THE TAX COMPENDIUM
APRIL 2021
DOP-03 10-20
Tom Wolf, Governor C. Daniel Hassell, Secretary of Revenue
THE SECRETARY (717) 783-3680
April 2021
Taxpayers of Pennsylvania:
On behalf of the Pennsylvania Department of Revenue, I am pleased to present a new edition of the
Pennsylvania Tax Compendium.
The Department of Revenue administers and enforces the state tax codes, while performing fiscal analysis
and budget planning for the Governor. In fiscal year 2019-20, the Department collected $32.3 billion in
revenue for the General Fund, $2.7 billion for the Motor License Fund and $628.2 million for the Gaming
Fund.
The Tax Compendium describes the basis, rate and history of Pennsylvania taxes and is intended for
research and background information. It is a general guide to Pennsylvania taxes, not a tax manual. The
Statistical Supplement for the Tax Compendium contains tax collections data, including historical data for
comparison purposes. Both reports are available on the Department’s website, www.revenue.pa.gov,
under Tax Information > News and Statistics > Reports and Statistics.
I encourage you to visit the Revenue Department’s website to explore the online services that the
Department offers. Taxpayers can file returns and reports, make payments, register businesses, ask
questions and file appeals electronically for Pennsylvania personal income and business taxes.
You can also stay on top of recent developments in the Department by visiting the website and signing up
to receive the Pennsylvania Tax Update, a bi-monthly electronic newsletter.
Sincerely,
C. Daniel Hassell
Secretary of Revenue
General Fund
1
Corporation Taxes
2
Corporate Net Income Tax 2
Gross Receipts Tax 5
Public Utility Realty Tax 7
Insurance Premiums Tax 8
Financial Institutions Tax 10
Consumption Taxes 12
Sales, Use, and Hotel Occupancy Taxes 12
Cigarette Tax
15
Other Tobacco Products Tax 17
Malt Beverage Tax 18
Liquor Tax 19
Other Taxes
20
Personal Income Tax 20
Realty Transfer Tax 24
Inheritance and Estate Taxes 26
Table Game Taxes 28
Fantasy Contest Tax 29
Interactive Gaming and Multi-Use Gaming Device Taxes
30
Sports Wagering Tax 31
Minor and Repealed Taxes 32
Non-Tax Revenue 34
Tax Credit Programs 35
Motor License Fund 74
Liquid Fuels Taxes 75
Oil Company Franchise Tax 75
Motor Carries Road Tax/ IFTA 77
Alternative Fuels Tax 78
Aviation Gasoline and Jet Fuel Taxes 79
Minor and Repealed Taxes
80
Motor Vehicle Licenses and Fees
81
Other Revenue 82
Other Special Funds
83
Public Transportation Fund Taxes and Fees
84
Public Transportation Trust Fund 86
Multimodal Transportation Fund 87
Lottery Fund 88
Gaming Fund 90
Video Gaming Fund 93
Recent Changes in Tax Law
94
Tax Summary
120
Furthermore, several specialized zones use tax revenues that would otherwise go to the General Fund for the purpose of economic
development within the zones.
law to special funds. Special funds receive monies set aside for particular purposes. The General Fund is the primary funding source
The corporate revenues component consists of taxes levied directly on business entities, with a tax on corporate income
constituting the bulk of revenues received. Taxes on utility, transportation, and communications companies, as well as
financial institutions, makes up the remainder.
The consumption taxes component of the General Fund is comprised of taxes on the purchase of goods and services by the
end consumer. These revenues are largely generated by the Sales and Use Taxes, with smaller amounts generated by
taxes on alcohol and tobacco products.
Other taxes included in the General Fund do not fall on a specific type of activity like those in the corporate and
consumption components. The personal income tax, which is assessed against eight types of income, is by far the largest
source of revenue for this component. Also included are taxes assessed on real estate transfers and inheritances. All of
the commonwealth’s taxes on gaming are included in this component, as well as a small amount of minor taxes and
residual payments on repealed taxes.
The non-tax component of General Fund revenue includes items such as licenses, fines, penalties, interest income,
miscellaneous revenues, escheated accounts, profits from the operation of Pennsylvania liquor stores, and transfers from
special funds.
education, health and human services, and protection of persons and property account for the majority of General Fund
1
Employment incentive payment credit adjustment
Current year bonus depreciation
Tax preference items
DEDUCTIONS
Corporate dividends received
Interest on US securities
An adjustment for bonus depreciation, that can result in both an addition to and a deduction from federal income.
Federal wages disallowed as a result of tax credits under IRC Sec 45B or IRC Sec 51.
owning capital or property in Pennsylvania. The tax is levied on federal taxable income with Pennsylvania modifications. If the
business of the corporation is not transacted entirely within Pennsylvania, taxable income is usually determined by a single sales
factor apportionment formula. Net operating loss deduction is allowed, with a current cap of 40% of taxable income.
and surety companies, and nonprofit corporations.
federal return must start with the taxable income which would have been shown on separate federal returns in order to arrive at the
Pennsylvania base.
business can take a deduction from their taxable income under the Corporate Net Income Tax, relative to investments in
manufacturing capacity.
2
YEAR RATE
1935 6.00%
1936 10.00%
1937 7.00%
1943 4.00%
1951 5.00%
1956 6.00%
1967 7.00%
1969 12.00%
1972 11.00%
1974 9.50%
1977 10.50%
1985 9.50%
1987 8.50%
1991 12.25%
1994 11.99%
1995 9.99%
TAX YEAR PROPERTY PAYROLL SALES
1994 and prior
33.3% 33.3% 33.3%
1995 to 1998 25.0% 25.0% 50.0%
1999 to 2006 20.0% 20.0% 60.0%
2007 and 2008 15.0% 15.0%
70.0%
2009 8.5% 8.5%
83.0%
Act 48-2009
2010 to 2012 5.0% 5.0%
90.0%
Act 48-2009
2013 and beyond 0.0% 0.0%
100.0%
Act 85-2012
Other apportionment methods are available for special industries.
LEGISLATION/NOTES
TAX RATE
Act 77-1986
The current tax rate of 9.99% has been in effect since tax year 1995.
The rate was 12% for the first half of 1972 and 11% for the second half.
Act 98-1977 temporarily raised the rate to 10.5%, and Act 246-1982 made this rate permanent
Act 94-1984
CORPORATE NET INCOME TAX
CONTINUED
PAYMENTS
Quarterly payments are due on the 15th day of the 3rd, 6th, 9th, and 12th months of the tax year. Final reports and payments are
due thirty days after the federal report is due, or would be due if the corporation were required to file federally. Extensions are
available for filing annual reports, but not for remitting payments.
APPORTIONMENT
For corporations whose entire business is not transacted within Pennsylvania, the income base may be allocated and apportioned to
determine income subject to taxation in Pennsylvania. Nonbusiness income is directly allocated within or without Pennsylvania.
Business income is usually apportioned based on the basis of property, payroll, and sales factors within and without Pennsylvania, as
follows:
LEGISLATION
Act 21-1995
Act 4-1999
Act 116-2006
Act 22-1991
Act 48-1994
Act 21-1995
The tax is paid on an estimated tax payment system, wherein prepayments are considered deposits as opposed to tentative liabilities.
Total prepayments must exceed 90% of reported annual liability, or 100% of the liability two years' prior (subject to current law).
Act 52 of 2013 clarified the rules for the sales apportionment factor with regard to sale of services for tax years beginning after
December 31, 2013. The sale, lease, rental or other use of real property occurs at the location of the real property. The rental, lease
or licensing of tangible personal property occurs at the location of first possession of the property. Sales of services occur at the point
of delivery of the services.
3
CARRY FORWARD
1 taxable year
2 taxable years
3 taxable years
2 taxable years (plus 1995)
1 taxable year (plus 1995 and 1996)
1995 through 1997
1995 tax year
10 taxable years
20 taxable years
TAX YEAR NOL CAP LEGISLATION
Uncapped
Suspended Act 22-1991
$500,000 Act 48-1994
$1 million
Act 21-1995
$2 million Act 4-1999
$3 million or 12.5% of taxable income Act 116-2006
$3 million or 15% of taxable income Act 116-2006
$3 million or 20% of taxable income Act 48-2009
$4 million or 25% of taxable income Act 52-2013
$5 million or 30% of taxable income Act 52-2013
30% of taxable income Act 43-2017
35% of taxable income Act 43-2017
40% of taxable income Act 43-2017
LEGISLATION
The enabling legislation is Article IV of the Tax Reform Code of 1971 (P.L. 6, No. 2), as amended.
Please refer to the Recent Changes in Tax Law section for additional information.
1999 to 2006
2017
2018
2019 and thereafter
2007 and 2008
2009
2010 to 2013
2014
2015 and 2016
1988
Pennsylvania Supreme Court's ruling in Nextel Communications of the Mid-Atlantic, Inc., v. Commonwealth of Pennsylvania, in which
LEGISLATION
Act 195-1979
Act 195-1979
Act 48-1994
Act 48-1994
Act 48-1994
Act 48-1994
Act 48-1994
Act 45-1998
Act 89-2002
1982 to 1990
1991 to 1994
1995
1996 to 1998
Pennsylvania Supreme Court. It was enacted as an emergency tax again in 1923 and in 1935. In 1957, the tax was made permanent
and was later codified into the Tax Reform Code.
TAX YEAR
1981
shows the number of years a loss may be carried forward.
1995 to 1997
1998 and thereafter
1989
1990 to 1993
1994
1982
1983 to 1987
4
TAX BASE
Passengers, baggage, oil and freight transported wholly within this State;
Certain telegraph or telephone and mobile telecommunications gross receipts are excludable, including:
Sales of access to the Internet;
Sales for resale of telecommunications services; and
Exemptions apply for electric light, waterpower, and hydro-electric companies as well, including:
Sales for resale;
companies; telephone, telegraph and mobile communications companies; electric light, water power and hydroelectric companies;
leased by corporations, associations, or individuals. Various gross receipts taxes are imposed upon private bankers; pipeline,
conduit, steamboat, canal, slack water navigation and transportation companies; telephone, telegraph and mobile
communications companies; electric light, water power and hydroelectric companies; express companies; palace car and sleeping
car companies; and freight and oil transportation companies.
Telegraph or telephone messages transmitted wholly within the state, and telegraph or telephone messages transmitted
in interstate commerce where such messages originate or terminate in this state and the charges for such messages are
billed to a service address in this state;
Mobile telecommunications services messages sourced to this commonwealth based on the place of primary use
standard; and
Sales of electric energy within this state, and certain sales of electric energy produced in Pennsylvania and made outside of
the state.
The sales of telephones, telephone handsets, modems, tablets and related accessories, including cases, chargers, holsters,
clips, hands-free devices, screen protectors and batteries.
Certain gross receipts received in connection with a nuclear generating facility which has experienced a major accident or
natural disaster;
Municipally owned or operated public utilities may exclude gross receipts derived from business done inside the limits of
the municipality; and
surcharge is calculated based on the amount of PURTA refunds during the prior fiscal year. Act 46–2003 excludes from the surcharge
gross receipts derived from providing mobile telecommunications services and telegraph or telephone messages transmitted in
Electric cooperative corporations are exempt from gross receipts tax on electric companies for sales within their service
territory.
5
Tax rates by sector are as follows:
TAX YEAR BASE RNR SURCHARGE TOTAL BASE SURCHARGE TOTAL
1999 44.0 -2.0 - 42.0 50.0 - 50.0
2000 44.0 6.0 - 50.0 50.0 - 50.0
2001 44.0 -1.0 - 43.0 50.0 - 50.0
2002 44.0 15.0 - 59.0 50.0 - 50.0
2003 44.0 15.0 - 59.0 50.0 - 50.0
2004 44.0 15.0 0.0 59.0 50.0 0.0 50.0
2005 44.0 15.0 0.6 59.6 50.0 0.6 50.6
2006 44.0 15.0 0.0 59.0 50.0 0.0 50.0
2007 44.0 15.0 1.2 60.2 50.0 1.2 51.2
2008 44.0 15.0 2.8 61.8 50.0 2.8 52.8
2009 44.0 15.0 0.0 59.0 50.0 0.0 50.0
2010 44.0 15.0 0.0 59.0 50.0 0.0 50.0
2011 44.0 15.0 1.6 60.6 50.0 1.6 51.6
2012 - PRESENT 44.0 15.0 0.0 59.0 50.0 0.0 50.0
PAYMENTS
Firms are required to file reports and remit tax payments annually by March 15th for taxable gross receipts in the prior year.
OTHER EXEMPTIONS
Various acts have made broad exemptions upon entities previously subject to the gross receipts tax:
Exemption
Effective Date
LEGISLATION
January 1, 2000
January 1, 2000
Railroads
Motor Carriers
Natural Gas
January 1, 1998
Act 7–1997 changed the gross receipts tax from a tentative to an estimated prepayment system effective for tax years beginning on
or after January 1, 1998. Under this system, prepayments are considered deposits as opposed to tentative liabilities.
Estimated payments are due March 15th for the current taxable year and must exceed 90 percent of reported annual liability, or 100
percent of the liability two years prior, subject to the current rate. The adequacy of these payments is judged retrospectively based on
the final return.
ELECTRIC
INTRASTATE TELECOM AND OTHER
Beginning July 1, 1993, the revenue raised from 0.25 mill of the tax collected during the fiscal year is transferred to the Alternative
Fuels Incentive Grant Fund pursuant to Act 166–1992.
The tax on gross receipts originated in 1864. In 1889 a revised gross receipts tax was enacted, and eventually codified. The enabling
legislation of the current Gross Receipts Tax is Article XI of the Tax Reform Code of 1971 (P.L. 6, No. 2), as amended.
Please refer to the Recent Changes in Tax Law section for additional information.
GROSS RECEIPTS TAX
CONTINUED
TAX RATE (continued)
January 1, 2017
Act 21-1995
Act 45-1998
Act 4-1999 & Act 21-1999
Sale for Resale of Telecommunications Services
Managed Care Organizations
Act 23-2000
Act 84-2016
Legislation
January 1, 1995
6
TAX BASE
PAYMENTS
LEGISLATION
a similar regulatory body. Public utilities furnishing sewage services and municipal authorities furnishing public utility service are
exempt from tax. The commonwealth imposes this tax on public utility realty in lieu of local real estate taxes and distributes the local
realty tax equivalent to local taxing authorities.
value of utility realty, which is defined as the assessed value of the realty, as adjusted by the common level ratio of the county in
which the realty is located. Exempt from the tax are easements, rights-of-way, pipe, rail or other lines, machinery or equipment
not affixed to the land, and certain property subject to local taxation. An amendment to the Constitution of Pennsylvania in 1968
provided for the state taxation of public utility realty.
7
The miscellaneous insurance taxes have the following due dates for payments and reports:
The marine insurance underwriting profits tax is due by June 1st.
members of mutual or stock insurance companies.
when the insured’s home state is Pennsylvania. All premiums of the insured are taxed at the full rate, no matter where the risk is
located.
commonwealth. The tax is levied on premiums, premium deposits, or assessments received in the course of doing business in the
on taxable companies incorporated in other states that impose a higher burden upon Pennsylvania companies doing business there.
from $100,000 to $1,100,000. Act 21–1995 exempted all sums paid or otherwise received by insurance companies as consideration
for annuity contracts from the insurance premiums tax base effective January 1, 1996.
profits in lieu of a tax on their premiums.
agent if such agent was involved in the placement. However, in the case of a policy placed without a surplus lines agent, the insured
must remit a report and payment of tax within 30 days of the date the insurance was procured. The insurance premiums tax on life
8
ASSOCIATED CREDITS
LEGISLATION
Please refer to the Recent Changes in Tax Law section for additional information.
or the Pennsylvania Property and Casualty Insurance Guaranty Association (PP&CIGA) for assessments paid to the guaranty
associations for the purpose of continuation of coverage for policyholders and claimants in the event of insolvency. The credits are to
be taken equally over five years, beginning the year after the assessment is paid and may not exceed certain percentages of taxable
sold $100 million in tax credits to qualified insurance companies via a bidding process. Insurance companies first claimed credits in
calendar year 2017 against insurance premiums tax liabilities for taxable years beginning on or after January 1, 2016. No more than
$20 million in credits may be claimed in any fiscal year, nor may they exceed a taxpayer’s insurance premiums tax liability for that
9
ENTITIES SUBJECT TO THE TAX
TAX BASE
the Title Insurance Companies Shares tax (TICT) are levied on the value of shares as of each January 1st. The Mutual Thrift
States obligations or Pennsylvania state and local obligations is excluded from the computation of net earnings on income. The
deduction of the portion of interest expense associated with tax-exempt income is disallowed. Apportionment of income to
Pennsylvania is permitted through payroll, receipts, and deposits factors. Mutual thrift institutions are permitted to carry forward net
operating losses a maximum of three years.
charitable, religious, or educational institutions). Additionally, a deduction is permitted for exempt federal obligations as a proportion
moving average of total equity capital, with a proportional exemption for United States obligations. For each year in the average,
total equity capital and deductions for United States obligations were determined by averaging the values as shown in the Report of
Condition for each quarter of the preceding calendar year.
obligations, effective for tax years beginning on January 1, 2014 and thereafter. Total bank equity capital and deductions for United
States obligations are determined by the most recent year-end values as shown in the Report of Condition. Effective January 1, 2018,
total number of shares divided into the book values of capital stock paid in, surplus and undivided profits, with a proportional
exemption for United States obligations. For each year in the average, book values and deductions for United States obligations are
10
TAX RATE
YEAR RATE YEAR RATE
1959 0.80% 1959 0.80%
1967 1.00% 1967 1.00%
1969 1.30% 1969 1.30%
1971 1.50% 1971 1.50%
1984 1.075% 1984 1.075%
1989 10.77% 1989 10.77%
1990 1.25% 1990 1.25%
2014 0.89%
2017 0.95%
YEAR RATE
1969 11.5%
1987 20.0%
1991 12.5%
1992 11.5%
PAYMENTS
APPORTIONMENT, ADJUSTMENTS, AND NEXUS
LEGISLATION
The enabling legislation is found in Articles VII, VIII and XV of the Tax Reform Code of 1971 (P.L. 6, No. 2)
Please refer to the Recent Changes in Tax Law section for additional information.
BST
TICT
LEGISLATION
LEGISLATION
Act 66-1983
Act 66-1983
Act 21-1989
Act 21-1989
Act 21-1989
Act 21-1989
Act 52-2013
Act 84-2016
MTIT
LEGISLATION
January 1, 1995. Apportionment was also established for domestic title insurance companies.
on receipts, rather than on payroll, receipts, and deposits. The act also expanded nexus by using a more customer-based definition of
changed the source for income in the receipts definition from the federal tax return to the Consolidated Reports of Condition and
clarified the deduction for goodwill generated from combination activity and the apportionment of receipts from investment and
trading assets and activity.
Act 106-1988
Act 21-1989
Act 21-1989
second preceding year, or by paying at least 90 percent of the reported annual liability for the current year. Final reports are due 105
days after the close of the fiscal year. Extensions are available for filing reports; however, no extensions are granted for payment of
11
YEAR RATE
1954 1.00%
1956 3.00%
1959 3.50%
1959 4.00%
1963 5.00%
1968 6.00%
ambassadors, ministers and consular officers of foreign governments, volunteer firemen's organizations, and certain institutions of
purely public charity.
others such as manufacturers, retail vendors, or licensed agents of the commonwealth.
is also imposed on certain services relating to such property and on the charge for specific business services. Major items exempt
from the tax include food (not ready-to-eat), most apparel, prescription and non-prescription drugs, and residential utilities. There
consumed in Pennsylvania where no Sales Tax is paid to a vendor.
the same person.
to the Supreme Court opinion in South Dakota v. Wayfair, Inc. The decision upheld South Dakota’s economic nexus statute, and
overturned a previous decision which required a business to have a physical presence in a state in order for it to be required to collect
that state’s sales tax. Economic nexus applies only to those persons who, in the previous twelve months, made more than $100,000
12
Intergovernmental Cooperation Authority Act for cities of the first class and the Second Class County Code, respectively. The
provisions parallel those under the state Sales, Use, and Hotel Occupancy Tax except the local levies are point-of-sale taxes.
COUNTY
CURRENT RATE
AUTHORIZING LEGISLATION
NOTABLE CHANGES
Philadelphia 2% Act 6-1991
Act 44-2009: increased rate from 1% to 2%;
Act 52-2013: permanently extended 2% rate
Allegheny
1%
Act 77-1993
property or services; leasing, renting, or using tangible personal property; or renting hotel rooms within the commonwealth. Vendor
licenses are renewable on a five-year cycle and may be suspended or revoked.
consumed in Pennsylvania where no sales tax is paid to a vendor. For example, the purchase may have been made out-of-state.
unless otherwise noted.
LIABILITY
FREQUENCY
MINIMUM
MAXIMUM
DUE DATES & PAYMENT
Semi-annual -- $75 annually
Return and payment due August 20th for January to June
period, February 20th for July to December period
Quarterly $75.01 annually $600.00
Return and payment due 20th day of April, July, October,
and January for the preceding calendar quarter
Monthly - No Prepayment $600.01 $24,999.99 Return and payment due 20th day of the following month
Monthly - Level 1 Prepayment $25,000.00 $99,999.99
Prepayment due 20th of same month, may be either 50
percent of the tax liability for the same month of the
previous year or greater than 50 percent of the actual tax
liability for the same month in the current year; return
and remaining payment due 20th of following month
Monthly - Level 2 Prepayment $100,000.00 --
Prepayment due 20th of same month, must be 50
percent of the tax liability for the same month of the
previous year; return and remaining payment due 20th of
following month
13
FREQUENCY
Monthly
Monthly
LEGISLATION
Please refer to the Recent Changes in Tax Law section for additional information.
Beginning in 2022-23, an annual transfer will occur from Motor Vehicle sales and Use Tax receipts. The amount of the transfer will be
the greater of the ratio of $450 million to FY 2020-21 motor vehicle Sales Tax receipts multiplied by current year Sales Tax receipts, or
$450 million.
A one-time transfer occurred in FY 2019-20 to the Tobacco Settlement Fund to replace monies deducted from the Master Settlement
Agreement for deposit in the Tobacco Revenue Bond Debt Service Account.
Previously, 1.22% of Sales and Use Tax receipts were transferred monthly to the Supplemental Public Transportation Account,
effective July 1, 1997, authorized under Act 3–1997. The transfer was capped at $75 million per fiscal year. Act 44–2007 replaced this
transfer by providing that 4.4% of Sales and Use Tax receipts be transferred monthly to the Public Transportation Transfer Fund,
effective July 1, 2007.
The sales, use, and hotel occupancy taxes were enacted in 1953 and later codified into the Tax Reform Code of 1971. The enabling
legislation is Article II of the Tax Reform Code of 1971 (P.L. 6, No. 2), as amended.
