Harrisburg, May 25, 2021 – The Senate Finance Committee approved two bills today authored by State Senator John Yudichak (I-Luzerne/Carbon) that will help businesses recover from the COVID-19 pandemic.
Senate Bill 681 allows for a temporary carry-forward of all purchased tax credits. Specifically, the legislation will provide for two, one-year carry-forward provisions for tax credits purchased in 2020 and 2021. This means that tax credits purchased in 2020 could be used for 2020 or 2021, and tax credits purchased in 2021 can be used for 2021 or 2022. This carry-forward is a temporary COVID-19 relief measure, and tax credit sales initiated in 2022 and every year thereafter would not be eligible for this carry-forward.
“During COVID-19, over 30 percent of Pennsylvania’s businesses were closed as a result of the Department of Health’s mitigation orders, forcing over 3 million Pennsylvanians out of work and leaving the financial future of thousands of business owners very uncertain,” said State Senator John Yudichak. “Senate Bill 681 will bring confidence in Pennsylvania’s tax credit programs and will help businesses expand, retain and create new jobs, and invest in their local communities.”
Senate Bill 682 extends the eligibility timeframe for the Keystone Innovation Zone (KIZ) tax credit program from 8 years to 10 years. Currently, the KIZ tax credit program provides tax credits to for-profit companies, less than eight years old, operating within geographic boundaries of a particular KIZ. In order to apply for a KIZ tax credit, these companies must show a 50 percent increase in gross revenue from year to year within the first 8 years of incorporation.
By extending the eligibility timeframe by two years, it will allow companies who are now turning eight years old time to recover financially from the COVID-19 pandemic and qualify for tax credits again.
“The Keystone Innovation Zone program is one of the most innovative and successful tax credit programs under the Department of Community and Economic Development,” said Senator Yudichak. “Senate Bill 682 will allow businesses to recover from the pandemic and ensure that the full potential of the Commonwealth’s investment in these companies will not be diminished by the COVID-19 disruption.”
According to the Keystone Innovation Zone Tax Credit and Tax Credit Sale Programs Fiscal Year 2019-20 report by DCED, there were 28 KIZs located throughout Pennsylvania that leveraged over $102 million in private investment and created or retained almost 3,000 jobs in 2019.
Senate Bill 681 passed by a vote of 8-2 and Senate Bill 682 passed by a vote of 8-2. They will now advance to the full Senate for consideration.
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