H0542B2536A04076 MSP:CMD 10/17/17 #90 A04076
AMENDMENTS TO HOUSE BILL NO. 542
Sponsor: REPRESENTATIVE SAYLOR
Printer's No. 2536
Amend Bill, page 2, lines 27 through 52; page 3, lines 1
through 40; by striking out all of said lines on said pages and
inserting
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;
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,
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
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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 certifications, 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;
providing for tobacco master settlement payment revenue
bonds and sale of revenue;
making related repeals; and
making editorial changes.
Amend Bill, page 104, lines 8 through 30; pages 105 through
187, lines 1 through 30; page 188, lines 1 through 28; by
striking out all of said lines on said pages and inserting
Section 1. Section 201(m) of the act of March 4, 1971
(P.L.6, No.2), known as the Tax Reform Code of 1971, amended
July 13, 2016 (P.L.526, No.84), is amended 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
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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,
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.
* * *
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 or any other person
required by this article from the purchaser, and shall be paid
over to the Commonwealth as herein provided.
* * *
Section 3. 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
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
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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 4. Article II of the act is amended by adding a part
to read:
PART V-A
MARKETPLACE SALES
Section 213. Definitions.--For the purposes of this part V-A
only, the following words, terms and phrases shall have the
meaning ascribed to them in this section, except where the
context clearly indicates a different meaning:
(a) "Affiliated person." A person that, with respect to
another person:
(1) has a direct or indirect ownership interest of more than
five percent in the other person; or
(2) is related to the other person because a third person,
or group of third persons who are affiliated with each other as
defined in this subsection, holds a direct or indirect ownership
interest of more than five percent in the related person.
(b) "Forum." A place where sales at retail occur, whether
physical or electronic. The term includes a store, a booth, a
publicly accessible Internet website, a catalog or similar
place.
(c) "Marketplace facilitator." A person that facilitates
the sale at retail of tangible personal property. For purposes
of this section, a person facilitates a sale at retail if the
person or an affiliated person:
(1) lists or advertises tangible personal property for sale
at retail in any forum; and
(2) either directly or indirectly through agreements or
arrangements with third parties, collects the payment from the
purchaser and transmits the payment to the person selling the
property.
The term includes a person that may also be a vendor.
(d) "Marketplace seller." A person that has an agreement
with a marketplace facilitator pursuant to which the marketplace
facilitator facilitates sales for the person.
(e) "Notice and reporting requirements." The notice
requirements under section 213.2 and the reporting requirements
under sections 213.3 and 213.4.
(f) "Referral." The transfer by a referrer of a potential
purchaser to a person that advertises or lists products for sale
on the referrer's platform.
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(g) "Referrer." A person, other than a person engaging in
the business of printing or publishing a newspaper, that,
pursuant to an agreement or arrangement with a marketplace
seller or remote seller, does the following:
(1) Agrees to list or advertise for sale at retail one or
more products of the marketplace seller or remote seller in a
physical or electronic medium.
(2) Receives consideration from the marketplace seller or
remote seller from the sale offered in the listing or
advertisement.
(3) Transfers by telecommunications, internet link or other
means, a purchaser to a marketplace seller, remote seller or
affiliated person to complete a sale.
(4) Does not collect a receipt from the purchaser for the
sale.
The term does not include a person that:
(1) provides internet advertising services; and
(2) does not provide the marketplace seller's or remote
seller's shipping terms or advertise whether a marketplace
seller or remote seller collects a sales or use tax.
The term includes a person that may also be a vendor.
(h) "Remote seller." A person, other than a marketplace
facilitator, marketplace seller or referrer, that does not
maintain a place of business in this Commonwealth that, through
a forum, sells tangible personal property at retail, the sale or
use of which is subject to the tax imposed by this article. The
term does not include an employe who in the ordinary scope of
employment renders services to his employer in exchange for
wages and salaries.
Section 213.1. Election.--(a) Subject to the provisions of
subsections (c) and (d), on or before March 1, 2018, and on or
before June 1 of each calendar year thereafter, beginning June
1, 2019, a remote seller, a marketplace facilitator or a
referrer that had aggregate sales at retail of tangible personal
property subject to tax under this article within this
Commonwealth or delivered to locations within this Commonwealth
worth at least ten thousand dollars ($10,000) during the
immediately preceding twelve calendar month period shall file an
election with the department to collect and remit the tax
imposed under section 202 or to comply with the notice and
reporting requirements. The election shall be made on a form and
in a manner prescribed by the department and, except as provided
in subsection (e), shall apply to the next succeeding fiscal
year.
(b) A remote seller, a marketplace facilitator or a referrer
that makes an election under subsection (a) to collect and remit
the tax imposed under section 202 shall obtain a license under
Part IV of this article.
(c) The requirement by a marketplace facilitator to make an
election under subsection (a) shall only apply to the following:
(1) sales at retail through the marketplace facilitator's
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forum made by or on behalf of a marketplace seller that does not
maintain a place of business in this Commonwealth; and
(2) sales at retail made by a marketplace facilitator on its
own behalf if the marketplace facilitator does not maintain a
place of business in this Commonwealth.
(d) The requirement by a referrer to make an election under
subsection (a) shall only apply to sales at retail:
(1) directly resulting from a referral of a purchaser to a
marketplace seller that does not maintain a place of business in
this Commonwealth;
(2) directly resulting from a referral of a purchaser to a
remote seller; and
(3) of the referrer's own products if the referrer does not
maintain a place of business in this Commonwealth.
A referrer may make an election under subsection (a) for the
sales described in paragraphs (1) and (2) that is different from
the election made for the sales described in paragraph (3).
(e) An election made on or before March 1, 2018, shall be in
effect for the balance of the 2017-2018 fiscal year and for the
2018-2019 fiscal year. A remote seller, marketplace facilitator
or referrer may change an election to comply with the notice and
reporting requirements to an election to collect and remit the
tax imposed under section 202 at any time during a fiscal year
by filing a new election with the department and obtaining a
license under Part IV of this article. The new election shall be
effective thirty days after the filing and shall be effective
for the balance of the fiscal year in which the new election was
filed and for the next succeeding fiscal year.
(f) A remote seller, marketplace facilitator or referrer who
does not submit an election under subsection (a) or a new
election under subsection (e) shall be deemed to have elected to
comply with the notice and reporting requirements.
(g) In addition to records that may be required to be
maintained under other applicable provisions of this article by
a remote seller, marketplace facilitator or referrer, a remote
seller, marketplace facilitator or referrer subject to this part
shall also be subject to section 271 relating to the keeping of
records and section 272 relating to the examination of records
by the department and agents and employes of the department.
Section 213.2. Notice requirements.--(a) A remote seller,
marketplace facilitator or referrer required to make an election
under section 213.1(a) that does not elect to collect and remit
the tax imposed by section 202 shall comply with the applicable
notice requirements of this section.
(b) A remote seller or marketplace facilitator subject to
the requirements of this section shall:
(1) Post a conspicuous notice on its forum that informs
purchasers intending to purchase tangible personal property for
delivery to a location within this Commonwealth that includes
all of the following:
(i) sales or use tax may be due in connection with the
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purchase and delivery of the tangible personal property;
(ii) the Commonwealth requires the purchaser to file a
return if use tax is due in connection with the purchase and
delivery; and
(iii) the notice is required by this section.
(2) Provide a written notice to each purchaser at the time
of each sale at retail that includes all of the following:
(i) a statement that sales tax is not being collected in
connection with the purchase;
(ii) a statement that the purchaser may be required to remit
use tax directly to the department; and
(iii) instructions for obtaining additional information from
the department regarding whether and how to remit use tax to the
department.
(c) The notice required by subsection (b)(2) must be
prominently displayed on all invoices and order forms and on
each sales receipt or similar document, whether in paper or
electronic form, provided to the purchaser. No statement that
sales or use tax is not imposed on a transaction may be made by
a remote seller or marketplace facilitator unless the
transaction is exempt from sales and use tax pursuant to this
article or other applicable Commonwealth law.
(d) A referrer subject to the requirements of this section
shall post a conspicuous notice on its platform that informs
purchasers intending to purchase tangible personal property for
delivery to a location within this Commonwealth that includes
all of the following:
(1) Sales or use tax may be due in connection with the
purchase and delivery.
(2) The person to which the purchaser is being referred may
or may not collect and remit sales tax to the department in
connection with the transaction.
(3) The Commonwealth requires the purchaser to file a return
if use tax is due in connection with the purchase and delivery
and not collected by the person.
(4) The notice is required by this section.
(5) Instructions for obtaining additional information from
the department regarding whether and how to remit sales or use
tax to the department.
(6) If the person to whom the purchaser is being referred
does not collect sales tax on a subsequent purchase by the
purchaser, the person may be required to provide information to
the purchaser and the department about the purchaser's potential
sales or use tax liability.
(e) The notice required under subsection (d) must be
prominently displayed and may include pop-up boxes or
notification by other means that appears when the referrer
transfers a purchaser to another person to complete the sale.
Section 213.3. Reports to purchasers and marketplace
sellers.--(a) A remote seller or marketplace facilitator
required to make an election under section 213.1(a) that does
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not elect to collect and remit the tax imposed by section 202
shall, no later than January 31 of each year, provide a written
report to each purchaser required to receive the notice under
section 213.2(b)(2) during the immediately preceding calendar
year that includes all of the following:
(1) A statement that the remote seller or marketplace
facilitator did not collect sales tax in connection with the
purchaser's transactions with the remote seller or marketplace
facilitator and that the purchaser may be required to remit use
tax to the department.
(2) A list, by date, indicating the type and purchase price
of each product purchased or leased by the purchaser from the
remote seller or marketplace facilitator and delivered to a
location within this Commonwealth.
(3) Instructions for obtaining additional information from
the department regarding whether and how to remit use tax to the
department.
(4) A statement that the remote seller or marketplace
facilitator is required to submit a report to the department
under section 213.4 that includes the name of the purchaser and
the aggregate dollar amount of the purchaser's purchases from
the remote seller or marketplace facilitator.
(5) Such additional information as the department may
reasonably require.
(b) The department shall prescribe the form of the report
required under subsection (a) and shall make the form available
on its publicly accessible Internet website.
(c) The report required under subsection (a) shall be mailed
by first-class mail in an envelope prominently marked with words
indicating that important tax information is enclosed to the
purchaser's billing address, if known, or, if unknown, to the
purchaser's shipping address. If the purchaser's billing and
shipping address are unknown, the report shall be sent
electronically to the purchaser's last known e-mail address with
a subject heading indicating that important tax information is
being provided.
(d) A referrer required to make an election under section
213.1(a) that does not elect to collect and remit the tax
imposed by section 202 shall, no later than January 31 of each
year, provide a written notice to each remote seller to whom the
referrer transferred a potential purchaser located in this
Commonwealth during the immediately preceding calendar year that
includes all of the following:
(1) A statement that a sales or use tax may be imposed by
the Commonwealth on the transaction.
(2) A statement that the remote seller may be required to
make the election required by section 213.1(a).
(3) Instructions for obtaining additional information
regarding sales and use tax from the department.
Section 213.4. Reports to department.--(a) A remote seller
or marketplace facilitator required to make an election under
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section 213.1(a) that does not elect to collect and remit the
tax imposed by section 202 shall, no later than January 31 of
each year, submit a report to the department. The report shall
include, with respect to each purchaser required to receive the
notice under section 213.2(b)(2) during the immediately
preceding calendar year, the following:
(1) The purchaser's name.
(2) The purchaser's billing address and, if different, the
purchaser's last known mailing address.
(3) The address within this Commonwealth to which products
were delivered to the purchaser.
(4) The aggregate dollar amount of the purchaser's purchases
from the remote seller or marketplace facilitator.
(5) The name and address of the remote seller, marketplace
facilitator or marketplace seller that made the sales to the
purchaser.
(b) A referrer required to make an election under section
213.1(a) that does not elect to collect and remit the tax
imposed by section 202 shall, no later than January 31 of each
year, submit a report to the department. The report shall
include a list of persons who received the notice required under
section 213.3(d).
(c) The department shall prescribe the forms of the reports
required under this section and shall make them available on its
publicly accessible Internet website. The reports shall be
submitted electronically in such manner as the department shall
require.
(d) A report required under this section shall be submitted
by an officer of the remote seller, marketplace facilitator or
referrer and shall include a statement, made under penalty of
perjury, by the officer that the remote seller, marketplace
facilitator or referrer made reasonable efforts to comply with
the notice and reporting requirements of this part.
Section 213.5. Liability and penalties.--(a) The department
shall assess a penalty in the amount of twenty thousand dollars
($20,000) or twenty per cent of total sales in Pennsylvania
during the previous twelve months, whichever is less, against a
remote seller, marketplace facilitator or referrer that makes an
election under section 213.1(a) to comply with the notice and
reporting requirements, or is deemed to have made such election
under section 213.2(f), and fails to comply with the
requirements under section 213.3 or 213.4. The penalty shall be
assessed separately for each violation, but may only be assessed
once in a calendar year.
