PRINTER'S NO. 1528
No. 1206 Session of 1999
INTRODUCED BY BOSCOLA, NOVEMBER 18, 1999
REFERRED TO FINANCE, NOVEMBER 18, 1999
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 the calculation of the
11 manufacturing, processing, research and development
12 exemptions.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Section 602(b) of the act of March 4, 1971
16 (P.L.6, No.2), known as the Tax Reform Code of 1971, amended May
17 12, 1999 (P.L.26, No.4), is amended to read:
18 Section 602. Imposition of Tax.--* * *
19 (b) (1) Every foreign entity from which a report is
20 required under section 601 hereof, shall be subject to and pay
21 to the department annually, a franchise tax which is the greater
22 of (i) the amount computed by multiplying each dollar of the
1 capital stock value as defined in section 601(a) by the
2 appropriate rate of tax as set forth in subsection (h); or (ii)
3 the minimum tax set forth in subsection (i), upon a taxable
4 value to be determined in the following manner. The capital
5 stock value shall be ascertained in the manner prescribed in
6 section 601(a) of this article. The taxable value shall then be
7 determined by employing the relevant apportionment factors set
8 forth in Article IV: Provided, That the manufacturing,
9 processing, research and development exemptions contained under
10 section 602(a) shall also apply to foreign corporations and in
11 determining the relevant apportionment factors the numerator of
12 the property[, payroll, or sales] or payroll factors shall not
13 include any property[, payroll or sales] or payroll attributable
14 to manufacturing, processing, research or development activities
15 in the Commonwealth[: and Provided further, That, except]. Any
16 property or payroll attributable to manufacturing, processing,
17 research or development activities outside of the Commonwealth
18 shall also be excluded from the numerator of the property or
19 payroll factors. Except for the imposition of the minimum tax
20 set forth in subsection (i), the provisions of this section
21 shall not apply to the taxation of so much of the capital stock
22 value attributable to student loan assets owned or held by an
23 entity created for the securitization of student loans or by a
24 trustee on its behalf. Any foreign corporation, joint-stock
25 association, limited partnership or company subject to the tax
26 prescribed herein may elect to compute and pay its tax under
27 section 602(a): Provided, That any foreign corporation, joint-
28 stock association, limited partnership or company electing to
29 compute and pay its tax under section 602(a) shall be treated as
30 if it were a domestic corporation for the purpose of determining
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1 which of its assets are exempt from taxation and for the purpose
2 of determining the proportion of the value of its capital stock
3 which is subject to taxation.
4 (2) The provisions of this article shall apply to the
5 taxation of entities organized for manufacturing, processing,
6 research or development purposes, but shall not apply to such
7 entities as enjoy and exercise the right of eminent domain.
8 * * *
9 Section 2. This act shall apply to tax years beginning after
10 December 31, 1998.
11 Section 3. This act shall take effect immediately.
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