Commonwealth Financing Authority (CFA) Act 85-2016 July 2016
Amount necessary to make
payment for annual principal and
interest obligations
Monthly
Transit Revitalization Investment District (TRID) Act 151-2016 June 2016
$700,000 transfer for 20 calendar
years
Annual
Public Transportation Trust Fund (PTTF) Act 83-2013 FY 2022-23
Motor Vehicle receipts
Annual
See formula below
SALES, USE, AND HOTEL OCCUPANCY TAX
CONTINUED
RECURRING TRANSFERS
TRANSFER
LEGISLATION
EFFECTIVE
AMOUNT
Public Transportation Assistance Fund (PTAF)
Act 46-2003
July 2003
0.947% of total receipts
Public Transportation Trust Fund (PTTF)
Act 44-2007
July 2007
4.4% of total receipts
14
The Cigarette Tax is an excise tax levied on the sale or possession of cigarettes in Pennsylvania.
The current rate of 13 cents per cigarette has been in effect since August 1, 2016.
The tax is imposed at the following combined rates for the General Fund and special funds:
YEAR
1935
1947
1955
1959
1963
1967 October 13, 1967
1970 January 15, 1970
1991 August 19, 1991 Act 22-1991
2002 July 15, 2002 Act 89-2002
2004 January 7, 2004 Act 46-2003
2009 November 1, 2009 Act 48-2009
2016 August 1, 2016 Act 84-2016
Cigarette stamping agents, wholesalers, retailers, and vendors must be licensed.
$0.0800
$0.0500
$0.0675
$0.1300
RATE PER CIGARETTE
$0.0010
$0.0090
$0.0025
EFFECTIVE DATE
LEGISLATION
$0.0065
$0.0030
$0.0040
$0.0020
$0.0155
15
Two thirty firsts (2/31) of total receipts
Three thirty firsts (3/31) of total receipts
Two thirty firsts (2/31) of total receipts
$25.485 million annually
Local Cigarette Tax Fund
Please refer to the Recent Changes in Tax Law section for additional information.
TRANSFER
LEGISLATION
EFFECTIVE
AMOUNT
$30.73 million annually
Agricultural Conservation Easement
Purchase Fund
Act 22-1991
1993-94 to 2001-02
Act 89-2002
2002-03 to 2015-16
$20.485 million annually
Act 84-2016
2016-17 to Present
Children's Health Insurance Program Fund
Act 22-1991
1992-93 to 1996
Act 7-1997
1997 to 2001-02
Act 89-2002
2002-03 to Present
Health Care Provider Retention Account
Act 46-2003
Jan 2004 to Oct 2009
18.52 percent of total receipts
Tobacco Settlement Fund
Act 20-2019
20019-20 to 2020-21 $115.3 million annually
Act 23-2020
Act 84-2016
2017-18 to Present
See formula below
case, the General Fund will transfer the difference between $58 million and actual deposits to the Local Cigarette Tax Fund. This
transfer is effective for fiscal years 2016-17, with the first transfer having occurred in fiscal year 2017-18.
16
The tax shall be separately stated on an invoice or other sales document.
The enabling legislation is Article XII of the Tax Reform Code of 1971 (P.L. 6, No. 2), as amended by Act 84 of 2016.
Please refer to the Recent Changes in Tax Law section for additional information.
retailers and customers in Pennsylvania. Retailer licensees purchasing from unlicensed wholesalers and unlicensed manufacturers
must collect the tax when selling to customers.
smoking tobacco, snuff, dry snuff, snuff flour, Cavendish, plug and twist tobacco, fine-cut and other chewing tobaccos, shorts, refuse
scraps, clippings, cuttings and sweepings of tobacco and other kinds and forms of tobacco, prepared in such manner as to be suitable
for chewing or ingesting or for smoking in a pipe or otherwise, or any combination of chewing, ingesting or smoking. The term does
circuit, or both) that provide a vapor of nicotine or any other substance, and the use of inhalation of which simulates smoking. It also
includes any liquid or substance placed in or sold for use in an electronic cigarette. Components, such as but not limited to coils,
batteries, and reservoirs, if sold separately, are not subject to the tax.
17
The Malt Beverage Tax rates are as follows:
RATE RATE RATE
$2.48 $0.32 $0.03
$1.24
$0.10 $0.02
$1.06 $0.09 $0.02
$0.96 $0.08 $0.01
$0.62 $0.05 $0.01
$0.42
The enabling legislation is Article XX of the Tax Reform Code of 1971 (P.L. 6, No. 2), as amended.
Please refer to the Recent Changes in Tax Law section for additional information.
LEGISLATION
12 gallon
1 gallon
1 pint
1/4 barrel
2 liter
1/2 pint
1/6 barrel
PAYMENTS
Manufacturers must file reports and submit payments by the 15th day of each month for the preceding month. For the purpose of
verifying tax payments, every transporter for hire, bailee for hire, warehouseman, and distributor also must submit reports by the
15th of the month for the preceding month.
CREDIT
Certain manufacturers of malt or brewed beverages are permitted a credit for qualifying capital expenditures, defined as purchases of
plant, machinery, or equipment for use in the commonwealth. The annual credit per manufacturer is equal to the amount of
qualifying capital expenditures in the reporting year or $200,000, whichever is less. This credit applies to purchases made through
December 31, 2008 or after June 30, 2017. The credit for purchases made prior to December 31, 2008 was limited to taxpayers whose
annual production of malt or brewed beverages did not exceed 1.5 million barrels. The credit for purchases made after June 30, 2017
has no limit on annual production but is capped at $5 million.
These rates have remained unchanged since 1947. Prior to 1947, malt beverage tax rates were one-half the current rate.
160 ounce
1 quart
50 liter
4 liter
25 ounce
TAX RATE
MALT BEVERAGE TAX
ENTITIES SUBJECT TO THE TAX
TAX BASE
The Malt Beverage Tax is levied on the volume of malt or brewed beverages manufactured and sold for use in Pennsylvania, or
manufactured outside of Pennsylvania but sold for importation and use in Pennsylvania.
The tax is borne by the consumer, but manufacturers, distributors, and importers remit the tax to the commonwealth.
The Malt Beverage Tax is assessed by volume on malt or brewed beverages sold to consumers in Pennsylvania.
STANDARD FRACTION
STANDARD FRACTION
STANDARD FRACTION
1 barrel
1/8 barrel
40 ounce
1/2 barrel
18
The tax is borne by the consumer, paid directly through transactions in state liquor stores.
The tax is imposed at the following rates:
TAX YEAR RATE
1936 10.00%
1963 15.00%
1968 18.00%
The LCB periodically transmits reports and payments to the Department of Revenue.
Please refer to the Recent Changes in Tax Law section for additional information.
under the auspices of the Pennsylvania Liquor Control Board (LCB). The commonwealth assumed the liquor control responsibility
transaction. Retail licensees, such as restaurants and bars, purchase liquor from the PLCB at a discounted price and pay Liquor and
handling charge, and federal tax. The first sale of liquor is also subject to the Sales and Use Tax at the time of purchase.
19
EXCLUSIONS
deferral of income, regardless of whether the distribution is paid during employment or retirement. With some exceptions, including
certain types of retirement contributions, Pennsylvania’s constructive receipt rules are now the same as the federal constructive
receipt rules to determine when compensation is received by a cash basis taxpayer.
Compensation
Net profits from the operation of a business, profession, or farm
Net gains or income less net losses from dispositions of property
Net gains or income from rents, royalties, patents, and copyrights
Dividends
Interest
Gambling and Lottery winnings
Net gains or income derived through estates or trusts
made cash prizes of the Pennsylvania Lottery subject to personal income tax, effective for tax years beginning on or after January 1,
Description of Exclusion
Effective Date
Legislation
Income and qualified distributions from Archer MSAs
January 1997
Act 179-1996
Qualified payments made under a cafeteria plan
January 1997
Act 7-1997
Capital gain from sale of a principal residence
January 1998
Act 45-1998
Personal use of employer-provided property or services
January 1998
Act 45-1998
Income and qualified distributions from health savings accounts
January 2005
Act 48-2005
Income, rollovers, and qualified distributions from tuition programs
January 2006
Act 67-2006
Income, transfers, and qualified distributions from ABLE accounts
April 2016
Act 17-2016
Deferral of gain following an involuntary conversion
September 2016
Act 84-2016
20
Forgiveness of federal Paycheck Protection Plan loans issued during COVID-19 pandemic
Act 1-2021
DEDUCTIONS
CREDITS
TAX YEAR LEGISLATION CLAIMANT SPOUSE DEPENDENT PHASE-OUT
1974 Act 32-1974 $3,000 $750 $100 $1,200 for first dependent
1987 Act 58-1987 $4,500 $1,000 $100 $1,500 for first dependent
1988
Act 106-1988 $6,300 $1,000 $100 $1,500 for first dependent
1991 Act 40-1991 $6,300 $1,000 $100 $1,500 for first dependent
1994 Act 48-1994 $6,300 $3,000 $100
1997 Act 7-1997 $6,300 $6,300 $4,000 $100
1998 Act 45-1998 $6,500 $6,500 $6,000 $250 $6,500 for first dependent for single claimants
1999 Act 4-1999 $6,500 $6,500 $6,500 $250
2000 Act 23-2000 $6,500 $6,500 $7,500 $250
2001
Act 23-2001 $6,500 $6,500 $8,500 $250
2002 Act 89-2002 $6,500 $6,500 $9,000 $250
2003 Act 46-2003 $6,500 $6,500 $9,500 $250
Description of Exclusion
Effective Date
Legislation
Value of medals and prize money from Olympic competition
July 2019
Act 13-2019
Federal Opportunity Zone income
January 2020
Act 13-2019
Description of Deduction
Effective Date
Legislation
Unreimbursed work expenses
Contributions to Archer MSAs
January 1997
Act 179-1996
Contributions to health savings accounts
January 2006
Act 67-2006
Contributions to qualified tuition programs (subject to federal gift limits)
January 2006
Act 67-2006
Act 17-2016
Description of Credit
Effective Date
Legislation
Business start-up costs
January 2014
Act 52-2013
Alternate deduction for intangible drilling costs
January 2014
Act 52-2013
February 2021
Taxes paid to other states
Special provisions for poverty
Beginning farmer tax credit
January 2020
Act 65-2019
eligibility threshold, forgiveness is reduced by ten percent at each increment of the phase-out amount. Spouses were considered
dependents until the passage of Act 7-1997.
individual to $7,000, with an additional allowance of $2,000 for each dependent and household member. Additionally, the legislation
adopted the federal definition of dependent and counted all poverty income earned by any member of a household toward the
eligibility threshold.
ADDITIONAL DETAILS
Contributions to ABLE accounts
April 2016
21
The tax is imposed at the following rates:
YEAR RATE
1971 2.30%
1974 2.00%
1978 2.20%
1983 2.45%
1984 2.40%
1985 2.35%
1986 2.16%
1987 2.10%
1991 2.60%
1992 2.95%
1993 2.80%
2004 3.07%
2) Employers withhold and remit employees' taxes on wage and salary income according to the following schedule:
Act 29-1983
LEGISLATION
Act 98-1977
Act 46-2003
Act 29-1983
Blended rate due to midyear rate change.
Act 29-1983
Act 29-1985/Act 77-1986
Blended rate due to midyear rate change.
Act 77-1986
Act 22-1991
Blended rate due to midyear rate change.
Act 22-1991
Blended rate due to midyear rate change.
Act 22-1991
c) Semi-Monthly - If $4,000 or more but less than $20,000 in tax is expected to be withheld per calendar year, due within
three banking days of the close of the semi-monthly period.
d) Semi-Weekly - If $20,000 or more in tax is expected to be withheld per calendar year, due Wednesday after the payday
if the payday falls on a Wednesday, Thursday, or Friday, and on the Friday after payday if the payday falls on a Saturday,
Sunday, Monday, or Tuesday.
An employer reconciliation statement must be filed by January 31st following the calendar year for which taxes were
withheld or within 30 days after the termination of a business.
modified to a flat rate tax on the eight separate classes of income described above, effective June 1, 1971.
individuals; (2) employer withholding; (3) withholding from nonresident partners, shareholders, partnerships, estates and trusts, or S
corporations; and (4) withholding by payers of nonemployee compensation, business income, or lease payments to nonresident
individuals or disregarded entities with a nonresident owner.
and trusts with non-withheld income in excess of $8,000 annually must file and remit estimated payments by the 15th day of April,
June, September, and January for the preceding calendar quarter. For tax years beginning before January 1, 2000, the income
a) Quarterly - If total withholding tax is expected to be under $1,200 per calendar year, due the last day of April, July,
October, and January for the preceding calendar quarter.
b) Monthly - If $1,200 or more but less than $4,000 of tax is expected to be withheld per calendar year, due the 15th day
of the following month.
22
The enabling legislation is Article III of the Tax Reform Code of 1971 (P.L. 6, No. 2), as amended.
Please refer to the Recent Changes in Tax Law section for additional information.
Withholding of tax from nonemployee compensation or business income is required for payments of $5,000 or more annually and is
optional on payments less than $5,000. Payers of nonemployee compensation, business income, or lease payments are to follow the
same withholding and remittance schedule as employer withholding taxes on wages and salaries of employees. An annual
reconciliation statement must be filed by payers by January 31st following the calendar year for which taxes were withheld. Payers
must also file a copy of federal Form 1099-MISC with the department and provide a copy to the payee or lessor by January 31st of the
the tax remitted by the partnership or S corporation.
owner on income sourced to Pennsylvania are required to withhold personal income tax from such payments. The United States
government, the Commonwealth of Pennsylvania, their agencies, instrumentalities, and any political subdivisions of Pennsylvania are
to withhold personal income tax on such payments.
Revenue to extend several filing and payment deadlines related to the personal income tax in response to the novel coronavirus. The
ONE-TIME TRANSFERS FROM PIT REVENUES
FISCAL YEAR
AMOUNT ($M)
LEGISLATION
Environmental Stewardship Fund
2019-20
20
Act 20-2019
2020-21
13.782
Act 23-2020
Property Tax Relief Fund
2020-21
200
Act 114-2020
Public School Employees' Retirement System
2018-19
5.2
Act 42-2018
School Safety and Security Fund
2018-19
15
Act 42-2018
2019-20
45
Act 20-2019
account, beginning in fiscal year 2019-20. The amount of the transfer is currently approximately $13.25 million annually.
State Employees' Retirement System
2018-19
4.901
Act 42-2018
2019-20
3.852
Act 20-2019
23
All persons are subject to the tax unless otherwise exempted.
TAX RATE
Short term leases and instruments, which solely grant, vest, or confirm a public utility easement
actual monetary worth computed through use of assessed value adjusted to market value.
Certain transfers of ownership interest in a real estate company or family farm
Leases for the production or extraction of coal, oil, natural gas, or minerals
Certain partitions of realty held by cotenants, when the property was passed by testate or intestate succession
Deeds to burial sites
Certain agricultural, conservation, or historic preservation easements transfers to dedicated conservancies
estate company along with an option to purchase the remaining 11% after 3 years and avoid paying the RTT.
However, the exempt status of a party does not relieve the other parties to a transaction from the entire tax due.
Certain transfers to or from a non-profit industrial development agency
Certain transfer by not-for-profit veterans' organizations
Transfers to or from a land bank
Certain transfers among family members
Certain transfers to governmental units
Certain transfers between religious organizations
Certain transfers to shareholders or partners
Wills
transactions include:
Mortgages
Deeds of trust or similar instruments given as security for debts, and deeds to release such debt
Land contracts where legal title passes only upon completion of payment
24
PAYMENTS
TRANSFERS
KRPCF TRANSFER LEGISLATION
July 1994 December 2001 15% Act 50-1993
January 2002 June 2002 10% Act 89-2002
July 2002 June 2003 7.5% Act 89-2002
July 2003 June 2006 15% Act 89-2002
July 2006 June 2007 2.1% Act 67-2006
July 2007 forward 15% Act 67-2006
LEGISLATION
occurs first. Both grantor and grantee are held jointly and severally liable for payment of the tax. The County Recorder of Deeds
collects the tax and remits it to the commonwealth.
Park, and Conservation Fund (KRPCF).
DATES
Enhancement Fund beginning in fiscal year 2015-16. The transfer amount is to be the lesser of $25 million or 40 percent of the
difference between the total dollar amount of the realty transfer tax collected in the prior fiscal year and the total dollar amount of
the realty transfer tax official estimate for fiscal year 14-15 ($447.5 million). Act 13-2019 increased the maximum transfer to $40
25
ENTITIES SUBJECT TO THE TAX
TAX BASE
TAX RATE
The tax rates levied against estates are based on to whom property is bequeathed:
From non-jointly held property to spouse
From children 21 years of age or younger to parents
From parents to children 21 years of age or younger
To lineal heirs
To siblings
All other transfers
DATE OF DEATH RATE
Spouse Child to Parent Parent to Child Lineal Sibling Other
10/3/1991 TO 6/30/1994 6% 6% 6% 6% 15% 15% Act 22-1991
7/1/1994 TO 12/31/1994 3% 6% 6% 6% 15% 15% Act 48-1994
1/1/1995 TO 6/30/2000 0% 6% 6% 6% 15% 15% Act 21-1995
7/1/2000 TO 12/31/2019 0% 0% 4.5% 4.5% 12% 15% Act 23-2000
1/1/2020 TO PRESENT 0% 0% 0% 4.5% 12% 15% Act 13-2019
Rate history reflects the present inheritance tax only, established by Article XXI of the Tax Reform Code, effective 10/3/1991.
PAYMENTS
ESTATE TAX
INHERITANCE AND ESTATE TAXES
The Inheritance Tax is levied on the value of assets transferred via will or other posthumous transfer of property. See below for
estate tax details.
The personal representative of the decedent’s estate or the transferee pays Inheritance and Estate Taxes using proceeds from the
estate. The local Register of Wills acts as the commonwealth’s agent in the collection of these taxes.
The Inheritance Tax is imposed on the value of the decedent’s estate transferred to beneficiaries by will or intestacy. Certain inter
vivos transfers are also subject to inheritance tax. A fractional portion of property held by the decedent and one or more other
persons jointly with the right of survivorship is taxable in the decedent’s estate. Specified deductions may be taken in determining
taxable estate value.
LEGISLATION
Inheritance Tax is not levied on transfers of assets to certain types of entities. Transfers to governmental entities are exempt. Also
exempt are transfers of property to charitable and fraternal organizations when the property is used exclusively for religious,
charitable, scientific, literary, or educational purposes. Transfers to qualified veteran organizations are not subject to inheritance tax.
Inheritance Tax payments are due upon the death of the decedent and become delinquent nine months after the individual’s death. If
Inheritance Taxes are paid within three months of the decedent’s death, a 5 percent discount is allowed.
The Estate Tax was a pick-up tax imposed to absorb the maximum amount of credit allowed by federal estate tax law toward state
death taxes. For residents, the Estate Tax represented the difference between the Pennsylvania Inheritance Tax plus death taxes paid
to other states and the maximum federal credit for state taxes allowed by federal estate tax law. The federal credit was phased out
between 2002 and 2005. Once the credit was completely phased out, the Pennsylvania estate tax was eliminated. As a result of the
American Taxpayer Relief Act of 2012, the federal credit is not scheduled to return.
26
LEGISLATION
Please refer to the Recent Changes in Tax Law section for additional information.
and Fiscal Affairs), as amended.
27
ENTITIES SUBJECT TO THE TAX
Each table game operation certificate holder is subject to the tax.
TAX BASE
TAX RATE
PAYMENTS
Table Game Taxes are payable on a weekly basis based on the gross table game revenue derived during the previous week.
FUND
LEGISLATION
Enabling legislation is Act 1 of January 7, 2010 (P.L. 1, No. 1).
Please refer to the Recent Changes in Tax Law section for additional information.
games, contest or tournament fees or payments, and total amount of rakes collected minus cash or cash equivalents paid out, paid to
purchase annuities to fund prizes, and paid for personal property distributed to patrons as a result of playing a table game.
percent table game tax on gross table game revenue for the period August 1, 2016 through June 30, 2019. Act 13-2019 extended the
expiration of the additional 2 percent to August 1, 2021. Fully automated electronic gaming tables are subject to a 34 percent tax, in
Budget Stabilization Reserve Fund is certified by the Secretary of the Budget to exceed $750,000,000. Thereafter, the funds from
28
ENTITIES SUBJECT TO THE TAX
Each fantasy contest licensed operator is subject to the tax.
TAX BASE
TAX RATE
Act 42-2017 established a 15 percent fantasy contest tax on monthly fantasy contest adjusted revenue of licensed operators.
PAYMENTS
The tax is remitted monthly based upon monthly fantasy contest adjusted revenue derived during the previous month.
LEGISLATION
Enabling legislation is Act 42 of October 30, 2017 (P.L. 419, No. 42).
Please refer to the Recent Changes in Tax Law section for additional information.
fees collected from all participants entering the fantasy contest minus prizes or awards paid to participants in the fantasy contest,
29
ENTITIES SUBJECT TO THE TAX
TAX BASE
TAX RATE
PAYMENTS
The taxes are payable on a weekly basis based upon the revenue generated during the previous week.
RELATED TAX
LEGISLATION
Enabling legislation is Act 42 of October 30, 2017 (P.L. 419, No. 42).
Please refer to the Recent Changes in Tax Law section for additional information.
defined as the total of all cash or cash equivalent wagers paid by registered players to an interactive gaming certificate holder, or by
eligible passengers through the use of multi-use computing devices, including cash received as entry fees for contests or
tournaments, minus the total of cash or cash equivalents paid out to registered players, or eligible passengers, as winnings and the
Multi-Use Gaming Device Tax on daily gross interactive airport gaming revenue from peer-to-peer games and non-peer-to-peer
games that simulate table games and a 52 percent tax imposed on the daily gross interactive airport gaming revenue from non-peer-
30
ENTITIES SUBJECT TO THE TAX
Each sports wagering certificate holder is subject to the tax.
TAX BASE
TAX RATE
Act 42-2017 established a 34 percent Sports Wagering Tax on daily gross sports wagering revenue.
PAYMENTS
The tax is payable on a weekly basis based on the gross sports wagering revenue derived during the previous week.
AUTHORIZATION
LEGISLATION
Enabling legislation is Act 42 of October 30, 2017 (P.L. 419, No. 42).
Please refer to the Recent Changes in Tax Law section for additional information.
revenue of certificate holders in the event sports wagering was authorized under federal law. In May 2018, the Supreme Court
sports wagering minus the total of cash or cash equivalents paid to players, paid to purchase annuities to fund prizes, and paid for
personal property distributed to players as a result of sports wagering.
31
VEHICLE RENTAL TAX
WINE EXCISE TAX
OTHER SELECTIVE BUSINESS TAXES
CONSUMER FIREWORKS TAX
TAVERN GAMES TAXES
other selective business taxes, and Consumer Fireworks Tax. Payments received as Electronic Funds Transfers (EFT) that cannot be
tax revenue to the various zone programs are also made from Minor and Repealed Taxes. See the individual pages of the
Neighborhood Improvement Zones, City Revitalization and Improvement Zones, and the Military Installation Remediation Projects
transportation of non-commercial property for periods of less than 30 days. The tax was originally named the Passsenger Car Rental
days. However, Act 7–1997 expanded the tax to include the rental of trucks, trailers, and semi-trailers used in the transportation of
non-commercial property. Revenues from the Vehicle Rental Tax are used to refund the cost of licensing and title fees to vehicle
rental companies. Any excess funds are transferred to the General Fund.
by Section 488(J) of the Liquor Code and is in addition to the Sales and Use Tax. It is assessed at the rate of $2.50 per gallon of wine
sold; the 18 percent liquor tax does not apply to direct shipments of wine by direct wine shippers. The Wine Excise Tax took effect
August 8, 2016.