(b) A remote seller, marketplace facilitator or referrer
that makes an election under section 213.1(a) to collect and
remit the tax imposed under section 202 shall be subject to all
of the provisions of this article with respect to the collection
and remittance of such tax and shall be subject to all of the
penalties, interest and additions for failing to comply with the
provisions of this article, except as provided in this section.
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(c) For a period of five years after the effective date of
this section, the department may abate or reduce any penalty or
addition imposed under subsection (b) due to hardship or for
good cause shown.
(d) A marketplace facilitator or referrer is relieved of
liability under subsection (b) if the marketplace facilitator or
referrer can show to the satisfaction of the department that the
failure to collect the correct amount of tax was due to
incorrect information given to the marketplace facilitator or
referrer by a marketplace seller or remote seller.
(e) A class action may not be brought against a marketplace
facilitator or referrer on behalf of purchasers arising from or
in any way related to an overpayment of sales or use tax
collected by the marketplace facilitator or referrer, regardless
of whether such action is characterized as a tax refund claim.
Nothing in this subsection shall affect a purchaser's right to
seek a refund from the department under other provisions of this
article.
Section 213.6. Application.--Nothing in this section affects
the obligations of a vendor to register with the department and
to collect and remit sales tax or use tax.
Section 5. Section 278 of the act is amended by adding
subsections 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, 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.
(d) As used in this section, the term "remote seller" shall
have the same meaning as defined in section 213.
Section 6.
(Reserved).
Section 7. 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.
(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
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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.
"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.
Section 8. Section 312 of the act, amended July 13, 2016
(P.L.526, No.84), is amended to read:
Section 312. Tax Withheld.--The amount withheld under
section [316] 316.1 shall be allowed to the taxpayer from whose
income the tax was withheld as a credit against the tax imposed
on him by this article.
Section 9. 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
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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
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 10. 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 11. The act is amended by adding a section to read:
Section 316. Definitions.--The following words, terms and
phrases, when used in this part, shall have the meanings
ascribed to them in this section, except where the context
clearly indicates a different meaning:
"Payee." The person receiving the payments subject to
withholding under this part.
"Payments." The term does not include a partner or
shareholder's distributive share of income from a partnership or
Pennsylvania S corporation.
"Payor." The person required to withhold under this part.
Section 12. Section 316 of the act, amended July 13, 2016
(P.L.526, No.84), is renumbered to read:
Section [316] 316.1. Requirement of Withholding Tax.--(a)
Every employer maintaining an office or transacting business
within this Commonwealth and making payment of compensation (i)
to a resident individual, or (ii) to a nonresident individual
taxpayer performing services on behalf of such employer within
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this Commonwealth, shall deduct and withhold from such
compensation for each payroll period a tax computed in such
manner as to result, so far as practicable, in withholding from
the employe's compensation during each calendar year an amount
substantially equivalent to the tax reasonably estimated to be
due for such year with respect to such compensation. The method
of determining the amount to be withheld shall be prescribed by
regulations of the department.
(b) Whenever the Pennsylvania State Lottery or a person
making a Pennsylvania State Lottery prize payment in the form of
an annuity is required to withhold Federal income tax under
section 3402 of the Internal Revenue Code of 1986, as amended
(Public Law 99-514, 26 U.S.C. § 1 et seq.), or backup
withholding under section 3406 of the Internal Revenue Code of
1986, as amended, from a gambling or lottery prize payment
awarded by the Pennsylvania State Lottery that is taxable under
this article, the Pennsylvania State Lottery or the person
making the annuity payment shall deduct and withhold from the
prize payment an amount equal to the amount of the prize payment
subject to withholding under section 3402 or 3406 of the
Internal Revenue Code of 1986 multiplied by the tax rate in
effect under this article at the time the prize payment is made.
Section 13. The act is amended by adding a section to read:
Section 316.2. Withholding Tax Requirement for Non-Employer
Payors.--(a) To the extent not already required to withhold tax
on payments under section 316.1, a person that:
(1) makes payments of income from sources within this
Commonwealth described in section 303(a)(1) or (2) to either a
nonresident individual or an entity that is disregarded under
section 307.21 that has a nonresident member; and
(2) is required under section 335(f)(1) to file a copy of
form 1099-MISC with the department regarding the payments;
shall deduct and withhold from the payments an amount equal to
the net amount of the payments multiplied by the tax rate
specified under section 302(b).
(b) Withholding of tax by payors is optional and at the
discretion of the payor with respect to payees who receive
payments of less than $5,000 annually from the payor.
(c) This section shall not apply to payments made by a payor
to a payee if the payor is:
(1) The United States or an agency or instrumentality
thereof; or
(2) The Commonwealth or an agency, instrumentality or
political subdivision thereof.
(d) The department may prescribe regulations to implement and
clarify the withholding requirement set forth in this section.
Section 14. Section 317 of the act, amended July 13, 2016
(P.L.526, No.84), is amended to read:
Section 317. Information Statement.--(a) Every employer
required to deduct and withhold tax under [this article] section
316.1(a) shall furnish to each such employe to whom the employer
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has paid compensation during the calendar year a written
statement in such manner and in such form as may be prescribed
by the department showing the amount of compensation paid by the
employer to the employe, the amount deducted and withheld as
tax, pursuant to [this article] section 316.1(a), and such other
information as the department shall prescribe. Each statement
required by this section for a calendar year shall be furnished
to the employe on or before January 31 of the year succeeding
such calendar year. If the employe's employment is terminated
before the close of such calendar year, the employer, at his
option, shall furnish the statement to the employe at any time
after the termination but no later than January 31 of the year
succeeding such calendar year. However, if an employe whose
employment is terminated before the close of such calendar year
requests the employer in writing to furnish him the statement at
an earlier time, and, if there is no reasonable expectation on
the part of both employer and employe of further employment
during the calendar year, then the employer shall furnish the
statement to the employe on or before the later of the 30th day
after the day of the request or the 30th day after the day on
which the last payment of wages is made.
(b) Every person required to deduct and withhold tax under
section [316(b)] 316.1(b) shall report the prize and the amount
of withholding to the taxpayer on Internal Revenue Service Form
W-2G, or similar form used for reporting Federal income tax
withholding from the prize.
Section 15. The act is amended by adding sections to read:
Section 317.1. Information Statement for Non-Employer
Payors.--Every payor required to deduct and withhold tax under
section 316.2 shall furnish to a payee to whom the payor has
paid income from sources within this Commonwealth during the
calendar year a copy of form 1099-MISC required under section
335(f)(1). The copy of form 1099-MISC required by this section
for each calendar year shall be forwarded to the payee on or
before March 1 of the year succeeding the calendar year.
Section 317.2. Information Statement for Payees.--Every
payee receiving a copy of form 1099-MISC from a payor under
section 317.1 shall file a duplicate of such information return
with the payee's State income tax return.
Section 16. Section 318 of the act, amended July 13, 2016
(P.L.526, No.84), is amended to read:
Section 318. Time for Filing Withholding Returns.--(a)
Every employer required to deduct and withhold tax under [this
article] section 316.1(a) shall file a quarterly withholding
return on or before the last day of April, July, October and
January for the three months ending the last day of March, June,
September and December. Such quarterly returns shall be filed
with the department at its main office or at any branch office
which it may designate for filing returns.
(b) Every person required to deduct and withhold tax under
section [316(b)] 316.1(b) shall file a withholding tax return at
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the same time the person is required to file its annual return
of withheld Federal income tax (IRS Form 945) from nonpayroll
payments. The return shall be filed with the department.
Section 17. The act is amended by adding a section to read:
Section 318.1. Time for Filing Payors' Returns.--Every payor
required to deduct and withhold tax under section 316.2 shall
file a quarterly withholding return on or before the last day of
April, July, October and January for each three month period
ending the last day of March, June, September and December. The
quarterly returns shall be filed with the department in the
manner prescribed by regulation.
Section 18. Section 319 of the act, amended July 13, 2016
(P.L.526, No.84), is amended to read:
Section 319. Payment of Taxes Withheld.--(a) Every employer
withholding tax under [this article] section 316.1(a) shall pay
over to the department or to a depository designated by it the
tax required to be deducted and withheld under [this article]
section 316.1(a).
(1) Where the aggregate amount required to be deducted and
withheld by any employer for a calendar year can reasonably be
expected to be less than twelve hundred dollars ($1,200), such
employer shall file a return and pay the tax on or before the
last day for filing a quarterly return under section 318.
(2) Where the aggregated amount required to be deducted and
withheld by any employer for a calendar year can reasonably be
expected to be twelve hundred dollars ($1,200) or more but less
than four thousand dollars ($4,000), such employer shall pay the
tax monthly, on or before the fifteenth day of the month
succeeding the months of January to November, inclusive, and on
or before the last day of January following the month of
December.
(3) Where the aggregated amount required to be deducted and
withheld by any employer for a calendar year can reasonably be
expected to be four thousand dollars ($4,000) or more but less
than twenty thousand dollars ($20,000), such employer shall pay
the tax semi-monthly, within three banking days after the close
of the semi-monthly period.
(4) Where the aggregated amount required to be deducted and
withheld by any employer for a calendar year can reasonably be
expected to be twenty thousand dollars ($20,000) or more, such
employer shall pay the tax on the Wednesday after payday if the
payday falls on a Wednesday, Thursday or Friday and on the
Friday after payday if the payday falls on a Saturday, Sunday,
Monday or Tuesday.
Notwithstanding anything in this subsection to the contrary,
whenever any employer fails to deduct or truthfully account for
or pay over the tax withheld or file returns as prescribed by
this article, the department may serve a notice on such employer
requiring him to withhold taxes which are required to be
deducted under [this article] section 316.1(a) and deposit such
taxes in a bank approved by the department in a separate account
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in trust for and payable to the department, and to keep the
amount of such tax in such account until payment over to the
department. Such notice shall remain in effect until a notice of
cancellation is served on the employer by the department.
(b) Every person deducting and withholding tax under section
[316(b)] 316.1(b) shall remit the tax to the department on the
same frequency that the person is required to remit Federal
income tax withheld from nonpayroll payments.
Section 19. The act is amended by adding a section to read:
Section 319.1. Payment of Taxes Withheld for Non-Employer
Payors.--Every payor withholding tax under section 316.2 shall
pay over to the department or to a depository designated by the
department the tax required to be deducted and withheld under
section 316.2. The time for paying over the withheld tax shall
be as set forth in section 319(1), (2), (3) and (4).
Section 20. Section 320 of the act, amended July 13, 2016
(P.L.526, No.84), is amended to read:
Section 320. Liability for Withheld Taxes.--Every person
required to deduct and withhold tax under [this part] section
316.1 is hereby made liable for such tax. For purposes of
assessment and collection, any amount required to be withheld
and paid over to the department and any additions to tax
penalties and interest with respect thereto, shall be considered
the tax of the person. All taxes deducted and withheld pursuant
to [this part] section 316.1 or under color of [this part]
section 316.1 shall constitute a trust fund for the Commonwealth
and shall be enforceable against such person, his representative
or any other person receiving any part of such fund.
Section 21. The act is amended by adding sections to read:
Section 320.1. Payor's Liability for Withheld Taxes.--Every
payor required to deduct and withhold tax under section 316.2 is
hereby made liable for such tax. For purposes of assessment and
collection, any amount required to be withheld and paid over to
the department and any additions to tax, penalties, and interest
with respect thereto shall be considered the tax of the payor.
All taxes deducted and withheld from payees pursuant to section
316.2 or under color of section 316.2 shall constitute a trust
fund for the Commonwealth and shall be enforceable against such
payor, his representative or any other person receiving any part
of such fund.
Section 321.2. Payor's Failure to Withhold.--If a payor
fails to deduct and withhold tax as prescribed under section
316.2 and thereafter the tax which may be credited is paid, the
tax which was required to be deducted and withheld shall not be
collected from the payor, but the payor shall not be relieved of
the liability for any penalty, interest or additions to the tax
imposed with respect to such failure to deduct and withhold.
Section 22. The heading of Part VII-A of Article III of the
act is amended to read:
PART VII-A
WITHHOLDING TAX ON [SHARES ON] INCOME FROM SOURCES
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WITHIN THIS COMMONWEALTH
Section 23. Section 324.1 of the act is amended by adding a
subsection to read:
Section 324.1. Amount of Withholding Tax.--* * *
(c) There shall not be taken into account any share of
income of nonresident partner, member or shareholder from
sources within this Commonwealth to the extent that the amount
was subject to withholding under section 324.4 and to the extent
withholding actually occurred under section 324.4 by the time
withholding is required to be made by the partnership,
association or Pennsylvania S corporation under section 324.
Section 24. Section 324.2 of the act is amended to read:
Section 324.2. Treatment of Nonresident Partners, Members or
Shareholders.--(a) Each nonresident partner, member,
shareholder or holder of a beneficial interest shall be allowed
a credit for such partner's, member's, shareholder's or holder
of a beneficial interest's share of the withholding tax paid by
the partnership, association or Pennsylvania S corporation. Such
credit shall be allowed for the partner's, member's,
shareholder's or holder of a beneficial interest's taxable year
in which, or with which, the partnership, association or
Pennsylvania S corporation taxable year (for which such tax was
paid) ends.
