PRIOR PRINTER'S NOS. 473, 1122, 1661, 2199
PRINTER'S NO. 2202
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
AS AMENDED ON THIRD CONSIDERATION, IN SENATE, 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
25authority; in personal income tax, further providing for
1definitions, for classes of income and for taxability of
2partners; providing for tax treatment determined at
3partnership level and for tax imposed at partnership level;
4further providing for income of a Pennsylvania S Corporation,
5for income taxes imposed by other states and for operational
6provisions; providing for contributions for the Children's
7Trust Fund and for contributions for American Red Cross;
8further providing for general rule, for return of
9Pennsylvania S Corporation, for requirements concerning
10returns, notices, records and statements and for additions,
11penalties and fees; providing for citation authority; in
12corporate net income tax, further providing for definitions
13and for reports and payment of tax; in corporate stock and
14franchise tax, further providing for imposition and for
15expiration; in bank and trust company shares tax, further
16providing for imposition of tax, ascertainment of taxable
17amount and exclusion of United States obligations, for
18apportionment and for definitions; in realty transfer tax,
19further providing for definitions, for excluded transactions,
20for imposition of tax and for acquired company; providing for
21nonlicensed corporation pari-mutuel wagering tax; in film
22production tax credit, further providing for definitions, and
23for credit for qualified film production expenses; in
24educational opportunity scholarship tax credit, further
25providing for scholarships; repealing provisions relating to
26coal waste removal and ultraclean fuels tax credit; making an
27editorial change; in job creation tax credit, further
28providing for tax credits; providing for city revitalization
29and improvement zones, for mobile telecommunications
30broadband investment tax credit, for the Innovate in PA
31Program, for neighborhood improvement zones and for Keystone
32Special Development Zone program; in inheritance tax, further
33providing for transfers not subject to tax and for exemption
34for poverty; in inheritance tax, further providing for
35liabilities and for deductions not allowed; in procedure and
36administration, further providing for definitions and for
37petition for reassessment; providing for the Board of Finance
38and Revenue; further providing for review by the Board of
39Finance and Revenue; providing for a report concerning the
40significant changes in the structure and regulatory
41environment within the banking industry; and making related
51* * *
13* * *
14(23) A transfer of real estate:
15(i) for no or nominal consideration from the Commonwealth or
16any of its instrumentalities, agencies or political subdivisions
17to a volunteer emergency medical services agency, volunteer fire
18company or volunteer rescue company; or
25Section 4. This act shall take effect immediately.
3* * *
13(A) customer service and support;
14(B) technical assistance;
15(C) help desk service;
16(D) providing information;
17(E) conducting surveys;
18(F) revenue collections; or
19(G) receiving orders or reservations.
27* * *
5Section 206. Credit Against Tax.--(a) A credit against the
6tax imposed by section 202 shall be granted with respect to
7tangible personal property or services purchased for use outside
8the Commonwealth equal to the tax paid to another state by
9reason of the imposition by such other state of a tax similar to
10the tax imposed by this article: Provided, however, That no such
11credit shall be granted unless such other state grants
12substantially similar tax relief by reason of the payment of tax
13under this article or under the Tax Act of 1963 for Education.
14[(b) A credit against the tax imposed by section 202 on
15telecommunications services shall be granted to a call center
16for gross receipts tax paid by a telephone company on the
17receipts derived from the sale of incoming and outgoing
18interstate telecommunications services to the call center under
19section 1101(a)(2). The following apply:
20(1) A telephone company, upon request, shall notify a call
21center of the amount of gross receipts tax paid by the telephone
22company on the receipts derived from the sale of incoming and
23outgoing interstate telecommunications services to the call
1telecommunications services incurred in the prior calendar year.
2(4) By April 15 of the calendar year following the close of
3the calendar year during which the gross receipts tax was
4incurred, the department shall notify the applicant of the
5amount of the applicant's tax credit approved by the department.
6(5) The total amount of tax credits provided for in this
7subsection and approved by the department shall not exceed
8thirty million dollars ($30,000,000) in any fiscal year. If the
9total amount of tax credits applied for by all applicants
10exceeds the amount allocated for those credits, then the credit
11to be received by each applicant shall be determined as follows:
13(A) the tax credit applied for by the applicant; by
17(A) the quotient under subparagraph (i); by
18(B) the amount allocated for all tax credits.]
19Section 208. Licenses.--(a) Every person maintaining a
20place of business in this Commonwealth, selling or leasing
21services or tangible personal property, the sale or use of which
22is subject to tax and who has not hitherto obtained a license
23from the department, shall, prior to the beginning of business
24thereafter, make application to the department, on a form
25prescribed by the department, for a license. If such person
26maintains more than one place of business in this Commonwealth,
27the license shall be issued for the principal place of business
28in this Commonwealth.
1of this section, provided said applicant shall have filed all
2required State tax reports and paid any State taxes not subject
3to a timely perfected administrative or judicial appeal or
4subject to a duly authorized deferred payment plan. Such license
5shall be nonassignable. All licensees as of the effective date
6of this subsection shall be required to file for renewal of said
7license on or before January 31, 1992. Licenses issued through
8April 30, 1992, shall be based on a staggered renewal system
9established by the department. Thereafter, any license issued
10shall be valid for a period of five years.
11(b.1) If an applicant for a license or any person holding a
12license has not filed all required State tax reports and paid
13any State taxes not subject to a timely perfected administrative
14or judicial appeal or subject to a duly authorized deferred
15payment plan, the department may refuse to issue, may suspend or
16may revoke said license. The department shall notify the
17applicant or licensee of any refusal, suspension or revocation.
18Such notice shall contain a statement that the refusal,
19suspension or revocation may be made public. Such notice shall
20be made by first class mail. An applicant or licensee aggrieved
21by the determination of the department may file an appeal
22pursuant to the provisions for administrative appeals in this
23article, except that the appeal must be filed within thirty (30)
24days of the date of the notice. In the case of a suspension or
25revocation which is appealed, the license shall remain valid
26pending a final outcome of the appeals process. Notwithstanding
27sections 274, 353(f), 408(b), 603, 702, 802, 904 and 1102 of the
28act or any other provision of law to the contrary, if no appeal
29is taken or if an appeal is taken and denied at the conclusion
30of the appeal process, the department may disclose, by
1publication or otherwise, the identity of a person and the fact
2that the person's license has been refused, suspended or revoked
3under this subsection. Disclosure may include the basis for
4refusal, suspension or revocation.
5(c) A person that maintains a place of business in this
6Commonwealth for the purpose of selling or leasing services or
7tangible personal property, the sale or use of which is subject
8to tax, without having [first been licensed by the department] a
9valid license at the time of the sale or lease shall be guilty
10of a summary offense and, upon conviction thereof, be sentenced
11to pay a fine of not less than three hundred dollars ($300) nor
12more than one thousand five hundred ($1,500) and, in default
13thereof, to undergo imprisonment of not less than five days nor
14more than thirty days. The penalties imposed by this subsection
15shall be in addition to any other penalties imposed by this
16article. For purposes of this subsection, the offering for sale
17or lease of any service or tangible personal property, the sale
18or use of which is subject to tax, during any calendar day shall
19constitute a separate violation. The Secretary of Revenue may
20designate employes of the department to enforce the provisions
21of this subsection. The employes shall exhibit proof of and be
22within the scope of the designation when instituting proceedings
23as provided by the Pennsylvania Rules of Criminal Procedure.
27Section 4. Section 226 of the act is repealed:
1hereby authorized to receive use tax due and payable under the
2provisions of this article from any person other than a
3licensee. The receiving of such taxes shall be pursuant to rules
4and regulations promulgated by the department and upon forms
5furnished by the department. Each county treasurer shall remit
6to the department all use taxes received under the authority of
7this section minus the costs of administering this provision not
8to exceed one per cent of the amount of use taxes received,
9which amount shall be retained in lieu of any commission
10otherwise allowable by law for the collection of such tax.]
11Section 5. The act is amended by adding a section to read:
12Section 278. Remote Sales Reports.--(a) Within 90 days of
13the publication of the notice under subsection (b), the
14Independent Fiscal Office, in conjunction with the Department of
15Revenue, shall submit a detailed report to the chairman and
16minority chairman of the Appropriations Committee of the Senate,
17the chairman and minority chairman of the Finance Committee of
18the Senate, the chairman and minority chairman of the
19Appropriations Committee of the House of Representatives and the
20chairman and minority chairman of the Finance Committee of the
21House of Representatives outlining the plans concerning the
22implementation of the legislation referenced in subsection (b)
23or other substantially similar Federal legislation, which would
24grant the Commonwealth the authority to impose and collect the
25tax under this article due on sales from remote sellers. The
26report shall include all of the following:
27(1) The amount of State funds necessary to implement the
28legislation referenced in subsection (b) or other substantially
29similar legislation. The amount needed shall be itemized, and
30all costs, including personnel, office expenses and other
1related costs, shall be included.
2(2) The amount of State tax revenue expected to result from
3the implementation of the legislation referenced in subsection
4(b) or other substantially similar legislation for the fiscal
5year and for five fiscal years thereafter.
25Section 301. Definitions.--Any reference in this article to
26the Internal Revenue Code of 1986 shall mean the Internal
27Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.),
28as amended to January 1, 1997, unless the reference contains the
29phrase "as amended" and refers to no other date, in which case
30the reference shall be to the Internal Revenue Code of 1986 as
1it exists as of the time of application of this article. The
2following words, terms and phrases when used in this article
3shall have the meaning ascribed to them in this section except
4where the context clearly indicates a different meaning:
5* * *
6(d.2) "Corporate item" means an item, including income, gain
7or loss, deduction or credit determined at the Pennsylvania S
8corporation level, which is required to be taken into account
9for a Pennsylvania S corporation's taxable year.
10* * *
11(n.2) "Partnership item" means an item, including income,
12gain or loss, deduction or credit determined at the partnership
13level, which is required to be taken into account for a
14partnership's taxable year.
15* * *
16(o.4) "Publicly traded partnership" means an entity defined
17under section 7704 of the Internal Revenue Code of 1986 (Public
18Law 99-514, 26 U.S.C. § 7704) with equity securities registered
19with the Securities and Exchange Commission under section 12 of
20the Securities Exchange Act of 1934 (48 Stat. 881, 15 U.S.C. §
22* * *
23(t) "State" means, except as provided under section 314(a),
24any state or commonwealth of the United States, the District of
25Columbia, the Commonwealth of Puerto Rico, any territory or
26possession of the United States and any foreign country.
27* * *
1SPECIAL TAXING AUTHORITY
2Section 201-B. Special taxing authority.
3(a) Imposition of tax.--
4(1) A city of the first class may elect to impose a tax
5on the sale at retail of tangible personal property or
6services or use of tangible personal property or services
7purchased at retail, as those terms are defined in section
9(2) The tax imposed under this section shall be in
10addition to the tax authorized under section 503(a) and (b)
11of the act of June 5, 1991 (P.L. 9, No. 6), known as the
12Pennsylvania Intergovernmental Cooperation Authority Act for
13Cities of the First Class.
17(4) A tax imposed under this subsection on sales or uses
18shall be paid to and received by the Department of Revenue
19and, along with interest and penalties, less any refunds and
20credits paid, shall be credited to the local sales and use
21tax fund created under the Pennsylvania Intergovernmental
22Cooperation Authority Act for Cities of the First Class.
23Money in the fund shall be disbursed as provided in section
24509 of the Pennsylvania Intergovernmental Cooperation
25Authority Act for Cities of the First Class.
26(b) Rate.--The tax authorized under subsection (a) shall be
27imposed and collected at the rate of 1% and shall be computed as
28set forth in section 503(e)(2) of the Pennsylvania
29Intergovernmental Cooperation Authority Act for Cities of the
1(c) Collection.--The tax authorized under subsection (a)
2shall be administered, collected, deposited and disbursed in the
3same manner as the tax imposed under Chapter 5 of the
4Pennsylvania Intergovernmental Cooperation Authority Act for
5Cities of the First Class and the situs of the tax shall be
6determined in accordance with the Pennsylvania Intergovernmental
7Cooperation Authority Act and Article II-A. The Department of
8Revenue shall use the money received from the tax authorized
9under Chapter 5 of the Pennsylvania Intergovernmental
10Cooperation Authority Act for Cities of the First Class to cover
11costs for the administration of the tax authorized under
12subsection (a). The Department of Revenue shall not retain any
13additional amounts for the cost of collecting the tax authorized
14under subsection (a). No additional fee shall be charged for a
15license or license renewal other than the license or renewal fee
16authorized and imposed under Article II.
17(d) Municipal action.--In order to impose the tax, the
18governing body of the city shall adopt an ordinance stating the
19tax rate. The ordinance may be adopted prior to the effective
20date of this subsection. The ordinance shall take effect no
21earlier than 20 days after the adoption of the ordinance or 20
22days after the effective date of this section, whichever is
23later. A certified copy of the city ordinance shall be delivered
24to the Department of Revenue within ten days prior to or after
25the effective date of the ordinance. A certified copy of an
26ordinance to repeal the tax authorized under subsection (a)
27shall be delivered to the Department of Revenue at least 30 days
28prior to the effective date of repeal.
29(e) Use of tax receipts.--
30(1) Money received by the city from the levy, assessment
1and collection of the tax authorized under subsection (a) may
2only be paid to a school district of the first class in an
3amount of up to $120,000,000 if the Secretary of Education
4has made a determination, in the form of an annual
5certification published in the Pennsylvania Bulletin, that
6the school district of the first class has, in the judgment
7of the Secretary of Education, began implementation of
8reforms that provide for fiscal stability, educational
9improvement and operational control.
14(i) Deliver written certification of the
15determination to the majority and minority chairpersons
16of the Appropriations Committees of the Senate and the
17House of Representatives, the majority and minority
18chairpersons of the Education Committees of the Senate
19and the House of Representatives, the chief executive of
20the school district of the first class and the Secretary
21of the Department of Revenue.
22(ii) Upon receipt of the certification from the
23Secretary of Education, the Secretary of the Department
24of Revenue shall direct the State Treasurer to disburse,
25on or before the 10th day of every month, to the school
26district of the first class the total amount of money
27which is, as of the last day of the previous month,
28contained in the Local Sales and Use Tax Fund.
6(1) for fiscal years 2014-2015, 2015-2016, 2016-2017 and
72017-2018, the first $15,000,000 in each of those fiscal
8years may be retained for the payment of debt service
9incurred by the city for the benefit of a school district of
10the first class; and
11(2) the remaining money shall be paid to a city of the
12first class in accordance with the act of December 18, 1984
13(P.L.1005, No.205), known as the Municipal Pension Plan
14Funding Standard and Recovery Act.
