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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE BILL |
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| INTRODUCED BY REICHLEY, PETRI, BEYER, CLYMER, CREIGHTON, GEIST, GROVE, HESS, KILLION, KORTZ, MELIO, MILNE, MURT, MUSTIO, PICKETT, PYLE, RAPP, READSHAW, ROSS, SIPTROTH, SWANGER, VULAKOVICH, WATSON, YOUNGBLOOD AND QUINN, MARCH 11, 2009 |
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| REFERRED TO COMMITTEE ON FINANCE, MARCH 11, 2009 |
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| AN ACT |
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1 | Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An |
2 | act relating to tax reform and State taxation by codifying |
3 | and enumerating certain subjects of taxation and imposing |
4 | taxes thereon; providing procedures for the payment, |
5 | collection, administration and enforcement thereof; providing |
6 | for tax credits in certain cases; conferring powers and |
7 | imposing duties upon the Department of Revenue, certain |
8 | employers, fiduciaries, individuals, persons, corporations |
9 | and other entities; prescribing crimes, offenses and |
10 | penalties," providing for a biotechnology services tax |
11 | credit. |
12 | The General Assembly of the Commonwealth of Pennsylvania |
13 | hereby enacts as follows: |
14 | Section 1. The act of March 4, 1971 (P.L.6, No.2), known as |
15 | the Tax Reform Code of 1971, is amended by adding an article to |
16 | read: |
17 | ARTICLE XVII-F |
18 | BIOTECHNOLOGY SERVICES TAX CREDIT |
19 | Section 1701-F. Scope of article. |
20 | This article relates to biotechnology services tax credits. |
21 | Section 1702-F. Definitions. |
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1 | The following words and phrases when used in this article |
2 | shall have the meanings given to them in this section unless the |
3 | context clearly indicates otherwise: |
4 | "Biotechnology services." The use or utilization of |
5 | biological systems, living organisms or derivatives thereof in a |
6 | technological application to make or modify products or |
7 | processes for specific use. |
8 | "Department." The Department of Revenue of the Commonwealth. |
9 | "Pass-through entity." Any of the following: |
10 | (1) A partnership, limited partnership, limited |
11 | liability company, business trust or other unincorporated |
12 | entity that for Federal income tax purposes is taxable as a |
13 | partnership. |
14 | (2) A Pennsylvania S corporation. |
15 | "Qualified biotechnology services expense." Costs or |
16 | expenses incurred by an entity in the biotechnology services |
17 | industry to relocate in this Commonwealth or to establish a |
18 | presence in this Commonwealth. |
19 | "Qualified tax liability." The liability for taxes imposed |
20 | under Article III, IV or VI. The term shall include the |
21 | liability for taxes imposed under Article III on an owner of a |
22 | pass-through entity. |
23 | "Secretary." The Secretary of Revenue of the Commonwealth. |
24 | "Tax credit." The biotechnology services tax credit |
25 | authorized under this article. |
26 | "Taxpayer." An entity subject to tax under Article III, IV |
27 | or VI that is eligible for a tax credit under this article. The |
28 | term shall include the shareholder, owner or member of a pass- |
29 | through entity that receives a tax credit. |
30 | Section 1703-F. Credit for biotechnology services. |
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1 | (a) Application.--A taxpayer who incurs a qualified |
2 | biotechnology services expense in a taxable year may claim a tax |
3 | credit as provided in this article. By September 15, a taxpayer |
4 | must submit an application to the department for biotechnology |
5 | services incurred in the taxable year that ended in the prior |
6 | calendar year. |
7 | (b) Amount.--A taxpayer that is qualified under subsection |
8 | (a) shall receive a tax credit for the taxable year in the |
9 | amount of 30% of the qualified biotechnology services expense. |
10 | (c) Notification.--By December 15 of the calendar year |
11 | following the close of the taxable year during which the |
12 | qualified biotechnology services expense was incurred, the |
13 | department shall notify the taxpayer of the amount of the |
14 | taxpayer's tax credit approved by the department. |
15 | Section 1704-F. Carryover, carryback, refund and assignment of |
16 | credit. |
17 | (a) General rule.--If the taxpayer cannot use the entire |
18 | amount of the tax credit for the taxable year in which the tax |