(b) Each nonresident lessor shall be allowed a credit for
the nonresident lessor's share of the withholding tax paid by
the lessee under section 324.4.
(c) The credits under this section shall be allowed for the
nonresident lessor's taxable year in which the lessee withheld
tax.
Section 25. The act is amended by adding sections to read:
Section 324.4. Withholding on Income.--(a) Every lessee of
Pennsylvania real estate who makes a lease payment in the course
of a trade or business to a nonresident lessor shall withhold
Pennsylvania personal income tax on rental payments to such
nonresident lessor.
(b) Every lessee shall withhold from each payment made to a
lessor an amount equal to the net amount payable to the lessor
multiplied by the tax rate specified under section 302(b).
(c) (Reserved).
(d) The withholding of tax under this section is optional
and at the discretion of the lessee with respect to payments to
a lessor who receives less than $5,000 annually on a lease.
(e) For purposes of this section, the term or phrase:
(1) "Lessor" shall include an individual, estate, or trust.
(2) "Lease payment" shall include, but not be limited to
rents, royalties, bonus payments, damage payments, delay rents
and other payments made pursuant to a lease, other than
compensation derived from intangible property having a taxable
or business situs in this Commonwealth. Classification as a
"lease payment" under this section is solely for the purposes of
establishing withholding requirements and shall not be relevant
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for a determination as to the proper income classification of
any such lease payment.
(3) "In the course of a trade or business" shall include any
person or business entity making lease payments to a nonresident
or agent of a nonresident who collects rent or lease payments on
behalf of a nonresident owner, other than a tenant of
residential property.
Section 324.5. Annual Withholding Statement.--(a) Every
lessee shall furnish to each lessor an annual statement at such
time and in such manner as may be prescribed by the department
showing the total payments made by the lessee to the lessor
during the preceding taxable year and showing the amount of the
tax deducted and withheld from the payments under section 324.4.
(b) Every lessee shall file with the department an annual
statement at such time and in such manner as may be prescribed
by the department showing the total payments made to each lessor
subject to withholding during the preceding taxable year or any
portion of the preceding taxable year and the total amount of
tax deducted and withheld under section 324.4.
(c) Every lessor shall file a duplicate of the annual
statement furnished by the lessee under this section with the
lessor's State income tax return.
Section 26. Sections 335(f) and 352(f), (h) and (j) of the
act are amended to read:
Section 335. Requirements Concerning Returns, Notices,
Records and Statements.--* * *
(f) The following apply:
(1) Any person who:
(i) makes payments of Pennsylvania source income [from
sources within this Commonwealth] that fall within any of the
eight classes of income enumerated in section 303(a);
(ii) makes such payments [of nonemploye compensation or
payments under an oil and gas lease under subparagraph (i) to a
resident or nonresident] to an individual, an entity treated as
a partnership for tax purposes or a single member limited
liability company; and
(iii) is required to make a form 1099-MISC return to the
Secretary of the Treasury of the United States with respect to
[the] such payments, shall file a copy of such form 1099-MISC
with the department and send a copy of such form 1099-MISC to
the payee by [the Federal filing deadline] March 1 each year[.]
or, if filed electronically, by March 31 of each year. If the
form 1099-MISC filed by a payor with the Secretary of the
Treasury of the United States is not completed in such a manner
that State income and State tax withheld information, currently
boxes 16 through 18 on Federal form 1099-MISC, is reflected
thereon, the payor shall update the copies of form 1099-MISC to
be provided pursuant to this section to reflect such information
prior to filing it with the department and sending it to the
payee.
(2) If the payor is required to perform electronic filing
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for Pennsylvania employer withholding purposes, the form 1099-
MISC shall be filed electronically with the department.
(3) As used in this subsection, the following words and
phrases shall have the meanings given to them in this paragraph
unless the context clearly indicates otherwise:
"Payee." The person receiving the payments subject to
withholding under this subsection.
"Payments." The term does not include a partner or
shareholder's distributive share of income from a partnership or
Pennsylvania S corporation.
"Payor." The person required to withhold under this
subsection.
* * *
Section 352. Additions, Penalties and Fees.--* * *
(f) (1) Any person required under the provisions of section
317 to furnish a statement to an employe who wilfully furnishes
a false or fraudulent statement, or who wilfully fails to
furnish a statement in the manner, at the time, and showing the
information required under section 317 and the regulations
prescribed thereunder, shall, for each such failure, be subject
to a penalty of fifty dollars ($50) for each employe.
(2) Any person required to furnish an information return who
furnishes a false or fraudulent return or who fails to file or
provide an information return shall be subject to a penalty of
two hundred fifty dollars ($250).
(3) Every partnership, estate, trust or Pennsylvania S
corporation required to file a return with the department under
the provisions of section 330.1 or 335(c) who furnishes a false
or fraudulent return or who fails to file the return in the
manner and at the time required under section 330.1 or 335(c)
shall be subject to a penalty of $250 for each failure.
(4) Any person required to file a copy of form 1099-MISC
with the department under the provisions of section 335(f) who
wilfully furnishes a false or fraudulent form or who wilfully
fails to file the form in the manner, at the time and showing
the information required under section 335(f) shall, for each
such failure, be subject to a penalty of fifty dollars ($50).
(5) Any person required under the provisions of section
335(f) to furnish a copy of form 1099-MISC to a payee who
wilfully furnishes a false or fraudulent form or who wilfully
fails to furnish a form in the manner, at the time and showing
the information required by section 335(f) shall, for each such
failure, be subject to a penalty of fifty dollars ($50).
(6) Any person required to file an annual statement with the
department under the provisions of section 324.5 who wilfully
furnishes a false or fraudulent statement or who wilfully fails
to file the statement in the manner, at the time and showing the
information required under section 324.5 and the regulations
prescribed under section 324.5 shall, for each such failure, be
subject to a penalty of fifty dollars ($50).
(7) Any person required under the provisions of section
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324.5 to furnish an annual statement to a lessor who wilfully
furnishes a false or fraudulent statement or who wilfully fails
to furnish a statement in the manner, at the time and showing
the information required by section 324.5 and the regulations
prescribed under section 324.5 shall, for each such failure, be
subject to a penalty of fifty dollars ($50).
(h) If any amount of tax required to be withheld by an
employer and paid over to the department under section 319 or
319.1 is not paid on or before the due date prescribed for
filing the quarterly return under section 318 or 318.1,
determined without regard to an extension of time for filing,
there shall be added to the tax and paid to the department each
month five per cent of such underpayment for each month or
fraction thereof from the due date, for the period from the due
date to the date paid; but the underpayment shall, for purposes
of computing the addition for any month, be reduced by the
amount of any part of the tax which is paid by the beginning of
that month. The total of such additions shall not exceed fifty
per cent of the amount of tax required to be shown on the return
reduced by the amount of any part of the tax which is paid by
the return due date and by the amount of any credit against the
tax which may be claimed on the return.
* * *
(j) If any amount of tax required to be withheld by a
partnership, association [or], Pennsylvania S corporation or
lessee and paid over to the department under section 324 or
324.4 is not paid on or before the date prescribed therefor,
there shall be added to the tax and paid to the department each
month five per cent of such underpayment for each month or
fraction thereof from the due date, for the period from the due
date to the date paid; but the underpayment shall, for purposes
of computing the addition for any month, be reduced by the
amount of any part of the tax which is paid by the beginning of
that month. The total of such additions shall not exceed fifty
per cent of the amount of such tax.
Section 27. 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
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);
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(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
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; or
(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
(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
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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
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 prescribed in a satisfaction commitment letter
executed between the Department of Community and Economic
Development and a taxpayer under section 407.7(c).
* * *
Section 28. 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.
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(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
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
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
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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
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 29. The definition of "veterans' organization" in
section 1101-C of the act, added July 13, 2016 (P.L.526, No.84),
is amended to read:
Section 1101-C. Definitions.--The following words when used
in this article shall have the meanings ascribed to them in this
section:
* * *
"Veterans' service organization." A not-for-profit
organization that [is recognized by the Internal Revenue Service
as a tax exempt organization described under section 501(c)(19)
of the Internal Revenue Code of 1986 (Public Law 99-514, 26
U.S.C. § 501(c)(19)). For the purposes of this article, the term
shall only include a not-for-profit organization for the period
in which the organization has a valid tax exemption under
section 501(c)(19) of the Internal Revenue Code of 1986, as
determined by the Internal Revenue Service.] has been chartered
by the Congress of the United States to service veterans or is a
member of the Pennsylvania State Veterans' Commission under 51
Pa.C.S. Ch. 17 (relating to State Veterans' Commission and
Deputy Adjutant General for Veterans' Affairs).
* * *
Section 30. Section 1102-C.2 of the act, amended July 13,
2016 (P.L.526, No.84), is amended to read:
Section 1102-C.2. Exempt Parties.--The United States, the
Commonwealth or any of their instrumentalities, agencies or
political subdivisions, or veterans' service organizations shall
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be exempt from payment of the tax imposed by this article. The
exemption under this section shall not, however, relieve any
other party to a transaction from liability for the tax.
Section 31. The act is amended by adding an article to read:
ARTICLE XVII-A.1
TAX CREDIT ELIGIBILITY
Section 1701-A.1. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Department." The Department of Revenue of the Commonwealth.
"Tax credit." A tax credit authorized under any of the
following:
(1) Article XVII-B.
(2) Article XVII-D.
(3) Article XVII-E.
(4) Article XVII-G.
(5) Article XVII-H.
(6) Article XVII-I.
(7) Article XVII-J.
(8) Article XVII-K.
(9) Article XVIII.
(10) Article XVIII-B.
(11) Article XVIII-D.
(12) Article XVIII-E.
(13) Article XVIII-F.
(14) Article XVIII-G.
(15) Article XIX-A.
(16) Article XIX-E.
(17) Section 2010.
(18) Article XXIX-D.
(19) Article XX-B of the act of March 10, 1949 (P.L.30,
No.14), known as the Public School Code of 1949.
Section 1702-A.1. Eligibility.
(a) Except as otherwise provided by law, before a tax credit
can be awarded, the department may make a finding that the
taxpayer has filed all required State tax reports and returns
for all applicable taxable years and paid any balance of State
tax due as determined at settlement or assessment by the
department, unless the tax due is currently under appeal.
(b) (Reserved).
Section 32. Section 1711-D of the act is amended by adding
definitions to read:
Section 1711-D. Definitions.
The following words and phrases when used in this subarticle
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Deteriorated property." Any blighted, impoverished area
containing industrial, commercial or other real property that is
abandoned, unsafe, vacant, undervalued, underutilized,
overgrown, defective, condemned, demolished or which contains
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economically undesirable land use.
* * *
"Film production tax credit district." A district authorized
under section 1716.2-D.
* * *
Section 33. Section 1712-D of the act is amended by adding a
subsection to read:
Section 1712-D. Credit for qualified film production expenses.
* * *
(b.1) Review and approval of applications for film
production tax credit district activity.--For applications
involving film production expenses incurred within a designated
film production tax credit district authorized under section
1716.2-D, the department shall accept applications at any time.
Applications shall be reviewed by the department utilizing the
criteria required under subsection (b). Upon determining the
taxpayer has incurred or will incur qualified film production
expenses, the department shall approve the taxpayer for a tax
credit utilizing the tax credits authorized under section
1716.2-D, not to exceed the amount authorized for the fiscal
year.
* * *
Section 34. The act is amended by adding a section to read:
Section 1716.2-D. Film production tax credit districts.
(a) Establishment.--The department may designate not more
than two film production tax credit districts for the purpose of
enhancing, promoting and expanding film production opportunities
and establishing a film production industry within this
Commonwealth.
(b) Criteria.--A film production tax credit district shall:
(1) Be at least 55 acres in size.
(2) Be located on deteriorated property.
(3) Be comprised of a parcel that is or will be occupied
by two or more qualified businesses that:
(i) in the aggregate, make a capital investment of
at least $400,000,000 within the district within five
years after the effective date of the designation of the
district; and
(ii) are dedicated to film production activity,
postproduction activity or other activities that directly
or indirectly support film production activity occurring
within the district or within this Commonwealth.
(4) Contain at least one qualified production facility
and six sound stages.
(c) Application.--The following apply:
(1) An application to designate a film production tax
credit district may be made by the county or municipality in
which all or part of the district will be located. The
department shall review the application and, if approved,
issue a designation for the film production tax credit
district. The application period shall be set by the
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department.
(2) The application shall contain the following
information:
(i) The geographic area of the proposed film
production tax credit district.
(ii) A detailed map of the proposed district,
including geographic boundaries, total area and present
use and conditions of the land and structures.
(iii) A description of the current social, economic
and demographic characteristics of the proposed district
and anticipated improvements in education, health, human
services, public safety and employment that will result
from designation of the district.
(iv) A description of anticipated film production
activity and ancillary activities in the proposed
district.
(v) Evidence of potential private and public
investment in the proposed district.
(vi) The role of the proposed district in regional
economic and community development.
(d) Designation period.--A district designated under
subsection (c) shall expire 15 years after the effective date of
the designation.
(e) Construction.--The tax credits authorized under this
section are in addition to the tax credits under section 1716-
D(a) and are available exclusively for activities occurring
within the designated district.
