THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY BLOOM, AUMENT, BAKER, BARRAR, BEAR, BOBACK, BURNS, COX, CREIGHTON, CUTLER, DALEY, DENLINGER, ELLIS, EVERETT, FABRIZIO, FLECK, GABLER, GIBBONS, GILLESPIE, GRELL, GROVE, HARHART, HARKINS, HEFFLEY, HESS, HICKERNELL, HORNAMAN, KAUFFMAN, KORTZ, LONGIETTI, MATZIE, METCALFE, MILLARD, MILNE, MULLERY, MUNDY, OBERLANDER, O'NEILL, PETRARCA, PICKETT, PYLE, QUINN, READSHAW, ROCK, SAYLOR, CULVER, SIMMONS, STEPHENS, STERN, STEVENSON, TALLMAN AND TRUITT, SEPTEMBER 25, 2012

REFERRED TO COMMITTEE ON FINANCE, SEPTEMBER 25, 2012  

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 for transfers not subject to

tax.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 2111 of the act of March 4, 1971 (P.L.6,

No.2), known as the Tax Reform Code of 1971, is amended by

adding a subsection to read:

Section 2111.  Transfers Not Subject to Tax.--* * *

(t)  The following shall apply:

(1)  A transfer of all business assets, including real estate

between members of the same family, provided that:

(i)  After the transfer, all assets, including real estate,

continue to be devoted to the same business for a period of five

years beyond the transferor's date of death. An asset under this

article which is no longer devoted to the same business within

five years beyond the transferor's date of death shall be

subject to inheritance tax due the Commonwealth under section

2107, in the amount that would have been paid or payable on the

basis of valuation authorized under section 2121 for nonexempt

transfers of property, plus interest accruing as of the

transferor's date of death, at the rate established in section

2143.

(ii)  A tax imposed under section 2107 shall be a lien in

favor of the Commonwealth upon the property no longer being

devoted to the same use, collectible in the manner provided for

by law for the collection of delinquent taxes, including the

personal obligation of the owner of the property at the time of

the change of use.

(iii)  Every owner of any asset exempt under this subsection

shall certify to the department on an annual basis that the

asset qualifies for this exemption and shall notify the

department within thirty days of any transaction or occurrence

causing any asset to fail to qualify for the exemption. Each

year the department shall inform all owners of their obligation

to provide an annual certification under this subparagraph. The

certification and notification shall be completed in the form

and manner as provided by the department.

(2)  Subclause (1) shall apply to the transfer of assets if

the business is owned wholly by members of the same family

before the transfer. For the purposes of this subsection,

business assets shall also include any asset leased to a

business owned wholly by members of the same family before the

transfer by a member of the same family.

Section 2.  This act shall take effect in 60 days.