Signed by Governor Ed Rendell

Vote Smart's Synopsis:

Vote to concur with Senate amendments and pass a bill that amends tax law in various ways, including the following highlights.

Highlights:

-Increases the excise tax rate on the sale or possession of cigarettes from 6 3/4 cents per cigarette to 8 cents per cigarette, and decreases the rate of the additional tax imposed on individuals who possess cigarettes on which the aforementioned 8 cents per cigarette has been paid from 1 3/4 cents per cigarette to 1 1/4 cents per cigarette (Secs. 9.3). -Modifies capital stock and franchise tax rates as follows (Sec. 8):

-Existing rates:
-2.89 mills for January 1, 2008 to December 31, 2008; -1.89 mills for January 1, 2009 to December 31, 2009; and -0.89 mills for January 1, 2010 to December 31, 2010;
-New rates:
-2.89 mills for January 1, 2008 to December 31, 2011; -1.89 mills for January 1, 2012 to December 31, 2012; and -0.89 mills for January 1, 2013 to December 31, 2013.

-Defines "scholarship organization" as a nonprofit entity that contributes at least 80 percent of its annual cash receipts to a scholarship program, and defines "educational improvement organization" as a nonprofit entity that contributes at least 80 percent of its annual receipts as grants to a public school for innovative educational programs (Sec. 9.10). -Creates a tax credit equal to up to 75 percent of a qualified contribution for business firms providing proof of contribution to a scholarship organization or educational improvement organization, specifies that the credit shall be against the personal income tax, corporate net income tax, capital stock-franchise tax, bank and trust company shares tax, title insurance companies share tax, insurance premiums tax, or the mutual thrift institutions tax, and specifies that the credit shall not exceed $300,000 annually per business firm (Sec. 9.10). -Specifies that an additional tax credit of up to 90% of a qualified contribution to a scholarship organization or educational improvement organization shall be available to business firms that provide a written commitment to provide the same amount of contribution for two consecutive tax years, but limits the combined amount of this tax credit and the aforementioned credit to no more than $300,000 annually per business firm (Sec 9.10). -Creates a tax credit equal to 100 percent of the first $10,000 of a qualified contribution and up to 90 percent of the remaining amount contributed for business firms providing proof of contribution to a pre-kindergarten scholarship organization, specifies that the credit shall be against the personal income tax, corporate net income tax, capital stock-franchise tax, bank and trust company shares tax, title insurance companies share tax, insurance premiums tax, or the mutual thrift institutions tax, and specifies that the credit shall not exceed $150,000 annually per business firm (Sec. 9.10). Limits the total aggregate amount of all tax credits issued under the provisions mentioned in the previous three highlights to no more than $67 million per fiscal year, and specifies that no less than $44.67 million of this amount shall be used to provide tax credits for contributions to scholarship organizations and no less than $22.33 million shall be used to provide tax credits for contributions to educational improvement organizations (Sec 9.10). -Reduces the film production tax credit from $75 million per fiscal year to $42 million in fiscal year 2009-2010 and $60 million in fiscal year 2010-2011 (Sec. 11). -Reduces the educational improvement tax credit from $75 million per fiscal year to $60 million in fiscal year 2009-2010 and $50 million in fiscal year 2010-2011 (Sec. 11). -Reduces the research and development tax credit to 50 percent of the maximum amounts otherwise available for award in fiscal year 2009-2010 and 45 percent of the maximum amounts otherwise available for award in fiscal year 2010-2011 (Sec. 11). -Reduces the employment incentive payments tax credit, the resource enhancement and protection tax credit, the tax credit for new jobs, the neighborhood assistance tax credit, and certain other state tax credits to 50 percent of the amounts otherwise available for award in total in fiscal year 2009-2010 and 45 percent of the amounts otherwise available for award in total in fiscal year 2010-2011 (Sec. 11).

Full Bill Text

Vote Smart's Synopsis:

Vote to concur with House amendments and adopt further amendments to a bill that amends tax law in various ways, including the following highlights.

Highlights:

-Increases the excise tax rate on the sale or possession of cigarettes from 6 3/4 cents per cigarette to 8 cents per cigarette, and decreases the rate of the additional tax imposed on individuals who possess cigarettes on which the aforementioned 8 cents per cigarette has been paid from 1 3/4 cents per cigarette to 1 1/4 cents per cigarette (Secs. 9.3). -Modifies capital stock and franchise tax rates as follows (Sec. 8):

-Existing rates:
-2.89 mills for January 1, 2008 to December 31, 2008; -1.89 mills for January 1, 2009 to December 31, 2009; and -0.89 mills for January 1, 2010 to December 31, 2010;
-New rates:
-2.89 mills for January 1, 2008 to December 31, 2011; -1.89 mills for January 1, 2012 to December 31, 2012; and -0.89 mills for January 1, 2013 to December 31, 2013.

