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.
SB 949 would create a new sales and use tax exclusion for Pennsylvania steel products and establish a new corporate tax credit program called the Fueling Opportunities for the Revitalization, Growth and Efficiency of Steel (FORGES) tax credit. The bill defines Pennsylvania steel products broadly to include steel-made products processed in Pennsylvania, and in some cases cast iron products and certain machinery or equipment containing Pennsylvania-made steel components. The sales tax exclusion would apply to retail sales or use of those products beginning after December 31, 2026.
The bill’s tax credit program is aimed at companies that make major capital investments in steel-manufacturing facility improvements in Pennsylvania. To qualify, a company must invest at least $50 million in facility improvements and create at least 100 full-time equivalent jobs. The Department of Revenue would administer the credit, which could equal up to 3% of capital investment as a base credit, plus an additional credit of up to 3% for advanced manufacturing investments that support lower-carbon steel production, increase electricity or hydrogen generation capacity, or use recycled steel. A portion of the additional credit could also be used for workforce training, capped at $2,500 per worker.
The bill would set aside up to $20 million in tax credits each fiscal year, with an overall cap that a taxpayer may not receive more than 30% of its qualifying capital investment. The credit could be used against certain state tax liabilities, but it could not be carried forward, carried back, or refunded. The bill also allows sale or assignment of credits under specified conditions, and pass-through entities could transfer unused credits to owners in proportion to distributive shares. Recipients would be subject to audit, possible recapture if job requirements are not met, and full repayment if they relocate out of Pennsylvania within five years, subject to a hardship or public-benefit waiver.
The bill would also impose employment and reporting conditions. Recipients must certify that they hire or maintain an increased or equivalent number of employees for five years after receiving the credit and must implement a workforce development training program within one year. The Department of Revenue would be required to issue annual reports to legislative committees identifying credit recipients, amounts approved and used, and data on steel production and use attributable to the credit. The provisions would apply to tax years beginning after December 31, 2026, and the sales tax exclusion would apply to sales or use after that date.
Because there are no committee transcripts or recorded votes provided, there is no documented discussion or voting history to gauge support or opposition. Based on the bill text alone, the measure appears designed to support Pennsylvania’s steel industry, encourage large-scale industrial investment, and promote advanced, lower-carbon manufacturing, while also protecting the state through job-retention requirements, recapture provisions, and reporting oversight.
SB 949 would amend the Pennsylvania Tax Reform Code of 1971 by adding a new sales and use tax exclusion for qualifying Pennsylvania steel products and by creating a new Article XVII-G.2 tax credit program for steel-related capital investment. It would affect the Department of Revenue’s administration of tax credits, expand tax preferences for steel manufacturing, and alter the tax treatment of certain industrial products and facility improvements beginning with tax years after December 31, 2026.
No committee transcripts or votes are available, so there is no recorded legislative debate or roll-call evidence of support or opposition. The bill’s structure suggests a generally pro-industry, pro-manufacturing policy approach, with incentives for steel investment, job creation, and lower-carbon production balanced by compliance and recapture safeguards.
The main policy tensions implied by the bill are between economic development incentives and state revenue loss, and between encouraging investment and ensuring accountability. Potential points of contention include the size of the annual credit cap, the relatively high $50 million investment threshold, the job-creation requirement, the exclusion of recipients from other tax benefits, and whether the sales tax exclusion and transferable credits provide too much subsidy to a narrow set of steel companies. Supporters would likely emphasize industrial retention, workforce development, and cleaner steel production, while critics may focus on cost, targeting, and the risk of subsidizing projects that might have occurred anyway.