SB 655 — 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; in tax credit and tax benefit administration, further providing for definitions; and providing for personal health investment tax credit.

PRINTER'S NO.    708

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                        SENATE BILL
                        No. 655
                                               Session of
                                                 2025

     INTRODUCED BY MUTH, COSTA, FONTANA AND TARTAGLIONE,
        APRIL 30, 2025

     REFERRED TO FINANCE, APRIL 30, 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; in tax credit and tax benefit
13      administration, further providing for definitions; and
14      providing for personal health investment tax credit.
15      The General Assembly of the Commonwealth of Pennsylvania
16   hereby enacts as follows:
17      Section 1.    Section 303 of the act of March 4, 1971 (P.L.6,
18   No.2), known as the Tax Reform Code of 1971, is amended by
19   adding a subsection to read:
20      Section 303.    Classes of Income.--* * *
21      (a.13)   As follows:
22      (1)   An amount paid by a business that incurs costs by
23   offering free membership at a fitness facility to a qualified
24   individual shall be allowed as a deduction from taxable income
 1   on the annual personal income tax return. The amount paid as a
 2   free membership at a fitness facility to a qualified individual
 3   may not exceed the dollar amount paid as a membership at a
 4   fitness facility to any other individual. The deduction shall
 5   not result in taxable income being less than zero.
 6      (2)   For purposes of this subsection, the term "qualified
 7   individual" means an individual who is on active and full-time
 8   duty in the United States Armed Forces, a member of the
 9   Pennsylvania National Guard or a member of a reserve component
10   of the armed forces as defined in 51 Pa.C.S. § 7301 (relating to
11   definitions).
12      * * *
13      Section 2.     Section 401(3)1 of the act is amended by adding a
14   phrase to read:
15      Section 401.    Definitions.--The following words, terms, and
16   phrases, when used in this article, shall have the meaning
17   ascribed to them in this section, except where the context
18   clearly indicates a different meaning:
19      * * *
20      (3)   "Taxable income."    1.    * * *
21      (v)   (1)    An additional deduction shall be allowed from
22   taxable income in an amount equal to the amount paid for costs
23   by offering free membership at a fitness facility to a qualified
24   individual. The amount paid as a free membership at a fitness
25   facility to a qualified individual shall not exceed the dollar
26   amount paid as a membership at a fitness facility to any other
27   individual.
28      (2)   For purposes of this paragraph, the term "qualified
29   individual" means an individual who is on active and full-time
30   duty in the United States Armed Forces, a member of the

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 1   Pennsylvania National Guard or a member of a reserve component
 2   of the armed forces as defined in 51 Pa.C.S. § 7301 (relating to
 3   definitions).
 4      * * *
 5      Section 3.     The definition of "tax credit" in section 1701-
 6   A.1 of the act is amended by adding a paragraph to read:
 7   Section 1701-A.1.    Definitions.
 8      The following words and phrases when used in this article
 9   shall have the meanings given to them in this section unless the
10   context clearly indicates otherwise:
11      * * *
12      "Tax credit."    A tax credit authorized under any of the
13   following:
14          * * *
15          (14.2)     Article XVIII-I.
16          * * *
17      Section 4.     The act is amended by adding an article to read:
18                              ARTICLE XVIII-I
19                   PERSONAL HEALTH INVESTMENT TAX CREDIT
20   Section 1801-I.    Scope of article.
21      This article relates to personal health investment tax
22   credits.
23   Section 1802-I.    Definitions.
24      The following words and phrases when used in this article
25   shall have the meanings given to them in this section unless the
26   context clearly indicates otherwise:
27      "Department."    The Department of Revenue of the Commonwealth.
28      "Qualified individual."    An individual who is on active and
29   full-time duty in the United States Armed Forces, a member of
30   the Pennsylvania National Guard or a member of a reserve

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 1   component of the armed forces as defined in 51 Pa.C.S. § 7301
 2   (relating to definitions).
 3      "Qualified sports and fitness expenses."     Amounts paid for
 4   the sole purpose of participating in a physical activity,
 5   including membership at a fitness facility, participation or
 6   instruction in physical exercise or physical activity or
 7   equipment used in a program, including a self-directed program,
 8   of physical exercise or physical activity.
 9      "Resident individual."     As defined in section 301.
10      "Tax credit."     A personal health investment tax credit
11   provided for under this article.
12      "Tax liability."    The liability for taxes imposed under
13   Article III, excluding any tax withheld by an employer under
14   Article III.
15      "Taxpayer."    A resident individual subject to the tax imposed
16   under Article III.
17   Section 1803-I.    Tax credit.
18      (a)   Eligibility.--A taxpayer who is a qualified individual
19   and incurs qualified sports and fitness expenses in a taxable
20   year may claim a tax credit against the taxpayer's tax
21   liability.
22      (b)   Amount of tax credit.--The amount of the tax credit may
23   not exceed $600 per taxpayer per taxable year.
24      (c)   Claim of tax credit.--A taxpayer may claim a tax credit
25   on a return filed under section 330.
26      (d)   Applicability of tax credit.--A tax credit shall be
27   applied against the taxpayer's tax liability.
28   Section 1804-I.    Prohibitions.
29      The following apply:
30            (1)   A taxpayer may not carry over, carry back, obtain a

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 1      refund of or sell, assign or transfer a tax credit.
 2          (2)   A taxpayer may not claim a tax credit for the same
 3      qualified sports and fitness expenses used to claim a tax
 4      credit on a return filed by another taxpayer.
 5   Section 1805-I.    Duties of department.
 6      The department shall publish guidelines and may promulgate
 7   regulations necessary for the implementation and administration
 8   of this article.
 9      Section 5.     The addition of sections 303(a.13) and
10   401(3)1(v) and Article XVIII-I of the act shall apply to taxable
11   years commencing after December 31, 2024.
12      Section 6.     This act shall take effect immediately.




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