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PRIOR PRINTER'S NOS. 568, 1563, 2259
PRINTER'S NO. 2536
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
542
Session of
2017
INTRODUCED BY THOMAS, D. COSTA, MICCARELLI AND DAVIS,
FEBRUARY 17, 2017
AS AMENDED IN COMMITTEE ON RULES, OCTOBER 3, 2017
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties,"
further providing for the title of the act;
in sales and use tax, further providing for definitions,
for imposition of tax and for exclusions from tax; providing
for marketplace providers and marketplace sellers; further
providing for remote sales reports;
in personal income tax, providing for the Pennsylvania
ABLE Savings Program Tax Exemption, repealing provisions
relating to contribution for Korea/Vietnam Memorial National
Education Center and further providing for operational
provisions;
in corporate net income tax, further providing for
definitions and providing for qualified manufacturing
innovation and reinvestment deduction;
in gross receipts tax, further providing for imposition
of tax and establishing the Natural Gas Optimization Fund and
Natural Gas Optimization Program;
in realty transfer tax, further providing for definitions
and for exempt parties;
in entertainment production tax credit, further providing
for definitions and for credit for qualified film production
expenses, providing for film production tax credit districts
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and establishing the Entertainment Economic Enhancement
Program;
in city revitalization and improvement zones, further
providing for restrictions and for transfer of property;
in neighborhood improvement zones, further providing for
definitions and providing for transfer of property;
in keystone opportunity zones, keystone opportunity
expansion zones and keystone opportunity improvement zones,
further providing for additional keystone opportunity zones;
in inheritance tax, further providing for timely mailing
treated as timely filing and payment;
providing for an electric grid virtual financial
transactions tax;
in Public Transportation Assistance Fund, further
providing for fund;
providing for fireworks, for unconventional gas wells,
for unconventional natural gas air quality protection and for
environmental permitting reform;
in procedure and administration, further providing for
petition for reassessment, for petition procedure and for
review by board;
providing for Tobacco Master Settlement Payment Fund;
in general provisions, further providing for timely
filing;
providing for severability; and
making related repeals.
AMENDING THE ACT OF MARCH 4, 1971 (P.L.6, NO.2), ENTITLED "AN
ACT RELATING TO TAX REFORM AND STATE TAXATION BY CODIFYING
AND ENUMERATING CERTAIN SUBJECTS OF TAXATION AND IMPOSING
TAXES THEREON; PROVIDING PROCEDURES FOR THE PAYMENT,
COLLECTION, ADMINISTRATION AND ENFORCEMENT THEREOF; PROVIDING
FOR TAX CREDITS IN CERTAIN CASES; CONFERRING POWERS AND
IMPOSING DUTIES UPON THE DEPARTMENT OF REVENUE, CERTAIN
EMPLOYERS, FIDUCIARIES, INDIVIDUALS, PERSONS, CORPORATIONS
AND OTHER ENTITIES; PRESCRIBING CRIMES, OFFENSES AND
PENALTIES,"
IN SALES AND USE TAX, FURTHER PROVIDING FOR DEFINITIONS,
FOR IMPOSITION OF TAX AND FOR EXCLUSIONS FROM TAX, PROVIDING
FOR MARKETPLACE PROVIDERS AND MARKETPLACE SELLERS AND FURTHER
PROVIDING FOR REMOTE SALES REPORTS;
PROVIDING FOR LODGING TAX;
IN PERSONAL INCOME TAX, PROVIDING FOR THE PENNSYLVANIA
ABLE SAVINGS PROGRAM TAX EXEMPTION, REPEALING PROVISIONS
RELATING TO CONTRIBUTION FOR KOREA/VIETNAM MEMORIAL NATIONAL