(f) Annual tax credits.--The department may authorize a tax
credit for a film production tax credit district in fiscal year
2019-2020 and in each fiscal year thereafter.
Section 35. Article XVII-D of the act is amended by adding a
subarticle to read:
SUBARTICLE E
ENTERTAINMENT ECONOMIC ENHANCEMENT PROGRAM
Section 1771-D. Scope of subarticle.
This subarticle relates to the Entertainment Economic
Enhancement Program.
Section 1772-D. Definitions.
The following words and phrases when used in this subarticle
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Class 1 venue." A stadium, arena, other structure or
property owned by a municipality or an authority formed under
Article XXV-A of the act of July 28, 1953 (P.L.723, No.230),
known as the Second Class County Code, at which concerts are
performed and which is all of the following:
(1) Located in a city of the first class or a county of
the second class.
(2) Constructed in a manner in which the venue has a
seating capacity of at least 14,000.
"Class 2 venue." A stadium, arena or other structure at
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which concerts are performed and which is all of the following:
(1) Located outside the geographic boundaries of a city
of the first class or a county of the second class.
(2) Constructed in a manner in which the venue has a
seating capacity of at least 6,000.
"Class 3 venue." A stadium, arena or other structure which
is any of the following:
(1) Located within a neighborhood improvement zone, as
defined in section 1902-B.
(2) Owned by or affiliated with a State-related
institution as defined in 62 Pa.C.S. § 103 (relating to
definitions).
(3) Owned by the Commonwealth and affiliated with the
State System of Higher Education.
"Concert." A live performance of music in the presence of
individuals who view the performance.
"Concert tour equipment." Includes stage, set, scenery,
design elements, automation, rigging, trusses, spotlights,
lighting, sound equipment, video equipment, special effects,
cases, communication devices, power distribution equipment,
backline and other miscellaneous equipment or supplies used
during a concert or rehearsal.
"Department." The Department of Community and Economic
Development of the Commonwealth.
"Maintained a place of business" or "maintaining a place of
business." All of the following:
(1) Having, maintaining or using within this
Commonwealth an office, warehouse or other place of business.
(2) Regularly engaging in an activity as a business
within this Commonwealth in connection with the lease, sale
or delivery of tangible personal property or the performance
of a service for residents of this Commonwealth.
"Minimum rehearsal and tour requirements." During a tour,
all of the following must occur:
(1) The purchase or rental of concert tour equipment
delivered to a location in this Commonwealth, in an amount of
at least $3,000,000, from companies located and maintaining a
place of business in this Commonwealth for use on the tour.
(2) A rehearsal at a qualified rehearsal facility for a
minimum of 10 days.
(3) At least one concert performed at a class 1 venue.
(4) At least one concert performed at a venue which is
located in a municipality other than the municipality in
which the class 1 venue under paragraph (3) is located.
"Pass-through entity." Any of the following:
(1) A partnership as defined in section 301(n.0).
(2) A Pennsylvania S corporation as defined in section
301(n.1).
(3) An unincorporated entity subject to section 307.21.
"Pennsylvania rehearsal and tour expenses." The sum of
Pennsylvania rehearsal expenses and tour expenses. The term
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includes Pennsylvania rehearsal expenses and tour expenses paid
prior to or during a rehearsal or tour.
"Pennsylvania rehearsal expense." A rehearsal expense which
is incurred or will be incurred within this Commonwealth. The
term includes:
(1) A payment which is made or will be made by a
recipient to a person upon which withholding will be made on
the payment by the recipient as required under Part VII of
Article III or a payment which is made or will be made to a
person who is required to make estimated payments under Part
VIII of Article III.
(2) A payment which is made or will be made to a
personal service corporation representing individual talent
if the tax imposed by Article IV will be paid or accrued on
the net income of the corporation for the taxable year.
(3) A payment which is made or will be made to a pass-
through entity representing individual talent for which
withholding will be made by the pass-through entity on the
payment as required under Part VII or VII-A of Article III.
"Qualified rehearsal and tour expense." All Pennsylvania
rehearsal and tour expenses if Pennsylvania rehearsal expenses
comprise or will comprise at least 60% of the total rehearsal
expenses. The term shall not include more than $2,000,000 in the
aggregate of compensation paid or to be paid to individuals or
payment made or to be made to entities representing an
individual for services provided in the tour.
"Qualified rehearsal facility." A rehearsal facility which
meets at least six of the following criteria:
(1) Has had a minimum of $8,000,000 invested in the
rehearsal facility in land or structure, or a combination of
land and structure.
(2) Has a permanent grid system with a capacity of
1,000,000 pounds.
(3) Has a built-in power supply system available at a
minimum of 3,200 amps without the need for supplemental
generators.
(4) Has a height from floor to permanent grid of a
minimum of 80 feet.
(5) Has at least two sliding or roll-up access doors
with a minimum height of 14 feet.
(6) Has a perimeter security system which includes 24-
hour, seven-days-a-week security cameras and the use of
access control identification badges.
(7) Has a service area with production offices, catering
and dressing rooms with a minimum of 5,000 square feet.
(8) Is located within one mile of a minimum of two
companies which provide concert tour equipment for use on a
tour.
"Qualified tax liability." The liability for taxes imposed
under Article III, IV, VI, VII or IX. The term does not include
tax withheld by an employer from an employee under Article III.
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"Recipient." A taxpayer that has been awarded a tax credit
under section 1773-D(e).
"Rehearsal." An event or series of events which occur in
preparation for a tour prior to the start of the tour or during
a tour when additional preparation may be needed.
"Rehearsal expense." All of the following when incurred or
will be incurred during a rehearsal:
(1) Compensation paid or to be paid to an individual
employed in the rehearsal of the performance.
(2) Payment to a personal service corporation
representing individual talent.
(3) Payment to a pass-through entity representing
individual talent.
(4) The costs of construction, operations, editing,
photography, staging, lighting, wardrobe and accessories.
(5) The cost of leasing vehicles.
(6) The cost of transportation of people or concert tour
equipment to or from a train station, bus depot, airport or
other transportation facility or directly from a residence or
business entity.
(7) The cost of insurance coverage.
(8) The cost of food and lodging.
(9) The cost of purchase or rental of concert tour
equipment.
(10) The cost of renting a rehearsal facility.
(11) The cost of emergency or medical support services
required to conduct a rehearsal.
"Rehearsal facility." As follows:
(1) A facility primarily used for rehearsals which is
all of the following:
(i) Located within this Commonwealth.
(ii) Has a minimum of 25,000 square feet of column-
free, unobstructed floor space.
(2) The term does not include a facility at which
concerts are capable of being held.
"Start date." The date the first set of concert tour
equipment arrives or is expected to arrive at a qualified
rehearsal facility.
"Tax credit." The concert rehearsal and tour tax credit as
provided under this subarticle.
"Taxpayer." A concert tour promotion company, concert tour
management company or other concert management company subject
to tax under Article III, IV or VI. The term does not include
contractors or subcontractors of a concert tour promotion
company, concert tour management company or other concert
management company.
"Tour." A series of concerts performed or to be performed by
a musical performer in more than one location. The term includes
at least one rehearsal.
"Tour expense." As follows:
(1) Costs incurred or which will be incurred during a
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tour for venues located in this Commonwealth. The term
includes all of the following:
(i) A payment which is made or will be made by a
recipient to a person upon which withholding will be made
on the payment by the recipient as required under Part
VII of Article III or a payment which is made or will be
made to a person who is required to make estimated
payments under Part VIII of Article III.
(ii) The cost of transportation of people or concert
touring equipment which is incurred or will be incurred
while transporting to or from a train station, bus depot,
airport or other transportation facility or while
transporting directly from a residence or business entity
located in this Commonwealth, or which is incurred or
will be incurred for transportation provided by a company
which is subject to the tax imposed under Article III or
IV.
(iii) The cost of leasing vehicles upon which the
tax imposed by Article II will be paid or accrued.
(iv) The cost of insurance coverage which is
purchased or will be purchased through an insurance agent
based in this Commonwealth.
(v) The cost of purchasing or renting facilities and
equipment from or through a resident of this Commonwealth
or an entity subject to taxation in this Commonwealth.
(vi) The cost of food and lodging which is incurred
or will be incurred from a facility located in this
Commonwealth.
(vii) Expenses which are incurred or will be
incurred in marketing or advertising a tour at venues
located within this Commonwealth.
(viii) The cost of merchandise which is purchased or
will be purchased from a company located within this
Commonwealth and used on the tour.
(ix) A payment which is made or will be made to a
personal service corporation representing individual
talent if the tax imposed by Article IV will be paid or
accrued on the net income of the corporation for the
taxable year.
(x) A payment which is made or will be made to a
pass-through entity representing individual talent for
which withholding will be made by the pass-through entity
on the payment as required under Part VII or VII-A of
Article III.
(2) The term does not include development cost,
including the writing of music or lyrics.
"Venue." A class 1, class 2 or class 3 venue.
Section 1773-D. Procedure.
(a) Application.--A taxpayer may apply to the department for
a tax credit under this section. The application shall be on the
form required by the department.
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(b) Review and approval.--
(1) The department shall establish application periods
not to exceed 30 days. All applications received during an
application period shall be reviewed and evaluated by the
department based on the following criteria:
(i) The anticipated number of rehearsal days in a
qualified rehearsal facility.
(ii) The anticipated number of concerts at class 1
venues.
(iii) The anticipated number of concerts at class 2
venues.
(iv) The anticipated number of concerts at class 3
venues.
(v) The anticipated amount of Pennsylvania rehearsal
expenses in comparison to the anticipated aggregate
amount of rehearsal expenses.
(vi) The anticipated amount of the tour expenses.
(vii) The anticipated amount of the concert tour
equipment expenses which are or will be purchased or
rented from a company located and maintaining a place of
business in this Commonwealth and which will be used on
the tour.
(viii) The anticipated number of days spent in
Commonwealth hotels.
(ix) Other criteria that the department deems
appropriate to ensure maximum employment opportunities
and entertainment benefits for the residents of this
Commonwealth.
(2) Except as provided in subsection (c) and upon
determining that the taxpayer has paid the applicable
application fee not to exceed $300, has met or will meet the
minimum rehearsal and tour requirements and has incurred or
will incur qualified rehearsal and tour expenses, the
department may approve the taxpayer for a tax credit.
Applications not approved may be reviewed and considered in
subsequent application periods. The department may approve a
taxpayer for a tax credit based on its evaluation of the
criteria under this subsection.
(c) Restriction.--The department may only consider
rehearsals held or to be held, and qualified rehearsal and tour
expenses incurred or to be incurred, after January 1, 2017, in
determining whether a taxpayer has met or will meet the minimum
rehearsal and tour requirements.
(d) Contract.--If the department approves the taxpayer 's
application under subsection (b), the department and the
taxpayer shall enter into a contract containing the following:
(1) An itemized list of rehearsal expenses incurred or
to be incurred for the tour.
(2) An itemized list of Pennsylvania rehearsal expenses
incurred or to be incurred for the tour.
(3) With respect to a contract entered into prior to
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completion of a tour, a commitment by the taxpayer to incur
the Pennsylvania rehearsal expenses as itemized.
(4) An itemized list of the qualified rehearsal and tour
expenses incurred or to be incurred for the tour.
(5) With respect to a contract entered into prior to
completion of a tour, a commitment by the taxpayer to incur
the qualified rehearsal and tour expenses as itemized.
(6) With respect to a contract entered into prior to
completion of a tour, a commitment by the taxpayer to hold at
least one concert at a class 1 venue.
(7) With respect to a contract entered into prior to
completion of a tour, a commitment by the taxpayer to hold at
least one concert at a venue located in a municipality other
than the municipality in which the class 1 venue under
paragraph (6) is located.
(8) The start date or the expected start date.
(9) Any other information the department deems
appropriate.
(e) Certificate.--Upon execution of the contract required by
subsection (d), the department shall award the taxpayer a
concert rehearsal and tour tax credit and issue the recipient a
tax credit certificate.
Section 17 7 4-D. Claim.
Beginning July 1, 2017, a recipient may claim a concert
rehearsal and tour tax credit against the qualified tax
liability of the recipient.
Section 17 7 5-D. Carryover, carryback and assignment of tax
credit.
(a) General rule.--If a recipient cannot use the entire
amount of a tax credit for the taxable year in which the tax
credit is first approved, the excess may be carried over to
succeeding taxable years and used as a tax credit against the
qualified tax liability of the recipient for those taxable
years. Each time the tax credit is carried over to a succeeding
taxable year, the tax credit shall be reduced by the amount that
was used as a credit during the immediately preceding taxable
year. The tax credit may be carried over and applied to
succeeding taxable years for no more than three taxable years
following the first taxable year for which the recipient was
entitled to claim the tax credit.
(b) Application.--A tax credit approved by the department in
a taxable year first shall be applied against the recipient's
qualified tax liability for the current taxable year as of the
date on which the tax credit was approved before the tax credit
can be applied against tax liability under subsection (a).
(c) No carryback or refund.--A recipient shall not be
entitled to carry back or obtain a refund of any portion of an
unused tax credit granted to the recipient under this
subarticle.
