PRIOR PRINTER'S NOS. 473, 1122, 1661
PRINTER'S NO. 2199
THE GENERAL ASSEMBLY OF PENNSYLVANIA
INTRODUCED BY MACKENZIE, AUMENT, BOBACK, CAUSER, CONKLIN, CUTLER, DAY, DENLINGER, DUNBAR, EVANKOVICH, EVERETT, FLECK, GROVE, HAGGERTY, HAHN, HICKERNELL, KAUFFMAN, KNOWLES, KORTZ, MAHONEY, MICOZZIE, MILLARD, R. MILLER, READSHAW, ROCK, ROSS, SACCONE, SAINATO, SANTARSIERO, SAYLOR, SCHLOSSBERG, SIMMONS, STEPHENS, SWANGER, TALLMAN, WATSON, GOODMAN, GILLEN, C. HARRIS, KULA, GIBBONS, NEUMAN, MALONEY, BARRAR, PYLE, GODSHALL, GABLER, COHEN, MATZIE, FARRY, TOEPEL, MOLCHANY, J. HARRIS, TRUITT, BRADFORD, DAVIDSON, CLYMER, ENGLISH, KRIEGER AND REED, JANUARY 30, 2013
SENATOR CORMAN, APPROPRIATIONS, IN SENATE, RE-REPORTED AS AMENDED, JUNE 30, 2013
<-1Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2act relating to tax reform and State taxation by codifying
3and enumerating certain subjects of taxation and imposing
4taxes thereon; providing procedures for the payment,
5collection, administration and enforcement thereof; providing
6for tax credits in certain cases; conferring powers and
7imposing duties upon the Department of Revenue, certain
8employers, fiduciaries, individuals, persons, corporations
9and other entities; prescribing crimes, offenses and
10penalties," in realty transfer tax, further providing for
11definitions and for excluded transactions.
<-12Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
13act relating to tax reform and State taxation by codifying
14and enumerating certain subjects of taxation and imposing
15taxes thereon; providing procedures for the payment,
16collection, administration and enforcement thereof; providing
17for tax credits in certain cases; conferring powers and
18imposing duties upon the Department of Revenue, certain
19employers, fiduciaries, individuals, persons, corporations
20and other entities; prescribing crimes, offenses and
21penalties," in tax for education, further providing for
22definitions, for exclusions from tax, for credit against tax,
23for licenses and for local receivers of use tax; providing
24for remote sales reports; providing for special taxing
1authority; in personal income tax, further providing for
2definitions, for classes of income and for taxability of
3partners; providing for tax treatment determined at
4partnership level and for tax imposed at partnership level;
5further providing for income of a Pennsylvania S Corporation,
6for income taxes imposed by other states and for operational
7provisions; providing for contributions for the Children's
8Trust Fund and for contributions for American Red Cross;
9further providing for general rule, for return of
10Pennsylvania S Corporation, for requirements concerning
11returns, notices, records and statements and for additions,
12penalties and fees; providing for citation authority; in
13corporate net income tax, further providing for definitions
14and for reports and payment of tax; in corporate stock and
15franchise tax, further providing for imposition and for
16expiration; in bank and trust company shares tax, further
17providing for imposition of tax, ascertainment of taxable
18amount and exclusion of United States obligations, for
19apportionment and for definitions; in realty transfer tax,
20further providing for definitions, for excluded transactions,
21for imposition of tax and for acquired company; providing for
22nonlicensed corporation pari-mutuel wagering tax; in film
23production tax credit, further providing for definitions, and
24for credit for qualified film production expenses; in
25educational opportunity scholarship tax credit, further
26providing for scholarships; repealing provisions relating to
27coal waste removal and ultraclean fuels tax credit; making an
28editorial change; in job creation tax credit, further
29providing for tax credits; providing for city revitalization
30and improvement zones, for mobile telecommunications
31broadband investment tax credit, for the Innovate in PA
32Program, for neighborhood improvement zones and for Keystone
33Special Development Zone program; in inheritance tax, further
34providing for transfers not subject to tax and for exemption
35for poverty; in inheritance tax, further providing for
36liabilities and for deductions not allowed; in procedure and
37administration, further providing for definitions and for
38petition for reassessment; providing for the Board of Finance
39and Revenue; further providing for review by the Board of
40Finance and Revenue; providing for a report concerning the
41significant changes in the structure and regulatory
42environment within the banking industry; and making related
1* * *
14* * *
15(23) A transfer of real estate:
16(i) for no or nominal consideration from the Commonwealth or
17any of its instrumentalities, agencies or political subdivisions
18to a volunteer emergency medical services agency, volunteer fire
19company or volunteer rescue company; or
26Section 4. This act shall take effect immediately.
30Section 201. Definitions.--The following words, terms and
4* * *
14(A) customer service and support;
15(B) technical assistance;
16(C) help desk service;
17(D) providing information;
18(E) conducting surveys;
19(F) revenue collections; or
20(G) receiving orders or reservations.
28* * *
6Section 206. Credit Against Tax.--(a) A credit against the
7tax imposed by section 202 shall be granted with respect to
8tangible personal property or services purchased for use outside
9the Commonwealth equal to the tax paid to another state by
10reason of the imposition by such other state of a tax similar to
11the tax imposed by this article: Provided, however, That no such
12credit shall be granted unless such other state grants
13substantially similar tax relief by reason of the payment of tax
14under this article or under the Tax Act of 1963 for Education.
15[(b) A credit against the tax imposed by section 202 on
16telecommunications services shall be granted to a call center
17for gross receipts tax paid by a telephone company on the
18receipts derived from the sale of incoming and outgoing
19interstate telecommunications services to the call center under
20section 1101(a)(2). The following apply:
21(1) A telephone company, upon request, shall notify a call
22center of the amount of gross receipts tax paid by the telephone
23company on the receipts derived from the sale of incoming and
24outgoing interstate telecommunications services to the call
3(4) By April 15 of the calendar year following the close of
4the calendar year during which the gross receipts tax was
5incurred, the department shall notify the applicant of the
6amount of the applicant's tax credit approved by the department.
7(5) The total amount of tax credits provided for in this
8subsection and approved by the department shall not exceed
9thirty million dollars ($30,000,000) in any fiscal year. If the
10total amount of tax credits applied for by all applicants
11exceeds the amount allocated for those credits, then the credit
12to be received by each applicant shall be determined as follows:
14(A) the tax credit applied for by the applicant; by
18(A) the quotient under subparagraph (i); by
19(B) the amount allocated for all tax credits.]
20Section 208. Licenses.--(a) Every person maintaining a
21place of business in this Commonwealth, selling or leasing
22services or tangible personal property, the sale or use of which
23is subject to tax and who has not hitherto obtained a license
24from the department, shall, prior to the beginning of business
25thereafter, make application to the department, on a form
26prescribed by the department, for a license. If such person
27maintains more than one place of business in this Commonwealth,
28the license shall be issued for the principal place of business
29in this Commonwealth.
30(b) The department shall, after the receipt of an
1application, issue the license applied for under subsection (a)
2of this section, provided said applicant shall have filed all
3required State tax reports and paid any State taxes not subject
4to a timely perfected administrative or judicial appeal or
5subject to a duly authorized deferred payment plan. Such license
6shall be nonassignable. All licensees as of the effective date
7of this subsection shall be required to file for renewal of said
8license on or before January 31, 1992. Licenses issued through
9April 30, 1992, shall be based on a staggered renewal system
10established by the department. Thereafter, any license issued
11shall be valid for a period of five years.
12(b.1) If an applicant for a license or any person holding a
13license has not filed all required State tax reports and paid
14any State taxes not subject to a timely perfected administrative
15or judicial appeal or subject to a duly authorized deferred
16payment plan, the department may refuse to issue, may suspend or
17may revoke said license. The department shall notify the
18applicant or licensee of any refusal, suspension or revocation.
19Such notice shall contain a statement that the refusal,
20suspension or revocation may be made public. Such notice shall
21be made by first class mail. An applicant or licensee aggrieved
22by the determination of the department may file an appeal
23pursuant to the provisions for administrative appeals in this
24article, except that the appeal must be filed within thirty (30)
25days of the date of the notice. In the case of a suspension or
26revocation which is appealed, the license shall remain valid
27pending a final outcome of the appeals process. Notwithstanding
28sections 274, 353(f), 408(b), 603, 702, 802, 904 and 1102 of the
29act or any other provision of law to the contrary, if no appeal
30is taken or if an appeal is taken and denied at the conclusion
1of the appeal process, the department may disclose, by
2publication or otherwise, the identity of a person and the fact
3that the person's license has been refused, suspended or revoked
4under this subsection. Disclosure may include the basis for
5refusal, suspension or revocation.
6(c) A person that maintains a place of business in this
7Commonwealth for the purpose of selling or leasing services or
8tangible personal property, the sale or use of which is subject
9to tax, without having [first been licensed by the department] a
10valid license at the time of the sale or lease shall be guilty
11of a summary offense and, upon conviction thereof, be sentenced
12to pay a fine of not less than three hundred dollars ($300) nor
13more than one thousand five hundred ($1,500) and, in default
14thereof, to undergo imprisonment of not less than five days nor
15more than thirty days. The penalties imposed by this subsection
16shall be in addition to any other penalties imposed by this
17article. For purposes of this subsection, the offering for sale
18or lease of any service or tangible personal property, the sale
19or use of which is subject to tax, during any calendar day shall
20constitute a separate violation. The Secretary of Revenue may
21designate employes of the department to enforce the provisions
22of this subsection. The employes shall exhibit proof of and be
23within the scope of the designation when instituting proceedings
24as provided by the Pennsylvania Rules of Criminal Procedure.
28Section 4. Section 226 of the act is repealed:
1except in counties of the first class, the county treasurer is
2hereby authorized to receive use tax due and payable under the
3provisions of this article from any person other than a
4licensee. The receiving of such taxes shall be pursuant to rules
5and regulations promulgated by the department and upon forms
6furnished by the department. Each county treasurer shall remit
7to the department all use taxes received under the authority of
8this section minus the costs of administering this provision not
9to exceed one per cent of the amount of use taxes received,
10which amount shall be retained in lieu of any commission
11otherwise allowable by law for the collection of such tax.]
12Section 5. The act is amended by adding a section to read:
13Section 278. Remote Sales Reports.--(a) Within 90 days of
14the publication of the notice under subsection (b), the
15Independent Fiscal Office, in conjunction with the Department of
16Revenue, shall submit a detailed report to the chairman and
17minority chairman of the Appropriations Committee of the Senate,
18the chairman and minority chairman of the Finance Committee of
19the Senate, the chairman and minority chairman of the
20Appropriations Committee of the House of Representatives and the
21chairman and minority chairman of the Finance Committee of the
22House of Representatives outlining the plans concerning the
23implementation of the legislation referenced in subsection (b)
24or other substantially similar Federal legislation, which would
25grant the Commonwealth the authority to impose and collect the
26tax under this article due on sales from remote sellers. The
27report shall include all of the following:
3(2) The amount of State tax revenue expected to result from
4the implementation of the legislation referenced in subsection
5(b) or other substantially similar legislation for the fiscal
6year and for five fiscal years thereafter.
26Section 301. Definitions.--Any reference in this article to
27the Internal Revenue Code of 1986 shall mean the Internal
28Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.),
29as amended to January 1, 1997, unless the reference contains the
30phrase "as amended" and refers to no other date, in which case
1the reference shall be to the Internal Revenue Code of 1986 as
2it exists as of the time of application of this article. The
3following words, terms and phrases when used in this article
4shall have the meaning ascribed to them in this section except
5where the context clearly indicates a different meaning:
6* * *
7(d.2) "Corporate item" means an item, including income, gain
8or loss, deduction or credit determined at the Pennsylvania S
9corporation level, which is required to be taken into account
10for a Pennsylvania S corporation's taxable year.
11* * *
12(n.2) "Partnership item" means an item, including income,
13gain or loss, deduction or credit determined at the partnership
14level, which is required to be taken into account for a
15partnership's taxable year.
16* * *
17(o.4) "Publicly traded partnership" means an entity defined
18under section 7704 of the Internal Revenue Code of 1986 (Public
19Law 99-514, 26 U.S.C. § 7704) with equity securities registered
20with the Securities and Exchange Commission under section 12 of
21the Securities Exchange Act of 1934 (48 Stat. 881, 15 U.S.C. §
23* * *
24(t) "State" means, except as provided under section 314(a),
25any state or commonwealth of the United States, the District of
26Columbia, the Commonwealth of Puerto Rico, any territory or
27possession of the United States and any foreign country.
28* * *
2SPECIAL TAXING AUTHORITY
3Section 201-B. Special taxing authority.
4(a) Imposition of tax.--
5(1) A city of the first class may elect to impose a tax
6on the sale at retail of tangible personal property or
7services or use of tangible personal property or services
8purchased at retail, as those terms are defined in section
10(2) The tax imposed under this section shall be in
11addition to the tax authorized under section 503(a) and (b)
12of the act of June 5, 1991 (P.L. 9, No. 6), known as the
13Pennsylvania Intergovernmental Cooperation Authority Act for
14Cities of the First Class.
18(4) A tax imposed under this subsection on sales or uses
19shall be paid to and received by the Department of Revenue
20and, along with interest and penalties, less any refunds and
21credits paid, shall be credited to the local sales and use
22tax fund created under the Pennsylvania Intergovernmental
23Cooperation Authority Act for Cities of the First Class.
24Money in the fund shall be disbursed as provided in section
25509 of the Pennsylvania Intergovernmental Cooperation
26Authority Act for Cities of the First Class.
27(b) Rate.--The tax authorized under subsection (a) shall be
28imposed and collected at the rate of 1% and shall be computed as
29set forth in section 503(e)(2) of the Pennsylvania
30Intergovernmental Cooperation Authority Act for Cities of the
2(c) Collection.--The tax authorized under subsection (a)
3shall be administered, collected, deposited and disbursed in the
4same manner as the tax imposed under Chapter 5 of the
5Pennsylvania Intergovernmental Cooperation Authority Act for
6Cities of the First Class and the situs of the tax shall be
7determined in accordance with the Pennsylvania Intergovernmental
8Cooperation Authority Act and Article II-A. The Department of
9Revenue shall use the money received from the tax authorized
10under Chapter 5 of the Pennsylvania Intergovernmental
11Cooperation Authority Act for Cities of the First Class to cover
12costs for the administration of the tax authorized under
13subsection (a). The Department of Revenue shall not retain any
14additional amounts for the cost of collecting the tax authorized
15under subsection (a). No additional fee shall be charged for a
16license or license renewal other than the license or renewal fee
17authorized and imposed under Article II.
