[author: James L. Fritz]
On October 25th, Governor Corbett signed Act 206 of 2012, which will permit qualifying companies to retain (or obtain a rebate of) 95% of the PA Personal Income Tax withheld from new employees. The bill’s prime sponsor was Rep. Kerry Benninghoff (Centre/Mifflin).
To qualify, a company must create 250 new jobs within five years (of which, 100 must be created within two years). The company must provide health insurance and pay 50% of the premium. The new jobs must pay at least 100% of the county average wage. The period during which the company may receive benefit varies from seven to ten years based on the percentage over the average wage:
100% - 7 years
110% - 8 years
120% - 9 years
140% - 10 years
Benefits are not available to many organizations and industries, including the following: Gambling Industry, Religious Organizations, Retail Establishments, Educational Establishments and Service Providers, Public Administration Organizations, Utility Companies, and Food Service and Drinking Place. Tax delinquents also are not eligible.
A 100% claw-back applies if the company fails to fulfill its agreement with the Dept. of Community and Economic Development. A 66% claw-back applies if the company relocates out-of-state within three years after the final benefit year and a 33% claw-back applies for moving within 3-5 years.