(d) Sale or assignment.--The following shall apply:
(1) A recipient, upon application to and approval by the
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department, may sell or assign, in whole or in part, a tax
credit granted to the recipient under this subarticle.
(2) The department and the Department of Revenue shall
jointly promulgate regulations for the approval of
applications under this subsection.
(3) Before an application is approved, the Department of
Revenue must make a finding that the recipient has filed all
required State tax reports and returns for all applicable
taxable years and paid any balance of State tax due as
determined at settlement, assessment or determination by the
Department of Revenue.
(4) Notwithstanding any other provision of law, the
Department of Revenue shall settle, assess or determine the
tax of a taxpayer under this subsection within 60 days of the
filing of all required final returns or reports in accordance
with section 806.1(a)(5) of the act of April 9, 1929
(P.L.343, No.176), known as The Fiscal Code.
(e) Purchasers and assignees.--The following apply:
(1) The purchaser or assignee of all or a portion of a
tax credit under subsection (d) shall immediately claim the
tax credit in the taxable year in which the purchase or
assignment is made.
(2) The amount of the tax credit that a purchaser or
assignee may use against one qualified tax liability may not
exceed 50% of the qualified tax liability for the taxable
year.
(3) The purchaser or assignee may not carry forward,
carry back or obtain a refund of or sell or assign the tax
credit.
(4) The purchaser or assignee shall notify the
Department of Revenue of the seller or assignor of the tax
credit in compliance with procedures specified by the
Department of Revenue.
Section 17 7 6-D. Determination of Pennsylvania rehearsal and
tour expenses.
When prescribing standards for determining which rehearsal or
tour expenses are considered Pennsylvania rehearsal and tour
expenses for purposes of computing the tax credit provided by
this subarticle, the department shall consider:
(1) The location where services are performed.
(2) The location where concert tour equipment is
purchased, rented, delivered and used.
(3) The location where rehearsals or concerts are held.
(4) Other factors the department determines are
relevant.
Section 17 7 7-D. Limitations.
(a) Cap.-- Except as provided in this subsection, the
department may not award tax credits for qualified rehearsal and
tour expenses incurred or to be incurred related to more than
five tours in a fiscal year. In a fiscal year, the department
may, in the department's discretion, advance the award of tax
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credits for qualified rehearsal and tour expenses incurred or to
be incurred related to a maximum of two additional tours.
(b) Advance award of credits.--The advance award of tax
credits under subsection (a) shall:
(1) count against the total number of tours that the
department may award tax credits for qualified rehearsal and
tour expenses incurred or to be incurred related to a tour in
that next succeeding fiscal year; and
(2) reduce the number of tours that the department may
award tax credits for qualified rehearsal and tour expenses
incurred or to be incurred related to a tour in that next
succeeding fiscal year.
(c) Individual limitations.--The following shall apply:
(1) A taxpayer may not be awarded more than $800,000 of
tax credits for a tour.
(2) Except as provided under paragraph (5), the
aggregate amount of tax credits awarded by the department
under section 17 7 3-D(e) to a taxpayer for a tour with
concerts at two class 1 venues or a class 1 venue and a class
2 venue may not exceed 25% of the qualified rehearsal and
tour expenses incurred or to be incurred.
(3) Except as provided under paragraph (5), the
aggregate amount of tax credits awarded by the department
under section 17 7 3-D(e) to a taxpayer for a tour with
concerts at a class 1 venue and a class 3 venue may not
exceed 30% of the qualified rehearsal and tour expenses
incurred or to be incurred.
(4) Except as provided under paragraph (5), the
aggregate amount of tax credits awarded by the department
under section 17 7 3-D(e) to a taxpayer for a tour with
concerts at a class 1 venue and a class 3 venue which does
not serve alcohol may not exceed 35% of the qualified
rehearsal and tour expenses incurred or to be incurred.
(5) In addition to the tax credits under paragraph (2),
(3) or (4), a taxpayer is eligible for a tax credit in the
amount of 5% of the qualified rehearsal and tour expenses
incurred or to be incurred by the taxpayer if the taxpayer
holds concerts at a total of two or more class 2 venues or
class 3 venues.
(d) Qualified rehearsal facility.--To be considered a
qualified rehearsal facility under this subarticle, the owner of
a rehearsal facility shall provide evidence to the department to
verify the development or facility specifications and capital
improvement costs incurred for the rehearsal facility so that
the threshold amounts set in the definition of "qualified
rehearsal facility" under section 17 7 2-D are satisfied, and,
upon verification, the rehearsal facility shall be registered by
the department officially as a qualified rehearsal facility.
(e) Waiver.--The department may make a determination that
the financial benefit to this Commonwealth resulting from the
direct investment in or payments made to Pennsylvania rehearsal
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and concert facilities outweighs the benefit of maintaining the
60% Pennsylvania rehearsal expenses requirement contained in the
definition of "qualified rehearsal and tour expense" under
section 17 7 2-D. If the determination is made, the department may
waive the requirement that 60% of a tour's aggregate rehearsal
expenses be comprised of Pennsylvania rehearsal expenses.
Section 17 7 8-D. Penalty.
A recipient which claims a tax credit and fails to incur the
amount of qualified rehearsal and tour expenses agreed to under
section 17 7 3-D(d)(4) for a tour in that taxable year shall repay
to the Commonwealth an amount equal to 110% of the difference
between the amount agreed to under section 17 7 3-D(d)(4) and the
amount of qualified rehearsal and tour expenses actually
incurred by the recipient. The penalty shall be assessed and
collected under Article II.
Section 17 7 9-D. Pass-through entity.
(a) General rule.--If a pass-through entity has any unused
tax credits under section 17 7 5-D, the pass-through entity may
elect in writing, according to procedures established by the
Department of Revenue, to transfer all or a portion of the tax
credits to shareholders, members or partners in proportion to
the share of the entity's distributive income to which each
shareholder, member or partner is entitled.
(b) Limitation.--A pass-through entity and a shareholder,
member or partner of a pass-through entity may not claim the tax
credit under subsection (a) for the same qualified rehearsal and
tour expense.
(c) Application.--A shareholder, member or partner of a
pass-through entity to whom a tax credit is transferred under
subsection (a) shall immediately claim the tax credit in the
taxable year in which the transfer is made. The shareholder,
member or partner may not carry forward, carry back, obtain a
refund of or sell or assign the tax credit.
Section 1780-D. Department guidelines and regulations.
The department shall develop written guidelines for the
implementation of this subarticle. The guidelines shall be in
effect until the department promulgates regulations for the
implementation of this subarticle.
Section 1781-D. Report to General Assembly.
No later than June 1, 2018, and September 1 of each year
thereafter, the Secretary of Community and Economic Development
shall submit a report to the General Assembly summarizing the
effectiveness of the tax credits provided by this subarticle.
The report shall include the name of the tours which rehearsed
in this Commonwealth, the names of all recipients awarded a tax
credit as of the date of the report and the amount of tax
credits approved for each recipient. The report may also include
recommendations for changes in the calculation or administration
of the tax credits provided under this subarticle. The report
shall be submitted to the chairperson and minority chairperson
of the Appropriations Committee of the Senate, the chairperson
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and minority chairperson of the Finance Committee of the Senate,
the chairperson and minority chairperson of the Appropriations
Committee of the House of Representatives and the chairperson
and minority chairperson of the Finance Committee of the House
of Representatives. The report shall include the following
information, which shall be separated by geographic location
within this Commonwealth:
(1) The amount of tax credits claimed during the fiscal
year by tour.
(2) The total amount spent in this Commonwealth during
the fiscal year by tours and concert tour promotion companies
for services and supplies.
(3) The total amount of tax revenues, both directly and
indirectly, generated for the Commonwealth during the fiscal
year by the concert rehearsal and tour industry.
Section 36. The definition of "qualified tax liability" in
section 1702-G of the act is amended to read:
Section 1702-G. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
* * *
"Qualified tax liability." The liability for taxes imposed
under Articles III, IV, VI, VII, VIII, IX, XI and XV. The term
does not include tax withheld under section [316] 316.1.
* * *
Section 36.1. Section 1811-C(b) of the act is amended by
adding a paragraph to read:
Section 1811-C. Certification.
* * *
(b) Content.--
* * *
(3) The department shall request documentation regarding
State eligible taxes paid or refunds received from the agency
required to collect the taxes or issue the refunds before
requiring such documentation from the qualified business.
Instructions issued by the department after the effective
date of this section shall include a statement that the
qualified business will not be required to submit supporting
documentation with the qualified business's request for
certification under this article. Nothing in this paragraph
shall prohibit the department from auditing reports submitted
by qualified businesses for compliance with this article.
* * *
Section 37. Sections 1813-C and 1814-C of the act, amended
July 13, 2016 (P.L.526, No.84), are amended to read:
Section 1813-C. Restrictions.
(a) Utilization.--Money transferred under section 1812-C may
only be utilized for the following:
(1) Payment of debt service on bonds issued or
refinanced for the acquisition, development, construction,
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including related infrastructure and site preparation,
reconstruction, renovation or refinancing of a facility in
the zone and normal and customary fees for professional
services associated with the issuance or refinance of the
bonds.
(2) Acquisition, development, construction, including
related infrastructure and site preparation, reconstruction,
renovation or refinancing of all or a part of a facility.
(3) Replenishment of amounts in debt service reserve
funds established to pay debt service on bonds.
(4) Employment of an independent auditing firm to
perform the duties under section 1807-C(c).
(5) Improvement or development of all or part of a zone.
(6) Improvement projects, including fixtures and
equipment for a facility owned, in whole or in part, by a
public authority.
(7) Payment or reimbursement of reasonable
administrative, auditing and compliance services required by
this article. Reasonable administrative costs may not exceed
5% of the money transferred under section 1812-C. For
purposes of this paragraph, professional services shall not
be considered administrative costs.
(b) Prohibition.--Money transferred under section 1812-C may
not be utilized for maintenance or repair of a facility.
(c) Excess money.--
(1) [If] Except as set forth in paragraph (4), if the
amount of money transferred to the fund under sections 1811-
C(c) and 1812-C in any one calendar year exceeds the money
utilized under this section in that calendar year, the
contracting authority shall submit by April 15 following the
end of the calendar year the excess money to the State
Treasurer for deposit into the General Fund.
(2) At the time of submission to the State Treasurer,
the contracting authority shall submit to the State
Treasurer, the office and the department a detailed
accounting of the calculation resulting in the excess money.
(3) The excess money shall be credited to the
contracting authority and applied to the amount required to
be repaid under section 1812-C(c)(5) until there is full
repayment.
(4) Paragraph (1) does not apply to money utilized in a
pilot zone provided the excess money is used in accordance
with subsection (a).
(d) Matching funds.--
(1) The amount of money transferred from the fund
utilized for the acquisition, development, construction,
including related site preparation and infrastructure,
reconstruction or renovation of facilities, or normal and
customary fees for professional services shall be matched by
private, Federal or local money at a ratio of five fund
dollars to one private, Federal or local dollar. The
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contracting authority shall verify the private, Federal or
local match for a project at the time of the bond and report
proof of the match to the agencies. All of the following
shall be deemed private money:
(i) Equity.
(ii) Private developer debt and financing.
(iii) Soft costs associated with land development.
(iv) Costs of professional services associated with
development.
(v) Costs associated with improvements of the
parcel.
(vi) Costs of land acquisition and real estate
transactions.
(1.1) Private, Federal or local dollars invested in any
single year or multiple years may be amortized over the term
of the private or public financing provided to the project in
order to meet the matching fund ratio of five fund dollars to
one private, Federal or local dollar invested in the project.
(2) By April 1 following the baseline year and for each
year thereafter, the contracting authority shall file an
annual report with the Department of Community and Economic
Development, the office and the department that contains a
detailed account of the fund money expenditures and the
private, Federal or local money expenditures and a
calculation of the ratio in paragraph (1) for the prior
calendar year.
(3) If it is determined that insufficient private,
Federal or local money was utilized under paragraph (1), the
amount of fund money utilized under paragraph (1) in the
prior calendar year shall be deducted from the next transfer
of the fund.
Section 1814-C. Transfer of property.
(a) Property.--Parcels in a zone where a facility has not
been constructed, reconstructed or renovated using money under
this article may be transferred out of the zone, if the
contracting authority provides a notarized certification,
confirmed in the annual audit required under section 1807-C(c),
that no fund dollars were used on the property. Additional
acreage, not to exceed the acreage transferred out of the zone,
may be [simultaneously] added to the zone.
(a.1) Public meeting.--Prior to requesting approval, the
contracting authority shall hold a public meeting to consider
the proposed transfer. At the meeting, any interested party may
attend and offer comment on the proposal change.
(a.2) Infeasibility.--
(1) If no activity in furtherance of development has
taken place on the parcel within eight years of the enactment
of this section or designation of the zone, whichever occurs
later, the contracting authority may conduct a public hearing
on the feasibility of the parcel to continue with the
designation pursuant to a request from the city or
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municipality where the parcel sits. The hearing shall be held
and notice provided to the owner of the parcel in accordance
with section 908 of the act of July 31, 1968 (P.L.805,
No.247), known as the Pennsylvania Municipalities Planning
Code. For purposes of this section, activity shall include,
but not be limited to, construction, building, renovation,
reconstruction, site preparation and site development.
