THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY TURZAI, BEAR, BENNINGHOFF, BOYD, CAUSER, CHRISTIANA, CLYMER, CREIGHTON, EVERETT, FLECK, GEIST, GINGRICH, GROVE, HENNESSEY, HESS, HORNAMAN, HUTCHINSON, KAUFFMAN, KRIEGER, MARSHALL, MARSICO, METCALFE, METZGAR, MILLER, MILNE, MURT, PHILLIPS, PICKETT, RAPP, REESE, REICHLEY, ROHRER, SCAVELLO, STEVENSON, TALLMAN, WATSON AND VULAKOVICH, DECEMBER 4, 2009

REFERRED TO COMMITTEE ON FINANCE, DECEMBER 4, 2009  

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," further providing, in personal income tax, for

definitions and for classes of income and, in corporate net

income tax, for definitions.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 301(l.2) of the act of March 4, 1971

(P.L.6, No.2), known as the Tax Reform Code of 1971, added

December 3, 1993 (P.L.473, No.68), is amended and the section is

amended by adding a clause to read:

Section 301.  Definitions.--Any reference in this article to

the Internal Revenue Code of 1986 shall mean the Internal

Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.),

as amended to January 1, 1997, unless the reference contains the

phrase "as amended" and refers to no other date, in which case

the reference shall be to the Internal Revenue Code of 1986 as

it exists as of the time of application of this article. The

following words, terms and phrases when used in this article

shall have the meaning ascribed to them in this section except

where the context clearly indicates a different meaning:

* * *

(l.2)  "Intellectual property" means property that derives

from the work of the mind or intellect that has commercial

value, including copyrighted property such as literary or

artistic works, and ideational property, including patents,

appellations of origin, business methods and industrial

processes.

(l.3)  "Investment company" includes any incorporated or

unincorporated enterprise registered with the Federal Securities

and Exchange Commission under the Investment Company Act of 1940

(54 Stat. 789, 15 U.S.C. § 80a-1 et seq.).

* * *

Section 2.  Section 303(a)(4) of the act, added August 31,

1971 (P.L.362, No.93), is amended to read:

Section 303.  Classes of Income.--(a)  The classes of income

referred to above are as follows:

* * *

(4)  Net gains or income derived from or in the form of

rents, royalties, patents and copyrights[.] except net gains or

income derived from or in the form of rents, royalties, patents

and copyrights derived from intellectual property.

* * *

Section 3.  Section 401(3)1 of the act is amended by adding a

paragraph to read:

Section 401.  Definitions.--The following words, terms, and

phrases, when used in this article, shall have the meaning

ascribed to them in this section, except where the context

clearly indicates a different meaning:

* * *

(3)  "Taxable Income."  1.  * * *

(t)  An additional deduction shall be allowed from taxable

income in the amount of any income derived from or in the form

of rents, royalties, patents and copyrights derived from

intellectual property. As used in this paragraph, "intellectual

property" shall be defined as provided in section 301.

* * *

Section 4.  This act shall take effect immediately.