(1) “Annual taxable payroll.” The total amount of wages paid in this Commonwealth by a taxpayer for the base year or year one, as applicable, from which personal income tax under Article III¹ is withheld.

(2) “Base year.” The four calendar quarters preceding the start date.

(3) “Department.” The Department of Community and Economic Development of the Commonwealth.

(4) “Manufacture.” The mechanical, physical, biological or chemical transformation of materials, substances or components into new products that are creations of new items of tangible personal property for sale.

(5) “Qualified manufacturing innovation and reinvestment deduction.” An allowable deduction as determined, calculated and executed in a commitment letter between the department and the taxpayer. The deduction shall be applied to the taxable income of the taxpayer to reduce a qualified tax liability of the taxpayer following the allocation and apportionment of the income of the taxpayer.

(6) “Qualified tax liability.” A taxpayer's tax liability under this article.

(7) “Start date.” The first day of the calendar quarter in which a taxpayer advises the department of the taxpayer's intent to initiate an eligible project unless the applicant requests and the department agrees to a later start date.

(8) “Taxpayer.” An employer subject to the tax under this article.

(9) “Year one.” The four calendar quarters immediately following the start date.