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FOR IMMEDIATE RELEASE |
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CONTACT: Gabrielle
A. Prutisto |
State Rep. Ted Harhai |
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Harhai proposal to provide tax credits approved by committee
HARRISBURG, April 27 – The state House Finance Committee has approved legislation introduced by state Rep. Ted Harhai, that would expand the Neighborhood Assistance Tax Credit program to include some corporations that currently are prohibited from participating.
Harhai’s bill (H.B. 518) allow small businesses with Personal Income Tax liability commonly referred to as S corporations, limited liability companies and partnerships to participate in the program.
“This kind of tax benefit can help encourage both large and small businesses to provide the financial backing to nonprofit neighborhood organizations providing education, job training, crime prevention or neighborhood assistance," Harhai said, “Only about one-third of the available tax credits are being used so this is an effort to expand participation.
The Neighborhood Assistance Tax Credit program is a vital economic development tool that provides tax credits to companies that invest in economically distressed neighborhoods, Harhai said. It allows business leaders to tap into a valuable resource of funding for local economic growth.
The legislation would also increase the tax credit to 60 percent from the current level of 50 percent. Additionally, in special areas as designated by the governor, the credit would be increased from 70 percent to 80 percent. The credit also would increase from 70 percent to 80 percent for five-year commitments in comprehensive service projects.
The overall cap on tax credits for a single company would double to $500,000 and for expenditures in comprehensive service projects, the cap would be increased from $350,000 to $1.25 million. S-corporations would also be able to apply the tax credit to their Personal Income Tax, which Harhai said would encourage them to use it more.
The bill also would earmark $2 million out of the program's $18 million allocation for the exclusive use of small businesses. An additional provision in the legislation would allow businesses that have no tax liabilities to transfer or sell their tax credits to other companies. S-corporations also would be able to pass their tax credits on to their shareholders.
The bill now goes to the House floor for full consideration.
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