Pennsylvania HB 775: An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, providing for phoenix employee and returnship tax credits; and imposing penalties.

Bill Text

PRINTER'S NO. 797
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 775
Session of
2025
INTRODUCED BY HOWARD, GIRAL, KENYATTA, SANCHEZ, HILL-EVANS,
SCHLOSSBERG AND GREEN, MARCH 3, 2025
REFERRED TO COMMITTEE ON FINANCE, MARCH 3, 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," providing for phoenix employee and returnship tax
credits; and imposing penalties.
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-M
PHOENIX EMPLOYEE AND RETURNSHIP TAX CREDITS
Section 1701-M. 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:
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"Company." A corporation, partnership, limited liability
company, limited liability partnership, business trust,
affiliate, unincorporated joint venture or other business entity
doing business in this Commonwealth.
"Department." The Department of Revenue of the Commonwealth.
"Educational program." A program offered by a secondary
school or institution of higher education. The term does not
include trainings or classes taken to maintain an occupational
licensure or certification.
"Occupation of high demand." An occupation that has a
shortage of qualified individuals to fill working positions as
determined by the department in consultation with the Department
of Labor and Industry.
"Phoenix employee." An employee or prospective employee who
has not been enrolled in an educational program within the last
three years and meets one of the following:
(1) has been out of the workforce for two years; or
(2) has been hired into a position that would increase
the employee's earnings by at least 50% over the employee's
previous company.
"Phoenix employee tax credit." A phoenix employee tax credit
issued under section 1703-M.
"Returnship." A paid internship that reintroduces a phoenix
employee into the workforce or an industry , with the intent of
the company to hire the phoenix employee into a permanent,
substantially similar position .
"Returnship tax credit." A tax credit issued under section
1704-M.
Section 1702-M. Eligibility.
To be eligible to receive a phoenix employee tax credit or
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returnship tax credit under this article for occupations of high
demand under this article, a company must demonstrate to the
department:
(1) The ability to hire or create jobs for phoenix
employees.
(2) The ability to provide applicable training and
resources for phoenix employees who are reentering the
workforce.
(3) A signed statement stating the intent to retain a
phoenix employee for at least three years.
(4) A signed statement stating the intent to maintain
operations in this Commonwealth for a period of five years
from the date the company submits a phoenix employee tax
credit or returnship tax credit certificate to the
department.
Section 1703-M. Phoenix employee tax credit.
(a) Maximum amount.--A company may claim a phoenix employee
tax credit equal to two times the percentage of the State
personal income tax, prior to deductions, imposed on a phoenix
employee within the company.
(b) Evidence of phoenix employee.--The company shall submit
the following evidence that the employee meets qualifications of
a phoenix employee:
(1) Evidence of a phoenix employee's salary from
previous employment, if applicable.
(2) Evidence of a phoenix employee's previous enrollment
in an educational program, including photographic or written
evidence of a degree or diploma, photographic or written
evidence of enrollment in an educational program or other
form of evidence deemed acceptable by the department.
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(3) Evidence that a job was created to hire a phoenix
employee, if applicable.
(c) Applicable taxes.--A company may apply the phoenix
employee tax credit to 100% of the company's State corporate net
income tax, capital stock and franchise tax or the capital stock
and franchise tax of a shareholder of the company if the company
is a Pennsylvania S corporation, gross premiums tax, gross
receipts tax, bank and trust company shares tax, mutual thrift
institution tax, title insurance company