An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in personal income tax, further providing for classes of income.
Summary
HB207 amends Pennsylvania’s Tax Reform Code in the personal income tax section that defines “compensation.” The bill revises the existing exclusion from taxable compensation for income earned from the United States Government for active duty outside Pennsylvania by members of the armed forces, and it also preserves the related exclusion for a spouse who resides with that service member outside the Commonwealth. The measure also continues the exclusion for income paid by the United States Government or the Commonwealth for active state duty in an emergency, including duty under the Emergency Management Assistance Compact.
In practical terms, the bill appears to clarify and restate the categories of military- and emergency-duty pay that are not included in Pennsylvania taxable compensation. It would affect the calculation of Pennsylvania personal income tax for service members, certain spouses living with them outside the state, and individuals called to emergency state duty. The bill takes effect 60 days after enactment.
Impact
HB207 would amend Section 303(a)(1)(i) of the Tax Reform Code of 1971, which governs the “compensation” class of income for Pennsylvania personal income tax purposes. The bill would preserve and restate exclusions from taxable compensation for certain federal military pay earned on active duty outside Pennsylvania, spouse income in specified out-of-state living arrangements, and pay for active state emergency duty, including duty under the Emergency Management Assistance Compact. Its effect would be to shape which military and emergency-response earnings are subject to state income tax.
Sentiment
The available record shows no committee transcript, recorded debate, or vote history, so there is no documented opposition or support beyond the bill’s introduction and referral to the House Finance Committee. Based on the text alone, the measure appears technical and targeted, with a policy focus on tax treatment for service members and emergency-duty personnel rather than a broader tax change.
Contention
No specific points of contention are documented in the provided materials. If concerns arise, they would likely center on the scope of the tax exclusion, the treatment of spouses living outside Pennsylvania, and whether the bill is a substantive policy change or simply a clarifying amendment to existing law. No named opponents or supporters are identified in the available record.