PRIOR PRINTER'S NO. 1237 PRINTER'S NO. 3847
No. 1119 Session of 1993
INTRODUCED BY TRELLO, FAJT, DeLUCA, NAILOR, HALUSKA, VAN HORNE,
MELIO, RAYMOND, CESSAR, STISH, BELFANTI, PETRARCA, CORNELL,
S. H. SMITH, BROWN, GEIST, PESCI, STABACK, O'BRIEN, FLICK,
FAIRCHILD, JAROLIN, GODSHALL, BARLEY, ARMSTRONG, HESS,
ULIANA, LYNCH, CLYMER, MILLER, GANNON, CLARK, PISTELLA, LEH,
KING, GERLACH, SAURMAN, LEDERER, OLASZ, KASUNIC, MIHALICH AND
LAUGHLIN, APRIL 19, 1993
AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF
REPRESENTATIVES, AS AMENDED, JUNE 8, 1994
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," further providing for bakery products in relation
11 to the sales tax AND FOR PERSONAL INCOME TAX SAVINGS AND <--
12 LIMITATIONS PROVISIONS; and making an editorial change.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Section 201(c) and (d) of the act of March 4,
16 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971,
17 amended August 4, 1991 (P.L.97, No.22), are amended to read:
18 Section 201. Definitions.--The following words, terms and
19 phrases when used in this Article II shall have the meaning
20 ascribed to them in this section, except where the context
1 clearly indicates a different meaning:
2 * * *
3 (c) "Manufacture." The performance of manufacturing,
4 fabricating, compounding, processing or other operations,
5 engaged in as a business, which place any tangible personal
6 property in a form, composition or character different from that
7 in which it is acquired whether for sale or use by the
8 manufacturer, and shall include, but not be limited to--
9 (1) Every operation commencing with the first production
10 stage and ending with the completion of tangible personal
11 property having the physical qualities (including packaging, if
12 any, passing to the ultimate consumer) which it has when
13 transferred by the manufacturer to another;
14 (2) The publishing of books, newspapers, magazines and other
15 periodicals and printing;
16 (3) Refining, blasting, exploring, mining and quarrying for,
17 or otherwise extracting from the earth or from waste or stock
18 piles or from pits or banks any natural resources, minerals and
19 mineral aggregates including blast furnace slag;
20 (4) Building, rebuilding, repairing and making additions to,
21 or replacements in or upon vessels designed for commercial use
22 of registered tonnage of fifty tons or more when produced upon
23 special order of the purchaser, or when rebuilt, repaired or
24 enlarged, or when replacements are made upon order of, or for
25 the account of the owner;
26 (5) Research having as its objective the production of a new
27 or an improved (i) product or utility service, or (ii) method of
28 producing a product or utility service, but in either case not
29 including market research or research having as its objective
30 the improvement of administrative efficiency.
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1 (6) Remanufacture for wholesale distribution by a
2 remanufacturer of motor vehicle parts from used parts acquired
3 in bulk by the remanufacturer using an assembly line process
4 which involves the complete disassembly of such parts and
5 integration of the components of such parts with other used or
6 new components of parts, including the salvaging, recycling or
7 reclaiming of used parts by the remanufacturer.
8 The term "manufacture[,]" shall not include constructing,
9 altering, servicing, repairing or improving real estate or
10 repairing, servicing or installing tangible personal property,
11 nor the cooking[,] or freezing [or baking] of fruits,
12 vegetables, mushrooms, fish, seafood, meats[,] or poultry [or
13 bakery products].
14 * * *
15 (d) "Processing." The performance of the following
16 activities when engaged in as a business enterprise:
17 (1) The cooking[, baking] or freezing of fruits, vegetables,
18 mushrooms, fish, seafood, meats[,] or poultry [or bakery
19 products], when the person engaged in such business packages
20 such property in sealed containers for wholesale distribution.
21 (2) The scouring, carbonizing, cording, combing, throwing,
22 twisting or winding of natural or synthetic fibers, or the
23 spinning, bleaching, dyeing, printing or finishing of yarns or
24 fabrics, when such activities are performed prior to sale to the
25 ultimate consumer.
26 (3) The electroplating, galvanizing, enameling, anodizing,
27 coloring, finishing, impregnating or heat treating of metals or
28 plastics for sale or in the process of manufacturing.
29 (4) The rolling, drawing or extruding of ferrous and non-
30 ferrous metals.
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1 (5) The fabrication for sale of ornamental or structural
2 metal or of metal stairs, staircases, gratings, fire escapes or
3 railings (not including fabrication work done at the
4 construction site).