18(d) Municipal action.--In order to impose the tax, the
19governing body of the city shall adopt an ordinance stating the
20tax rate. The ordinance may be adopted prior to the effective
21date of this subsection. The ordinance shall take effect no
22earlier than 20 days after the adoption of the ordinance or 20
23days after the effective date of this section, whichever is
24later. A certified copy of the city ordinance shall be delivered
25to the Department of Revenue within ten days prior to or after
26the effective date of the ordinance. A certified copy of an
27ordinance to repeal the tax authorized under subsection (a)
28shall be delivered to the Department of Revenue at least 30 days
29prior to the effective date of repeal.
30(e) Use of tax receipts.--
1(1) Money received by the city from the levy, assessment
2and collection of the tax authorized under subsection (a) may
3only be paid to a school district of the first class in an
4amount of up to $120,000,000 if the Secretary of Education
5has made a determination, in the form of an annual
6certification published in the Pennsylvania Bulletin, that
7the school district of the first class has, in the judgment
8of the Secretary of Education, began implementation of
9reforms that provide for fiscal stability, educational
10improvement and operational control.
15(i) Deliver written certification of the
16determination to the majority and minority chairpersons
17of the Appropriations Committees of the Senate and the
18House of Representatives, the majority and minority
19chairpersons of the Education Committees of the Senate
20and the House of Representatives, the chief executive of
21the school district of the first class and the Secretary
22of the Department of Revenue.
23(ii) Upon receipt of the certification from the
24Secretary of Education, the Secretary of the Department
25of Revenue shall direct the State Treasurer to disburse,
26on or before the 10th day of every month, to the school
27district of the first class the total amount of money
28which is, as of the last day of the previous month,
29contained in the Local Sales and Use Tax Fund.
30(iii) If the Secretary of Education does not issue a
7(1) for fiscal years 2014-2015, 2015-2016, 2016-2017 and
82017-2018, the first $15,000,000 in each of those fiscal
9years may be retained for the payment of debt service
10incurred by the city for the benefit of a school district of
11the first class; and
12(2) the remaining money shall be paid to a city of the
13first class in accordance with the act of December 18, 1984
14(P.L.1005, No.205), known as the Municipal Pension Plan
15Funding Standard and Recovery Act.
21* * *
22(2) Net profits. The net income from the operation of a
23business, profession, or other activity, after provision for all
24costs and expenses incurred in the conduct thereof, determined
25either on a cash or accrual basis in accordance with accepted
26accounting principles and practices but without deduction of
27taxes based on income. For purposes of calculating net income
28under this paragraph, to the extent a taxpayer properly deducts
29an amount under section 195(b)(1)(A) of the Internal Revenue
30Code of 1986 (26 U.S.C. § 195(b)(1)(A)), as amended, and the
4* * *
5(a.8) A person who incurs intangible drilling and
6development costs shall capitalize the costs unless the taxpayer
7elects to currently expense the costs for Federal income tax
8purposes under section 263(c) of the Internal Revenue Code of
91986, as amended, and regulations thereunder, is required to
10capitalize the costs and recover them over a ten-year period in
11the taxable year the costs are incurred; or a person may elect
12to currently expense up to one-third of the costs in the taxable
13year in which the costs are incurred and recover the remaining
14costs over a ten-year period beginning in the taxable year the
15costs are incurred.
18Section 306. Taxability of Partners.--[A] Except as provided
19under section 306.2, a partnership as an entity shall not be
20subject to the tax imposed by this article, but the income or
21gain of a member of a partnership in respect of said partnership
22shall be subject to the tax and the tax shall be imposed on his
23share, whether or not distributed, of the income or gain
24received by the partnership for its taxable year ending within
25or with the member's taxable year.
26Section 9. The act is amended by adding sections to read:
27Section 306.1. Tax Treatment Determined at Partnership
28Level.--The classification or character of a partnership item
29shall be determined at the partnership level. This section shall
30not prohibit the department from adjusting a partner's return.
1Section 306.2. Tax Imposed at Partnership Level.--(a) A
2partnership underreporting income by more than one million
3dollars ($1,000,000) for any tax year shall be liable for the
4tax, excluding interest, penalties or additions at the tax rate
5applicable to the tax year, on the underreported income without
6regard to the tax liability of the partners for the
7underreported income. The department shall assess the
8partnership for the tax on the underreported income. The
9department shall not assess the partners for the underreported
10income or the tax thereon; rather, the partnership shall be
11required to provide an amended statement to each partner as
12required under section 335(c)(3) of the partner's pro rata share
13of the underreported income within ninety days of the assessment
14becoming final. Nothing in this subsection shall relieve the
15partners of their tax liability on the underreported income.
16(a.1) Each partner shall be allowed a credit for such
17partner's share of the tax assessed against the partnership
18under subsection (a) and paid by the partnership. The credit
19shall be allowed for the partner's taxable year in which the
20underreported income was required to be reported.
27(3) A partnership which has only partners who are natural
28persons and which elects to be subject to this subsection. The
29election must be included on the partnership return to be filed
30with the department.
11Section 307.8. Income of a Pennsylvania S Corporation.--(a)
12A Pennsylvania S corporation shall not be subject to the tax
13imposed by this article, except as provided under subsection
14(f), but the shareholders of the Pennsylvania S corporation
15shall be subject to the tax imposed under this article as
16provided in this article.
17* * *
20(1) A Pennsylvania S corporation underreporting income
21by more than one million dollars ($1,000,000) for any tax
22year shall be liable for the tax, excluding interest,
23penalties or additions, at the tax rate applicable to the tax
24year, on the underreported income without regard to the tax
25liability of the shareholders for the underreported income.
26The department shall assess the Pennsylvania S corporation
27for the tax on the underreported income. The department shall
28not assess the shareholders for the underreported income or
29the tax thereon; rather, the Pennsylvania S corporation shall
30be required to provide an amended statement to each
1shareholder as required under section 330.1 of the
2shareholder's pro rata share of the underreported income
3within 90 days of the assessment becoming final. Nothing in
4this subsection shall relieve the shareholders of their tax
5liability on the underreported income.
6(1.1) Each shareholder shall be allowed a credit for the
7shareholder's share of the tax assessed against the Pennsylvania
8S corporation under paragraph (1) and paid by the Pennsylvania S
9corporation. The credit shall be allowed for the shareholder's
10taxable year in which the underreported income was required to
1312 shall be allowed a credit against the tax otherwise due
2under this article for the amount of any income tax, wage tax or
3tax on or measured by gross or net earned or unearned income
4imposed on him or on a Pennsylvania S corporation in which he is
5a shareholder, to the extent of his pro rata share thereof
6determined in accordance with section 307.9, by another state
7with respect to income which is also subject to tax under this
8article. For purposes of this subsection, the term "state" shall
9only include a state of the United States, the District of
10Columbia, the Commonwealth of Puerto Rico and any territory or
11possession of the United States.
12* * *
15Section 315.9. Operational Provisions.--
16(b) Except as set forth in subsection (b.1), any checkoff
17established under this part and applicable for the first time in
18a taxable year beginning after December 31, 2009, shall expire
19four years after the beginning of such first taxable year.
24Section 13. The act is amended by adding sections to read:
25Section 315.10. Contributions for the Children's Trust
26Fund.--(a) The department shall provide a space on the
27Pennsylvania individual income tax return form whereby an
28individual may voluntarily designate a contribution of any
29amount desired to the Children's Trust Fund established in
30section 8 of the act of December 15, 1988 (P.L.1235, No.151),
1known as the "Children's Trust Fund Act."
2(b) The amount designated under subsection (a) by an
3individual on the income tax return form shall be deducted from
4the tax refund to which that individual is entitled and shall
5not constitute a charge against the income tax revenues due the
7(c) The department shall determine annually the total amount
8designated pursuant to this section, less reasonable
9administrative costs, and shall report the amount to the State
10Treasurer, who shall transfer the amount from the General Fund
11to the Children's Trust Fund.
12Section 315.11. Contributions for American Red Cross.--(a)
13The department shall provide a space on the Pennsylvania
14individual income tax return form by which an individual may
15voluntarily designate a contribution of any amount desired to
16the American Red Cross established under 36 U.S.C. Ch. 3001
17(relating to the American National Red Cross).
18(b) The amount designated under subsection (a) by an
19individual on the income tax return form shall be deducted from
20the tax refund to which the individual is entitled and shall not
21constitute a charge against the income tax revenues due the
23(c) The department shall determine annually the total amount
24designated under this section, less reasonable administrative
25costs, and shall report the amount to the State Treasurer, who
26shall transfer the amount from the General Fund to the American
30Section 324. General Rule.--(a) When a partnership, estate,
1trust or Pennsylvania S corporation receives income from sources
2within this Commonwealth for any taxable year and any portion of
3the income is allocable to a nonresident partner, beneficiary,
4member or shareholder thereof, the partnership, estate, trust or
5Pennsylvania S corporation shall pay a withholding tax under
6this section at the time and in the manner prescribed by the
7department; however, notwithstanding any other provision of this
8article, all such withholding tax shall be paid over on or
9before the fifteenth day of the fourth month following the end
10of the taxable year.
11(b) This section shall not apply to any publicly traded
12partnership as defined under section 7704 of the Internal
13Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 7704) with
14equity securities registered with the Securities and Exchange
15Commission under section 12 of the Securities Exchange Act of
161934 (48 Stat. 881, 15 U.S.C. § 78a).
20Section 330.1. Return of Pennsylvania S Corporation.--(a)
21Every Pennsylvania S corporation shall make a return for each
22taxable year, stating specifically all items of gross income and
23deductions, the names and addresses of all persons owning stock
24in the corporation at any time during the taxable year, the
25number of shares of stock owned by each shareholder at all times
26during the taxable year, the amount of money and other property
27distributed by the corporation during the taxable year to each
28shareholder, the date of each distribution, each shareholder's
29pro rata share of each item of the corporation for the taxable
30year and such other information as the department may require.
4(c) Every Pennsylvania S corporation shall also submit to
5the department a true copy of the income tax return filed with
6the Federal Government at the time the return required under
7subsection (a) is filed.
8(d) Each Pennsylvania S corporation required to file a
9return under subsection (a) for a taxable year shall, on or
10before the day on which the return for the taxable year was
11filed, furnish to each person who is a shareholder at any time
12during the taxable year, a written statement of the
13shareholder's pro rata share of each item on the corporate
14return, in a form required by the department.
18Section 335. Requirements Concerning Returns, Notices,
19Records and Statements.--(a) The department may prescribe by
20regulation for the keeping of records, the content and form of
21returns, declarations, statements and other documents and the
22filing of copies of Federal income tax returns and
23determinations. The department may require any person, by
24regulation or notice served upon such person, to make such
25returns, render such statements, or keep such records, as the
26department may deem sufficient to show whether or not such
27person is liable for tax under this article.
30(i) Any person required under the authority of this article
1to make a return, declaration, statement, or other document
2shall include in such return, declaration, statement or other
3document such identifying number as may be prescribed for
4securing proper identification of such person.
5(ii) Any person with respect to whom a return, declaration,
6statement, or other document is required under the authority of
7this article to make a return, declaration, statement, or other
8document with respect to another person, shall request from such
9other person, and shall include in any such return, declaration,
10statement, or other document, such identifying number as may be
11prescribed for securing proper identification of such other
16(c) (1) Every partnership, estate or trust having a
17resident partner or a resident beneficiary or every partnership,
18estate or trust having any income derived from sources within
19this Commonwealth shall make a return for the taxable year
20setting forth all items of income, loss and deduction, and such
21other pertinent information as the department may [by
22regulations prescribe] require. Such return shall be filed on or
23before the fifteenth day of the fourth month following the close
24of each taxable year. For purposes of this subsection, "taxable
25year" means year or period which would be a taxable year of the
26partnership if it were subject to tax under this article.
27(2) Every partnership, estate or trust required to file a
28return under paragraph (1) shall also file with the department a
29true copy of the income tax return filed with the Federal
30Government at the time the return required under paragraph (1)
2(3) Every partnership, estate or trust required to file a
3return under paragraph (1) for any taxable year shall, on or
4before the day the return is filed, furnish to each partner or
5nominee for another person or to each beneficiary to whom the
6income or gains of the estate or trust is taxable, a written
7statement of the partner's pro rata share of each item on the
8partnership return or the beneficiary's pro rata share of income
9on the estate or trust return, in a form required by the
11(4) A partnership required to file a return under paragraph
12(1) for a taxable year shall, on or before the day the return is
13filed, furnish to each partner classified as a corporation,
14partnership or disregarded entity for Federal income tax
15purposes a copy of the Pennsylvania income tax form reporting
16corporate partner apportioned business income or loss. A
17reporting partnership shall not be required to provide a partner
18who is either a partnership or disregarded entity a copy of this
19form, if the reporting partnership is able to determine that an
20entity classified as a corporation for Federal income tax
21purposes is not an indirect owner of the reporting partnership.
22(d) The department may prescribe regulations requiring
23returns of information to be made and filed on or before
24February 28 of each year as to the payment or crediting in any
25calendar year of amounts of ten dollars ($10) or more to any
26taxpayer. Such returns may be required of any person, including
27lessees or mortgagors of real or personal property, fiduciaries,
28employers and all officers and employes of this Commonwealth, or
29of any municipal corporation or political subdivision of this
30Commonwealth having the control, receipt, custody, disposal or
1payment of interest, rents, salaries, wages, premiums,
2annuities, compensations, remunerations, emoluments or other
3fixed or determinable gains, profits or income, except interest
4coupons payable to bearer. A duplicate of the statement as to
5tax withheld on compensation required to be furnished by an
6employer to an employe, shall constitute the return of
7information required to be made under this section with respect
8to such compensation.
9(e) Any person who is required to make a form W-2G return to
10the Secretary of the Treasury of the United States in regard to
11taxable gambling or lottery winnings from sources within this
12Commonwealth shall file a copy of the form with the department
13by March 1 of each year or, if filed electronically, by March 31
14of each year.
15(f) The following apply:
16(1) Any person who:
19(ii) makes payments of nonemploye compensation or payments
20under an oil and gas lease under subparagraph (i) to a resident
21or nonresident individual, an entity treated as a partnership
22for tax purposes or a single member limited liability company;
24(iii) is required to make a form 1099-MISC return to the
25Secretary of the Treasury of the United States with respect to
26the payments shall file a copy of form 1099-MISC with the
27department and send a copy of form 1099-MISC to the payee by the
28Federal filing deadline each year.
1MISC shall be filed electronically with the department.
2(g) (1) Every estate, trust, Pennsylvania S Corporation or
3partnership, other than a publicly traded partnership, shall
4maintain at the end of the entity's taxable year an accurate
5list of partners, members, beneficiaries or shareholders. The
6list shall include the name, current address and tax
7identification number of all existing partners, members,
8beneficiaries or shareholders and of all partners, members,
9beneficiaries or shareholders, who were admitted or who withdrew
10during the taxable year, including the date of withdrawal and
12(2) If the entity under paragraph (1) does not maintain an
13accurate list as required, the tax, penalty and interest with
14respect to the entity shall be considered the tax, penalty and
15interest of the partnership, estate, trust or Pennsylvania S
16Corporation and of the general partner, tax matters partner,
17corporate officer or trustee.