EDUCATION CENTER, FURTHER PROVIDING FOR OPERATIONAL
PROVISIONS, PROVIDING FOR DEFINITIONS, FURTHER PROVIDING FOR
REQUIREMENT OF WITHHOLDING TAX, PROVIDING FOR WITHHOLDING TAX
REQUIREMENT FOR NON-EMPLOYER PAYORS, FURTHER PROVIDING FOR
INFORMATION STATEMENT, PROVIDING FOR INFORMATION STATEMENT
FOR NON-EMPLOYER PAYORS AND FOR INFORMATION STATEMENT FOR
PAYEES, FURTHER PROVIDING FOR TIME FOR FILING WITHHOLDING
RETURNS, PROVIDING FOR TIME FOR FILING PAYORS' RETURNS,
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FURTHER PROVIDING FOR PAYMENT OF TAXES WITHHELD, PROVIDING
FOR PAYMENT OF TAXES WITHHELD FOR NON-EMPLOYER PAYORS,
FURTHER PROVIDING FOR LIABILITY FOR WITHHELD TAXES, PROVIDING
FOR PAYOR'S LIABILITY FOR WITHHELD TAXES AND FOR PAYOR'S
FAILURE TO WITHHOLD, FURTHER PROVIDING FOR AMOUNT OF
WITHHOLDING TAX AND FOR TREATMENT OF NONRESIDENT PARTNERS,
MEMBERS OR SHAREHOLDERS, PROVIDING FOR WITHHOLDING ON INCOME
AND FOR ANNUAL WITHHOLDING STATEMENT AND FURTHER PROVIDING
FOR REQUIREMENTS CONCERNING RETURNS, NOTICES, RECORDS AND
STATEMENTS AND FOR ADDITIONS, PENALTIES AND FEES;
IN CORPORATE NET INCOME TAX, FURTHER PROVIDING FOR
DEFINITIONS AND PROVIDING FOR QUALIFIED MANUFACTURING
INNOVATION AND REINVESTMENT DEDUCTION;
IN REALTY TRANSFER TAX, FURTHER PROVIDING FOR DEFINITIONS
AND FOR EXEMPT PARTIES;
PROVIDING FOR TAX CREDIT ELIGIBILITY;
IN ENTERTAINMENT PRODUCTION TAX CREDIT, FURTHER PROVIDING
FOR DEFINITIONS AND FOR CREDIT FOR QUALIFIED FILM PRODUCTION
EXPENSES, PROVIDING FOR FILM PRODUCTION TAX CREDIT DISTRICTS
AND ESTABLISHING THE ENTERTAINMENT ECONOMIC ENHANCEMENT
PROGRAM;
IN CITY REVITALIZATION AND IMPROVEMENT ZONES, FURTHER
PROVIDING FOR RESTRICTIONS AND FOR TRANSFER OF PROPERTY;
IN NEIGHBORHOOD IMPROVEMENT ZONES, PROVIDING FOR TRANSFER
OF PROPERTY;
IN KEYSTONE OPPORTUNITY ZONES, KEYSTONE OPPORTUNITY
EXPANSION ZONES AND KEYSTONE OPPORTUNITY IMPROVEMENT ZONES,
FURTHER PROVIDING FOR ADDITIONAL KEYSTONE OPPORTUNITY ZONES;
IN INHERITANCE TAX, FURTHER PROVIDING FOR TIMELY MAILING
TREATED AS TIMELY FILING AND PAYMENT;
IN PUBLIC TRANSPORTATION ASSISTANCE FUND, FURTHER
PROVIDING FOR FUND;
PROVIDING FOR FIREWORKS;
IN PROCEDURE AND ADMINISTRATION, FURTHER PROVIDING FOR
PETITION FOR REASSESSMENT AND FOR REVIEW BY BOARD;
IN GENERAL PROVISIONS, FURTHER PROVIDING FOR TIMELY
FILING;
PROVIDING FOR SEVERABILITY;
MAKING RELATED REPEALS; AND
MAKING EDITORIAL CHANGES.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The title of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971, is amended to read:
AN ACT
Relating to tax reform and State taxation by codifying and
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enumerating certain subjects of taxation and imposing taxes
thereon; providing procedures for the payment, collection,
administration and enforcement thereof; providing for tax
credits in certain cases; providing for environmental
permitting; conferring powers and imposing duties upon the
Department of Revenue, certain employers, fiduciaries,
individuals, persons, corporations and other entities;
prescribing crimes, offenses and penalties.
Section 1.1. Section 201(m) of the act, amended July 13,
2016 (P.L.526, No.84), is amended and the section is amended by
adding clauses to read:
Section 201. Definitions.--The following words, terms and
phrases when used in this Article II shall have the meaning
ascribed to them in this section, except where the context
clearly indicates a different meaning:
* * *
(m) "Tangible personal property."