Imposition of these taxes is in lieu of other corporation taxes and certain excise taxes. Electric cooperatives are exempt from gross
tax is in addition to the sales and use tax already imposed on such sales. Sellers of consumer fireworks are required to apply for a
Consumer Fireworks Facility License with the Pennsylvania Department of Agriculture, Bureau of Ride and Measurement Standards.
Licensees must submit a quarterly consumer fireworks tax return with the Pennsylvania Department of Revenue, even for periods
revenue from tavern games. For games required to be purchased from a licensed distributor, net revenue is the difference between
the face value, as indicated by the manufacturer, collectible by a licensee, and the maximum amount of prizes, as indicated by the
manufacturer, payable by a licensee from a tavern game. For tavern games not required to be purchased from a licensed distributor,
net revenue is the difference between the actual gross revenue collected by a licensee from a tavern game and the actual amount of
32
TAVERN GAMES TAXES (cont'd)
Enabling legislation is Act 90 of November 27, 2013 (P.L. 1045 No. 90).
CAPITAL STOCK AND FOREIGN FRANCHISE TAXES
CORPORATE LOANS TAX
is not required to be purchased from a licensed distributor. Licensed distributors must file tavern games tax returns and remit tax by
the 20th day of each month for the preceding month. Tavern games licensees must file returns and remit tax on a quarterly basis.
Returns and tax for each calendar quarter are due on the 20th of the month following the close of each calendar quarter.
corporations with capital stock, joint-stock associations, limited liability companies, business trusts, and other companies doing
business within Pennsylvania. Nonprofit and family farm corporations are exempt. Domestic corporations are subject to the capital
stock tax while foreign corporations are subject to the foreign franchise tax on capital stock apportioned to Pennsylvania. Effective
for tax years 2016 and after, the Capital Stock and Foreign Franchise tax has been eliminated.
33
LICENSES AND FEES
LIQUOR STORE PROFITS
annually determined by the LCB, subject to the approval of the Governor. Enabling legislation is the Liquor Code, Act of June 29, 1987
(P.L. 32) 47 P.S. §§ 8-802 et seq.
FINES, PENALTIES, AND INTEREST
these fines and penalties collected by the various departments are an integral part of enforcement of the laws providing for licenses
and fees. The largest revenues collected are by the Insurance Department for surcharges from moving vehicle violations and by the
to support a specific purpose. Although amounts obtained from an individual class of license very often are sufficient only to cover
regulatory costs, any additional money is available for general purposes. Many licenses and fees are required by laws designed to
protect the public from indiscriminate and unsafe practices. The largest recurring revenues in the aggregate are collected by the
Insurance Department for appointment and licensing fees and by the State Department for corporate and Uniform Commercial Code
MISCELLANEOUS
which are given to the commonwealth by individuals, or are provided by law to be deposited in the Judicial Computer System
Augmentation Account in accordance with Act 1988-79. Interest accrued by the Treasury Department and escheated property to the
state are also included as miscellaneous revenue.
TRANSFERS
Gaming Fund. On the last day of each fiscal year, the remaining balance in the Video Gaming Fund that is not transferred to the
34
credits and incentive programs encourage economic activity, charitable contributions, and community improvement by providing tax
tax credits are tied to the amount of money given to a scholarship foundations, while the Neighborhood Assistance Program issues
credits based on contributions and investments in qualified neighborhood assistance projects. These types of programs incentivize
businesses to directly participate in the improvement of the community around them in targeted ways.
Tax credits are also used to reward businesses for making investments that both benefit the business, and serve the commonwealth's
overall economic interests. Industry specific incentives, such as the Computer Data Center Equipment Incentive Program or the
Qualified Manufacturing Innovation and Reinvestment Deduction, help businesses looking to expand their capacity make those
investments here in Pennsylvania. These investments mean new jobs, which are also directly incentivized by credit programs such as
the Manufacturing and Investment Tax Credit. Other credits incentivize business to engage in business activities that are beneficial to
performance, film, and video game industries reward new employment and capital investment in the commonwealth, while the
Revitalization and Improvement Zones (CRIZ) and Neighborhood Improvement Zone (NIZ), use captured state and local taxes to
finance local improvement projects. Other geographically bound tax credit programs incentivize certain business activities within
their bounds (e.g. the Keystone Innovation Zones), or award tax credits for new jobs and/or investment created within the zone, such
35
WHO IS ELIGIBLE TO PARTICIPATE IN THE PROGRAM?
WHAT ACTIVITY DOES THE PROGRAM SEEK TO PROMOTE?
WHAT COMMONWEALTH TAXES ARE ELIGIBLE FOR THE PROGRAM?
PARTICIPATION AND REPORTING
class cities, and home rule municipalities with populations of at least 20,000. A CRIZ is an area of up to 130 acres, comprised of
State and local taxes collected within the CRIZ are used to repay debt service to stimulate economic development projects within
while providing incremental funding for tax revenues based on new growth generated over and above an established baseline per
business and new tax revenue generated in the zone by new businesses. General Fund and local tax revenues above the baseline
amount may be used for the purpose of improvement and development within the zones. Businesses within zones must complete
an annual state tax report each year so the Department of Revenue may certify state taxes to be transferred to the zones' contracting
baseline are calculated by individual entity, rather than by the entire zone. If an entity’s taxes fall below its baseline, the amount is no
the second class, third class cities with populations over 20,000, and otherwise eligible third class cities that have had a receiver. The
act allowed pilot zones to include multiple municipalities. Further, the act expanded the definition of eligible tax types within the
zone to include hotel occupancy tax and personal income tax paid by members or partners of Subchapter S corporations, limited
liability companies, partnerships, or sole proprietors on income. Recalculation of the baselines for existing zones to include hotel
occupancy tax was prohibited. The act also lowered the maximum amount that a zone may borrow per year from $10 million to $7.5
transfer of parcels in and out of the zone does not need to occur simultaneously. Also, the act provides that excess money
transferred to a CRIZ fund for utilization in a pilot zone is not required to be returned to the commonwealth by the pilot zone’s
contracting authority and must be used in accordance with the current utilization provisions in the article. The changes were effective
October 30, 2017.
36
PARTICIPATION AND REPORTING (continued)
The CRIZ program was created by Act 52-2013.
authorities operating within the CRIZ that have been negatively impacted by the proclamation of disaster emergency related to
COVID-19 for the following purposes: business operating expenses; working capital; business loan payments to financial institutions;
payroll to current employees as a means of retaining employees; and establishment of short-term loan guarantee accounts. These
37
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
Credit caps by fiscal year are as follows (millions):
CAP
$7.5
$10.0
$10.0
$20.0
$20.0
CAN THE CREDIT BE CARRIED FORWARD?
CAN THE CREDIT BE SOLD/ASSIGNED?
REPORTING
AUTHORIZING LEGISLATION
The credit was created by Act 84 of 2016.
2020-21
FISCAL YEAR
2016-17
commonwealth by using coal refuse for power generation, control acid gasses for emission control, and use ash produced by the
facilities to reclaim mining-affected sites. The credit is distributed at a rate of $4 per ton of qualified coal refuse utilized at an
eligible facility, or a prorated amount should the total of all credits awarded by the Department of Community and Economic
Development exceed the statutory cap.
includes the names of taxpayers utilizing the credit, along with the amounts approved, utilized, and sold or assigned by that taxpayer.
reduce a taxpayer’s qualified liability by 75 percent in a given tax year.
Stock and Franchise Tax, Bank Shares Tax, Title Insurance Company Premiums Tax, Insurance Premiums Tax and Mutual Thrift
2017-18
2018-19
2019-20
38
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
The maximum amount of CBS tax credits awarded is $3 million and $100,000 per taxpayer annually.
The CBS tax credit is available for fiscal years 2013-14 through 2019-20.
CAN THE CREDIT BE CARRIED FORWARD?
Tax credits may not be carried forward or carried back.
CAN THE CREDIT BE SOLD/ASSIGNED?
Tax credits are not refundable or transferable.
REPORTING
Reporting on this tax credit is not statutorily required.
title insurance company shares tax, insurance premiums tax, and mutual thrift institutions tax.
39
PROGRAM CAP
REPORTING
The program is administered by the Department of Revenue. No report is statutorily required to be published.
AUTHORIZING LEGISLATION
refunds for the purchases of computer data center equipment, such as that used to outfit, operate, or benefit a computer data
center and component parts, installations, refreshments, replacement, and upgrades to the equipment. Total refunds are capped
relating to the size of new investment being made to the computer data center as well as a requirement as to annual compensation
40
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
Credits caps by fiscal year are as follows (millions):
EITC EOSTC TOTAL
$30.0 NA $30.0
$40.0 NA $40.0
$45.0
NA $45.0
$49.0 NA $49.0
$59.0
NA $59.0
$75.0 NA $75.0
$60.0 NA $60.0
$75.0 NA $75.0
$100.0 $50.0 $150.0
$125.0 $50.0 $175.0
$135.0 $50.0 $185.0
$160.0 $50.0 $210.0
$185.0 $50.0 $235.0
Reform Code, which contained the ETC program. Act 86-2016 moved the ETC program back to the Public School Code.
2019-20
educational improvement organziations. Act 194-2014 created the Educational Tax Credits (ETC) Program by consolidating both
the Educational Improvement Tax Credit (EITC) and the Educational Opportunity Scholarship Tax Credit (EOSTC) in Article XVIIF of
& Foreign Franchise Tax, Bank Shares Tax, Title Insurance Company Shares Tax, Insurance Premiums Tax, Mutual Thrift Institutions
2012-13
2016-17
2017-18
2018-19
FISCAL YEAR
2001-02
2003-04
2004-05
2005-06
2006-07
2007-08
2009-10
2011-12
41
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
Fiscal year limits by organization type are as follows (millions):
organization, or a pre-kindergarten scholarship organization.
& Foreign Franchise Tax, Bank Shares Tax, Title Insurance Company Shares Tax, Insurance Premiums Tax, Mutual Thrift Institutions
tax liability of a business for any given taxable year. The tax credit may be increased to 90% of the contribution made, up to a
maximum of $750,000 per taxable year, if the business firm agrees at the time of application to provide the same amount of
contribution for two consecutive tax years. To ensure the receipt and retention of the 90% tax credit, the business firm must make
the same amount of contribution in each of the two consecutive tax years.
during the taxable year, and may receive a tax credit equal to 90% of any additional amount contributed during the taxable year, up
to a maximum of $200,000 of tax credits per taxable year.
FISCAL YEAR
SCHOLARSHIP
EDUCATIONAL IMPROVEMENT
PRE-KINDERGARTEN
2001-02
$20.0
$10.0
NA
2003-04
$26.7
$13.3
NA
2004-05
$26.7
$13.3
$5.0
2005-06
$29.3
$14.7
$5.0
2006-07
$36.0
$18.0
$5.0
2007-08
$44.7
$22.3
$8.0
2009-10
$35.7
$17.9
$6.4
2010-11
$40.2
$13.4
$6.4
$37.5
$12.5
2011-12
$44.7
$22.3
$8.0
2012-13
$60.0
$30.0
$10.0
improvement, or pre-kindergarten scholarship organizations. The credits are based on the amount contriubuted, subject to
2018-19
$110.0
$37.5
$12.5
2019-20
$135.0
$37.5
$12.5
2016-17
$75.0
$37.5
$12.5
2017-18
$85.0
42
CAN THE CREDIT BE CARRIED FORWARD?
CAN THE CREDIT BE SOLD/ASSIGNED?
REPORTING
OTHER INFORMATION
program credit to the General Assembly by June 30th of each year.
43
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
CAN THE CREDIT BE CARRIED FORWARD?
CAN THE CREDIT BE SOLD/ASSIGNED?
REPORTING
OTHER INFORMATION
Act 85-2012 created the EOSTC program.
Stock and Foreign Franchise Tax, Bank Shares Tax, Title Insurance Company Shares Tax, Insurance Premiums Tax, Mutual Thrift
Institutions Tax, and Malt Beverage Tax.
Opportunity Scholarship Organization. Business contributions are then used by Opportunity Scholarship Organizations to provide
another public school outside of their district or nonpublic school. The tax credits awarded to businesses will be equal to 75
percent of their contribution amount, which can be increased to 90 percent upon the business committing for two years. The total
eligible students residing within the boundaries of a low-achieving school to attend another public school outside of their district or a
nonpublic school. A low-achieving school is defined as a public elementary or secondary school ranking in the bottom 15 percent of
their designation as an elementary or secondary school based upon combined math and reading Pennsylvania System of School
44
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
Credits caps by fiscal year are as follows (millions):
FILM CONCERT VIDEO GAME TOTAL
$75.0 NA NA $75.0
$42.0 NA NA $42.0
$60.0 NA NA $60.0
$65.0 $4.0 $1.0 $70.0
$65.0
$8.0 $1.0 $74.0
$70.0 $8.0 $1.0 $79.0
2017-18
2018-19
2019-20
ENTERTAINMENT PRODUCTION TAX CREDITS
Taxpayers that are production companies in the film/tv/commercial, concert promotion, or video game industries, and which have
qualified Pennsylvania based expenses, can claim Entertainment Production Tax Credits.
FISCAL YEAR
Entertainment credits may be claimed against Personal Income Tax, Corporate Net Income Tax, Bank Shares Tax, Title Insurance
Company Shares Tax, Mutual Thrift Institutions Tax, and Insurance Premiums Tax liabilities.
Pennsylvania offers Entertainment Production Tax Credits through three programs; the Entertainment Economic Enhancement
Program (or Concert Tax Credit), the Film Production Tax Credit, and Video Game Production Tax Credit. These credits are
intended to incentivize entertainment production companies to locate aspects of their production in the commonwealth.
2007-08
2009-10
2010-11
AUTHORIZING LEGISLATION
Act 43-2017 combined the Concert, Film, and Video Game Tax Credits under Article XVII-D of the Tax Reform Code, Entertainment
Production Tax Credits.
45
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
The credit promotes the commonwealth's live performance industries.
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
CAN THE CREDIT BE CARRIED FORWARD?
Credits granted may be carried forward; however, they may not be carried back or refunded.
CAN THE CREDIT BE SOLD/ASSIGNED?
REPORTING
AUTHORIZING LEGISLATION
Tax Credit.
promotion companies, concert tour management companies, or other concert management companies for qualified rehearsal and
tour expenses. Individual credit limits per tour are based on the types of venues and number of performances at which the
an employee), Bank and Trust Company Shares Tax, and Insurance Premiums Tax.
management companies, excluding contractors or subcontractors of such companies. The amount of credit awarded per taxpayer
may not exceed certain percentages of qualified rehearsal and tour costs, based on the types of venues and number of performances
46
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP ($M)
The program cap has changed several times since the credit was enacted:
CAP
$75.0
$42.0
$60.0
$65.0
$70.0
CAN THE CREDIT BE CARRIED FORWARD?
Credits granted may be carried forward, but may not be carried back or refunded.
2009-10
2010-11
2017-18
2019-20
2007-08
incurred in Pennsylvania except that compensation paid to individuals or payments made to entities representing individuals for
services provided in the film cannot exceed $15 million. DCED may waive the 60 percent requirement in certain circumstances. An
additional tax credit of 5 percent is available if the taxpayer films a feature film, television film, or television series intended for a
national audience in a qualified production facility that meets all minimum stage requirements.
intended for a national audience for certain production expenses. The program provides a 25 percent credit for qualified film
production expenses incurred in Pennsylvania, with an additional five percent credit is available if the production is filmed in a
qualified production facility that meets all minimum stage filming requirements.
intended for a national audience. Production expenses include compensation paid to individuals or payments made to entities
representing individuals for their services, the costs of construction, operations, editing, photography, sound synchronization,
lighting, wardrobe and accessories, the cost of transportation, the cost of insurance coverage, the costs of food and lodging, the
purchase of music or story rights, and the cost of rental of facilities and equipment. Production expenses do not include certain items
such as deferred compensation or profit sharing, development costs, marketing or advertising expenses or expenses related to the
selling of the credit.
must meet certain location, size, technical, and investment requirements, and the designation will expire after 15 years. Tax credits
for these districts are in addition to the existing Film Production Tax Credit and may be approved beginning in fiscal year 2019-20.
FISCAL YEAR
Income Tax, Bank Shares Tax, Title Insurance Company Shares Tax, Mutual Thrift Institutions Tax, and Insurance Premiums Tax
47
CAN THE CREDIT BE SOLD/ASSIGNED?
REPORTING
AUTHORIZING LEGISLATION
promulgated. There are procedures for the transfer of unused credits by pass-through entities (Subchapter S corporations, Limited
Liability Companies, and Partnerships) to a shareholder, member, or partner. Films receiving a film production grant are not eligible
for this credit for the same film. Act 52-2013 made clarifications and technical changes to the program, including clarifying the term
“start date”, and providing that credits purchased or assigned in 2013 or 2014 could be carried forward to 2014 and 2015,
respectively.
applications are received and issues tax credit certificates upon review and approval of an audit, economic impact report, and any
other information requested by the Pennsylvania Film Office. Provided the information supplied to the Film Office meets the
advance 30 percent of the dollar amount of tax credits available to be awarded in the next succeeding fiscal year, 20 percent in the
program by September 1 each year.
program was created under Act 95-2004, then replaced with a grant program in fiscal year 2006-07. The current credit has been
amended several times since its inception.
48
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
The credit seeks to promote the commonwealth's video game development industry.
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
CAN THE CREDIT BE CARRIED FORWARD?
Credits granted may be carried forward; however, they may not be carried back or refunded.
CAN THE CREDIT BE SOLD/ASSIGNED?
REPORTING
AUTHORIZING LEGISLATION
The credit was created under Act 84-2016 and was first available in fiscal year 2017-18.
companies, for qualified Pennsylvania production expenses. The amount of credit awarded per taxpayer may not exceed 25 percent
of the qualified production expenses incurred in the first four years of such expense and may not exceed 10 percent in years
incurred in Pennsylvania. Credit awarded per taxpayer may not exceed 25 percent of the qualified production expenses incurred in
from an employee), Bank and Trust Company Shares Tax, Title Insurance Company Shares Tax, Insurance Premiums Tax, or Mutual
Thrift Institutions Tax.
49
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
CAN THE CREDIT BE CARRIED FORWARD?
CAN THE CREDIT BE SOLD/ASSIGNED?
REPORTING
income-producing properties. All projects must include a qualified rehabilitation plan that is approved by the Pennsylvania
Historical and Museum Commission (PHMC) as being consistent with the standards for rehabilitation of historic buildings as
adopted by the United States Secretary of the Interior. The tax credits awarded to a qualified taxpayer are either 25 or 30 percent
liability companies, partnerships, or any other form of legal business entities, owning a PA commercial building that qualifies as a
certified historical structure according to the Internal Revenue Code (IRC).
preserving and rehabilitating the commonwealth's historic structures and the impact these efforts have had on the stimulation of
the Pennsylvania Historical and Museum Commission or 30 percent of qualified expenditures associated with a workforce housing
project.
credits would be awarded after June 30, 2020.
the first taxable year for which the taxpayer was entitled to claim the credit.
and House of Representatives by October 1 of the following fiscal year. The information in the report shall be public information and
50
The HPI Tax Credit was created as part of Act 85–2012.
51
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
CAN THE CREDIT BE CARRIED FORWARD?
CAN THE CREDIT BE SOLD/ASSIGNED?
REPORTING
The credit was created by Act 52-2013.
responsible for publishing reports on the program. The reports are to be published each January 1, beginning with 2015.
proceeds of the sale benefited early-stage venture capital investment through the Ben Franklin Technology Partners, the Venture
Investment Program, and the Life Sciences Greenhouses. Credits were first permitted to be used in 2017 against tax liabilities for
52
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
CAN THE CREDIT BE CARRIED FORWARD?
Credits granted may be carried forward; however, they may not be carried back or refunded.
CAN THE CREDIT BE SOLD/ASSIGNED?
REPORTING
AUTHORIZING LEGISLATION
well as a tax credit. The zones are defined parcels and are operated by a partnership of business groups and institutions of higher
businesses are generally engaged in research and development and other high technology projects in affiliation with institutions of
higher education. The credit is equal to 50 percent of the increase in its gross revenues from the previous year attributable to its
apply to DCED for a tax credit equal to 50 percent of the increase in its gross revenues from the previous year attributable to its
activities in a zone. A KIZ company may not claim in excess of $100,000 in tax credit per year.
53
OU OS
properties across the commonwealth. In defined, parcel-specific areas, the program allows businesses and residents to receive tax
relief from various local and state taxes upon meeting certain requirements. By waiving these taxes for a series of years, the
program hopes to stimulate development of the selected sites.
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
the taxable year. The “active conduct of a trade or business” means a business: (1) engaged in a commercial enterprise conducted for
profit earning “net profits” from the operation of the business within the subzone; and (2) employing at least one fulltime employee
within the subzone. Activity from real estate investment trusts, venture capital funds, and hedge funds are not engaged in the active
conduct of trade or business for the business.
Income Tax, Bank Shares Tax, and Mutual Thrift Institutions Tax. Insurance companies and certain regulated transportation
companies may earn tax credits based on the number of jobs created in a zone. Businesses operating in a zone are exempted from
paying sales and use taxes on items purchased for consumption in a zone. At the local level, property, earned income, and various
other taxes are waived for zone businesses and residents.
PARTICIPATION AND REPORTING
commonwealth. The program was enlarged in scope and length by the creation of Keystone Opportunity Expansion Zones (KOEZ).
and expire no later than January 1, 2014. Act 217 also created Keystone Opportunity Improvement Zones (KOIZ).
period for KOIZ subzones until June 1, 2004. Benefits in the additional KOZ and KOEZ acreage began January 1, 2004 and were set to
expire with the rest of the subzone, either December 31, 2010 or December 31, 2013. Approved KOIZ subzones were set to expire
Additionally, the Department of Community and Economic Development is allowed to designate up to 19 additional KOEZs. Act 16-
2012 also permits the expansion of an existing KOZ and KOEZ zone if the expansion is expected to increase job creation or capital
acres each for a period of up to 10 years effective for January 1, 2017 to December 31, 2026. In addition, existing parcels can be
extended up to 10 years for state tax benefits, if the applicant can meet the job creation and capital investment requirements in the
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
employment in the commonwealth for development and revitalization.
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
54
OU OS
Keystone Opportunity Zones were established by Act 92-1998.
AUTHORIZING LEGISLATION
55
Act 26–2011 established the KSDZ program.