20Section 352. Additions, Penalties and Fees.--* * *
21(f) (1) Any person required under the provisions of section
22317 to furnish a statement to an employe who wilfully furnishes
23a false or fraudulent statement, or who wilfully fails to
24furnish a statement in the manner, at the time, and showing the
25information required under section 317 and the regulations
26prescribed thereunder, shall, for each such failure, be subject
27to a penalty of fifty dollars ($50) for each employe.
3(3) Every partnership, estate, trust or Pennsylvania S
4corporation required to file a return with the department under
5the provisions of section 330.1 or 335(c) who furnishes a false
6or fraudulent return or who fails to file the return in the
7manner and at the time required under section 330.1 or 335(c)
8shall be subject to a penalty of $250 for each failure.
9(4) Any person required to file a copy of form 1099-MISC
10with the department under the provisions of section 335(f) who
11wilfully furnishes a false or fraudulent form or who wilfully
12fails to file the form in the manner, at the time and showing
13the information required under section 335(f) shall, for each
14such failure, be subject to a penalty of fifty dollars ($50).
15(5) Any person required under the provisions of section
16335(f) to furnish a copy of form 1099-MISC to a payee who
17wilfully furnishes a false or fraudulent form or who wilfully
18fails to furnish a form in the manner, at the time and showing
19the information required by section 335(f) shall, for each such
20failure, be subject to a penalty of fifty dollars ($50).
21* * *
22Section 18. The act is amended by adding a section to read:
23Section 352.2. Citation Authority.--(a) Notwithstanding any
24other provision of this act, any person who does any of the
25following commits a summary offense and, upon conviction, shall
26be subject to the fines and penalties imposed under section
27208(c) (relating to licenses):
1authorized deferred payment plan.
2(2) Underpays an employer withholding tax, interest or
3penalty within ninety days after the due date and the tax
4liability due has not been timely appealed or subject to a duly
5authorized deferred payment plan.
6(3) Fails to file a tax employer withholding return or
7report, or any other reporting document within ninety days after
8the due date of the applicable payment or return, report or any
9other reporting document.
12(c) The Secretary of Revenue may designate employes of the
13department to enforce this subsection. The employes shall
14exhibit proof of and be within the scope of the designation when
15instituting proceedings as provided under the Pennsylvania Rules
16of Criminal Procedure.
17Section 19. Section 401(3)1, 2(a)(17) and 4(c)(1)(A)(IV) of
18the act, amended September 9, 1971 (P.L.437, No.105), are
19amended, clause (3)1 and 2 are amended by adding phrases,
20subclause 2(a) is amended by adding a paragraph, paragraphs
21(3)4(c)(1)(A) and 2(B) are amended by adding subparagraphs and
22the section is amended by adding clauses to read:
23Section 401. Definitions.--The following words, terms, and
24phrases, when used in this article, shall have the meaning
25ascribed to them in this section, except where the context
26clearly indicates a different meaning:
27* * *
28(3) "Taxable income." 1. * * *
1to any authority the department has on the effective date of
2this paragraph to deny a deduction related to a fraudulent or
3sham transaction, no deduction shall be allowed for an
4intangible expense or cost, or an interest expense or cost,
5paid, accrued or incurred directly or indirectly in connection
6with one or more transactions with an affiliated entity. In
7calculating taxable income under this paragraph, when the
8taxpayer is engaged in one or more transactions with an
9affiliated entity that was subject to tax in this Commonwealth
10or another state or possession of the United States on a tax
11base that included the intangible expense or cost, or the
12interest expense or cost, paid, accrued or incurred by the
13taxpayer, the taxpayer shall receive a credit against tax due in
14this Commonwealth in an amount equal to the apportionment factor
15of the taxpayer in this Commonwealth multiplied by the greater
16of the following:
17(A) the tax liability of the affiliated entity with respect
18to the portion of its income representing the intangible expense
19or cost, or the interest expense or cost, paid, accrued or
20incurred by the taxpayer; or
24The credit issued under this paragraph shall not exceed the
25taxpayer's liability in this Commonwealth attributable to the
26net income taxed as a result of the adjustment required by this
1length rates and terms.
2(3) The adjustment required by paragraph (1) shall not apply
3to a transaction between a taxpayer and an affiliated entity
4domiciled in a foreign nation which has in force a comprehensive
5income tax treaty with the United States providing for the
6allocation of all categories of income subject to taxation, or
7the withholding of tax, on royalties, licenses, fees and
8interest for the prevention of double taxation of the respective
9nations' residents and the sharing of information.
10(4) The adjustment required by paragraph (1) shall not apply
11to a transaction where an affiliated entity directly or
12indirectly paid, accrued or incurred a payment to a person who
13is not an affiliated entity, if the payment is paid, accrued or
14incurred on the intangible expense or cost, or interest expense
15or cost, and is equal to or less than the taxpayer's
16proportional share of the transaction. The taxpayer's
17proportional share shall be based on relative sales, assets,
18liabilities or another reasonable method.
192. In case the entire business of any corporation, other
20than a corporation engaged in doing business as a regulated
21investment company as defined by the Internal Revenue Code of
221986, is not transacted within this Commonwealth, the tax
23imposed by this article shall be based upon such portion of the
24taxable income of such corporation for the fiscal or calendar
25year, as defined in subclause 1 hereof, and may be determined as
27(a) Division of Income.
28* * *
8(II) If the tangible personal property is subsequently taken
9out of this State, the taxpayer may use a reasonably determined
10estimate of usage in this State to determine the extent of sale
11in this State.
12(C) (I) Sales from the sale of service, if the service is
13delivered to a location in this State. If the service is
14delivered both to a location in and outside this State, the sale
15is in this State based upon the percentage of total value of the
16service delivered to a location in this State.
17(II) If the state or states of assignment under subparagraph
18(I) cannot be determined for a customer who is an individual
19that is not a sole proprietor, a service is deemed to be
20delivered at the customer's billing address.
21(III) If the state or states of assignment under
22subparagraph (I) cannot be determined for a customer, except for
23a customer under subparagraph (II), a service is deemed to be
24delivered at the location from which the services were ordered
25in the customer's regular course of operations. If the location
26from which the services were ordered in the customer's regular
27course of operations cannot be determined, a service is deemed
28to be delivered at the customer's billing address.
3(B) The income-producing activity is performed both in and
4outside this State and a greater proportion of the income-
5producing activity is performed in this State than in any other
6state, based on costs of performance.
7* * *
8(e) Satellite Television Services Providers.
9(1) All business income of providers of satellite television
10services shall be apportioned to this Commonwealth by
11multiplying the income by a fraction, the numerator of which is
12the value of equipment located in this Commonwealth that is
13owned or rented by the taxpayer or owned by an entity that is
14included with the taxpayer in a controlled group, as defined in
15section 267(f) of the Internal Revenue Code of 1986 (Public Law
1699-514, 26 U.S.C. § 166), and used by the taxpayer in
17generating, processing or transmitting satellite television
18services whether or not such equipment is affixed to real
19estate, and the denominator of which is the value of all such
20equipment located everywhere. The value of property owned by the
21taxpayer or owned by an entity included with the taxpayer in a
22controlled group and used by the taxpayer shall be its cost less
23depreciation per the books and records of the owner. The value
24of rented equipment shall be determined in accordance with
25paragraph (11) of phrase (a) of subclause 2 of this definition.
29* * *
304. * * *
1(c) (1) The net loss deduction shall be the lesser of:
2(A) * * *
3(IV) For taxable years beginning after December 31, 2009,
4the greater of twenty per cent of taxable income as determined
5under subclause 1 or, if applicable, subclause 2 or three
6million dollars ($3,000,000); [or]
7(V) For taxable years beginning after December 31, 2013, the
8greater of twenty-five per cent of taxable income as determined
9under subclause 1 or, if applicable, subclause 2 or four million
11(VI) For taxable years beginning after December 31, 2014,
12the greater of thirty per cent of taxable income as determined
13under subclause 1 or, if applicable, subclause 2 or five million
14dollars ($5,000,000); or
15* * *
16(2) * * *
17(B) The earliest net loss shall be carried over to the
18earliest taxable year to which it may be carried under this
19schedule. The total net loss deduction allowed in any taxable
20year shall not exceed:
21* * *
22(V) The greater of twenty-five per cent of taxable income as
23determined under subclause 1 or, if applicable, subclause 2 or
24four million dollars ($4,000,000) for taxable years beginning
25after December 31, 2013.
26(VI) The greater of thirty per cent of taxable income as
27determined under subclause 1 or, if applicable, subclause 2 or
28five million dollars ($5,000,000) for taxable years beginning
29after December 31, 2014.
30* * *
1(8) "Intangible expense or cost." Royalties, licenses or
2fees paid for the acquisition, use, maintenance, management,
3ownership, sale, exchange or other disposition of patents,
4patent applications, trade names, trademarks, service marks,
5copyrights, mask works or other similar expenses or costs.
6(9) "Interest expense or cost." A deduction allowed under
7section 163 of the Internal Revenue Code of 1986 (26 U.S.C. §
8163) to the extent that such deduction is directly related to an
9intangible expense or cost.
13(i) a stockholder who is an individual, or a member of the
14stockholder's family as set forth in section 318 of the Internal
15Revenue Code of 1986 (26 U.S.C. § 318), if the stockholder and
16the members of the stockholder's family own, directly,
17indirectly, beneficially or constructively, in the aggregate,
18more than fifty per cent of the value of the taxpayer's
20(ii) a stockholder, or a stockholder's partnership, limited
21liability company, estate, trust or corporation, if the
22stockholder and the stockholder's partnerships, limited
23liability companies, estates, trusts and corporations own
24directly, indirectly, beneficially or constructively, in the
25aggregate, more than fifty per cent of the value of the
26taxpayer's outstanding stock;
27(iii) a corporation, or a party related to the corporation
28in a manner that would require an attribution of stock from the
29corporation to the party or from the party to the corporation
30under the attribution rules of the Internal Revenue Code of
11986, if the taxpayer owns, directly, indirectly, beneficially
2or constructively, more than fifty per cent of the value of the
3corporation's outstanding stock. The attribution rules of
4section 318 of the Internal Revenue Code of 1986 shall apply for
5purposes of determining whether the ownership requirements of
6this definition have been met;
14Section 403. Reports and Payment of Tax.--* * *
15(d) If the officers of any corporation shall neglect, or
16refuse to make any report as herein required, or shall knowingly
17make any false report, [the following percentages of the amount
18of the tax shall be added by the department to the tax
19determined to be due on the first one thousand dollars ($1,000)
20of tax ten per cent, on the next four thousand dollars ($4,000)
21five per cent, and on everything in excess of five thousand
22dollars ($5,000) one per cent, no such] a penalty of five
23hundred dollars ($500) plus an additional one per cent for every
24dollar of tax determined to be due in excess of twenty-five
25thousand dollars ($25,000) shall be added to the tax determined
26to be due. No amounts added to the tax shall bear any interest
28* * *
1Section 602. Imposition of Tax.--* * *
30January 1, 2006, to
1December 31, 2006
18Section 701. Imposition of Tax.--(a) Every institution
19doing business in this Commonwealth shall, on or before March 15
20in each and every year, make to the Department of Revenue a
21report in writing, verified as required by law, setting forth
22the full number of shares of the capital stock subscribed for or
23issued, as of the preceding January 1, by such institution, and
24the taxable amount of such shares of capital stock determined
25pursuant to section 701.1.
26(b) It shall be the duty of the Department of Revenue to
27assess such shares for the calendar years beginning January 1,
281971 through January 1, 1983, at the rate of fifteen mills and
29for the calendar years beginning January 1, 1984 through January
301, 1988, at the rate of one and seventy-five one thousandths per
1cent and for the calendar year beginning January 1, 1989, at the
2rate of 10.77 per cent and for the calendar [year] years
3beginning January 1, 1990[, and each calendar year thereafter]
4through January 1, 2013, at the rate of 1.25 per cent and for
5the calendar year beginning January 1, 2014, and each calendar
6year thereafter at the rate of 0.89 per cent upon each dollar of
7taxable amount thereof, the taxable amount of each share of
8stock to be ascertained and fixed pursuant to section 701.1, and
9dividing this amount by the number of shares.
10(c) It shall be the duty of every institution doing business
11in this Commonwealth, at the time of making every report
12required by this section, to compute the tax and to pay the
13amount of said tax to the State Treasurer, through the
14Department of Revenue either from its general fund, or from the
15amount of said tax collected from its shareholders.[: Provided,
16That for the calendar years beginning January 1, 1971 through
17January 1, 1991, such institution, upon the date its report,
18herein required is made for such calendar years beginning
19January 1, 1971 through January 1, 1991, shall pay to the
20Department of Revenue not less than eighty per cent of the tax
21due to the Commonwealth by it for such calendar year, and the
22remaining tax due shall be paid at the time when the report
23herein required for the year next succeeding is made:] Provided,
24That in case any institution shall collect, annually, from the
25shareholders thereof said tax, according to the provisions of
26this article, that have been subscribed for or issued, and pay
27the same into the State Treasury, through the Department of
28Revenue, the shares, and so much of the capital and profits of
29such institution as shall not be invested in real estate, shall
30be exempt from local taxation under the laws of this
1Commonwealth; and such institution shall not be required to make
2any report to the local assessor or county commissioners of its
3personal property owned by it in its own right for purposes of
4taxation and shall not be required to pay any tax thereon.
