SENATE AMENDED
PRIOR PRINTER'S NO. 1761 PRINTER'S NO. 3697
No. 1450 Session of 1983
INTRODUCED BY LAUGHLIN, TRELLO, MANDERINO, VAN HORNE, WAMBACH,
ALDERETTE, SPITZ, WILSON, BOYES, D. W. SNYDER, NOYE, MORRIS,
COY, LUCYK, DORR, MRKONIC, COLAFELLA, BUNT, BELFANTI, OLASZ,
CLARK, MISCEVICH, REINARD, MILLER, DeLUCA, ITKIN, McCALL,
LESCOVITZ, PETRARCA, MAYERNIK, MARKOSEK, COHEN, STEWART,
FREEMAN, TRUMAN, McHALE, GODSHALL, MACKOWSKI, COSLETT,
GLADECK, F. E. TAYLOR, E. Z. TAYLOR, DOMBROWSKI, SIRIANNI,
PRATT, WOZNIAK, FEE, PHILLIPS, RUDY, SEMMEL, POTT, HERSHEY,
MADIGAN, KLINGAMAN, STEIGHNER AND HASAY, SEPTEMBER 20, 1983
SENATOR HOWARD, FINANCE, IN SENATE, AS AMENDED,
NOVEMBER 19, 1984
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," shifting the burden of proof from vendors to the
11 Department of Revenue on questions concerning the utilization
12 of exemption certificates; AND FURTHER PROVIDING FOR THE TAX <--
13 ON REAL ESTATE TRANSFERS.
14 The General Assembly of the Commonwealth of Pennsylvania
15 hereby enacts as follows:
16 Section 1. Section 237(c) of the act of March 4, 1971
17 (P.L.6, No.2), known as the Tax Reform Code of 1971, amended
18 March 26, 1976 (P.L.60, No.26), is amended to read:
19 Section 237. Collection of Tax.--* * *
1 (c) Exemption Certificates. If the tax does not apply to the
2 sale or lease of tangible personal property or services, the
3 purchaser or lessee shall furnish to the vendor a certificate
4 indicating that the sale is not legally subject to the tax. The
5 certificate shall be in substantially such form as the
6 department may, by regulation, prescribe. Where the tangible
7 personal property or service is of a type which is never subject
8 to the tax imposed or where the sale or lease is in interstate
9 commerce, such certificate need not be furnished. Where a series
10 of transactions are not subject to tax, a purchaser or user may
11 furnish the vendor with a single exemption certificate in
12 substantially such form and valid for such period of time as the
13 department may, by regulation, prescribe. The department shall
14 provide all school districts and intermediate units with a
15 permanent tax exemption number. An exemption certificate, which
16 is complete and regular and on its face discloses a valid basis
17 of exemption if taken in good faith, shall relieve the vendor
18 from the liability imposed by this section. An exemption
19 certificate accepted by a vendor from a natural person domiciled
20 within this Commonwealth or any association, fiduciary,
21 partnership, corporation or other entity, either authorized to
22 do business within this Commonwealth or having an established
23 place of business within this Commonwealth, in the ordinary
24 course of the vendor's business, which on its face discloses a
25 valid basis of exemption consistent with the activity of the
26 purchaser and character of the property or service being
27 purchased or which is provided to the vendor by a charitable,
28 religious, educational or volunteer firemen's organization and
29 contains the organization's charitable exemption number AND <--
30 WHICH, IN THE CASE OF ANY PURCHASE COSTING TWO HUNDRED DOLLARS
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1 ($200) OR MORE, IS ACCOMPANIED BY A SWORN DECLARATION (ON A FORM
2 TO BE PROVIDED BY THE DEPARTMENT) OF AN INTENDED USAGE OF THE
3 PROPERTY OR SERVICE WHICH WOULD RENDER IT NONTAXABLE, shall be
4 presumed to be taken in good faith and the burden of proving
5 otherwise shall be on the Department of Revenue.