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
the Land Recycling and Environmental Remediation Standards Act. In order to be eligible to receive KSDZ tax credits, a KSDZ
employer must employ one or more employees at a designated KSDZ site. To be eligible, the employee must be employed by a KSDZ
employer, or its predecessor, after June 30, 2011, be employed for at least 35 hours per week by a KSDZ employer, and spend at least
90% of the time working at the KSDZ location. The KSDZ employer must agree to maintain operations related to the KSDZ tax credits
in this commonwealth for a period of 5 years from the date the company first submits a KSDZ tax credit certificate to the Department
property certified as Brownfields in order to foster redevelopment of these former industrial and commercial sites. Upon meeting
certain requirements, approved business in the zone may be awarded $2,100 per new job which may be used against Personal
Income Tax, Corporate Net Income Tax, Capital Stock and Franchise Tax, Bank Shares Tax, Title Insurance Tax, and Mutual Thrift
Institutions Tax.
REPORTING
authorizing DCED to request access to, and review of, the applicant’s and it’s affiliates’ state tax returns. Authorized representatives
of the applicant with full authority to waive confidentiality under Pennsylvania law will sign off on the release of tax information by
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
AUTHORIZING LEGISLATION
KSDZ program is an incentive-based tax credit program to foster redevelopment of these former industrial and commercial sites and
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP ($M)
excess of the number of FTEs employed by the KSDZ employer in Pennsylvania prior to January 1, 2012. Prior to Act 84-2016, the tax
credit was available for ten consecutive tax years during the fifteen-year period the tax credit was to be in existence, ending June 30,
CAN THE CREDIT BE CARRIED FORWARD?
CAN THE CREDIT BE SOLD/ASSIGNED?
56
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
CAN THE CREDIT BE CARRIED FORWARD?
CAN THE CREDIT BE SOLD/ASSIGNED?
REPORTING
AUTHORIZING LEGISLATION
The credit was created by Act 66 of 2020.
thereafter. The report includes the names of taxpayers utilizing the credit, along with the amounts approved, utilized, and sold or
manufacture of petrochemicals or fertilizers at a facility placed in service after September 21, 2020. The capital investment for this
facility must be $400 million or more, and create at least 800 new and permanent jobs which pay at least the prevailing minimum
wage and benefits for that job type. A qualified tax payer must also demonstrate a good faith effort to recruit from the local labor
eligible credits to another taxpayer. The eligible buyer of the credit may use the purchased credits to offset up to 50 percent of its
goals to qualify for the credit. The value of the credit is equal to $0.47 per thousand cubic feet of natural gas produced in the
commonwealth, that is then used in the manufacturing of petrochemicals or fertilizers at the facility, for the period beginning
$6,666,667. A taxpayer may use this credit to reduce their tax liability by a maximum of 20 percent for any tax year in which it is
57
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
CAN THE CREDIT BE CARRIED FORWARD?
CAN THE CREDIT BE SOLD/ASSIGNED?
REPORTING
2016.
Tax imposed under Article XX of the Tax Reform Code for investment in qualified capital expenditures placed into service in this
Beverage Tax. The credit is equal to the amount of qualified capital expenditures placed into service in Pennsylvania, with an
January 1, 1974 to December 31, 2008 for small brewers with an annual production of 1,500,000 or less barrels per year.
approve greater than $5 million of tax credits per fiscal year.
any tax becoming due from the taxpayer to be carried forward for up to three calendar years. No credit shall be allowed against any
58
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
The credit is designed to support job creation in the commonwealth.
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
The budget allocation is $4 million a year beginning in fiscal year 2017-18.
CAN THE CREDIT BE CARRIED FORWARD?
CAN THE CREDIT BE SOLD/ASSIGNED?
REPORTING
Reporting on this tax credit is not statutorily required.
Act 84-2016 created the Manufacturing and Investment Tax Credit.
reduce a taxpayer’s qualified liability by 50 percent in a given tax year.
the increase in payroll for at least five years from the start date. The credit is worth up to 5 percent of the taxpayer’s increase in
new full-time jobs can earn a tax credit equal to up to 5 percent of the taxpayer’s increase in annual taxable payroll. Jobs must be
Foreign Franchise Tax, Bank Shares Tax, Title Insurance Company Premiums Tax, Insurance Premiums Tax, Gross Receipts Tax, and
Mutual Thrift Institutions Tax.
59
WHO IS ELIGIBLE TO PARTICIPATE IN THE PROGRAM?
WHAT ACTIVITY DOES THE PROGRAM SEEK TO PROMOTE?
WHAT COMMONWEALTH TAXES ARE ELIGIBLE FOR THE PROGRAM?
PARTICIPATION AND REPORTING
improvement and development within designated parcels to fund contaminant remediation in a municipality with a former
military installation. Eligible taxes, including Corporate Net Income Tax, Sales and Use Tax, Employer Withholding, Personal
Income Tax, and others, paid by a qualified business or individual are transferred from the general fund to the MIRP Fund for
Department of Revenue may certify state taxes to be transferred to the MIRP Fund for utilization by the Military Installation
the lesser of $1,000 or 10 percent of all eligible state taxes payable by the qualified taxpayer for activities in the MIRP during the
Cigarette Tax, and Personal Income Tax paid by shareholders, members or partners of Subchapter S corporations, limited liability
companies, partnerships or amounts paid by sole proprietors on income other than passive activity income as defined under section
used by a branch of the United States Armed Forces and was officially disestablished based on the recommendation of the Defense
Base Closure and Realignment Commission no more than 15 years prior to the effective date of the authorizing legislation. Parcels
previously used exclusively for housing are excluded.
the MIRP; any construction contractor engaged in construction, including infrastructure or site preparation, reconstruction or
renovation of a facility located in or partially in the MIRP; and individuals whose primary residence is in a parcel designated within the
collected from the MIRP will be used to fund projects for the migration of contamination from per- and polyfluoroalkyl substances
60
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
CAN THE CREDIT BE CARRIED FORWARD?
Credits granted may be carried forward for up to seven taxable years; however, they may not be carried back or refunded.
CAN THE CREDIT BE SOLD/ASSIGNED?
REPORTING
AUTHORIZING LEGISLATION
Income Tax, Bank and Trust Company Shares Tax, Title Insurance Company Shares Tax, Insurance Premiums Tax, Gross Receipts Tax,
or Mutual Thrift Institutions Tax.
association or any other form of legal business entity that is subject to eligible taxes and meets the criteria set forth in guidelines
purchasers. Proceeds are deposited in the Mixed-use Development Program Fund, which supports affordable housing and
61
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
CAN THE CREDIT BE CARRIED FORWARD?
CAN THE CREDIT BE SOLD/ASSIGNED?
Taxpayers are allowed to carry forward unused credits for a maxiumum of five years. The credit may be assigned but not sold.
REPORTING
The credit is administered by the Department of Revenue.
AUTHORIZING LEGISLATION
The credit was created by Act 52 of 2013.
providers of mobile communications services in the amount of 5% of the purchase price of qualified broadband equipment. The
credit seeks to increase returns from investments in expanding serviced to rural and other areas with limited broadband internet
access
and small returns on capital investments.
shareholders, members, or partners of pass-through entities that receive unused credits from the pass-through entity are required to
62
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
CAN THE CREDIT BE CARRIED FORWARD?
CAN THE CREDIT BE SOLD/ASSIGNED?
Companies Shares Tax, Insurance Premiums Tax, and Mutual Thrift Institutions Tax.
improve distressed areas. The amount of the credit is based on the contribution amount, the type of program to which the
contribution was made, and the business type of the contributor. The amount of the credits awarded annually cannot exceed
$500,000 for contributions or investments for single projects or $1,250,000 for contributions or investments for four projects, and
taxable year in which they were purchased and may not be carried back, carried forward, refunded or sold.
the amount contributed to special program priorities defined by the Department of Community and Economic Development in
regulations. For private companies, the amount is 25 percent of the amount of qualified investment, or 35 percent of the amount
invested in special program priorities.
projects with a five-year commitment may be awarded. A credit equal to 80 percent of the contributions made by a business firm
during a taxable year for comprehensive service projects with a six-year commitment may be awarded.
year, with $2 million allocated exclusively to pass-through entities. However, if the pass-through entities do not claim the $2 million,
the unused portion is available for other taxpayers. Per Act 13-2019 no more than $2 million of the total aggregate amount of tax
credits available may be used towards youth and adolescent development services.
63
REPORTING
Act 48-1994 established the Neighborhood Assistance Program.
October 1 of the following fiscal year.
the neighborhood assistance program and recommendations for the tax credit. The report shall be submitted to the Finance
Committees of the Senate and the House of Representatives.
64
WHO IS ELIGIBLE TO PARTICIPATE IN THE PROGRAM?
WHAT ACTIVITY DOES THE PROGRAM SEEK TO PROMOTE?
WHAT COMMONWEALTH TAXES ARE ELIGIBLE FOR THE PROGRAM?
PARTICIPATION AND REPORTING
Act 50-2009 created the Neighborhood Improvement Zone (NIZ) program.
Gross Receipts Tax, Unemployment Compensation, Realty Transfer Tax, Cigarette Tax, Vehicle Rental Tax, Transportation Assistance,
debt service and bonds issued by the Allentown Neighborhood Improvement Zone Development Authority in order to encourage
development and revitalization in downtown Allentown. Businesses within the NIZ are subject to special reporting and filing
is used to repay debt service and bonds issued by the Allentown Neighborhood Improvement Zone Development Authority to fund
acceptance of late reports within the program reconciliation, and an annual program audit by an independent auditing firm.
acreage transferred out. The Department of Revenue and municipality must certify that there is no activity in the parcels being
transferred that generates tax receipts or other revenue. The amendment was effective one year after passage.
identify the responsible party required to fulfill reporting compliance on behalf of a qualified business for concerts or other
performances in a facility in the zone, effective immediately.
65
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
CAN THE CREDIT BE CARRIED FORWARD?
CAN THE CREDIT BE SOLD/ASSIGNED?
REPORTING
Act 193-2014 reestablished the Organ and Bone Marrow Donor Tax Credit.
Company Shares Tax, Title Insurance Companies Shares Tax, Insurance Premiums Tax, or Mutual Thrift Institutions Tax.
is available to firms that provide a paid leave of absence to an employee for the purpose of living organ or bone marrow donation.
The qualifying leave of absence period per employee cannot exceed five days. The tax credit amount is equal to the amount of
employee compensation paid during the leave of absence period, the cost of temporary replacement help, if any, during the leave
five days or the hourly equivalent), the cost of temporary replacement help during the period, and any authorized miscellaneous
expenses incurred in connection to the period. The credit is subject to apportionment based on Pennsylvania payroll. There is no
overall cap to the credit.
66
AUTHORIZING LEGISLATION
The credit was created by Act 85 of 2012.
another taxpayer. The eligible buyer of the credit may use the purchased credits to offset up to 50 percent of its Pennsylvania tax
liabilities. The credit can be assigned to related entities.
credit relative to their purchase of hydrocarbon inputs. The credit is equal to $0.05 per gallon of ethane purchased ($2.10/barrel)
31, 2042. The credit may be used to offset a taxpayer’s liabilities for Personal Income tax, Corporate Net Income Tax, Capital Stock
and Foreign Franchise Tax, Bank Shares Tax, Title insurance Company Shares Tax, Insurance Premiums Tax, and Mutual Thrift
67
WHO IS ELIGIBLE TO RECEIVE THE DEDUCTION?
WHAT ACTIVITY DOES THE DEDUCTION SEEK TO PROMOTE?
WHAT TAXES CAN THE DEDUCTION BE APPLIED AGAINST?
DEDUCTION LIMITATIONS
CAN THE DEDUCTION BE TRANSFERRED OR CARRIED FORWARD?
The deduction is non-transferrable. Any unused portion in a tax year shall expire at the end of the corresponding tax year.
REPORTING
AUTHORIZING LEGISLATION
The deduction was authorized by Act 43 of 2017.
half percent of the private capital investment utilized in the creation of new or refurbished manufacturing capacity. The maximum
of the private capital investment utilized in the creation of new or refurbished manufacturing capacity. The maximum deduction
Net Income Tax. These firms must be able to demonstrate a new private capital investment of $60 million or more in the creation of
their taxable income under the Corporate Net Income Tax, relative to investments in manufacturing capacity. Investments must
68
TOTAL CAP
SMALL CAP NON-SMALL CAP
$15.0 $3.0 $12.0
$30.0 $6.0 $24.0
$40.0 $8.0 $32.0
$20.0 $4.0 $16.0
$18.0 $3.6 $14.4
$55.0 $11.0 $44.0
Unused credits may be carried forward 15 taxable years.
AUTHORIZING LEGISLATION
The credit was created by Act 7 of 1997, and renewed by Act 84 of 2016.
1997 to 2003
2004 and 2005
2006 to 2008
2009
2010
2011 and beyond
The R&D tax credit was to sunset on December 31, 2015. Act 84-2016 repealed this provision.
CAN THE CREDIT BE CARRIED FORWARD?
CAN THE CREDIT BE SOLD/ASSIGNED?
in the taxable year in which the purchase or assignment is made and the credit cannot exceed 75% of the tax liability for the taxable
year. The purchaser may not carry credits forward or back or obtain a refund of any unused credit. This change applied to credits
REPORTING
Act 7-1997
Act 46-2003
Act 116-2006
Act 48-2009
Act 48-2009
Act 26-2011
AWARD YEARS
with $11M of that amount set aside for small businesses. The initial calculation of the credit is equal to 10 percent of the increase
in Pennsylvania research activities over a base period. For small businesses, the tentative credit is equal to 20 percent of the
increase. If the tentative award amounts exceed the caps, the awards are prorated down to the cap levels.
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
business set aside, where small business is defined as a "for-profit corporation, limited liability company, partnership, or
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP ($M)
LEGISLATION
69
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
CAN THE CREDIT BE CARRIED FORWARD?
Credits granted may be carried forward; however, they may not be carried back or refunded.
CAN THE CREDIT BE SOLD/ASSIGNED?
REPORTING
AUTHORIZING LEGISLATION
shareholders, partners or members.
of $250,000 for each eligible applicant or project. There is no limitation on the amount of credit that can be awarded to a sponsor of
farmland.
agricultural programs that manage nutrients and sediment and protect surface water and groundwater. Depending on the type of
70
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
CAN THE CREDIT BE CARRIED FORWARD?
The tax credit can be carried forward for 5 years, but may not be carried back or refunded.
CAN THE CREDIT BE SOLD/ASSIGNED?
REPORTING
Act 84-2016 created the Rural Jobs and Investment Tax Credit.
business development in rural areas. The capital is sourced to Rural Growth Funds, designated to receive up to $50 million dollars
in capital contributions from investors. The state is using this investment tool to attract and retain rural businesses, create family
sustaining jobs, and to stimulate economic growth in rural businesses. Six million in aggregate tax credits may be awarded per
year over five years in the program and may be used against the Bank and Trust Company Shares Tax, Title Insurance Company
business investment company under the Small Business Investment Act. Entities must have previously invested at least $100 million
in nonpublic companies located in rural areas of the commonwealth or other states.
equal to the credit-eligible capital contribution. Prior to Act 13-2019, eligible business firms could be approved for up to a 90 percent
equivalent tax credit per contributed dollar.
the program. Act 13-2019 provides that beginning fiscal year 2019-20, the fiscal year cap is $6 million and the aggregate award cap is
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SDAs were created by Act 151-2006.
designated areas. The designation is in effect for fifteen years and must be approved by the political subdivision in which the SDA
is located. Businesses that meet certain job creation or capital investment requirements may receive tax relief from various local
and state taxes.
WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
or business involving energy, bioscience, or manufacturing, or a related activity, and meet one of the following criteria: (1) Create or
maintain a minimum of 500 jobs within the first three years of full operation within the strategic development area; or (2) Invest a
minimum of $45,000,000 in capital investment in the property located in the strategic development area within the first three years
of full operation.
REPORTING
located in a designated strategic development area and the owners and addresses of that real property at any time during the
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
Income Tax, Capital Stock and Foreign Franchise Tax, and the Personal Income Tax. In addition, sales at retail of services or tangible
personal property, other than motor vehicles, to a qualified business for use at its facility located within a strategic development area
are exempt from the Sales and Use tax. Insurance companies and certain regulated transportation companies may earn tax credits
based on the number of jobs created in a zone. At the local level, property taxes, earned income and net profit taxes, mercantile
TAX CREDIT CAP ($M)
creation may not exceed $1 million in the aggregate or 50 percent of the taxpayer's liability. Tax benefits may not extend past
CAN THE CREDIT BE CARRIED FORWARD?
CAN THE CREDIT BE SOLD/ASSIGNED?
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WHO IS ELIGIBLE TO RECEIVE THE CREDIT?
WHAT ACTIVITY DOES THE CREDIT SEEK TO PROMOTE?
The credit seeks to promote development of the commonwealth's waterfronts.
WHAT TAXES CAN THE CREDIT BE APPLIED AGAINST?
TAX CREDIT CAP
CAN THE CREDIT BE CARRIED FORWARD?
Credits granted may be carried forward; however, they may not be carried back or refunded.
CAN THE CREDIT BE SOLD/ASSIGNED?
REPORTING
AUTHORIZING LEGISLATION
corporations, Limited Liability Companies, and Partnerships) to a shareholder, member or partner. Particularly, a pass-through entity
and a shareholder, member or partner of a pass-through entity may not claim a credit under this article for the same waterfront
franchise, title insurance company shares, insurance premiums (including surplus lines), or mutual thrift institutions taxes that have
Company Shares, Title Insurance Company Shares, Insurance Premiums Tax (including surplus lines), or Mutual Thrift Institutions Tax.
The tax credit may not exceed 75 percent of the total contribution made by the business firm during the taxable year.
organization to fund a waterfront development project. The credit is limited to 75 percent of the total contribution made by the
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highway and aviation purposes, contributions from local subdivisions for highway projects, fines, and other miscellaneous highway
activities, administration costs, and the Department of Transportation licensing and safety activities. It also finances State Police
highway patrol operations, pays subsidies to local subdivisions for the construction and maintenance of roads, and funds other
operations.
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ENTITIES SUBJECT TO THE TAX
TAX BASE
TAX RATE
STARTING
FUELS
1/1/2014 51.0
1/1/2015 64.2
1/1/2016 64.0
1/1/2017
74.7
1/1/2018 74.1
1/1/2019 74.1
1/1/2020 74.1
Tax rates are shown for calendar year 2014 and forward, the effective date of Act 89-2013 which reformed motor fuel taxation.
57.6
40.7
50.5
50.3
58.2
57.6
57.6
LIQUID FUELS
subdivisions, volunteer fire companies, ambulance services and rescue squads, second class county port authorities, and nonpublic
October 1, 1997. Act 89-2013 added an additional 64 mills beginning January 1, 2014, 49 mills in 2015, 48 mills in 2016, 41 mills in
2017, and 39 mills in 2018 and each calendar year thereafter. These additional mills are levied on both liquid fuels and fuels
purchases. Act 89-2013 also set the average wholesale price at $1.87 per gallon in 2014, $2.49 in 2015 and 2016, and uncapped the
OIL COMPANY FRANCHISE TAX RATES
(cents per gallon)
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PAYMENTS
REVENUE DISTRIBUTION
LEGISLATION
Enabling legislation is Chapter 95 of Title 75 (the Vehicle Code) of the Pennsylvania Consolidated Statutes.
preceding month.
Please refer to the Recent Changes in Tax Law section for additional information.
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ENTITIES SUBJECT TO THE TAX
TAX BASE
TAX RATE
PAYMENTS
SURTAX
LEGISLATION
The enabling legislation is Chapter 21 and Chapter 96 of Title 75 (the Vehicle Code) of the Pennsylvania Consolidated Statutes.
granted for tax paid at the pump or directly remitted. Credit is also granted for fuel purchased in Pennsylvania but consumed
elsewhere. Exempt from this tax are vehicles operated by political subdivisions, farm vehicles, emergency vehicles, special mobile
equipment, implements of husbandry, vehicles operated by charitable and religious organizations, vehicles operated by electric
indicating vehicle registration in Pennsylvania are also included in these taxes. The cost is $5 per calendar year, and the decals must
per gallon surtax on fuel used by qualified motor vehicles. Surtax revenue funded, in part, the restricted highway bridge improvement
account and was not considered to be part of motor carriers road tax/IFTA collections. Act 3–1997 repealed the surtax effective
Please refer to the Recent Changes in Tax Law section for additional information.
operators of qualified motor vehicles used in interstate operations. The Motor Carriers Road Tax/IFTA is imposed on fuel
used, designed, or maintained for the transportation of persons or property which: (1) have two axles and a registered or gross
weight greater than 26,000 pounds, or (2) have three or more axles regardless of weight, or (3) are operated as a vehicle combination
exceeding 26,000 pounds. Qualified motor vehicles operated in Pennsylvania intrastate activities only are subject to fuel taxation
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ENTITIES SUBJECT TO THE TAX
TAX BASE
TAX RATE
PAYMENTS
LEGISLATION
Enabling legislation is Chapter 90 of Title 75 (the Vehicle Code) of the Pennsylvania Consolidated Statutes.
the preceding month. The Department of Revenue may permit dealer-users to report the tax due for reporting periods greater than
one month, up to an annual basis, provided the tax is prepaid on an estimated basis.
Please refer to the Recent Changes in Tax Law section for additional information.
alcohol mixtures containing at least 85 percent alcohol by volume, hydrogen, hythane, electricity, and any other fuel not taxable as
liquid fuels or fuels. Dealers-users of these fuels are required to collect and remit the tax based on consumption within the
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ENTITIES SUBJECT TO THE TAX
TAX BASE
TAX RATE
EFFECTIVE RATE EFFECTIVE RATE EFFECTIVE RATE
7/1/1935 4.0 1/1/1992 3.6 1/1/2006 5.3
6/1/1949 5.0 1/1/1994 3.5 1/1/2009 5.8
9/13/1955 6.0 1/1/1997 3.7 1/1/2010 5.4
6/1/1956 1.5 1/1/1998 3.5 1/1/2011 5.5
11/1/1984 3.0 1/1/1999 3.3 1/1/2012 5.9
1/1/1988 3.3 1/1/2000 3.7 1/1/2016 5.5
1/1/1989 3.2 1/1/2001 4.3 1/1/2018 5.7
1/1/1990 3.3 1/1/2002 4.1 1/1/2019 6.0
1/1/1991 3.8 1/1/2005 4.7 1/1/2020 5.9
EFFECTIVE
RATE EFFECTIVE RATE EFFECTIVE RATE
6/1/1956 1.5 1/1/1992 1.8 1/1/2010 1.6
6/1/1960 1.0 1/1/1994 1.7 1/1/2011 1.7
11/1/1984 1.1 1/1/1997 1.9
1/1/2012 2.0
1/1/1985 1.3
1/1/1998 1.7 1/1/2016 1.6
7/1/1985
1.5 1/1/1999 1.5 1/1/2018 1.8
1/1/1988 1.8 1/1/2000 1.9 1/1/2019 2.0
1/1/1989 1.7 1/1/2001 2.0 1/1/2020 1.9
1/1/1990 1.8
1/1/2002 1.8
1/1/1991 2.0 1/1/2005 2.0
PAYMENTS
Payments and reports are due on or before the 20th day of the month following the month of tax collection.