(1) Corporeal personal property including, but not limited
to, goods, wares, merchandise, steam and natural and
manufactured and bottled gas for non-residential use,
electricity for non-residential use, prepaid telecommunications,
premium cable or premium video programming service, spirituous
or vinous liquor and malt or brewed beverages and soft drinks,
interstate telecommunications service originating or terminating
in the Commonwealth and charged to a service address in this
Commonwealth, intrastate telecommunications service with the
exception of (i) subscriber line charges and basic local
telephone service for residential use and (ii) charges for
telephone calls paid for by inserting money into a telephone
accepting direct deposits of money to operate, provided further,
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the service address of any intrastate telecommunications service
is deemed to be within this Commonwealth or within a political
subdivision, regardless of how or where billed or paid. In the
case of any such interstate or intrastate telecommunications
service, any charge paid through a credit or payment mechanism
which does not relate to a service address, such as a bank,
travel, credit or debit card, but not including prepaid
telecommunications, is deemed attributable to the address of
origination of the telecommunications service.
(2) The term shall include the following, whether
electronically or digitally delivered, streamed or accessed and
whether purchased singly, by subscription or in any other
manner, including maintenance[,] and updates [and support]:
(i) video;
(ii) photographs;
(iii) books;
(iv) any other otherwise taxable printed matter;
(v) applications, commonly known as apps;
(vi) games;
(vii) music;
(viii) any other audio, including satellite radio service;
(ix) canned software, notwithstanding the function
performed, including support, except separately invoiced help
desk or call center support; or
(x) any other otherwise taxable tangible personal property
electronically or digitally delivered, streamed or accessed.
* * *
(eee) "Marketplace provider." A person who, either directly
or indirectly through agreements or arrangements with third
parties and pursuant to an agreement with a marketplace seller,
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facilitates a sale by a marketplace seller. For purposes of this
definition, a person "facilitates a sale" if the person or an
affiliated person:
(1) collects the payment made by a customer to or for a
marketplace seller regardless of whether the marketplace
provider receives compensation or other consideration in
exchange for its services; and
(2) provides the forum in which, or by means of which, the
sale takes place, including a shop, a store, a booth, an
Internet website, a catalog or a similar forum.
(fff) "Marketplace seller." A person, whether or not the
person is required to register to collect tax under this
article, who:
(1) has an agreement with a marketplace provider under which
the marketplace provider will facilitate sales for the person;
and
(2) makes sales at retail subject to tax under this article.
Section 2. Section 202(a) of the act is amended to read:
Section 202. Imposition of Tax.--(a) There is hereby
imposed upon each separate sale at retail of tangible personal
property or services, as defined herein, within this
Commonwealth a tax of six per cent of the purchase price, which
tax shall be collected by the vendor from the purchaser, or by
the marketplace provider for each separate sale at retail
facilitated for a marketplace seller, and shall be paid over to
the Commonwealth as herein provided.
* * *
Section 2.1. Section 204(13) of the act, amended July 13,
2016 (P.L.526, No.84), is amended to read:
Section 204. Exclusions from Tax.--The tax imposed by
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section 202 shall not be imposed upon any of the following:
* * *
(13) The sale at retail, or use of wrapping paper, wrapping
twine, bags, cartons, tape, rope, labels, nonreturnable
containers [and], all other wrapping supplies and kegs used to
contain malt or brewed beverages, when such use is incidental to
the delivery of any personal property, except that any charge
for wrapping or packaging shall be subject to tax at the rate
imposed by section 202, unless the property wrapped or packaged
will be resold by the purchaser of the wrapping or packaging
service. As used in this paragraph, the term "cartons" includes
corrugated boxes used by a person engaged in the manufacture of
snack food products to deliver the manufactured product, whether
or not the boxes are returnable for potential reuse.
* * *
Section 2.2. Article II of the act is amended by adding a
part to read:
PART V-A
MARKETPLACE PROVIDERS AND MARKETPLACE SELLERS
Section 213. Marketplace Providers and Marketplace
Sellers.--(a) A marketplace provider shall:
(1) comply with all of the provisions of this article with
respect to the collection of tax by vendors;
(2) have all the duties, benefits and entitlements of a
person required to collect tax under this article with respect
to sales facilitated for a marketplace seller, as if the
marketplace provider were the vendor with respect to the sale,
including the right to receive the refund authorized by section
247 or section 247.1; and
(3) keep the records and information required of a vendor
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under this article.
(b) A marketplace seller is not a person required to collect
tax for purposes of this section regarding a particular sale at
retail if:
(1) the marketplace seller can show that the sale was
facilitated by a marketplace provider from whom the seller has
received a properly completed certificate of collection on a
form prescribed by the department certifying that the
marketplace provider is registered to collect tax and will
collect tax on all taxable sales by the marketplace seller and
with other information as the department may prescribe; and
(2) any failure of the marketplace provider to collect the
proper amount of tax in regard to the sale was not the result of
the marketplace seller providing the marketplace provider with
incorrect information.
