SWIC

On July 26, 2007 Senate Bill 97 was signed into law by Governor Rendell as Act 55. The new law which is effective immediately, makes changes to NAP to improve the competitiveness of the NAP tax credit. We are in the process of revising our Guidelines, Addendum and Fact Sheets. Please continue to use the enclosed package to apply and keep in mind the following four revisions as you develop your NAP Tax Credit program:

1. Neighborhood Assistance Program Tax Credit Rate
    Increases
•    NAP (regular) has increased to 55% for business firms.

•    EZP has increased to 25% for private companies.

•    NPP has increased to 75% for business firms for a 5-year
     commitment; and 80% for a commitment of six or more years.

2. Increase in Caps
•    The overall limit for tax credits for a contributor/investor has
      increased from $250,000 to $500,000 for contributions or
      investments to fewer than four (4) projects.

•    The overall limit for tax credits for a contributor/investor has
      increased to $1,250,000 for contributions or investments to
      four (4) or more projects.

3. Extending NAP Credits to the State Personal Income Tax
•    Pass-through entities such as S-Corporations and Partnerships
     are added as entities eligible to receive NAP credits. Pass-through
     entities normally do not pay any state taxes, but they can elect
     to transfer all or a portion of the credit to shareholders, members
     or partners, in proportion to the share of the entity’s distributive
     income to which the shareholder, member, or partner is entitled.

•    Two (2) million dollars of the $18 million authorization is set
     aside for these pass-through entities per fiscal year.

4. Sale or Transfer of NAP Credits
•    Act 55 also permits tax credits to be sold or assigned to other
     eligible taxpayers. The acquiring taxpayer must use the tax
     credits in the taxable year in which the purchase or assignment
     is made.