19 | credit is first approved, then the excess may be carried over to |
20 | succeeding taxable years and used as a credit against the |
21 | qualified tax liability of the taxpayer for those taxable years. |
22 | Each time that the tax credit is carried over to a succeeding |
23 | taxable year, it is to be reduced by the amount that was used as |
24 | a credit during the immediately preceding taxable year. The tax |
25 | credit may be carried over and applied to succeeding taxable |
26 | years for no more than 15 taxable years following the first |
27 | taxable year for which the taxpayer was entitled to claim the |
28 | credit. |
29 | (b) Application.--A tax credit approved by the department |
30 | for a qualified biotechnology services expense in taxable year |
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1 | first shall be applied against the taxpayer's qualified tax |
2 | liability for the current taxable year as of the date on which |
3 | the credit was approved before the tax credit is applied against |
4 | any tax liability under subsection (a). |
5 | (c) Unused credit.--A taxpayer may not assign, carry back or |
6 | obtain a refund of an unused tax credit. |
7 | Section 1705-F. Time limitations. |
8 | A taxpayer is not entitled to a tax credit for qualified |
9 | biotechnology services expenses incurred in taxable years ending |
10 | after December 31, 2013. The department shall not approve a tax |
11 | credit under this article for taxable years ending after |
12 | December 31, 2013. |
13 | Section 1706-F. Limitation on credits. |
14 | (a) Total credit limitation.--The total amount of tax |
15 | credits approved by the department shall not exceed $40,000,000 |
16 | in any fiscal year. |
17 | (b) Proration.--If the total amount of tax credits applied |
18 | for by all taxpayers exceeds the amount allocated for those |
19 | credits, the tax credit to be received by each applicant shall |
20 | be prorated by the department among all applicants who have |
21 | qualified for the credit. |
22 | Section 1707-F. Shareholder, owner or member pass-through. |
23 | (a) Pennsylvania S corporation.--If a Pennsylvania S |
24 | corporation does not have an eligible tax liability against |
25 | which the tax credit may be applied, a shareholder of the |
26 | Pennsylvania S corporation is entitled to a tax credit equal to |
27 | the tax credit determined for the Pennsylvania S corporation for |
28 | the taxable year multiplied by the percentage of the |
29 | Pennsylvania S corporation's distributive income to which the |
30 | shareholder is entitled. |
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1 | (b) Non-Pennsylvania S corporation.--If a pass-through |
2 | entity other than a Pennsylvania S corporation does not have an |
3 | eligible tax liability against which the tax credit may be |
4 | applied, an owner or member of that pass-through entity is |
5 | entitled to a tax credit equal to the tax credit determined for |
6 | the pass-through entity for the taxable year multiplied by the |
7 | percentage of the pass-through entity's distributive income to |
8 | which the owner or member is entitled. |
9 | (c) Additional credit.--The credit provided under subsection |
10 | (a) or (b) is in addition to any tax credit to which a |
11 | shareholder, owner or member of a pass-through entity is |
12 | otherwise entitled under this article. A pass-through entity and |
13 | a shareholder, owner or member of a pass-through entity may not |
14 | claim a credit under this article for the same qualified |
15 | biotechnology services expense. |
16 | Section 1708-F. Report. |
17 | The secretary shall annually report to the General Assembly |
18 | indicating the effectiveness of the credit provided by this |
19 | article no later than March 15 following the year in which the |
20 | credits were approved. The report shall include the names of all |
21 | taxpayers utilizing the credit as of the date of the report and |
22 | the amount of credits approved and utilized by each taxpayer. |
23 | Notwithstanding any law providing for the confidentiality of tax |
24 | records, the information contained in the report shall be public |
25 | information. The report may also include recommendations for |
26 | changes in the calculation or administration of the credit. |
27 | Section 1709-F. Regulations. |
28 | The secretary shall promulgate regulations necessary for the |
29 | implementation and administration of this article. |
30 | Section 2. This act shall take effect immediately. |
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