20* * *
21(2) Net profits. The net income from the operation of a
22business, profession, or other activity, after provision for all
23costs and expenses incurred in the conduct thereof, determined
24either on a cash or accrual basis in accordance with accepted
25accounting principles and practices but without deduction of
26taxes based on income. For purposes of calculating net income
27under this paragraph, to the extent a taxpayer properly deducts
28an amount under section 195(b)(1)(A) of the Internal Revenue
29Code of 1986 (26 U.S.C. § 195(b)(1)(A)), as amended, and the
30regulations promulgated under section 195(b)(1)(A) of the
3* * *
4(a.8) A person who incurs intangible drilling and
5development costs shall capitalize the costs unless the taxpayer
6elects to currently expense the costs for Federal income tax
7purposes under section 263(c) of the Internal Revenue Code of
81986, as amended, and regulations thereunder, is required to
9capitalize the costs and recover them over a ten-year period in
10the taxable year the costs are incurred; or a person may elect
11to currently expense up to one-third of the costs in the taxable
12year in which the costs are incurred and recover the remaining
13costs over a ten-year period beginning in the taxable year the
14costs are incurred.
17Section 306. Taxability of Partners.--[A] Except as provided
18under section 306.2, a partnership as an entity shall not be
19subject to the tax imposed by this article, but the income or
20gain of a member of a partnership in respect of said partnership
21shall be subject to the tax and the tax shall be imposed on his
22share, whether or not distributed, of the income or gain
23received by the partnership for its taxable year ending within
24or with the member's taxable year.
25Section 9. The act is amended by adding sections to read:
26Section 306.1. Tax Treatment Determined at Partnership
27Level.--The classification or character of a partnership item
28shall be determined at the partnership level. This section shall
29not prohibit the department from adjusting a partner's return.
30Section 306.2. Tax Imposed at Partnership Level.--(a) A
1partnership underreporting income by more than one million
2dollars ($1,000,000) for any tax year shall be liable for the
3tax, excluding interest, penalties or additions at the tax rate
4applicable to the tax year, on the underreported income without
5regard to the tax liability of the partners for the
6underreported income. The department shall assess the
7partnership for the tax on the underreported income. The
8department shall not assess the partners for the underreported
9income or the tax thereon; rather, the partnership shall be
10required to provide an amended statement to each partner as
11required under section 335(c)(3) of the partner's pro rata share
12of the underreported income within ninety days of the assessment
13becoming final. Nothing in this subsection shall relieve the
14partners of their tax liability on the underreported income.
15(a.1) Each partner shall be allowed a credit for such
16partner's share of the tax assessed against the partnership
17under subsection (a) and paid by the partnership. The credit
18shall be allowed for the partner's taxable year in which the
19underreported income was required to be reported.
26(3) A partnership which has only partners who are natural
27persons and which elects to be subject to this subsection. The
28election must be included on the partnership return to be filed
29with the department.
30(c) This section shall not apply to a publicly traded
10Section 307.8. Income of a Pennsylvania S Corporation.--(a)
11A Pennsylvania S corporation shall not be subject to the tax
12imposed by this article, except as provided under subsection
13(f), but the shareholders of the Pennsylvania S corporation
14shall be subject to the tax imposed under this article as
15provided in this article.
16* * *
19(1) A Pennsylvania S corporation underreporting income
20by more than one million dollars ($1,000,000) for any tax
21year shall be liable for the tax, excluding interest,
22penalties or additions, at the tax rate applicable to the tax
23year, on the underreported income without regard to the tax
24liability of the shareholders for the underreported income.
25The department shall assess the Pennsylvania S corporation
26for the tax on the underreported income. The department shall
27not assess the shareholders for the underreported income or
28the tax thereon; rather, the Pennsylvania S corporation shall
29be required to provide an amended statement to each
30shareholder as required under section 330.1 of the
1shareholder's pro rata share of the underreported income
2within 90 days of the assessment becoming final. Nothing in
3this subsection shall relieve the shareholders of their tax
4liability on the underreported income.
5(1.1) Each shareholder shall be allowed a credit for the
6shareholder's share of the tax assessed against the Pennsylvania
7S corporation under paragraph (1) and paid by the Pennsylvania S
8corporation. The credit shall be allowed for the shareholder's
9taxable year in which the underreported income was required to
1under this article for the amount of any income tax, wage tax or
2tax on or measured by gross or net earned or unearned income
3imposed on him or on a Pennsylvania S corporation in which he is
4a shareholder, to the extent of his pro rata share thereof
5determined in accordance with section 307.9, by another state
6with respect to income which is also subject to tax under this
7article. For purposes of this subsection, the term "state" shall
8only include a state of the United States, the District of
9Columbia, the Commonwealth of Puerto Rico and any territory or
10possession of the United States.
11* * *
14Section 315.9. Operational Provisions.--
15(b) Except as set forth in subsection (b.1), any checkoff
16established under this part and applicable for the first time in
17a taxable year beginning after December 31, 2009, shall expire
18four years after the beginning of such first taxable year.
23Section 13. The act is amended by adding sections to read:
24Section 315.10. Contributions for the Children's Trust
25Fund.--(a) The department shall provide a space on the
26Pennsylvania individual income tax return form whereby an
27individual may voluntarily designate a contribution of any
28amount desired to the Children's Trust Fund established in
29section 8 of the act of December 15, 1988 (P.L.1235, No.151),
30known as the "Children's Trust Fund Act."
1(b) The amount designated under subsection (a) by an
2individual on the income tax return form shall be deducted from
3the tax refund to which that individual is entitled and shall
4not constitute a charge against the income tax revenues due the
6(c) The department shall determine annually the total amount
7designated pursuant to this section, less reasonable
8administrative costs, and shall report the amount to the State
9Treasurer, who shall transfer the amount from the General Fund
10to the Children's Trust Fund.
11Section 315.11. Contributions for American Red Cross.--(a)
12The department shall provide a space on the Pennsylvania
13individual income tax return form by which an individual may
14voluntarily designate a contribution of any amount desired to
15the American Red Cross established under 36 U.S.C. Ch. 3001
16(relating to the American National Red Cross).
17(b) The amount designated under subsection (a) by an
18individual on the income tax return form shall be deducted from
19the tax refund to which the individual is entitled and shall not
20constitute a charge against the income tax revenues due the
22(c) The department shall determine annually the total amount
23designated under this section, less reasonable administrative
24costs, and shall report the amount to the State Treasurer, who
25shall transfer the amount from the General Fund to the American
1within this Commonwealth for any taxable year and any portion of
2the income is allocable to a nonresident partner, beneficiary,
3member or shareholder thereof, the partnership, estate, trust or
4Pennsylvania S corporation shall pay a withholding tax under
5this section at the time and in the manner prescribed by the
6department; however, notwithstanding any other provision of this
7article, all such withholding tax shall be paid over on or
8before the fifteenth day of the fourth month following the end
9of the taxable year.
10(b) This section shall not apply to any publicly traded
11partnership as defined under section 7704 of the Internal
12Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 7704) with
13equity securities registered with the Securities and Exchange
14Commission under section 12 of the Securities Exchange Act of
151934 (48 Stat. 881, 15 U.S.C. § 78a).
19Section 330.1. Return of Pennsylvania S Corporation.--(a)
20Every Pennsylvania S corporation shall make a return for each
21taxable year, stating specifically all items of gross income and
22deductions, the names and addresses of all persons owning stock
23in the corporation at any time during the taxable year, the
24number of shares of stock owned by each shareholder at all times
25during the taxable year, the amount of money and other property
26distributed by the corporation during the taxable year to each
27shareholder, the date of each distribution, each shareholder's
28pro rata share of each item of the corporation for the taxable
29year and such other information as the department may require.
30(b) The return shall be filed on or before thirty days after
3(c) Every Pennsylvania S corporation shall also submit to
4the department a true copy of the income tax return filed with
5the Federal Government at the time the return required under
6subsection (a) is filed.
7(d) Each Pennsylvania S corporation required to file a
8return under subsection (a) for a taxable year shall, on or
9before the day on which the return for the taxable year was
10filed, furnish to each person who is a shareholder at any time
11during the taxable year, a written statement of the
12shareholder's pro rata share of each item on the corporate
13return, in a form required by the department.
17Section 335. Requirements Concerning Returns, Notices,
18Records and Statements.--(a) The department may prescribe by
19regulation for the keeping of records, the content and form of
20returns, declarations, statements and other documents and the
21filing of copies of Federal income tax returns and
22determinations. The department may require any person, by
23regulation or notice served upon such person, to make such
24returns, render such statements, or keep such records, as the
25department may deem sufficient to show whether or not such
26person is liable for tax under this article.
4(ii) Any person with respect to whom a return, declaration,
5statement, or other document is required under the authority of
6this article to make a return, declaration, statement, or other
7document with respect to another person, shall request from such
8other person, and shall include in any such return, declaration,
9statement, or other document, such identifying number as may be
10prescribed for securing proper identification of such other
15(c) (1) Every partnership, estate or trust having a
16resident partner or a resident beneficiary or every partnership,
17estate or trust having any income derived from sources within
18this Commonwealth shall make a return for the taxable year
19setting forth all items of income, loss and deduction, and such
20other pertinent information as the department may [by
21regulations prescribe] require. Such return shall be filed on or
22before the fifteenth day of the fourth month following the close
23of each taxable year. For purposes of this subsection, "taxable
24year" means year or period which would be a taxable year of the
25partnership if it were subject to tax under this article.
26(2) Every partnership, estate or trust required to file a
27return under paragraph (1) shall also file with the department a
28true copy of the income tax return filed with the Federal
29Government at the time the return required under paragraph (1)
1(3) Every partnership, estate or trust required to file a
2return under paragraph (1) for any taxable year shall, on or
3before the day the return is filed, furnish to each partner or
4nominee for another person or to each beneficiary to whom the
5income or gains of the estate or trust is taxable, a written
6statement of the partner's pro rata share of each item on the
7partnership return or the beneficiary's pro rata share of income
8on the estate or trust return, in a form required by the
10(4) A partnership required to file a return under paragraph
11(1) for a taxable year shall, on or before the day the return is
12filed, furnish to each partner classified as a corporation,
13partnership or disregarded entity for Federal income tax
14purposes a copy of the Pennsylvania income tax form reporting
15corporate partner apportioned business income or loss. A
16reporting partnership shall not be required to provide a partner
17who is either a partnership or disregarded entity a copy of this
18form, if the reporting partnership is able to determine that an
19entity classified as a corporation for Federal income tax
20purposes is not an indirect owner of the reporting partnership.
21(d) The department may prescribe regulations requiring
22returns of information to be made and filed on or before
23February 28 of each year as to the payment or crediting in any
24calendar year of amounts of ten dollars ($10) or more to any
25taxpayer. Such returns may be required of any person, including
26lessees or mortgagors of real or personal property, fiduciaries,
27employers and all officers and employes of this Commonwealth, or
28of any municipal corporation or political subdivision of this
29Commonwealth having the control, receipt, custody, disposal or
30payment of interest, rents, salaries, wages, premiums,
1annuities, compensations, remunerations, emoluments or other
2fixed or determinable gains, profits or income, except interest
3coupons payable to bearer. A duplicate of the statement as to
4tax withheld on compensation required to be furnished by an
5employer to an employe, shall constitute the return of
6information required to be made under this section with respect
7to such compensation.
8(e) Any person who is required to make a form W-2G return to
9the Secretary of the Treasury of the United States in regard to
10taxable gambling or lottery winnings from sources within this
11Commonwealth shall file a copy of the form with the department
12by March 1 of each year or, if filed electronically, by March 31
13of each year.
14(f) The following apply:
15(1) Any person who:
18(ii) makes payments of nonemploye compensation or payments
19under an oil and gas lease under subparagraph (i) to a resident
20or nonresident individual, an entity treated as a partnership
21for tax purposes or a single member limited liability company;
23(iii) is required to make a form 1099-MISC return to the
24Secretary of the Treasury of the United States with respect to
25the payments shall file a copy of form 1099-MISC with the
26department and send a copy of form 1099-MISC to the payee by the
27Federal filing deadline each year.
1(g) (1) Every estate, trust, Pennsylvania S Corporation or
2partnership, other than a publicly traded partnership, shall
3maintain at the end of the entity's taxable year an accurate
4list of partners, members, beneficiaries or shareholders. The
5list shall include the name, current address and tax
6identification number of all existing partners, members,
7beneficiaries or shareholders and of all partners, members,
8beneficiaries or shareholders, who were admitted or who withdrew
9during the taxable year, including the date of withdrawal and
11(2) If the entity under paragraph (1) does not maintain an
12accurate list as required, the tax, penalty and interest with
13respect to the entity shall be considered the tax, penalty and
14interest of the partnership, estate, trust or Pennsylvania S
15Corporation and of the general partner, tax matters partner,
16corporate officer or trustee.
19Section 352. Additions, Penalties and Fees.--* * *
20(f) (1) Any person required under the provisions of section
21317 to furnish a statement to an employe who wilfully furnishes
22a false or fraudulent statement, or who wilfully fails to
23furnish a statement in the manner, at the time, and showing the
24information required under section 317 and the regulations
25prescribed thereunder, shall, for each such failure, be subject
26to a penalty of fifty dollars ($50) for each employe.
27(2) Any person required [by regulation] to furnish an
28information return who furnishes a false or fraudulent return or
29who fails to file or provide an information return shall [for
30each failure] be subject to a penalty of two hundred fifty
2(3) Every partnership, estate, trust or Pennsylvania S
3corporation required to file a return with the department under
4the provisions of section 330.1 or 335(c) who furnishes a false
5or fraudulent return or who fails to file the return in the
6manner and at the time required under section 330.1 or 335(c)
7shall be subject to a penalty of $250 for each failure.
8(4) Any person required to file a copy of form 1099-MISC
9with the department under the provisions of section 335(f) who
10wilfully furnishes a false or fraudulent form or who wilfully
11fails to file the form in the manner, at the time and showing
12the information required under section 335(f) shall, for each
13such failure, be subject to a penalty of fifty dollars ($50).
14(5) Any person required under the provisions of section
15335(f) to furnish a copy of form 1099-MISC to a payee who
16wilfully furnishes a false or fraudulent form or who wilfully
17fails to furnish a form in the manner, at the time and showing
18the information required by section 335(f) shall, for each such
19failure, be subject to a penalty of fifty dollars ($50).