5 (6) The preparation of animal feed or poultry feed for sale.
6 (7) The production, processing and bottling of non-alcoholic
7 beverages for wholesale distribution.
8 (8) The operation of a saw mill or planing mill for the
9 production of lumber or lumber products for sale.
10 (9) The milling for sale of flour or meal from grains.
11 (10) The slaughtering and dressing of animals for meat to be
12 sold or to be used in preparing meat products for sale, and the
13 preparation of meat products including lard, tallow, grease,
14 cooking and inedible oils for wholesale distribution.
15 (11) The processing of used lubricating oils.
16 (12) The broadcasting of radio and television programs of
17 licensed commercial or educational stations.
18 * * *
19 SECTION 2. SECTION 359 OF THE ACT, AMENDED DECEMBER 21, 1977 <--
20 (P.L.330, NO.98), IS AMENDED TO READ:
21 SECTION 359. SAVING CLAUSE AND LIMITATIONS.--(A)
22 NOTWITHSTANDING ANYTHING CONTAINED IN ANY LAW TO THE CONTRARY,
23 INCLUDING BUT NOT LIMITED TO THE PROVISIONS OF THE ACT OF AUGUST
24 5, 1932 (SP.SESS., P.L.45, NO.45), REFERRED TO AS THE STERLING
25 ACT, THE VALIDITY OF ANY ORDINANCE OR PART OF ANY ORDINANCE OR
26 ANY RESOLUTION OR PART OF ANY RESOLUTION, AND ANY AMENDMENTS OR
27 SUPPLEMENTS THERETO NOW OR HEREAFTER ENACTED OR ADOPTED BY ANY
28 POLITICAL SUBDIVISION OF THIS COMMONWEALTH FOR OR RELATING TO
29 THE IMPOSITION, LEVY OR COLLECTION OF ANY TAX, SHALL NOT BE
30 AFFECTED OR IMPAIRED BY ANYTHING CONTAINED IN THIS ARTICLE,
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1 EXCEPT AS HEREINAFTER PROVIDED IN SUBSECTION (B) OF THIS
2 SECTION.
3 (B) (1) NOTWITHSTANDING THE PROVISIONS OF SUBSECTION (A) OF
4 THIS SECTION TO THE CONTRARY, ANY RATE OF TAX IMPOSED BY
5 ORDINANCE OF A CITY OF THE FIRST CLASS PURSUANT TO THE ABOVE
6 CITED STERLING ACT ON SALARIES, WAGES, COMMISSIONS, COMPENSATION
7 OR OTHER INCOME RECEIVED OR TO BE RECEIVED FOR WORK DONE OR
8 SERVICES PERFORMED WITHIN SUCH CITY BY PERSONS WHO ARE NOT LEGAL
9 RESIDENTS OF SUCH CITY, SHALL NOT, EXCEPT AS HEREINAFTER
10 PROVIDED, EXCEED THE TAX IMPOSITION RATE OF FOUR AND FIVE-
11 SIXTEENTHS PER CENT FOR THE TAX YEAR 1977 OR FOR ANY TAX YEAR
12 THEREAFTER.
13 (2) IN THE EVENT SUCH CITY BY ORDINANCE IMPOSES A TAX RATE
14 ON RESIDENTS OR NONRESIDENTS IN EXCESS OF THE AFORESAID TAX RATE
15 ON THE INCOME CATEGORIES ENUMERATED HEREIN, THE PROVISIONS OF
16 THE ORDINANCE IMPOSING SUCH TAX RATE INCREASE ON INCOME OF
17 PERSONS WHO ARE LEGAL RESIDENTS OF SUCH CITY, SHALL BE DEEMED
18 VALID AND LEGALLY EFFECTIVE WITHIN THE MEANING AND APPLICATION
19 OF SUBSECTION (A) HEREIN. BUT THE PROVISIONS OF SUCH ORDINANCE
20 IMPOSING A TAX RATE IN EXCESS OF FOUR AND FIVE-SIXTEENTHS PER
21 CENT WITH RESPECT TO PERSONS WHO ARE NOT LEGAL RESIDENTS OF SUCH