7Section 701.1. Ascertainment of Taxable Amount; Exclusion of
8United States Obligations.--(a) [The taxable amount of shares
9shall be ascertained and fixed by adding together the value
10determined under subsection (b) for the current and preceding
11five years and dividing the resulting sum by six. If an
12institution has not been in existence for a period of six years,
13the taxable amount of shares shall be ascertained and fixed by
14adding together the values determined under subsection (b) for
15the number of years the institution has been in existence and
16dividing the resulting sum by such number of years.] The taxable
17amount of shares shall be ascertained and fixed by the book
18value of total bank equity capital as determined by the Reports
19of Condition at the end of the preceding calendar year in
20accordance with the requirements of the Board of Governors of
21the Federal Reserve System, the Comptroller of the Currency, the
22Federal Deposit Insurance Corporation or other applicable
24(b) [The value for each year required by subsection (a)
25shall be determined by deducting from the book value of total
26equity capital] A deduction for the value of United States
27obligations shall be provided from the taxable amount of shares
28in an amount equal to the same percentage of total bank equity
29capital as the book value of obligations of the United States
30bears to the book value of the total assets, except that, for
1the value of shares reported on tax returns due on March 15,
22008, and thereafter, any goodwill recorded as a result of the
3use of purchase accounting for an acquisition or combination as
4described in this section and occurring after June 30, 2001, may
5be subtracted from the book value of total bank equity capital
6and disregarded in determining the deduction provided for
7obligations of the United States. [for the six-year period
8described in subsection (a). For purposes of this subsection,
9book values and deductions for United States obligations for
10each year shall be determined by the Reports of Condition for
11each calendar quarter of the preceding calendar year in
12accordance with the requirements of the Board of Governors of
13the Federal Reserve System, the Comptroller of the Currency, the
14Federal Deposit Insurance Corporation or other applicable
15regulatory authority; and book values shall be averaged as
16calculated by averaging book values as determined by such
17Reports of Condition.] For purposes of this article, United
18States obligations shall be obligations coming within the scope
19of 31 U.S.C. § 3124. [For any year in which an institution does
20not file four quarterly Reports of Condition, book values and
21deductions for United States obligations shall be determined by
22adding together the book values and deductions for United States
23obligations from each quarterly Reports of Condition filed for
24such year and dividing the resulting sums by the number of such
25Reports of Condition.] In the case of institutions which do not
26file such Reports of Condition, book values shall be determined
27by generally accepted accounting principles as of the end of
28[each calendar quarter. For any year in which an institution
29which does not file Reports of Condition is not in existence for
30four quarters, the book value for that year shall be determined
1by adding together the book values for each quarter in which the
2institution was in existence and dividing by that number of
3quarters. For purposes of this section, a partial year shall be
4treated as a full year.] the preceding calendar year.
5(c) For purposes of this section:
6(1) a mere change in identity, form or place of organization
7of one institution, however effected, shall be treated as if a
8single institution had been in existence prior to as well as
9after such change; and
10(2) [the] if there is a combination of two or more
11institutions into one [shall be treated as if the constituent
12institutions had been a single institution in existence prior to
13as well as after the combination and], the book values and
14deductions for United States obligations from the Reports of
15Condition of the constituent institutions shall be combined. For
16purposes of this section, a combination shall include any
17acquisition required to be accounted for by using the purchase
18method in accordance with generally accepted accounting
19principles or a statutory merger or consolidation.
22Section 701.4. Apportionment.--An institution may apportion
23its taxable amount of shares determined under section 701.1 in
24accordance with this subsection if the institution is subject to
25tax in another state based on or measured by net worth, gross
26receipts, net income or some similar base of taxation, or if it
27could be subject to such tax, whether or not such a tax has in
28fact been enacted. The following shall apply:
1accordance with a fraction, the numerator of which is the sum of
2the payroll factor, the receipts factor and the deposits factor,
3and the denominator of which is three. If one of the factors is
4inapplicable, the denominator is two. If two of the factors are
5inapplicable, the denominator is one.
6(ii) For the calendar year beginning January 1, 2014, and
7each calendar year thereafter, the taxable amount of shares
8shall be apportioned based upon the receipts factor and the
9payroll and deposits factors shall be disregarded.
10(2) The payroll factor is a fraction, the numerator of which
11is the total wages paid in this Commonwealth and the denominator
12of which is the total wages paid in all states. Wages are paid
13in a state if paid to an employe having a regular presence
15(3) The receipts factor is a fraction, the numerator of
16which is total receipts located in this Commonwealth and the
17denominator of which is the total receipts located in all
18states. [Receipts do not include principal repayments on loans
19or credit, travel and entertainment cards. Receipts from sale or
20disposition of intangible and tangible property include only the
21net gain therefrom.] The method of calculating receipts for
22purposes of the denominator shall be the same as the method used
23in determining receipts for purposes of the numerator. The
24location of receipts shall be determined as follows:
27(ii) All receipts from performance of services are located
28in a state to the extent the services are performed in the
29state. If services are performed partly within two or more
30states, the receipts located in each state shall be measured by
1the ratio which the time spent in performing such services in
2the state bears to the total time spent in performing such
3services in all states. Time spent in performing services in a
4state is the time spent by employes having a regular presence in
5the state in performing such services.
8(iv) Interest or service charges, excluding merchant
9discounts, from credit, travel and entertainment card
10receivables and credit card holders' fees are located in the
11state in which the credit card holder resides in the case of an
12individual or, if a corporation, in the state of the
13cardholder's commercial domicile if, in either case, the
14institution maintains an office in such state. Otherwise, the
15receipts are located in the state in which the institution
16maintains an office which treats such receivables as assets on
17its books or records.
18(v) Interest, dividends and net gains from the sale or
19disposition of intangibles, exclusive of those receipts
20described elsewhere in this section, are located in the state in
21which the institution maintains an office which treats such
22intangibles as assets on its books or records.
26(vii) Receipts from sales of tangible property are located
27in the state in which the property is delivered or shipped to a
28purchaser, regardless of the f.o.b. point or other conditions of
30(viii) All receipts not specifically treated under this
4(i) The numerator of the receipts factor shall include
5receipts from the lease or rental of real property owned by the
6institution if the property is located within this Commonwealth
7or receipts from the sublease of real property if the property
8is located within this Commonwealth.
11(A) Except as provided under clause (B), the numerator of
12the receipts factor shall include receipts from the lease or
13rental of tangible personal property owned by the institution if
14the property is located within this Commonwealth when it is
15first placed in service by the lessee.
16(B) The following shall apply:
17(I) Receipts from the lease or rental of transportation
18property owned by the institution shall be included in the
19numerator of the receipts factor to the extent that the property
20is used in this Commonwealth.
21(II) The extent an aircraft shall be deemed to be used in
22this Commonwealth and the amount of receipts that shall be
23included in the numerator of this Commonwealth's receipts factor
24shall be determined by multiplying all the receipts from the
25lease or rental of the aircraft by a fraction, the numerator of
26which is the number of landings of the aircraft in this
27Commonwealth and the denominator of which is the total number of
28landings of the aircraft.
1(IV) If the extent of the use of transportation property
2within this Commonwealth cannot be determined, the property
3shall be deemed to be used wholly in the state in which the
4property has its principal base of operations.
13(II) If the real property under subclause (I) is located
14both within this Commonwealth and one or more other states, the
15receipts under this subsection shall be included in the
16numerator of the receipts factor if more than fifty per cent of
17the fair market value of the real property is located within
19(III) If more than fifty per cent of the fair market value
20of real property under subclause (I) is not located within any
21single state, the receipts under this subsection shall be
22included in the numerator of the receipts factor if the borrower
23is located in this Commonwealth.
24(B) The determination of whether real property securing a
25loan is located within this Commonwealth shall be made as of the
26time the original agreement was made and all subsequent
27substitutions of collateral shall be disregarded.
2(v) The numerator of the receipts factor shall include net
3gains from the sale of loans. Net gains from the sale of a loan
4shall include income recorded under the coupon stripping rules
5of section 1286 of the Internal Revenue Code of 1986 (Public Law
699-514, 26 U.S.C. § 1286). The following shall apply:
7(A) The amount of net gains, equal to zero or above, from
8the sale of loans secured by real property included in the
9numerator shall be determined by multiplying the net gains by a
10fraction, the numerator of which is the amount included in the
11numerator of the receipts factor under subparagraph (iii) and
12the denominator of which is the total amount of interest and
13fees or penalties in the nature of interest from loans secured
14by real property.
15(B) The amount of net gains, equal to zero or above, from
16the sale of loans not secured by real property included in the
17numerator shall be determined by multiplying the net gains by a
18fraction, the numerator of which is the amount included in the
19numerator of the receipts factor under subparagraph (iv) and the
20denominator of which is the total amount of interest and fees or
21penalties in the nature of interest from loans not secured by
23(vi) The numerator of the receipts factor shall include
24interest, fees and penalties charged to credit, debit or similar
25cardholders, including annual fees and overdraft fees, if the
26billing address of the cardholder is in this Commonwealth.
27(vii) The numerator of the receipts factor shall include net
28gains, equal to zero or above, from the sale of credit card
29receivables multiplied by a fraction, the numerator of which is
30the amount included in the numerator of the receipts factor
1under subparagraph (vi) and the denominator of which is the
2institution's total amount of interest and fees or penalties in
3the nature of interest from credit card receivables and fees
4charged to cardholders.
7(A) All credit card issuer's reimbursement fees multiplied
8by a fraction, the numerator of which is the amount of fees,
9interest and penalties charged to credit cardholders included in
10the numerator of the receipts factor under subparagraph (vi) and
11the denominator of which is the institution's total amount fees,
12interest and penalties charged to credit cardholders.
13(B) All card issuer's reimbursement fees, except as provided
14under clause (A), multiplied by a fraction, the numerator of
15which is the amount of the fees, interest and penalties charged
16to all other cardholders included in the numerator of the
17receipts factor under subparagraph (vi) and the denominator of
18which is the institution's total amount of fees, interest and
19penalties charged to all other cardholders.
22(A) If the institution can readily determine the location of
23the merchant and if the merchant is in this Commonwealth, the
24numerator of the receipts factor shall include receipts from
30(I) For a merchant discount related to the use of a credit
1card, the numerator of which shall be the amount of fees,
2interest and penalties charged to credit cardholders that is
3included in the numerator of the receipts factor under
4subparagraph (vi) and the denominator of which is the
5institution's total amount of fees, interest and penalties
6charged to credit cardholders.
7(II) For a merchant discount related to the use of a debit
8card, the numerator of which shall be the amount of fees,
9interest and penalties charged to debit cardholders that is
10included in the numerator of the receipts factor under
11subparagraph (vi) and the denominator of which is the
12institution's total amount of fees, interest and penalties
13charged to debit cardholders.
14(III) For a merchant discount related to the use of cards,
15except as provided under subclauses (I) and (II), the numerator
16of which shall be the amount of fees, interest and penalties
17charged to all other cardholders that is included in the
18numerator of the receipts factors under subparagraph (vi) and
19the denominator of which is the institution's total amount of
20fees, interest and penalties charged to all other cardholders.
24(A) The numerator of the receipts factor shall include fees
25charged to a cardholder for the use at an Automated Teller
26Machine of a card issued by the institution if the cardholder's
27billing address is in this Commonwealth.
3(xi) The following shall apply to loan servicing fees:
4(A) (I) The numerator of the receipts factor shall include
5loan servicing fees derived from loans secured by real property
6multiplied by a fraction, the numerator of which is the amount
7included in the numerator of the receipts factor under
8subparagraph (iii) and the denominator of which is the total
9amount of interest and fees or penalties in the nature of
10interest from loans secured by real property.
11(II) The numerator of the receipts factor shall include loan
12servicing fees derived from loans not secured by real property
13multiplied by a fraction, the numerator of which is the amount
14included in the numerator of the receipts factor under
15subparagraph (iv) and the denominator of which is the total
16amount of interest and fees or penalties in the nature of
17interest from loans not secured by real property.
18(B) If the institution receives loan servicing fees for
19servicing the secured or the unsecured loans of another
20institution, the numerator of the receipts factor shall include
21loan servicing fees if the borrower is located in this
23(xii) The numerator of the receipts factor shall include
24receipts from services not otherwise apportioned under this
25section if the recipient of the services receives all of the
26benefit of the services in this Commonwealth. If the recipient
27of the services receives some of the benefit of the services in
28this Commonwealth, the receipts shall be included in the
29numerator of the apportionment factor in proportion to the
30extent that the recipient receives benefit of the services in
5(A) Interest, dividends, net gains equal to zero or above,
6and other income from investment assets and activities and from
7trading assets and activities, shall be included in the receipts
8factor. Investment assets and activities and trading assets and
9activities shall include investment securities, trading account
10assets, Federal funds, securities purchased and sold under
11agreements to resell or repurchase, options, futures contracts,
12forward contracts, notional principal contracts such as swaps,
13equities and foreign currency transactions. For the investment
14and trading assets and activities under subclauses (I) and (II),
15the receipts factor shall include the amounts under subclauses
16(I) and (II). The following shall apply:
17(I) The receipts factor shall include the amount by which
18interest from Federal funds sold and securities purchased under
19resale agreements exceeds interest expense on Federal funds
20purchased and securities sold under repurchase agreements.
21(II) The receipts factor shall include the amount by which
22interest, dividends, gains and other income from trading assets
23and activities, including assets and activities in the matched
24book, in the arbitrage book and foreign currency transactions,
25exceed amounts paid in lieu of interest, amounts paid in lieu of
26dividends and losses from the assets and activities.
27(B) The numerator of the receipts factor shall include
28interest, dividends, net gains, equal to zero or above, and
29other income from investment assets and activities and from
30trading assets and activities under clause (A) that are
3(I) Method 1. The numerator shall be determined by
4multiplying the total amount of receipts from trading assets and
5activities under clause (A) by a fraction the numerator of which
6is the total amount of all other receipts attributable to this
7Commonwealth and the denominator of which is the total amount of
8all other receipts.
9(II) Method 2. The numerator shall be determined by
10multiplying the total amount of receipts under clause (A) by a
11fraction the numerator of which is the average value of the
12assets which generate the receipts which are properly assigned
13to a regular place of business of the institution within this
14Commonwealth and the denominator of which is the average value
15of all such assets.
16(C) Upon the election by the institution to use one of the
17methods under clause (B), the institution shall use the method
18on all subsequent returns unless the institution receives prior
19permission from the Department of Revenue to use a different
21(D) The following shall apply:
22(I) An institution electing to use Method 2 shall have the
23burden of proving that an investment asset or activity or
24trading asset or activity was properly assigned to a regular
25place of business outside of this Commonwealth by demonstrating
26that the day-to-day decisions regarding the asset or activity
27occurred at a regular place of business outside this
1than one regular place of business and one regular place of
2business is in this Commonwealth and one regular place of
3business is outside this Commonwealth, the asset or activity
4shall be considered to be located at the regular place of
5business of the institution where the investment or trading
6policies or guidelines with respect to the asset or activity are
8(III) Unless the institution demonstrates to the contrary,
9the investment or trading policies and guidelines under
10subclause (II) shall be presumed to be established at the
11commercial domicile of the institution.
19(III) interest, dividends, gains and other income from
20trading assets and activities, including assets and activities
21in the matched book, in the arbitrage book and foreign currency
25(A) The numerator of the receipts factor shall include
26receipts from the sale or disposition of tangible personal
27property if the property is delivered or shipped to a purchaser
28within this Commonwealth regardless of the f.o.b. point or other
29conditions of the sale.
30(B) The numerator of the receipts factor shall include all
23(c) the customer does not have a commercial domicile.
27(xvi) For purposes of determining the location where
28benefits are received from under subparagraphs (xii) and (xv),
29if a service or other activity generating the receipts provides
30benefits to two or more recipients located in different states
1or provides benefits to a recipient in more than one state, the
2location where benefits are received may be estimated using
3reasonable procedures to estimate the locations in which
4benefits are received.
