ARTICLE
3 September 2019

Worth Another Look: Tax Reform Code

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Wrapping up by the June 30 deadline with time to spare, the General Assembly sent the Governor all of the legislative pieces necessary for a balanced 2019-2020 state spending plan.
United States Tax

Wrapping up by the June 30 deadline with time to spare, the General Assembly sent the Governor all of the legislative pieces necessary for a balanced 2019-2020 state spending plan. This year included all possible "Code bills:" Administrative Code, Fiscal Code, Human Services Code, Public School Code and Tax Code. Below is a summary of this year's Tax Code, H.B. 262. The bill passed in the House of Representatives by a vote of Y:194/N:3 and in the Senate by a vote of Y:44/N:6.

  • Provides updates to the marketplace seller tax provisions, including requiring vendors (marketplace sellers and facilitators) with at least $100,000 to collect and remit sales tax.
  • Provides sales tax rules for Pennsylvania breweries.
  • Exempts the sale at retail or use of food and beverages by nonprofit associations which support youth centers from the sales and use tax.
  • Exempts the sale at retail or use of food and beverages by a volunteer firemen's organization to raise funds for the purposes of the volunteer firemen's organization from the sales and use tax.
  • Exempts the sale at retail of building materials and supplies used for the construction or repair of an animal housing facility from the sales and use tax.
  • Updates the state's personal income tax provisions to conform with the federal Opportunity Zones Program.
  • Excludes the value of a medal awarded by or prize money received from the Olympic or Paralympic Games from state income taxes.
  • Provides a space on the state's individual income tax reform form for individuals to contribute to the Veterans' Trust Fund.
  • Allows an executor of an estate to treat the income of a trust as part of the estate and elect to file a joint tax return for the estate.
  • Requires that any personal income tax return prepared by a paid tax return preparer be signed by preparer and bear the preparer's tax identification number.
  • Expands the Manufacturing Innovation and Reinvestment Program, which encourages increased investment and job creation through manufacturing.
  • Exempts the transfer of real estate to a qualified beginner farmer from the realty transfer tax.
  • Increases the limit of the amount transferred from the General Fund to the Pennsylvania Housing Affordability and Rehabilitation Enhancement (PHARE) Fund from $25 million to $40 million. PHARE assists with the creation, rehabilitation, and support of affordable housing.
  • Updates provisions relating to the Film Production Tax Credit, including increasing the cap from $65 million to $70 million per fiscal year.
  • Updates provisions relating to the Concert Rehearsal and Tour Tax Credit, including increasing the cap from $4 million to $8 million per fiscal year.
  • Updates provisions relating to the Resource Enhancement and Protection Tax Credit, including increasing the cap from $10 million to $13 million per fiscal year.
  • Updates provisions relating to the Historic Preservation Incentive Tax Credit, including extending the sunset date from 2020 to 2031 and increasing the cap from $3 million to $5 million per fiscal year.
  • Updates provisions relating to the Coal Refuse Reclamation Tax Credit, including extending the sunset date from 2026 to 2036 and increasing the cap from 410 million to $20 million per fiscal year.
  • Ends the Job Creation Tax Credit program on June 30, 2020.
  • Updates provisions relating to the Rural Jobs and Investment Tax Credit, including increasing the cap from $1 million per year over four years to $6 million per year over five years.
  • Provides "youth and adolescent development services" as an eligible activity to receive a tax credit under the Neighborhood Assistance Program, and allocates no more than $2 million toward those services.
  • Designates additional Keystone Opportunity Expansion Zones.
  • Increases the cap from $2 million to $3 million per fiscal year for the Mixed-Use Development Tax Credit.
  • Eliminates the inheritance tax for a transfer of property to or for the use of a child 21 years or younger from a parent.
  • Extends the sunset date of the two percent tax games tax from 2019 to 2021.
  • Clarifies the definition of "exclusive use, consumption and utilization" for determining sales and use taxes within a Strategic Development Area.
  • Increases the Computer Data Center Equipment Incentive Program cap for sales and use tax refunds from $5 million to $7 million per fiscal year.
  • Treats charter schools the same as school districts in relation to the exemption from the surplus lines tax.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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