20* * *
21Section 18. The act is amended by adding a section to read:
22Section 352.2. Citation Authority.--(a) Notwithstanding any
23other provision of this act, any person who does any of the
24following commits a summary offense and, upon conviction, shall
25be subject to the fines and penalties imposed under section
26208(c) (relating to licenses):
27(1) Does not pay employer withholding tax, interest or
28penalty within ninety days after the due date and the tax
29liability due has not been timely appealed or subject to a duly
30authorized deferred payment plan.
1(2) Underpays an employer withholding tax, interest or
2penalty within ninety days after the due date and the tax
3liability due has not been timely appealed or subject to a duly
4authorized deferred payment plan.
5(3) Fails to file a tax employer withholding return or
6report, or any other reporting document within ninety days after
7the due date of the applicable payment or return, report or any
8other reporting document.
11(c) The Secretary of Revenue may designate employes of the
12department to enforce this subsection. The employes shall
13exhibit proof of and be within the scope of the designation when
14instituting proceedings as provided under the Pennsylvania Rules
15of Criminal Procedure.
16Section 19. Section 401(3)1, 2(a)(17) and 4(c)(1)(A)(IV) of
17the act, amended September 9, 1971 (P.L.437, No.105), are
18amended, clause (3)1 and 2 are amended by adding phrases,
19subclause 2(a) is amended by adding a paragraph, paragraphs
20(3)4(c)(1)(A) and 2(B) are amended by adding subparagraphs and
21the section is amended by adding clauses to read:
22Section 401. Definitions.--The following words, terms, and
23phrases, when used in this article, shall have the meaning
24ascribed to them in this section, except where the context
25clearly indicates a different meaning:
26* * *
27(3) "Taxable income." 1. * * *
1this paragraph to deny a deduction related to a fraudulent or
2sham transaction, no deduction shall be allowed for an
3intangible expense or cost, or an interest expense or cost,
4paid, accrued or incurred directly or indirectly in connection
5with one or more transactions with an affiliated entity. In
6calculating taxable income under this paragraph, when the
7taxpayer is engaged in one or more transactions with an
8affiliated entity that was subject to tax in this Commonwealth
9or another state or possession of the United States on a tax
10base that included the intangible expense or cost, or the
11interest expense or cost, paid, accrued or incurred by the
12taxpayer, the taxpayer shall receive a credit against tax due in
13this Commonwealth in an amount equal to the apportionment factor
14of the taxpayer in this Commonwealth multiplied by the greater
15of the following:
16(A) the tax liability of the affiliated entity with respect
17to the portion of its income representing the intangible expense
18or cost, or the interest expense or cost, paid, accrued or
19incurred by the taxpayer; or
23The credit issued under this paragraph shall not exceed the
24taxpayer's liability in this Commonwealth attributable to the
25net income taxed as a result of the adjustment required by this
27(2) The adjustment required by paragraph (1) shall not apply
28to a transaction that did not have as the principal purpose the
29avoidance of tax due under this article and was done at arm's
30length rates and terms.
1(3) The adjustment required by paragraph (1) shall not apply
2to a transaction between a taxpayer and an affiliated entity
3domiciled in a foreign nation which has in force a comprehensive
4income tax treaty with the United States providing for the
5allocation of all categories of income subject to taxation, or
6the withholding of tax, on royalties, licenses, fees and
7interest for the prevention of double taxation of the respective
8nations' residents and the sharing of information.
9(4) The adjustment required by paragraph (1) shall not apply
10to a transaction where an affiliated entity directly or
11indirectly paid, accrued or incurred a payment to a person who
12is not an affiliated entity, if the payment is paid, accrued or
13incurred on the intangible expense or cost, or interest expense
14or cost, and is equal to or less than the taxpayer's
15proportional share of the transaction. The taxpayer's
16proportional share shall be based on relative sales, assets,
17liabilities or another reasonable method.
182. In case the entire business of any corporation, other
19than a corporation engaged in doing business as a regulated
20investment company as defined by the Internal Revenue Code of
211986, is not transacted within this Commonwealth, the tax
22imposed by this article shall be based upon such portion of the
23taxable income of such corporation for the fiscal or calendar
24year, as defined in subclause 1 hereof, and may be determined as
26(a) Division of Income.
27* * *
7(II) If the tangible personal property is subsequently taken
8out of this State, the taxpayer may use a reasonably determined
9estimate of usage in this State to determine the extent of sale
10in this State.
11(C) (I) Sales from the sale of service, if the service is
12delivered to a location in this State. If the service is
13delivered both to a location in and outside this State, the sale
14is in this State based upon the percentage of total value of the
15service delivered to a location in this State.
16(II) If the state or states of assignment under subparagraph
17(I) cannot be determined for a customer who is an individual
18that is not a sole proprietor, a service is deemed to be
19delivered at the customer's billing address.
20(III) If the state or states of assignment under
21subparagraph (I) cannot be determined for a customer, except for
22a customer under subparagraph (II), a service is deemed to be
23delivered at the location from which the services were ordered
24in the customer's regular course of operations. If the location
25from which the services were ordered in the customer's regular
26course of operations cannot be determined, a service is deemed
27to be delivered at the customer's billing address.
30(A) The income-producing activity is performed in this
2(B) The income-producing activity is performed both in and
3outside this State and a greater proportion of the income-
4producing activity is performed in this State than in any other
5state, based on costs of performance.
6* * *
7(e) Satellite Television Services Providers.
8(1) All business income of providers of satellite television
9services shall be apportioned to this Commonwealth by
10multiplying the income by a fraction, the numerator of which is
11the value of equipment located in this Commonwealth that is
12owned or rented by the taxpayer or owned by an entity that is
13included with the taxpayer in a controlled group, as defined in
14section 267(f) of the Internal Revenue Code of 1986 (Public Law
1599-514, 26 U.S.C. § 166), and used by the taxpayer in
16generating, processing or transmitting satellite television
17services whether or not such equipment is affixed to real
18estate, and the denominator of which is the value of all such
19equipment located everywhere. The value of property owned by the
20taxpayer or owned by an entity included with the taxpayer in a
21controlled group and used by the taxpayer shall be its cost less
22depreciation per the books and records of the owner. The value
23of rented equipment shall be determined in accordance with
24paragraph (11) of phrase (a) of subclause 2 of this definition.
28* * *
294. * * *
30(c) (1) The net loss deduction shall be the lesser of:
1(A) * * *
2(IV) For taxable years beginning after December 31, 2009,
3the greater of twenty per cent of taxable income as determined
4under subclause 1 or, if applicable, subclause 2 or three
5million dollars ($3,000,000); [or]
6(V) For taxable years beginning after December 31, 2013, the
7greater of twenty-five per cent of taxable income as determined
8under subclause 1 or, if applicable, subclause 2 or four million
10(VI) For taxable years beginning after December 31, 2014,
11the greater of thirty per cent of taxable income as determined
12under subclause 1 or, if applicable, subclause 2 or five million
13dollars ($5,000,000); or
14* * *
15(2) * * *
16(B) The earliest net loss shall be carried over to the
17earliest taxable year to which it may be carried under this
18schedule. The total net loss deduction allowed in any taxable
19year shall not exceed:
20* * *
21(V) The greater of twenty-five per cent of taxable income as
22determined under subclause 1 or, if applicable, subclause 2 or
23four million dollars ($4,000,000) for taxable years beginning
24after December 31, 2013.
25(VI) The greater of thirty per cent of taxable income as
26determined under subclause 1 or, if applicable, subclause 2 or
27five million dollars ($5,000,000) for taxable years beginning
28after December 31, 2014.
29* * *
30(8) "Intangible expense or cost." Royalties, licenses or
1fees paid for the acquisition, use, maintenance, management,
2ownership, sale, exchange or other disposition of patents,
3patent applications, trade names, trademarks, service marks,
4copyrights, mask works or other similar expenses or costs.
5(9) "Interest expense or cost." A deduction allowed under
6section 163 of the Internal Revenue Code of 1986 (26 U.S.C. §
7163) to the extent that such deduction is directly related to an
8intangible expense or cost.
12(i) a stockholder who is an individual, or a member of the
13stockholder's family as set forth in section 318 of the Internal
14Revenue Code of 1986 (26 U.S.C. § 318), if the stockholder and
15the members of the stockholder's family own, directly,
16indirectly, beneficially or constructively, in the aggregate,
17more than fifty per cent of the value of the taxpayer's
19(ii) a stockholder, or a stockholder's partnership, limited
20liability company, estate, trust or corporation, if the
21stockholder and the stockholder's partnerships, limited
22liability companies, estates, trusts and corporations own
23directly, indirectly, beneficially or constructively, in the
24aggregate, more than fifty per cent of the value of the
25taxpayer's outstanding stock;
26(iii) a corporation, or a party related to the corporation
27in a manner that would require an attribution of stock from the
28corporation to the party or from the party to the corporation
29under the attribution rules of the Internal Revenue Code of
301986, if the taxpayer owns, directly, indirectly, beneficially
1or constructively, more than fifty per cent of the value of the
2corporation's outstanding stock. The attribution rules of
3section 318 of the Internal Revenue Code of 1986 shall apply for
4purposes of determining whether the ownership requirements of
5this definition have been met;
13Section 403. Reports and Payment of Tax.--* * *
14(d) If the officers of any corporation shall neglect, or
15refuse to make any report as herein required, or shall knowingly
16make any false report, [the following percentages of the amount
17of the tax shall be added by the department to the tax
18determined to be due on the first one thousand dollars ($1,000)
19of tax ten per cent, on the next four thousand dollars ($4,000)
20five per cent, and on everything in excess of five thousand
21dollars ($5,000) one per cent, no such] a penalty of five
22hundred dollars ($500) plus an additional one per cent for every
23dollar of tax determined to be due in excess of twenty-five
24thousand dollars ($25,000) shall be added to the tax determined
25to be due. No amounts added to the tax shall bear any interest
27* * *
30Section 602. Imposition of Tax.--* * *
17Section 701. Imposition of Tax.--(a) Every institution
18doing business in this Commonwealth shall, on or before March 15
19in each and every year, make to the Department of Revenue a
20report in writing, verified as required by law, setting forth
21the full number of shares of the capital stock subscribed for or
22issued, as of the preceding January 1, by such institution, and
23the taxable amount of such shares of capital stock determined
24pursuant to section 701.1.
25(b) It shall be the duty of the Department of Revenue to
26assess such shares for the calendar years beginning January 1,
271971 through January 1, 1983, at the rate of fifteen mills and
28for the calendar years beginning January 1, 1984 through January
291, 1988, at the rate of one and seventy-five one thousandths per
30cent and for the calendar year beginning January 1, 1989, at the
1rate of 10.77 per cent and for the calendar [year] years
2beginning January 1, 1990[, and each calendar year thereafter]
3through January 1, 2013, at the rate of 1.25 per cent and for
4the calendar year beginning January 1, 2014, and each calendar
5year thereafter at the rate of 0.89 per cent upon each dollar of
6taxable amount thereof, the taxable amount of each share of
7stock to be ascertained and fixed pursuant to section 701.1, and
8dividing this amount by the number of shares.
9(c) It shall be the duty of every institution doing business
10in this Commonwealth, at the time of making every report
11required by this section, to compute the tax and to pay the
12amount of said tax to the State Treasurer, through the
13Department of Revenue either from its general fund, or from the
14amount of said tax collected from its shareholders.[: Provided,
15That for the calendar years beginning January 1, 1971 through
16January 1, 1991, such institution, upon the date its report,
17herein required is made for such calendar years beginning
18January 1, 1971 through January 1, 1991, shall pay to the
19Department of Revenue not less than eighty per cent of the tax
20due to the Commonwealth by it for such calendar year, and the
21remaining tax due shall be paid at the time when the report
22herein required for the year next succeeding is made:] Provided,
23That in case any institution shall collect, annually, from the
24shareholders thereof said tax, according to the provisions of
25this article, that have been subscribed for or issued, and pay
26the same into the State Treasury, through the Department of
27Revenue, the shares, and so much of the capital and profits of
28such institution as shall not be invested in real estate, shall
29be exempt from local taxation under the laws of this
30Commonwealth; and such institution shall not be required to make
6Section 701.1. Ascertainment of Taxable Amount; Exclusion of
7United States Obligations.--(a) [The taxable amount of shares
8shall be ascertained and fixed by adding together the value
9determined under subsection (b) for the current and preceding
10five years and dividing the resulting sum by six. If an
11institution has not been in existence for a period of six years,
12the taxable amount of shares shall be ascertained and fixed by
13adding together the values determined under subsection (b) for
14the number of years the institution has been in existence and
15dividing the resulting sum by such number of years.] The taxable
16amount of shares shall be ascertained and fixed by the book
17value of total bank equity capital as determined by the Reports
18of Condition at the end of the preceding calendar year in
19accordance with the requirements of the Board of Governors of
20the Federal Reserve System, the Comptroller of the Currency, the
21Federal Deposit Insurance Corporation or other applicable
23(b) [The value for each year required by subsection (a)
24shall be determined by deducting from the book value of total
25equity capital] A deduction for the value of United States
26obligations shall be provided from the taxable amount of shares
27in an amount equal to the same percentage of total bank equity
28capital as the book value of obligations of the United States
29bears to the book value of the total assets, except that, for
30the value of shares reported on tax returns due on March 15,
12008, and thereafter, any goodwill recorded as a result of the
2use of purchase accounting for an acquisition or combination as
3described in this section and occurring after June 30, 2001, may
4be subtracted from the book value of total bank equity capital
5and disregarded in determining the deduction provided for
6obligations of the United States. [for the six-year period
7described in subsection (a). For purposes of this subsection,
8book values and deductions for United States obligations for
9each year shall be determined by the Reports of Condition for
10each calendar quarter of the preceding calendar year in
11accordance with the requirements of the Board of Governors of
12the Federal Reserve System, the Comptroller of the Currency, the
13Federal Deposit Insurance Corporation or other applicable
14regulatory authority; and book values shall be averaged as
15calculated by averaging book values as determined by such
16Reports of Condition.] For purposes of this article, United
17States obligations shall be obligations coming within the scope
18of 31 U.S.C. § 3124. [For any year in which an institution does
19not file four quarterly Reports of Condition, book values and
20deductions for United States obligations shall be determined by
21adding together the book values and deductions for United States
22obligations from each quarterly Reports of Condition filed for
23such year and dividing the resulting sums by the number of such
24Reports of Condition.] In the case of institutions which do not
25file such Reports of Condition, book values shall be determined
26by generally accepted accounting principles as of the end of
27[each calendar quarter. For any year in which an institution
28which does not file Reports of Condition is not in existence for
29four quarters, the book value for that year shall be determined
30by adding together the book values for each quarter in which the
4(c) For purposes of this section:
5(1) a mere change in identity, form or place of organization
6of one institution, however effected, shall be treated as if a
7single institution had been in existence prior to as well as
8after such change; and
9(2) [the] if there is a combination of two or more
10institutions into one [shall be treated as if the constituent
11institutions had been a single institution in existence prior to
12as well as after the combination and], the book values and
13deductions for United States obligations from the Reports of
14Condition of the constituent institutions shall be combined. For
15purposes of this section, a combination shall include any
16acquisition required to be accounted for by using the purchase
17method in accordance with generally accepted accounting
18principles or a statutory merger or consolidation.