(c) This section shall be administered in a manner
consistent with this article as if a certificate of collection
were a resale or exemption certificate, including with regard to
the completeness of the certificate of collection and the timing
of its acceptance by the marketplace seller, provided that, with
regard to any sales by a marketplace seller that are facilitated
by a marketplace provider who is affiliated with the marketplace
seller, the marketplace seller shall be deemed liable as a
person under a duty to act for the marketplace provider for
purposes of this article.
(d) A marketplace provider is relieved of liability under
this section for failure to collect the correct amount of tax to
the extent that the marketplace provider can show that the error
was due to incorrect information given to the marketplace
provider by the marketplace seller. This subsection shall not
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apply if the marketplace seller and marketplace provider are
affiliated.
(e) For purposes of this section, two persons are affiliated
if one person has an ownership interest of more than five per
cent, whether direct or indirect, in the other, or where an
ownership interest of more than five per cent, whether direct or
indirect, is held in each of the persons by another person or by
a group of other persons which are affiliated persons with
respect to each other.
Section 2.3. Section 278 of the act is amended by adding a
subsection to read:
Section 278. Remote Sales Reports.--* * *
(c) If Federal legislation relating to remote sellers has
not been enacted by December 31, 2018, the Independent Fiscal
Office, in conjunction with the Department of Revenue, shall
conduct a study assessing the legal implications and fiscal
impact of mandating notice requirements for remote sellers. By
April 1, 2019, results of the study, if a study is produced,
shall be provided to the chairman and minority chairman of the
Appropriations Committee of the Senate, the chairman and
minority chairman of the Finance Committee of the Senate, the
chairman and minority chairman of the Appropriations Committee
of the House of Representatives and the chairman and minority
chairman of the Finance Committee of the House of
Representatives.
Section 3. The act is amended by adding a section to read:
Section 304.2. Pennsylvania ABLE Savings Program Tax
Exemption.--(a) The following shall be exempt from all taxation
by the Commonwealth and its political subdivisions:
(1) Undistributed earnings on an account.
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(2) An amount distributed from an account that is not
included in gross income under section 529A(c)(1) of the
Internal Revenue Code .
(b) The following shall apply:
(1) An amount contributed to an account shall be deductible
from the taxable income of the contributor under this article
for the tax year the contribution was made.
(2) The total contributions made by a contributor during a
taxable year to all accounts that are allowable as a deduction
under this section shall not exceed the dollar amount under
section 2503(b) of the Internal Revenue Code .
(3) The deduction shall not result in the contributor's
taxable income being less than zero.
(4) The department and the Treasury Department shall
cooperate in verifying account information relating to
contributions to an account itemized by a contributor and the
contributor's specific contributions.
(c) An amount that is distributed from an account and not
otherwise exempt from taxation under this section shall be
taxable income to the designated beneficiary under this article.
(d) A change in designated beneficiaries under section
529A(c) of the Internal Revenue Code shall not constitute a
taxable event.
(e) As used in this section, the following words and phrases
shall have the meanings given to them in this subsection unless
the context clearly indicates otherwise:
"Account." An ABLE savings account as defined in section 102
of the Pennsylvania ABLE Act.
"Contributor." An individual who makes a contribution to an
account as defined in section 102 of the Pennsylvania ABLE Act.
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"Designated beneficiary." The term shall have the same
meaning as provided in section 102 of the Pennsylvania ABLE Act.
"Internal Revenue Code." The Internal Revenue Code of 1986
(Public Law 99-514, 26 U.S.C. § 1 et seq.), as amended.
"Pennsylvania ABLE Act." The act of April 18, 2016 (P.L.128,
No.17), known as the Pennsylvania ABLE Act.
"Pennsylvania ABLE Savings Program." The program established
under the Pennsylvania ABLE Act.
"Qualified disability expense." The term shall have the same
meaning as provided in section 102 of the Pennsylvania ABLE Act.
"Rollover distribution." The term shall have the same
meaning as provided in section 102 of the Pennsylvania ABLE Act
* * *
Section 4. Section 315.6 of the act is repealed:
[Section 315.6. Contribution for Korea/Vietnam Memorial
National Education Center.--(a) For tax years 1997, 1998, 1999,
2000, 2001, 2002, 2003 and 2004, the department shall provide a
space on the face of the Pennsylvania individual income tax
return form whereby an individual may voluntarily designate a
contribution of any amount from the individual's tax refund to
the Korea/Vietnam Memorial National Education Center.
