Pennsylvania SB 191: An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in tax credit and tax benefit administration, further providing for definitions; in research and development tax credit, further providing for limitation on credits; and providing for Angel Investment Tax Credit.

Bill Text

PRINTER'S NO. 141
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 191
Session of
2025
INTRODUCED BY STREET, COSTA AND KANE, JANUARY 29, 2025
REFERRED TO FINANCE, JANUARY 29, 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 tax credit and tax benefit administration,
further providing for definitions; in research and
development tax credit, further providing for limitation on
credits; and providing for Angel Investment Tax Credit.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definition of "tax credit" in section 1701-
A.1 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
Reform Code of 1971, is amended by adding a paragraph to read:
Section 1701-A.1. 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:
* * *
"Tax credit." A tax credit authorized under any of the
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following:
* * *
(8.2) Article XVII-M.
* * *
Section 2. Section 1709-B(a) of the act is amended to read:
Section 1709-B. Limitation on Credits.--(a) The total
amount of credits approved by the department shall not exceed
[sixty million dollars ($60,000,000)] one hundred million
dollars ($100,000,000) in any fiscal year. Of that amount,
[twelve million dollars ($12,000,000)] twenty million dollars
($20,000,000) shall be allocated exclusively for small
businesses. However, if the total amounts allocated to either
the group of applicants exclusive of small businesses or the
group of small business applicants is not approved in any fiscal
year, the unused portion will become available for use by the
other group of qualifying taxpayers.
* * *
Section 3. The act is amended by adding an article to read:
ARTICLE XVII-M
ANGEL INVESTMENT TAX CREDIT
Section 1701-M. Scope of article.
This article relates to the Angel Investment Tax Credit.
Section 1702-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:
"Accredited investor." Any of the following:
(1) An individual whose net worth or joint net worth
with the individual's spouse exceeds $1,000,000.
(2) An individual who had individual income in excess of
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$200,000 in each of the two most recent years or joint income
with that individual's spouse in excess of $300,000 in each
of those years and has a reasonable expectation of reaching
the same income level in the current year.
(3) An entity in which all of the equity owners meet
paragraph (1) or (2).
"Business plan." An outline of business structure and a
formal statement of business goals, including an explanation of
how the goals are anticipated to be achieved.
"Department." The Department of Community and Economic
Development of the Commonwealth.
"Pass-through entity." A partnership as defined in section
301(n.0) or a Pennsylvania S corporation as defined in section
301(n.1).
"Program." The Angel Investment Tax Credit Program
established in this article.
"Qualified business venture." A business that meets all of
the following criteria:
(1) Is headquartered or that will establish its
headquarters in this Commonwealth prior to the time that the
taxpayer is eligible to apply for the tax credit.
(2) Maintains its headquarters in this Commonwealth for
at least five years after the taxpayer applied for the tax
credit.
(3) Employs at least 51% of its employees in this
Commonwealth at the time that the taxpayer applies for the
tax credit.
(4) Has fewer than 100 employees at the time that the
taxpayer applies for the tax credit.
(5) Has been in operation in this Commonwealth for not
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more than five consecutive years at the time that the
taxpayer applies for the tax credit.
(6) Has not received more than $2,000,000, in the
aggregate, in private equity investments of which not more
than $1,000,000 was invested by a single investor.
"Qualified investment." A payment of money or its equivalent
for a private equity interest in a qualified business venture.
"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