An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in sales and use tax, further providing for exclusions from tax; and establishing a fueling opportunities for the revitalization, growth and efficiency of steel tax credit.

PRINTER'S NO. 1070
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 949
Session of
2025
INTRODUCED BY PISCIOTTANO, KIM, TARTAGLIONE, FONTANA, KANE,
MALONE, HUGHES, COSTA AND SANTARSIERO, JULY 23, 2025
REFERRED TO FINANCE, JULY 23, 2025
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," in sales and use tax, further providing for
exclusions from tax; and establishing a fueling opportunities
for the revitalization, growth and efficiency of steel tax
credit.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 204 of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971, is amended by
adding a clause to read:
Section 204. Exclusions from Tax.--The tax imposed by
section 202 shall not be imposed upon any of the following:
* * *
(77) The sale at retail or use of Pennsylvania steel
products in this Commonwealth. For the purposes of this clause,
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the term "Pennsylvania steel products" means p roducts rolled,
formed, shaped, drawn, extruded, forged, cast, fabricated or
otherwise similarly processed, or processed by a combination of
two or more of such operations, from steel made in Pennsylvania
by the open hearth, basic oxygen, electric furnace, Bessemer or
other steel making process. The following shall apply:
(i) The term shall include cast iron products made i n
Pennsylvania or machinery and equipment listed in United States
Department of Commerce Standard Industrial Classification 25
(furniture and fixtures), 35 (industrial and commercial
machinery and computer equipment) and 37 (transportation
equipment) and made of, fabricated from or containing steel
components made in Pennsylvania.
(ii) If a product contains Pennsylvania steel and United
States steel or foreign steel, the product shall be considered a
Pennsylvania steel product under this clause only if at least
seventy-five per cent of the cost of the articles, materials and
supplies have been mined, produced or manufactured, as the case
may be, in Pennsylvania.
Section 2. The act is amended by adding an article to read:
ARTICLE XVII-G.2
FUELING OPPORTUNITIES FOR THE REVITALIZATION,
GROWTH AND EFFICIENCY OF STEEL TAX CREDIT
Section 1701-G.2. Scope of article.
This article establishes a fueling opportunities for the
revitalization, growth and efficiency of steel tax credit.
Section 1702-G.2. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
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"Company." A corporation, partnership, limited liability
company, limited liability partnership, business trust,
affiliate, unincorporated joint venture or other business entity
doing business within this Commonwealth.
"Department." The Department of Revenue of the Commonwealth.
"Facility improvement." A retrofit, upgrade or operational
improvement at a facility located in this Commonwealth for the
purpose of manufacturing steel at the facility, including the
installation or use of advanced manufacturing technology.
"Pass-through entity." Any of the following:
(1) A partnership as defined in section 301(n.0).
(2) A Pennsylvania S corporation as defined in section
301(n.1).
(3) An unincorporated entity subject to section 307.21.
"Qualified tax liability." The liability for taxes imposed
under Articles III, IV, VI, VII, VIII, IX, XI and XV. The term
does not include tax withheld under section 316.1.
"Qualified taxpayer." A company that satisfies all of the
following:
(1) Purchases and uses facility improvements to
manufacture steel material at a facility located in this
Commonwealth.
(2) Has made a capital investment of at least
$50,000,000 in facility improvements to manufacture steel
material at a facility located in this Commonwealth.
(3) Has created at least 100 full-time equivalent jobs
due to the purchase and use of facility improvements to
manufacture steel material at a facility located in this
Commonwealth.
"Tax credit." The fueling opportunities for the
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revitalization, growth and efficiency of steel tax credit
established under this article.
Section 1703-G.2. Eligibility.
In order to be eligible to receive a tax credit, a company
shall demonstrate:
(1) The company is a qualified taxpayer.
(2) Confirmation that the company has filed all required
State tax reports and returns for all applicable taxable
years and paid any balance of State tax due as determined by
assessment or determination by the department and not under
timely appeal.
Section 1704-G.2. Application and approval of tax credit.