6 * * *
7 Section 2. This act shall take effect immediately. <--
8 SECTION 2. THE DEFINITION OF "DOCUMENT" IN SECTION 1101-C OF <--
9 THE ACT, AMENDED DECEMBER 9, 1982 (P.L.1047, NO.246), IS AMENDED
10 AND DEFINITIONS ARE ADDED TO READ:
11 SECTION 1101-C. DEFINITIONS.--THE FOLLOWING WORDS WHEN USED
12 IN THIS ARTICLE SHALL HAVE THE MEANINGS ASCRIBED TO THEM IN THIS
13 SECTION, EXCEPT IN THOSE INSTANCES WHERE THE CONTEXT CLEARLY
14 INDICATES A DIFFERENT MEANING:
15 * * *
16 "DOCUMENT." ANY DEED, INSTRUMENT OR WRITING WHEREBY ANY
17 LANDS, TENEMENTS OR HEREDITAMENTS WITHIN THIS COMMONWEALTH OR
18 ANY INTEREST THEREIN SHALL BE QUITCLAIMED, GRANTED, BARGAINED,
19 SOLD, OR OTHERWISE CONVEYED TO THE GRANTEE, PURCHASER, OR ANY
20 OTHER PERSON, BUT DOES NOT INCLUDE WILLS, MORTGAGES, TRANSFERS
21 BETWEEN CORPORATIONS OPERATING HOUSING PROJECTS PURSUANT TO THE
22 HOUSING AND REDEVELOPMENT ASSISTANCE LAW AND THE SHAREHOLDERS
23 THEREOF, TRANSFERS BETWEEN NONPROFIT INDUSTRIAL DEVELOPMENT
24 AGENCIES AND INDUSTRIAL CORPORATIONS PURCHASING FROM THEM, ANY
25 TRANSFERS TO NONPROFIT INDUSTRIAL DEVELOPMENT AGENCIES,
26 TRANSFERS TO A NATURE CONSERVANCY OR SIMILAR ORGANIZATION WHICH
27 POSSESSES A TAX-EXEMPT STATUS PURSUANT TO SECTION 501(C)(3) OF
28 THE INTERNAL REVENUE CODE, AND WHICH HAS AS ITS PRIMARY PURPOSE
29 THE PRESERVATION OF LAND FOR HISTORIC, RECREATIONAL, SCENIC,
30 AGRICULTURAL OR OPEN SPACE OPPORTUNITIES, AND TRANSFERS BETWEEN
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1 HUSBAND AND WIFE, TRANSFERS BETWEEN PERSONS WHO WERE PREVIOUSLY
2 HUSBAND AND WIFE BUT WHO HAVE SINCE BEEN DIVORCED PROVIDED SUCH
3 TRANSFER IS MADE WITHIN THREE MONTHS OF THE DATE OF THE GRANTING
4 OF THE FINAL DECREE IN DIVORCE, OR THE DECREE OF EQUITABLE
5 DISTRIBUTION OF MARITAL PROPERTY, WHICHEVER IS LATER, AND THE
6 PROPERTY OR INTEREST THEREIN SUBJECT TO SUCH TRANSFER WAS
7 ACQUIRED BY THE HUSBAND AND WIFE OR HUSBAND OR WIFE PRIOR TO THE
8 GRANTING OF THE FINAL DECREE IN DIVORCE, TRANSFERS BETWEEN
9 PARENT AND CHILD OR THE SPOUSE OF SUCH A CHILD OR BETWEEN PARENT
10 AND TRUSTEE FOR THE BENEFIT OF A CHILD OR THE SPOUSE OF SUCH
11 CHILD, TRANSFERS BETWEEN A GRANDPARENT AND GRANDCHILD OR THE
12 SPOUSE OF SUCH GRANDCHILD, BY AND BETWEEN A PRINCIPAL AND STRAW
13 PARTY FOR THE PURPOSE OF PLACING A MORTGAGE OR GROUND RENT UPON
14 THE PREMISES, CORRECTIONAL DEEDS WITHOUT CONSIDERATION,
15 TRANSFERS TO THE UNITED STATES, THE COMMONWEALTH OF
16 PENNSYLVANIA, OR TO ANY OF THEIR INSTRUMENTALITIES, AGENCIES OR
17 POLITICAL SUBDIVISIONS, BY GIFT, DEDICATION OR DEED IN LIEU OF
18 CONDEMNATION, OR DEED OF CONFIRMATION IN CONNECTION WITH
19 CONDEMNATION PROCEEDINGS, OR RECONVEYANCE BY THE CONDEMNING BODY
20 OF THE PROPERTY CONDEMNED TO THE OWNER OF RECORD AT THE TIME OF
21 CONDEMNATION WHICH RECONVEYANCE MAY INCLUDE PROPERTY LINE
22 ADJUSTMENTS PROVIDED SAID RECONVEYANCE IS MADE WITHIN ONE YEAR
23 FROM THE DATE OF CONDEMNATION, LEASES, A CONVEYANCE TO A TRUSTEE
24 UNDER A RECORDED TRUST AGREEMENT FOR THE EXPRESS PURPOSE OF
25 HOLDING TITLE IN TRUST AS SECURITY FOR A DEBT CONTRACTED AT THE
26 TIME OF THE CONVEYANCE UNDER WHICH THE TRUSTEE IS NOT THE LENDER