LEGISLATION
Enabling legislation is Chapter 90 of Title 75 (the Vehicle Code) of the Pennsylvania Consolidated Statutes.
AVIATION GASOLINE TAX RATES
(cents per gallon)
JET FUEL TAX RATES
(cents per gallon)
that both taxes shall decrease/increase 0.1 cent per gallon for each 10% change in the producer price index of jet fuel as reported by
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Minor and repealed taxes produce comparatively small annual yields and primarily consist of the following:
fuels and fuels used or sold and delivered by distributors in the commonwealth beginning October 1, 1997. Act 89-2013 repealed the
12 cents per gallon tax on liquid fuels and fuels effective January 1, 2014. Any receipts due to assessments, late filing, court rulings, or
similar events is posted here.
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LEGISLATION
Title 75 (the Vehicle Code) of the Pennsylvania Consolidated Statutes.
operator's licenses, transfers of registration, special hauling permits, and from other states for Pennsylvania's share of registration
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LEGISLATION
Title 75 (the Vehicle Code) of the Pennsylvania Consolidated Statutes.
the sale and rental of properties, maps, and plans. Act 89-2013 ended the transfer of payments from the Pennsylvania Turnpike
1, 1987, the total of certain fines, fees, and costs collected by any division of the unified judicial system which are in excess of the
amount collected from such sources in fiscal year 1986-87 are to be deposited into this account. This transfer was to continue until a
statutory cap of $80 million was transferred but subsequent legislation eliminated this cap. Fines, fees, or costs that are allocated by
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to the Public Transportation Assistance Fund. They can also receive funds out of other taxes, usually from sources related to the
fund’s purpose. For example, a portion of the motor vehicle related Sales and Use Tax revenue is deposited in the Public
Fund can be used generally to fund mass transportation, the Multimodal Transportation fund focuses on more specific categories like
bicycle and pedestrian projects. Somewhere in between these two is the Lottery Fund. By law, all state lottery proceeds must be
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APPLICABILITY OF SALES AND USE TAX
NEWLY PURCHASED TIRE FEE
MOTOR VEHICLE LEASE TAX
MOTOR VEHICLE RENTAL FEE
SALES AND USE TAX TRANSFER
PUBLIC UTILITY REALTY ADDITIONAL TAX
licensed for highway use are deemed to be for highway use regardless of the actual usage. The purchase of new tires in conjunction
with the purchase of other property, for example a motor vehicle, is subject to the fee. The sale of used tires or tires which are for
other than highway use are not subject to the fee.
and fees are in addition to the Sales and Use Tax (SUT) and require any person making sales, rentals, or leases subject to taxes or fees
to obtain a Public Transportation Assistance Tax License from the Department of Revenue. The rules and procedures for filing returns
are the same as for SUT. If a transaction is taxable and the purchaser does not pay the tax to the vendor for any reason, then the
purchaser must pay the tax directly to the Department of Revenue. Specific entities receive exemption for specified purchases.
Tax) of the Tax Reform Code. The term lease means a contract for the use of a motor vehicle for a period of 30 days or more. The 6
Reform Code, at the rate of $2.00 for each day or part of a day for which a vehicle is rented. The term rental means a contract for the
use of a motor vehicle for a period of less than 30 days.
the tax on periodicals under Act 26–1991. Effective for revenues collected on or after April 1, 1995, Act 48 of 1994 requires an
additional transfer of 0.09 percent of SUT revenues from the General Fund to the PTA Fund for the exemption of vehicles class 4 and
above from the lease tax. Effective for transfers after June 30, 2003, Act 46 of 2003 requires an additional amount of 0.417 percent of
SUT to be transferred each month from the General Fund to the PTA Fund. As a result, the current monthly transfer totals 0.947
A of the Tax Reform Code pay an additional tax of 7.6 mills on each dollar of state taxable value of its utility realty. Act 46–2003
Act imposed fees and taxes to be deposited into that fund and dedicated for funding mass transportation, including a portion of
Sales and Use Tax revenue. Act 44-2007 created the transfer of a portion of PTA Fund money to the Public Transportation Trust
Rentals of less than two hours will be subject to a $0.25 fee. Rentals of two to three hours will be subject to a fee of $0.50. Rentals of
more than three but less than four hours will be subject to a $1.25 fee. Rentals of four or more hours will be subject to a fee of $2.00.
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UTILITY GROSS RECEIPTS TAX
suppliers is deposited into the Public Transportation Assistance Fund. Act 46–2003 repealed this transfer effective for fiscal year 2003-
suppliers is deposited into the Public Transportation Assistance Fund. Act 46–2003 repealed this transfer effective for fiscal year 2003-
04 and forward.
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REVENUE SOURCES
Revenue sources for the fund are as follows:
EFFECTIVE SOURCE
2007-08 and Beyond Sales and Use Tax
2017-18 and Beyond Miscellaneous Transportation Fees
2014-15 to 2021-22 Pennsylvania Turnpike Commission
2021-22 and Beyond Pennsylvania Turnpike Commission
2022-23 and Beyond Motor Vehicle Sales and Use Tax
$420 million
$50 million
See formula below
The Motor Vehicle Sales and Use Tax transfer will be $450 million or the total amount of SUT collected in the previous fiscal year
multiplied by the ratio of $450 million to the total amount of SUT collected in fiscal year 2020-21, whichever is greater. Of that
transfer, $30 million will be transferred to the Multimodal Transportation Fund.
Act 89-2013
Act 89-2013
Act 89-2013
77% of total receipts
PUBLIC TRANSPORTATION TRUST FUND
AMOUNT
4.4% of total receipts
The Public Transportation Trust Fund was created by Act 44-2007 to provide dedicated funding to public transportation agencies
for operating costs, capital and asset improvements, and programs of statewide significance. A transfer from Sales and Use Tax
revenue provides part of this fund.
LEGISLATION
Act 44-2007
Act 89-2013
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REVENUE SOURCES
title, certified copies of records, and photo ids. Amounts totaling $35 million annually from the Oil Company Franchise Tax deposited
in the Motor License Fund are transferred to the fund. The fund also receives a $30 million annual transfer from the Pennsylvania
Turnpike Commission. That transfer will cease after fiscal year 2021-22. Beginning in fiscal year 2022-23, the fund will receive a $30
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THE PENNSYLVANIA LOTTERY
PROPERTY TAX OR RENT REBATE (PTRR)
$500
$500
Widow/widower aged 55-64
$15,001 - $18,000
rebates of up to one-half of their base rebate. Similar claimants living elsewhere in the commonwealth are also eligible for
benefits, all federal veterans' disability benefits, all state veterans' benefits, and 50 percent of the average annual Social Security
$300
--
Disabled aged 18-64
$18,001 - $35,000
$250
--
Aged 65+
$0 - $8,000
$650
$650
Spouse aged 65+
$8,001 - $15,000
MAXIMUM OWNER
REBATE
MAXIMUM RENTER
REBATE
ELIGIBLE CLAIMANTS
citizen benefit programs. Lottery sales originated on March 7, 1972 when the first 50-cent ticket went on sale. In November 1972, the
first $1 game was introduced, establishing a product mix of different games. The product mix has undergone numerous revisions
created by Act 42-2017 are deposited in the Lottery Fund. This fund is used to pay prizes and authorized programs. Benefit programs
these games unless authorized by an act of law. The Act also allocates no less than 27 percent of total revenues from the sale of
lottery tickets or shares to property tax relief and free or reduced fare transit service for the elderly in fiscal years beginning before
HOUSEHOLD ELIGIBILITY
INCOME
PTRR program was designed to assist Pennsylvania’s elderly, widows, widowers and permanently disabled citizens in maintaining
statutory possession of their homesteads by providing tax relief in the form of rebate. Eligibility requirement are outlined below:
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LOTTERY FUND
CONTINUED
PHARMACEUTICAL ASSISTANCE (PACE and PACENET)
TRANSPORTATION PROGRAMS
PennCARE
LEGISLATION
Enabling legislation is the State Lottery Law of 1971 (P.L. 351, No. 91), as amended.
eligibility requirements and established the PACE Needs Enhancement Tier (PACENET). Those qualifying for these programs must be
at least 65 years of age and meet income eligibility requirements.
on weekdays, weekends, and holidays. This program also applies to commuter rail lines. The Shared Ride Program for Older
Pennsylvanians, as amended by Act 36–1991, permits citizens aged 65 or older to shared-ride services at a cost of only 15 percent of
aging services at the local level. Lottery funded services include, for example, in-home care, senior center activities, and home
Please refer to the Recent Changes in Tax Law section for additional information.
than $14,500 but not exceeding $27,500 and married couples with annual incomes greater than $17,700 but not exceeding $35,500
is $8 for generic drugs and $15 for brand-name prescriptions. Effective for 2014, Social Security Medicare Part B premiums are now
excluded from income. This change has the same effect as raising the income limits by that amount. For most Medicare beneficiaries,
this amount is $1,258.80 per person for a year. For married couples, the excluded amount would be $2,517.60 for a year.
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GAMING FUND
Several transfers are made from the Gaming Fund, including:
$3 million, annually, to the Department of Health for drug and alcohol addiction treatment services.
$25 million to the General Fund for the Volunteer Fire Company Grant Program.
SLOT MACHINE TAX AND ASSESSMENT
multi-use computing devices, sports wagering, and video gaming devices at licensed truck stops. With the exception of video gaming
devices at licensed trucks stops and fantasy sports contests, each of these types of gaming is assessed a local share assessment which
is deposited into a restricted receipt account within the Gaming Fund. The exact distribution of the assessment is prescribed in the
act. This funding supports various services and public interest projects in the commonwealth and in counties and municipalities
tax is imposed on gross terminal revenue of each Category 4 licensee. For purposes of this calculation, gross terminal revenue is
defined as total cash or cash equivalents received by a slot machine or received as entry fees for slot machine contests or
tournaments less cash or cash equivalents paid out, cash or cash equivalents paid to purchase annuities to fund prizes, and personal
current law, a total of 24 slot machine licenses with four categories have been established. A slot machine tax and local share
assessments are deposited into the Gaming Fund. The local share assessments are deposited into a restricted receipt account
$2 million, or 0.2 percent of gross terminal revenue of all active and operating Category 1,2, and 3 licensed gaming
entities, whichever is greater, annually, to the Compulsive and Problem Gambling Treatment Fund.
$2 million, annually, to the Pennsylvania Gaming Control Board (PGCB) for law enforcement grants. Except that beginning
July 1, 2017, the $2 million is transferred to the Casino Marketing and Capital Development Account, until the earlier of 10
years or when the gross terminal revenue for each Category 1 and 2 gaming entity exceeds $200 million and each Category
3 gaming entity exceeds $50 million for the previous fiscal year.
Payments in lieu taxes to counties, school districts, and townships for tax-exempt land owned by the Department of
Community and Economic Development, Pennsylvania Game Commission, and Pennsylvania Fish and Boat Commission
related to preservation and conservation.
Repayments to the Lottery Fund for property tax relief enacted under Act 1-2006 of the Special Session on Property Tax
Relief.
implementation provisions and, finally, Act 25 of 2016. In addition, the escrow accounts established by each licensed gaming entity
and used to pay the commonwealth’s administrative expenses related to the Act, are also deposited in the Fund. Each Category 1 and
2 slot machine licensee must provide and maintain a deposit of $1.5 million. Each Category 3 licensee must provide and maintain a
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SLOT MACHINE TAX AND ASSESSMENT (continued)
Enabling legislation is the Pennsylvania Race Horse Development and Gaming Act of July 5, 2004 (P.L. 572, No.71).
SLOT MACHINE OPERATION FEE
Enabling legislation is Act 42 of October 30, 2017 (P.L. 419, No. 42).
TABLE GAME ASSESSMENT
Enabling legislation is Act 1 of January 7, 2010 (P.L. 1, No. 1).
INTERACTIVE GAMING TAX AND ASSESSMENT
gaming entity. The exact distribution and uses are prescribed by the legislation and are based upon the classification of the county
and municipality in which the facility resides. This funding supports various services and projects at the county and municipal level.
The local share assessment on each Category 4 licensee is distributed quarterly as follows: 50 percent to a receipt account within the
Commonwealth Financing Authority to be used exclusively for grants for public interest projects within the hosting county and 50
percent to the municipality hosting the facility, subject to budgetary limitations.
machines. The tax is initially deposited in the State Gaming Fund and is then distributed as follows: 65 percent to the Property Tax
Relief Fund, 10 percent to a restricted receipt account within the State Treasury to be distributed to host counties, and 25 percent to
a restricted receipt account to be established in the Commonwealth Financing Authority to be used exclusively for projects in the
distributed as follows: 65 percent to the Property Tax Relief Fund; 10 percent is added to a restricted receipt account within the State
Treasurer for distribution to host counties as prescribed by the act; 10 percent to a restricted receipt account within the
Commonwealth Financing Authority for grants for public interest projects within the commonwealth; and 12 percent to the
imposed on the gross terminal revenue of each Category 3 and 4 slot machine licensee. The local share assessment on each slot
machine licensee, other than a Category 4 licensee, is deposited into the Gaming Fund and, quarterly, is distributed to local
jurisdictions hosting a licensed gaming entity. The distribution and uses are prescribed by the legislation and are based upon the
classification of the county and municipality in which the facility resides. This funding supports various services and projects at the
county and municipal level. The local share assessment remitted by Category 4 licensees is distributed quarterly, as follows: 50
percent to a receipt account within the Commonwealth Financing Authority for grants for projects in the public interest with the
entity in amount equal to 20 percent of the slot machine license fee paid at the time of issuance. The fee is deposited in the Gaming
Fund and, quarterly, is distributed to local jurisdictions hosting a licensed gaming entity. The exact distribution and uses are
prescribed by the legislation and are based upon the classification of the county in which the facility resides. This funding supports
various services and projects at the county and municipal level.
equivalents received in the playing of table games, contest or tournament fees or payments, and total amount of rakes collected
minus cash or cash equivalents paid out, paid to purchase annuities to fund prizes, and paid for personal property distributed to
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INTERACTIVE GAMING TAX AND ASSESSMENT (continued)
Enabling legislation is Act 42 of October 30, 2017 (P.L. 419, No. 42).
MULTIUSE GAMING DEVICE ASSESSMENT
Enabling legislation is Act 42 of October 30, 2017 (P.L. 419, No. 42).
SPORTS WAGERING ASSESSMENT
Enabling legislation is Act 42 of October 30, 2017 (P.L. 419, No. 42).
LICENSES AND FEES
Some license and fee revenue related to slots gaming is deposited into the Gaming Fund. These fees include licenses and annual
renewals for manufacturers and suppliers of slots gaming equipment, and a multitude of other gaming related permits issued by the
PGCB. Prior to fiscal year 2013-14, the one-time slot machine license fee paid by licensed gaming entities ($50 million for a category 1
received by the Board is deposited to the General Fund in accordance with applicable Fiscal Code budget implementation provisions
and, finally, Act 25 of 2016. Act 42-2017 expanded gaming and implemented various fees, including several related to slots gaming.
These fees are deposited to the General Fund.
Act 42-2017 established a 2 percent local share assessment imposed on daily gross interactive gaming revenue of peer-to-peer and
non-peer-to-peer interactive games that simulate table games and of peer-to-peer games simulating slot machines. Fifty (50) percent
of the assessment is deposited into the Gaming Fund and is distributed quarterly to local jurisdictions hosting a licensed gaming
entity. The exact distribution and uses are prescribed by the legislation and are based upon the classification of the county and
municipality in which the facility resides. This funding supports various services and projects at the county and municipal level. The
other 50 percent is deposited into a restricted receipt account established in the Commonwealth Financing Authority for grants for
assessment is deposited into the Gaming Fund and, quarterly, is distributed as follows: Fifty (50) percent to a restricted receipt
account established in the Commonwealth Financing Authority for grants for public interest projects in the county hosting the
qualified airport; except, for an international airport located partially in a county of the first class and partially in a contiguous county,
50 percent to be divided between a school district of the first class and a restricted receipt account within the Commonwealth
Financing Authority for grants for public interest projects in the contiguous host county. The other 50 percent is deposited into a
restricted receipt account established in the Commonwealth Financing Authority for grants for public interest projects in the
commonwealth.
wagering revenue and directed its deposit into a restricted receipt account in the Gaming Fund. On a quarterly basis, the assessment
is deposited into a restricted receipt account established in the Commonwealth Financing Authority for grants for public interest
projects in the commonwealth.
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VIDEO GAMING TERMINAL TAX AND ASSESSMENT
Enabling legislation is Act 42 of October 30, 2017 (P.L. 419, No. 42).
truck stop establishments within the commonwealth by licensed terminal operators. A video gaming terminal tax and local share
Act 42-2017 established a 42 percent Video Gaming Terminal Tax and a 10 percent local share assessment on gross terminal revenue
from all video gaming terminals operated by a terminal operator licensee within this Commonwealth. Gross terminal revenue is
defined as the total of cash or cash equivalents received by a video gaming terminal minus the total of cash or cash equivalents paid
out to players as a result of playing a video gaming terminal. The tax is remitted bimonthly and is deposited in the Video Gaming
Fund, but transferred to the General Fund at the end of each fiscal year as a transfer under non-tax revenue receipts. The local share
assessment is deposited in the Video Gaming Fund. On a quarterly basis, the local share assessment is deposited into a restricted
receipt account established in the Commonwealth Financing Authority for grants for public interest projects in the commonwealth.
Financing Authority for grants for public interest projects in the commonwealth. On the last day of each fiscal year, an amount equal
to 0.002 multiplied by the total gross terminal revenue of all licensed terminal operators is transferred to the Compulsive and
Problem Gambling Treatment Fund. On the last day of each fiscal year, the remaining balance in the Video Gaming Fund that is not
transferred to the Compulsive and Problem Gambling Treatment Fund is transferred to the General Fund as a transfer under non-tax
revenue receipts. In addition, a regulatory assessment imposed on each licensed terminal operator to cover the costs and expenses
incurred by the commonwealth to administer video gaming is deposited into accounts established for each terminal operator within
the Video Gaming Fund until the funds are appropriated by the General Assembly.
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ACT #1 of February 5, 2021 made the following changes:
To the Fiscal Code:
•
•
ACT #136 of November 25, 2020 made the following changes:
To the Public School Code:
•
ACT #132 of November 25, 2020 made the following changes:
To the Mobile Telecommunication Broadband Investment Tax Credit:
•
ACT #129 of November 25, 2020 made the following changes:
To Title 75:
•
•
ACT #118 of November 25, 2020 made the following changes:
To the Local Option Small Games of Chance Act:
•
•
Allows Educational Improvement and Opportunity Scholarship Tax Credits awarded to a business firm during the 2020-21
or 2021-22 fiscal year that cannot be used by the firm during the fiscal year in which it was awarded to be carried forward
and used during the two taxable years following the taxable year in which the tax credit was awarded.
Provides that the Department of Revenue may not award any credits after June 30, 2020, and repeals the credit, effective
immediately. The act establishes the Unserved High-Speed Broadband Funding Program as a grant program to be
administered by the Commonwealth Financing Authority.
Permits political subdivisions and volunteer emergency services to enter into written agreements for the commingling of
tax-free motor fuels, effective November 25, 2020. A political subdivision may also transfer tax-free motor fuels to a
volunteer emergency service.
Provides that Department of Revenue tax agents may report public safety violations related to motor fuels to appropriate
enforcement authorities for investigation.
Provides that, beginning November 25, 2020, club licensees may utilize all proceeds received from small games of chance
for operating expenses beginning with the 2020 calendar year through a period of one year after the termination of either:
(1) The proclamation of disaster emergency issued by the Governor on March 6, 2020; (2), or a declaration of disaster
emergency related to COVID-19 that is issued after March 6, 2020.
Requires licensees to report amounts retained on its annual report to the Department of Revenue.
Provides that federal Paycheck Protection Plan (PPP) loans used to pay business expenses during the COVID-19 pandemic
that are subsequently forgiven by the lender are not taxable income for Pennsylvania personal income tax purposes. The
bill also states that for PA personal income tax purposes, no deduction may be disallowed for an expense that is otherwise
deductible if the payment of the expense results in forgiveness of a covered loan.
Provides specifically that stimulus checks, otherwise known as economic impact payments, being distributed by the
federal government are not subject to Pennsylvania personal income tax under the Tax Reform Code. The payments are
already classified as a rebate that is non-taxable for Pennsylvania personal income tax purposes.
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ACT #114 of November 23, 2020 made the following changes:
To the Fiscal Code:
•
•
•
To Keystone Opportunity Zones:
•
To Military Investment Remediation Projects:
•
ACT #107 of November 3, 2020 made the following changes:
To the City Revitalization and Improvement Zones (CRIZ) Program:
•
•
To the Pennsylvania Housing Tax Credit:
•
•
•
Provides that the credit may be applied against personal income tax, corporate net income tax, bank and trust company
shares tax, title insurance companies shares tax, insurance premiums tax, gross receipts tax, and mutual thrift institutions
tax. The credit may not exceed 50 percent of a taxpayer's liability in a taxable year. The credit may be carried forward up
to five taxable years but may not be carried back or refunded.
Grants access to the qualified authority and each local taxing authority to a report and certification filed under chapter 3-A
of the Transit Revitalization Investment District Act, as well as state or local tax information, filed on or after November
27, 2019, by a qualified business for a designated parcel to document the project's required certification.
Creates the Pennsylvania Housing Tax Credit to encourage the development of low-income housing projects within the
commonwealth. The program is to be administered by the Pennsylvania Housing Finance Agency and the Department of
Revenue. The credit is available to individuals, business firms, corporations, business trusts, limited liability companies,
partnerships, limited liability partnerships, associations or any other forms of legal business entities.
Provides a temporary extension of the timeline to file state and local zone reports due in calendar year 2020.
Provides that the grants and loans authorized under Act 68 of 2020 only apply to zones located in a count of the third class
that has not adopted a home rule charter (Lancaster).
Details that to make credits available, the Secretary of the Budget shall submit a notice to the Legislative Reference Bureau
to appear in the Pennsylvania Bulletin. Until such notice, no credits will be awarded.
Provides for $531,175,000 in transfers from special funds to the General Fund. Large transfers include $100,000,000 from
the Budget Stabilization Reserve Fund and $185,000,000 from the Workers' Compensation Security Fund. The transfer
from the Workers' Compensation Security Fund must be repaid by July 1, 2028.
Provides that a political subdivision may apply to the Department of Community and Economic Development for approval
as a Keystone Opportunity Improvement Zone of a property previously designated by the Governor by executive order as a
proposed improvement subzone in a township of the second class located in a county of the Second Class A. The
application must be made A no later than December 31, 2020.
Repealed and reinstituted a transfer of $13,782,000 to the Environmental Stewardship Fund from Personal Income Tax
revenue for FY 2020-21.
Provides for a transfer of up to $200,000,000 from Personal Income Tax revenues to the Property Tax Relief Fund to
ensure that $621,000,000 in property tax relief is generated for FY 2020-21.