(a) Determination of tax credit amount.--
(1) The annual tax credit amount may be determined based
upon any one or more of the following:
(i) A base tax credit equal to no more than 3% of
the amount of capital investments in facility
improvements.
(ii) An additional tax credit equal to no more than
3% of the amount of capital investments in facility
improvements involving advanced manufacturing technology
that:
(A) enable lower-carbon steel production;
(B) increase electricity or hydrogen generation
capacity; or
(C) use recycled steel as a material input.
(2) A portion of the additional tax credit under
paragraph (1)(ii) may be allocated to workforce development
expenditures, including training for employees in advanced or
modern steel production practices, not to exceed $2,500 per
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worker.
(b) Application.--
(1) A qualified taxpayer may apply to the department for
a tax credit under this section.
(2) The application must be submitted to the department
by March 1 for the tax credit claimed for capital investments
in facility improvements by the qualified taxpayer during the
prior calendar year. The application must be on the form
required by the department.
(3) The qualified taxpayer shall include all of the
following in the application:
(i) A workforce reassignment plan for employees
displaced by technology upgrades caused by facility
improvements.
(ii) An estimate of new jobs created due to facility
improvements.
(iii) An estimate of existing jobs retained as a
result of facility improvements.
(4) The department may require information necessary to
document the capital investments in facility improvements.
(c) Review and approval.--
(1) The department shall review and approve or
disapprove the applications by May 1.
(2) Upon approval, the department shall issue a
certificate stating the amount of tax credit granted for
capital investments in facility improvements in the prior
calendar year.
(3) In awarding tax credits, the department shall give
priority to qualified taxpayers that make capital investments
in existing facilities in this Commonwealth on or before the
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effective date of this paragraph before issuing credits to
qualified taxpayers that make capital investments in new or
proposed facilities in this Commonwealth after the effective
date of this paragraph.
(d) Availability of tax credits.--
(1) Each fiscal year, $20,000,000 in tax credits shall
be made available to the department in accordance with this
article.
(2) The department shall issue up to $20,000,000 in tax
credits in a fiscal year to the qualified taxpayers which
meet the qualifications to receive a tax credit under this
article.
(3) The total aggregate amount of tax credits awarded to
a qualified taxpayer under this article may not exceed 30% of
the amount of capital investments in facility improvements.
Section 1705-G.2. Use of tax credits.
(a) Initial use.--Prior to sale or assignment of a tax
credit under section 1708-G.2, a qualified taxpayer must first
use a tax credit against the qualified tax liability incurred in
the taxable year for which the tax credit was approved.
(b) Eligibility.--The tax credit may be applied against up
to 20% of the qualified taxpayer's qualified tax liabilities
incurred in the taxable year for which the tax credit was
approved.
(c) Limit.--A qualified taxpayer that has been granted a tax
credit under this article shall be ineligible for any other tax
credit provided under this act or a tax benefit as defined in
section 1701-A.1.
Section 1706-G.2. Employment protections.
(a) Employment requirements.--A qualified taxpayer receiving
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the tax credit shall certify to the department that the
qualified taxpayer hires or maintains an increased or equivalent
amount of employees for the five-year period after receipt of
the tax credit.
(b) Training program.--A qualified taxpayer receiving the
tax credit shall implement a workforce development training
program within one year of receipt of the tax credit in
accordance with guidelines developed by the department.
Section 1707-G.2. Carryover, carryback and refund.
A tax credit may not be carried back, carried forward or used
to obtain a refund.
Section 1708-G.2. Sale or assignment.
(a) Authorization.--If a qualified taxpayer holds a tax
credit through the end of the calendar year in which the tax
credit was granted, the qualified taxpayer may sell or assign a
tax credit, in whole or in part, provided the sale is effective
by the close of the following calendar year.
(b) Application.--
(1) To sell or assign a tax credit, a qualified taxpayer
must file an application for the sale or assignment of the
tax credit with the department. The application must be on a
form required by the department.
(2) To approve an application, the department must
receive a finding from the department that the applicant has:
(i) filed all required State tax reports and returns
for all applicable taxable years; and
(ii) paid any balance of State tax due as determined
by assessment or determination by the department and not
under timely appeal.