(b) The amount designated by an individual on the
Pennsylvania individual income tax return form shall be deducted
from the tax refund to which the individual is entitled and
shall not constitute a charge against the income tax revenues
due the Commonwealth.
(c) The department shall determine annually the total amount
designated by individual taxpayers under this section and shall
report the amount to the State Treasurer, who shall prepare the
appropriate documentation and transfer the designated amount
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from the General Fund to the Korea/Vietnam Memorial National
Education Center.
(d) The department shall provide adequate information
regarding the center and its purposes in its instructions for
tax years 1997, 1998, 1999, 2000, 2001, 2002, 2003 and 2004
which accompany Pennsylvania individual income tax return forms
to include the address of the Korea/Vietnam Memorial National
Education Center to which contributions may be sent by taxpayers
who wish to make additional contributions to the center.
(e) On or before March 31 of each year, the Korea/Vietnam
Memorial National Education Center shall submit a report
detailing contributions received and activities undertaken
during the prior calendar year to the Military and Veterans'
Affairs Committee of the Senate and the Veterans Affairs and
Emergency Preparedness Committee of the House of
Representatives.
(f) This section shall expire December 31, 2005.]
Section 4.1. Section 315.9(b.1) and (c) of the act are
amended to read:
Section 315.9. Operational Provisions.--
* * *
(b.1) Notwithstanding subsection (b), the checkoffs
established in sections 315.2 [and], 315.3, 315.4, 315.7, 315.8,
315.10 and 315.11 shall not expire.
[(c) Sections 315.3, 315.4 and 315.8 shall expire January 1,
2018.]
Section 4.2. Section 401(3)4(c) of the act is amended and
the subsection is amended by adding a clause to read:
Section 401. Definitions.--The following words, terms, and
phrases, when used in this article, shall have the meaning
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ascribed to them in this section, except where the context
clearly indicates a different meaning:
* * *
(3) "Taxable income." * * *
4. * * *
(c) (1) The net loss deduction shall be the lesser of:
(A) (I) For taxable years beginning before January 1, 2007,
two million dollars ($2,000,000);
(II) For taxable years beginning after December 31, 2006,
the greater of twelve and one-half per cent of taxable income as
determined under subclause 1 or, if applicable, subclause 2 or
three million dollars ($3,000,000);
(III) For taxable years beginning after December 31, 2008,
the greater of fifteen per cent of taxable income as determined
under subclause 1 or, if applicable, subclause 2 or three
million dollars ($3,000,000);
(IV) For taxable years beginning after December 31, 2009,
the greater of twenty per cent of taxable income as determined
under subclause 1 or, if applicable, subclause 2 or three
million dollars ($3,000,000);
(V) For taxable years beginning after December 31, 2013, the
greater of twenty-five per cent of taxable income as determined
under subclause 1 or, if applicable, subclause 2 or four million
dollars ($4,000,000);
(VI) For taxable years beginning after December 31, 2014,
the greater of thirty per cent of taxable income as determined
under subclause 1 or, if applicable, subclause 2 or five million
dollars ($5,000,000); [or]
(VII) For taxable years beginning after December 31, 2017,
thirty-five per cent of taxable income as determined under
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subclause 1 or, if applicable, subclause 2;
(VIII) For taxable years beginning after December 31, 2018,
forty per cent of taxable income as determined under subclause 1
or, if applicable, subclause 2;
(B) The amount of the net loss or losses which may be
carried over to the taxable year or taxable income as determined
under subclause 1 or, if applicable, subclause 2.
(1.1) In no event shall the net loss deduction include more
than five hundred thousand dollars ($500,000), in the aggregate,
of net losses from taxable years 1988 through 1994.
(2) (A) A net loss for a taxable year may only be carried
over pursuant to the following schedule:
Taxable Year Carryover
1981 1 taxable year
1982 2 taxable years
1983-1987 3 taxable years
1988 2 taxable years plus
1 taxable year
starting with the
1995 taxable year
1989 1 taxable year plus
2 taxable years
starting with the
1995 taxable year
1990-1993 3 taxable years
starting with the
1995 taxable year
1994 1 taxable year
1995-1997 10 taxable years
1998 and thereafter 20 taxable years
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(B) The earliest net loss shall be carried over to the
earliest taxable year to which it may be carried under this
schedule. The total net loss deduction allowed in any taxable
year shall not exceed:
(I) Two million dollars ($2,000,000) for taxable years
beginning before January 1, 2007.
