Pennsylvania HB 2626 - Authorizes Employers to Keep Income Taxes Paid by their Employees - Key Vote

Title: Authorizes Employers to Keep Income Taxes Paid by their Employees

Signed by Governor Tom Corbett

Title: Authorizes Employers to Keep Income Taxes Paid by their Employees

Vote Smart's Synopsis:

Vote to concur with Senate amendments and pass a bill that authorizes qualified companies to retain 95 percent of employees' income taxes.

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Full Bill Text

Title: Authorizes Employers to Keep Income Taxes Paid by their Employees

Vote Smart's Synopsis:

Vote to pass a bill that authorizes qualified companies to retain 95 percent of employees' income taxes.

Highlights:

Authorizes a qualified company to retain 95 percent of a new employee’s income tax once the company enters into an agreement with the Department of Revenue (Secs. 301, 302 & 304).

Defines a “qualified company” as one that meets certain criteria, including but not limited to, the following (Sec. 103):

It is a for-profit corporation, partnership, or other entity;
It agrees to create at least 250 new jobs in Pennsylvania within a specified period of time; and
It provides health insurance coverage to full-time employees and pays at least 50 percent of the health insurance premium.

Specifies that the qualified company can retain 95 percent of a new employee’s income tax for the following time periods (Sec. 302):

7 years if new employees are compensated at 100 percent of the county average wage;
8 years if new employees are compensated at 110 percent of the county average wage;
9 years if new employees are compensated at 120 percent of the county average wage; and
10 years if new employees are compensated at 140 percent of the county average wage.

Requires a qualified company to create 100 new jobs within 2 years of entering into the agreement with the Department of Revenue (Sec. 301).

Limits the annual aggregate amount of new employees’ income taxes that a qualified company can retain to no more than $5 million (Sec. 313).

Prohibits the Department of Revenue from entering into an agreement authorizing a qualified company to retain new employee income taxes with a qualified company after January 1, 2018 (Sec. 314).

Key Votes