§ 19-3206. Conditions for Use and Occupancy Tax Exemption.

   (1)   A taxpayer claiming an exemption from realty use and occupancy tax under this Chapter shall cause to be filed the required returns pursuant to Section 19-1806 and shall calculate on such return the tax liability that would be owing if the subject property were not located in the Zone.

§ 19-3207. Conditions for Business Income and Receipts Tax Credit. 667

   (1)   The Department shall establish rules and regulations and methods of apportionment and allocation so that only that part of such net income and receipts attributable to business activity conducted directly by a qualified business within the Zone shall be entitled to a credit against the business income and receipts tax.

   (2)   A qualified business, when filing its business income and receipts tax return, shall first compute its receipts and net income in conformity with Chapter 19-2600 with no adjustments or subtractions for receipts or net income attributable to business activity in the Zone, prior to calculating any credit under this Chapter.

   (3)   The credit against business income and receipts tax allowed to a taxpayer in any tax year under this Chapter shall not exceed the business income and receipts tax liability of the taxpayer for such tax year, and shall not carry forward to any other tax year.

 

Notes

667	Caption and Section amended, Bill No. 110758 (approved December 21, 2011), effective May 1, 2012.

§ 19-3208. Conditions for Net Profits Tax Exemption.

   (1)   The Department shall establish rules and regulations and methods of apportionment and allocation so that only such part of net profits attributable to business activity conducted within the Zone directly by the taxpayer shall be entitled to a credit against net profits tax.

   (2)   A taxpayer, when filing its net profits tax return, shall first compute its net profits in conformity with Chapter 19-1500 or 19-2800 with no adjustments or subtractions for net profits attributable to business activity in the Zone, prior to calculating any credit under this Chapter.

   (3)   The credit against net profits tax allowed to a taxpayer in any tax year under this Chapter shall not exceed the net profits tax liability of the taxpayer for such tax year, and shall not carry forward to any other tax year.

§ 19-3209. Conditions for Sales and Use Tax Exemption.

   (1)   Construction contracts. For any construction contract performed within the Zone, the exemption from sales and use tax under this Chapter shall only apply to the sale at retail or use of building machinery and equipment to a qualified business, or to a construction contractor pursuant to a construction contract with a qualified business, for the exclusive use, consumption and utilization by the qualified business at its facility in the Zone. For the purposes of this exemption, building machinery and equipment shall include distribution equipment purchased for the exclusive use, consumption and utilization in a facility located within the Zone. 668

   (2)   Sales at retail of tangible personal properly and services shall be defined in accordance with Article II of the Tax Reform Code of 1971, as amended.

 

Notes

668	Amended, Bill No. 010092 (approved February 28, 2001).

§ 19-3210. Conditions for Wage Tax Exemption. 669

   (1)   Residency. In order to qualify each year for an exemption from wage tax under this Chapter, a person shall be domiciled and shall reside in the Zone for a period of 184 consecutive days during each taxable year, which may begin on the date of designation of the Zone by DCED or on the date the person first resides within the Zone.

   (2)   Except as provided in subsection (3) below, and notwithstanding any exemption provided by this Chapter, the employer of any person claiming such exemption shall remain subject to Sections 19-1504 and 19-2806 relating to tax withholding. Any taxpayer claiming an exemption from wage tax pursuant to this Chapter may file a claim for refund with the Department of Revenue pursuant to Section 19-1703. 670

   (3)   Notwithstanding the provisions of subsection (2) above, an employer shall not be subject to the provisions of Sections 19-1504 and 19-2806, relating to tax withholding, with respect to any employee who is resident of the Philadelphia Strategic Development Area, so long as the employee has furnished to his or her employer information, as prescribed by the Department, necessary for the employer to withhold the correct amount of tax, including any changes to such information within 20 days after the change, unless the employer reasonably and in good faith believes such information to be inaccurate. Within 20 days after an employer receives any information from an employee requesting exemption from withholding, the employer shall forward a copy of such information to the Department. The information shall not be given retroactive effect for withholding purposes. 671

 

Notes

669	Amended, Bill No. 010092 (approved February 28, 2001).
670	Amended, Bill No. 071081 (approved December 21, 2007). See note 613 for effective date provisions.
671	Added, Bill No. 071081 (approved December 21, 2007). See note 613 for effective date provisions.

§ 19-3211. Regulations.

   (1)   The Department and, where applicable, the Board of Revision of Taxes, may promulgate regulations to implement any of the abatements, credits or exemptions provided for under this Chapter. Such regulations shall be consistent with the purposes of the Act and this Chapter and may include, but need not be limited to, provisions relating to applications, required documentation and recordkeeping, enforcement and compliance.

§ 19-3212. Transferability.

   (1)   Any exemption, abatement or credit provided to any person or business under this Chapter is nontransferable and cannot be applied, used or assigned to any other person or business or tax account.

§ 19-3213. Recapture. 672

   (1)   General rule. If any qualified business located within the Zone has received an exemption, abatement or credit under this Chapter and subsequently relocates outside of the Zone within five years, that business shall refund to the City or School District, as applicable, the following (for purposes of this subsection, the Zone shall not include the Economic Development District or the Strategic Development Area):  673

      (a)   If a qualified business relocates within three years from the date of first locating in the Zone, sixty-six percent (66%) of all the exemptions, abatements or credits attributed to that qualified business's participation in the Zone shall be refunded.

      (b)   If a qualified business relocates within three to five years from the date of first locating in the Zone, thirty-three percent (33%) of all exemptions, abatements or credits attributed to that qualified business's participation in the Zone shall be refunded.

      (c)   If the qualified business was located within a facility operated by a nonprofit organization to assist in the creation and development of a start-up business, no exemption, abatement or credit shall be refunded.

   (2)   If any qualified business located within the Economic Development District has received an exemption, abatement or credit under this Chapter and subsequently relocates outside of the Economic Development District within five years, that business shall refund to the City the following:

      (a)   If the qualified business relocates within three years from the date of first locating in the economic development district, seventy-five percent (75%) of all the exemptions, deductions, abatements or credits attributed to the qualified business's participation in the economic development district shall be refunded to the Commonwealth and the qualified political subdivisions.

      (b)   If a qualified business relocates within four to seven years from the date of first locating in the economic development district, fifty percent (50%) of all exemptions, deductions, abatements or credits attributed to the qualified business's participation in the economic development district shall be refunded to the Commonwealth and the qualified political subdivisions.

      (c)   If the qualified business was located within a facility operated by a nonprofit organization for food distribution, no exemption, deduction, abatement or credit shall be refunded.

   (3)   If the Department, the Board of Revisions of Taxes or DCED finds that a taxpayer claimed an abatement, exemption or credit of real estate tax or any other tax to which the taxpayer was not entitled under the Act or this Chapter, the taxpayer shall be liable for the abated taxes and subject to the applicable interest and penalty provisions provided by law.

 

Notes

672	Amended, Bill No. 010092 (approved February 28, 2001); amended, Bill No. 050504-A (approved July 8, 2005). See note 594 for effective date provisions.
673	Amended, Bill No. 071081 (approved December 21, 2007). See note 613 for effective date provisions.