22 CITY SHALL BE DEEMED SUSPENDED AND WITHOUT ANY VALIDITY TO THE
23 EXTENT THAT SUCH TAX RATE EXCEEDS THE TAX RATE OF FOUR AND FIVE-
24 SIXTEENTHS PER CENT ON INCOME OF SUCH NONRESIDENTS. AND, SUCH
25 EXCESS TAX RATE PROVISIONS SHALL REMAIN SUSPENDED AND WITHOUT
26 ANY VALIDITY UNTIL SUCH DATE AS THE CITY OF THE FIRST CLASS, BY
27 ORDINANCE, IMPOSES A RATE OF TAX ON INCOME OF BOTH LEGAL
28 RESIDENTS OR NONRESIDENTS OF SUCH CITY IN EXCESS OF THE TAX RATE
29 IMPOSITION OF FIVE AND THREE-FOURTHS PER CENT PER YEAR. IN SUCH
30 CASE THE LEGISLATURE HEREBY DECLARES SUCH SUSPENSION TO BE
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1 REMOVED AND THE TAX RATE VALID AS TO NONRESIDENTS, PROVIDED,
2 HOWEVER, THAT SUCH SUSPENSION IS REMOVED AND THE RATE DEEMED
3 VALID ONLY TO THE EXTENT THE TAX RATE IMPOSED ON INCOME OF SUCH
4 NONRESIDENTS DOES NOT EXCEED SEVENTY-FIVE PER CENT OF THE TAX
5 RATE IMPOSED BY ORDINANCE PER YEAR ON THE INCOME OF LEGAL
6 RESIDENTS OF SUCH CITY. IT IS THE INTENTION OF THE LEGISLATURE
7 BY THIS SUBSECTION TO IMPOSE CERTAIN TERMS AND CONDITIONS WITH
8 RESPECT TO THE VALIDITY AND LEGAL EFFECTIVENESS OF THE STERLING
9 ACT OR OF ANY ORDINANCE OF THE CITY OF THE FIRST CLASS ENACTED
10 PURSUANT THERETO WHICH IMPOSES A TAX ON THE INCOME OF
11 NONRESIDENTS OF SUCH CITY.
12 (3) NOTWITHSTANDING THE SUSPENSION PROVISIONS SET FORTH
13 HERETOFORE, EACH CITY OF THE FIRST CLASS WHICH IMPOSES A TAX
14 PURSUANT TO THE ABOVE CITED STERLING ACT SHALL, BY ORDINANCE
15 DIRECT EVERY EMPLOYER MAINTAINING AN OFFICE OR TRANSACTING
16 BUSINESS WITHIN SUCH CITY AND MAKING PAYMENT OF COMPENSATION (I)
17 TO A RESIDENT INDIVIDUAL, OR (II) TO A NONRESIDENT INDIVIDUAL
18 TAXPAYER PERFORMING SERVICES ON BEHALF OF SUCH EMPLOYER WITHIN
19 SUCH CITY, SHALL DEDUCT AND WITHHOLD FROM SUCH COMPENSATION FOR
20 EACH PAYROLL PERIOD A TAX COMPUTED IN SUCH MANNER AS TO RESULT,
21 SO FAR AS PRACTICABLE, IN WITHHOLDING FROM THE EMPLOYE'S
22 COMPENSATION DURING EACH CALENDAR YEAR AN AMOUNT SUBSTANTIALLY
23 EQUIVALENT TO THE TAX REASONABLY ESTIMATED TO BE DUE FOR SUCH
24 YEAR WITH RESPECT TO SUCH COMPENSATION. THE METHOD OF
25 DETERMINING THE AMOUNT TO BE WITHHELD SHALL BE TO WITHHOLD THE
26 HIGHEST AMOUNT OF TAX IMPOSED WITH PROVISION IN SUCH ORDINANCE
27 TO PROVIDE REFUNDS OF THE EXCESS TAX WITHHELD TO QUALIFIED
28 NONRESIDENT TAXPAYERS WITHIN FOUR MONTHS OF THE END OF EACH
29 CALENDAR YEAR.
30 (4) IN THE EVENT THAT ALL OR ANY PART OF THE PROVISIONS OF
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1 SUBSECTION (B) OF THIS SECTION ARE DECLARED BY A COURT TO BE
2 UNCONSTITUTIONAL, IT SHALL BE THE DUTY OF THE COURT TO CONSTRUE
3 THE REMAINING AMENDATORY PROVISIONS TO ARTICLE III IN ACCORDANCE
4 WITH SECTION 358.
5 (C) (1) EVERY EMPLOYER HAVING A PLACE OF BUSINESS WITHIN
6 THIS COMMONWEALTH WHO EMPLOYS ONE OR MORE PERSONS WHO ARE