(II) The greater of twelve and one-half per cent of the
taxable income as determined under subclause 1 or, if
applicable, subclause 2 or three million dollars ($3,000,000)
for taxable years beginning after December 31, 2006.
(III) The greater of fifteen per cent of the taxable income
as determined under subclause 1 or, if applicable, subclause 2
or three million dollars ($3,000,000) for taxable years
beginning after December 31, 2008.
(IV) The greater of twenty per cent of the taxable income as
determined under subclause 1 or, if applicable, subclause 2 or
three million dollars ($3,000,000) for taxable years beginning
after December 31, 2009.
(V) The greater of twenty-five per cent of taxable income as
determined under subclause 1 or, if applicable, subclause 2 or
four million dollars ($4,000,000) for taxable years beginning
after December 31, 2013.
(VI) The greater of thirty per cent of taxable income as
determined under subclause 1 or, if applicable, subclause 2 or
five million dollars ($5,000,000) for taxable years beginning
after December 31, 2014.
(VII) Thirty-five per cent of taxable income as determined
under subclause 1 or, if applicable, subclause 2 for taxable
years beginning after December 31, 2017.
(VIII) Forty per cent of taxable income as determined under
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subclause 1 or, if applicable, subclause 2 for taxable years
beginning after December 31, 2018.
(c.1) A deduction under part IV.1 shall be allowed from
taxable income as proscribed in a satisfaction commitment letter
executed between the Department of Community and Economic
Development and a taxpayer under section 407.7(c).
* * *
Section 4.3. Article IV of the act is amended by adding a
part to read:
PART IV-A
QUALIFIED MANUFACTURING INNOVATION
AND REINVESTMENT DEDUCTION
Section 407.6. Definitions.--(a) For the purposes of this
part only, the following words, terms and phrases shall have the
meaning ascribed to them in this subsection, except where the
context clearly indicates a different meaning:
(1) "Annual taxable payroll." The total amount of wages
paid in this Commonwealth by a taxpayer for the base year or
year one, as applicable, from which personal income tax under
Article III is withheld.
(2) "Base year." The four calendar quarters preceding the
start date.
(3) "Department." The Department of Community and Economic
Development of the Commonwealth.
(4) "Manufacture." The mechanical, physical, biological or
chemical transformation of materials, substances or components
into new products that are creations of new items of tangible
personal property for sale.
(5) "Qualified manufacturing innovation and reinvestment
deduction." An allowable deduction as determined, calculated
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and executed in a commitment letter between the department and
the taxpayer.
(6) "Qualified tax liability." A taxpayer's tax liability
under this article.
(7) "Start date." The first day of the calendar quarter in
which a taxpayer advises the department of the taxpayer's intent
to initiate an eligible project unless the applicant requests
and the department agrees to a later start date.
(8) "Taxpayer." An employer subject to the tax under this
article.
(9) "Year one." The four calendar quarters immediately
following the start date.
Section 407.7. Manufacturing Innovation and Reinvestment
Deduction.--(a) In order to be eligible to receive a
manufacturing innovation and reinvestment deduction, a taxpayer
must demonstrate to the department a capital investment in
excess of one hundred million dollars ($100,000,000) for the
creation of new or refurbished manufacturing capacity within
three years of a designated start date.
(b) (1) A taxpayer must advise the department in advance of
the start date of any project for which the taxpayer may seek a
qualified manufacturing innovation and reinvestment deduction. A
taxpayer must attest the taxpayer's intent to meet the
eligibility criteria and provide relevant information pertinent
to the project's size and scope in a manner as determined by the
department.
(2) Within five years of a project's start date, a taxpayer
must complete to the department's satisfaction an application on
a form and in a manner as determined by the department to attest
that the project has been completed and the eligibility criteria
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has been satisfied.
(c) Upon the receipt of the taxpayer's application, the
Department of Revenue must make a finding that the applicant has
filed all required State tax reports and returns for all
applicable tax years and paid any balance of State tax due as
determined at settlement, assessment or determination and the
department, then in conjunction with the Department of Revenue,
shall make an eligibility or satisfaction determination within
ninety days of submission. If the department makes a
satisfaction determination, the department and the taxpayer
shall execute a satisfaction commitment letter containing the
following:
(1) The number of new jobs created and their corresponding
description.