21Section 701.4. Apportionment.--An institution may apportion
22its taxable amount of shares determined under section 701.1 in
23accordance with this subsection if the institution is subject to
24tax in another state based on or measured by net worth, gross
25receipts, net income or some similar base of taxation, or if it
26could be subject to such tax, whether or not such a tax has in
27fact been enacted. The following shall apply:
1the payroll factor, the receipts factor and the deposits factor,
2and the denominator of which is three. If one of the factors is
3inapplicable, the denominator is two. If two of the factors are
4inapplicable, the denominator is one.
5(ii) For the calendar year beginning January 1, 2014, and
6each calendar year thereafter, the taxable amount of shares
7shall be apportioned based upon the receipts factor and the
8payroll and deposits factors shall be disregarded.
9(2) The payroll factor is a fraction, the numerator of which
10is the total wages paid in this Commonwealth and the denominator
11of which is the total wages paid in all states. Wages are paid
12in a state if paid to an employe having a regular presence
14(3) The receipts factor is a fraction, the numerator of
15which is total receipts located in this Commonwealth and the
16denominator of which is the total receipts located in all
17states. [Receipts do not include principal repayments on loans
18or credit, travel and entertainment cards. Receipts from sale or
19disposition of intangible and tangible property include only the
20net gain therefrom.] The method of calculating receipts for
21purposes of the denominator shall be the same as the method used
22in determining receipts for purposes of the numerator. The
23location of receipts shall be determined as follows:
26(ii) All receipts from performance of services are located
27in a state to the extent the services are performed in the
28state. If services are performed partly within two or more
29states, the receipts located in each state shall be measured by
30the ratio which the time spent in performing such services in
1the state bears to the total time spent in performing such
2services in all states. Time spent in performing services in a
3state is the time spent by employes having a regular presence in
4the state in performing such services.
7(iv) Interest or service charges, excluding merchant
8discounts, from credit, travel and entertainment card
9receivables and credit card holders' fees are located in the
10state in which the credit card holder resides in the case of an
11individual or, if a corporation, in the state of the
12cardholder's commercial domicile if, in either case, the
13institution maintains an office in such state. Otherwise, the
14receipts are located in the state in which the institution
15maintains an office which treats such receivables as assets on
16its books or records.
17(v) Interest, dividends and net gains from the sale or
18disposition of intangibles, exclusive of those receipts
19described elsewhere in this section, are located in the state in
20which the institution maintains an office which treats such
21intangibles as assets on its books or records.
25(vii) Receipts from sales of tangible property are located
26in the state in which the property is delivered or shipped to a
27purchaser, regardless of the f.o.b. point or other conditions of
3(i) The numerator of the receipts factor shall include
4receipts from the lease or rental of real property owned by the
5institution if the property is located within this Commonwealth
6or receipts from the sublease of real property if the property
7is located within this Commonwealth.
10(A) Except as provided under clause (B), the numerator of
11the receipts factor shall include receipts from the lease or
12rental of tangible personal property owned by the institution if
13the property is located within this Commonwealth when it is
14first placed in service by the lessee.
15(B) The following shall apply:
16(I) Receipts from the lease or rental of transportation
17property owned by the institution shall be included in the
18numerator of the receipts factor to the extent that the property
19is used in this Commonwealth.
20(II) The extent an aircraft shall be deemed to be used in
21this Commonwealth and the amount of receipts that shall be
22included in the numerator of this Commonwealth's receipts factor
23shall be determined by multiplying all the receipts from the
24lease or rental of the aircraft by a fraction, the numerator of
25which is the number of landings of the aircraft in this
26Commonwealth and the denominator of which is the total number of
27landings of the aircraft.
30(IV) If the extent of the use of transportation property
12(II) If the real property under subclause (I) is located
13both within this Commonwealth and one or more other states, the
14receipts under this subsection shall be included in the
15numerator of the receipts factor if more than fifty per cent of
16the fair market value of the real property is located within
18(III) If more than fifty per cent of the fair market value
19of real property under subclause (I) is not located within any
20single state, the receipts under this subsection shall be
21included in the numerator of the receipts factor if the borrower
22is located in this Commonwealth.
23(B) The determination of whether real property securing a
24loan is located within this Commonwealth shall be made as of the
25time the original agreement was made and all subsequent
26substitutions of collateral shall be disregarded.
27(iv) The numerator of the receipts factor shall include
28interest, fees and penalties imposed in connection with loans
29not secured by real property if the borrower is located in this
1(v) The numerator of the receipts factor shall include net
2gains from the sale of loans. Net gains from the sale of a loan
3shall include income recorded under the coupon stripping rules
4of section 1286 of the Internal Revenue Code of 1986 (Public Law
599-514, 26 U.S.C. § 1286). The following shall apply:
6(A) The amount of net gains, equal to zero or above, from
7the sale of loans secured by real property included in the
8numerator shall be determined by multiplying the net gains by a
9fraction, the numerator of which is the amount included in the
10numerator of the receipts factor under subparagraph (iii) and
11the denominator of which is the total amount of interest and
12fees or penalties in the nature of interest from loans secured
13by real property.
14(B) The amount of net gains, equal to zero or above, from
15the sale of loans not secured by real property included in the
16numerator shall be determined by multiplying the net gains by a
17fraction, the numerator of which is the amount included in the
18numerator of the receipts factor under subparagraph (iv) and the
19denominator of which is the total amount of interest and fees or
20penalties in the nature of interest from loans not secured by
22(vi) The numerator of the receipts factor shall include
23interest, fees and penalties charged to credit, debit or similar
24cardholders, including annual fees and overdraft fees, if the
25billing address of the cardholder is in this Commonwealth.
26(vii) The numerator of the receipts factor shall include net
27gains, equal to zero or above, from the sale of credit card
28receivables multiplied by a fraction, the numerator of which is
29the amount included in the numerator of the receipts factor
30under subparagraph (vi) and the denominator of which is the
6(A) All credit card issuer's reimbursement fees multiplied
7by a fraction, the numerator of which is the amount of fees,
8interest and penalties charged to credit cardholders included in
9the numerator of the receipts factor under subparagraph (vi) and
10the denominator of which is the institution's total amount fees,
11interest and penalties charged to credit cardholders.
12(B) All card issuer's reimbursement fees, except as provided
13under clause (A), multiplied by a fraction, the numerator of
14which is the amount of the fees, interest and penalties charged
15to all other cardholders included in the numerator of the
16receipts factor under subparagraph (vi) and the denominator of
17which is the institution's total amount of fees, interest and
18penalties charged to all other cardholders.
21(A) If the institution can readily determine the location of
22the merchant and if the merchant is in this Commonwealth, the
23numerator of the receipts factor shall include receipts from
1interest and penalties charged to credit cardholders that is
2included in the numerator of the receipts factor under
3subparagraph (vi) and the denominator of which is the
4institution's total amount of fees, interest and penalties
5charged to credit cardholders.
6(II) For a merchant discount related to the use of a debit
7card, the numerator of which shall be the amount of fees,
8interest and penalties charged to debit cardholders that is
9included in the numerator of the receipts factor under
10subparagraph (vi) and the denominator of which is the
11institution's total amount of fees, interest and penalties
12charged to debit cardholders.
13(III) For a merchant discount related to the use of cards,
14except as provided under subclauses (I) and (II), the numerator
15of which shall be the amount of fees, interest and penalties
16charged to all other cardholders that is included in the
17numerator of the receipts factors under subparagraph (vi) and
18the denominator of which is the institution's total amount of
19fees, interest and penalties charged to all other cardholders.
23(A) The numerator of the receipts factor shall include fees
24charged to a cardholder for the use at an Automated Teller
25Machine of a card issued by the institution if the cardholder's
26billing address is in this Commonwealth.
27(B) The numerator of the receipts factor shall include fees
28charged to a cardholder, other than the institution's
29cardholder, for the use of the card at an Automated Teller
30Machine owned or rented by the institution, if the Automated
1Teller Machine is in this Commonwealth.
2(xi) The following shall apply to loan servicing fees:
3(A) (I) The numerator of the receipts factor shall include
4loan servicing fees derived from loans secured by real property
5multiplied by a fraction, the numerator of which is the amount
6included in the numerator of the receipts factor under
7subparagraph (iii) and the denominator of which is the total
8amount of interest and fees or penalties in the nature of
9interest from loans secured by real property.
10(II) The numerator of the receipts factor shall include loan
11servicing fees derived from loans not secured by real property
12multiplied by a fraction, the numerator of which is the amount
13included in the numerator of the receipts factor under
14subparagraph (iv) and the denominator of which is the total
15amount of interest and fees or penalties in the nature of
16interest from loans not secured by real property.
17(B) If the institution receives loan servicing fees for
18servicing the secured or the unsecured loans of another
19institution, the numerator of the receipts factor shall include
20loan servicing fees if the borrower is located in this
22(xii) The numerator of the receipts factor shall include
23receipts from services not otherwise apportioned under this
24section if the recipient of the services receives all of the
25benefit of the services in this Commonwealth. If the recipient
26of the services receives some of the benefit of the services in
27this Commonwealth, the receipts shall be included in the
28numerator of the apportionment factor in proportion to the
29extent that the recipient receives benefit of the services in
4(A) Interest, dividends, net gains equal to zero or above,
5and other income from investment assets and activities and from
6trading assets and activities, shall be included in the receipts
7factor. Investment assets and activities and trading assets and
8activities shall include investment securities, trading account
9assets, Federal funds, securities purchased and sold under
10agreements to resell or repurchase, options, futures contracts,
11forward contracts, notional principal contracts such as swaps,
12equities and foreign currency transactions. For the investment
13and trading assets and activities under subclauses (I) and (II),
14the receipts factor shall include the amounts under subclauses
15(I) and (II). The following shall apply:
16(I) The receipts factor shall include the amount by which
17interest from Federal funds sold and securities purchased under
18resale agreements exceeds interest expense on Federal funds
19purchased and securities sold under repurchase agreements.
20(II) The receipts factor shall include the amount by which
21interest, dividends, gains and other income from trading assets
22and activities, including assets and activities in the matched
23book, in the arbitrage book and foreign currency transactions,
24exceed amounts paid in lieu of interest, amounts paid in lieu of
25dividends and losses from the assets and activities.
26(B) The numerator of the receipts factor shall include
27interest, dividends, net gains, equal to zero or above, and
28other income from investment assets and activities and from
29trading assets and activities under clause (A) that are
30attributable to this Commonwealth using one of the following
2(I) Method 1. The numerator shall be determined by
3multiplying the total amount of receipts from trading assets and
4activities under clause (A) by a fraction the numerator of which
5is the total amount of all other receipts attributable to this
6Commonwealth and the denominator of which is the total amount of
7all other receipts.
8(II) Method 2. The numerator shall be determined by
9multiplying the total amount of receipts under clause (A) by a
10fraction the numerator of which is the average value of the
11assets which generate the receipts which are properly assigned
12to a regular place of business of the institution within this
13Commonwealth and the denominator of which is the average value
14of all such assets.
15(C) Upon the election by the institution to use one of the
16methods under clause (B), the institution shall use the method
17on all subsequent returns unless the institution receives prior
18permission from the Department of Revenue to use a different
20(D) The following shall apply:
21(I) An institution electing to use Method 2 shall have the
22burden of proving that an investment asset or activity or
23trading asset or activity was properly assigned to a regular
24place of business outside of this Commonwealth by demonstrating
25that the day-to-day decisions regarding the asset or activity
26occurred at a regular place of business outside this
1business is in this Commonwealth and one regular place of
2business is outside this Commonwealth, the asset or activity
3shall be considered to be located at the regular place of
4business of the institution where the investment or trading
5policies or guidelines with respect to the asset or activity are
7(III) Unless the institution demonstrates to the contrary,
8the investment or trading policies and guidelines under
9subclause (II) shall be presumed to be established at the
10commercial domicile of the institution.
18(III) interest, dividends, gains and other income from
19trading assets and activities, including assets and activities
20in the matched book, in the arbitrage book and foreign currency
24(A) The numerator of the receipts factor shall include
25receipts from the sale or disposition of tangible personal
26property if the property is delivered or shipped to a purchaser
27within this Commonwealth regardless of the f.o.b. point or other
28conditions of the sale.
1property is located in this Commonwealth.
22(c) the customer does not have a commercial domicile.
26(xvi) For purposes of determining the location where
27benefits are received from under subparagraphs (xii) and (xv),
28if a service or other activity generating the receipts provides
29benefits to two or more recipients located in different states
30or provides benefits to a recipient in more than one state, the
4(xvii) Receipts which would be assigned under this section
5to a state in which the institution is not subject to a business
6privilege tax, a net income tax, a franchise tax measured by net
7income, a franchise tax for the privilege of doing business or a
8corporate stock tax or shares tax of the type imposed under this
9article shall be included in the numerator of the receipts
10factor, if the institution's commercial domicile is in this
12(4) The deposits factor is a fraction, the numerator of
13which is the average value of deposits located in this
14Commonwealth during the taxable year and the denominator of
15which is the average value of the total deposits during the
16taxable year. The average value of deposits is to be computed on
17a quarterly basis. Deposits are located in the state in which
18the institution maintains an office which properly treats the
19deposits as a liability on its books or records. A deposit is
20considered to be properly treated as a liability on the books or
21records of the office with which it has a greater portion of
22contact. In determining whether a deposit has a greater portion
23of contact with a particular office, consideration is given to:
30(iii) Whether the deposit was solicited by an employe
9Section 701.5. Definitions.--The following words, terms and
10phrases when used in this article shall have the meaning
11ascribed to them in this section, except where the context
12clearly indicates a different meaning:
13"Billing address." The location indicated in the books and
14records of an institution on the first day of the taxable year
15or on a later date in the taxable year when the customer
16relationship began, as the address where a notice, statement and
17bill relating to a customer's account is mailed.
