Pennsylvania HB 1129: An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in corporate net income tax, repealing provisions relating to penalties and to repealer and effective date; establishing the Net Operating Loss Transfer Program; and imposing penalties.

Bill Text

PRIOR PRINTER'S NO. 1258 PRINTER'S NO. 2065
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1129
Session of
2025
INTRODUCED BY FRIEL, FRITZ, HANBIDGE, PIELLI, GIRAL, VENKAT,
SANCHEZ, CEPEDA-FREYTIZ, MALAGARI, DONAHUE, HILL-EVANS,
ZIMMERMAN, WEBSTER, GREEN AND BRENNAN, APRIL 4, 2025
AS REPORTED FROM COMMITTEE ON FINANCE, HOUSE OF REPRESENTATIVES,
AS AMENDED, JULY 1, 2025
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, repealing provisions
relating to penalties and to repealer and effective date;
establishing the Net Operating Loss Transfer Program; and
imposing penalties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Parts VII and VIII of Article IV of the act of
March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
1971, are repealed:
[PART VII
PENALTIES
Section 410. Penalties.--(a) Any person violating any of
the provisions of section 409 shall be guilty of a misdemeanor,
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

and shall, upon conviction thereof, be sentenced to pay a fine
not exceeding one thousand dollars ($1,000) and costs of
prosecution, or to undergo imprisonment for not more than six
months, or both.
(b) Any person who shall wilfully make a false and
fraudulent return of taxable income made taxable by this
article, shall be guilty of wilful and corrupt perjury, and,
upon conviction thereof, shall be subject to punishment as
provided by law. Such penalty shall be in addition to any other
penalties imposed by this article.
(c) Any person, who wilfully fails, neglects, or refuses to
make a report or to pay the tax as herein prescribed, or who
shall refuse to permit the department to examine the books,
papers, and records of any corporation liable to pay tax under
this article, shall be guilty of a misdemeanor, and, upon
conviction thereof, shall be sentenced to pay a fine not
exceeding one thousand dollars ($1,000) and costs of
prosecution, or to undergo imprisonment not exceeding six
months, or both. Such penalty shall be in addition to any other
penalties imposed by this article.
PART VIII
REPEALER; EFFECTIVE DATE
Section 411. Repeal.--The act of May 16, 1935 (P.L.208),
known as the "Corporate Net Income Tax Act," is repealed.
Section 412. Effective Date.--This article shall take effect
immediately, and the tax imposed shall apply to taxable years
beginning January 1, 1971 and thereafter.]
Section 2. Article IV of the act is amended by adding parts
to read:
PART IX
20250HB1129PN2065 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30

NET OPERATING LOSS TRANSFER PROGRAM
Section 421. Definitions.
The following words and phrases when used in this part shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Allowable expenditures." Costs incurred in connection with
the operation of an eligible business, including the expenses of
fixed assets, such as the construction, acquisition and
development of real estate, materials, start-up, tenant fit-out,
working capital, salaries and research and development
expenditures.
"Biotechnology." The continually expanding body of
fundamental knowledge about the functioning of biological
systems from the macro level to the molecular and subatomic
levels, including novel products, services, technologies and
subtechnologies developed as a result of insights gained from
research advances, which add to that body of fundamental
knowledge.
"Biotechnology business." A person that:
(1) has headquarters or base of operations located in
this Commonwealth; and DOES BUSINESS IN THIS COMMONWEALTH AND
FILES A CORPORATE NET INCOME TAX RETURN UNDER THIS ARTICLE;
AND
(2) is engaged in either of the following:
(i) the research, development, production or
provision of biotechnology for the purpose of developing
or providing products or processes for specific
commercial or public purposes, including medical,
pharmaceutical, nutritional and other health-related
purposes, agricultural purposes and environmental
20250HB1129PN2065 - 3 -
<--
<--
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30

purposes; or
(ii) the provision of services or products necessar y
for research, development, production or the provision of
a technology or biotechnology business.
"Cost." The expenses incurred in connection with the
operation of an eligible business in this Commonwealth,
including the expenses of fixed asse