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ACT #68 of July 23, 2020 made the following changes:
To the City Revitalization and Improvement Zones (CRIZ) Program:
•
•
•
To the Rural Jobs and Investment Tax Credit:
•
•
•
ACT #66 of July 23, 2020 made the following changes:
To the Realty Transfer Tax:
•
To the Local Resource Manufacturing Tax Credit:
•
•
Reduces the amount the Department of Revenue may approve in investment authority from $100 million to $50 million.
Amends the definition of “qualified tax liability” to include any other retaliatory tax imposed on a business firm in this
commonwealth. These changes to the Rural Jobs and Investment Tax Credit are effective 60 days from enactment.
A “qualified taxpayer” is a company that: (1) purchases dry natural gas for use in manufacturing petrochemicals or
fertilizers at a project facility in the commonwealth which has been placed in service on or after the effective date; (2) has
made a capital investment of at least $400 million in order to construct the project facility; (3) has created a minimum
aggregate total of 800 new jobs and permanent jobs; (4) has made good faith efforts to recruit and employ, and to
encourage any contactors or subcontractors to recruit and employ, workers from the local labor market for employment
during construction of the project facility; and (5) has demonstrated that the new jobs created at the project facility are
paid at least the prevailing minimum wage and benefit rates for each craft or classification as determined by the
Department of Labor and Industry.
Expands the exemption to any transfer of real estate to or by a volunteer EMS company, volunteer fire company, or
volunteer rescue company, effective immediately.
Establishes the Local Resource Manufacturing Tax Credit program providing a tax credit equal to $0.47 per unit of dry
natural gas that is purchased and used by a qualified taxpayer in the manufacturing of petrochemicals or fertilizers at the
project facility.
Specifies that the prohibition under current law on the use of money for maintenance or repair of a facility does not apply
for the period of April 1, 2020 through June 30, 2021.
Requires that at least 60% of a rural growth fund's investment authority shall be comprised of credit-eligible capital
contributions. The investment shall purchase an equity interest in the rural growth fund or purchase, at par value or
premium, a debt instrument that has a maturity date at least five years from the closing date.
Clarifies that the contracting authority’s report submitted by April 15, used in calculating the excess monies to be
transferred back to the General Fund, includes monies budgeted or appropriated by official resolution of the contracting
authority.
Amends section 1813-C of Article XVIII-C of the Tax Reform Code of 1971 regarding restrictions on the utilization of money
transferred to a contracting authority in a CRIZ. Specifically, the money may be used to provide grants and loans to
qualifying businesses, political subdivisions, and municipal authorities operating within the CRIZ that have been negatively
impacted by the proclamation of disaster emergency related to COVID-19 for the following purposes: business operating
expenses; working capital; business loan payments to financial institutions; payroll to current employees as a means of
retaining employees; and establishment of short-term loan guarantee accounts. These provisions expire June 30, 2021.
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•
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ACT #29 of June 5, 2020 made the following changes:
To the Liquor Code:
•
•
ACT #23 of May 29, 2020 made the following changes:
To the Fiscal Code:
•
•
•
•
ACT #21 of May 21, 2020 made the following changes:
To the Liquor Code:
•
•
Provides for the extension of the transfer of revenues from the Cigarette Tax to the Tobacco Settlement Fund for Fiscal
Year 2020-21.
Provides a Category 1, 2, or 3 slot machine licensee that holds a sports wagering certificate and is affiliated with a
Category 4 licensed facility (mini-casino) may conduct sports wagering at the Category 4 facility without having to pay an
additional sports wagering authorization fee. In the event a Category 4 facility would change ownership and no longer be
affiliated with a sports wagering certificate holder, the facility would be required to pay the sports wagering authorization
fee to continue to offer sports wagering at the facility.
Provides that within 90 days of the effective date, the Pennsylvania Gaming Control Board (board) shall conduct an
auction for the Category 4 (mini-casino) license for which the board denied the application filed by the winning bidder of
the initial auction.
Creates a transfer of $13,782,000 to the Environmental Stewardship Fund from Personal Income Tax revenue for FY 2020-
21.
Allows an entity holding a restaurant or hotel liquor license that has lost more than 25% of their average monthly sales as
a result of restrictions imposed during the COVID-19 disaster emergency to sell prepared beverages and mixed drinks for
off-premises consumption where meals prepared for pickup or curbside pick-up are also available.
The legislation is effective immediately and specifies that sales authorized under this section may continue for the period
after the disaster emergency when the licensee is operating at less than 60% capacity.
Removes the liquid fuel prohibition contained in the Liquor Code for restaurant, hotel and club licensees, malt and brewed
beverage licensees, and malt and brewed beverage manufacturers, distributors, and importing distributors. In addition,
the legislation allows the use of all cash registers by malt or brewed beverage sales by licensees, retail dispenser licensees,
and wine expanded permit holders provided they meet certain conditions.
Exempts national veterans’ organizations and volunteer fire companies from the $700 application surcharge for the
renewal of restaurant, club, or catering club liquor licenses.
The tax credit is capped at $26,666,668 per fiscal year. No more than four qualified taxpayers may receive a tax credit
annually, for a maximum credit of $6,666,667 each. The Department of Revenue, at its discretion, may issue unallocated
credits to a qualified taxpayer, notwithstanding the maximum credit limit per taxpayer. The credits may be used against
personal income tax, corporate net income tax, bank and trust company shares tax, title insurance companies shares tax,
insurance premiums tax, gross receipts tax, and mutual thrift institutions tax.
The tax credit must first be applied against up to 20% of the qualified taxpayer’s tax liabilities in the year in which the tax
credit was approved. The qualified taxpayer is ineligible for other tax credits in the Tax Reform Code. A qualified taxpayer
holding a tax credit through the end of the calendar year in which the tax credit was awarded may sell or assign any
unused tax credit in whole or in part, provided the sale is effective by the close of the following calendar year.
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ACT #20 of May 19, 2020 made the following changes:
To the Property Tax/Rent Rebate Program:
•
•
•
ACT #10 of March 27, 2020 made the following changes:
To the Fiscal Code:
•
•
ACT #101 of November 27, 2019 made the following change:
To the Transit Revitalization Investment District Act:
•
ACT #97 of November 27, 2019 made the following change:
To the State Lottery Law:
•
ACT #90 of November 27, 2019 made the following changes:
To the Time Period for Collection of Assessed Taxes:
•
To Criminal Tax Enforcement:
•
Adds new Article I-A (Emergency Finance and Tax Provisions) to the Fiscal Code, which in part, authorizes the Department
of Revenue to extend filing and payment deadlines related to the personal income tax (PIT) as follows: extends the
deadline for declarations of estimated PIT; extends the deadline for payments of estimated PIT; and extends the deadline
for the filing of informational returns related to Pennsylvania S corporations and partnerships, estates and trusts (Form
PA20S/PA-65). The authorization to extend tax filing and payment dates expires July 31, 2020.
Provides the department additional time for investigation, development, and prosecution of quality cases focusing on
those who are stealing “trust fund” taxes. This provision is effective immediately.
For fiscal years beginning after June 30, 2019, and ending June 30, 2024, the mandated minimum rate of return on
revenues accruing from the sale of lottery tickets is temporarily reduced from 25% to 20%. For fiscal years beginning after
June 30, 2024, the rate returns to 25%.
Beginning January 1, 2021, the time period for collection of taxes owed to the commonwealth is ten years from the date
of the settlement, determination, or assessment of the tax — except in cases of fraud or willfully failing to file a return.
The statute of repose applies to all commonwealth taxes except Inheritance Tax.
Beginning November 27, 2019, state tax revenue resulting from the development of a qualified former military installation
and nearby parcels is directed to a qualified municipal authority created to fund military installation remediation projects.
Permanently establishes the Enhanced Revenue Collections Account (ERCA) within General Fund. Revenues collected and
the amount of refunds avoided as a result of expanded tax return reviews and tax collection activities by the Department
of Revenue will be deposited into the account.
Provides that, if funds are available, a reimbursement on a claim for calendar year 2019 may be made from the State
Lottery Fund immediately.
Extends the filing deadline for calendar year 2019 claims to December 31, 2020.
Requires the Secretary of Revenue to expedite a claim satisfying PTRR eligibility requirements for calendar year 2019
which had a calendar year 2018 claim approved for reimbursement.
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To the Financial Institution Data Match Program:
•
To Sales and Use Tax:
•
ACT #65 of July 2, 2019 made the following change:
To the Beginning Farmer Tax Credit:
•
ACT #20 of June 28, 2019 made the following changes:
To Transfers and Payments:
•
•
•
•
•
•
Provided that an amount equal to the annual debt service due in fiscal year 2019-20 shall be transferred to the Tobacco
Settlement Fund from Cigarette Tax revenues. The amount certified by the Secretary of the Budget shall be deposited by
April 30, 2020.
Provided that any funds from fiscal years ending before July 1, 2019, not committed for local law enforcement grants on
September 1, 2019, shall be transferred to the General Fund. From those transferred funds, $1.192 million shall be
transferred to the Video Gaming Fund.
Act 65-2019 established the Beginning Farmer Tax Credit, which allows an owner of agricultural assets to take a credit
against the personal income tax for the sale or rental of agricultural assets to a beginning farmer. The tax credit shall be
equal to: (1) 5 percent of the lesser of the sale price or the fair market value of the agricultural asset, up to a maximum of
$32,000; or (2) 10 percent of the gross rental income in each of the first, second, and third years of a rental agreement, up
to a maximum of $7,000 per year. No more than $5 million shall be allocated for the taxable year beginning after
December 31, 2019, and no more than $6 million for the taxable years beginning after December 31, 2020. Any amount
authorized but not allocated in any taxable year does not cancel and is added to the allocation for the next taxable year.
The tax credit may not be sold, passed through, carried forward or refunded. The tax credit expires for taxable years
beginning after December 31, 2029.
Beginning November 27, 2019, the sale at retail or use by a financial institution of canned computer software directly
utilized in conducting the business of banking is excluded from Sales and Use Tax. The term “financial institution” means
an institution doing business in the commonwealth subject to the Bank and Trust Company Shares Tax or the Mutual Thrift
Institutions Tax.
Updates the bank attachment process previously established by Act 85 of 2012 by authorizing the department to enter
into agreements with financial institutions to electronically share certain bank account information of delinquent
taxpayers for the purposes of tax collection. Changes are effective January 26, 2020.
Created a restricted revenue account for the Department of General Services to make payments related to the Farm Show
Complex and provides that transfers will be made from Personal Income Tax revenues into this account in each fiscal year
beginning with the 2019-20 fiscal year.
Provided that $3.852 million will be transferred to the State Employees Retirement System from Personal Income Tax
revenues.
Provided that, by September 1, 2020, $45 million will be transferred to the School Safety and Security Fund from Personal
Income Tax revenues.
Provided that $20 million will be transferred to the Environmental Stewardship Fund from Personal Income Tax revenues.
99
ACT #16 of June 28, 2019 made the following changes:
To the Public School Code:
•
•
•
ACT #15 of June 28, 2019 made the following change:
To the Administrative Code:
•
ACT #13 of June 28, 2019 made the following changes:
To the Sales and Use Tax:
•
•
•
•
•
To the Inheritance Tax:
•
To the Personal Income Tax:
•
•
Increased the total aggregate amount of tax credits available in any fiscal year for the Educational Improvement Tax Credit
(EITC) to $185 million from $160 million beginning July 1, 2019.
Beginning July 1, 2019 and applicable to tax year 2019, a qualified subchapter S trust is considered a pass-through entity
for EITC/OSTC purposes.
The sale at retail of building materials and supplies used for the construction or repair of an animal housing facility is
exempt from sales and use tax beginning January 1, 2020.
Beginning January 1, 2020, volunteer firemen’s organizations do not have to charge sales tax on food and beverages sold
to raise funds.
Provided technical changes to the Pub. 1075 requirements previously adopted in Act 40 of 2017. The requirements
provide that all executive branch state agencies or political subdivisions that use federal tax information (FTI) are to
require any current or prospective employee or contractor whose duties and responsibilities require access to FTI to
submit to fingerprinting and a criminal history background check.
Beginning July 1, 2019, vendors who have no physical presence but whose direct sales and facilitated marketplace sales
attributed to Pennsylvania exceed $100,000 must register to collect and remit Pennsylvania sales tax. The act suspended
the Act 43-2017 election and notice requirements.
Beginning January 1, 2020, youth centers do not have to charge sales tax on food and beverages sold to raise funds.
The rate of inheritance tax upon the transfer of property to or for the use of a child 21 years of age or younger from a
parent who dies after December 31, 2019 shall be 0%.
Applicable to tax years beginning after December 31, 2019, a fiduciary may make and file a joint tax return for an estate
and trust for the taxable years when trust income is reported as part of estate income.
Effective July 1, 2019, the value of medals awarded by and prize money received from the United States Olympic
Committee on account of competition in the Olympic Games or Paralympic Games are exempt from personal income tax.
Beginning July 1, 2019, sellers are permitted to include sales tax in the retail price of an item. When including the tax in the
retail price sellers are required to list the sales tax paid on behalf of the purchaser on any receipt or sales documentation.
Increased the total aggregate amount of tax credits available in any fiscal year for the Opportunity Scholarship Tax Credit
(OSTC) to $55 million from $50 million beginning July 1, 2019.
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•
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To the Realty Transfer Tax:
•
•
To the Surplus Lines Tax:
•
To the Table Games Tax:
•
To the City Revitalization and Improvement Zone (CRIZ) Program:
•
To the Coal Refuse Energy and Reclamation Tax Credit:
•
To the Computer Data Center Equipment Incentive Program:
•
The total aggregate amount of state tax refunds approved in any fiscal year for the Computer Data Center Equipment
Incentive Program increases to $7 million from $5 million, effective July 1. 2019.
The additional 2% state tax on casino table games is extended until August 1, 2021. This keeps the total state tax on table
games at 14% through the extension period.
A contracting authority may now use CRIZ funds to make improvements within and outside of the zone without state
approval for the expended funds on utilities, water, sewer, storm water, parking, road improvements, or
telecommunications. Additionally, CRIZ funds may be utilized to establish a revolving loan for a qualified business.
Beginning July 1, 2019, the total amount of credits that can be awarded increases from $10 million to $20 million per fiscal
year. The commonwealth may reduce the amount of credits awarded to applicants that participate in a similar Federal
Coal Refuse Reclamation Tax Credit Program that has yet to be created. Additionally, the sunset date of the program is
extended to December 31, 2036.
Beginning July 1, 2019, any transfer of real estate that is subject to agricultural conservation easement to a qualified
beginner farmer is exempt from realty transfer tax.
Beginning in fiscal year 2019-20, the annual transfer from realty transfer tax revenue to the Pennsylvania Housing
Affordability and Rehabilitation Enhancement (PHARE) Fund increased from a $25 million minimum to a $40 million
minimum or the difference between total realty transfer tax collections for the prior fiscal year and the official estimate
for fiscal year 2014-15.
For policies placed after June 30, 2019, premiums received for surplus lines insurance sold to a charter school,
regional charter school, or cyber charter school are not subject to surplus lines tax.
Applicable to tax years beginning after December 31, 2019, net gains or income, net losses, and dividends which are
excluded from federal income in a Federal Opportunity Zone are also excluded from Pennsylvania personal income tax.
Applicable to tax years beginning after December 31, 2019, net gains or income, net losses, and dividends which are
excluded from federal income in a Federal Opportunity Zone are also excluded from Pennsylvania personal income tax.
Beginning January 1, 2020, each paid tax return preparer is required to sign and list their IRS preparer tax identification
number (PTIN) on each Pennsylvania personal income tax return they prepare.
Beginning in tax year 2020, the Department of Revenue shall provide personal income taxpayers the option to voluntarily
designate a contribution from their tax refund to the Veterans’ Trust Fund.
101
To the Entertainment Production Tax Credit:
•
o
o
To the Historic Preservation Tax Credit:
•
To the Keystone Opportunity Expansion Zone Program:
•
To the Mixed-Use Development Tax Credit:
•
To the Neighborhood Assistance Tax Credit:
•
To the Qualified Manufacturing Innovation and Reinvestment Deduction:
•
To the Resource Enhancement and Protection (REAP) Tax Credit:
•
A number of changes are made to this credit program effective July 1, 2019. Among the changes, the credit is expanded to
include non-commercial and workforce housing projects. The total aggregate amount of tax credits available in any fiscal
year for the Historic Preservation Tax Credit increases to $5 million from $3 million. The deadline to file an application for
the credit requires the payment of a processing fee and requires applications to be submitted between October 1 and
October 31. No applications will be accepted after February 1, 2031.
Three additional Keystone Opportunity Expansion Zones may be established. Applications that meet population criteria
within this expansion must be received prior to October 1, 2021.
The total aggregate amount of tax credits available in any fiscal year for the Mixed-used Development Tax Credit shall
increase to $3 million from $2 million.
Effective July 1, 2019, youth and adolescent development services have been added as a defined activity by a
neighborhood organization. Business firms may contribute to a neighborhood organization which engages in the activities
of providing youth and adolescent development services. No more than $2 million of the total aggregate amount of tax
credits available may be used towards youth and adolescent development services.
Applicable to tax years beginning after December 31, 2019, manufacturers that invest between $60 million and $100
million in the creation of new or refurbished manufacturing capacity may deduct up to 7.5% of capital investment from
taxable income for corporate net income tax purposes annually for ten years, up to a maximum of 37.5% of the
investment. Manufacturers that invest more than $100 million are still permitted to deduct up to 5% of capital investment
annually for ten years, for a maximum of 25% of the investment.
The total aggregate amount of tax credits available in any fiscal year for the REAP Tax Credit shall increase to $13 million
from $10 million, with $3 million to be used for projects in the Chesapeake Bay watershed area. Additionally, the program
now permits joint filing for utilization of the credit. Changes are effective July 1, 2019.
Applicable to fiscal years beginning on or after July 1, 2019, numerous changes were made to these tax credit programs:
Under the Entertainment Economic Enhancement Program (EEEP), eligible postproduction and rehearsal
expenses and qualified taxpayers are expanded. Further, the cap structure was amended, and total credits
available will increase to $8 million from $4 million.
The Film Production Tax Credit Program cap will increase to $70 million from $65 million. Special procedures
are created for sale, assignment, and usage of credits within the same federal consolidated group. For Film
Production Tax Credit districts, the size, investment, and technical requirements for the districts are amended.
102
To the Rural Jobs and Investment Tax Credit:
•
To the Strategic Development Area (SDA) Program:
•
To the Tax Credit for New Jobs:
•
ACT #131 of October 24, 2018 made the following changes:
To the Corporate Net Income Tax:
•
•
ACT #109 of October 24, 2018 made the following changes:
To the Hotel Occupancy Tax:
•
•
ACT #100 of October 24, 2018 made the following changes:
To the Neighborhood Assistance Program Tax Credit:
•
To the Realty Transfer Tax:
•
Exempts from tax transfers of real estate by a housing authority created under the Housing Authorities Law to a nonprofit
organization, which is utilizing the real estate for the purpose of Rental Assistance Demonstration administered by the U.S.
Department of Housing and Urban Development. This applies to a county of the fifth class with a population between
115,000 and 118,000 that filed an appeal with the Board of Finance and Revenue after December 31, 2015.
Increases the Neighborhood Assistance Program Tax Credit cap from $18 to $36 million, effective July 1, 2019.
Directs that the tax collected on accommodation fees will be deposited into the Tourism Promotion Fund and disbursed
for the purpose of promoting tourism within the commonwealth.
Provides that booking agents that act as intermediaries in facilitating the short-term booking of an occupancy are required
to collect and remit hotel occupancy tax on the room as well as any additional amounts charged, including service and
accommodation fees, effective January 22, 2019.
Allows “qualified air freight forwarding companies” to utilize special income apportionment based on revenue miles, for
tax years starting after December 31, 2016.
Qualified companies are those engaged in the air freight forwarding business and primarily use an airline with which it has
common ownership and control. Such companies shall use the revenue miles of the airline.
DCED may not approve applications for the Tax Credit for New Jobs after June 30, 2020.
The total amount of tax credits available in any fiscal year for the Rural Jobs and Investment Tax Credit is increased to $6
million from $1 million. Total awards, in the aggregate, may not exceed $30 million. This change is effective July 1, 2019.
Applicable to tax years beginning on or after January 1, 2019, certain items used within and outside of a designated SDA by
a business qualified for the program are exempt from state and local sales and use tax when exclusively used by an
employee assigned to a location in the SDA.
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ACT #72 of June 28, 2018 made the following changes:
To the Corporate Net Income Tax:
•
ACT #52 of June 28, 2018 made the following changes:
To the Gross Receipts Tax:
•
ACT #42 of June 22, 2018 made the following changes:
To the Property Tax/Rent Rebate (PTRR) Program:
•
To the Neighborhood Improvement Zone:
•
To the Entertainment Economic Enhancement Program:
•
To the Enhanced Revenue Collections Account:
•
To Transfers and Payments:
•
For fiscal year 2018-19 only, increases the number of tours that may be awarded concert rehearsal and tour tax credits
from five to 10 tours. The Department of Community and Economic Development in consultation with the Department of
Revenue may advance the award of tax credits for qualified rehearsal and tour expenses incurred or to be incurred to a
maximum of two additional tours in fiscal year 2018-19.
Effective for claim year 2018 and thereafter, retired federal civil service employees receiving benefit payments from the
Civil Service Retirement System (CSRS) who did not have to contribute to Social Security for that equivalent period of
employment will be able to exclude 50% of the average annual Social Security benefit amount from their PTRR income on
claim forms reporting their eligibility income for Property Tax and Rent Rebate purposes.
Effective immediately, adds the definition of “entertainment business financial management firm” to enable the
contracting authority to identify the responsible party required to fulfill reporting compliance on behalf of a qualified
business, for concerts or other performances in a facility in the zone.
Provides that the Enhanced Revenue Collection Account (ERCA) in the Department of Revenue will continue through FY
2019-20. For fiscal years from 2018-19 and 2019-20, up to $30 million is appropriated to the department to fund the costs
associated with the increased tax collection enforcement and reduction of tax refund errors.
Provides that $5.2 million and $4.901 million shall be transferred to the Public School Employees Retirement System and
the State Employees Retirement System, respectively, from Personal Income Tax revenues.
Excludes from Gross Receipts Tax the sales of telephones, telephone handsets, modems, tablets, and related accessories,
including cases, chargers, holsters, clips, hands-free devices, screen protectors and batteries from both landline receipts
and mobile telecommunications receipts. The act is effective immediately and retroactively applies to gross receipts from
transactions occurring on or after January 1, 2004, except claims for refund or credit for a tax paid prior to the effective
date.
For property placed in service after September 27, 2017, companies can take an additional deduction under Internal
Revenue Code §167 and §168 on their Pennsylvania return, which generally would be depreciation under modified
acceleration cost recovery system or other accounting methods. The act is effective immediately for tax years beginning
on or after January 1, 2017.
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ACT #39 of June 22, 2018 made the following changes:
To the Public School Code:
•
ACT #55 of November 7, 2017 made the following changes:
To The Public School Code:
•
ACT #48 of October 30, 2017 made the following changes:
To Tax Credit Programs:
•
ACT #44 of October 30, 2017 made the following changes:
To Transfers and Payments:
•
•
To the Enhanced Revenue Collections Account:
•
•
Provides that during fiscal year 2017-18, $300 million shall be transferred from amounts available in special funds and
restricted accounts to the General Fund.
