PRINTER'S NO. 101
No. 90 Session of 1979
INTRODUCED BY GOEBEL AND ZORD, FEBRUARY 6, 1979
REFERRED TO COMMITTEE ON BUSINESS AND COMMERCE, FEBRUARY 6, 1979
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," further defining the term "taxable income" to 11 exclude from the corporate income tax the amortization of 12 certified pollution control devices. 13 The General Assembly of the Commonwealth of Pennsylvania 14 hereby enacts as follows: 15 Section 1. Subclause 1 of clause (3) of section 401 of the 16 act of March 4, 1971 (P.L.6, No.2), known as the "Tax Reform 17 Code of 1971," amended November 26, 1978 (No.306), is amended to 18 read: 19 Section 401. Definitions.--The following words, terms, and 20 phrases, when used in this article, shall have the meaning 21 ascribed to them in this section, except where the context 22 clearly indicates a different meaning: 23 * * *
1 (3) "Taxable income." 1. In case the entire business of the 2 corporation is transacted within this Commonwealth, for any 3 taxable year which begins on or after January 1, 1971, taxable 4 income for the calendar year or fiscal year as returned to and 5 ascertained by the Federal Government, or in the case of a 6 corporation participating in the filing of consolidated returns 7 to the Federal Government, the taxable income which would have 8 been returned to and ascertained by the Federal Government if 9 separate returns had been made to the Federal Government for the 10 current and prior taxable years, subject, however, to any 11 correction thereof, for fraud, evasion, or error as finally 12 ascertained by the Federal Government: Provided, That additional 13 deductions shall be allowed from taxable income on account of 14 any dividends received from any other corporation but only to 15 the extent that such dividends are included in taxable income as 16 returned to and ascertained by the Federal Government: Provided 17 further, That additional deductions shall be allowed from 18 taxable income in an amount equal to the amount of any reduction 19 in an employer's deduction for wages and salaries as required by 20 section 280C of the Internal Revenue Code as a result of the 21 employer taking a credit for "new jobs" pursuant to section 44B 22 of the Internal Revenue Code: Provided further, That taxable 23 income will include the sum of the following tax preference 24 items as defined in section 57 of the Internal Revenue Code, as 25 amended, (i) excess investment interest; (ii) accelerated 26 depreciation on real property; (iii) accelerated depreciation on 27 personal property subject to a net lease; [(iv) amortization of 28 certified pollution control facilities;] (v) amortization of 29 railroad rolling stock; (vi) stock options; (vii) reserves for 30 losses on bad debts of financial institutions; (viii) and 19790H0090B0101 - 2 -
1 capital gains but only to the extent that such preference items 2 are not included in "taxable income" as returned to and 3 ascertained by the Federal Government. No deduction shall be 4 allowed for net operating losses sustained by the corporation 5 during any other fiscal or calendar year. In the case of 6 regulated investment companies as defined by the Internal 7 Revenue Code of 1954, as amended, "taxable income" shall be 8 investment company taxable income as defined in the aforesaid 9 Internal Revenue Code of 1954, as amended. In arriving at 10 "taxable income" for Federal tax purposes for any taxable year 11 beginning on or after January 1, 1971, any corporate net income 12 tax due to the Commonwealth pursuant to the provisions of this 13 article shall not be allowed as a deduction and the amount of 14 corporate tax so due and excluded from Federal taxable income 15 under the Internal Revenue Code shall not be apportioned but 16 shall be subject to tax at the rate imposed under this article. 17 Section 2. This act shall take effect immediately. A23L56RW/19790H0090B0101 - 3 -