No.13), are
amended to read:
Section 1. Section 407.7(a) and (d) of the act of March 4,
1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, are
amended and the section is amended by adding a subsection to
read:
Section 407.7. Manufacturing Innovation and Reinvestment
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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)] one hundred
million dollars ($100,000,000) one million dollars ($1,000,000)
for the creation of new or refurbished manufacturing capacity
within three years of a designated start date.
* * *
(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)] one million dollars
($1,000,000), but not more than ten million dollars
($10,000,000), the maximum allowable deduction shall be equal to
[thirty-seven and one-half] ten 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.] per
tax year for a period of five years.
(1.2) If the private capital investment [exceeds one hundred
million dollars ($100,000,000)] is in excess of ten million
dollars ($10,000,000), but not more than one hundred million
dollars ($100,000,000), the maximum allowable deduction shall be
equal to [twenty-five] 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
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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.] for a
period of five years.
(1.3) If the private capital investment exceeds one hundred
million dollars ($100,000,000), the maximum allowable deduction
shall be equal to five per cent of the private capital
investment utilized in the creation of new or refurbished
manufacturing capacity for a period of five years.
* * *
(a.1) The qualified manufacturing innovation and
reinvestment deduction shall be applied to a taxpayer's taxable
income to reduce the taxpayer's liability following the
allocation and apportionment of income.
* * *
(d) (1.1) If the private capital investment is in excess of
one million dollars ($1,000,000), but not more than ten million
dollars ($10,000,000), the maximum allowable deduction shall be
equal to sixty-two 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 twelve 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.
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(1.2) If the private capital investment is in excess of ten
million dollars ($10,000,000), but not more than sixty million
dollars ($60,000,000), the maximum allowable deduction shall be
equal to fifty 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 ten 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.
[(1.1)] (1.3) 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.
[(1.2)] (1.4) If the private capital investment exceeds one
hundred million dollars ($100,000,000), 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.
(3) A taxpayer cannot use the deduction to reduce its 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 2. This act shall take effect in 60 days.
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