Provides that the Independent Fiscal Office (IFO) will review all tax credit programs and that every tax credit program is
reviewed at least once during a five-year period. The director of the IFO and the Secretary of the Budget are to develop a
schedule for review of all tax credits within 30 days of the legislation’s effective date.
Educational Tax Credits: Increases funding from $125 million to $135 million for the aggregate amount of all tax credits
approved for contributions from business firms to scholarship organizations, educational improvement organizations and
pre-kindergarten scholarship organizations.
Provides for $200 million to be transferred from the Pennsylvania Professional Liability Joint Underwriting Association on
or before December 1, 2017.
Provides that the Enhanced Revenue Collection Account (ERCA) in the Department of Revenue will continue through FY
2019-20. For fiscal years from 2017-18 through 2019-20, up to $30 million is appropriated to the department to fund the
costs associated with the increased tax collection enforcement and reduction of tax refund errors.
Specifies that the balance of the money in the account shall be returned proportionately to the General Fund revenue or
refund accounts that were the source of the money no later than the 28th day of each month of the fiscal year.
Educational Tax Credits: Increases funding from $135 million to $160 million for the aggregate amount of all tax credits
approved for contributions from business firms to scholarship organizations, educational improvement organizations and
pre-kindergarten scholarship organizations.
Provides that, by September 1, 2018, $15 million shall be transferred to the School Safety and Security Fund from Personal
Income Tax Revenues.
Provides that if the Secretary of the Budget certifies that there is a surplus in the General Fund for fiscal year 2017-18, 50
percent of the surplus shall be deposited by the end of the next succeeding fiscal quarter into the Budget Stabilization
Reserve Fund.
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ACT #43 of October 30, 2017 made the following changes:
To the Sales and Use Tax:
•
•
• Makes provisions for marketplace sales:
○
○
○
To the Personal Income Tax:
•
•
•
•
Defines affected entities to include: marketplace facilitators, persons who list or advertise property for sale in
any forum and who either directly or indirectly collect the payment from the purchaser and transmit the
payment to the person selling the property; remote sellers, persons that do not maintain a place of business in
the commonwealth and sell at retail into the commonwealth; and referrers, persons who provide a forum for
interaction between buyers and sellers but do not directly participate in the sale. Marketplace facilitators and
referrers are required to file an election on behalf of all the sellers participating in their system. If the election
is made to collect sales tax, then the marketplace facilitator or referrer is required to collect and remit sales tax
on all of its taxable marketplace sales.
Provides that, for entities opting to collect sales tax, the new provisions require collection to begin by April 1,
2018, for tangible personal property. The effective date is delayed until April 1, 2019, for digital goods such as
electronic copies of books, canned software, music and similar items.
Sellers of products on the internet not maintaining a place of business in the commonwealth and not collecting
Pennsylvania sales tax, making sales of at least $10,000 into Pennsylvania in the previous calendar year, must
file an election by March 1, 2018, opting either to begin to collect sales and use tax by April 1, or commit to
sending use tax notices with each sale. Additionally, sellers sending notices must also send an annual summary
of purchases both to the customer and to the Department of Revenue.
Effective October 30, 2017, help desk or call center support for canned software is exempt from sales and use tax when
separately invoiced.
Effective October 30, 2017, kegs used to contain malt or brewed beverages are exempt from sales and use tax as part of
wrapping and packaging supplies.
Further clarifies that ABLE accounts, undistributed earnings, and distributions for qualified disability expenses of the
account beneficiary are exempt from tax.
Effective October 30, 2017, repeals the expired Korea/Vietnam Memorial National Education Center refund donation
checkoff, and repeals the expiration of the refund donation checkoffs for the Wild Resource Conservation Fund, Organ and
Tissue Donation Awareness Trust Fund, Military Family Relief Assistance Program, Pennsylvania Children’s Trust Fund and
American Red Cross.
Effective January 1, 2018, requires payers of nonemployee compensation and business income to non-resident individuals
(or disregarded entities with a non-resident owner) to withhold income tax from such payments. The United States
government, the Commonwealth of Pennsylvania, their agencies, instrumentalities, and any political subdivisions of
Pennsylvania are excluded from this withholding requirement. Further, lessees of Pennsylvania real estate making “lease
payments” to non-resident lessors are also required to withhold personal income tax on such payments. Residential rental
payments are exempt from the withholding requirement. Withholding of tax is required for payments of $5,000 or more
annually and is optional on payments less than $5,000.
Effective October 30, 2017, a contributor to an Achieving a Better Life Experience (ABLE) account may deduct up to the
current dollar limit under Internal Revenue Code Section 2503(b) from Pennsylvania taxable income, provided the
deduction does not reduce the contributor’s taxable income to less than zero. Note that under the IRC, yearly total
contributions from all contributors to an ABLE account are limited to the amount in IRC Section 2503(b).
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To the Corporate Net Income Tax:
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To the Realty Transfer Tax:
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To the Inheritance Tax:
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To the Public Transportation Assistance Fund:
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To the Fireworks Tax:
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To Tax Credit and Economic Development Programs:
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Provides that before a tax credit can be awarded, the Department of Revenue may make a finding that the taxpayer has
filed all required state tax reports and returns and paid any balance due, unless the tax due is currently under appeal.
Effective October 30, 2017, provides for a prorated fee for partial day car sharing services as a clarification of the current
vehicle rental fee. Rentals of less than two hours will be subject to a $0.25 fee. Rentals of two to three hours will be
subject to a fee of $0.50. Rentals of more than three but less than four hours will be subject to a $1.25 fee. Rentals of four
or more hours will be subject to a fee of $2.00.
Incorporates the existing Fireworks Law into the Tax Reform Code and modernizes and expands the definition of legal
consumer fireworks. The Department of Agriculture will continue to administer the Fireworks Law.
Effective October 30, 2017, imposes a 12 percent tax on the sale price of consumer fireworks suitable for use by the
public. The fireworks tax will be in addition to the sales and use tax already imposed on such sales.
Clarifies existing requirements regarding the filing of returns for the inheritance tax exemption on transfers of certain
family owned farms and family owned businesses. Any inheritance tax return filed after July 1, 2012, under Section 2136
(returns) that reports transfers of property which are exempt from inheritance tax under Section 2111 (transfers not
subject to tax) will be considered timely if filed within one year of the tax return due date, including an extended due date.
Amends the existing Film Production Tax Credit to authorize the creation of not more than two film production tax credit
districts. The districts must meet certain location, size, technical, and investment requirements, and the designation will
expire after 15 years. Tax credits for these districts are in addition to the existing Film Production Tax Credit and may be
approved beginning in fiscal year 2019-20.
Creates the Qualified Manufacturing Innovation & Reinvestment Deduction, which allows a qualified business to deduct
five percent of its capital investment from their corporate net income tax liability if it invests at least $100 million in the
creation of new or refurbished manufacturing capacity within 3 years of a designated start date. The deduction would be
available to each qualifying business for five years and cannot exceed 50 percent of the corporation’s tax liability. The
deduction is effective December 29, 2017.
Effective October 30, 2017, broadens the category of veterans’ service organizations defined as tax-exempt.
Effective upon publication of the notice, the $5 million cap on NOL deductions is removed, and the deduction is capped at
35% of taxable income for tax year 2018 and capped at 40% of taxable income for tax year 2019 and after.
Provides that if any part of the net operating loss (NOL) deduction is declared to be unconstitutional by the Pennsylvania
Supreme Court, the Department of Revenue is required to publish a notice of the decision in the Pennsylvania Bulletin.
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To Petitions for Reassessment:
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ACT #42 of October 30, 2017 made the following changes:
To Title 4 Amusements (Gaming):
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• Provides for Category 3 facilities to add up to 250 additional slots and 15 additional tables for an additional fee.
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• Provides for the conduct of fantasy contests by licensed operators and the taxes and fees associated therewith.
Effective in one year, amends the Neighborhood Improvement Zone (NIZ) program to allow the contracting authority to
transfer parcels out of the zone and replace with parcels not to exceed the acreage transferred out. The Department of
Revenue and municipality must certify that there is no activity in the parcels being transferred that generates tax receipts
or other revenue.
For petitions for refunds, petitions for reassessments, and petitions for redeterminations filed with the Department on or
after December 29, 2017, reduces the period of time for a taxpayer to file a petition for reassessment, review or
adjustment with the Board of Appeals (BOA) from 90 days to 60 days after the mailing date of the notice of assessment,
and additionally reduces the time period for appeal to the Board of Finance and Revenue (BF&R) by a taxpayer from 90
days to 60 days.
Provides for the implementation of interactive gaming operated by slot machine licensees and qualified gaming entities
and the taxes and fees associated therewith.
Provides for an interactive gaming certificate holder to conduct interactive gaming at a qualified airport through the use of
multi-use computing devices.
Accelerates repayment of loans provided under Section 1901 to be deposited to the General Fund instead of the State
Gaming Fund.
Provides for ten Category 4 slot machine licenses, along with the taxes and fees associated with the slots and tables
operated therein.
Provides for the removal of Category 3 license conditions, defining which individuals may enter a gaming area, for a one-
time fee to be deposited in the General Fund.
Provides for video gaming at licensed truck stop establishments and establishes the Video Gaming Fund in which the taxes
on gross terminal revenue are to be initially deposited.
Effective October 30, 2017, amends the City Revitalization and Improvement Zone (CRIZ) program to allow an inactive
parcel to be transferred out of the zone and replaced with a parcel of equal or lesser acreage. Such a transfer of parcels in
and out of the zone does not need to occur simultaneously. Provides that excess money transferred to a CRIZ fund for
utilization in a pilot zone is not required to be returned to the commonwealth by the pilot zone’s contracting authority and
must be used in accordance with the current utilization provisions in the article.
Extends the application deadline for additional Keystone Opportunity Zones from October 2016 to October 2018 and
extends the date for DCED action on applications for additional KOZs from December 2016 to December 2018.
Moves the authorizing language for the Entertainment Economic Enhancement Program from Title 12, Chapter 33 to the
Tax Reform as Subarticle E of the Entertainment Production Tax Credits. The program’s Concert Rehearsal and Tour Tax
Credit remains available to up to five tours per year at a maximum credit of $800,000 per tour.
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ACT #39 of October 30, 2017 made the following changes:
To the Personal Income Tax:
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ACT #7 of June 22, 2017 made the following changes:
To the Concert Rehearsal and Tour Tax Credit/Entertainment Economic Enhancement Program:
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ACT #175 of November 21, 2016 made the following changes:
To the Realty Transfer Tax:
• Clarifies timelines for the applicability of definition changes for the terms “conservancy” and “veterans’ organization”.
ACT #151 of November 4, 2016 made the following changes:
To the Sales and Use Tax:
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ACT #117 of November 2, 2016 made the following changes:
To the Property Tax or Rent Rebate (PTRR)Program:
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ACT #93 of July 20, 2016 made the following changes:
To the Personal Income Tax:
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Amended the definition of income to exclude federal veterans’ disability payments and state veterans’ benefits. The
changes are effective within 60 days and will first impact claim year 2017 rebates.
Effective within 180 days, provides that in the case of any taxpayer due to receive a personal income tax refund, the
Department of Revenue shall deduct the amount of any court-ordered obligations arising from criminal prosecution or
proceeding and pay the amount to the clerk of courts for the county in which the order was entered.
Provides for an annual $700,000 transfer to the Transit Revitalization Investment District (TRID) Fund for 20 calendar years
beginning June 1, 2016.
Changes the structure of the program cap from $4 million per year to permitting awards to up to five tours per year with a
maximum award of up to $800,000 per tour.
Creates a new personal income tax refund donation checkoff option for donations to pediatric cancer research, beginning
with tax year 2018 returns.
Moves the authorizing language from the Tax Reform Code to the Entertainment Economic Enhancement Program under
Title 12, Chapter 33 of the Pennsylvania Consolidated Statutes.
Provides for the conduct of sports wagering by sports wagering certificate holders and the taxes and fees associated
therewith.
Eliminates the higher tax rate of 14 percent of daily gross table game revenue applicable for a period of two years
following commencement of table games operations at a licensed facility.
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ACT #86 of July 13, 2016 made the following changes:
To the Public School Code:
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ACT #85 of July 13, 2016 made the following changes:
To the Fiscal Code:
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In fiscal year 2016-17, the following transfers, totaling $265.5 million, will be made to the General Fund:
○ $5.0 million from the Alternative Fuels Incentive Fund;
○ $2.0 million from the Local Law Enforcement Block Grants;
○ $9.0 million from the Recycling Fund;
○ $28.5 million from the Tobacco Settlement Fund;
○ $9.0 million from the Volunteer Companies Loan Fund;
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○ $12.0 million from the CFA Building Pennsylvania program account.
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$200.0 million from the unappropriated surplus of the Pennsylvania Professional Liability Joint Underwriting
Association; and
For any slot machine issued in fiscal year 2016-17, the Pennsylvania Gaming Control Board shall require the slot machine
license fee ($50.0 million) and the table games authorization fee ($24.75 million) to be paid in full to the General Fund no
later than June 30, 2017.
Authorized a transfer to the Commonwealth Financing Authority (CFA) restricted revenue account from sales and use tax
for such amounts as may be necessary to make payment for principal and interest obligations coming due in each fiscal
year, beginning July 1, 2016 and thereafter.
Under the Cigarette and the Sales and Use taxes, starting August 1, 2016, the mandatory cost of doing business (selling
cigarettes) increases from 6.0 percent to 7.0 percent, resulting in a minimum price increase of $0.06.
In fiscal year 2016-17, $350.2 million in payments will be made from the Tobacco Settlement Fund to fund health related
programs.
The Educational Tax Credit statute was moved back to the Public School Code from the Tax Reform Code by Act 86 of 2016
as well.
Educational Tax Credits: Funding has increased from $100 million to $125 million for the aggregate amount of all tax
credits approved for contributions from business firms to scholarship organizations, educational improvement
organizations and pre-kindergarten scholarship organizations. Additionally, a new procedural change effective for the
2016-17 fiscal year requires the Department of Community and Economic Development to notify applicants of the status
of the application in writing within 90 days of submitting the application to the Department.
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ACT #84 of July 13, 2016 made the following changes:
To the Sales and Use Tax:
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To the Cigarette and Tobacco Products Taxes:
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• The expiration date of the Local Cigarette Tax of June 30, 2019 is eliminated.
To the Corporate Net Income Tax:
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Effective September 11, 2016, the sale at retail or use of services related to the setup, teardown, or maintenance of
tangible personal property rented by an authority to exhibitors at the Pennsylvania Convention Center and the David L.
Lawrence Convention Center is exempt from sales and use tax.
A transfer of monies from the General Fund to the Local Cigarette Tax Fund is established to occur if the amount of monies
deposited in the Local Cigarette Tax Fund in fiscal year 2016-17 and thereafter falls below the amount deposited in fiscal
year 2015-16. The transfer amount shall be equal to the difference between the amount deposited in the Local Cigarette
Tax Fund in the given fiscal year and $58 million. The transfer, if it is necessary, will occur annually by July 15th.
For tax years beginning after December 31, 2015, corporate net income tax reports (RCT-101) are due 30 days after the
federal report is due, or would be due if that corporation were required to file federally.
Starting August 1, 2016, the state tax on cigarettes is $2.60 per pack, a $1.00 per pack increase. In Philadelphia the tax will
be $4.60 per pack.
Effective October 1, 2016, pipe tobacco, chewing tobacco, snuff, and any other tobacco products for chewing, ingesting or
smoking, except cigars, will be subject to a $0.55 per ounce tax, with a minimum tax per package of $0.66. Electronic
cigarettes including both the liquid product and the delivery device will be subject to a 40 percent tax on the wholesale
price.
Effective immediately, the possession, sale or distribution of zappers or sales suppression software with the intent to
evade taxes is deemed an offense and individuals could be fined up to $10,000 and one year in prison.
Effective immediately, returnable corrugated boxes used to deliver snack food products when purchased by a
manufacturer are exempt from the sales and use tax.
Effective July 1, 2017, property and services directly and predominately used in timbering operations are exempt from
sales and use tax when purchased by a company primarily engaged in the business of harvesting trees. Timbering does not
include the harvesting of trees for clearing land for access roads.
The tax on roll-your-own tobacco at $0.55 per ounce will be effective 60 days after the Attorney General publishes a
notice in the Pennsylvania Bulletin that the tax is permitted under the Master Settlement Agreement with the tobacco
companies.
Starting August 1, 2016, the sales and use tax specifically extends to items delivered to a customer electronically or
digitally or by streaming. This includes music or any other audio, video - such as movies and streaming services - e-books
and any otherwise taxable printed matter. Also now taxable are items such as apps and in-app purchases, ringtones, online
games, canned software - frequently referred to as off-the-shelf software - and any updates, maintenance or support of
these items. Items that are exempt in physical form are not subject to tax.
For sales tax returns for periods ending after August 1, 2016, the sales tax vendor discount is capped at the lesser of one
percent of the amount of sales tax collected or $25 on a monthly return, $75 on a quarterly return or $150 on a semi-
annual return.
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To the Bank Shares Tax:
• Effective January 1, 2107, the bank shares tax rate changes from 0.89 percent to 0.95 percent.
• Effective January 1, 2018 a phased-in deduction is allowed for Edge Act corporation equity.
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To the Personal Income Tax:
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The Act clarifies the language specifying the treatment of intangible drilling costs in the personal income tax.
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To the Realty Transfer Tax:
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All three provisions take effect September 11, 2016.
To the Inheritance Tax:
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Transfers to or from a land bank, which can be established by government entities in the commonwealth, are excluded
from tax under the Realty Transfer Tax.
Effective September 11, 2016, Section 1033 of the Internal Revenue Code shall be applicable to the personal income tax.
This federal provision allows a taxpayer to acquire replacement property and make an election to defer recognition of gain
following an involuntary conversion, for example when the original property is destroyed by fire or natural disaster.
Agricultural, conservation, or historic preservation easements transferred or sold to certain dedicated conservancies as
well as government entities may be made without the seller paying the realty transfer tax.
Transfers by not-for-profit veterans’ organizations that are recognized by the Internal Revenue Service as 501(c)(19) tax-
exempt organizations are exempt from realty transfer tax, though other parties to the transaction may still be liable.
The exemption for family farms and family businesses are amended, allowing for farms and businesses that are
transferred “to or for the benefit of” a member of the same family to be exempt from the taxable estate. This language
extends the family farm and business exclusions to transfers of trusts for the benefit of members of the same family. This
amendment also added relatives of a decedent’s spouse to the definition of “members of the same family.” The farm
provision is effective retroactive to dates of death after December 31, 2012, while the business provision is retroactive to
dates of death after June 30, 2013.
The deduction for goodwill generated from combination activity and for the apportionment of receipts from investment
and trading assets and activities has been clarified.
Retroactive to January 1, 2016, the Pennsylvania personal income tax applies to cash prizes from the Pennsylvania Lottery.
Starting in the 2016 tax year, taxpayers receiving a personal income tax refund will have the option of designating all or a
portion of the refund as a contribution to a Tuition Account Program (TAP) directly from their personal income tax return.
The source for income in the receipts definition is changed from the federal tax return to the Consolidated Reports of
Condition.
Beginning with amended reports filed after December 31, 2016, the Act provides procedures for corporations filing
amended corporate tax reports (RTC-101). Taxpayers will have three years from the due date of the original report to file
an amended report. The department will have one year from the date the amended report is filed to notify the taxpayer if
the changes are accepted. If the taxpayer is not notified within one year, the report is deemed accepted.
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To the Tax Amnesty Program:
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To the Table Game Taxes:
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To the Tax Credits and Economic Development Programs
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• Repealed Article XVII-F of the Tax Reform Code containing the provisions of the Educational Tax Credit Program.
Concert Rehearsal and Tour Tax Credit: This tax credit is designed to attract investment in the commonwealth
by awarding tax credits to tour operators representing musicians for rehearsals and live musical performances
within the state. Credits may be awarded for up to 40 percent of eligible expenses up to $800,000 per taxpayer
per fiscal year. The budget allocation is $4 million a year beginning in the 2017-18 fiscal year.
Video Game Production Tax Credit: This new tax credit is designed to attract investment in the commonwealth
by awarding tax credits for production expenses incurred by video game production companies. Credits may be
awarded for up to 25 percent of qualified expenses in the first four years of production and 10 percent for each
year thereafter per taxpayer per fiscal year. The budget allocation is $1 million a year beginning in the 2017-18
fiscal year.
Coal Refuse Energy and Reclamation Tax Credit: This new tax credit is designed to incentivize eligible facilities that
generate electricity in the commonwealth to use coal refuse for power generation, control acid gasses for emission
control and use ash produced by the facility to reclaim mining-affected sites. Credits may be awarded at a rate of $4 per
2,000 pounds of qualified refuse capped at 22.2 percent of the available budget allocation per fiscal year. The allocation is
$7.5 million for the 2016-17 fiscal year and $10 million each fiscal year thereafter.
Film Production Tax Credit: The scope for eligible production expenses used to quantify the tax credit and
permitted uses of the credit against tax liability has been expanded. Additionally, the budget allocation has also
been increased from $60 million to $65 million per year beginning in the 2017-18 fiscal year. Additionally, the
Department of Community and Economic Development may now reissue unused Film Production Tax Credits
from prior fiscal years, beginning in the 2017-18 fiscal year.
Waterfront Development Tax Credit: This new tax credit is designed to generate funding for waterfront development
projects that provide or improve public access to waterfront sites within the commonwealth. Contributions in the form of
cash or personal property may be donated to an approved waterfront organization for up to a 75 percent equivalent tax
credit per contributed dollar. The budget allocation is $1.5 million a year beginning in the 2017-18 fiscal year.
The sunset provision of December 31, 2015, for the Research and Development (R&D) tax credit has been removed from
the law.
The Film Production Tax Credit is renamed the Entertainment Production Tax Credit. There are three subsections: An
expanded Film Production Tax Credit, and two new tax credits, the Concert Rehearsal and Tour Tax Credit and the Video
Game Production Tax Credit.
The 12 percent tax on casinos’ gross table games revenue is increased to 14 percent effective August 1, 2016. This
additional 2 percent tax is set to expire on June 30, 2019.
The Act provides for a tax amnesty program to be implemented by the Department of Revenue. The Governor will
establish the 60-day period that must end by June 30, 2017. During amnesty, the department will waive 100 percent of
penalties and half of the interest due on taxes delinquent as of December 31, 2015. The department is required to publish
guidelines for the program within 60 days of the effective date of Act 84, including an explanation of the program, the
amnesty period dates, a sample tax return, and estimates for amnesty revenue.
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The Neighborhood Assistance Tax Credit program is amended with new definitions for affordable housing, domestic
violence or veterans’ housing assistance. By inclusion of these amendments, tax credits may be awarded equivalent to 75
percent of the total amount contributed by business firms participating in the program. The amendment is effective
immediately.