18"Commercial domicile." As follows:
21(2) if a trade or business is organized under the laws of a
22foreign country, the person's commercial domicile shall be
23deemed to be the state of the United States or the District of
24Columbia from which the institution's trade or business in the
25United States is principally managed and directed. It shall be
26presumed, subject to rebuttal, that the location from which a
27trade or business is principally managed and directed is the
28state of the United States or the District of Columbia to which
29the greatest number of employes are regularly connected or out
30of which they are working, notwithstanding where the services of
3"Card issuer's reimbursement fee." The fee an institution
4receives from a merchant's bank because one of the persons to
5whom the institution has issued a credit, debit or similar type
6of card has charged merchandise or services to the card.
10"Debit card." A card, or other means of providing
11information, that enables the holder to charge the cost of
12purchases or cash withdrawal, against the holder's bank account
13or a remaining balance on the card.
14"Deposits." Deposits consist of those items specified for
15inclusion as such in quarterly Reports of Condition, but do not
16include deposits made by the Federal Government, its agencies or
18"Doing business in this Commonwealth." As follows:
19(1) An institution is engaged in doing business in this
20Commonwealth and is subject to the tax imposed under this
21article if it satisfies any of the following requirements and
22generates gross receipts apportioned to this Commonwealth under
23section 701.4 in excess of $100,000:
1or an employe, representative, independent contractor or agent
2of an affiliate of the institution, directly or indirectly
3solicits business in this Commonwealth by or for the benefit of
4the institution, through:
16(vii) The institution has a physical presence in this
17Commonwealth for a period of more than one day during the tax
18year or conducts an activity sufficient to create a nexus in
19this Commonwealth for tax purposes under the Constitution of the
21(2) The term shall not include:
22(i) The use by the institution of a professional performing
23a service on behalf of the institution in this Commonwealth if
24the services are not significantly associated with the
25institution's ability to establish and maintain a market in this
3"Institution." As follows:
4(1) The term shall mean:
5(i) Every bank operating as such and having capital stock
6which is incorporated under any law of this Commonwealth, under
7the law of the United States or under the law of any other
8jurisdiction [and is located within this Commonwealth].
9[(2)] (ii) Every operating company having capital stock
10[located within this Commonwealth] and having any of the powers
11of companies entitled to the benefits of an act, entitled "An
12act conferring upon certain fidelity, insurance, safety deposit,
13trust, and savings companies, the powers and privileges of
14companies incorporated under the provisions of section 29 of an
15act, entitled 'An act to provide for the incorporation and
16regulation of certain corporations,' approved April 29, 1874,
17and of the supplements thereto," approved June 27, 1895,
18commonly known as trust companies.
19[(3)] (iii) Every company organized and operating as a bank
20and trust company or as trust company having capital stock
21[located in this Commonwealth], whether the institution is
22incorporated under any law of this Commonwealth, the law of the
23United States or any law of any jurisdiction. The term shall not
24include any of such companies, all of the shares of capital
25stock of which, other than shares necessary to qualify
26directors, are owned by a company which is liable to pay to the
27Commonwealth a tax pursuant to this article.
6"Lease." Any leasing transaction in which the lessor would
7be treated as owner of the leased property under generally
8accepted accounting principles. All other transactions
9purporting to be leases shall be treated as loans for purposes
10of this article.
20(4) Such institution engages in regular solicitation in this
21Commonwealth, whether at a place of business, by traveling loan
22officers or other representatives, by mail, by telephone or
23other electronic means, and the solicitation results in the
24creation of a depository or direct debtor/creditor relationship
25with a resident of this Commonwealth. For purposes of this
26article, mere processing or transfer through financial
27intermediaries of checks, credit card receivables, commercial
28paper and the like does not create a debtor/creditor
29relationship. A financial institution is engaged in regular
30solicitation within this Commonwealth if it has entered into any
1of the relationships listed in this clause with twenty or more
2residents of this Commonwealth during any tax period or if it
3has five million dollars ($5,000,000) or more of assets
4attributable to sources within this Commonwealth at any time
5during the tax period.
12"Loan." As follows:
13(1) The term shall mean any of the following:
20(3) The term shall not include:
21(i) Futures or forward contracts.
22(ii) An option.
23(iii) A notional principal contract such as swaps.
28(vi) A cash item in the process of collection.
29(vii) A Federal fund sold.
30(viii) A security purchased under an agreement to resell.
1(ix) An asset held in a trading account.
2(x) A security.
7"Loan secured by real property." A loan for which at least
850 per cent of the aggregate value of the collateral used to
9secure a loan or other obligation, when valued at fair market
10value as of the time the original loan or obligation was
11incurred, was real property.
15"Merchant discount." The fee or negotiated discount charged
16to a merchant by an institution for the privilege of
17participating in a program by which a credit, debit or similar
18type of card is accepted in payment for merchandise or services
19sold to the cardholder, net of any cardholder charge-back and
20unreduced by any interchange transaction or issuer reimbursement
21fee paid to another for a charge or purchase made by its
23"Origination of loans." A loan is deemed to have originated
24in the state in which the office is located which properly
25treats the loan as an asset on its books or records. However, if
26an institution maintains an office in a state, the following
3(i) application for the loan;
4(ii) negotiation for the loan;
5(iii) approval of the loan; or
6(iv) administrative responsibility for the loan.
7(2) All other loans made to borrowers residing or having
8their commercial domicile within the state are deemed to have
9originated at an office within the state, if at least one of the
10following activities occurs at an office in the state:
11(i) application for the loan;
12(ii) negotiation for the loan;
13(iii) approval of the loan; or
14(iv) administrative responsibility for the loan.
15"Principal base of operations." As follows:
22(ii) communicates with customers or other people; or
25"Property located in a state."
30(2) Tangible personal property which is characteristically
10(iii) the state is the residence or commercial domicile of
11the lessee or other user of the property, where there is no
12principal base of operations and the operation of the property
13is in two or more states.
16(1) Real and tangible personal property, respectively,:
19(ii) property to which the institution holds legal title and
20on which no other person may claim depreciation for Federal
21income tax purposes, or could claim depreciation if subject to
22Federal income tax.
25"Receipts." As follows:
1returned to and ascertained by the Federal Government if a
2separate return had been made to the Federal Government by the
3institution, including the taxable income of a subsidiary of the
4institution that are disregarded entities for purposes of
6"Regular place of business." An office at which an
7institution carries on its business in a regular and systematic
8manner and which is continuously maintained, occupied and used
9by employes of an institution.
21"Syndication." An extension of credit in which two or more
22people provide funds and each person is at risk for up to a
23specified percentage of the total extension of credit or for up
24to a specified dollar amount.
25"Transportation property." A vehicle and vessel capable of
26moving under its own power, such as aircraft, a train, water
27vessel and motor vehicle. The term includes equipment or a
28container attached to the property, such as rolling stock, a
29barge, trailer or similar equipment or container.
30Section 24. The definitions of "document," "real estate" and
7* * *
8"Document." Any deed, instrument or writing which conveys,
9transfers, devises, vests, confirms or evidences any transfer or
10devise of title to real estate in this Commonwealth, but does
11not include wills, mortgages, deeds of trust or other
12instruments of like character given as security for a debt and
13deeds of release thereof to the debtor, land contracts whereby
14the legal title does not pass to the grantee until the total
15consideration specified in the contract has been paid or any
16cancellation thereof unless the consideration is payable over a
17period of time exceeding thirty years or instruments which
18solely grant, vest or confirm a public utility easement.
19"Document" shall also include a declaration of acquisition
20required to be presented for recording under section 1102-C.5 of
22* * *
24(1) Any lands, tenements or hereditaments [within this
25Commonwealth], including, without limitation, buildings,
26structures, fixtures, mines, minerals, oil, gas, quarries,
27spaces with or without upper or lower boundaries, trees and
28other improvements, immovables or interests which by custom,
29usage or law pass with a conveyance of land, but excluding
30permanently attached machinery and equipment in an industrial
2(2) A condominium unit.
14[(2)] (ii) holds real estate, the value of which comprises
15ninety per cent or more of the value of its entire tangible
16asset holdings exclusive of tangible assets which are freely
17transferable and actively traded on an established market.
18(2) Ninety percent or more of the ownership interest in the
19corporation or association is held by thirty-five or fewer
20persons and the corporation or association owns, as ninety
21percent or more of the fair market value of its assets, a direct
22or indirect interest in a real estate company. An indirect
23ownership interest is an interest in a corporation or
24association, ninety percent or more of the ownership interest
25which is held by thirty-five or fewer persons whose purpose is
26the ownership of a real estate company.
27* * *
8Section 1102-C. Imposition of Tax.--Every person who makes,
9executes, delivers, accepts or presents for recording any
10document or in whose behalf any document is made, executed,
11delivered, accepted or presented for recording, shall be subject
12to pay for and in respect to the transaction or any part
13thereof, or for or in respect of the vellum parchment or paper
14upon which such document is written or printed, a State tax at
15the rate of one per cent of the value of the real estate within
16this Commonwealth represented by such document, which State tax
17shall be payable at the earlier of the time the document is
18presented for recording or within thirty days of acceptance of
19such document or within thirty days of becoming an acquired
25* * *
26(23) A transfer of real estate:
27(i) for no or nominal consideration from the Commonwealth or
28any of its instrumentalities, agencies or political subdivisions
29to a volunteer emergency medical services agency, volunteer fire
30company or volunteer rescue company; or
9(1) does not affect the continuity of the company; and
10(2) of itself or together with prior changes has the effect
11of transferring, directly or indirectly, ninety per cent or more
12of the total ownership interest in the company within a period
13of three years.
22(iii) the transferring party receives full consideration, in
23any form, in exchange for the transfer.], the transferring party
24provides the transferee a legally binding commitment or option,
25enforceable at a future date, to execute the transfer.
26* * *
30NONLICENSED CORPORATION PARI-MUTUEL WAGERING TAX
1Section 1601-B. Scope.
5Section 1602-B. Definitions.
12"Association." A general partnership, limited partnership,
13limited liability partnership or any other form of
14unincorporated enterprise, owned or conducted by two or more
15persons other than a private trust or decedent's estate.
19"Corporation." A corporation, joint-stock association or
20business trust which is organized under the laws of this
21Commonwealth, the United States, or any other state, territory,
22foreign country or dependency.
23"Department." The Department of Revenue of the Commonwealth.
27"Nonlicensed corporation." A person other than a licensed
28corporation that offers and accepts pari-mutuel wagers made
29within this Commonwealth, including an advance deposit account
30wagering, in which the wagers are included in common pool
1wagering through a pari-mutuel system.
2"Pari-mutuel system." The hardware, software and
3communications equipment used to record wagers, calculate
4payouts for winning wagers and transmit wagering transactions
5and pari-mutuel pool data for display to patrons and to
6communicate with other pari-mutuel systems linked to facilitate
7common pool wagering.
8"Pari-mutuel wagering." A form of wagering on the outcome of
9a horse race or harness horse race in which all wagers are
10pooled and held by a pari-mutuel pool host for distribution of
11the total amount, minus the deductions authorized by law, to
12holders of tickets on the winning contestants.
13"Person." A natural person, association or corporation. The
14term shall, when used in any provision prescribing and imposing
15a penalty, include the responsible members or general partners
16of an association or the officers of a corporation.
17Section 1603-B. Tax.
18(a) Imposition.--A tax is imposed on the privilege of
19conducting pari-mutuel wagering in this Commonwealth by all
20nonlicensed corporations. A nonlicensed corporation shall pay a
21tax through the department for deposit into the restricted
22account established under section 1606-B.
23(b) Rate.--The tax imposed under subsection (a) shall be a
24percentage tax of 10% on the amount of pari-mutuel wagers made
25each day through the nonlicensed corporation where the wagers
26were placed from within this Commonwealth, including wagers made
27by an advance deposit account wagering system, in which the
28wagers are included in common pool wagering through a pari-
30Section 1604-B. Pari-mutuel tax return.
1(a) Returns.--A nonlicensed corporation subject to this
2article shall file with the department, on a form prescribed by
3the department, a nonlicensed corporation pari-mutuel wagering
4tax return. The return shall be filed under oath or affirmation
5of an authorized officer, member or partner reporting the tax
6due under this part in the prior calendar month. A return shall
7be due by the 20th day following the end of the reporting
8period. The return shall set forth all of the following with
9regard to the nonlicensed corporation:
10(1) The total amount of pari-mutuel wagers made within
11this Commonwealth, including wagers made by an advance
12deposit account wagering system, in which the wagers are
13included in common pool wagering through a pari-mutuel
14system, on thoroughbred meets.
15(2) The total amount of pari-mutuel wagers made within
16this Commonwealth, including wagers made by an advance
17deposit account wagering system, in which the wagers are
18included in common pool wagering through a pari-mutuel
19system, on harness meets.
20(3) Calculation of the tax due at 10%.
21(4) Other information required by the department.
25(c) Penalties and interest.--If a nonlicensed corporation
26fails to file the return required under subsection (a) or fails
27to pay the tax imposed under section 1603-B, the department may
28do any of the following:
29(1) Assess the amount of tax due.
30(2) Impose and assess an administrative penalty equal to
15% of the tax or $500, whichever is greater, due but unpaid
2for each quarter or fraction of the quarter that the tax
3remains unpaid together with interest at the rate established
4under section 806 of the act of April 9, 1929 (P.L.343,
5No.176), known as The Fiscal Code, on the tax from the time
6when the tax became due. The penalties provided under this
7paragraph shall be added to the tax and assessed and
8collected at the same time and in the same manner as a part
9of the tax. Unless otherwise specified, the tax shall be
10assessed, collected and enforced by the department under the
11provisions of Article II.
12Section 1605-B. Regulations.
16Section 1606-B. Advanced Deposit Wagering Collections Account.
17(a) Advanced Deposit Wagering Collections Account.--There is
18created within the General Fund a restricted account to be known
19as the Advanced Deposit Wagering Collections Account. Revenues
20collected under this article shall be deposited into the
22(b) Transfer.--Of the funds deposited in the Advanced
23Deposit Wagering Collections Account, beginning fiscal year
242013-2014 and each fiscal year thereafter, up to $5,000,000 is
25transferred to the State racing commissions in the Department of
26Agriculture for general government operations of the
27commissions. For fiscal year 2013-2014, any funds that exceed
28the $5,000,000 shall be transferred to the Pennsylvania Race
29Horse Development Fund.