5(xvii) Receipts which would be assigned under this section
6to a state in which the institution is not subject to a business
7privilege tax, a net income tax, a franchise tax measured by net
8income, a franchise tax for the privilege of doing business or a
9corporate stock tax or shares tax of the type imposed under this
10article shall be included in the numerator of the receipts
11factor, if the institution's commercial domicile is in this
13(4) The deposits factor is a fraction, the numerator of
14which is the average value of deposits located in this
15Commonwealth during the taxable year and the denominator of
16which is the average value of the total deposits during the
17taxable year. The average value of deposits is to be computed on
18a quarterly basis. Deposits are located in the state in which
19the institution maintains an office which properly treats the
20deposits as a liability on its books or records. A deposit is
21considered to be properly treated as a liability on the books or
22records of the office with which it has a greater portion of
23contact. In determining whether a deposit has a greater portion
24of contact with a particular office, consideration is given to:
10Section 701.5. Definitions.--The following words, terms and
11phrases when used in this article shall have the meaning
12ascribed to them in this section, except where the context
13clearly indicates a different meaning:
14"Billing address." The location indicated in the books and
15records of an institution on the first day of the taxable year
16or on a later date in the taxable year when the customer
17relationship began, as the address where a notice, statement and
18bill relating to a customer's account is mailed.
19"Commercial domicile." As follows:
22(2) if a trade or business is organized under the laws of a
23foreign country, the person's commercial domicile shall be
24deemed to be the state of the United States or the District of
25Columbia from which the institution's trade or business in the
26United States is principally managed and directed. It shall be
27presumed, subject to rebuttal, that the location from which a
28trade or business is principally managed and directed is the
29state of the United States or the District of Columbia to which
30the greatest number of employes are regularly connected or out
4"Card issuer's reimbursement fee." The fee an institution
5receives from a merchant's bank because one of the persons to
6whom the institution has issued a credit, debit or similar type
7of card has charged merchandise or services to the card.
11"Debit card." A card, or other means of providing
12information, that enables the holder to charge the cost of
13purchases or cash withdrawal, against the holder's bank account
14or a remaining balance on the card.
15"Deposits." Deposits consist of those items specified for
16inclusion as such in quarterly Reports of Condition, but do not
17include deposits made by the Federal Government, its agencies or
19"Doing business in this Commonwealth." As follows:
20(1) An institution is engaged in doing business in this
21Commonwealth and is subject to the tax imposed under this
22article if it satisfies any of the following requirements and
23generates gross receipts apportioned to this Commonwealth under
24section 701.4 in excess of $100,000:
30(iii) A person, including an employe, representative,
1independent contractor, agent or affiliate of the institution,
2or an employe, representative, independent contractor or agent
3of an affiliate of the institution, directly or indirectly
4solicits business in this Commonwealth by or for the benefit of
5the institution, through:
17(vii) The institution has a physical presence in this
18Commonwealth for a period of more than one day during the tax
19year or conducts an activity sufficient to create a nexus in
20this Commonwealth for tax purposes under the Constitution of the
22(2) The term shall not include:
23(i) The use by the institution of a professional performing
24a service on behalf of the institution in this Commonwealth if
25the services are not significantly associated with the
26institution's ability to establish and maintain a market in this
4"Institution." As follows:
5(1) The term shall mean:
6(i) Every bank operating as such and having capital stock
7which is incorporated under any law of this Commonwealth, under
8the law of the United States or under the law of any other
9jurisdiction [and is located within this Commonwealth].
10[(2)] (ii) Every operating company having capital stock
11[located within this Commonwealth] and having any of the powers
12of companies entitled to the benefits of an act, entitled "An
13act conferring upon certain fidelity, insurance, safety deposit,
14trust, and savings companies, the powers and privileges of
15companies incorporated under the provisions of section 29 of an
16act, entitled 'An act to provide for the incorporation and
17regulation of certain corporations,' approved April 29, 1874,
18and of the supplements thereto," approved June 27, 1895,
19commonly known as trust companies.
20[(3)] (iii) Every company organized and operating as a bank
21and trust company or as trust company having capital stock
22[located in this Commonwealth], whether the institution is
23incorporated under any law of this Commonwealth, the law of the
24United States or any law of any jurisdiction. The term shall not
25include any of such companies, all of the shares of capital
26stock of which, other than shares necessary to qualify
27directors, are owned by a company which is liable to pay to the
28Commonwealth a tax pursuant to this article.
7"Lease." Any leasing transaction in which the lessor would
8be treated as owner of the leased property under generally
9accepted accounting principles. All other transactions
10purporting to be leases shall be treated as loans for purposes
11of this article.
21(4) Such institution engages in regular solicitation in this
22Commonwealth, whether at a place of business, by traveling loan
23officers or other representatives, by mail, by telephone or
24other electronic means, and the solicitation results in the
25creation of a depository or direct debtor/creditor relationship
26with a resident of this Commonwealth. For purposes of this
27article, mere processing or transfer through financial
28intermediaries of checks, credit card receivables, commercial
29paper and the like does not create a debtor/creditor
30relationship. A financial institution is engaged in regular
1solicitation within this Commonwealth if it has entered into any
2of the relationships listed in this clause with twenty or more
3residents of this Commonwealth during any tax period or if it
4has five million dollars ($5,000,000) or more of assets
5attributable to sources within this Commonwealth at any time
6during the tax period.
13"Loan." As follows:
14(1) The term shall mean any of the following:
21(3) The term shall not include:
22(i) Futures or forward contracts.
23(ii) An option.
24(iii) A notional principal contract such as swaps.
29(vi) A cash item in the process of collection.
30(vii) A Federal fund sold.
1(viii) A security purchased under an agreement to resell.
2(ix) An asset held in a trading account.
3(x) A security.
8"Loan secured by real property." A loan for which at least
950 per cent of the aggregate value of the collateral used to
10secure a loan or other obligation, when valued at fair market
11value as of the time the original loan or obligation was
12incurred, was real property.
16"Merchant discount." The fee or negotiated discount charged
17to a merchant by an institution for the privilege of
18participating in a program by which a credit, debit or similar
19type of card is accepted in payment for merchandise or services
20sold to the cardholder, net of any cardholder charge-back and
21unreduced by any interchange transaction or issuer reimbursement
22fee paid to another for a charge or purchase made by its
24"Origination of loans." A loan is deemed to have originated
25in the state in which the office is located which properly
26treats the loan as an asset on its books or records. However, if
27an institution maintains an office in a state, the following
4(i) application for the loan;
5(ii) negotiation for the loan;
6(iii) approval of the loan; or
7(iv) administrative responsibility for the loan.
8(2) All other loans made to borrowers residing or having
9their commercial domicile within the state are deemed to have
10originated at an office within the state, if at least one of the
11following activities occurs at an office in the state:
12(i) application for the loan;
13(ii) negotiation for the loan;
14(iii) approval of the loan; or
15(iv) administrative responsibility for the loan.
16"Principal base of operations." As follows:
23(ii) communicates with customers or other people; or
26"Property located in a state."
1(2) Tangible personal property which is characteristically
2moving property, such as motor vehicles, rolling stock,
3aircraft, vessels, mobile equipment and the like, shall be
4deemed to be located in a state if:
11(iii) the state is the residence or commercial domicile of
12the lessee or other user of the property, where there is no
13principal base of operations and the operation of the property
14is in two or more states.
17(1) Real and tangible personal property, respectively,:
20(ii) property to which the institution holds legal title and
21on which no other person may claim depreciation for Federal
22income tax purposes, or could claim depreciation if subject to
23Federal income tax.
26"Receipts." As follows:
30(2) If consolidated returns are filed with the Federal
1Government, an item that would be included in taxable income
2returned to and ascertained by the Federal Government if a
3separate return had been made to the Federal Government by the
4institution, including the taxable income of a subsidiary of the
5institution that are disregarded entities for purposes of
7"Regular place of business." An office at which an
8institution carries on its business in a regular and systematic
9manner and which is continuously maintained, occupied and used
10by employes of an institution.
22"Syndication." An extension of credit in which two or more
23people provide funds and each person is at risk for up to a
24specified percentage of the total extension of credit or for up
25to a specified dollar amount.
26"Transportation property." A vehicle and vessel capable of
27moving under its own power, such as aircraft, a train, water
28vessel and motor vehicle. The term includes equipment or a
29container attached to the property, such as rolling stock, a
30barge, trailer or similar equipment or container.
1Section 24. The definitions of "document," "real estate" and
2"real estate company" in section 1101-C of the act, amended July
32, 1986 (P.L.318, No.77), are amended and the section is amended
4by adding definitions to read:
8* * *
9"Document." Any deed, instrument or writing which conveys,
10transfers, devises, vests, confirms or evidences any transfer or
11devise of title to real estate in this Commonwealth, but does
12not include wills, mortgages, deeds of trust or other
13instruments of like character given as security for a debt and
14deeds of release thereof to the debtor, land contracts whereby
15the legal title does not pass to the grantee until the total
16consideration specified in the contract has been paid or any
17cancellation thereof unless the consideration is payable over a
18period of time exceeding thirty years or instruments which
19solely grant, vest or confirm a public utility easement.
20"Document" shall also include a declaration of acquisition
21required to be presented for recording under section 1102-C.5 of
23* * *
25(1) Any lands, tenements or hereditaments [within this
26Commonwealth], including, without limitation, buildings,
27structures, fixtures, mines, minerals, oil, gas, quarries,
28spaces with or without upper or lower boundaries, trees and
29other improvements, immovables or interests which by custom,
30usage or law pass with a conveyance of land, but excluding
3(2) A condominium unit.
15[(2)] (ii) holds real estate, the value of which comprises
16ninety per cent or more of the value of its entire tangible
17asset holdings exclusive of tangible assets which are freely
18transferable and actively traded on an established market.
19(2) Ninety percent or more of the ownership interest in the
20corporation or association is held by thirty-five or fewer
21persons and the corporation or association owns, as ninety
22percent or more of the fair market value of its assets, a direct
23or indirect interest in a real estate company. An indirect
24ownership interest is an interest in a corporation or
25association, ninety percent or more of the ownership interest
26which is held by thirty-five or fewer persons whose purpose is
27the ownership of a real estate company.
28* * *
9Section 1102-C. Imposition of Tax.--Every person who makes,
10executes, delivers, accepts or presents for recording any
11document or in whose behalf any document is made, executed,
12delivered, accepted or presented for recording, shall be subject
13to pay for and in respect to the transaction or any part
14thereof, or for or in respect of the vellum parchment or paper
15upon which such document is written or printed, a State tax at
16the rate of one per cent of the value of the real estate within
17this Commonwealth represented by such document, which State tax
18shall be payable at the earlier of the time the document is
19presented for recording or within thirty days of acceptance of
20such document or within thirty days of becoming an acquired
26* * *
27(23) A transfer of real estate:
1company or volunteer rescue company; or
10(1) does not affect the continuity of the company; and
11(2) of itself or together with prior changes has the effect
12of transferring, directly or indirectly, ninety per cent or more
13of the total ownership interest in the company within a period
14of three years.
23(iii) the transferring party receives full consideration, in
24any form, in exchange for the transfer.], the transferring party
25provides the transferee a legally binding commitment or option,
26enforceable at a future date, to execute the transfer.
27* * *
1NONLICENSED CORPORATION PARI-MUTUEL WAGERING TAX
2Section 1601-B. Scope.
6Section 1602-B. Definitions.
13"Association." A general partnership, limited partnership,
14limited liability partnership or any other form of
15unincorporated enterprise, owned or conducted by two or more
16persons other than a private trust or decedent's estate.
20"Corporation." A corporation, joint-stock association or
21business trust which is organized under the laws of this
22Commonwealth, the United States, or any other state, territory,
23foreign country or dependency.
24"Department." The Department of Revenue of the Commonwealth.
3"Pari-mutuel system." The hardware, software and
4communications equipment used to record wagers, calculate
5payouts for winning wagers and transmit wagering transactions
6and pari-mutuel pool data for display to patrons and to
7communicate with other pari-mutuel systems linked to facilitate
8common pool wagering.
9"Pari-mutuel wagering." A form of wagering on the outcome of
10a horse race or harness horse race in which all wagers are
11pooled and held by a pari-mutuel pool host for distribution of
12the total amount, minus the deductions authorized by law, to
13holders of tickets on the winning contestants.
14"Person." A natural person, association or corporation. The
15term shall, when used in any provision prescribing and imposing
16a penalty, include the responsible members or general partners
17of an association or the officers of a corporation.
18Section 1603-B. Tax.
19(a) Imposition.--A tax is imposed on the privilege of
20conducting pari-mutuel wagering in this Commonwealth by all
21nonlicensed corporations. A nonlicensed corporation shall pay a
22tax through the department for deposit into the restricted
23account established under section 1606-B.
24(b) Rate.--The tax imposed under subsection (a) shall be a
25percentage tax of 10% on the amount of pari-mutuel wagers made
26each day through the nonlicensed corporation where the wagers
27were placed from within this Commonwealth, including wagers made
28by an advance deposit account wagering system, in which the
29wagers are included in common pool wagering through a pari-
1Section 1604-B. Pari-mutuel tax return.
2(a) Returns.--A nonlicensed corporation subject to this
3article shall file with the department, on a form prescribed by
4the department, a nonlicensed corporation pari-mutuel wagering
5tax return. The return shall be filed under oath or affirmation
6of an authorized officer, member or partner reporting the tax
7due under this part in the prior calendar month. A return shall
8be due by the 20th day following the end of the reporting
9period. The return shall set forth all of the following with
10regard to the nonlicensed corporation:
11(1) The total amount of pari-mutuel wagers made within
12this Commonwealth, including wagers made by an advance
13deposit account wagering system, in which the wagers are
14included in common pool wagering through a pari-mutuel
15system, on thoroughbred meets.
16(2) The total amount of pari-mutuel wagers made within
17this Commonwealth, including wagers made by an advance
18deposit account wagering system, in which the wagers are
19included in common pool wagering through a pari-mutuel
20system, on harness meets.
21(3) Calculation of the tax due at 10%.
22(4) Other information required by the department.
26(c) Penalties and interest.--If a nonlicensed corporation
27fails to file the return required under subsection (a) or fails
28to pay the tax imposed under section 1603-B, the department may
29do any of the following:
30(1) Assess the amount of tax due.
1(2) Impose and assess an administrative penalty equal to
25% of the tax or $500, whichever is greater, due but unpaid
3for each quarter or fraction of the quarter that the tax
4remains unpaid together with interest at the rate established
5under section 806 of the act of April 9, 1929 (P.L.343,
6No.176), known as The Fiscal Code, on the tax from the time
7when the tax became due. The penalties provided under this
8paragraph shall be added to the tax and assessed and
9collected at the same time and in the same manner as a part
10of the tax. Unless otherwise specified, the tax shall be
11assessed, collected and enforced by the department under the
12provisions of Article II.