The Malt Beverage Tax Credit will be reinstated in the 2017-18 fiscal year with a $5 million a year budget allocation. The
credit was formerly effective from January 1, 1974, to December 31, 2008.
Neighborhood Improvement Zone (NIZ) Program: The NIZ program has been amended to include broadened definitions
regarding the scope and administration of the program for the state and contracting authority. Amendments include new
penalty provisions, acceptance of late reports within the program reconciliation and an annual program audit by an
independent auditing firm. Other notable changes include the prohibition of assessing real estate taxes on any property
owned by the contracting authority in a zone, collection and distribution changes to local hotel taxes within the zone, and
property valuation prohibitions for property within the zone for use by the county.
The sunset date for the Keystone Special Development Zone (KSDZ) Tax Credit program has been changed from 2026 to
2035. The amendment is effective immediately.
The Keystone Opportunity Zone (KOZ) program has been expanded to include the designation of 12 new Keystone
Opportunity Expansion Zones consisting of 375 acres each for a period of up to 10 years effective January 1, 2017 to
December 31, 2026. In addition, existing parcels can be extended up to 10 years for state tax benefits, if the applicant can
meet the job creation and capital investment requirements in the enabling legislation.
Mixed-Use Development Tax Credit: This new tax credit is designed to help communities address affordable housing
shortages and support business growth. The program allows developers to access funds for construction or rehabilitation
projects that enable affordable housing and business in the same structure. Tax credit availability is based on the sale of
the credits from the Pennsylvania Housing Finance Agency. The budget allocation is $2 million a year beginning in the 2017-
18 fiscal year.
The budget allocation for the Keystone Innovation Zone (KIZ) tax credits is reduced to $15 million per fiscal year from $25
million per fiscal year effective immediately.
Rural Jobs and Investment Tax Credit: This new tax credit is designed to stimulate growth and job creation in rural areas by
providing access to capital to rural businesses from businesses supporting rural growth funds. Credit for eligible
contributions made by a business firm may be approved for up to a 90 percent equivalent tax credit per contributed dollar.
The budget allocation is $1 million a year beginning in the 2017-18 fiscal year, and is not to exceed $4 million for the
duration of the program.
Tax Credit for New Jobs: Formerly referred to as the Job Creation Tax Credit program, this tax credit has been amended to
include an incentive for businesses to hire veterans for a job tax credit equivalent to $2,500 per veteran hired. The
amendment is effective immediately.
The City Revitalization and Improvement Zone (CRIZ) Program is amended to include broadened definitions regarding the
scope and administration of the program. Amendments include: changes to program eligibility for qualifying cities and
municipalities, new CRIZ eligible tax types, and expanded powers or duties of the contracting authority. Other notable
changes include an amended formula for the calculation of the annual certification, a lowered cap on annual borrowing by
zones, and permitted uses of CRIZ funds by the contracting authority. The amendment is effective immediately.
Manufacturing and Investment Tax Credit: This new tax credit is designed to support job creation. Eligible taxpayers,
capable of increasing annual taxable payroll by a minimum of $1 million through the creation of new full-time jobs can
earn a tax credit up to 5 percent of the taxpayer’s increase in annual taxable payroll. Jobs must be maintained for at least
five years. The budget allocation is $4 million a year beginning in the 2017-18 fiscal year.
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• Effective December 1, 2016, the Promoting Employment Across Pennsylvania (PEP) tax credit is repealed.
ACT #39 of June 8, 2016 made the following changes:
To the Liquor Code:
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• Allows for the conversion of an eating place license to a restaurant license for a fee of $30,000.
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Effective 60 days after enactment.
ACT #25 of April 25, 2016 made the following changes:
To the Fiscal Code:
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By June 1, 2016, $4,500,000 shall be transferred from the Dormitory Sprinkler System fund to the General Fund.
Allows the LCB to sell PA Lottery tickets through instant ticket vending machines, player activated terminals and
technologies for the self-service sale of PA Lottery tickets and provides that the licensee commission be deposited in the
General Fund.
Authorizes the LCB to issue licenses to casinos for a fee of $1 million to sell alcohol 24 hours a day, 7 days a week. The
renewal fee will be $1 million for the next four years and will be set at $250,000 per year thereafter.
Allows a restaurant license that ceased to exist under law to be auctioned by the LCB once a year to the highest bidder
with the minimum bid set at $25,000.
The initial permit fee is $2,000 and the renewal fee is equal to 2.0 percent of the cost of wine purchased from the board
for off-premise consumption.
Computer Data Center Equipment Incentive Program: This new program is designed to attract new investment from
businesses that operate within facilities containing equipment such as servers or data storage equipment necessary to
operate a computer data center. Applicants must meet capital investment and annual compensation requirements for
employees working within the data center. The budget allocation is $5 million a year beginning in the 2017-18 fiscal year.
Allows restaurants and hotels to purchase an expanded wine permit to sell up to 3,000 mL of wine (4 bottles) for off-
premise consumption.
The legislation provides language necessary to allow a business which participates in the Educational Improvement Tax
Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) programs during FY 2015-16 to utilize the credit in either the
tax year in which the application or the contribution is made.
The legislation directs that any payment of a slot machine license fee received by the Pennsylvania Gaming Control Board
after June 30, 2014, is to be deposited in and credited to the General Fund. The transfer is estimated to generate a deposit
of $50 million by June 30, 2016.
Provides for up to $1 million annually for the awarding of grants for the purpose of increasing production of malt and
brewed beverages made in PA. Provides for up to $1 million annually for the awarding of grants for the purpose of
increasing production of wines made in PA.
Reduces the statutory annual transfer from the Oil and Gas Lease Fund to the Marcellus Legacy Fund for transfer to the
Environmental Stewardship Fund for FY 2015-16 to $20,000,000 to align with amounts available and modifies the
distribution to agencies from that transfer to ensure that mandatory debt service continues to be paid and to preserve the
funding for the Agricultural Conservation Easement Program.
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ACT #16 of April 18, 2016 made the following changes:
Created the stand alone Medical Marijuana Act:
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ACT #17 of April 18, 2016 made the following changes:
Created the Pennsylvania ABLE Act:
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ACT #7 of February 23, 2016 made the following changes:
To the Administrative Code:
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An excise tax of 5.0 percent is imposed on the gross receipts from the sale of MM by a grower/processor to a dispensary.
The tax shall be paid by the grower/processor and shall not be paid by dispensary or the patient or caregiver. The proceeds
of the tax are to be deposited in the Medical Marijuana Program Fund. This fund is established in the State Treasury. The
sale of MM to a patient or caregiver is exempt from sales tax.
DOH and the Department of Revenue shall monitor the price of medical marijuana sold by a grower/processor and by a
dispensary, including the per-dose price. If both DOH and the Department of Revenue determine that prices are
unreasonable or excessive, a cap may be placed on the price of medical marijuana for a period of six months.
Imposed the Pari-Mutuel Tax on Secondary Pari-Mutuel Organizations, which were previously subject to the Nonlicensed
Corporation Pari-Mutuel Wagering Tax, which was deposited into the Advanced Deposit Wagering Collections Account, a
restricted account within the General Fund. From those funds, up to $5 million was appropriated to the State Racing
Commission in the Department of Agriculture for general government operations.
Created the Pennsylvania ABLE (Achieving a Better Life Experience) Act and provides that contributions made to an ABLE
account, any increase in the value of those contributions, the retention or transfer during life or as a result of death of any
legal interest in an account and payment of qualified disability expenses of eligible individuals from an account shall be
exempt from all taxation by the commonwealth and its political subdivisions.
An amount that is distributed from an account which is not described as being exempt from taxation under this act shall
be subject to tax under the Pennsylvania personal income tax.
Repealed the Race Horse Industry Reform Act (P.L. 534, No. 135) and Article XV1-B of the Tax Reform Code of 1971,
related to Nonlicensed Corporation Pari-Mutuel Wagering Tax, and added Article XXVIII-D, Race Horse Industry Reform,
providing for the regulatory oversight of horse and harness racing.
Maintained the existing Pari-Mutuel Tax rate, which is deposited to the State Racing Fund, but eliminated the Admissions
Tax. The established Pennsylvania Sire Stakes Fund and Pennsylvania Breeding Fund and established distributions are
maintained in the bill.
Establishes a program for the use of medical marijuana (MM) to be administered by the Pennsylvania Department of
Health (DOH). This legislation is effective in 30 days after enactment.
The Enhanced Revenue Collection Account (ERCA) in the Department of Revenue will continue through FY 2019-20.
Revenues collected will be deposited into the account. Of the funds in the account, for each of the fiscal years from FY
2015-16 through FY 2019-20, up to $25,000,000 is appropriated to the department to fund the costs associated with the
increased tax collection enforcement and reduction of tax refund errors. The balance in account on June 15, 2014 and
each June 15 thereafter shall be deposited into the General Fund. The department will generate a report to the governor
and General Assembly including a detailed breakdown of administrative costs, the amount of revenue collected and the
amount of refunds avoided.
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ACT #58 of November 4, 2015 made the following changes:
To the Pennsylvania Housing Affordability and Rehabilitation Enhancement Fund:
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ACT #203 of October 31, 2014 made the following changes:
To Procedure and Tax Administration for Out-of-State Entities during a Declared Emergency:
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These exemptions apply to an out-of-state business who performs work for a period of not more than ten days before and
not more than 60 days after the end of a declared disaster emergency period and the business must be in compliance with
all applicable regulatory and licensing requirements in its state of domicile. The exemption period may be extended by the
Governor for a period of not more than 30 days for each declared disaster emergency.
Provided for various licenses for horse racing, which are deposited to the State Racing Fund, including a new annual license
fee to conduct electronic wagering, at an initial fee of $500,000, with a $100,000 annual renewal. However, if an applicant
that is also a Category 1 slot machine licensee paid the license fee under 4 Pa.C.S. § 1209 (relating to slot machine license
fee), this fee shall be deemed paid and the amount of the fee shall be transferred to the State Racing Fund upon
certification of the Secretary of the Budget.
Provides for a transfer of realty transfer tax funds to the Pennsylvania Housing Affordability and Rehabilitation
Enhancement Fund, beginning in fiscal year 2015-16.
Specifies that the annual transfer is to be the lesser of $25 million or 40 percent of the difference between (a) the total
dollar amount of the realty transfer tax collected in the prior fiscal year and (b) the total dollar amount of the realty
transfer tax official estimate for the fiscal year 2014-15 ($447.5 million).
Provides that out-of-state businesses responding to a disaster emergency declared by the Governor of Pennsylvania or
President would not be subject to: state or local business licensing or registration; PUC or regulatory requirements; state
and local taxes/fees, such as unemployment insurance, sales and use tax, property tax on equipment brought in on a
temporary basis, used or consumed in the commonwealth during the disaster emergency, and subsequently removed
from the commonwealth, state or local occupational licensing fees or local service taxes; and state or local tax on or
measured by, in whole or in part, net or gross income or receipts.
An out-of-state employee shall not be considered to have established residency that would require the individual or the
employer to do the following: file and pay income taxes; be subjected to income tax withholding; or file and pay any other
state or local tax or fee for disaster emergency-related work performed during the period designated.
Established the Pennsylvania Race Horse Testing Program, providing all cost for medication testing and research be paid
out of the Pennsylvania Race Horse Development Fund, in 52 equal, weekly payments to the State Racing Fund. This
transfer expires on June 30, 2020.
Provided that 37.5 percent of the breakage retained by licensed racing entities conducting horse race meetings (currently
25 percent by licensed entities conducting thoroughbred race meetings) shall be paid to the Department of Revenue for
credit to the State Racing Fund. Breakage is defined as "the odd cents of redistributions to be made on contributions to
pari-mutuel pools exceeding a sum equal to the next lowest multiple of ten."
Provided, beginning July 1, 2016, and annually thereafter, that one percent of the previous fiscal year deposits to the
Pennsylvania Race Horse Development Fund shall be transferred to the State Racing Fund for the promotion of horse
racing.
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ACT #201 of October 31, 2014 made the following changes:
To the State Lottery Fund:
•
•
ACT #194 of October 31, 2014 made the following changes:
To the Educational Improvement Tax Credit (EITC) and Educational Opportunity Scholarship Tax Credit (EOSTC):
• Repeals the EITC and EOSTC as stand-alone Articles in the Tax Reform Code (TRC).
•
• Adds the Malt Beverage Tax to the list of taxes against which the ETC can be applied.
• Includes numerous administrative changes regarding how the ETC operates.
To the City Revitalization and Improvement Zones (CRIZ):
•
ACT #193 of October 31, 2014 made the following changes:
To the Organ and Bone Marrow Donor Tax Credit:
•
•
•
ACT # 156 of October 22, 2014 made the following changes:
To the Property Tax or Rent Rebate (PTRR) Program:
•
Consolidates both the EITC and EOSTC programs into Article XVII-F of the TRC under the title of the Educational Tax Credits
(ETC) Program
Allowed that PTRR claimants who are eligible as of December 31, 2012 would remain eligible if the household income limit
is exceeded only due to a Social Security cost-of-living increase. This provision expires on December 31, 2016.
Effectively allows a borough or township to create an authority to apply for a pilot zone. Previous law did not include this
language, so no pilot zones were able to be awarded.
Repeals Act 65-2006, the Organ and Bone Marrow Donor Act, which contained the original creation of the Organ and Bone
Marrow Tax Credit.
Adds Article XVIII to the Tax Reform Code (TRC), containing the reestablished Organ and Bone Marrow Tax Credit, which
had expired in 2010.
The Organ and Bone Marrow Donor Tax Credit is for expenses incurred when a business firm grants to any of its
employees a paid leave of absence for the purpose of donating an organ or bone marrow. Credits can be used against the
taxes imposed under Articles III, IV, VI, VII, VIII or XV of the TRC. The credit is retroactively available for tax years beginning
on or after January 1, 2011. (Effective immediately)
Added definitions for Internet Instant Game and Keno, while prohibiting the Secretary of Revenue from authorizing these
games unless authorized by an act of law.
Allocates no less than 27.0 percent of total revenues from the sale of lottery tickets or shares to property tax relief and
free or reduced fare transit service for the elderly in fiscal years beginning before July 1, 2014. For fiscal years beginning
after June 30, 2014, that percentage drops to 25.0 percent.
118
ACT #131 of September 24, 2014 made the following changes:
To the Cigarette Tax:
•
Authorizes Philadelphia School District to levy a cigarette tax at the rate of 10 cents per cigarette. Effective October 1,
2014 to June 30, 2019.
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TAX:
ALTERNATIVE FUELS
TAX RATE: The oil franchise tax is applied to each gasoline gallon equivalent.
PAYMENT REMITTED BY: Dealer-users of fuel
REPORT DUE DATE: 20th day of each month
TAX:
BANK AND TRUST COMPANY SHARES
TAX RATE: 0.95% of the value of shares as of each January 1st
PAYMENT REMITTED BY: All bank and trust companies doing business in Pennsylvania
REPORT DUE DATE: March 15th of each year
TAX:
CIGARETTE
TAX RATE:
$0.13 per cigarette
PAYMENT REMITTED BY:
Cigarette Stamping Agents
TAX: CONSUMER FIREWORKS TAX
TAX RATE:
12% of the sales price of consumer fireworks after sales tax is applied.
PAYMENT REMITTED BY:
Licensed sellers of consumer fireworks
REPORT DUE DATE:
20th day of April, July, Oct and January
TAX: CORPORATE NET INCOME TAX
TAX RATE:
9.99%
PAYMENT REMITTED BY:
Corporations doing business in Pennsylvania
REPORT DUE DATE:
Due 30 days after the Federal report is due or would be due if required to file federally
TAX: FANTASY CONTEST TAX
TAX RATE:
15% of fantasy contest adjusted revenue
PAYMENT REMITTED BY:
Licensed operators
REPORT DUE DATE:
Monthly
TAX: INSURANCE PREMIUMS TAX
TAX RATE:
2% of gross premiums, with certain exceptions
PAYMENT REMITTED BY:
Domestic and foreign insurance companies
REPORT DUE DATE:
April 15th of each year
TAX: INHERITANCE AND ESTATE TAXES
Rate determined by relationship to decedent:
Spouses - 0%
Parents of decedent 21 years of age or younger - 0%
Siblings – 12%
Other lineal heirs – 4.5%
All other heirs – 15%
PAYMENT REMITTED BY:
Local Registers of Wills
REPORT DUE DATE:
Monthly
TAX: INTERACTIVE GAMING TAX
PAYMENT REMITTED BY:
Interactive gaming certificate holders
REPORT DUE DATE:
Weekly
REPORT DUE DATE:
Payment is due by the 15th day of each month. Report is due by the 10th day after the month for which
they are prepared
TAX RATE:
14% of gross interactive gaming revenue from peer- to-peer and non-peer-to-peer games simulating table
games; 52% on non-peer-to- peer games simulating slot machines.
TAX RATE:
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TAX: JET FUEL
TAX RATE:
1.6 cents per gallon
PAYMENT REMITTED BY:
Licensed distributors
REPORT DUE DATE:
20th day of each month
TAX: LIQUOR TAX
TAX RATE:
18%
PAYMENT REMITTED BY:
Liquor Control Board (LCB)
REPORT DUE DATE:
LCB functions on a monthly accounting cycle. Reports are due on the last day of the calendar month.
TAX: MALT BEVERAGE
TAX RATE:
$2.48 per barrel
PAYMENT REMITTED BY:
Manufacturers, distributors and importers of malt beverages
REPORT DUE DATE:
15th day of each month
TAX: MOTOR CARRIIERS ROAD TAX/IFTA
TAX RATE:
201.5 mills on liquid fuels and 256.5 mills on fuels (same rate as the Oil Company Franchise Tax)
PAYMENT REMITTED BY:
Motor carriers with vehicles in excess of 26,000 pounds
REPORT DUE DATE:
IFTA reports are due on the last day of April, July, October, and January. MCRT reports are filed annually
TAX: MOTOR VEHICLE LEASE TAX
TAX RATE:
3%
PAYMENT REMITTED BY:
Any entity making taxable leases of motor vehicles
REPORT DUE DATE:
20th day of each month
TAX: MOTOR VEHICLE RENTAL FEE
TAX RATE:
$2 per day
PAYMENT REMITTED BY:
Any entity making taxable rentals of motor vehicles
REPORT DUE DATE:
20th day of each month
TAX: MULTI-USE GAMING DEVICE TAX
PAYMENT REMITTED BY:
Interactive gaming certificate holders authorized to conduct games at qualified airports
REPORT DUE DATE:
Weekly
TAX: MUTUAL THRIFT INSTITUTIONS TAX
TAX RATE:
11.5%
REPORT DUE DATE:
15th day of the 4th month after the close of a tax year
TAX: NEW TIRE FEE
TAX RATE:
$1 per tire
PAYMENT REMITTED BY:
Any entity selling new tires intended for highway use
REPORT DUE DATE:
20th day of each month
TAX: OIL COMPANY FRANCHISE TAX
TAX RATE:
201.5 mills on liquid fuels and 256.5 mills on fuels (changes through 2018 – see text)
PAYMENT REMITTED BY:
Registered liquid fuels and fuels distributors
REPORT DUE DATE:
20th day of each month
14% of gross interactive airport gaming revenue from peer-to-peer and non-peer-to- peer games
simulating table games; 52% on non-peer-to- peer games simulating slot machines.
Savings institutions, savings banks, savings and loan associations, and building and loan associations doing
business in Pennsylvania
TAX RATE:
PAYMENT REMITTED BY:
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TAX: OTHER TOBACCO PRODUCTS TAX
TAX RATE:
55 cents per ounce on certain tobacco products; 40% of wholesale price for electronic cigarettes
PAYMENT REMITTED BY:
Any entity making sales to retailers
REPORT DUE DATE:
20th day of each month
TAX: PERSONAL INCOME TAX
TAX RATE:
3.07%
REPORT DUE DATE:
April 15th of each year
TAX: PRIVATE BANKERS TAX
TAX RATE:
1%
PAYMENT REMITTED BY:
Private bankers authorized to do business in Pennsylvania
REPORT DUE DATE:
February 15th of each year
TAX: PUBLIC UTILITY REALTY TAX
PAYMENT REMITTED BY:
REPORT DUE DATE:
May 1st of each year
TAX: REALTY TRANSFER TAX
TAX RATE:
1%
PAYMENT REMITTED BY:
County Recorders of Deeds
REPORT DUE DATE:
Upon the presentation of any document for recording or the transfer of certain interests in real estate
TAX: SALES, USE, AND HOTEL OCCUPANCY TAX
TAX RATE:
6%
PAYMENT REMITTED BY:
Any entity making taxable sales or anyone who incurs use tax
REPORT DUE DATE:
20th day of each month
TAX: SALES, USE, AND HOTEL OCCUPANCY TAX (LOCAL)
TAX RATE:
1% (Allegheny County); 2% (City of Philadelphia)
REPORT DUE DATE:
20th day of each month
TAX: SPORTS WAGERING TAX
TAX RATE:
34% of gross sports wagering
PAYMENT REMITTED BY:
Sports wagering certificate holders
REPORT DUE DATE:
Weekly
TAX: TABLE GAME TAXES
TAX RATE:
12%, with and additional 34% from table games played on fully automated electronic gaming tables
PAYMENT REMITTED BY:
Table game operation certificate holders
REPORT DUE DATE:
Weekly
Pennsylvania employers and residents, estates and trusts, nonresidents with income from sources within
Pennsylvania and businesses with nonresident owners which receive income from sources within
Pennsylvania
The Department will annually calculate a variable tax rate in order to raise an amount of revenue equal to
the distribution of the realty tax equivalent to the local taxing authorities. An additional tax rate of 7.6
mills is applied to the tax base.
Public utilities furnishing services and regulated by the Pennsylvania Public Utility Commission or a
regulatory body of another state of the United States.
Any entity making taxable sales or anyone who incurs use tax in the City of Philadelphia or Allegheny
County (see text for special situs provisions)
PAYMENT REMITTED BY:
TAX RATE:
PAYMENT REMITTED BY:
122
TAX: TAVERN GAMES TAXES
PAYMENT REMITTED BY:
Licensed distributors and tavern games licensees
REPORT DUE DATE:
Weekly
TAX: TITLE INSURANCE COMPANY SHARES TAX
TAX RATE:
1.25%
REPORT DUE DATE:
March 15th of each year
TAX: VEHICLE RENTAL TAX
TAX RATE:
2%
PAYMENT REMITTED BY:
Entities renting taxable vehicles
REPORT DUE DATE:
Quarterly reports due 20th day of January, April, July and October. Reconciliation due February 15th
TAX: VIDEO GAMING TERMINAL TAX
TAX RATE:
42% of gross terminal revenue from video gaming terminals operated within this commonwealth
PAYMENT REMITTED BY:
Licensed terminal operators
REPORT DUE DATE:
Bi-monthly
60% of net revenue on tavern games (tavern games tax) and 5% of net revenue on tavern games (host
municipality tavern games tax)
Pennsylvania title insurance companies (foreign title insurance companies are subjected to the gross
premiums tax)
TAX RATE:
PAYMENT REMITTED BY:
123