Today, the Legislature sent an omnibus Tax Reform Code bill to the Governor for his signature. This is just one piece of the completed 2021-2022 state spending plan due by June 30. As introduced, H.B. 952 (Oberlander, R-Clarion) would convert the state’s sales tax refund program for data centers to a sales tax exemption program. The new program, which would exempt certain equipment purchased by both data centers and their tenants from the state’s 6% sales and use tax, is designed to incentivize companies to locate their data centers in the Commonwealth, creating capital investments and high-paying jobs.

The bill also includes the following provisions:

  • An exemption from sales and use tax for flight simulators, multipurpose agricultural vehicles, and breast feeding equipment;
  • Updates to reflect federal changes to the 1099-NEC form for reporting nonemployee compensation; requires that any personal income tax over $15,000 be remitted electronically, subject to a $500 fine;
  • Corrects language necessary for proper calculation of the Qualified Manufacturing Innovation and Reinvestment Deduction;
  • Updates the definition of “receipts” for the Bank Shares Tax.
  • Corrects a spelling error pertaining to the Realty Transfer Tax.
  • Provides for improved tax credit and tax benefit accountability and transparency by: (1) providing agencies the ability to verify tax credit applications; (2) training employees to review applications; (3) providing for the registration of brokers and standardization of forms and reports; (4) providing for an appeals process before the Board of Finance and Revenue; and providing for a petition for review upon denial.
  • Extends the deadline to apply for the Research and Development Tax Credit.
  • Updates provisions pertaining to the Entertainment Production Tax Credit and Entertainment Economic Enhancement Program.
  • Establishes a tax credit to assist the live events industry, which has been severely impacted by the COVID-19 pandemic.
  • Reduces the allowable tax credits under the Local Resource Manufacturing Tax Credit program from four to two, and that only one unallocated credit may be awarded subject to capital investments and job creation requirements.
  • Extends the deadline for an area to be designated as a Keystone Opportunity Expansion Zone until October 2022.
  • Increases the amount of multi-use development tax credits from $3 million to $4.5 million.
  • Extends the application period for tax credits for companies located in Keystone Innovation Zones.
  • Provides $10 million in Housing Tax Credits, provided that no taxpayer shall be awarded a credit exceeding $1.5 million for a qualified low-income housing project.
  • Provides that the maximum fee for a bad check paid or electronic transmission not credited to the Department of Revenue for monies due to the Commonwealth shall be $100 (down from $1,000).