7 RESIDENTS OF A CITY OF THE FIRST CLASS SHALL, WITHIN THIRTY DAYS
8 AFTER BECOMING SUCH AN EMPLOYER, REGISTER WITH THE REVENUE
9 COMMISSIONER OF A CITY OF THE FIRST CLASS THE EMPLOYER'S NAME
10 AND ADDRESS AND SUCH OTHER INFORMATION AS THE REVENUE
11 COMMISSIONER MAY REQUIRE.
12 (2) EVERY EMPLOYER HAVING A PLACE OF BUSINESS WITHIN THIS
13 COMMONWEALTH WHO EMPLOYS ONE OR MORE PERSONS WHO ARE RESIDENTS
14 OF A CITY OF THE FIRST CLASS SHALL DEDUCT FROM THE SALARY,
15 WAGES, COMMISSIONS OR COMPENSATION DUE THAT PERSON, AT THE TIME
16 OF PAYMENT THEREOF, THE TAX IMPOSED BY THE CITY OF THE FIRST
17 CLASS ON ANY SALARY, WAGE, COMMISSION OR OTHER COMPENSATION DUE
18 THAT EMPLOYE.
19 (3) EVERY EMPLOYER EMPLOYING ONE OR MORE PERSONS WHO ARE
20 RESIDENTS OF A CITY OF THE FIRST CLASS WHO PAY ANY TAX IMPOSED
21 UNDER THIS ARTICLE SHALL FILE A RETURN AND PAY TO THE REVENUE
22 COMMISSIONER THE AMOUNT OF TAXES DEDUCTED AS PROVIDED UNDER THE
23 STERLING ACT. THE RETURN SHALL BE ON A FORM OR FORMS FURNISHED
24 BY THE REVENUE COMMISSIONER, AND SHALL SET FORTH THE NAMES AND
25 RESIDENCES OF EACH EMPLOYE OF THAT EMPLOYER DURING ALL OR ANY
26 PART OF THE PERIOD COVERED BY THE RETURN, THE AMOUNTS OF
27 SALARIES, WAGES, COMMISSIONS OR OTHER COMPENSATION EARNED DURING
28 SUCH PERIOD BY EACH EMPLOYE, TOGETHER WITH SUCH OTHER
29 INFORMATION AS THE REVENUE COMMISSIONER MAY REQUIRE.
30 (4) THE EMPLOYER SHALL REMIT THE RETURN AND THE TOTAL TAX
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1 DEDUCTED IN ACCORDANCE WITH TIME FRAMES ESTABLISHED BY
2 REGULATIONS PROMULGATED BY THE REVENUE COMMISSIONER OF A CITY OF
3 THE FIRST CLASS.
4 (5) ANNUALLY, ON OR BEFORE THE TWENTY-EIGHTH DAY OF
5 FEBRUARY, EVERY EMPLOYER WHO HAS FILED RETURNS OF TAX WITHHELD
6 AND REMITTED THE TAX THROUGH THE YEAR, SHALL BE REQUIRED TO FILE
7 AN EMPLOYER'S ANNUAL RECONCILIATION OF WAGE TAX WITHHELD, ALONG
8 WITH A COPY OF FORM W-2 OF THE INTERNAL REVENUE SERVICE FOR EACH
9 EMPLOYE, OTHER LISTINGS OR ELECTRONIC DATA PROCESSING TAPES,
10 SETTING FORTH THE FOLLOWING INFORMATION: (I) NAME AND ADDRESS
11 OF EMPLOYER; (II) EMPLOYER'S FEDERAL IDENTIFICATION NUMBER;
12 (III) FULL NAME AND RESIDENCE ADDRESS OF EACH EMPLOYE; (IV)
13 EMPLOYE'S SOCIAL SECURITY NUMBER; (V) TOTAL WAGES PAID DURING
14 THE YEAR BEFORE ANY DEDUCTIONS; AND (VI) EMPLOYER'S CITY
15 ACCOUNT NUMBER.
16 (6) IF AN EMPLOYER FAILS TO DEDUCT AND WITHHOLD TAX AS
17 PRESCRIBED IN THIS SUBSECTION, IT SHALL NOT RELIEVE THE EMPLOYE
18 FROM PAYMENT OF SUCH TAX WHERE PAYMENT CANNOT, FOR ANY REASON,
19 BE OBTAINED FROM THE EMPLOYER.
20 Section 2. This 3. THE AMENDMENT OF SECTION 201(C) AND (D) <--
21 OF THE act shall be retroactive to August 4, 1991.
22 Section 3 4. This act shall take effect immediately. <--
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