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 inheritance tax, adding definitions of
11"domestic partner" and "spouse"; and further providing for
12joint tenancy, for transfers not subject to tax, for
13inheritance tax and for duties of depositories.

14The General Assembly of the Commonwealth of Pennsylvania
15hereby enacts as follows:

16Section 1. Section 2102 of the act of March 4, 1971 (P.L.6, 
17No.2), known as the Tax Reform Code of 1971, is amended by
18adding definitions to read:

19Section 2102. Definitions.--The following words, terms and
20phrases, when used in this article, shall have the meanings
21ascribed to them in this section, except where the context
22clearly indicates a different meaning:

23* * *

1"Domestic partner." An otherwise unrelated individual who
2resides with another individual if evidence exists to establish
3that at least three of the following apply:

4(1) The individuals have entered into a domestic partnership
5agreement which is recognized by a governmental entity.

6(2) The individuals hold common ownership of real property
7or have a common leasehold interest in real property.

8(3) The individuals hold joint title to a motor vehicle.

9(4) The individuals list a common address on their
10respective driver's licenses.

11(5) The individuals have joint bank or credit accounts.

12(6) One of the individuals has designated the other as a
13beneficiary:

14(i) in a life insurance policy;

15(ii) for retirement benefits; or

16(iii) in a will.

17(7) One of the individuals has designated the other power of
18attorney or health care power of attorney and the other
19individual accepted the designation.

20* * *

21"Spouse." A husband, wife or domestic partner.

22* * *

23Section 2. Sections 2108(b) and 2111(m) of the act, amended
24June 30, 1995 (P.L.139, No.21), are amended to read:

25Section 2108. Joint Tenancy.--* * *

26(b) Except as provided in subsection (c), this section shall
27not apply to property or interests in property passing by right
28of survivorship to the survivor of [husband and wife] a spouse.

29Section 2111. Transfers Not Subject to Tax.--* * *

30(m) Property owned by [husband and wife] a spouse with right

1of survivorship is exempt from inheritance tax. If the ownership
2was created within the meaning of section 2107(c)(3), the entire
3interest transferred shall be subject to tax under section
42107(c)(3) as though a part of the estate of the spouse who
5created the co-ownership.

6* * *

7Section 3. Section 2116(a) and (b.1) of the act, amended or
8added June 16, 1994 (P.L.279, No.48) and May 24, 2000 (P.L.106,
9No.23), are amended to read:

10Section 2116. Inheritance Tax.--(a) (1) Inheritance tax
11upon the transfer of property passing to or for the use of any
12of the following shall be at the rate of four and one-half per
13cent:

14(i) grandfather, grandmother, father, mother, except
15transfers under subclause (1.2), and lineal descendants; or

16(ii) [wife or widow and husband or widower] spouse and widow 
17or widower of a child.

18(1.1) Inheritance tax upon the transfer of property passing
19to or for the use of a [husband or wife] spouse shall be:

20(i) At the rate of three per cent for estates of decedents
21dying on or after July 1, 1994, and before January 1, 1995.

22(ii) At a rate of zero per cent for estates of decedents
23dying on or after January 1, 1995.

24(1.2) Inheritance tax upon the transfer of property from a
25child twenty-one years of age or younger to or for the use of a
26natural parent, an adoptive parent or a stepparent of the child
27shall be at the rate of zero per cent.

28(1.3) Inheritance tax upon the transfer of property passing
29to or for the use of a sibling shall be at the rate of twelve
30per cent.

1(2) Inheritance tax upon the transfer of property passing to
2or for the use of all persons other than those designated in
3subclause (1), (1.1), (1.2) or (1.3) or exempt under section
42111(m) shall be at the rate of fifteen per cent.

5(3) When property passes to or for the use of a [husband and
6wife] spouse with right of survivorship, one of whom is taxable
7at a rate lower than the other, the lower rate of tax shall be
8applied to the entire interest.

9* * *

10(b.1) The inheritance tax due upon the transfer of property
11passing to or for the use of a [husband or wife] spouse shall be
12the lesser of the tax imposed under subsection (a)(1.1) or the
13tax due after the allowance of the credit provided for under
14section 2112.

15Section 4. Section 2147 of the act, added August 4, 1991
16(P.L.97, No.22), is amended to read:

17Section 2147. Duties of Depositories.--When money is
18deposited or invested in a financial institution located in this
19Commonwealth in the names of two or more persons, other than
20[husband and wife] a spouse, or in the name of a person or
21persons in trust for another or others, and one of the parties
22to the deposit or investment dies, it shall be the duty of the
23financial institution, within ten days after knowledge of the
24death, to notify the department, giving the name of the deceased
25person, the date of the creation of the joint or trust deposit
26or investment, the amount invested or on deposit at the date of
27death with the financial institution and the name and address of
28the survivor or survivors to the account. No notification shall
29be required in regard to the account when the deposit at the
30time of death does not exceed three hundred dollars ($300).

1Section 5. This act shall apply to the estates of decedents
2who die after June 30, 2013.

3Section 6. This act shall take effect immediately.