(d) The Revenue Department shall provide application forms for businesses
that wish to apply for tax credits under this Section, and it shall enter into
contribution agreements under this Section with up to twenty-five (25)
applicants on a "first come-first served" basis. The Revenue Department shall
when necessary randomly choose among applicants that apply on the same
date.
(e) A business may terminate its contribution agreement with the
City at any time. A business that terminates a contribution agreement will not
lose any tax credits it has taken for contributions made under the contribution
agreement, but the business will not be eligible to apply for any future tax
credits under this subsection. If a business terminates its contribution
agreement, a new business may apply to receive tax credits under this
subsection, provided that such tax credits shall be limited to the number of
years that were remaining on the terminating business’ contribution
agreement, and further provided that the new business must enter into a
contribution agreement with the City under which it agrees to make contributions
of $100,000 per year to the same Qualifying CDC which was the recipient under
the terminating business’ contribution agreement, and for the number of
years that remained under that agreement.
(f) The Revenue Department
shall by December 31 of each year submit a written report to the Mayor, with a
copy to the President and Chief Clerk of Council, summarizing the City’s
experience during the prior year with the tax credit provided under this
Section.
(7)
Credit for New Job Creation; Pilot
Program.
[364] (a)
Definitions.
For purposes of this subsection, the following definitions shall
apply:
(1)
Base Period. The three years preceding the date on
which a business may begin creating new jobs which may be eligible for job
creation tax credits.
(2)
Job Creation Tax Credits. Tax credits
for which the City of Philadelphia’s Revenue Department has issued a
certificate under this Chapter.
(3)
New Job. A full-time job,
the average hourly rate, excluding benefits, for which must be at least 150% of
the federal minimum wage, created within the City and County of Philadelphia by
a company within five (5) years from the start date.
(4)
Start
Date. The date on which a business may begin creating new jobs which may be
eligible for job creation tax credits.
(5)
Year One. A one-year
period immediately following the start date.
(6)
Year Two. A
one-year period immediately following the end of year one.
(7)
Year
Three. A one-year period immediately following the end of year
two.
(8)
Year Four. A one-year period immediately following the
end of year three.
(9)
Year Five. A one-year period immediately
following the end of year four.
(b)
Eligibility. In order to be
eligible to receive Job Creation Tax Credits, a business must demonstrate the
following:
(1) A current Job Creation Tax Credit Certificate from the
Commonwealth of Pennsylvania for jobs located in the City of Philadelphia or
each of the following:
(i) The ability to create the number of jobs
required by the Revenue Department within five (5) years from the start
date.
(ii)
Financial stability and the project’s
financial viability.
(iii)
The intent to maintain operations
in the City of Philadelphia for a period of five (5) years from the date the
company submits its Tax Credit Certificate to the Department of
Revenue.
(iv) An affirmation that the decision to expand or locate in
the City of Philadelphia was due in large part to the availability of a Job
Creation Tax Credit.
(c)
Application
Process.
(1)
Application. A business must complete and
submit to the Revenue Department a Job Creation Tax Credit
Application.
(2)
Creation of Jobs. The applicant must agree to
create at least 25 new jobs or to increase the applicant’s number of
employees by at least 20%, within five (5) years of the start
date.
(3)
Approval. If the Revenue Department approves the
company’s application, the Department and the company shall execute a
commitment letter containing the following:
(i) A description of the
project.
(ii)
The number of new jobs to be
created.
(iii) The amount of private capital investment in the
project.
(iv) The maximum job creation tax credit amount the company
may claim.
(v) A signed statement that the company intends to
maintain its operation in the City of Philadelphia for five (5) years from the
start date.
(vi) Such other information as the Department deems
appropriate.
(4)
Commitment Letter. After a commitment letter
has been signed by both the City of Philadelphia and the business, and the City
determines that new jobs have been created pursuant to that commitment, the
business shall receive a Job Creation Tax Credit Certificate reflecting the
number of jobs created and filing information.
(d)
Tax
Credits.
(1)
Maximum Amount. A business may claim a tax
credit of $1,000 per new job created up to the maximum job creation amount
specified in the commitment letter.
(2)
Determination of new jobs
created.
(i)
New jobs shall be deemed created in year one
to the extent that the business’ average employment by quarter during year
one exceeds the greater of the business’ average employment level during
the business’ base period or the business’ employment level at the
start date.
(ii)
New jobs shall be deemed created in year two
to the extent that the business’ average employment by quarter during year
two exceeds the business’ average employment by quarter during year
one.
(iii) New jobs shall be deemed created in year three to the
extent that the business’ average employment by quarter during year three
exceeds the business’ average employment by quarter during year
two.
(iv) New jobs shall be deemed created in year four to the extent
that the business’ average employment by quarter during year four exceeds
the business’ average employment by quarter during year
three.
(v) New jobs shall be deemed created in year five to the
extent that the business’ average employment by quarter during year five
exceeds the business’ average employment by quarter during year
four.
(3)
Applicable Taxes. A business may apply the tax credit
against the business’ total business privilege tax liability.
(4)
Tax Credit Term. A business may claim the Job Creation Tax
Credit for each new job created, as approved by the City of Philadelphia, for a
period not to exceed five (5) years from the date the business first submits a
Job Creation Tax Credit Certificate to the Department of
Revenue.
(5)
Maximum. The total amount of all tax credits
available in year one for commitment under subsection (7)(c)(3) shall not exceed
1% of all revenues collected by the City through the gross receipts and net
income components of the business privilege tax during the previous tax
year.
(e)
Prohibitions.
(1)
Prohibitions. The
following actions with regard to Job Creation Tax Credits are
prohibited:
(i)
Approval of jobs that have been created prior
to the start date.
(ii)
The assignment, transfer or use of
credits by any other company.
(iii) Approval for a company which is
relocating operations from one location in Philadelphia to another location in
Philadelphia.
(2)
Allocations. Twenty-five percent of all tax
credits available in any year under section subsection (7)(d)(5) shall be
available for commitment under subsection (7)(c)(3) to businesses with fewer
than 25 employees.
(f)
Penalties.
(1)
Failure to
maintain operations. A business which receives Job Creation Tax Credits and
fails to substantially maintain existing operations and the operations related
to the Job Creation Tax Credits in the City of Philadelphia for a period of five
(5) years from the date the business first submits a Job Creation Tax Credit
Certificate to the Department of Revenue shall be required to refund to the City
of Philadelphia the total amount of credit or credits
granted.
(2)
Failure to create jobs. A business which receives job
creation tax credits and fails to create the approved number of new jobs within
five (5) years of the start date will be required to refund to the City of
Philadelphia the total amount of credit or credits
granted.
(3)
Waiver. The Department of Revenue may waive the
penalties outlined in subsection (1) and (2) if it is determined that a
business’ operations were not maintained or the new jobs were not created
because of circumstances beyond the business’ control. Such circumstances
include natural disasters, acts of terrorism, unforeseen industry trends or a
loss of a major supplier or market.
(g) The Department of Revenue shall
by December 31 of each year submit a written report to the Mayor, with a copy to
the President and Chief Clerk of Council, summarizing the City’s
experience during the prior year with the tax credit provided under this
Section, and containing any recommendations as to continuation or modification
of the pilot tax credit program established by this Section.