30Section 27. Sections 1702-D and 1703-D of the act, amended
3Section 1702-D. Definitions.
9"Film." A feature film, a television film, a television talk
10or game show series, a television commercial or a television
11pilot or each episode of a television series which is intended
12as programming for a national audience. The term does not
13include a production featuring news, current events, weather and
14market reports, public programming, sports events, awards shows
15or other gala events, a production that solicits funds, a
16production containing obscene material or performances as
17defined in 18 Pa.C.S. § 5903(b) (relating to obscene and other
18sexual materials and performances) or a production primarily for
19private, political, industrial, corporate or institutional
21"Minimum stage filming requirements." Include:
1by a qualified production facility.
8(iii) spend or incur a minimum of $5,000,000 in
9direct expenditures relating to the use or rental of
10tangible property at or for performance of services
11provided by a qualified production facility.
23(3) Payment to a pass-through entity representing
24individual talent if the tax imposed by Article III will be
25paid or accrued by all of the partners, members or
26shareholders of the pass-through entity for the taxable year
27for which the tax imposed under Article III has been withheld
28and remitted under the requirements of Article III by the
30(4) The cost of transportation incurred while
15"Production expense." As follows:
16(1) The term includes all of the following:
26(v) The cost of leasing vehicles.
29(vii) The cost of insurance coverage.
30(viii) The costs of food and lodging.
1(ix) The purchase of music or story rights.
2(x) The cost of rental of facilities and equipment.
3(2) The term does not include any of the following:
4(i) Deferred, leveraged or profit participation paid
5or to be paid to individuals employed in the production
6of the film or paid to entities representing an
7individual for services provided in the production of the
9(ii) Development cost.
14"Qualified film production expense." All Pennsylvania
15production expenses if Pennsylvania production expenses comprise
16at least 60% of the film's total production expenses. The term
17shall not include more than $15,000,000 in the aggregate of
18compensation paid to individuals or payment made to entities
19representing an individual for services provided in the
20production of the film.
21"Qualified production facility." A film production facility
22located within this Commonwealth that contains at least one
23sound stage with a column-free, unobstructed floor space and
24meets either of the following criteria:
29(2) Meets at least three of the following criteria:
30(i) A sound stage having an industry standard noise
1criteria rating of 25 or better.
30(1) the first day of principal photography in this
9Section 1703-D. Credit for qualified film production expenses.
13(b) Review and approval.--The department shall establish
14application periods not to exceed 90 days each. All applications
15received during the application period shall be reviewed and
16evaluated by the department based on the following criteria:
19(2) The anticipated number of Pennsylvania employees.
26(6) The use of studio resources.
30Upon determining the taxpayer has incurred or will incur
1qualified film production expenses, the department may approve
2the taxpayer for a tax credit. Applications not approved may be
3reviewed and considered in subsequent application periods. The
4department may approve a taxpayer for a tax credit based on its
5evaluation of the criteria under this subsection.
16(4) The start date.
19(d) Certificate.--Upon execution of the contract required by
20subsection (c), the department shall award the taxpayer a film
21production tax credit and issue the taxpayer a film production
22tax credit certificate.
26Section 1705-D. Carryover, carryback and assignment of credit.
27* * *
8Section 1708-G.1. Scholarships.
9* * *
10(b) Award.--A scholarship organization may award a
11scholarship to an applicant who resides within the attendance
12boundary of a low-achieving school to attend a participating
13public school or a participating nonpublic school selected by
14the parent of the applicant. If an applicant who received an
15educational opportunity scholarship under this article for the
16prior school year resides within the attendance boundary of a
17school that was removed from the list of low-achieving schools
18provided by the department under subsection (a), the applicant
19may receive an educational opportunity scholarship. The
20scholarship may be for each year of enrollment in a
21participating public school or participating nonpublic school
22for up to the lesser of five years or until completion of grade
2312 provided the applicant otherwise remains eligible. In
24awarding scholarships, a scholarship organization shall give
25preference to any of the following:
1application is being made.
2(3) An applicant of a household with a household income
3that does not exceed 185% of the Federal poverty level for
4the school year preceding the school year for which the
5application is being made and who resides within any of the
7(i) a first class school district;
11(iii) a school district that receives an advance of
12its basic education subsidy at any time and is either
13subject to a declaration of financial distress under
14section 691 of the Public School Code of 1949 or engaged
15in litigation against the Commonwealth in which the
16school district seeks financial assistance from the
17Commonwealth to allow the school district to continue to
19* * *
23COAL WASTE REMOVAL AND ULTRACLEAN FUELS
1clearly indicates a different meaning:
4"Developer" means the owner-operator of a facility, as
5defined in this section, or the operator of the facility that
6has sold the facility in new condition to a third party from
7whom that operator has simultaneously leased back the facility
8for a minimum period of twelve years.
9"Facility" includes all plant and equipment purchased or
10constructed by or on behalf of the developer which is used
11within this Commonwealth by the developer to produce one or more
15"Qualified fuels" means those fuels produced from
16nontraditional coal culm and silt feedstocks as defined in
17section 29(c) of the Internal Revenue Code of 1986 (Public Law
1899-514, 26 U.S.C. § 29(c)).
30(4) Be located within this Commonwealth.
7"Tax credit base" means only the cost or other basis of
8qualifying property that is properly transferred to the
9facility's basis for depreciation for Federal income tax
10purposes between January 1, 2000, and December 31, 2012.
11Section 1803-A. Investment Tax Credits Program.--(a) A
12developer of a new facility for the production of one or more
13qualified fuels shall be allowed an investment tax credit
14against the taxes imposed under Articles II, IV and VI of this
15act. The amount of the credit shall be computed as a percentage
16applied to the cost or other basis for Federal income tax
17purposes of qualifying property.
23(3) Any amount of allowable investment tax credit not used
24in the tax year for which the credit was claimed can be carried
25forward by the claiming taxpayer to succeeding years until the
26full amount of allowable credit has been used.
27(c) (1) The developer, upon notice to the department as
28specified by the department, may sell or assign, in whole or in
29part, any investment tax credit afforded under this section to
30one or more taxpayers if no claim for allowance of such credit
1has been filed.
2(2) A taxpayer recipient by purchase or assignment of any
3portion of the developer's investment tax credit under paragraph
4(1) shall initially claim such credit, upon notice to the
5department of the derivative basis of the credit in compliance
6with procedures specified by the department, for the tax year in
7which the purchase or assignment is made, but in no event
8subsequent to the filing of an income tax return for the year
10(3) Any taxpayer who acquires any portion of the developer's
11investment tax credit by sale or assignment for value and
12without notice by the developer of any irregularity or
13invalidity shall not suffer any disallowance of the credit or
14the imposition of any adjustment or fraud penalty attributable
15to conduct by the developer.
16(d) (1) If prior to the expiration of any qualifying
17property's useful life, as used to calculate depreciation for
18Federal income tax purposes, the developer, upon mandatory
19notice to the department in compliance with procedures specified
20by the department, disposes of any qualifying property, in a
21transaction other than a sale-leaseback transaction, upon which
22the department has previously allowed an investment tax credit
23claimed by any taxpayer, a portion of all such credit shall be
24recaptured and added to the developer's tax liability for the
25tax year in which the qualifying property is disposed.
26(2) The portion of the investment tax credit previously
27allowed, which is subject to recapture from the developer, shall
28be equal to a fraction whose numerator is the number of years
29remaining to fully depreciate for Federal income tax purposes
30the qualifying property disposed and whose denominator is the
6(e) The department shall verify the validity of any claim
7for allowance of any investment tax credit afforded under this
8section and, in the case of a fraudulent claim, may assess
9against the developer a penalty of one hundred and twenty-five
10per cent of the credit improperly claimed.
14Section 1804-A. Contract Required.--(a) In order for a
15developer to claim investment tax credits under this article,
16the developer must enter into a contract with the Commonwealth
17that provides as follows:
21(2) The developer shall make periodic payments to the
22Commonwealth, which payments may not exceed in the aggregate
23forty-six million eight hundred thousand dollars ($46,800,000)
24over the term of the contract.
25(3) The periodic payments shall occur every five years and
26each payment shall be nine million three hundred sixty thousand
27dollars ($9,360,000), except as provided in paragraphs (4), (5)
1(i) An amount equal to the business losses of the developer,
2if any, relating to the facility that are sustained in the first
3and second years of the contract, provided such amount does not
4exceed three million seven hundred forty-four thousand dollars
5($3,744,000) for both years.
9(5) For the remaining five-year periods, the amount
10specified in paragraph (3) shall be reduced by the amount of
11allowable offsets identified in subsection (b), provided that
12such offsets do not exceed nine million three hundred sixty
13thousand dollars ($9,360,000) during any five-year period.
14(6) To the extent the amount of allowable offsets during any
15five-year period exceeds nine million three hundred sixty
16thousand dollars ($9,360,000), the excess may be carried over
17and added to the allowable offsets taken in the following five-
18year period, provided that the excess is applied first.
1Section 1805-A. Requirements.--Tax credits authorized by
2this article shall not be granted unless the developer has
3obtained an investment tax credit from the Federal Government or
4an investment by a person other than an agency or
5instrumentality of the Commonwealth, or any combination thereof,
6in an amount equal to or greater than the tax credit granted by
10Section 1804-B. Tax credits.
11* * *
12(d) Tax credit term.--
13(1) A company may claim the job creation tax credit for each
14new job created, as approved by the department, for a one-year,
15two-year or three-year period as authorized by the department,
16except that no tax credit may be claimed for more than five
17years from the date the company first submits a job creation tax
19(2) Notwithstanding the provisions of paragraph (1), nothing
20in this article shall be construed to prohibit the Department of
21Community and Economic Development from awarding the total
22amount of tax credit authorized for a multiple year tax credit
23in the first year in which the new job is created and the tax
25* * *
30CITY REVITALIZATION AND IMPROVEMENT ZONES
1Section 31. The act is amended by adding sections to read:
2Section 1801-C. Scope of article.
5Section 1802-C. Definitions.
13"City." A city of the third class with a population of at
14least 30,000 based on the most recent Federal decennial census.
15The term shall not include a city that has had a receiver
16appointed under Chapter 7 of the act of July 10, 1987 (P.L.246,
17No.47), known as the Municipalities Financial Recovery Act.
18"City revitalization and improvement zone." An area of not
19more than 130 acres, comprised of parcels designated by the
20contracting authority, which will provide economic development
21and job creation within a city.
25(1) designating zones; and
29"Department." The Department of Revenue of the Commonwealth.
30"Earned income tax." A tax imposed on earned income within a
1zone under the act of December 31, 1965 (P.L.1257, No.511),
2known as The Local Tax Enabling Act, which a city, or a school
3district contained entirely within the boundaries of or
4coterminous with the city, is entitled to receive.
5"Eligible tax." Any of the following taxes:
6(1) Corporate net income tax, capital stock and
7franchise tax, bank shares tax or business privilege tax,
8calculated and apportioned as to amount attributable to the
9location within the zone and calculated under section
101904-B(b) and (c).
25The term does not include cigarette tax.
29"Office." The Office of the Budget.
30"Pilot zone." An area of not more than 130 acres designated
1by the authority following application and approval by the
2Department of Community and Economic Development, the office and
3the department which will provide economic development and job
4creation within a township or borough, with a population of at
5least 7,000 based on the most recent Federal decennial census.
6"Qualified business." As follows:
19"Zone." Any of the following:
20(1) A city revitalization and improvement zone.
21(2) A pilot zone.
24Section 1803-C. Establishment of contracting authority.
3(c) Counties.--The home rule county where a distressed city
4under the Municipalities Financial Recovery Act is located may
5establish a contracting authority to designate a zone under this
6article within the distressed city.
7Section 1804-C. Approval.
13(2) An economic development plan.
6(d) Time.--An application under this section shall be
7approved or disapproved within 90 days of the postmark date of
8submission. An application which is not disapproved within the
9time period under this subsection shall be deemed to be
14Section 1805-C. Exclusions.
15A part of a zone may not include a keystone opportunity zone,
16keystone opportunity expansion zone, keystone opportunity
17improvement zone, keystone innovation zone, keystone special
18development zone, neighborhood improvement zone or strategic
20Section 1806-C. Functions of contracting authorities.
28(i) Development or improvement within a zone.
5Section 1807-C. Qualified businesses.
6(a) List.--By June 1 following the end of the baseline year,
7and for every year thereafter, each contracting authority shall
8file with the department a complete list of all businesses
9located in the zone and all construction contractors engaged in
10construction, reconstruction or renovation of a facility in the
11zone in the prior calendar year. The list shall include for each
12business address, State tax identification number and parcel
13number and a map of the zone with parcel numbers.
28Section 1808-C. Funds.
1(b) Establishment.--Upon receipt of notice under subsection
2(a), the State Treasurer shall establish for each zone a special
3fund for the benefit of the contracting authority to be known as
4the City Revitalization and Improvement Zone Fund. Interest
5income derived from investment of money in a fund shall be
6credited by the State Treasury to the fund.
7Section 1809-C. Reports.
8(a) State zone report.--By June 15 following the baseline
9year and each year thereafter, each qualified business shall
10file a report with the department in a form or manner required
11by the department which includes all of the following:
18(b) Local zone report.--By June 15 following the baseline
19year and for each year thereafter, each qualified business shall
20file a report with the local taxing authority which includes all
21of the following:
1penalty of the lesser of:
4(ii) one thousand dollars.
5(2) A penalty for a violation of subsection (a) shall be
6imposed, assessed and collected by the department under
7procedures set forth in Article II. Money collected under
8this paragraph shall be deposited in the General Fund.
16Section 1810-C. Calculation of baseline.
24(2) For qualified businesses not included under
25paragraph (1) but located or partially located in the zone as
26determined by the department or included in the information
27received by the department under section 1809-C(a), the
28amount of eligible State tax paid, less eligible State tax
30(b) Moves and noninclusions.--
8(2) A qualified business subject to paragraph (1) shall
9file a State zone report under section 1809-C following the
10end of the first full calendar year in which the qualified
11business conducted business in the zone and each calendar
12year thereafter. The amount of eligible State tax verified by
13the department for the qualified business for the prior
14calendar year shall be added to the State baseline tax amount
15for the zone for the prior calendar year and each year
20Section 1811-C. Certification.