13Section 1605-B. Regulations.
17Section 1606-B. Advanced Deposit Wagering Collections Account.
18(a) Advanced Deposit Wagering Collections Account.--There is
19created within the General Fund a restricted account to be known
20as the Advanced Deposit Wagering Collections Account. Revenues
21collected under this article shall be deposited into the
23(b) Transfer.--Of the funds deposited in the Advanced
24Deposit Wagering Collections Account, beginning fiscal year
252013-2014 and each fiscal year thereafter, up to $5,000,000 is
26transferred to the State racing commissions in the Department of
27Agriculture for general government operations of the
28commissions. For fiscal year 2013-2014, any funds that exceed
29the $5,000,000 shall be transferred to the Pennsylvania Race
30Horse Development Fund.
4Section 1702-D. Definitions.
10"Film." A feature film, a television film, a television talk
11or game show series, a television commercial or a television
12pilot or each episode of a television series which is intended
13as programming for a national audience. The term does not
14include a production featuring news, current events, weather and
15market reports, public programming, sports events, awards shows
16or other gala events, a production that solicits funds, a
17production containing obscene material or performances as
18defined in 18 Pa.C.S. § 5903(b) (relating to obscene and other
19sexual materials and performances) or a production primarily for
20private, political, industrial, corporate or institutional
22"Minimum stage filming requirements." Include:
9(iii) spend or incur a minimum of $5,000,000 in
10direct expenditures relating to the use or rental of
11tangible property at or for performance of services
12provided by a qualified production facility.
24(3) Payment to a pass-through entity representing
25individual talent if the tax imposed by Article III will be
26paid or accrued by all of the partners, members or
27shareholders of the pass-through entity for the taxable year
28for which the tax imposed under Article III has been withheld
29and remitted under the requirements of Article III by the
16"Production expense." As follows:
17(1) The term includes all of the following:
27(v) The cost of leasing vehicles.
30(vii) The cost of insurance coverage.
1(viii) The costs of food and lodging.
2(ix) The purchase of music or story rights.
3(x) The cost of rental of facilities and equipment.
4(2) The term does not include any of the following:
5(i) Deferred, leveraged or profit participation paid
6or to be paid to individuals employed in the production
7of the film or paid to entities representing an
8individual for services provided in the production of the
10(ii) Development cost.
15"Qualified film production expense." All Pennsylvania
16production expenses if Pennsylvania production expenses comprise
17at least 60% of the film's total production expenses. The term
18shall not include more than $15,000,000 in the aggregate of
19compensation paid to individuals or payment made to entities
20representing an individual for services provided in the
21production of the film.
22"Qualified production facility." A film production facility
23located within this Commonwealth that contains at least one
24sound stage with a column-free, unobstructed floor space and
25meets either of the following criteria:
30(2) Meets at least three of the following criteria:
10Section 1703-D. Credit for qualified film production expenses.
14(b) Review and approval.--The department shall establish
15application periods not to exceed 90 days each. All applications
16received during the application period shall be reviewed and
17evaluated by the department based on the following criteria:
20(2) The anticipated number of Pennsylvania employees.
27(6) The use of studio resources.
1Upon determining the taxpayer has incurred or will incur
2qualified film production expenses, the department may approve
3the taxpayer for a tax credit. Applications not approved may be
4reviewed and considered in subsequent application periods. The
5department may approve a taxpayer for a tax credit based on its
6evaluation of the criteria under this subsection.
17(4) The start date.
20(d) Certificate.--Upon execution of the contract required by
21subsection (c), the department shall award the taxpayer a film
22production tax credit and issue the taxpayer a film production
23tax credit certificate.
27Section 1705-D. Carryover, carryback and assignment of credit.
28* * *
9Section 1708-G.1. Scholarships.
10* * *
11(b) Award.--A scholarship organization may award a
12scholarship to an applicant who resides within the attendance
13boundary of a low-achieving school to attend a participating
14public school or a participating nonpublic school selected by
15the parent of the applicant. If an applicant who received an
16educational opportunity scholarship under this article for the
17prior school year resides within the attendance boundary of a
18school that was removed from the list of low-achieving schools
19provided by the department under subsection (a), the applicant
20may receive an educational opportunity scholarship. The
21scholarship may be for each year of enrollment in a
22participating public school or participating nonpublic school
23for up to the lesser of five years or until completion of grade
2412 provided the applicant otherwise remains eligible. In
25awarding scholarships, a scholarship organization shall give
26preference to any of the following:
3(3) An applicant of a household with a household income
4that does not exceed 185% of the Federal poverty level for
5the school year preceding the school year for which the
6application is being made and who resides within any of the
8(i) a first class school district;
12(iii) a school district that receives an advance of
13its basic education subsidy at any time and is either
14subject to a declaration of financial distress under
15section 691 of the Public School Code of 1949 or engaged
16in litigation against the Commonwealth in which the
17school district seeks financial assistance from the
18Commonwealth to allow the school district to continue to
20* * *
24COAL WASTE REMOVAL AND ULTRACLEAN FUELS
5"Developer" means the owner-operator of a facility, as
6defined in this section, or the operator of the facility that
7has sold the facility in new condition to a third party from
8whom that operator has simultaneously leased back the facility
9for a minimum period of twelve years.
10"Facility" includes all plant and equipment purchased or
11constructed by or on behalf of the developer which is used
12within this Commonwealth by the developer to produce one or more
16"Qualified fuels" means those fuels produced from
17nontraditional coal culm and silt feedstocks as defined in
18section 29(c) of the Internal Revenue Code of 1986 (Public Law
1999-514, 26 U.S.C. § 29(c)).
1(4) Be located within this Commonwealth.
8"Tax credit base" means only the cost or other basis of
9qualifying property that is properly transferred to the
10facility's basis for depreciation for Federal income tax
11purposes between January 1, 2000, and December 31, 2012.
12Section 1803-A. Investment Tax Credits Program.--(a) A
13developer of a new facility for the production of one or more
14qualified fuels shall be allowed an investment tax credit
15against the taxes imposed under Articles II, IV and VI of this
16act. The amount of the credit shall be computed as a percentage
17applied to the cost or other basis for Federal income tax
18purposes of qualifying property.
24(3) Any amount of allowable investment tax credit not used
25in the tax year for which the credit was claimed can be carried
26forward by the claiming taxpayer to succeeding years until the
27full amount of allowable credit has been used.
3(2) A taxpayer recipient by purchase or assignment of any
4portion of the developer's investment tax credit under paragraph
5(1) shall initially claim such credit, upon notice to the
6department of the derivative basis of the credit in compliance
7with procedures specified by the department, for the tax year in
8which the purchase or assignment is made, but in no event
9subsequent to the filing of an income tax return for the year
11(3) Any taxpayer who acquires any portion of the developer's
12investment tax credit by sale or assignment for value and
13without notice by the developer of any irregularity or
14invalidity shall not suffer any disallowance of the credit or
15the imposition of any adjustment or fraud penalty attributable
16to conduct by the developer.
17(d) (1) If prior to the expiration of any qualifying
18property's useful life, as used to calculate depreciation for
19Federal income tax purposes, the developer, upon mandatory
20notice to the department in compliance with procedures specified
21by the department, disposes of any qualifying property, in a
22transaction other than a sale-leaseback transaction, upon which
23the department has previously allowed an investment tax credit
24claimed by any taxpayer, a portion of all such credit shall be
25recaptured and added to the developer's tax liability for the
26tax year in which the qualifying property is disposed.
27(2) The portion of the investment tax credit previously
28allowed, which is subject to recapture from the developer, shall
29be equal to a fraction whose numerator is the number of years
30remaining to fully depreciate for Federal income tax purposes
7(e) The department shall verify the validity of any claim
8for allowance of any investment tax credit afforded under this
9section and, in the case of a fraudulent claim, may assess
10against the developer a penalty of one hundred and twenty-five
11per cent of the credit improperly claimed.
15Section 1804-A. Contract Required.--(a) In order for a
16developer to claim investment tax credits under this article,
17the developer must enter into a contract with the Commonwealth
18that provides as follows:
22(2) The developer shall make periodic payments to the
23Commonwealth, which payments may not exceed in the aggregate
24forty-six million eight hundred thousand dollars ($46,800,000)
25over the term of the contract.
26(3) The periodic payments shall occur every five years and
27each payment shall be nine million three hundred sixty thousand
28dollars ($9,360,000), except as provided in paragraphs (4), (5)
30(4) For the first five-year period, the amount specified in
1paragraph (3) shall be reduced by:
2(i) An amount equal to the business losses of the developer,
3if any, relating to the facility that are sustained in the first
4and second years of the contract, provided such amount does not
5exceed three million seven hundred forty-four thousand dollars
6($3,744,000) for both years.
10(5) For the remaining five-year periods, the amount
11specified in paragraph (3) shall be reduced by the amount of
12allowable offsets identified in subsection (b), provided that
13such offsets do not exceed nine million three hundred sixty
14thousand dollars ($9,360,000) during any five-year period.
15(6) To the extent the amount of allowable offsets during any
16five-year period exceeds nine million three hundred sixty
17thousand dollars ($9,360,000), the excess may be carried over
18and added to the allowable offsets taken in the following five-
19year period, provided that the excess is applied first.
2Section 1805-A. Requirements.--Tax credits authorized by
3this article shall not be granted unless the developer has
4obtained an investment tax credit from the Federal Government or
5an investment by a person other than an agency or
6instrumentality of the Commonwealth, or any combination thereof,
7in an amount equal to or greater than the tax credit granted by
11Section 1804-B. Tax credits.
12* * *
13(d) Tax credit term.--
14(1) A company may claim the job creation tax credit for each
15new job created, as approved by the department, for a one-year,
16two-year or three-year period as authorized by the department,
17except that no tax credit may be claimed for more than five
18years from the date the company first submits a job creation tax
20(2) Notwithstanding the provisions of paragraph (1), nothing
21in this article shall be construed to prohibit the Department of
22Community and Economic Development from awarding the total
23amount of tax credit authorized for a multiple year tax credit
24in the first year in which the new job is created and the tax
26* * *
1CITY REVITALIZATION AND IMPROVEMENT ZONES
2Section 31. The act is amended by adding sections to read:
3Section 1801-C. Scope of article.
6Section 1802-C. Definitions.
14"City." A city of the third class with a population of at
15least 30,000 based on the most recent Federal decennial census.
16The term shall not include a city that has had a receiver
17appointed under Chapter 7 of the act of July 10, 1987 (P.L.246,
18No.47), known as the Municipalities Financial Recovery Act.
19"City revitalization and improvement zone." An area of not
20more than 130 acres, comprised of parcels designated by the
21contracting authority, which will provide economic development
22and job creation within a city.
26(1) designating zones; and
30"Department." The Department of Revenue of the Commonwealth.
1"Earned income tax." A tax imposed on earned income within a
2zone under the act of December 31, 1965 (P.L.1257, No.511),
3known as The Local Tax Enabling Act, which a city, or a school
4district contained entirely within the boundaries of or
5coterminous with the city, is entitled to receive.
6"Eligible tax." Any of the following taxes:
7(1) Corporate net income tax, capital stock and
8franchise tax, bank shares tax or business privilege tax,
9calculated and apportioned as to amount attributable to the
10location within the zone and calculated under section
111904-B(b) and (c).
26The term does not include cigarette tax.
30"Office." The Office of the Budget.
1"Pilot zone." An area of not more than 130 acres designated
2by the authority following application and approval by the
3Department of Community and Economic Development, the office and
4the department which will provide economic development and job
5creation within a township or borough, with a population of at
6least 7,000 based on the most recent Federal decennial census.
7"Qualified business." As follows:
20"Zone." Any of the following:
21(1) A city revitalization and improvement zone.
22(2) A pilot zone.
25Section 1803-C. Establishment of contracting authority.
4(c) Counties.--The home rule county where a distressed city
5under the Municipalities Financial Recovery Act is located may
6establish a contracting authority to designate a zone under this
7article within the distressed city.
8Section 1804-C. Approval.
14(2) An economic development plan.
30(1) Following the effective date of this paragraph,
1applications for two initial zones may be approved.
7(d) Time.--An application under this section shall be
8approved or disapproved within 90 days of the postmark date of
9submission. An application which is not disapproved within the
10time period under this subsection shall be deemed to be
15Section 1805-C. Exclusions.
16A part of a zone may not include a keystone opportunity zone,
17keystone opportunity expansion zone, keystone opportunity
18improvement zone, keystone innovation zone, keystone special
19development zone, neighborhood improvement zone or strategic
21Section 1806-C. Functions of contracting authorities.
29(i) Development or improvement within a zone.
30(ii) Construction, including infrastructure and site
6Section 1807-C. Qualified businesses.
7(a) List.--By June 1 following the end of the baseline year,
8and for every year thereafter, each contracting authority shall
9file with the department a complete list of all businesses
10located in the zone and all construction contractors engaged in
11construction, reconstruction or renovation of a facility in the
12zone in the prior calendar year. The list shall include for each
13business address, State tax identification number and parcel
14number and a map of the zone with parcel numbers.
29Section 1808-C. Funds.
30(a) Notice.--Following the designation of a zone, the
1contracting authority shall notify the State Treasurer.
2(b) Establishment.--Upon receipt of notice under subsection
3(a), the State Treasurer shall establish for each zone a special
4fund for the benefit of the contracting authority to be known as
5the City Revitalization and Improvement Zone Fund. Interest
6income derived from investment of money in a fund shall be
7credited by the State Treasury to the fund.
8Section 1809-C. Reports.
9(a) State zone report.--By June 15 following the baseline
10year and each year thereafter, each qualified business shall
11file a report with the department in a form or manner required
12by the department which includes all of the following:
19(b) Local zone report.--By June 15 following the baseline
20year and for each year thereafter, each qualified business shall
21file a report with the local taxing authority which includes all
22of the following:
30(1) Failure to file a timely and complete report under
5(ii) one thousand dollars.
6(2) A penalty for a violation of subsection (a) shall be
7imposed, assessed and collected by the department under
8procedures set forth in Article II. Money collected under
9this paragraph shall be deposited in the General Fund.
17Section 1810-C. Calculation of baseline.
25(2) For qualified businesses not included under
26paragraph (1) but located or partially located in the zone as
27determined by the department or included in the information
28received by the department under section 1809-C(a), the
29amount of eligible State tax paid, less eligible State tax
1(b) Moves and noninclusions.--
9(2) A qualified business subject to paragraph (1) shall
10file a State zone report under section 1809-C following the
11end of the first full calendar year in which the qualified
12business conducted business in the zone and each calendar
13year thereafter. The amount of eligible State tax verified by
14the department for the qualified business for the prior
15calendar year shall be added to the State baseline tax amount
16for the zone for the prior calendar year and each year
21Section 1811-C. Certification.
