United States: Worth Another Look: Tax Reform Code

Last Updated: September 3 2019
Article by Buchanan Government Relations

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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