30(B) the amount of eligible State tax paid.
4(B) the difference under subparagraph (i).
8(1) The certification may include the following:
16(2) The certification shall not include the following:
24(c) Submission.--The following shall apply:
25(1) An entity collecting an eligible local tax within the
26zone shall, by October 15 following the baseline year, and each
27year thereafter, submit the following to the State Treasurer for
28transfer to the fund:
9Section 1812-C. Transfers.
10(a) Office.--Within ten days of receiving the certification
11from the department under section 1811-C, the office shall
12direct the State Treasurer to transfer the amount of certified
13eligible State zone tax from the General Fund to each fund of a
15(b) State Treasurer.--Within ten days of receiving direction
16under subsection (a), the State Treasurer shall pay into the
17fund the amount directed under subsection (a) until bonds issued
18to finance the construction, including related infrastructure
19and site preparation, reconstruction or renovation of a facility
20or other eligible project in the zone are retired.
21(c) Notification.--The following shall apply:
22(1) If the transfers under subsection (a) and section
231811-C(c) are insufficient to make payments on the bonds
24issued under section 1813-C(a)(1) for the calendar year when
25the transfers are made, the contracting authority shall
26notify the Department of Community and Economic Development,
27the office and the department of the amount of additional
28money necessary to make payments on the bonds.
1authority's expenditures and the calculation which resulted
2in the request for additional money. The Department of
3Community and Economic Development, the office or the
4department may request additional information from the
5contracting authority and shall jointly verify the proper
6amount of money necessary to make the payments on the bonds.
7(3) Notwithstanding 53 Pa.C.S. § 5607(e), (relating to
8purposes and powers), within 90 days of the date of the
9notification request, the office shall direct the State
10Treasurer to establish a restricted account within the
11General Fund. The office shall direct the State Treasurer to
12transfer the amount verified under paragraph (2) from the
13General Fund to the restricted account for the use of the
14contracting authority to make payments on the bonds issued
15under section 1813-C(a)(1).
16(4) Money transferred under paragraph (3):
23(4.1) Under extraordinary circumstances, a contracting
24authority may request money in excess of the limitations in
25paragraph (4)(i). The Department of Community and Economic
26Development, the office and the department shall determine
27whether the circumstances merit additional money and the
28amount to be transferred. The money shall be transferred
29under the procedure under this section.
30(5) Money transferred under paragraph (4) shall be
1repaid to the General Fund by the contracting authority. If
2money transferred under paragraph (3) is not repaid to the
3General Fund by the contracting authority by the date of the
4final payment on the bonds originally issued under section
51813-C(a)(1), the city or county which established the
6contracting authority shall pay the money not repaid to the
7General Fund plus an additional penalty of 10% of the amount
8outstanding on the date of the final payment on the bonds
9originally issued under section 1813-C(a)(1).
10Section 1813-C. Restrictions.
25(5) Improvement or development of all or part of a zone.
30(c) Excess money.--
1(1) If the amount of money transferred to the fund under
2sections 1811-C(c) and 1812-C in any one calendar year
3exceeds the money utilized under this section in that
4calendar year, the contracting authority shall submit by
5January 15 following the end of the calendar year the excess
6money to the State Treasurer for deposit into the General
8(2) At the time of submission to the State Treasurer,
9the contracting authority shall submit to the State
10Treasurer, the office and department a detailed accounting of
11the calculation resulting in the excess money.
16(d) Matching funds.--
17(1) The amount of money transferred from the fund
18utilized for the construction, including related site
19preparation and infrastructure, reconstruction or renovation
20of facilities shall be matched by private money at a ratio of
21five fund dollars to one private dollar.
22(2) By April 1, following the baseline year and for each
23year thereafter, the contracting authority shall file an
24annual report with the Department of Community and Economic
25Development, the office and the department that contains
26detailed account of the fund money expenditures and the
27private money expenditures and a calculation of the ratio in
28paragraph (1) for the prior calendar year. The agencies shall
29determine whether sufficient private money was utilized.
30(3) If it is determined that insufficient private money
4Section 1814-C. Transfer of property.
5(a) Property.--Portions of a zone where a facility has not
6been constructed, reconstructed or renovated using money under
7this article may be transferred out of the zone. Additional
8acreage, not to exceed the acreage transferred out of the zone,
9may be added to the zone.
13Section 1815-C. Duration.
14A zone shall be in effect for a period equal to the length of
15time for the repayment of debt incurred for the zone, including
16bonds issued. Bonds shall be paid, and all zones shall cease no
17later than 30 years following the initial issuance of the bonds.
18Section 1816-C. Commonwealth pledges.
19(a) Pledge.--If and to the extent the contracting authority
20pledges amounts required to be transferred to its fund under
21section 1812-C for payment of bonds issued by the contracting
22authority, until all bonds secured by the pledge of the
23contracting authority, together with interest on the bonds, are
24fully paid or provided for, the Commonwealth pledges to and
25agrees with any person, firm, corporation or government agency,
26in this Commonwealth or elsewhere, and pledges to and agrees
27with any Federal agency subscribing to or acquiring the bonds of
28the contracting authority that the Commonwealth itself will not,
29nor will it authorize any government entity to, do any of the
1(1) Abolish or reduce the size of the zone.
2(2) Amend or repeal section 1810-C or 1811-C.
3(3) Limit or alter the rights vested in the contracting
4authority in a manner inconsistent with the obligations of
5the contracting authority with respect to the bonds issued by
6the contracting authority.
9(b) Limitation.--Nothing in this section shall limit the
10authority of the Commonwealth or a political subdivision
11government entity to change the rate, base or subject of a
12specific tax or to repeal or enact any tax.
13Section 1817-C. Confidentiality.
14(a) Sole use.--A zone report or certification under this
15article shall only be used by the contracting authority to
16verify the amount of the State tax baseline amount calculated
17under section 1810-C and State tax certification under section
22Section 1818-C. Guidelines.
26Section 32. The act is amended by adding articles to read:
28MOBILE TELECOMMUNICATIONS BROADBAND
29INVESTMENT TAX CREDIT
30Section 1801-E. Definitions.
6"Qualified broadband equipment." Machinery and equipment
7located in this Commonwealth that is used by a mobile
8telecommunication services provider to provide Internet access
9service and is capable of sending, receiving, storing,
10transmitting, retransmitting, amplifying, switching or routing
11data, video or other electronic information. The term does not
12include machinery or equipment that is used to provide voice
14"Tax credit." The credit provided under this article.
15Section 1802-E. Tax credit.
16(a) General rule.--For tax years beginning after December
1731, 2013, and ending before January 1, 2024, a taxpayer that is
18a provider of mobile communications services shall be allowed a
19tax credit against the tax imposed under Article IV for
20investment in qualified broadband equipment placed into service
21in this Commonwealth during a taxable year.
3Section 1803-E. Pass-through entity.
4(a) Transfer.--If a pass-through entity has any unused tax
5credit under this section, the entity may elect, in writing,
6according to the department's procedures, to transfer all or a
7portion of the credit to shareholders, members or partners in
8proportion to the share of the entity's distributive income to
9which the shareholder, member or partner is entitled.
10(b) Additional tax credit.--The tax credit provided under
11subsection (a) shall be in addition to any tax credit to which a
12shareholder, member or partner of a pass-through entity is
13otherwise entitled under this article, except that a pass-
14through entity and a shareholder, member or partner of a pass-
15through entity may not claim a tax credit under this article for
16the same qualified broadband equipment.
17(c) Claim.--A shareholder, member or partner of a pass-
18through entity to whom credit is transferred under subsection
19(a) must immediately claim the credit in the taxable year in
20which the transfer is made. The shareholder, member or partner
21may not carry forward, carry back, obtain a refund of or sell or
22assign the tax credit.
23Section 1804-E. Procedure.
24(a) Application.--A taxpayer who purchased and placed into
25service qualified broadband equipment in a taxable year may
26apply for a tax credit as provided in this article. By October
2715, 2015, and every October 15 thereafter, a taxpayer must
28submit an application to the department for the purchase price
29of qualified broadband equipment placed into service in the
30taxable year that ended in the prior calendar year.
1(b) Notification.--By December 15, 2015, and of the calendar
2year following the close of the taxable year during which the
3qualified broadband equipment was placed into service and every
4December 15 thereafter, the department shall notify the taxpayer
5of the amount of the taxpayer's tax credit approved by the
7Section 1805-E. Limitation.
10(b) Allocation.--If the total amount of tax credits applied
11for by all taxpayers exceeds the limitation on the amount of tax
12credits in subsection (a) in a fiscal year, the tax credit to be
13received by each application shall be the product of the
14allocated amount multiplied by the quotient of the tax credit
15applied for by the applicant divided by the total of all tax
16credits applied for by all applicants, the algebraic equivalent
17of which is:
22INNOVATE IN PA TAX CREDIT
23Section 1801-F. Scope of article.
24This article relates to the Innovate in PA Tax Credit.
25Section 1802-F. Legislative intent.
26It is the intent of this article to invest in innovation as a
27catalyst for economic growth. Investment, in the Ben Franklin
28Technology Development Authority, the Ben Franklin Technology
29Partners, regional biotechnology research centers, the
30department and venture capital funds will advance the
1competitiveness of this Commonwealth's companies in the global
2economy. It is the goal of this article to maximize the
3available funding from a minimum amount of $131,250,000 and up
4to and exceeding $147,800,000.
5Section 1803-F. Definitions.
11"Authority." The Ben Franklin Technology Development
12Authority established to manage and fund programs in this
13Commonwealth that support the development of technology as
14described in the act of June 22, 2001 (P.L.569, No.38), known as
15The Ben Franklin Technology Development Authority Act.
16"Ben Franklin Technology Partners Program." A program under
17the Ben Franklin Technology Development Authority that funds
18four regionally based economic development organizations
19dedicated to a common mission of technology commercialization.
24"Fund." The Innovate in PA Fund.
25"Impact investment." An investment intended to solve social
26or environmental challenges while generating financial profit.
27Impact investing recognizes that investments have social and
28environmental returns in addition to financial returns and
29attempts to maximize the three returns rather than one at the
30expense of others.
3"Program." The Innovate in PA Program.
25Section 1804-F. Tax credit.
26A qualified taxpayer may purchase tax credits from the
27department in accordance with this article and may apply the tax
28credits against its insurance premiums tax liability in
29accordance with this article.
30Section 1805-F. Duties.
1(a) Sale of tax credits.--The department shall have the
2authority to sell up to $175,000,000 in tax credits to qualified
3taxpayers. The sale of the tax credits shall be in accordance
4with section 1808-F.
10(1) Transfer an amount from the General Fund equal to
11the amount of premiums tax credits claimed by a foreign fire
12insurance company against taxes that otherwise would be
13distributed in accordance with Chapter 7 of the act of
14December 18, 1984 (P.L.1005, No.205), known as the Municipal
15Pension Plan Funding Standard and Recovery Act, to the fund
16as defined in section 702 of the Municipal Pension Plan
17Funding Standard and Recovery Act.
18(2) Transfer from the General Fund an amount equal to
19the amount of a premiums tax credit claimed by a foreign
20casualty insurance company against taxes that otherwise would
21be distributed and used for police pension, retirement or
22disability purposes as provided by the act of May 12, 1943
23(P.L.259, No.120), referred to as the Foreign Casualty
24Insurance Premium Tax Allocation Law, for distribution in
25accordance with the Foreign Casualty Insurance Premium Tax
27Section 1806-F. Use of tax credits by qualified taxpayers.
6(c) Construction.--The following shall apply:
7(1) A qualified taxpayer may not be required to reduce
8the amount of insurance premiums tax included by the taxpayer
9in connection with rate making for any insurance contract
10written in this Commonwealth because of a reduction of the
11taxpayer's insurance premiums tax liability derived from the
12tax credit purchased under this article.
13(2) If, under the insurance laws of this Commonwealth,
14the assets of the qualified taxpayer are examined or
15considered, the taxpayer's balance of tax credits shall be
16treated as an admitted asset subject to the same financial
17rating as held by the Commonwealth.
18(d) Limitations.--The following shall apply:
19(1) The total amount of tax credits applied against
20insurance premiums tax liability by all qualified taxpayers
21in a fiscal year may not exceed $35,000,000 per year
22beginning in calendar year 2017.
26Section 1807-F. Sale, carryover and carryback.
27(a) Carryover.--If the qualified taxpayer cannot use the
28entire amount of the tax credit for the taxable year in which
29the taxpayer is eligible for the credit, the excess may be
30carried over to succeeding taxable years and used as a credit
4(b) Sale.--No sooner than 30 days after providing the
5Insurance Department and the department written notice of the
6intent to transfer tax credits, a qualified taxpayer may
7transfer tax credits held without restriction to any entity that
8is a qualified taxpayer in good standing with the Insurance
9Department and that agrees to assume all of the transferor's
10obligations with respect to the tax credit.
13Section 1808-F. Sale of tax credits to qualified taxpayers.
17(b) Process.--The department may sell the tax credits
18authorized under this article or may contract with an
19independent third party to conduct a bidding process among
20qualified taxpayers to purchase the credits. In raising capital
21for the program, the department shall have the discretion to
22distribute credits using a market-driven approach or any
23approach that maximizes the yield to the Commonwealth.
27(d) Bidding process.--Using procedures adopted by the
28department or, if applicable, by an independent third party,
29each qualified taxpayer that submits an application shall make a
30timely and irrevocable offer, subject only to the department's
13(ii) The percentage of the requested dollar amount
14of tax credits that the department and, if applicable,
15the independent third party, determines to be consistent
16with market conditions as of the offer date.
19(f) Notice of approval.--Each qualified taxpayer that
20submits an application under this section shall receive a
21written notice from the department indicating whether or not it
22has been approved as a purchaser of tax credits and, if so, the
23amount of tax credits allocated.
4(b) Issuance of tax credit certificates.--On receipt of
5payment of capital, the department shall issue to each qualified
6taxpayer a tax credit certificate representing a fully vested
7credit against insurance premium tax liability.
8(c) Certificate issued in accordance with bidding process.--
9The department shall issue tax credit certificates to qualified
10taxpayers in accordance with the bidding process selected by the
11department or the independent third party.
21(4) Any penalties or other remedies for noncompliance.
2(b) Penalty.--A qualified taxpayer that fails to make a
3contribution of capital within the time the department specifies
4shall be subject to a penalty equal to 10% of the amount of
5capital that remains unpaid. The penalty shall be paid to the
6department within 30 days after demand.
