An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in Pennsylvania Economic Development for a Growing Economy (PA EDGE) Tax Credits, providing for Pennsylvania space economy.

PRINTER'S NO. 1131
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 986
Session of
2025
INTRODUCED BY ROBINSON, FONTANA, PENNYCUICK, STEFANO, COSTA,
ARGALL, MILLER, FARRY AND FLYNN, SEPTEMBER 4, 2025
REFERRED TO FINANCE, SEPTEMBER 4, 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 Pennsylvania Economic Development for a
Growing Economy (PA EDGE) Tax Credits, providing for
Pennsylvania space economy.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Article XVII-L 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 subarticle to read:
SUBARTICLE G
PENNSYLVANIA SPACE ECONOMY
Section 1794.1-L. Definitions.
The following words and phrases when used in this subarticle
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
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"Eligible commercial space company." An integrator of
complete standalone spacecraft that utilizes supplier
subcontractors for the development of systems and delivers
products and services to end-use customers to achieve space
mission objectives.
"Project facility." A facility located in this Commonwealth
that is owned and operated by a qualified taxpayer and where the
development of space technology systems and delivery of products
and services to end-use customers to achieve space mission
objectives is conducted by the qualified taxpayer at the project
facility.
"Qualified taxpayer." A company that:
(1) Conducts research, development or manufacturing of
power, communications or other infrastructure-related space
technology and that has received Federal contract funding in
those areas.
(2) Received Federal contract funding in the areas
listed under paragraph (1) in the three years prior to
applying for a tax credit.
(3) Has delivered and operated a spacecraft in space at
least once prior to award of the tax credit.
(4) Has its corporate headquarters located in this
Commonwealth.
(5) Has at least 20% of the company's total revenue in a
given year come from Federal contracts in infrastructure-
related space technology, including, but not limited to,
power, communications and transportation.
(6) Has made good faith efforts to recruit and employ,
and to encourage any contractors or subcontractors to recruit
and employ, workers from the local labor market for
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employment.
Section 1794.2-L. Eligibility for tax credits.
In order to be eligible to receive a tax credit, a company
shall demonstrate the following:
(1) The company meets the criteria of 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.
(3) The company has given preference to use products
manufactured in this Commonwealth and services performed by
Pennsylvania companies as a demonstrable part of the
company's procurement process, assuming the product or
service is otherwise qualified for the function or task to be
performed and is offered at or near fair market value.
Section 1794.3-L. Application and approval of tax credit.
(a) Determination of tax credit amount.--A qualified
taxpayer shall be eligible for a tax credit in the following
amounts, which shall match research and development funds from
Federal contract funding:
(1) For the first taxable year, up to $35,000,000.
(2) For subsequent taxable years, up to $10,000,000.
(b) Application process.--
(1) An application for a tax credit under this
subarticle must be submitted by March 1 for the prior
calendar year.
(2) The application shall require information as deemed
necessary by the department, including, but not limited to:
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(i) documentation of conducted research, development
or manufacturing of power, communications or other
infrastructure-related space technology;
(ii) documentation that the company has received
Federal contract funding in the areas listed under
subparagraph (i); and
(iii) verification of qualified taxpayer status.
(c) Review and approval.--
(1) The department shall review applications and notify
the applicant of approval or disapproval by May 1.
(2) Upon approval, the department shall issue a
certificate stating the amount of the tax credit granted for
the eligible commercial space company.
Section 1794.4-L. Tax credit management.
(a) Sale or assignment.--Tax credits can be sold or assigned
if held until the end of the calendar year. Approval from the
department is required.
(b) Purchasers and assignees.--A purchaser or assignee of a
tax credit must claim the credit in the year of purchase,
limited to 50% of qualified tax liabilities.
(c) Pass-through entities.--A pass-through entity may
transfer unused credits to shareholders or partners but may not
claim the transferred credit.
(d) Guidelines and regulations.--The department shall issue
guidelines for the implementation of this subarticle, which
shall be in effect until the department promulgates regulations
for the implementation of this subarticle.
(e) Reporting.--The department shall annually submit a
report to the General Assembly on the effectiveness of the tax
credits, including job creation and credit utilization. The
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department shall post the report on the department's publicly
accessible Internet website.
Section 1794.5-L. Applicability.
This subarticle shall apply to an eligible commercial space
company for a period of 15 years at each project facility.
Section 2. This act shall take effect in 60 days.
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