Regular Session 2019-2020 Senate Bill 1077 P.N. 1561

PRINTER'S NO. 1561

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

1077

Session of

2020

INTRODUCED BY COLLETT, BROWNE, FONTANA, FARNESE, SANTARSIERO,

HUGHES, TARTAGLIONE, COSTA AND MUTH, MARCH 9, 2020

REFERRED TO FINANCE, MARCH 9, 2020

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 public works impacted business 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 XVIII-I

PUBLIC WORKS IMPACTED

BUSINESS TAX CREDIT

Section 1801-I. Scope of article.

This article relates to tax credits to owners of businesses

which experience a loss in personal income or corporate net

income or gross receipts in a given tax year directly

attributable to obstructions to the business by a public works

project.

Section 1802-I. Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Department." The Department of Revenue of the Commonwealth

of Pennsylvania.

"Lost corporate net income." The reduction between the net

income of a public works impacted business at the location where

and in the tax year in which the business obstruction occurred

and the average net income of the business in the two preceding

tax years.

"Lost gross receipts." The reduction between the gross

receipts of a public works impacted business at the location

where and in the tax year in which the business obstruction

occurred and the average gross receipts of the distressed

business in the two preceding tax years.

"Public works impacted business." A business that meets the

eligibility criteria under section 1803-I.

"Public works project." A publicly funded construction

project undertaken by the United States, the Commonwealth of

Pennsylvania, a political subdivision of the Commonwealth of

Pennsylvania, an authority or other governmental or quasi-

governmental agency for the benefit or use of the general

public. Public works may not include privately owned utilities.

"Qualified taxpayer." A public works impacted business that

is required to remit taxes to the Commonwealth under Articles

II, IV or XI, which meets the criteria in section 1803-I.

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"Tax credit." The public works impacted business tax credit.

Section 1803-I. Claim of tax credit.

(a) General rule.--A qualified taxpayer may claim a tax

credit against the qualified tax liability of the qualified

taxpayer if the qualified taxpayer meets all of the following

eligibility criteria:

(1) The public works impacted business must be within

2,000 feet of the site of a public works project.

(2) For at least 30 days, the public works project must

substantially obstruct customer access to the place of

business of the public works impacted business, otherwise

deter business or substantially obscure the place of business

to the extent that the existence of the place of business or

the fact that the business is open may not be ascertained

from the street.

(3) One of the following:

(i) A public works impacted business must suffer

loss of net income in an amount that is at least 10% of

the business's total net income in the tax year in which

the business obstruction occurred.

(ii) A public works impacted business must suffer

loss of gross receipts in an amount that is at least 10%

of the business's total receipts in the tax year in which

the business obstruction occurred.

(b) Maximum amount.--Subject to subsection (c), the

department may award a qualified taxpayer a tax credit not to

exceed 20% of the amount of the public works impacted business's

lost net income and lost gross receipts amount.

$20,000 to a qualified taxpayer.

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Section 1804-I. Application and approval of tax credit.

(a) Application.--An application by a qualified taxpayer for

a tax credit shall be in the form and manner as the department

specifies and shall include documentation that the business

meets all the eligibility criteria under section 1803-I(a). The

documentation shall include a letter from the political

subdivision in which the public works project has occurred

attesting to the existence of the public works project and any

of the following:

(1) photographs clearly depicting the business

obstruction under section 1803-I(a)(2);

(2) evidence documenting the proximity of the business

to a public works project under section 1803-I(a)(1);

(3) lost net income under section 1803-I(a)(3)(i);

(4) lost gross receipts under section 1803-I(a)(3)(ii)

for the duration of the public works project; and

(5) other proof as the department may require.

(b) Review and approval.--No later than March 20, 2021, and

each year thereafter, the department shall review and approve or

disapprove the applications for a tax credit.

tax credit to 100% of the qualified taxpayer's tax liability.

(d) Availability.--A tax credit shall be made available by

the department on a first-come, first-served basis.

(e) Transfers.--By July 1, 2020, and each July 1 thereafter,

the sum of $5,000,000 shall be transferred from the General Fund

to the department for tax credits under this article.

Section 2. This act shall apply to losses sustained on or

after the effective date of this act.

Section 3. This act shall take effect in 60 days.

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