(2) If the contracting authority determines that the
project is no longer feasible, the contracting authority
shall issue a written opinion within 45 days of the hearing
setting forth the reasons supporting the determination and
verifying that no activity has taken place. The decision may
be appealed in accordance with section 1001-A of the
Pennsylvania Municipalities Planning Code.
(b) Approval.--A transfer under subsections (a) and (a.2)
must be approved by the Department of Community and Economic
Development in consultation with the office and the department.
Section 38. (Reserved).
Section 39. The act is amended by adding a section to read:
Section 1904.3-B. Transfer of property.
(a) Transfer of parcels.--Parcels in a zone may be
transferred out of the zone and replaced with parcels not to
exceed the acreage transferred out of the zone by the
contracting authority, if:
(1) The department certifies that there is currently no
activity in the parcels transferred in the zone that
generates tax receipts or other revenue to the Commonwealth.
(2) The municipality where the zone is located certifies
that there is currently no activity in the parcels
transferred into the zone that generates tax receipts or
other revenue, other than taxes on real property, to the
municipality and the school district and county where the
zone is located.
(b) Public hearing.--The following apply:
(1) For a parcel identified by the contracting authority
to be transferred out of the zone, the contracting authority
may conduct a public hearing pursuant to a request from an
owner of real estate located within the parcel or the city or
municipality where the parcel sits. The hearing shall be held
and notice of the hearing provided to the owner of the parcel
in accordance with section 908 of the act of July 31, 1968
(P.L.805, No.247), known as the Pennsylvania Municipalities
Planning Code.
(2) If the contracting authority determines that it will
transfer a parcel out of the zone, the contracting authority
shall issue a written opinion within 45 days of the hearing
setting forth the reasons supporting the determination.
Section 40. Section 1911-D(c) of the act, added July 13,
2016 (P.L.526, No.84), is amended to read:
Section 1911-D. Additional keystone opportunity zones.
* * *
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(c) Application.--In order to receive a designation under
this section, the department must receive an application from a
political subdivision or its designee no later than October 1,
[2016] 2018. The application must contain the information
required under section 302(a)(1), (2)(i) and (ix), (5) and (6)
of the KOZ Act. The department, in consultation with the
Department of Revenue, shall review the application and, if
approved, issue a certification of all tax exemptions,
deductions, abatements or credits under this act for the zone
within three months of receipt of the application. The
department shall act on an application for a designation under
section 302(a)(1) of the KOZ Act by December 31, [2016] 2018.
The department may make designations under this section on a
rolling basis during the application period.
* * *
Section 41. Section 2166 of the act is amended to read:
Section 2166. Timely Mailing Treated as Timely Filing and
Payment.--Notwithstanding the provisions of any State tax law to
the contrary, whenever a report or payment of all or any portion
of a State tax is required by law to be received by the
department or other agency of the Commonwealth on or before a
day certain, the taxpayer shall be deemed to have complied with
the law if the letter transmitting the report or payment of the
tax which has been received by the department is postmarked by
the United States Postal Service on or prior to the final day on
which the payment is to be received. For the purposes of this
article, presentation of a receipt indicating that the report or
payment was mailed by registered or certified mail on or before
the due date shall be evidence of timely filing and payment. Any
inheritance tax return filed after July 1, 2012, under section
2136 that reports transfers of property that are exempt from the
inheritance tax under section 2111(s), (s.1) and (t) shall be
considered timely filed if filed within one year of the tax
return due date, including an extended due date.
Section 42. Section 2301(e) of the act is amended and the
section is amended by adding a subsection to read:
Section 2301. Public Transportation Assistance Fund.--* * *
(e) [There] Except as provided in subsection (e.1), there is
hereby imposed on each rental of a motor vehicle subject to tax
under Article II a fee of two dollars ($2) for each day or part
of a day for which the vehicle is rented.
(e.1) (1) There is hereby imposed on each rental of a motor
vehicle subject to tax under Article II and used in carsharing a
fee for each day or part of a day computed according to the
following schedule:
Rental Interval Fee
Less than 2 hours $.25
2 to 3 hours $.50
More than 3, but less
than 4 hours $1.25
4 hours or more $2.00
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(2) For purposes of this subsection, the term "carsharing"
shall mean a membership based service that provides an
alternative to personal car ownership and which meets the
following conditions:
(i) Does not require a trip-specific written agreement each
time a member rents a vehicle.
(ii) Does not require an attendant to be present at the
beginning or end of a rental.
(iii) Offers members access to a dispersed network of shared
vehicles 24-hours per day, 7 days per week, 365 days per year.
(iv) Allows a vehicle to be rented on a per minute, per
hour, per day, or per trip basis, and at per mile or per
kilometer rates, which typically include fuel, insurance and
maintenance.
Section 43. The act is amended by adding an article to read:
ARTICLE XXIV
FIREWORKS
Section 2401. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"APA 87-1." The American Pyrotechnics Association Standard
87-1: Standard for Construction and Approval for Transportation
of Fireworks, Novelties, and Theatrical Pyrotechnics , 2001
edition, or any subsequent edition.
"Consumer fireworks."
(1) Any combustible or explosive composition or any
substance or combination of substances which is intended to
produce visible or audible effects by combustion, is suitable
for use by the public, complies with the construction,
performance, composition and labeling requirements
promulgated by the Consumer Products Safety Commission in 16
CFR (relating to commercial practices) or any successor
regulation and complies with the provisions for "consumer
fireworks" as defined in APA 87-1 or any successor standard,
the sale, possession and use of which shall be permitted
throughout this Commonwealth.
(2) The term does not include devices as "ground and
hand-held sparkling devices," "novelties" or "toy caps" in
APA 87-1 or any successor standard, the sale, possession and
use of which shall be permitted at all times throughout this
Commonwealth.
"Display fireworks." Large fireworks to be used solely by
professional pyrotechnicians and designed primarily to produce
visible or audible effects by combustion, deflagration or
detonation. The term includes, but is not limited to:
(1) salutes that contain more than two grains or 130
milligrams of explosive materials;
(2) aerial shells containing more than 60 grams of
pyrotechnic compositions; and
(3) other display pieces that exceed the limits of
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explosive materials for classification as consumer fireworks
and are classified as fireworks UN0333, UN0334 or UN0335
under 49 CFR 172.101 (relating to purpose and use of
hazardous materials table).
"Municipality." A city, borough, incorporated town or
township.
"NFPA 1124." The National Fire Protection Association
Standard 1124, Code for the Manufacture, Transportation and
Storage of Fireworks and Pyrotechnic Articles , 2006 edition, or
any subsequent edition.
"Occupied structure." A structure, vehicle or place adapted
for overnight accommodation of persons or for conducting
business whether or not a person is actually present.
"Outdoor storage unit." A consumer fireworks building,
trailer, semitrailer, metal shipping container or magazine
meeting the specifications of NFPA 1124.
"Temporary structure." A structure, other than a permanent
facility with fixed utility connections, which is in use or in
place for a period
of 20 consecutive calendar days or less and
is dedicated to the storage and sale of consumer fireworks and
related items. The term includes temporary retail sales stands,
tents, canopies and membrane structures meeting the
specifications of NFPA 1124. The term shall not include a
facility that is not licensed to sell consumer fireworks under
this article.
Section 2402. Permits.
(a) Permissible purposes.--Display fireworks may be
possessed and used by a person holding a permit from a
municipality at the display covered by the permit or when used
as authorized by a permit for any of the following:
(1) For agricultural purposes in connection with the
raising of crops and the protection of crops from bird and
animal damage.
(2) By railroads or other transportation agencies for
signal purposes or illumination.
(3) In quarrying or for blasting or other industrial
use.
(4) In the sale or use of blank cartridges for a show or
theater.
(5) For signal or ceremonial purposes in athletics or
sports.
(6) By military organizations or organizations composed
of veterans of the armed forces of the United States.
(b) Age limitation.--A display fireworks permit may not be
issued to a person under 21 years of age.
(c) Bond.--The governing body of the municipality shall
require a bond deemed adequate by it from the permittee in a sum
not less than $50,000 conditioned for the payment of all damages
which may be caused to a person or property by reason of the
display and arising from an act of the permittee or an agent, an
employee or a subcontractor of the permittee.
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Section 2403. Request for extension.
(a) Authorization.--If, because of unfavorable weather, the
display for which a permit has been granted does not occur at
the time authorized by the permit, the person to whom the permit
was issued may within 24 hours apply for a request for extension
to the municipality which granted the permit.
(b) Contents of request.--The request for extension shall
state under oath that the display was not made, provide the
reason that the display was not made and request a continuance
of the permit for a date designated within the request, which
shall be not later than one week after the date originally
designated in the permit.
(c) Determination.--Upon receiving the request for
extension, the municipality, if it believes that the facts
stated within the request are true, shall extend the provisions
of the permit to the date designated within the request, which
shall be not later than one week after the date originally
designated in the permit.
(d) Conditions.--The extension of time shall be granted
without the payment of an additional fee and without requiring a
bond other than the bond given for the original permit, the
provisions of which shall extend to and cover all damages which
may be caused by reason of the display occurring at the extended
date and in the same manner and to the same extent as if the
display had occurred at the date originally designated in the
permit.
Section 2404. Use of consumer fireworks.
(a) Conditions.--A person who is at least 18 years of age
and meets the requirements of this article may purchase, possess
and use consumer fireworks.
(b) Prohibitions.--A person may not intentionally ignite or
discharge:
(1) Consumer fireworks on public or private property
without the express permission of the owner.
(2) Consumer fireworks or sparkling devices within, or
throw consumer fireworks or sparkling devices from, a motor
vehicle or building.
(3) Consumer fireworks or sparkling devices into or at a
motor vehicle or building or at another person.
(4) Consumer fireworks or sparkling devices while the
person is under the influence of alcohol, a controlled
substance or another drug.
(5) Consumer fireworks within 150 feet of an occupied
structure.
Section 2404.1. Use of display fireworks.
No display fireworks shall be ignited within 300 feet of a
facility that meets the requirements of section 2407 or 2410.
Section 2405. Agricultural purposes.
(a) Authorization.--The governing body of a municipality
may, under reasonable rules and regulations adopted by it, grant
permits for the use of suitable fireworks for agricultural
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purposes in connection with the raising of crops and the
protection of crops from bird and animal damage.
(b) Duration of permit.--A permit under this section shall
remain in effect for the calendar year in which it was issued.
(c) Conditions.--After a permit under this section has been
granted, sales, possession and use of fireworks of the type and
for the purpose mentioned in the permit shall be lawful for that
purpose only.
Section 2406. Rules and regulations by municipality.
(a) Authorization.--Permission shall be given by the
governing body of a municipality under reasonable rules and
regulations for displays of display fireworks to be held within
the municipality.
(b) Conditions.--
(1) Each display shall be:
(i) handled by a competent operator; and
(ii) of a character and so located, discharged or
fired as, in the opinion of the chief of the fire
department or other appropriate officer as may be
designated by the governing body of the municipality,
after proper inspection, to not be hazardous to property
or endanger any person.
(2) After permission is granted under this section,
possession and use of display fireworks for display shall be
lawful for that purpose only.
(3) A permit shall be transferable.
Section 2407. Sales locations.
Except as provided in section 2410, consumer fireworks shall
be sold only from facilities which are licensed by the
Department of Agriculture and that meet the following criteria:
(1) The facility shall comply with the provisions of the
act of November 10, 1999 (P.L.491, No.45), known as the
Pennsylvania Construction Code Act.
(2) The facility shall be a stand-alone permanent
structure.
(3) Storage areas shall be separated from wholesale or
retail sales areas to which a purchaser may be admitted by
appropriately rated fire separation.
(4) The facility shall be located no closer than 250
feet from a facility selling or dispensing gasoline, propane
or other flammable products.
(5) The facility shall be located at least 1,500 feet
from another facility licensed to sell consumer fireworks.
(6) The facility shall have a monitored burglar and fire
alarm system.
(7) Quarterly fire drills and preplanning meetings shall
be conducted as required by the primary fire department.
Section 2408. Fees, granting of licenses and inspections.
(a) Initial application fees.--
(1) An initial application for a license to sell
consumer fireworks shall be submitted to the Department of
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Agriculture on forms prescribed and provided by the
department with a nonrefundable application fee as follows:
(i) For a facility meeting the requirements of
section 2407, the application shall be submitted with a
nonrefundable application fee of $2,500.
(ii) For a facility meeting the requirements of
section 2410, the application shall be submitted with a
nonrefundable application fee of $1,000 no later than 60
days prior to the first day of sale.
(2) An application under paragraph (1)(i) or (ii) shall
also be accompanied by the appropriate annual license fee as
provided in subsection (b).
(b) Annual license fees.--The annual license fee for a
facility licensed to sell consumer fireworks shall be as
follows:
(1) $7,500 for a location up to 10,000 square feet;
(2) $10,000 for a location greater than 10,000 and up to
15,000 square feet;
(3) $20,000 for a location greater than 15,000 square
feet; and
(4) $3,000 for a temporary structure.
