Gov. Tom Corbett has signed a bill that would allow companies that create 250 new jobs to keep virtually all of the personal income tax paid by their employees.
The bill, known as the Promoting Employment Across Pennsylvania Act, was designed to encourage economic development and new job creation in the state, the Corbett administration said.
"As Governor, I am committed to ushering in an economic environment where the private sector can grow and create jobs," Corbett said. "I commend the General Assembly for their work on this initiative to grow new jobs in Pennsylvania."
The deadline for the governor to sign the bill was Sunday.
Under the act, a qualified company that enters into an agreement with the Department of Community and Economic Development (DCED) will be eligible to retain 95 percent of the qualified company's withholding taxes for individuals employed in new jobs created by the company. Qualified companies must create at least 250 new jobs in Pennsylvania within a five year period, 100 of which must be created within the first two years.
The act also allows for an alternate process of which an employer may remit all of the personal income tax witheld from its employees, and then receive a rebate of that personal income tax from the commonwealth.
The program is capped at a total of $5 million per year and is set to expire on January 1, 2018.
Legislative sources told the Inquirer the bill was designed to lure software giant Oracle to Centre County, home to Penn State.
Sen. Jake Corman (R., Centre) on Wednesday said he didn't have any direct talks with Oracle, but like the concept of the bill because the tax diversion would ensure local jobs. Critics say such a maneuver amounts to employees paying their employers.
See more on the background of the bill in my story here.
Roxbury News captured the frantic back room lawmaking in action as the House Rules Committee (made of leaders in both parties), meeting in House Majority leader Mike Turzai's office, rushed through the final version of the bill on the day of its passage.
Read the full text of the bill (HB2626) at http://www.legis.state.pa.us.