1(B) the amount of eligible State tax paid.
5(B) the difference under subparagraph (i).
9(1) The certification may include the following:
17(2) The certification shall not include the following:
25(c) Submission.--The following shall apply:
26(1) An entity collecting an eligible local tax within the
27zone shall, by October 15 following the baseline year, and each
28year thereafter, submit the following to the State Treasurer for
29transfer to the fund:
30(i) the eligible local tax collected in the prior
10Section 1812-C. Transfers.
11(a) Office.--Within ten days of receiving the certification
12from the department under section 1811-C, the office shall
13direct the State Treasurer to transfer the amount of certified
14eligible State zone tax from the General Fund to each fund of a
16(b) State Treasurer.--Within ten days of receiving direction
17under subsection (a), the State Treasurer shall pay into the
18fund the amount directed under subsection (a) until bonds issued
19to finance the construction, including related infrastructure
20and site preparation, reconstruction or renovation of a facility
21or other eligible project in the zone are retired.
22(c) Notification.--The following shall apply:
23(1) If the transfers under subsection (a) and section
241811-C(c) are insufficient to make payments on the bonds
25issued under section 1813-C(a)(1) for the calendar year when
26the transfers are made, the contracting authority shall
27notify the Department of Community and Economic Development,
28the office and the department of the amount of additional
29money necessary to make payments on the bonds.
30(2) The notification under paragraph (1) must be
1accompanied by a detailed account of the contracting
2authority's expenditures and the calculation which resulted
3in the request for additional money. The Department of
4Community and Economic Development, the office or the
5department may request additional information from the
6contracting authority and shall jointly verify the proper
7amount of money necessary to make the payments on the bonds.
8(3) Notwithstanding 53 Pa.C.S. § 5607(e), (relating to
9purposes and powers), within 90 days of the date of the
10notification request, the office shall direct the State
11Treasurer to establish a restricted account within the
12General Fund. The office shall direct the State Treasurer to
13transfer the amount verified under paragraph (2) from the
14General Fund to the restricted account for the use of the
15contracting authority to make payments on the bonds issued
16under section 1813-C(a)(1).
17(4) Money transferred under paragraph (3):
24(4.1) Under extraordinary circumstances, a contracting
25authority may request money in excess of the limitations in
26paragraph (4)(i). The Department of Community and Economic
27Development, the office and the department shall determine
28whether the circumstances merit additional money and the
29amount to be transferred. The money shall be transferred
30under the procedure under this section.
1(5) Money transferred under paragraph (4) shall be
2repaid to the General Fund by the contracting authority. If
3money transferred under paragraph (3) is not repaid to the
4General Fund by the contracting authority by the date of the
5final payment on the bonds originally issued under section
61813-C(a)(1), the city or county which established the
7contracting authority shall pay the money not repaid to the
8General Fund plus an additional penalty of 10% of the amount
9outstanding on the date of the final payment on the bonds
10originally issued under section 1813-C(a)(1).
11Section 1813-C. Restrictions.
26(5) Improvement or development of all or part of a zone.
1(c) Excess money.--
2(1) If the amount of money transferred to the fund under
3sections 1811-C(c) and 1812-C in any one calendar year
4exceeds the money utilized under this section in that
5calendar year, the contracting authority shall submit by
6January 15 following the end of the calendar year the excess
7money to the State Treasurer for deposit into the General
9(2) At the time of submission to the State Treasurer,
10the contracting authority shall submit to the State
11Treasurer, the office and department a detailed accounting of
12the calculation resulting in the excess money.
17(d) Matching funds.--
18(1) The amount of money transferred from the fund
19utilized for the construction, including related site
20preparation and infrastructure, reconstruction or renovation
21of facilities shall be matched by private money at a ratio of
22five fund dollars to one private dollar.
23(2) By April 1, following the baseline year and for each
24year thereafter, the contracting authority shall file an
25annual report with the Department of Community and Economic
26Development, the office and the department that contains
27detailed account of the fund money expenditures and the
28private money expenditures and a calculation of the ratio in
29paragraph (1) for the prior calendar year. The agencies shall
30determine whether sufficient private money was utilized.
1(3) If it is determined that insufficient private money
2was utilized under paragraph (1), the amount of fund money
3utilized under paragraph (1) in the prior calendar year shall
4be deducted from the next transfer of the fund.
5Section 1814-C. Transfer of property.
6(a) Property.--Portions of a zone where a facility has not
7been constructed, reconstructed or renovated using money under
8this article may be transferred out of the zone. Additional
9acreage, not to exceed the acreage transferred out of the zone,
10may be added to the zone.
14Section 1815-C. Duration.
15A zone shall be in effect for a period equal to the length of
16time for the repayment of debt incurred for the zone, including
17bonds issued. Bonds shall be paid, and all zones shall cease no
18later than 30 years following the initial issuance of the bonds.
19Section 1816-C. Commonwealth pledges.
20(a) Pledge.--If and to the extent the contracting authority
21pledges amounts required to be transferred to its fund under
22section 1812-C for payment of bonds issued by the contracting
23authority, until all bonds secured by the pledge of the
24contracting authority, together with interest on the bonds, are
25fully paid or provided for, the Commonwealth pledges to and
26agrees with any person, firm, corporation or government agency,
27in this Commonwealth or elsewhere, and pledges to and agrees
28with any Federal agency subscribing to or acquiring the bonds of
29the contracting authority that the Commonwealth itself will not,
30nor will it authorize any government entity to, do any of the
2(1) Abolish or reduce the size of the zone.
3(2) Amend or repeal section 1810-C or 1811-C.
4(3) Limit or alter the rights vested in the contracting
5authority in a manner inconsistent with the obligations of
6the contracting authority with respect to the bonds issued by
7the contracting authority.
10(b) Limitation.--Nothing in this section shall limit the
11authority of the Commonwealth or a political subdivision
12government entity to change the rate, base or subject of a
13specific tax or to repeal or enact any tax.
14Section 1817-C. Confidentiality.
15(a) Sole use.--A zone report or certification under this
16article shall only be used by the contracting authority to
17verify the amount of the State tax baseline amount calculated
18under section 1810-C and State tax certification under section
23Section 1818-C. Guidelines.
27Section 32. The act is amended by adding articles to read:
29MOBILE TELECOMMUNICATIONS BROADBAND
30INVESTMENT TAX CREDIT
1Section 1801-E. Definitions.
7"Qualified broadband equipment." Machinery and equipment
8located in this Commonwealth that is used by a mobile
9telecommunication services provider to provide Internet access
10service and is capable of sending, receiving, storing,
11transmitting, retransmitting, amplifying, switching or routing
12data, video or other electronic information. The term does not
13include machinery or equipment that is used to provide voice
15"Tax credit." The credit provided under this article.
16Section 1802-E. Tax credit.
17(a) General rule.--For tax years beginning after December
1831, 2013, and ending before January 1, 2024, a taxpayer that is
19a provider of mobile communications services shall be allowed a
20tax credit against the tax imposed under Article IV for
21investment in qualified broadband equipment placed into service
22in this Commonwealth during a taxable year.
30(3) Any credit claimed under this article, but not used
4Section 1803-E. Pass-through entity.
5(a) Transfer.--If a pass-through entity has any unused tax
6credit under this section, the entity may elect, in writing,
7according to the department's procedures, to transfer all or a
8portion of the credit to shareholders, members or partners in
9proportion to the share of the entity's distributive income to
10which the shareholder, member or partner is entitled.
11(b) Additional tax credit.--The tax credit provided under
12subsection (a) shall be in addition to any tax credit to which a
13shareholder, member or partner of a pass-through entity is
14otherwise entitled under this article, except that a pass-
15through entity and a shareholder, member or partner of a pass-
16through entity may not claim a tax credit under this article for
17the same qualified broadband equipment.
18(c) Claim.--A shareholder, member or partner of a pass-
19through entity to whom credit is transferred under subsection
20(a) must immediately claim the credit in the taxable year in
21which the transfer is made. The shareholder, member or partner
22may not carry forward, carry back, obtain a refund of or sell or
23assign the tax credit.
24Section 1804-E. Procedure.
25(a) Application.--A taxpayer who purchased and placed into
26service qualified broadband equipment in a taxable year may
27apply for a tax credit as provided in this article. By October
2815, 2015, and every October 15 thereafter, a taxpayer must
29submit an application to the department for the purchase price
30of qualified broadband equipment placed into service in the
1taxable year that ended in the prior calendar year.
2(b) Notification.--By December 15, 2015, and of the calendar
3year following the close of the taxable year during which the
4qualified broadband equipment was placed into service and every
5December 15 thereafter, the department shall notify the taxpayer
6of the amount of the taxpayer's tax credit approved by the
8Section 1805-E. Limitation.
11(b) Allocation.--If the total amount of tax credits applied
12for by all taxpayers exceeds the limitation on the amount of tax
13credits in subsection (a) in a fiscal year, the tax credit to be
14received by each application shall be the product of the
15allocated amount multiplied by the quotient of the tax credit
16applied for by the applicant divided by the total of all tax
17credits applied for by all applicants, the algebraic equivalent
18of which is:
23INNOVATE IN PA TAX CREDIT
24Section 1801-F. Scope of article.
25This article relates to the Innovate in PA Tax Credit.
26Section 1802-F. Legislative intent.
27It is the intent of this article to invest in innovation as a
28catalyst for economic growth. Investment, in the Ben Franklin
29Technology Development Authority, the Ben Franklin Technology
30Partners, regional biotechnology research centers, the
1department and venture capital funds will advance the
2competitiveness of this Commonwealth's companies in the global
3economy. It is the goal of this article to maximize the
4available funding from a minimum amount of $131,250,000 and up
5to and exceeding $147,800,000.
6Section 1803-F. Definitions.
12"Authority." The Ben Franklin Technology Development
13Authority established to manage and fund programs in this
14Commonwealth that support the development of technology as
15described in the act of June 22, 2001 (P.L.569, No.38), known as
16The Ben Franklin Technology Development Authority Act.
17"Ben Franklin Technology Partners Program." A program under
18the Ben Franklin Technology Development Authority that funds
19four regionally based economic development organizations
20dedicated to a common mission of technology commercialization.
25"Fund." The Innovate in PA Fund.
26"Impact investment." An investment intended to solve social
27or environmental challenges while generating financial profit.
28Impact investing recognizes that investments have social and
29environmental returns in addition to financial returns and
30attempts to maximize the three returns rather than one at the
1expense of others.
4"Program." The Innovate in PA Program.
26Section 1804-F. Tax credit.
27A qualified taxpayer may purchase tax credits from the
28department in accordance with this article and may apply the tax
29credits against its insurance premiums tax liability in
30accordance with this article.
1Section 1805-F. Duties.
2(a) Sale of tax credits.--The department shall have the
3authority to sell up to $175,000,000 in tax credits to qualified
4taxpayers. The sale of the tax credits shall be in accordance
5with section 1808-F.
11(1) Transfer an amount from the General Fund equal to
12the amount of premiums tax credits claimed by a foreign fire
13insurance company against taxes that otherwise would be
14distributed in accordance with Chapter 7 of the act of
15December 18, 1984 (P.L.1005, No.205), known as the Municipal
16Pension Plan Funding Standard and Recovery Act, to the fund
17as defined in section 702 of the Municipal Pension Plan
18Funding Standard and Recovery Act.
19(2) Transfer from the General Fund an amount equal to
20the amount of a premiums tax credit claimed by a foreign
21casualty insurance company against taxes that otherwise would
22be distributed and used for police pension, retirement or
23disability purposes as provided by the act of May 12, 1943
24(P.L.259, No.120), referred to as the Foreign Casualty
25Insurance Premium Tax Allocation Law, for distribution in
26accordance with the Foreign Casualty Insurance Premium Tax
28Section 1806-F. Use of tax credits by qualified taxpayers.
7(c) Construction.--The following shall apply:
8(1) A qualified taxpayer may not be required to reduce
9the amount of insurance premiums tax included by the taxpayer
10in connection with rate making for any insurance contract
11written in this Commonwealth because of a reduction of the
12taxpayer's insurance premiums tax liability derived from the
13tax credit purchased under this article.
14(2) If, under the insurance laws of this Commonwealth,
15the assets of the qualified taxpayer are examined or
16considered, the taxpayer's balance of tax credits shall be
17treated as an admitted asset subject to the same financial
18rating as held by the Commonwealth.
19(d) Limitations.--The following shall apply:
20(1) The total amount of tax credits applied against
21insurance premiums tax liability by all qualified taxpayers
22in a fiscal year may not exceed $35,000,000 per year
23beginning in calendar year 2017.
27Section 1807-F. Sale, carryover and carryback.
1carried over to succeeding taxable years and used as a credit
2against the qualified tax liability of the taxpayer for those
3taxable years, provided that the credit may not be carried over
4to any taxable year that begins after December 31, 2025.
5(b) Sale.--No sooner than 30 days after providing the
6Insurance Department and the department written notice of the
7intent to transfer tax credits, a qualified taxpayer may
8transfer tax credits held without restriction to any entity that
9is a qualified taxpayer in good standing with the Insurance
10Department and that agrees to assume all of the transferor's
11obligations with respect to the tax credit.
14Section 1808-F. Sale of tax credits to qualified taxpayers.
18(b) Process.--The department may sell the tax credits
19authorized under this article or may contract with an
20independent third party to conduct a bidding process among
21qualified taxpayers to purchase the credits. In raising capital
22for the program, the department shall have the discretion to
23distribute credits using a market-driven approach or any
24approach that maximizes the yield to the Commonwealth.
1timely and irrevocable offer, subject only to the department's
2issuance to the taxpayer of tax credit certificates, to make
3specified contributions of capital to the department on dates
4specified by the department.
14(ii) The percentage of the requested dollar amount
15of tax credits that the department and, if applicable,
16the independent third party, determines to be consistent
17with market conditions as of the offer date.
20(f) Notice of approval.--Each qualified taxpayer that
21submits an application under this section shall receive a
22written notice from the department indicating whether or not it
23has been approved as a purchaser of tax credits and, if so, the
24amount of tax credits allocated.
30(a) Payment of capital.--Capital committed by a qualified
1taxpayer shall be paid to the department for deposit into the
2fund. Nothing under this section shall prohibit the department
3from establishing an installment payment schedule for capital
4payments to be made by the qualified taxpayer.
5(b) Issuance of tax credit certificates.--On receipt of
6payment of capital, the department shall issue to each qualified
7taxpayer a tax credit certificate representing a fully vested
8credit against insurance premium tax liability.
9(c) Certificate issued in accordance with bidding process.--
10The department shall issue tax credit certificates to qualified
11taxpayers in accordance with the bidding process selected by the
12department or the independent third party.
22(4) Any penalties or other remedies for noncompliance.