(c) Time limitations and inspections.--
(1) A facility meeting the requirements of section 2407
shall be inspected by the Department of Agriculture within 30
days of receipt of a complete application for a license. The
Department of Agriculture shall issue or deny a license
within 14 days of completing the inspection.
(2) The Department of Agriculture shall issue or deny a
license for a facility meeting the requirements of section
2410 no later than 10 days prior to the first day of sale.
The facility shall be available for inspection by the
Department of Agriculture for compliance with NFPA 1124 at
all times during the licensed selling period.
(d) Term of license.--A license issued for the sale of
consumer fireworks shall be effective for one year from the date
the license is issued.
(e) License renewal and inspections.--License renewal shall
be automatic upon payment of the appropriate annual license fee
under subsection (b), but each facility shall be subject to
annual inspections by the Department of Agriculture and at other
times as the department may deem appropriate.
(f) Condition.--No license may be issued to a convicted
felon or to an entity in which a convicted felon owns a
percentage of the equity interest.
Section 2409. Conditions for facilities.
A facility licensed by the Department of Agriculture shall be
exclusively dedicated to the storage and sale of consumer
fireworks and related items, and the facility shall operate in
accordance with the following rules:
(1) There shall be security personnel on the premises
for the seven days preceding and including July 4 and for the
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three days preceding and including January 2.
(2) No smoking shall be permitted in the facility.
(3) No cigarettes or tobacco products, matches, lighters
or any other flame-producing devices shall be permitted to be
taken into the facility.
(4) No minors shall be permitted in the facility unless
accompanied by an adult, and each minor shall stay with the
adult in the facility.
(5) All facilities shall carry at least $2,000,000 in
public and product liability insurance.
(6) A licensee shall provide its employees with
documented training in the area of operational safety of a
facility. The licensee shall provide to the Department of
Agriculture written documentation that each employee has
received the training.
(7) No display fireworks shall be stored or located at a
facility.
(8) No person who appears to be under the influence of
intoxicating liquor or drugs shall be admitted to the
facility, and no liquor, beer or wine shall be permitted in
the facility.
(9) Emergency evacuation plans shall be conspicuously
posted in appropriate locations within the facility.
Section 2410. Temporary structures.
(a) Conditions.--Notwithstanding section 2407 or any other
provision of law, a temporary structure may be licensed by the
Department of Agriculture to sell consumer fireworks if the
temporary structure meets all of the following requirements:
(1) The temporary structure is located no closer than
250 feet from a facility storing, selling or dispensing
gasoline, propane or other flammable products.
(2) An evacuation plan is posted in a conspicuous
location for a temporary structure in accordance with NFPA
1124.
(3) The outdoor storage unit, if any, is separated from
the wholesale or retail sales area to which a purchaser may
be admitted by appropriately rated fire separation.
(4) The temporary structure complies with NFPA 1124 as
it relates to retail sales of consumer fireworks in temporary
structures.
(5) The temporary structure is located one of the
following distances from a permanent facility licensed to
sell consumer fireworks under the act of May 15, 1939
(P.L.134, No.65), referred to as the Fireworks Law, at the
time of the effective date of this article:
(i) Prior to January 1, 2023, at least five miles.
(ii) Beginning January 1, 2023, at least two miles.
(6) The temporary structure does not exceed 2,500 square
feet.
(7) The temporary structure is secured at all times
during which consumer fireworks are displayed within the
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structure.
(8) The temporary structure has a minimum of $2,000,000
in public and product liability insurance.
(9) The sales period is limited to June 15 through July
8 and December 21 through January 2 of each year.
(10) Consumer fireworks not on display for retail sale
are stored in an outdoor storage unit.
(b) Limitations.--The sale of consumer fireworks from the
temporary structure is limited to the following:
(1) Helicopter, Aerial Spinner (APA 87-1, 3.1.2.3).
(2) Roman Candle (APA 87-1, 3.1.2.4).
(3) Mine and shell devices not exceeding 500 grams.
Section 2411. Attorney General.
(a) Registration.--Any business entity which performs,
provides or supervises fireworks displays or exhibitions for
profit shall register annually with the Attorney General.
(b) Rules.--The Attorney General shall promulgate rules to
implement this section.
Section 2412. Consumer fireworks tax.
(a) Imposition.--In addition to any other tax imposed by
law, a tax is imposed on each separate sale at retail of
consumer fireworks, which tax shall be collected by the retailer
from the purchaser at the time of sale and shall be paid over to
the Commonwealth as provided in this section. A tax imposed
under this subsection on each separate sale at retail shall be
paid to and received by the Department of Revenue and, along
with interest and penalties, shall be deposited into the General
Fund.
(b) Rate.--The tax authorized under subsection (a) shall be
imposed and collected at the rate of 12% of the purchase price
per item sold. The purchase price shall include State and local
sales taxes.
(c) Collection and administration.--The provisions of Part
VI of Article II shall apply to the tax authorized under
subsection (a). No additional fee shall be charged for a license
or license renewal other than the license or renewal fee
required under section 2408 and the license or renewal fee
authorized and imposed under Article II.
Section 2413. Disposition of certain funds.
(a) Transfer.--One-sixth of the tax collected under this
article in a fiscal year, not to exceed $2,000,000, shall be
transferred annually for use as follows:
(1) Seventy-five percent of the amount transferred under
this subsection shall be used for the purpose of making
grants under 35 Pa.C.S. Ch. 78 Subch. C (relating to
Emergency Medical Services Grant Program).
(2) Twenty-five percent of the amount transferred under
this subsection shall be deposited into a special account in
the State Treasury designated as the Online Training Educator
and Training Reimbursement Account for the purposes of
developing, delivering and sustaining training programs for
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volunteer firefighters in this Commonwealth.
(3) The Office of the State Fire Commissioner shall
establish guidelines for use of the money deposited under
paragraph (2). By December 31, 2018, and each December 31
thereafter, the Office of the State Fire Commissioner shall
provide a written report detailing the use of the money
received from the prior fiscal year to the chairperson and
minority chairperson of the Agriculture and Rural Affairs
Committee of the Senate, the chairperson and minority
chairperson of the Veterans Affairs and Emergency
Preparedness Committee of the Senate, the chairperson and
minority chairperson of the Agriculture and Rural Affairs
Committee of the House of Representatives and the Veterans
Affairs and Emergency Preparedness Committee of the House of
Representatives.
(b) Payments.--The transfer required under subsection (a)
shall be made by September 15, 2018, and each September 15
thereafter.
Section 2414. Penalties.
The following shall apply:
(1) A person using consumer fireworks in violation of
the provisions of this article commits a summary offense and,
upon conviction, shall be punished by a fine of not more than
$100.
(2) A person selling consumer fireworks in violation of
the provisions of this act commits a misdemeanor of the
second degree.
(3) A person selling display fireworks in violation of
the provisions of this act commits a felony of the third
degree.
(4) A person selling federally illegal explosives such
as devices as described in 49 CFR 173.54 (relating to
forbidden explosives) or those devices that have not been
tested, approved and labeled by the United States Department
of Transportation, including, but not limited to, those
devices commonly referred to as "M-80," "M-100,"
"blockbuster," "cherry bomb" or "quarter or half stick"
explosive devices, in violation of the provisions of this act
commits a felony of the third degree.
Section 2415. Removal, storage and destruction.
The Pennsylvania State Police, a sheriff or police officer
shall take, remove or cause to be removed at the expense of the
owner all stocks of consumer fireworks or display fireworks or
combustibles offered or exposed for sale, stored or held in
violation of this article. The owner shall also be responsible
for the storage and, if deemed necessary, the destruction of
these fireworks.
Section 2416. Transition.
A person who, on the effective date of this section, holds a
license under the act of May 15, 1939 (P.L.134, No.65), referred
to as the Fireworks Law, may continue the activity permitted by
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the license for a period of 90 days following the effective date
of this section or the date the license expires by the terms of
the license, whichever is sooner. After the expiration of the
90-day period or the license, whichever is sooner, the person
must obtain the license required under this article to continue
the permitted activity, if applicable.
Section 44. Section 2702(a) and (a.1)(2) of the act are
amended to read:
Section 2702. Petition for reassessment.
(a) General rule.--A taxpayer may file a petition for
reassessment with the department within [90] 60 days after the
mailing date of the notice of assessment.
(a.1) Petition for review of tax adjustment not resulting in
an increase in liability.--
* * *
(2) A taxpayer must file a petition for review under
this subsection within [90] 60 days of the mailing date of
the department's notice of adjustment. A taxpayer's failure
to file a petition under this subsection shall not prejudice
the taxpayer's right to file a petition in a subsequent tax
year.
* * *
Section 45. Section 2704(a) and (b) of the act are amended
to read:
Section 2704. Review by board.
(a) Petition for review of a decision and order.--Within
[90] 60 days after the mailing date of the department's notice
of decision and order on a petition filed with it, a taxpayer
may petition the board to review the decision and order of the
department.
(b) Petition for review of denial by department's failure to
act.--A petition for review may be filed with the board within
[90] 60 days after the mailing date of the department's notice
to the petitioner of its failure to dispose of the petition
within the time periods prescribed by section 2703(d) or (e).
* * *
Section 45.1. The act is amended by adding an article to
read:
ARTICLE XXVIII
TOBACCO MASTER SETTLEMENT PAYMENT REVENUE
BONDS AND SALE OF REVENUE
Section 2801. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Account." The Tobacco Revenue Bond Debt Service Account
established in section 2805.
"Annual payment." A payment received by the Commonwealth
under section IX(c)(1) of the Master Settlement Agreement.
"Authority." The Commonwealth Financing Authority
established under 64 Pa.C.S. Ch. 15 (relating to Commonwealth
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Financing Authority).
"Executive director." The executive director of the
Commonwealth Financing Authority.
"Finance." The issuance of revenue bonds utilizing a portion
of annual payments due to the Commonwealth under the Master
Settlement Agreement.
"Fund." The Tobacco Settlement Fund.
"Master Settlement Agreement." The settlement agreement and
related documents entered into on November 23, 1998, by the
Commonwealth and leading United States tobacco product
manufacturers approved by the Court of Common Pleas,
Philadelphia County, on January 13, 1999.
"Office." The Governor's Office of the Budget.
"Sales agreement." A written contract entered into under
section 2803.1 under which a portion of the revenue the
Commonwealth will receive under the Master Settlement Agreement
is sold.
"Secretary." The Secretary of the Budget of the
Commonwealth.
"Tobacco Settlement Act." The act of June 26, 2001 (P.L.755,
No.77), known as the Tobacco Settlement Act.
Section 2802. Bond issuance or sales agreement.
(a) Declaration of policy.--The General Assembly finds and
declares that:
(1) The Commonwealth experienced a revenue deficit of
$1,106,700,308 in General Fund revenue collections for fiscal
year 2016-2017.
(2) The Commonwealth's General Fund continues to
experience a structural deficit where annual expenditures
exceed recurring revenue collections.
(3) The General Fund for fiscal year 2016-2017 revenue
shortfall in combination with the structural deficit,
increased expenditure needs and increased tax refunds
resulted in a significant negative ending balance in the
General Fund of approximately $1,539,000,000 for fiscal year
2016-2017.
(4) A significant portion of the Commonwealth's General
Fund annual expenditures are dedicated to the protection of
the health, safety and general welfare of the people of this
Commonwealth and the furtherance of economic development and
efficiency within this Commonwealth by providing basic
services and facilities.
(5) The ability of the Commonwealth to provide for the
protection of the health, safety and general welfare of the
people of this Commonwealth and the provision of basic
services and facilities is jeopardized by the General Fund
for fiscal year 2016-2017 revenue deficit and the continuing
structural deficit.
(6) The provisions of 64 Pa.C.S. Ch. 15 (relating to
Commonwealth Financing Authority) are entitled to liberal
construction in order to effect legislative and public
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purposes.
(7) One of the stated purposes of 64 Pa.C.S. Ch. 15 is
"to protect the health, safety and general welfare of the
people of this Commonwealth and to further encourage economic
development and efficiency within this Commonwealth by
providing basic services and facilities, it is necessary to
provide additional or alternate means of financing
infrastructure facilities, transportation systems, industrial
parks, energy conversion facilities, facilities for the
furnishing of energy, water and telecommunications,
facilities for the collection or treatment of wastewater and
storm water, tourism, parking facilities, health care
facilities and other basic service and related facilities
which are conducive to economic activity within this
Commonwealth" under 64 Pa.C.S. § 1503(6) (relating to
findings and declaration of policy).
(8) The Tobacco Settlement Fund is a special revenue
fund established for the purpose of providing funding for
various Commonwealth programs.
(9) Utilizing a portion of annual payments received
through the Master Settlement Agreement and deposited in the
Tobacco Settlement Fund to leverage funding to offset the
effect of the fiscal year 2016-2017 revenue deficit and the
structural deficit is in the best interest of the
Commonwealth to provide General Fund budgetary relief
necessary for the protection of the health, safety and
general welfare of the people of this Commonwealth and the
provision of basic services and facilities.
