HB 1126 — An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in personal income tax, further providing for classes of income; in corporate net income tax, further providing for definitions; and providing for personal health investment tax credit.

PRINTER'S NO.   1254

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 1126
                                                Session of
                                                  2025

     INTRODUCED BY GUENST, WEBSTER, CERRATO, HILL-EVANS, SOLOMON,
        PROBST AND SANCHEZ, APRIL 3, 2025

     REFERRED TO COMMITTEE ON VETERANS AFFAIRS AND EMERGENCY
        PREPAREDNESS, APRIL 3, 2025


                                     AN ACT
 1   Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
 2      act relating to tax reform and State taxation by codifying
 3      and enumerating certain subjects of taxation and imposing
 4      taxes thereon; providing procedures for the payment,
 5      collection, administration and enforcement thereof; providing
 6      for tax credits in certain cases; conferring powers and
 7      imposing duties upon the Department of Revenue, certain
 8      employers, fiduciaries, individuals, persons, corporations
 9      and other entities; prescribing crimes, offenses and
10      penalties," in personal income tax, further providing for
11      classes of income; in corporate net income tax, further
12      providing for definitions; and providing for personal health
13      investment tax credit.
14      The General Assembly of the Commonwealth of Pennsylvania
15   hereby enacts as follows:
16      Section 1.     Section 303 of the act of March 4, 1971 (P.L.6,
17   No.2), known as the Tax Reform Code of 1971, is amended by
18   adding a subsection to read:
19      Section 303.     Classes of Income.--* * *
20      (a.13)   The following apply:
21      (1)   A fitness facility shall be allowed a deduction from
22   taxable income on its annual tax return for each free or
23   discounted membership provided to a qualified individual. The
 1   deduction for each free or discounted membership at a fitness
 2   facility to a qualified individual may not exceed the dollar
 3   amount paid as a membership at a fitness facility to any other
 4   individual. The deduction shall not result in taxable income
 5   being less than zero.
 6      (2)    For the purposes of this subsection, the following words
 7   and phrases shall have the meanings given to them in this
 8   paragraph unless the context clearly indicates otherwise:
 9      (i)    "Fitness facility" shall have the same meaning as
10   "health club" in section 2 of the act of December 21, 1989
11   (P.L.672, No.87), known as the Health Club Act.
12      (ii)    "Qualified individual" means an individual who is on
13   active and full-time duty in the United States Armed Forces, a
14   member of the Pennsylvania National Guard or a member of a
15   reserve component of the armed forces as defined in 51 Pa.C.S. §
16   7301 (relating to definitions).
17      * * *
18      Section 2.     Section 401(3)1 of the act is amended by adding a
19   phrase to read:
20      Section 401.     Definitions.--The following words, terms, and
21   phrases, when used in this article, shall have the meaning
22   ascribed to them in this section, except where the context
23   clearly indicates a different meaning:
24      * * *
25      (3)    "Taxable income."   1.    * * *
26      (v)    (1)   An additional deduction shall be allowed from the
27   taxable income of a fitness facility for each free or discounted
28   membership provided to a qualified individual. The deduction for
29   each free or discounted membership at a fitness facility
30   provided to a qualified individual may not exceed the dollar

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 1   amount paid as a membership fee at a fitness facility to any
 2   other individual. This additional deduction from taxable income
 3   shall only be permitted to the extent deductions for these free
 4   or discounted memberships were not taken by the fitness facility
 5   for Federal income tax purposes for the taxable year.
 6      (2)     For the purposes of this subsection, the following words
 7   and phrases shall have the meanings given to them in this
 8   paragraph unless the context clearly indicates otherwise:
 9      (i)     "Fitness facility" shall have the same meaning as
10   "health club" in section 2 of the act of December 21, 1989
11   (P.L.672, No.87), known as the Health Club Act.
12      (ii)     "Qualified individual" means an individual who is on
13   active and full-time duty in the United States Armed Forces, a
14   member of the Pennsylvania National Guard or a member of a
15   reserve component of the armed forces as defined in 51 Pa.C.S. §
16   7301 (relating to definitions).
17      * * *
18      Section 3.     The act is amended by adding an article to read:
19                              ARTICLE XVIII-I
20                   PERSONAL HEALTH INVESTMENT TAX CREDIT
21   Section 1801-I.    Scope of article.
22      This article relates to personal health investment tax
23   credits.
24   Section 1802-I.    Definitions.
25      The following words and phrases when used in this article
26   shall have the meanings given to them in this section unless the
27   context clearly indicates otherwise:
28      "Department."     The Department of Revenue of the Commonwealth.
29      "Fitness facility."    As defined in section 2 of the act of
30   December 21, 1989 (P.L.672, No.87), known as the Health Club

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 1   Act.
 2      "Qualified individual."       An individual who is on active and
 3   full-time duty in the United States Armed Forces, a member of
 4   the Pennsylvania National Guard or a member of a reserve
 5   component of the armed forces as defined in 51 Pa.C.S. § 7301
 6   (relating to definitions).
 7      "Qualified sports and fitness expenses."       Amounts paid for
 8   the sole purpose of participating in a physical activity,
 9   including membership at a fitness facility, participation or
10   instruction in physical exercise or physical activity or
11   equipment used in a program, including a self-directed program,
12   of physical exercise or physical activity.
13      "Resident individual."     As defined in section 301(p).
14      "Tax credit."     A personal health investment tax credit
15   provided for under this article.
16      "Tax liability."     The liability for taxes imposed under
17   Article III, excluding any tax withheld by an employer under
18   Article III.
19      "Taxpayer."     A resident individual subject to the tax imposed
20   under Article III.
21   Section 1803-I.    Tax credit.
22      (a)   Eligibility.--A taxpayer who is a qualified individual
23   and incurs qualified sports and fitness expenses in a taxable
24   year may claim a tax credit against the taxpayer's tax
25   liability.
26      (b)   Amount of tax credit.--The amount of the tax credit may
27   not exceed $600 per taxpayer per taxable year.
28      (c)   Claim of tax credit.--A taxpayer may claim a tax credit
29   on a return filed under section 330.
30      (d)   Applicability of tax credit.--A tax credit shall be

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 1   applied against the taxpayer's tax liability.
 2   Section 1804-I.    Prohibitions.
 3      The following apply:
 4          (1)   A taxpayer may not carry over, carry back, obtain a
 5      refund of or sell, assign or transfer a tax credit.
 6          (2)   A taxpayer may not claim a tax credit for the same
 7      qualified sports and fitness expenses used to claim a tax
 8      credit on a return filed by another taxpayer.
 9   Section 1805-I.    Duties of department.
10      The department shall publish guidelines and may promulgate
11   regulations necessary for the implementation and administration
12   of this article.
13      Section 4.     The addition of sections 303(a.13) and 401(3)1(v)
14   and Article XVIII-I of the act shall apply to taxable years
15   commencing after December 31, 2026.
16      Section 5.     This act shall take effect immediately.




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