Section 9935-C - Corporate net income tax(a) Credits.-- For the tax years that begin on or after January 1, 2008, a corporation that is a qualified business under this article may claim a credit against the tax imposed by Article IV for tax liability attributable to business activity conducted within the strategic development area in the taxable year. No credit may be claimed for activities conducted prior to designation of the strategic development area. The business activity must be conducted directly by a corporation in the strategic development area in order for the corporation to claim the tax credit.(b) Tax liability determinations.--The corporate tax liability attributable to business activity conducted within a strategic development area shall be determined by multiplying the corporation's taxable income that is attributable to business activity conducted within the strategic development area by the rate of tax imposed under Article IV for the taxable year.(c) Determinations of attributable tax liability.--Tax liability attributable to business activity conducted within a strategic development area shall be computed, construed, administered and enforced in conformity with Article IV and with specific reference to the following:(1) If the entire business of the corporation in this Commonwealth is transacted wholly within the strategic development area, the taxable income attributable to business activity within a strategic development area shall consist of the Pennsylvania taxable income as determined under Article IV.(2) If the entire business of the corporation in this Commonwealth is not transacted wholly within the strategic development area, the taxable income of a corporation in a strategic development area shall be determined upon such portion of the Pennsylvania taxable income of such corporation attributable to business activity conducted within the strategic development area and apportioned in accordance with subsection (d).(d) Income apportionment.--The taxable income of a corporation that is a qualified business shall be apportioned to the strategic development area by multiplying the Pennsylvania taxable income by a fraction, the numerator of which is the property factor plus the payroll factor plus the sales factor and the denominator of which is three, in accordance with the following: (1) The property factor is a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property owned or rented and used in the strategic development area during the tax period and the denominator of which is the average value of all the taxpayer's real and tangible personal property owned or rented and used in this Commonwealth during the tax period but shall not include the security interest of any corporation as seller or lessor in personal property sold or leased under a conditional sale, bailment lease, chattel mortgage or other contract providing for the retention of a lien or title as security for the sales price of the property.(2)(i) The payroll factor is a fraction, the numerator of which is the total amount paid in the strategic development area during the tax period by the taxpayer for compensation and the denominator of which is the total compensation paid in this Commonwealth during the tax period.(ii) Compensation is paid in the strategic development area if:(A) the person's service is performed entirely within the strategic development area;(B) the person's service is performed both within and without the strategic development area, but the service performed without the strategic development area is incidental to the person's service within the strategic development area; or(C) some of the service is performed in the strategic development area and the base of operations or, if there is no base of operations, the place from which the service is directed or controlled is in the strategic development area, or the base of operations or the place from which the service is directed or controlled is not in any location in which some part of the service is performed, but the person's residence is in the strategic development area.(3) The sales factor is a fraction, the numerator of which is the total sales of the taxpayer in the strategic development area during the tax period and the denominator of which is the total sales of the taxpayer in this Commonwealth during the tax period. (i) Sales of tangible personal property are in the strategic development area if the property is delivered or shipped to a purchaser that takes possession within the strategic development area regardless of the F.O. B. point or other conditions of the sale.(ii) Sales other than sales of tangible personal property are in the strategic development area if: (A) the income-producing activity is performed in the strategic development area; or(B) the income-producing activity is performed both within and without the strategic development area and a greater proportion of the income-producing activity is performed in the strategic development area than in any other location, based on costs of performance.(e) Computation.--A corporation shall compute its Commonwealth taxable income in conformity with Article IV with no adjustments or subtractions for strategic development area taxable income.(f) Limitation on amount of credit.--The credit allowed under this section shall not exceed the tax liability of the taxpayer under Article IV for the tax year.(g) Section not applicable to certain businesses.-- Any portion of the taxpayer's taxable income that is attributable to the operation of a railroad, truck, bus or airline company, pipeline or natural gas company, water transportation company, a corporation that qualifies as a regulated investment company under Article IV or holding company as defined in Article VI shall not be used to calculate a credit under this section.1971, March 4, P.L. 6, No. 2, art. XXIX-C, §2935-C, added 2006, Nov. 20, P.L. 1385, No. 151, § 2, imd. effective.