PRINTER'S NO. 985
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
965
Session of
2023
INTRODUCED BY PISCIOTTANO, MADDEN, VENKAT, PROBST, SANCHEZ,
SIEGEL, McNEILL, MARKOSEK, SCHLOSSBERG, ZABEL, CIRESI,
BOROWSKI, HILL-EVANS, DELLOSO, NEILSON, DEASY, OTTEN,
CONKLIN, KRAJEWSKI AND FLEMING, APRIL 24, 2023
REFERRED TO COMMITTEE ON FINANCE, APRIL 24, 2023
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," prohibiting tax deductions for anti-union
activities.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971, is amended by adding an article to
read:
ARTICLE XXIX-I
PROHIBITING TAX DEDUCTIONS FOR ANTI-UNION ACTIVITIES
Section 2901-I. Scope of article.
This article prohibits domestic entities and foreign entities
that are corporations operating in this Commonwealth from taking
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tax deductions for expenses incurred in opposing unionization
efforts of their workers.
Section 2902-I. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Corporation." A domestic entity or foreign entity
incorporated for a purpose involving pecuniary profit,
incidental or otherwise, to its shareholders or members, whether
or not the business entity is a cooperative corporation.
"Domestic entity." A corporation that is formed under the
laws of this Commonwealth and that exercises, whether in its own
name or through a corporation, limited liability company,
limited liability partnership, limited liability limited
partnership, limited partnership, general partnership or other
entity, any of the following privileges:
(1) Doing business in this Commonwealth.
(2) Carrying on activities in this Commonwealth,
including solicitation.
(3) Having capital or property employed or used in this
Commonwealth.
(4) Owning property in this Commonwealth.
"Foreign entity." A corporation that is organized by or
under the laws of a jurisdiction other than this Commonwealth
and that exercises, whether in its own name or through a
corporation, limited liability company, limited liability
partnership, limited liability limited partnership, limited
partnership, partnership or other entity, any of the following
privileges:
(1) Doing business in this Commonwealth.
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(2) Carrying on activities in this Commonwealth,
including solicitation.
(3) Having capital or property employed or used in this
Commonwealth.
(4) Owning property in this Commonwealth.
"General partnership." Either of the following:
(1) A partnership as defined in 15 Pa.C.S. § 8412
(relating to definitions).
(2) An association whose internal affairs are governed
by the laws of a jurisdiction other than this Commonwealth
which would be a partnership if its internal affairs were
governed by the laws of this Commonwealth.
"Labor organization." As follows:
(1) An organization of any kind or an agency or employee
representation committee or plan:
(i) in which employees participate; and
(ii) which exists for the purpose, in whole or in
part, of dealing with employers concerning grievances,
labor disputes, wages, rates of pay, hours of employment
or conditions of work.
(2) The term does not include a labor organization that,
by ritualistic practice, constitutional or bylaw
proscription, tacit agreement among its members or otherwise,
denies a person membership in the organization on account of
race, creed, color or political affiliation.
"Limited liability company." An association formed under and
subject to 15 Pa.C.S. Ch. 88 (relating to limited liability
companies).
"Limited liability limited partnership." A domestic or
foreign limited partnership for which there is in effect:
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(1) a statement of registration under 15 Pa.C.S. Ch. 82
(relating to limited liability partnerships and limited
liability limited partnerships);
(2) a provision of its certificate of limited
partnership electing to be subject to 15 Pa.C.S. Ch. 82; or
(3) a similar filing or provision under the organic law
of a foreign partnership.
"Limited liability partnership." A domestic or foreign
general partnership for which there is in effect:
(1) a statement of registration under 15 Pa.C.S. Ch. 82;
or
(2) a similar filing under the organic law of a foreign
general partnership.
"Limited partnership." Either of the following:
(1) A limited partnership as defined in 15 Pa.C.S. §
8612(a) (relating to definitions).
(2) An association whose internal affairs are governed
by the laws of a jurisdiction other than this Commonwealth
which would be a limited partnership if its internal affairs
were governed by the laws of this Commonwealth.
Section 2903-I. Prohibition.
Except as provided in section 2904-I, a taxpayer that is a
domestic entity or foreign entity subject to taxes under Article
III, IV or VI shall be prevented from deducting business
expenses that are related to an amount paid or incurred in
connection with attempting to influence the taxpayer's employees
with respect to a labor organization or the activities of a
labor organization, including:
(1) An amount paid or incurred by the taxpayer in
connection with an action that results in any of the
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following:
(i) A complaint issued under 29 U.S.C. § 160
(relating to prevention of unfair labor practices)
against the taxpayer for an unfair labor practice under
29 U.S.C. § 158(a) (relating to unfair labor practices) ,
unless an order of the National Labor Relations Board
related to the complaint is set aside in full accordance
with 29 U.S.C. § 160(e) or (f) .
(ii) A settlement offer related to an investigation
by the National Labor Relations Board of a charge of an
unfair labor practice under 29 U.S.C. § 158(a) that
results in a settlement of the charge without issuance of
a complaint under 29 U.S.C. § 160 .
(iii) A finding of interference, influence or
coercion by a Federal court under 45 U.S.C. § 152
(relating to general duties) .
(iv) A violation of the act of June 1, 1937
(P.L.1168, No.294), known as the Pennsylvania Labor
Relations Act.
(v) A complaint of an unfair labor practice under
the Pennsylvania Labor Relations Act.
(vi) A violation of an order issued by the
Pennsylvania Labor Relations Board.
(2) An amount paid or incurred, including wages, in
producing, conducting or attending a meeting or training:
(i) that includes employees of the taxpayer who are
or who could become bargaining unit members or members of
a craft or class under 45 U.S.C. Ch. 8 (Railway Labor
Act); and
(ii) at which labor organizations or a labor
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organization activity is discussed.
(3) An amount that is required to be reported under 29
U.S.C. Ch. 11 (relating to labor-management reporting and
disclosure procedure) .
Section 2904-I. Exceptions.
Notwithstanding section 2903-I, the following shall not be
treated as an amount paid or incurred in connection with
attempting to influence the taxpayer's employees with respect to
a labor organization or the activities of a labor organization:
(1) An amount paid or incurred for communications or
negotiations directly with the designated or selected
representative of the employees of the taxpayer described 29
U.S.C. § 159(a) (relating to representatives and elections)
or under 45 U.S.C. Ch. 8 (Railway Labor Act) .
(2) An amount paid or incurred for communications
directly with shareholders, as may be required under 15
U.S.C. § 78m (relating to periodical and other reports) .
(3) An amount paid or incurred for communications or
consultation by the taxpayer in the process of voluntarily
recognizing a labor organization as a r epresentative in
accordance with 29 U.S.C. § 159 .
(4) An amount paid or incurred for communications or
consultation related to the operation of a labor-management
partnership described in a collective bargaining agreement in
effect between a representative of employees of the taxpayer
and the taxpayer.
(5) An amount paid or incurred for communications or
consultation related to the operation of a grievance
procedure described in a collective bargaining agreement in
effect between a representative of employees of the taxpayer
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and the taxpayer.
(6) An amount paid or incurred by a labor organization.
(7) An amount paid or incurred for communicating
material, including visual or audio media, required to be
posted for, or provided to, employees of the taxpayer by law,
including under 29 U.S.C. § 151 et seq. (National Labor
Relations Act) or 45 U.S.C. Ch. 8 .
Section 2. The addition of Article XXIX-I of the act shall
apply to taxable years beginning on or after the effective date
of this section.
Section 3. This act shall take effect immediately.
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