27 AND REQUIRING THE TRUSTEE TO MAKE RECONVEYANCE TO THE GRANTOR-
28 BORROWER UPON THE REPAYMENT OF THE DEBT, OR A TRANSFER BY THE
29 OWNER OF PREVIOUSLY OCCUPIED RESIDENTIAL PREMISES TO A BUILDER
30 OF NEW RESIDENTIAL PREMISES WHEN SUCH PREVIOUSLY OCCUPIED
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1 RESIDENTIAL PREMISES IS TAKEN IN TRADE BY SUCH BUILDER AS PART
2 OF THE CONSIDERATION FROM THE PURCHASER OF A NEW PREVIOUSLY
3 UNOCCUPIED RESIDENTIAL PREMISES OR ANY TRANSFER FROM A MORTGAGOR
4 TO THE MORTGAGEE WHETHER PURSUANT TO A FORECLOSURE OR IN LIEU
5 THEREOF, OR CONVEYANCES TO MUNICIPALITIES, TOWNSHIPS, SCHOOL
6 DISTRICTS AND COUNTIES PURSUANT TO ACQUISITION BY
7 MUNICIPALITIES, TOWNSHIPS, SCHOOL DISTRICTS AND COUNTIES OF TAX
8 DELINQUENT PROPERTIES AT SHERIFF SALE OR TAX CLAIM BUREAU, OR
9 ANY TRANSFER BETWEEN RELIGIOUS ORGANIZATIONS OR OTHER BODIES OR
10 PERSONS HOLDING TITLE TO REAL ESTATE FOR A RELIGIOUS
11 ORGANIZATION IF SUCH REAL ESTATE IS NOT BEING OR HAS NOT BEEN
12 USED BY SUCH TRANSFEROR FOR COMMERCIAL PURPOSES, OR A TRANSFER
13 WITHIN A FAMILY FROM A SOLE PROPRIETOR FAMILY MEMBER TO A FAMILY
14 FARM CORPORATION OR IN ANY SHERIFF SALE INSTITUTED BY A
15 MORTGAGEE IN WHICH THE PURCHASER OF SAID SHERIFF SALE IS THE
16 MORTGAGEE WHO INSTITUTED SAID SALE.
17 "FAMILY FARM CORPORATION." A PENNSYLVANIA CORPORATION AT
18 LEAST SEVENTY-FIVE PER CENT OF THE ASSETS OF WHICH ARE DEVOTED
19 TO THE BUSINESS OF AGRICULTURE, WHICH BUSINESS, FOR THE PURPOSES
20 OF THIS DEFINITION, SHALL NOT BE DEEMED TO INCLUDE:
21 (1) RECREATIONAL ACTIVITIES SUCH AS, BUT NOT LIMITED TO,
22 HUNTING, FISHING, CAMPING, SKIING, SHOW COMPETITION OR RACING;
23 (2) THE RAISING, BREEDING OR TRAINING OF GAME ANIMALS OR
24 GAME BIRDS, FISH, CATS, DOGS OR PETS, OR ANIMALS INTENDED FOR
25 USE IN SPORTING OR RECREATIONAL ACTIVITIES;
26 (3) FUR FARMING;
27 (4) STOCKYARD AND SLAUGHTERHOUSE OPERATIONS; OR
28 (5) MANUFACTURING OR PROCESSING OPERATIONS OF ANY KIND:
29 PROVIDED, HOWEVER, THAT AT LEAST SEVENTY-FIVE PER CENT OF ALL OF
30 THE STOCK OF THE CORPORATION MUST BE OWNED BY MEMBERS OF THE
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1 SAME FAMILY.
2 "MEMBERS OF THE SAME FAMILY." ANY INDIVIDUAL, SUCH
3 INDIVIDUAL'S BROTHERS AND SISTERS, THE BROTHERS AND SISTERS OF
4 SUCH INDIVIDUAL'S PARENTS AND GRANDPARENTS, THE ANCESTORS AND
5 LINEAL DESCENDENTS OF ANY OF THE FOREGOING AND A SPOUSE OF ANY
6 OF THE FOREGOING. INDIVIDUALS RELATED BY THE HALF BLOOD OR LEGAL
7 ADOPTION SHALL BE TREATED AS IF THEY WERE RELATED BY THE WHOLE
8 BLOOD.
9 * * *
10 SECTION 3. THE ACT IS AMENDED BY ADDING A SECTION TO READ:
11 SECTION 1102-C.1. RECAPTURE OF TAX.--NOTWITHSTANDING THE
12 DEFINITION OF "DOCUMENT" IN SECTION 1101-C, IF ANY STOCK OF A
13 FAMILY FARM CORPORATION IS TRANSFERRED TO A PERSON WHO IS NOT A
14 FAMILY MEMBER WITHIN TEN YEARS FROM THE DATE OF THE CONVEYANCE
15 FROM A SOLE PROPRIETOR FAMILY MEMBER TO A FAMILY FARM
16 CORPORATION, THE TAX IMPOSED BY THIS ARTICLE SHALL BECOME
17 IMMEDIATELY DUE AND PAYABLE.
18 SECTION 4. THIS ACT SHALL TAKE EFFECT IN 60 DAYS.
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