(c) Approval.--Upon approval by the department , a qualified
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taxpayer may sell or assign, in whole or in part, a tax credit.
Section 1709-G.2. Purchasers and assignees.
(a) Time.--The purchaser or assignee under section 1708-G.2
must claim the tax credit in the calendar year in which the
purchase or assignment is made.
(b) Amount.--The amount of the tax credit that a purchaser
or assignee under section 1708-G.2 may use against any one
qualified tax liability may not exceed 50% of any of the
qualified tax liabilities for the taxable year.
(c) Resale and reassignment.--
(1) A purchaser under section 1708-G.2 may not sell or
assign the purchased tax credit.
(2) An assignee under section 1708-G.2 may not sell or
assign the assigned tax credit.
(d) Notice.--The purchaser or assignee under section 1708-
G.2 shall notify the department of the seller or assignor of the
tax credit in compliance with procedures specified by the
department.
Section 17010-G.2. Pass-through entity.
(a) Election.--If a pass-through entity has an unused tax
credit, it may elect in writing, according to procedures
established by the department, to transfer all or a portion of
the credit to shareholders, members or partners in proportion to
the share of the entity's distributive income to which the
shareholders, members or partners are entitled.
(b) Limitation.--The same unused tax credit under subsection
(a) may not be claimed by:
(1) the pass-through entity; and
(2) a shareholder, member or partner of the pass-through
entity.
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(c) Amount.--The amount of the tax credit that a transferee
under subsection (a) may use against any one qualified tax
liability may not exceed 20% of any qualified tax liabilities
for the taxable year.
(d) Time.--A transferee under subsection (a) must claim the
tax credit in the calendar year in which the transfer is made.
(e) Sale and assignment.--A transferee under subsection (a)
may not sell or assign the tax credit.
Section 1711-G.2. Administration.
(a) Audits and assessments.--The department shall:
(1) Audit a qualified taxpayer claiming a tax credit to
ascertain the validity of the amount claimed.
(2) Issue an assessment against a qualified taxpayer for
an improperly issued tax credit. The procedures, collection,
enforcement and appeals of any assessment made under this
section shall be governed by Article II.
(b) Recapture.--
(1) The department may recapture all or part of the tax
credit if a recipient fails to meet the job retention or
creation requirements under this article.
(2) A recipient of the tax credit that relocates
operations outside of this Commonwealth within five years
after receiving the credit shall repay the full amount of the
tax credit received to the department. The department may
waive the repayment requirement under this paragraph if a
recipient of the tax credit demonstrates substantial hardship
or public benefit to the department.
(c) Guidelines and regulations.--The department shall
develop written guidelines for the implementation of this
article. The guidelines shall be in effect until the department
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promulgates regulations for the implementation of the provisions
of this article.
Section 1712-G.2. Reports to General Assembly.
By September 1, 2026, and September 1 of each year
thereafter, the department shall submit a report on the tax
credit provided by this article to the chairperson and minority
chairperson of the Appropriations Committee of the Senate, the
chairperson and minority chairperson of the Appropriations
Committee of the House of Representatives, the chairperson and
minority chairperson of the Finance Committee of the Senate and
the chairperson and minority chairperson of the Finance
Committee of the House of Representatives. The report shall
include all of the following:
(1) The names of the qualified taxpayers utilizing the
tax credit as of the date of the report and the amount of tax
credits approved for, utilized by or sold or assigned by a
qualified taxpayer.
( 2) Data on the benefits provided to this Commonwealth
regarding the quantity of steel material produced and used as
a result of the tax credit.
Section 1713-G.2. Applicability.
The tax credit under this article shall apply to capital
investments in each facility improvement for a period of five
years from the effective date of this section.
Section 3. This act shall apply as follows:
(1) The addition of section 204(77) of the act shall
apply to sales at retail or use after December 31, 2026.
(2) The addition of Article XVII-G.2 of the act shall
apply for tax years commencing after December 31, 2026.
Section 4. This act shall take effect immediately.
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