3(b) Penalty.--A qualified taxpayer that fails to make a
4contribution of capital within the time the department specifies
5shall be subject to a penalty equal to 10% of the amount of
6capital that remains unpaid. The penalty shall be paid to the
7department within 30 days after demand.
8(c) Reallocation.--The department may offer to reallocate
9the defaulted capital among other qualified taxpayers, so that
10the result after reallocation is the same as if the initial
11allocation had been performed without considering the tax credit
12allocation to the defaulting qualified taxpayer.
13(d) Contribution.--If the reallocation of capital under
14subsection (c) results in the contribution by another qualified
15taxpayer of the amount of capital not contributed by the
16defaulting qualified taxpayer, the department may waive the
17penalty provided under subsection (b).
18(e) Transfer.--A qualified taxpayer that fails to make a
19contribution of capital within the time specified may avoid the
20imposition of the penalty by transferring the allocation of tax
21credits to a new or existing qualified taxpayer within 30 days
22after the due date of the defaulted installment. Any transferee
23of an allocation of tax credits of a defaulting qualified
24taxpayer under this subsection shall agree to make the required
25contribution of capital within 30 days after the date of the
27Section 1811-F. Innovate in PA Program.
30(b) Fund.--The authority shall have the power and duty to
1establish the Innovate in PA Fund within this authority.
8(2) Forty-five percent shall be distributed to the
9Venture Investment Program for use according to program
10guidelines, including traditional venture investments or
11impact investments. The authority may consider impact
12investments based on performance. Impact investments may not
13exceed 15% of the Venture Investment Program distribution
14under this paragraph.
18Section 1812-F. Guidelines.
22Section 1813-F. Report.
23(a) Duties.--On or before January 1, 2015, and January 1 of
24each subsequent year, the department, in consultation with the
25authority and each regional biotechnology research center, shall
26do the following:
29(i) The Governor.
30(ii) The chairman and minority chairman of the
1Appropriations Committee of the Senate.
8(1) The name of the purchaser of premiums tax credits.
1NEIGHBORHOOD IMPROVEMENT ZONES
2Section 1901-B. Scope of article.
3This article relates to neighborhood improvement zones.
4Section 1902-B. Definitions.
13"City." A city of the third class with, on the date of the
14designation of a neighborhood improvement zone by the
15contracting authority, a population of at least 106,000, based
16on the most recent Federal decennial census.
17"Contracting authority." An authority created under 53
18Pa.C.S. Ch. 56 (relating to municipal authorities) for the
19purpose of designating a neighborhood improvement zone and
20constructing a facility or other authority created under the
21laws of this Commonwealth which is eligible to apply for and
22receive redevelopment assistance capital grants under Chapter 3
23of the act of February 9, 1999 (P.L.1, No.1), known as the
24Capital Facilities Debt Enabling Act.
25"Department." The Department of Revenue of the Commonwealth.
26"Earned income tax." A tax or portion of a tax imposed on
27earned income within a neighborhood improvement zone under the
28act of December 31, 1965 (P.L.1257, No.511), known as The Local
29Tax Enabling Act, which a city, or a school district contained
30entirely within the boundaries of or coterminous with the city,
1is entitled to receive.
2"Facility." A stadium, arena or other structure owned or
3leased by a professional sports organization at which
4professional athletic events are conducted in the presence of
5individuals who pay admission to view the event constructed or
6operated by the contracting authority.
7"Facility complex." A development or complex of residential,
8commercial, exhibition, hospitality, conference, retail and
9community uses which includes a stadium arena or other place
10owned, leased or utilized by a professional sports organization
11at which a professional athletic event or other events are
12conducted in the presence of individuals who pay admission to
13view the event.
22(1) Owns a professional sports franchise.
25"Qualified business." An entity authorized to conduct
26business in this Commonwealth which is located or partially
27located within a neighborhood improvement zone and is engaged in
28the active conduct of a trade or business for the taxable year.
29An agent, broker or representative of a business shall not be
30considered to be in the active conduct of trade or business for
2Section 1903-B. Facility.
3The contracting authority may designate a neighborhood
4improvement zone of not greater than 130 acres in which a
5facility or facility complex may be constructed and may borrow
6funds for the purpose of improvement and development within the
7neighborhood improvement zone and construction of a facility or
8facility complex within the zone.
9Section 1904-B. Neighborhood Improvement Zone Funds.
10(a) Special funds.--Following the designation of a
11neighborhood improvement zone, the contracting authority shall,
12within ten days of making the designation or, in the case of a
13neighborhood improvement zone designated prior to July 1, 2012,
14within ten days of July 2, 2012, notify the State Treasurer of
15the designation. Upon the notice, the State Treasurer shall
16establish a special fund for the benefit of each contracting
17authority to be known as the "Neighborhood Improvement Zone
18Fund." Interest income derived from investment of the money in
19each fund shall be credited by the Treasury Department to the
30(A) The refund is for a tax:
1(I) set forth in subsection (b); and
2(II) certified as paid under subsection (b).
7(2) In addition to any penalties imposed under this act
8for failure to timely pay State taxes, failure to file a
9timely and complete report under paragraph (1) shall result
10in the imposition of a penalty of 10% of all State taxes,
11calculated in accordance with subsection (b), which were
12payable by the qualified business in the prior calendar year.
13(3) Any penalty imposed under this subsection shall be
14imposed, assessed and collected by the department under the
15provisions for imposing, assessing and collecting penalties
16under Article II of this act. When the penalty is received,
17the money shall be transferred from the General Fund to the
18fund of the contracting authority that designated the
19neighborhood improvement zone in which the qualifying
20business is located.
21(4) Within 30 days of the end of each calendar year,
22each qualified business shall file a report with the local
23taxing authority reporting all local taxes, calculated in
24accordance with subsection (b), which were paid by the
25qualified business in the prior calendar year. The report
26from each qualified business shall also list any local tax
27refunds of taxes set forth in subsection (b) received in the
28prior calendar year by the qualified business and any refunds
29related to the local taxes as calculated in accordance with
30subsection (b). The report shall be in a form and manner
1required by the department.
13(2) An entity collecting a local tax that, on July 2,
142012, is in possession of money attributable to a local tax
15not included in the amount to be calculated and certified
16under subsection (b) shall promptly remit that money to the
17local taxing authority entitled to receive the money.
18(3) Transfer and repayment is subject to the following:
1necessary to recover the money from the contracting
2authority, including by way of setoff from money to be
3paid to the contracting authority under paragraph (1).
4The contracting authority shall comply with a demand made
5by the State Treasurer for the repayment of money under
16(b) Calculation.--Within 60 days of the end of each calendar
17year, the department shall certify separately for each
18neighborhood improvement zone the amounts of State taxes paid,
19less any State tax refunds received, by the qualified businesses
20filing reports under subsection (a.1)(1) to the Office of the
21Budget. Beginning in the first full calendar year following the
22designation of a neighborhood improvement zone and in each
23calendar year thereafter, by November 1, the department shall
24calculate, in accordance with this subsection, amounts of State
25taxes actually received by the Commonwealth from each qualified
26business that filed a report under subsection (a.1)(1) in the
27prior calendar year, and the department shall certify the
28amounts received to the office. An entity collecting a local tax
29within the neighborhood improvement zone shall, within 30 days
30of the end of each calendar year, submit all of the local taxes
1that are to be calculated under this subsection and which were
2paid in the prior calendar year, less any certified local tax
3refunds received by a qualified business in the prior calendar
4year, to the State Treasurer to be deposited in the fund under
5subsection (d) of the contracting authority that established the
6neighborhood improvement zone. This subsection shall not apply
7to any taxes subject to a valid pledge or security interest
8entered into in order to secure debt service on bonds if the
9pledge or security interest was entered into prior to May 1,
102011, or in the case of the neighborhood improvement zone
11designated after July 1, 2011, on the date of the designation,
12and is still in effect. The following shall be the amounts
13calculated and certified separately for each neighborhood
15(1) An amount equal to all corporate net income tax,
16capital stock and franchise tax, personal income tax,
17business privilege tax, business privilege licensing fees and
18earned income tax related to the ownership and operation of a
19professional sports organization conducting professional
20athletic events at the facility or facility complex.
21(2) An amount equal to all of the following:
22(i) All personal income tax, earned income tax and
23local services tax withheld from its employees by a
24professional sports organization conducting professional
25athletic events at the facility or facility complex.
26(ii) All personal income tax, earned income tax and
27local services tax withheld from the employees of any
28provider of events at or services to, or any operator of
29an enterprise in, the facility or facility complex.
30(iii) All personal income tax, earned income tax and
5(3) An amount equal to all sales and use tax related to
6the operation of the professional sports organization and the
7facility and enterprises developed as part of the facility
8complex. This paragraph shall include sales and use tax paid
9by any provider of events or activities at or services to the
10facility or facility complex, including sales and use tax
11paid by vendors and concessionaires and contractors at the
12facility or facility complex.
16(5) The amount paid by the professional sports
17organization or by any provider of events or activities at or
18services to the facility or facility complex of any new tax
19enacted by the Commonwealth following October 9, 2009.
20(6) An amount equal to all personal income tax, earned
21income tax and local services tax withheld from personnel by
22the professional sports organization or by a contractor or
23other entity involved in the construction of the facility or
25(7) An amount equal to all sales and use tax paid on
26materials and other construction costs, whether withheld or
27paid by the professional sports organization or other entity,
28directly related to the construction of the facility or
30(8) An amount equal to all of the following:
1(i) All corporate net income tax, capital stock and
2franchise tax, personal income tax, business privilege
3tax, business privilege licensing fees and earned income
4tax related to the ownership and operation of any
5qualified business within the neighborhood improvement
11(iii) All personal income tax, earned income tax and
12local services tax withheld from the employees of a
13qualified business that provides events, activities or
14services in the neighborhood improvement zone.
15(iv) All personal income tax, earned income tax and
16local services tax to which the Commonwealth would be
17entitled from performers or other participants at an
18event or activity in the neighborhood improvement zone.
19(v) All sales and use tax related to the operation
20of a qualified business within the neighborhood
21improvement zone. This subparagraph shall include sales
22and use tax paid by a qualified business that provides
23events, activities or services in the neighborhood
1by the Commonwealth following October 9, 2009.
2(viii) All personal income tax, earned income tax
3and local services tax withheld from personnel by a
4qualified business involved in the improvement,
5development or construction of the neighborhood
7(ix) All sales and use tax paid on materials and
8other construction costs, whether withheld or paid by the
9professional sports organization or other qualified
10business, directly related to the improvement,
11development or construction of the neighborhood
13(x) An amount equal to any amusement tax paid by a
14qualified business operating in the neighborhood
15improvement zone. No political subdivision or other
16entity authorized to collect amusement taxes may impose
17or increase the rate of any tax on admissions to places
18of entertainment, exhibition, amusement or upon athletic
19events in the neighborhood improvement zone which are not
20in effect on the date the neighborhood improvement zone
21is designated by the contracting authority.
22(9) Except for a tax levied against real property and
23notwithstanding any other law, an amount equal to any tax
24imposed by the Commonwealth or any of its political
25subdivisions on a qualified business engaged in an activity
26within the neighborhood improvement zone or directly or
27indirectly on any sale or purchase of goods or services,
28where the point of sale or purchase is within the
29neighborhood improvement zone.
30(c) State tax liability apportionment.--For the purpose of
1making the calculations under subsection (b), the State tax
2liability of a qualified business shall be apportioned to the
3neighborhood improvement zone by multiplying the Pennsylvania
4State tax liability by a fraction, the numerator of which is the
5property factor plus the payroll factor plus the sales factor
6and the denominator of which is three, in accordance with the
8(1) The property factor is a fraction, the numerator of
9which is the average value of the taxpayer's real and
10tangible personal property owned or rented and used in the
11neighborhood improvement zone during the tax period and the
12denominator of which is the average value of all the
13taxpayer's real and tangible personal property owned or
14rented and used in this Commonwealth during the tax period
15but shall not include the security interest of any
16corporation as seller or lessor in personal property sold or
17leased under a conditional sale, bailment lease, chattel
18mortgage or other contract providing for the retention of a
19lien or title as security for the sale price of the property.
20(2) The following apply:
21(i) The payroll factor is a fraction, the numerator
22of which is the total amount paid in the neighborhood
23improvement zone during the tax period by the taxpayer
24for compensation and the denominator of which is the
25total compensation paid in this Commonwealth during the
1(B) the person's service is performed both
2within and without the neighborhood improvement zone,
3but the service performed without the neighborhood
4improvement zone is incidental to the person's
5service within the neighborhood improvement zone; or
6(C) some of the service is performed in the
7neighborhood improvement zone and the base of
8operations or, if there is no base of operations, the
9place from which the service is directed or
10controlled is in the neighborhood improvement zone,
11or the base of operations or the place from which the
12service is directed or controlled is not in any
13location in which some part of the service is
14performed, but the person's residence is in the
15neighborhood improvement zone.
16(3) The sales factor is a fraction, the numerator of
17which is the total sales of the taxpayer in the neighborhood
18improvement zone during the tax period and the denominator of
19which is the total sales of the taxpayer in this Commonwealth
20during the tax period.
21(i) Sales of tangible personal property are in the
22neighborhood improvement zone if the property is
23delivered or shipped to a purchaser that takes possession
24within the neighborhood improvement zone regardless of
25the F.O.B. point or other conditions of the sale.
30(B) the income-producing activity is performed
1both within and without the neighborhood improvement
2zone and a greater proportion of the income-producing
3activity is performed in the neighborhood improvement
4zone than in any other location, based on costs of
7(1) Within ten days of receiving certification under
8subsection (b), the Secretary of the Budget shall direct the
9State Treasurer to, notwithstanding any other law, transfer
10the amounts certified under subsection (b) for each
11neighborhood improvement zone from the General Fund to the
12fund of the contracting authority that established the
13neighborhood improvement zone. Beginning in the second
14calendar year following the designation of a neighborhood
15improvement zone and in each year thereafter, the amounts
16certified by the secretary to the State Treasurer and the
17amounts transferred by the State Treasurer to the fund of
18each contracting authority shall be determined as follows:
27(iv) Subtract from the sum under subparagraph (iii)
28any amounts certified under subsection (b) which are less
29than the amounts previously certified under subsection
30(b) with respect to the second prior calendar year.
1(2) The State Treasurer shall provide an annual transfer
2to the contracting authority until the bonds issued to
3finance and refinance the improvement and development of the
4neighborhood improvement zone and the construction of the
5facility or facility complex are retired. Each annual
6transfer to the contracting authority shall be equal to the
7balance of the fund of the contracting authority on the date
8of the transfer under paragraph (1).
11(1) The money may only be utilized as follows:
12(i) For payment of debt service, directly or
13indirectly through a multitiered ownership structure or
14other structure authorized by a contracting authority to
15facilitate financing mechanisms, on bonds or on
16refinancing loans used to repay bonds issued to finance