(b) Authority.--Notwithstanding any other law, the authority
is authorized to enter into a sales agreement on behalf of the
Commonwealth or to issue bonds, the proceeds of either of which
shall be deposited in the General Fund to provide General Fund
budgetary relief necessary for the protection of the health,
safety and general welfare of the people of this Commonwealth
and the furtherance of economic development and efficiency
within this Commonwealth by providing basic services and
facilities.
(c) Duty.--The authority shall issue bonds under section
2803 or enter into a sales agreement under section 2803.1. An
issuance or sale under this article shall be undertaken in a
manner consistent with the best interest of the Commonwealth and
in a way that provides the greatest value to taxpayers and
furthers the purposes of this article.
(d) Procedures for sale.--A sale under this article shall be
in accordance with the following:
(1) No later than 45 days after the effective date of
this section, the executive director shall accept statements
of qualifications and expressions of interest from persons in
relation to a sale under this article. The executive director
may specify a uniform format for statements of qualifications
and required information. Persons may amend these statements
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at any time by filing a new statement.
(2) The executive director or a designee of the
executive director may conduct discussions with any
responsible offeror to determine the offeror's qualifications
for further consideration. Discussions shall not disclose any
information derived from proposals submitted by other
offerors.
(3) The State Employees Retirement System and the Public
School Employees Retirement System may each submit to the
executive director a statement of qualification and
expression of interest under paragraph (1).
(4) An award to enter into a sales agreement under this
article shall be made to the responsible offeror determined
in writing by the authority to be best qualified based on the
evaluation factors set forth in the request for proposals.
The provisions of 64 Pa.C.S. § 1512(d)(1) shall apply to a
decision to award under this paragraph. If terms cannot be
agreed upon with the best qualified responsible offeror,
negotiations will be formally terminated with the offeror. If
proposals were submitted by one or more other responsible
offerors, negotiations may be conducted with the other
responsible offeror or responsible offerors in the order of
their respective qualification ranking. The sales agreement
may be entered into with the responsible offeror then ranked
as best qualified if the amount of compensation is determined
to be fair and reasonable.
(e) Debt or liability.--
(1) Bonds issued or a sales agreement entered into under
this article shall not be a debt or liability of the
Commonwealth and shall not create or constitute an
indebtedness, liability or obligation of the Commonwealth.
(2) Bond obligations or obligations under a sales
agreement shall be payable solely from revenues or funds
pledged or available for repayment or payment as authorized
under this article.
(3) Each bond must contain on its face a statement that:
(i) The authority is obligated to pay the principal
of or interest on the bonds only from the revenues or
funds pledged or available for repayment as authorized
under this article.
(ii) The Commonwealth shall not be obligated to pay
the principal of or interest on the bonds.
(iii) The full faith and credit of the Commonwealth
is not pledged to the payment of the principal of or the
interest on the bonds.
(4) Each sales agreement under this article must contain
a statement that:
(i) The authority is obligated to pay the portion of
the revenue the Commonwealth will receive under the
Master Settlement Agreement only from the revenues or
funds identified or available for payment as authorized
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under this article.
(ii) The Commonwealth shall not be obligated to pay
any amount provided in the sales agreement.
(iii) The full faith and credit of the Commonwealth
is not pledged to the payment of any amount provided in
the sales agreement.
Section 2803. Limitations on bond issuance.
(a) Maximum principal amount.--If the authority issues bonds
under this article, the authority may issue bonds in a maximum
aggregate principal amount sufficient to raise net proceeds of
$1,500,000,000.
(b) Limitation.--The authority shall not issue any bonds
under this article, except refunding bonds, after June 30, 2018.
The authority, in consultation with the office, shall determine
the principal amounts of taxable bonds and tax-exempt bonds to
be issued during fiscal year 2017-2018.
(c) Refunding bonds.--Notwithstanding any other limitation,
the authority, at the request of the secretary, may issue
refunding bonds at any time while bonds issued under this
article are outstanding, provided that the final maturity of a
series of bonds being refunded shall not be extended.
(d) Interest.--Interest on bonds issued under this article
and refunding bonds authorized under this section shall be
payable at the time or times the authority determines in the
resolution authorizing the bonds and, except as provided under
subsection (e), shall otherwise be subject to the other
provisions of 64 Pa.C.S. Ch. 15 (relating to Commonwealth
Financing Authority). Interest may be capitalized for a period
not to exceed two years.
(e) Debt limitations.--The aggregate principal amount of
bonds specified in this section shall not be subject to the debt
limitations specified in 64 Pa.C.S. § 1543 (relating to
indebtedness).
(f) Term of bonds.--The term of the bonds issued under this
article may not exceed 30 years.
Section 2803.1. Limitations on sales agreement.
(a) Maximum amount.--If the authority enters into a sales
agreement under this article, the authority may enter into a
sales agreement to sell a portion of the revenue the
Commonwealth will receive under the Master Settlement Agreement
in a maximum aggregate amount sufficient to raise net proceeds
of $1,500,000,000 during the 2017-2018 fiscal year.
(b) Limitation.--The authority shall not enter into an
agreement under this article after June 30, 2018.
(c) Terms of agreement.--The sales agreement may not provide
for a sale of revenue in excess of 10 years worth of payments
received by the Commonwealth under the Master Settlement
Agreement. No payments from the Master Settlement Agreement may
be required under the sales agreement before July 1, 2018.
Section 2804. Finance pledge.
(a) Annual payments for bond issuance.--
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(1) For a bond issuance under this article, annual
payments received under the Master Settlement Agreement are
pledged by the Commonwealth in the amount certified by the
secretary under paragraph (2) for payment of principal and
interest for bonds issued by the authority under this
article.
(2) The secretary shall certify the amount of annual
payments to be pledged for payment of principal and interest
for the bonds issued by the authority under this article
within 30 days of the closing date of the bond transaction.
The certification shall be published as a notice in the
Pennsylvania Bulletin.
(b) Annual payments for sales agreement.--
(1) Annual payments received under the Master Settlement
Agreement are pledged by the Commonwealth in the amount
provided in the sales agreement entered into by the authority
under this article.
(2) The secretary shall certify the amount of annual
payments under the Master Settlement Agreement to be pledged
for payment under the sales agreement entered into by the
authority under this article within 30 days of the effective
date of the sales agreement. The certification shall be
published as a notice in the Pennsylvania Bulletin.
(c) General revenues.--
(1) For a bond issuance, the Commonwealth may pledge
revenues collected by the Commonwealth under Article II for
the payment of principal and interest for the bonds issued by
the authority under this article. A pledge made under this
subsection shall be subordinate to the pledge of Article II
revenues made before the effective date of this section for
outstanding indebtedness of the authority.
(2) The secretary shall certify the maximum annual
amount of general revenues to be pledged to supplement
amounts pledged under subsection (a) for payment of principal
and interest for bonds issued by the authority under this
article within 30 days of the closing date of the bond
transaction. The certification shall be published as a notice
in the Pennsylvania Bulletin.
Section 2805. Tobacco Revenue Bond Debt Service Account.
(a) Establishment.--There is established in the State
Treasury a restricted account in the General Fund to be known as
the Tobacco Revenue Bond Debt Service Account.
(b) Annual payments.--The amount of each annual payment
received under the Master Settlement Agreement and pledged by
the Commonwealth under section 2804 and certified by the
secretary for the payment of principal and interest for bonds
issued under this article shall be deposited in the account upon
receipt of each annual payment.
(c) General revenue.--General revenues pledged by the
Commonwealth in section 2804 and certified by the secretary for
the payment of principal and interest for bonds issued under
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this article shall be deposited in the accounts in amounts
determined by the secretary.
(d) Payments on bonds.--Payments of principal and interest
due on the bonds shall be made from the account.
Section 2806. Service agreement for bond issuance authorized.
(a) Authorization.--For a bond issuance under this article,
the authority and the office may enter into an agreement or
service agreement to effectuate the purposes of this article,
including an agreement to secure bonds issued under this
article, under which the secretary shall agree to pay service
charges to the authority in each fiscal year that the bonds or
refunding bonds are outstanding in amounts sufficient to timely
pay in full the debt service and any other financing costs due
on the bonds issued under this article.
(b) Payment of service charges.--The office's payment of any
service charges shall be subject to and dependent upon approval
by the authority and the appropriation of funds by the General
Assembly to the office for payment of any service charges.
(c) Amendment of agreement.--The service agreement may be
amended or supplemented by the authority and the office in
connection with the issuance of a series of bonds or refunding
bonds authorized in this section.
Section 2806.1. Service agreement for sales agreement
authorized.
(a) Authorization.--For a sales agreement under this
article, the authority and the office may enter into an
agreement or service agreement to effectuate the purposes of
this article, including a direction to the secretary to pay all
or a specified portion of the tobacco settlement revenues
directly to a person who has entered into a sales agreement
under this article.
(b) Payment of service charges.--The office's payment of any
service charges shall be subject to and dependent upon approval
by the authority and the appropriation of funds by the General
Assembly to the office for payment of any service charges.
(c) Amendment of agreement.--The service agreement may be
amended or supplemented by the authority and the office in
connection with a sales agreement under this article.
Section 2807. Submission of sales agreement.
A certified copy of a sales agreement entered into under this
article shall be submitted to the Governor, State Treasurer,
Office of the Budget, President pro tempore of the Senate,
Minority Leader of the Senate, Speaker of the House of
Representatives and Minority Leader of the House of
Representatives promptly upon execution and delivery of the
sales agreement.
Section 2808. Deposit of proceeds.
The net proceeds of a sales agreement entered into or bonds
issued under this article, other than refunding bonds, exclusive
of costs of issuance, reserves and other financing charges,
shall be transferred by the authority to the State Treasurer for
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deposit into the General Fund and shall be available for
expenditure as provided in this article in accordance with
appropriations by the General Assembly.
Section 2809. Limitation on appropriations.
The amount of annual payments from the Master Settlement
Agreement that are pledged and certified by the secretary under
section 2804 for the payment of principal and interest for bonds
issued under this article or for payments required under a sales
agreement under this article shall not be subject to
appropriation under section 1713-A.1 of the act of April 9, 1929
(P.L.343, No.176), known as The Fiscal Code.
Section 46. If all or a part of the net loss deduction under
section 401(3)4(c) of the act has been deemed unconstitutional
as a result of a decision by the Pennsylvania Supreme Court, the
Secretary of Revenue shall submit a notice of the decision for
publication in the Pennsylvania Bulletin.
Section 47. This act shall apply as follows:
(1) The following shall apply:
(i) Except as provided in subparagraph (ii),
sections 213.2, 213.4 and 213.5 of the act shall apply to
transactions that occur after March 31, 2018.
(ii) Sections 213.2, 213.4 and 213.5 of the act, as
they relate to tangible personal property described in
section 201(m)(2), shall apply to transactions that occur
after March 31, 2019.
(2) The amendment or addition of the following
provisions of the acts shall apply to petitions for refunds,
petitions for reassessments and petitions for
redeterminations filed with the department on or after 60
days from the effective date of this section:
(i) Section 2702(a) and (a.1)(2).
(ii) Section 2704(a) and (b).
Section 48. Repeals are as follows:
(1) The General Assembly declares that the repeal under
paragraph (2) is necessary to effectuate the addition of
Subarticle E of Article XVII-D.
(2) 12 Pa.C.S. Ch. 33 is repealed.
(3) The General Assembly declares that the repeal under
paragraph (4) is necessary to effectuate the addition of
Article XXIV of the act.
(4) The act of May 15, 1939 (P.L.134, No.65), referred
to as the Fireworks Law, is repealed.
Section 49. This act shall take effect as follows:
(1) The following provisions shall take effect in 60
days:
(i) The amendment or addition of sections 312, 316,
316.1, 316.2. 317, 317.1, 317.2, 318, 318.1, 319, 319.1,
320, 320.1, 321.2, the heading of Part VII-A of Article
III, 324.1(c), 324.2, 324.4, 324.5, 335(f) and 352(f),
(h) and (j) of the act.
(i.1) The addition of section 401(3)4(c.1) of the
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act.
(ii) The addition of Part IV-A of Article IV of the
act.
(ii.1) The addition of Article XVII-A.1 of the act.
(iii) The addition of the definitions of
"deteriorated property" and "film production tax credit
district" in section 1711-D of the act.
(iv) The addition of section 1712-D(b.1) of the act.
(v) The addition of section 1716.2-D of the act.
(vi) The definition of "qualified tax liability" in
section 1702-G of the act.
(2) The following provisions shall take effect in 365
days:
(i) (Reserved).
(ii) The addition of section 1904.3-B of the act.
(3) The amendment or addition of section 401(3)4(c)(1)
(A)(VI), (VII) and (VIII) and (2)(B)(VII) and (VIII) of the
act shall take effect on the date of the publication of the
notice under section 46 of this act.
(4) (Reserved).
(5) As follows:
(i) Except as provided in subparagraph (ii),
sections 213.2, 213.4 and 213.5 of the act shall take
effect February 1, 2018.
(ii) Sections 213.2, 213.4 and 213.5 of the act, as
they relate to tangible personal property described in
section 201(m)(2), shall take effect February 1, 2019.
(6) The following provisions shall take effect
immediately:
(i) This section.
(ii) The remainder of this act.
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See A04076 in
the context
of HB0542