(2) The number of new jobs created during construction of
the project.
(3) The amount of private capital investment in the creation
of new jobs.
(4) The increase in the annual taxable payroll attributable
to new manufacturing jobs.
(5) A determination of the maximum allowable deduction
against a taxpayer's qualified tax liability under this article.
(6) Any other information as the department deems
appropriate.
(d) (1) Upon determining a taxpayer's satisfaction of the
eligibility criteria, the department shall calculate the maximum
allowable deduction that a taxpayer may claim against the
taxpayer's taxable income under this article. The deduction
shall be equal to five per cent of the private capital
investment utilized in the creation of new or refurbished
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manufacturing capacity per tax year for a period of five years.
(2) A taxpayer may utilize the amount of the deduction in
each year of the succeeding five tax years immediately following
the department's satisfaction determination and the execution of
a satisfaction commitment letter.
(3) A taxpayer cannot use the deduction to reduce its tax
liability by more than fifty per cent of the tax liability under
this article for the taxable year. The deduction is
nontransferable and any unused portion in a tax year shall
expire at the end of the corresponding tax year.
Section 4.4. Section 1101(a) introductory paragraph, (b)
heading and introductory paragraph, (c), (c.1), (e) and (f) of
the act, amended July 13, 2016 (P.L.526, No.84), are amended and
the section is amended by adding subsections to read:
Section 1101. Imposition of Tax.--(a) General Rule.--Every
pipeline company, conduit company, steamboat company, canal
company, slack water navigation company, transportation company,
and every other company, association, joint-stock association,
or limited partnership, now or hereafter incorporated or
organized by or under any law of this Commonwealth, or now or
hereafter organized or incorporated by any other state or by the
United States or any foreign government, and doing business in
this Commonwealth, and every copartnership, person or persons
owing, operating or leasing to or from another corporation,
company, association, joint-stock association, limited
partnership, copartnership, person or persons, any pipeline,
conduit, steamboat, canal, slack water navigation, or other
device for the transportation of freight, passengers, baggage,
or oil, except motor vehicles and railroads, and every limited
partnership, association, joint-stock association, corporation
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or company engaged in, or hereinafter engaged in, the
transportation of freight or oil within this State, and every
telephone company, telegraph company or provider of mobile
telecommunications services now or hereafter incorporated or
organized by or under any law of this Commonwealth, or now or
hereafter organized or incorporated by any other state or by the
United States or any foreign government and doing business in
this Commonwealth, and every limited partnership, association,
joint-stock association, copartnership, person or persons,
engaged in telephone or telegraph business or providing mobile
telecommunications services in this Commonwealth, shall pay to
the State Treasurer, through the Department of Revenue, a tax
[of forty-five mills with a surtax equal to five mills] at the
rate set forth in subsection (j.1) upon each dollar of the gross
receipts of the corporation, company or association, limited
partnership, joint-stock association, copartnership, person or
persons received from:
* * *
(b) Electric Light, Waterpower and Hydro-electric
[Utilities] Companies.--Every electric light company, waterpower
company and hydro-electric company now or hereafter incorporated
or organized by or under any law of this Commonwealth, or now or
hereafter organized or incorporated by any other state or by the
United States or any foreign government and doing business in
this Commonwealth, and every limited partnership, association,
joint-stock association, copartnership, person or persons,
engaged in electric light and power business, waterpower
business and hydro-electric business in this Commonwealth, shall
pay to the State Treasurer, through the Department of Revenue, a
tax [of forty-four mills] at the rate set forth in subsection
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(j.1) upon each dollar of the gross receipts of the corporation,
company or association, limited partnership, joint-stock
association, copartnership, person or persons, received from:
* * *
(b.2) Natural Gas Supply and Natural Gas Distribution
Companies.--
(1) Every natural gas supply company and natural gas
distribution company, incorporated or organized under the laws
of the United States, this Commonwealth, a state or a foreign
government, on or after the effective date of this subsection
and doing business in this Commonwealth, and every limited
partnership, association, joint-stock association,
copartnership, or person, engaged in natural gas supply or
natural gas distribution business in this Commonwealth, shall
pay to the State Treasurer, through the Department of Revenue, a
tax at the rate set forth in subsection (j.1) upon each dollar
of the gross receipts of the corporation, company or
association, limited partnership, joint-stock association,
copartnership or person, received from the sales and delivery of
natural gas to retail gas customers within this Commonwealth,
except gross receipts derived from:
(i) sales of liquefied petroleum gas;
(ii) (Reserved);
(iii) (Reserved);
(iv) sales to an electric generation company that are
consumed for the purpose of generating electricity; and
(v) gross receipts derived from the sales for resale to
persons, partnerships, associations or corporations subject to
the tax imposed by this act upon gross receipts derived from the
resale.