7(c) Reallocation.--The department may offer to reallocate
8the defaulted capital among other qualified taxpayers, so that
9the result after reallocation is the same as if the initial
10allocation had been performed without considering the tax credit
11allocation to the defaulting qualified taxpayer.
12(d) Contribution.--If the reallocation of capital under
13subsection (c) results in the contribution by another qualified
14taxpayer of the amount of capital not contributed by the
15defaulting qualified taxpayer, the department may waive the
16penalty provided under subsection (b).
17(e) Transfer.--A qualified taxpayer that fails to make a
18contribution of capital within the time specified may avoid the
19imposition of the penalty by transferring the allocation of tax
20credits to a new or existing qualified taxpayer within 30 days
21after the due date of the defaulted installment. Any transferee
22of an allocation of tax credits of a defaulting qualified
23taxpayer under this subsection shall agree to make the required
24contribution of capital within 30 days after the date of the
26Section 1811-F. Innovate in PA Program.
7(2) Forty-five percent shall be distributed to the
8Venture Investment Program for use according to program
9guidelines, including traditional venture investments or
10impact investments. The authority may consider impact
11investments based on performance. Impact investments may not
12exceed 15% of the Venture Investment Program distribution
13under this paragraph.
17Section 1812-F. Guidelines.
21Section 1813-F. Report.
22(a) Duties.--On or before January 1, 2015, and January 1 of
23each subsequent year, the department, in consultation with the
24authority and each regional biotechnology research center, shall
25do the following:
28(i) The Governor.
7(1) The name of the purchaser of premiums tax credits.
30NEIGHBORHOOD IMPROVEMENT ZONES
1Section 1901-B. Scope of article.
2This article relates to neighborhood improvement zones.
3Section 1902-B. Definitions.
12"City." A city of the third class with, on the date of the
13designation of a neighborhood improvement zone by the
14contracting authority, a population of at least 106,000, based
15on the most recent Federal decennial census.
16"Contracting authority." An authority created under 53
17Pa.C.S. Ch. 56 (relating to municipal authorities) for the
18purpose of designating a neighborhood improvement zone and
19constructing a facility or other authority created under the
20laws of this Commonwealth which is eligible to apply for and
21receive redevelopment assistance capital grants under Chapter 3
22of the act of February 9, 1999 (P.L.1, No.1), known as the
23Capital Facilities Debt Enabling Act.
24"Department." The Department of Revenue of the Commonwealth.
25"Earned income tax." A tax or portion of a tax imposed on
26earned income within a neighborhood improvement zone under the
27act of December 31, 1965 (P.L.1257, No.511), known as The Local
28Tax Enabling Act, which a city, or a school district contained
29entirely within the boundaries of or coterminous with the city,
30is entitled to receive.
1"Facility." A stadium, arena or other structure owned or
2leased by a professional sports organization at which
3professional athletic events are conducted in the presence of
4individuals who pay admission to view the event constructed or
5operated by the contracting authority.
6"Facility complex." A development or complex of residential,
7commercial, exhibition, hospitality, conference, retail and
8community uses which includes a stadium arena or other place
9owned, leased or utilized by a professional sports organization
10at which a professional athletic event or other events are
11conducted in the presence of individuals who pay admission to
12view the event.
21(1) Owns a professional sports franchise.
24"Qualified business." An entity authorized to conduct
25business in this Commonwealth which is located or partially
26located within a neighborhood improvement zone and is engaged in
27the active conduct of a trade or business for the taxable year.
28An agent, broker or representative of a business shall not be
29considered to be in the active conduct of trade or business for
1Section 1903-B. Facility.
2The contracting authority may designate a neighborhood
3improvement zone of not greater than 130 acres in which a
4facility or facility complex may be constructed and may borrow
5funds for the purpose of improvement and development within the
6neighborhood improvement zone and construction of a facility or
7facility complex within the zone.
8Section 1904-B. Neighborhood Improvement Zone Funds.
9(a) Special funds.--Following the designation of a
10neighborhood improvement zone, the contracting authority shall,
11within ten days of making the designation or, in the case of a
12neighborhood improvement zone designated prior to July 1, 2012,
13within ten days of July 2, 2012, notify the State Treasurer of
14the designation. Upon the notice, the State Treasurer shall
15establish a special fund for the benefit of each contracting
16authority to be known as the "Neighborhood Improvement Zone
17Fund." Interest income derived from investment of the money in
18each fund shall be credited by the Treasury Department to the
29(A) The refund is for a tax:
30(I) set forth in subsection (b); and
1(II) certified as paid under subsection (b).
6(2) In addition to any penalties imposed under this act
7for failure to timely pay State taxes, failure to file a
8timely and complete report under paragraph (1) shall result
9in the imposition of a penalty of 10% of all State taxes,
10calculated in accordance with subsection (b), which were
11payable by the qualified business in the prior calendar year.
12(3) Any penalty imposed under this subsection shall be
13imposed, assessed and collected by the department under the
14provisions for imposing, assessing and collecting penalties
15under Article II of this act. When the penalty is received,
16the money shall be transferred from the General Fund to the
17fund of the contracting authority that designated the
18neighborhood improvement zone in which the qualifying
19business is located.
20(4) Within 30 days of the end of each calendar year,
21each qualified business shall file a report with the local
22taxing authority reporting all local taxes, calculated in
23accordance with subsection (b), which were paid by the
24qualified business in the prior calendar year. The report
25from each qualified business shall also list any local tax
26refunds of taxes set forth in subsection (b) received in the
27prior calendar year by the qualified business and any refunds
28related to the local taxes as calculated in accordance with
29subsection (b). The report shall be in a form and manner
30required by the department.
12(2) An entity collecting a local tax that, on July 2,
132012, is in possession of money attributable to a local tax
14not included in the amount to be calculated and certified
15under subsection (b) shall promptly remit that money to the
16local taxing authority entitled to receive the money.
17(3) Transfer and repayment is subject to the following:
27(ii) If any amount of the money under subparagraph
28(i)(A) has already been transferred to a contracting
29authority, the State Treasurer shall take action as
30necessary to recover the money from the contracting
1authority, including by way of setoff from money to be
2paid to the contracting authority under paragraph (1).
3The contracting authority shall comply with a demand made
4by the State Treasurer for the repayment of money under
15(b) Calculation.--Within 60 days of the end of each calendar
16year, the department shall certify separately for each
17neighborhood improvement zone the amounts of State taxes paid,
18less any State tax refunds received, by the qualified businesses
19filing reports under subsection (a.1)(1) to the Office of the
20Budget. Beginning in the first full calendar year following the
21designation of a neighborhood improvement zone and in each
22calendar year thereafter, by November 1, the department shall
23calculate, in accordance with this subsection, amounts of State
24taxes actually received by the Commonwealth from each qualified
25business that filed a report under subsection (a.1)(1) in the
26prior calendar year, and the department shall certify the
27amounts received to the office. An entity collecting a local tax
28within the neighborhood improvement zone shall, within 30 days
29of the end of each calendar year, submit all of the local taxes
30that are to be calculated under this subsection and which were
1paid in the prior calendar year, less any certified local tax
2refunds received by a qualified business in the prior calendar
3year, to the State Treasurer to be deposited in the fund under
4subsection (d) of the contracting authority that established the
5neighborhood improvement zone. This subsection shall not apply
6to any taxes subject to a valid pledge or security interest
7entered into in order to secure debt service on bonds if the
8pledge or security interest was entered into prior to May 1,
92011, or in the case of the neighborhood improvement zone
10designated after July 1, 2011, on the date of the designation,
11and is still in effect. The following shall be the amounts
12calculated and certified separately for each neighborhood
14(1) An amount equal to all corporate net income tax,
15capital stock and franchise tax, personal income tax,
16business privilege tax, business privilege licensing fees and
17earned income tax related to the ownership and operation of a
18professional sports organization conducting professional
19athletic events at the facility or facility complex.
20(2) An amount equal to all of the following:
21(i) All personal income tax, earned income tax and
22local services tax withheld from its employees by a
23professional sports organization conducting professional
24athletic events at the facility or facility complex.
25(ii) All personal income tax, earned income tax and
26local services tax withheld from the employees of any
27provider of events at or services to, or any operator of
28an enterprise in, the facility or facility complex.
4(3) An amount equal to all sales and use tax related to
5the operation of the professional sports organization and the
6facility and enterprises developed as part of the facility
7complex. This paragraph shall include sales and use tax paid
8by any provider of events or activities at or services to the
9facility or facility complex, including sales and use tax
10paid by vendors and concessionaires and contractors at the
11facility or facility complex.
15(5) The amount paid by the professional sports
16organization or by any provider of events or activities at or
17services to the facility or facility complex of any new tax
18enacted by the Commonwealth following October 9, 2009.
19(6) An amount equal to all personal income tax, earned
20income tax and local services tax withheld from personnel by
21the professional sports organization or by a contractor or
22other entity involved in the construction of the facility or
24(7) An amount equal to all sales and use tax paid on
25materials and other construction costs, whether withheld or
26paid by the professional sports organization or other entity,
27directly related to the construction of the facility or
29(8) An amount equal to all of the following:
30(i) All corporate net income tax, capital stock and
1franchise tax, personal income tax, business privilege
2tax, business privilege licensing fees and earned income
3tax related to the ownership and operation of any
4qualified business within the neighborhood improvement
10(iii) All personal income tax, earned income tax and
11local services tax withheld from the employees of a
12qualified business that provides events, activities or
13services in the neighborhood improvement zone.
14(iv) All personal income tax, earned income tax and
15local services tax to which the Commonwealth would be
16entitled from performers or other participants at an
17event or activity in the neighborhood improvement zone.
18(v) All sales and use tax related to the operation
19of a qualified business within the neighborhood
20improvement zone. This subparagraph shall include sales
21and use tax paid by a qualified business that provides
22events, activities or services in the neighborhood
1(viii) All personal income tax, earned income tax
2and local services tax withheld from personnel by a
3qualified business involved in the improvement,
4development or construction of the neighborhood
6(ix) All sales and use tax paid on materials and
7other construction costs, whether withheld or paid by the
8professional sports organization or other qualified
9business, directly related to the improvement,
10development or construction of the neighborhood
12(x) An amount equal to any amusement tax paid by a
13qualified business operating in the neighborhood
14improvement zone. No political subdivision or other
15entity authorized to collect amusement taxes may impose
16or increase the rate of any tax on admissions to places
17of entertainment, exhibition, amusement or upon athletic
18events in the neighborhood improvement zone which are not
19in effect on the date the neighborhood improvement zone
20is designated by the contracting authority.
21(9) Except for a tax levied against real property and
22notwithstanding any other law, an amount equal to any tax
23imposed by the Commonwealth or any of its political
24subdivisions on a qualified business engaged in an activity
25within the neighborhood improvement zone or directly or
26indirectly on any sale or purchase of goods or services,
27where the point of sale or purchase is within the
28neighborhood improvement zone.
1liability of a qualified business shall be apportioned to the
2neighborhood improvement zone by multiplying the Pennsylvania
3State tax liability by a fraction, the numerator of which is the
4property factor plus the payroll factor plus the sales factor
5and the denominator of which is three, in accordance with the
7(1) The property factor is a fraction, the numerator of
8which is the average value of the taxpayer's real and
9tangible personal property owned or rented and used in the
10neighborhood improvement zone during the tax period and the
11denominator of which is the average value of all the
12taxpayer's real and tangible personal property owned or
13rented and used in this Commonwealth during the tax period
14but shall not include the security interest of any
15corporation as seller or lessor in personal property sold or
16leased under a conditional sale, bailment lease, chattel
17mortgage or other contract providing for the retention of a
18lien or title as security for the sale price of the property.
19(2) The following apply:
20(i) The payroll factor is a fraction, the numerator
21of which is the total amount paid in the neighborhood
22improvement zone during the tax period by the taxpayer
23for compensation and the denominator of which is the
24total compensation paid in this Commonwealth during the
30(B) the person's service is performed both
1within and without the neighborhood improvement zone,
2but the service performed without the neighborhood
3improvement zone is incidental to the person's
4service within the neighborhood improvement zone; or
5(C) some of the service is performed in the
6neighborhood improvement zone and the base of
7operations or, if there is no base of operations, the
8place from which the service is directed or
9controlled is in the neighborhood improvement zone,
10or the base of operations or the place from which the
11service is directed or controlled is not in any
12location in which some part of the service is
13performed, but the person's residence is in the
14neighborhood improvement zone.
15(3) The sales factor is a fraction, the numerator of
16which is the total sales of the taxpayer in the neighborhood
17improvement zone during the tax period and the denominator of
18which is the total sales of the taxpayer in this Commonwealth
19during the tax period.
20(i) Sales of tangible personal property are in the
21neighborhood improvement zone if the property is
22delivered or shipped to a purchaser that takes possession
23within the neighborhood improvement zone regardless of
24the F.O.B. point or other conditions of the sale.
6(1) Within ten days of receiving certification under
7subsection (b), the Secretary of the Budget shall direct the
8State Treasurer to, notwithstanding any other law, transfer
9the amounts certified under subsection (b) for each
10neighborhood improvement zone from the General Fund to the
11fund of the contracting authority that established the
12neighborhood improvement zone. Beginning in the second
13calendar year following the designation of a neighborhood
14improvement zone and in each year thereafter, the amounts
15certified by the secretary to the State Treasurer and the
16amounts transferred by the State Treasurer to the fund of
17each contracting authority shall be determined as follows:
26(iv) Subtract from the sum under subparagraph (iii)
27any amounts certified under subsection (b) which are less
28than the amounts previously certified under subsection
29(b) with respect to the second prior calendar year.
30(2) The State Treasurer shall provide an annual transfer
1to the contracting authority until the bonds issued to
2finance and refinance the improvement and development of the
3neighborhood improvement zone and the construction of the
4facility or facility complex are retired. Each annual
5transfer to the contracting authority shall be equal to the
6balance of the fund of the contracting authority on the date
7of the transfer under paragraph (1).
10(1) The money may only be utilized as follows:
11(i) For payment of debt service, directly or
12indirectly through a multitiered ownership structure or
13other structure authorized by a contracting authority to
14facilitate financing mechanisms, on bonds or on
15refinancing loans used to repay bonds issued to finance
26(1.1) The term of a bond to be refunded shall not exceed
27the maximum term permitted for the original bond issued for
28the improvement or development of the neighborhood
29improvement zone and the construction of a facility or