In research and development tax credit, further providing for limitation on credits.
Summary
HB1004 would amend Pennsylvania’s Tax Reform Code to increase the annual cap on the state’s research and development tax credit program. The bill raises the total amount of credits that may be approved by the Department of Revenue in a fiscal year from $60 million to $120 million. It also increases the portion reserved exclusively for small businesses from $12 million to $24 million.
The bill keeps the existing structure of the program in place, including the rule that if either the small-business allocation or the non-small-business allocation is not fully used in a fiscal year, the unused amount may be made available to the other group of eligible taxpayers. The measure would take effect 60 days after enactment.
Impact
HB1004 would directly amend Section 1709-B(a) of the Tax Reform Code of 1971, changing the statewide cap on research and development tax credits and the small-business set-aside. The practical effect would be to expand the amount of tax relief available to qualifying businesses engaged in R&D, while preserving the current allocation framework between small businesses and other applicants. It would affect the Department of Revenue’s administration of the credit and could reduce state tax collections by allowing more credits to be issued.
Sentiment
Based on the bill text and the absence of recorded committee debate or votes in the provided materials, the measure appears to be presented as a straightforward economic-development tax change rather than a controversial policy shift. The sponsorship list suggests broad interest among House members, and the bill’s focus on expanding support for innovation and small businesses indicates generally favorable intent. No recorded opposition or amendment activity is included in the provided context.
Contention
The main policy question raised by the bill is fiscal: increasing the credit cap from $60 million to $120 million would expand the state’s exposure to foregone revenue, which may concern budget-focused lawmakers. A second point of possible debate is whether doubling the small-business allocation to $24 million is the best way to target support, or whether the credit should remain at its current level. No specific objections, supporters, or negotiated compromises are included in the available committee or vote history.
In tax credit and tax benefit administration, further providing for definitions; in research and development tax credit, further providing for limitation on credits; and providing for Angel Investment Tax Credit.
In Waterfront Development Tax Credit, further providing for waterfront development organizations, for waterfront development projects, for tax credit and for limitations.
In waterfront development tax credit, further providing for waterfront development organizations, for waterfront development projects, for tax credit and for limitations.
In entertainment production tax credit, further providing for definitions and for limitations, providing for audits, further providing for limitations and providing for formal review by department, for creative professionals tax credit and for miscellaneous provisions.
In Pennsylvania Economic Development for a Growing Economy (PA EDGE) tax credits, further providing for definitions and providing for tax credits for critical minerals extraction.