-Defines "scholarship organization" as a nonprofit entity that contributes at least 80 percent of its annual cash receipts to a scholarship program, and defines "educational improvement organization" as a nonprofit entity that contributes at least 80 percent of its annual receipts as grants to a public school for innovative educational programs (Sec. 9.10). -Creates a tax credit equal to up to 75 percent of a qualified contribution for business firms providing proof of contribution to a scholarship organization or educational improvement organization, specifies that the credit shall be against the personal income tax, corporate net income tax, capital stock-franchise tax, bank and trust company shares tax, title insurance companies share tax, insurance premiums tax, or the mutual thrift institutions tax, and specifies that the credit shall not exceed $300,000 annually per business firm (Sec. 9.10). -Specifies that an additional tax credit of up to 90% of a qualified contribution to a scholarship organization or educational improvement organization shall be available to business firms that provide a written commitment to provide the same amount of contribution for two consecutive tax years, but limits the combined amount of this tax credit and the aforementioned credit to no more than $300,000 annually per business firm (Sec 9.10). -Creates a tax credit equal to 100 percent of the first $10,000 of a qualified contribution and up to 90 percent of the remaining amount contributed for business firms providing proof of contribution to a pre-kindergarten scholarship organization, specifies that the credit shall be against the personal income tax, corporate net income tax, capital stock-franchise tax, bank and trust company shares tax, title insurance companies share tax, insurance premiums tax, or the mutual thrift institutions tax, and specifies that the credit shall not exceed $150,000 annually per business firm (Sec. 9.10). Limits the total aggregate amount of all tax credits issued under the provisions mentioned in the previous three highlights to no more than $67 million per fiscal year, and specifies that no less than $44.67 million of this amount shall be used to provide tax credits for contributions to scholarship organizations and no less than $22.33 million shall be used to provide tax credits for contributions to educational improvement organizations (Sec 9.10). -Reduces the film production tax credit from $75 million per fiscal year to $42 million in fiscal year 2009-2010 and $60 million in fiscal year 2010-2011 (Sec. 11). -Reduces the educational improvement tax credit from $75 million per fiscal year to $60 million in fiscal year 2009-2010 and $50 million in fiscal year 2010-2011 (Sec. 11). -Reduces the research and development tax credit to 50 percent of the maximum amounts otherwise available for award in fiscal year 2009-2010 and 45 percent of the maximum amounts otherwise available for award in fiscal year 2010-2011 (Sec. 11). -Reduces the employment incentive payments tax credit, the resource enhancement and protection tax credit, the tax credit for new jobs, the neighborhood assistance tax credit, and certain other state tax credits to 50 percent of the amounts otherwise available for award in total in fiscal year 2009-2010 and 45 percent of the amounts otherwise available for award in total in fiscal year 2010-2011 (Sec. 11).

Full Bill Text

Vote Smart's Synopsis:

Vote to concur with Senate amendments and pass a bill that amends tax law in various ways, including the following highlights.

Highlights:

-Imposes a tobacco products tax on dealers, manufacturers, or any person at the time the tobacco product is first sold to a retailer at the rate of 30 percent of the purchase price charged to the retailer (Sec. 9.5). -Levies a natural gas severance tax on producers at a rate of 5 percent of the gross value of units severed at the wellhead during a reporting period plus 4.7 cents per unit severed, and exempts units severed from stripper wells from this tax (Sec. 9.5). -Modifies capital stock and franchise tax rates as follows (Sec. 8):

-Existing rates:
-2.89 mills for January 1, 2008 to December 31, 2008; -1.89 mills for January 1, 2009 to December 31, 2009; and -0.89 mills for January 1, 2010 to December 31, 2010;
-New rates:
-2.89 mills for January 1, 2008 to December 31, 2011; -1.89 mills for January 1, 2012 to December 31, 2012; and -0.89 mills for January 1, 2013 to December 31, 2013.

-Defines "scholarship organization" as a nonprofit entity that contributes at least 80 percent of its annual cash receipts to a scholarship program, and defines "educational improvement organization" as a nonprofit entity that contributes at least 80 percent of its annual receipts as grants to a public school for innovative educational programs (Sec. 9.7). -Creates a tax credit equal to up to 75 percent of a qualified contribution for business firms providing proof of contribution to a scholarship organization or educational improvement organization, specifies that the credit shall be against the personal income tax, corporate net income tax, capital stock-franchise tax, bank and trust company shares tax, title insurance companies share tax, insurance premiums tax, or the mutual thrift institutions tax, and specifies that the credit shall not exceed $300,000 annually per business firm (Sec. 9.7). -Specifies that an additional tax credit of up to 90% of a qualified contribution to a scholarship organization or educational improvement organization shall be available to business firms that provide a written commitment to provide the same amount of contribution for two consecutive tax years, but limits the combined amount of this tax credit and the aforementioned credit to no more than $300,000 annually per business firm (Sec 9.7). -Creates a tax credit equal to 100 percent of the first $10,000 of a qualified contribution and up to 90 percent of the remaining amount contributed for business firms providing proof of contribution to a pre-kindergarten scholarship organization, specifies that the credit shall be against the personal income tax, corporate net income tax, capital stock-franchise tax, bank and trust company shares tax, title insurance companies share tax, insurance premiums tax, or the mutual thrift institutions tax, and specifies that the credit shall not exceed $150,000 annually per business firm (Sec. 9.7). Limits the total aggregate amount of all tax credits issued under the provisions mentioned in the previous three highlights to no more than $67 million per fiscal year, and specifies that no less than $44.67 million of this amount shall be used to provide tax credits for contributions to scholarship organizations and no less than $22.33 million shall be used to provide tax credits for contributions to educational improvement organizations (Sec 9.7). -Reduces total amounts for the research and development tax credit, the film production tax credit, and the educational improvement tax credit to 67 percent of the total amount of credits authorized by law to he awarded each year (Sec. 11). -Reduces the amounts of the employment incentive payments tax credit, the resource enhancement and protection tax credit, the tax credit for new jobs, the neighborhood assistance tax credit, and certain other state tax credits to 67 percent of the amount authorized by law to be awarded (Sec. 11).

Full Bill Text