PRINTER'S NO. 2292
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1700
Session of
2019
INTRODUCED BY MURT, READSHAW, SCHLOSSBERG, MERSKI, MILLARD,
SOLOMON, GALLOWAY, KINSEY, JONES, FREEMAN, CIRESI,
CALTAGIRONE, ECKER, GILLEN AND SAINATO, JULY 8, 2019
REFERRED TO COMMITTEE ON FINANCE, JULY 8, 2019
AN ACT
Amending Title 12 (Commerce and Trade) of the Pennsylvania
Consolidated Statutes, in economic development programs,
providing for the Returning Heroes Supplemental Tax Credit
Program.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 12 of the Pennsylvania Consolidated
Statutes is amended by adding a chapter to read:
CHAPTER 44
RETURNING HEROES SUPPLEMENTAL TAX CREDIT PROGRAM
Sec.
4401. Scope of chapter.
4402. Definitions.
4403. Establishment.
4404. Application.
4405. Carryover, carryback, refund and assignment.
4406. Limitation on credits.
4407. Shareholder, owner or member of pass-through entity.
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4408. Reports.
4409. Regulations.
4410. Applicability.
§ 4401. Scope of chapter.
This chapter relates to the Returning Heroes Supplemental Tax
Credit Program.
§ 4402. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Department." The Department of Revenue of the Commonwealth.
"Federal Returning Heroes Tax Credit." A tax credit
established under section 261 of the VOW to Hire Heroes Act of
2011 (Public Law 112-56, 125 Stat. 711).
"Pass-through entity." A partnership as defined in section
301(n.0) of the Tax Reform Code or a Pennsylvania S corporation
as defined in section 301(n.1) of the Tax Reform Code.
"Qualified tax liability." The liability for taxes imposed
under Article III, IV or VI of the Tax Reform Code. The term
does not include any tax withheld by an employer from an
employee under Article III of the Tax Reform Code.
"Secretary." The Secretary of Revenue of the Commonwealth.
"Supplemental tax credit." The Returning Heroes Supplemental
Tax Credit established under this chapter.
"Tax Reform Code." The act of March 4, 1971 (P.L.6, No.2),
known as the Tax Reform Code of 1971.
"Taxpayer." An entity subject to tax under Article III, IV
or VI of the Tax Reform Code. The term includes the shareholder
of a Pennsylvania S corporation that receives a Returning Heroes
Supplemental Tax Credit.
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§ 4403. Establishment.
There is established a tax credit program to be known as the
Returning Heroes Supplemental Tax Credit Program. The program
shall provide supplemental tax credits to taxpayers who receive
a Federal Returning Heroes Tax Credit and meet the program
requirements.
§ 4404. Application.
(a) General rule.--By September 15, 2019, a taxpayer must
submit an application and proof to the department of all Federal
Returning Heroes Tax Credits that were awarded to the taxpayer
during tax years 2018 and 2019. By September 15 of each
subsequent year, a taxpayer must submit an application and proof
to the department of all Federal Returning Heroes Tax Credits
that were awarded to the taxpayer in the prior taxable year.
(b) Amount.--A taxpayer who receives a Federal Returning
Heroes Tax Credit shall be eligible to receive from the
department a supplemental tax credit of $2,000.
(c) Notification.--By December 15 of the calendar year
following the close of the taxable year during which a Federal
Returning Heroes Tax Credit was awarded to the taxpayer, the
department shall notify the taxpayer if its supplemental tax
credit application was approved or denied. If the application is
denied, the department shall state the reasons for the denial,
including a description of deficiencies in the application.
§ 4405. Carryover, carryback, refund and assignment.
(a) Carryover.--If the taxpayer cannot use the entire amount
of the supplemental tax credit for the taxable year in which the
supplemental tax credit is first approved, the excess may be
carried over to the succeeding taxable years and used as a
credit against the qualified tax liability of the taxpayer for
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those taxable years. Each time that the supplemental tax credit
is carried over to a succeeding taxable year, it shall be
reduced by the amount that was used as a credit during the
immediately preceding taxable year. The supplemental 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 credit.
(b) Application.--A supplemental tax credit approved by the
department 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 credit.--A taxpayer is not entitled to assign,
carry back or obtain a refund of an unused supplemental tax
credit.
§ 4406. Limitation on credits.
(a) Total amount.--The total amount of supplemental tax
credits approved by the department may not exceed $20,000,000 in
any fiscal year.
(b) Allocation.--Tax credits shall be allocated by the
department on a first-come, first-served basis.
§ 4407. Shareholder, owner or member of pass-through entity.
(a) Shareholder.--If a Pennsylvania S corporation does not
have an eligible tax liability against which the supplemental
tax credit may be applied, a shareholder of the Pennsylvania S
corporation is entitled to a supplemental 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.
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(b) Pass-through entity.--If a pass-through entity other
than a Pennsylvania S corporation does not have an eligible tax
liability against which the supplemental tax credit may be
applied, an owner or member of the pass-through entity is
entitled to a supplemental 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) Additional credit.--The supplemental tax credit provided
under subsection (a) or (b) shall be in addition to any other
tax credit to which a shareholder, owner or member of a pass-
through entity is entitled under this chapter, except that a
pass-through entity and a shareholder, owner or member of a
pass-through entity may not claim a supplemental tax credit
under this chapter for the same expense.
§ 4408. Reports.
The secretary shall submit an annual report to the General
Assembly indicating the use and effectiveness of the
supplemental tax credits no later than March 15 following the
year in which the credits were approved. The report shall
include the names of all businesses utilizing the supplemental
tax credits as of the date of the report and the amount of
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 also include any recommendations for changes in
the calculation or administration of the credit.
§ 4409. Regulations.
The secretary shall promulgate regulations necessary for the
implementation and administration of this chapter.
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§ 4410. Applicability.
This chapter shall apply to taxpayers receiving Federal
Returning Heroes Tax Credits during tax years beginning after
December 31, 2018.
Section 2. This act shall take effect immediately.
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