Bill Text: PA HB674 | 2011-2012 | Regular Session | Introduced

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Bill Title: Providing for a biotechnology services tax credit.

Spectrum: Slight Partisan Bill (Republican 13-6)

Status: (Introduced - Dead) 2011-02-14 - Referred to FINANCE [HB674 Detail]

Download: Pennsylvania-2011-HB674-Introduced.html

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PRINTER'S NO. 674
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 674 Session of2011
INTRODUCED BY REICHLEY, PETRI, THOMAS, CALTAGIRONE, CLYMER, GEIST, HARHART, HESS, KILLION, MILNE, M. O'BRIEN, READSHAW, ROSS, SWANGER, WAGNER AND WATSON, FEBRUARY 14, 2011
REFERRED TO COMMITTEE ON FINANCE, FEBRUARY 14, 2011
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 a biotechnology services 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 XVII-G
BIOTECHNOLOGY SERVICES TAX CREDIT
Section 1701-G. Scope of article.
This article relates to biotechnology services tax credits.
Section 1702-G. 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:
"Biotechnology services." The use or utilization of
biological systems, living organisms or derivatives thereof in a
technological application to make or modify products or
processes for specific use.
"Department." The Department of Revenue of the Commonwealth.
"Pass-through entity." Any of the following:
(1) A partnership, limited partnership, limited
liability company, business trust or other unincorporated
entity that for Federal income tax purposes is taxable as a
partnership.
(2) A Pennsylvania S corporation.
"Qualified biotechnology services expense." Costs or
expenses incurred by an entity in the biotechnology services
industry to relocate in this Commonwealth or to establish a
presence in this Commonwealth.
"Qualified tax liability." The liability for taxes imposed
under Article III, IV or VI. The term shall include the
liability for taxes imposed under Article III on an owner of a
pass-through entity.
"Secretary." The Secretary of Revenue of the Commonwealth.
"Tax credit." The biotechnology services tax credit
authorized under this article.
"Taxpayer." An entity subject to tax under Article III, IV
or VI that is eligible for a tax credit under this article. The
term shall include the shareholder, owner or member of a pass-
through entity that receives a tax credit.
Section 1703-G. Credit for biotechnology services.
(a) Application.--A taxpayer who incurs a qualified
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biotechnology services expense in a taxable year may claim a tax
credit as provided in this article. By September 15, a taxpayer
must submit an application to the department for biotechnology
services incurred in the taxable year that ended in the prior
calendar year.
(b) Amount.--A taxpayer that is qualified under subsection
(a) shall receive a tax credit for the taxable year in the
amount of 30% of the qualified biotechnology services expense.
(c) Notification.--By December 15 of the calendar year
following the close of the taxable year during which the
qualified biotechnology services expense was incurred, the
department shall notify the taxpayer of the amount of the
taxpayer's tax credit approved by the department.
Section 1704-G. Carryover, carryback, refund and assignment of
credit.
(a) General rule.--If the taxpayer cannot use the entire
amount of the tax credit for the taxable year in which the tax
credit is first approved, then the excess may be carried over to
succeeding taxable years and used as a credit against the
qualified tax liability of the taxpayer for those taxable years.
Each time that the tax credit is carried over to a succeeding
taxable year, it is to be reduced by the amount that was used as
a credit during the immediately preceding taxable year. The 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 tax credit approved by the department
for a qualified biotechnology services expense in taxable year
first shall be applied against the taxpayer's qualified tax
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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 may not assign, carry back or
obtain a refund of an unused tax credit.
Section 1705-G. Time limitations.
A taxpayer is not entitled to a tax credit for qualified
biotechnology services expenses incurred in taxable years ending
after December 31, 2013. The department shall not approve a tax
credit under this article for taxable years ending after
December 31, 2013.
Section 1706-G. Limitation on credits.
(a) Total credit limitation.--The total amount of tax
credits approved by the department shall not exceed $40,000,000
in any fiscal year.
(b) Proration.--If the total amount of tax credits applied
for by all taxpayers exceeds the amount allocated for those
credits, the tax credit to be received by each applicant shall
be prorated by the department among all applicants who have
qualified for the credit.
Section 1707-G. Shareholder, owner or member pass-through.
(a) Pennsylvania S corporation.--If a Pennsylvania S
corporation does not have an eligible tax liability against
which the tax credit may be applied, a shareholder of the
Pennsylvania S corporation is entitled to a 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.
(b) Non-Pennsylvania S corporation.--If a pass-through
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entity other than a Pennsylvania S corporation does not have an
eligible tax liability against which the tax credit may be
applied, an owner or member of that pass-through entity is
entitled to a 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 credit provided under subsection
(a) or (b) is in addition to any tax credit to which a
shareholder, owner or member of a pass-through entity is
otherwise entitled under this article. A pass-through entity and
a shareholder, owner or member of a pass-through entity may not
claim a credit under this article for the same qualified
biotechnology services expense.
Section 1708-G. Report.
The secretary shall annually report to the General Assembly
indicating the effectiveness of the credit provided by this
article no later than March 15 following the year in which the
credits were approved. The report shall include the names of all
taxpayers utilizing the credit 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 recommendations for
changes in the calculation or administration of the credit.
Section 1709-G. Regulations.
The secretary shall promulgate regulations necessary for the
implementation and administration of this article.
Section 2. This act shall take effect immediately.
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