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(2) For purposes of this subsection, sales of natural gas to
retail gas customers shall include all receipts from natural gas
supply services and natural gas distribution services.
(3) For the purposes of this subsection, the terms "natural
gas distribution services," "natural gas supply services" and
"retail gas customers" shall have the same meanings as the terms
have in 66 Pa.C.S. § 2202 (relating to definitions).
(c) Payment of Tax; Reports.--The said taxes imposed under
subsections (a) [and (b)], (b) and (b.2) shall be paid within
the time prescribed by law, and for the purpose of ascertaining
the amount of the same, it shall be the duty of the treasurer or
other proper officer of the said company, copartnership, limited
partnership, association, joint-stock association or
corporation, or person or persons, to transmit to the Department
of Revenue on or before March 15 of each year an annual report,
and under oath or affirmation, of the amount of gross receipts
of the said companies, copartnerships, corporations,
associations, joint-stock associations, limited partnerships,
person or persons, derived from all sources, and of gross
receipts from business done wholly within this State and in the
case of electric energy producers that transmit energy to other
states referred to in clause (2) of subsection (b), a
compilation of the relevant information regarding operating and
maintenance expenses and depreciation, during the period of
twelve months immediately preceding January 1 of each year.
(c.1) Safe Harbor Base year.--For purposes of the estimated
tax requirements under sections 3003.2 and 3003.3, the "safe
harbor base year" tax amount for providers of mobile
telecommunications services and for a natural gas supply company
and a natural gas distribution company subject to the provisions
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of subsection (b.2) shall be the amount that would have been
required to be paid by the taxpayer if the taxpayer had been
subject to this article.
(e) Time to File Reports.--The time for filing annual
reports may be extended, estimated assessments may be made by
the Department of Revenue if reports are not filed, and the
penalties for failing to file reports and pay the taxes imposed
under subsection (a) [and (b)], (b) and (b.2) shall be as
prescribed by the laws defining the powers and duties of the
Department of Revenue. In any case where the works of any
corporation, company, copartnership, association, joint-stock
association, limited partnership, person or persons are operated
by another corporation, company, copartnership, association,
joint-stock association, limited partnership, person or persons,
the taxes imposed under subsections (a) [and (b)], (b) and (b.2)
shall be apportioned between the corporations, companies,
copartnerships, associations, joint-stock associations, limited
partnerships, person or persons in accordance with the terms of
their respective leases or agreements, but for the payment of
the said taxes the Commonwealth shall first look to the
corporation, company, copartnership, association, joint-stock
association, limited partnership, person or persons operating
the works, and upon payment by the said company, corporation,
copartnership, association, joint-stock association, limited
partnership, person or persons of a tax upon the receipts, as
herein provided, derived from the operation thereof, no other
corporation, company, copartnership, association, joint-stock
association, limited partnership, person or persons shall be
held liable for any tax imposed under subsections (a) [and (b)],
(b) and (b.2) upon the proportion of said receipts received by
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said corporation, company, copartnership, association, joint-
stock association, limited partnership, person or persons for
the use of said works.
(f) Application to Municipalities.--This article shall be
construed to apply to municipalities, and to impose a tax upon
the gross receipts derived from any municipality owned or
operated public utility or from any public utility service,
natural gas distribution service or natural gas supply service
furnished by any municipality, except that, except as provided
under subsection (f.1), gross receipts shall be exempt from the
tax, to the extent that such gross receipts are derived from
business done inside the limits of the municipality, owning or
operating the public utility or furnishing the public utility
service.
(f.1) Certain Gross Receipts Taxed.--The exemption from tax
under subsection (f) shall not apply to gross receipts received
from the sales and delivery of natural gas to retail gas
customers under subsection (b.2).
* * *
(j.1) The tax imposed under this section shall be imposed at
the following rates:
(1) Sixty mills for receipts subject to tax under subsection
(a).
(2) Fifty mills for receipts subject to tax under subsection
(b).
(3) Fifty-seven mills for receipts subject to tax under
subsection (b.2).
(j.2) Schedule for Certain Payments.--
(1) For calendar year 2017, the tax applicable to the
payment of the tax under subsection (b.2) shall be due on March
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