PRINTER'S NO. 834
No. 782 Session of 1977
INTRODUCED BY MELLOW, KURY, STAPLETON, McKINNEY, MURRAY, HOLL,
MESSINGER, ROMANELLI, CIANFRANI, SCANLON, NOSZKA, ORLANDO,
GURZENDA, STAUFFER AND MANBECK, APRIL 26, 1977
REFERRED TO ENVIRONMENTAL RESOURCES, APRIL 26, 1977
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," extending the gross receipts tax to all
11 electricity produced in the Commonwealth; and providing for
12 reporting.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Section 1101, act of March 4, 1971 (P.L.6, No.2),
16 known as the "Tax Reform Code of 1971," the second paragraph
17 amended August 31, 1971 (P.L.362, No.93), is amended to read:
18 Section 1101. Imposition of Tax.--(a) General Rule.--Every
19 railroad company, pipeline company, conduit company, steamboat
20 company, canal company, slack water navigation company,
21 transportation company, and every other company, association,
22 joint-stock association, or limited partnership, now or
1 hereafter incorporated or organized by or under any law of this
2 Commonwealth, or now or hereafter organized or incorporated by
3 any other state or by the United States or any foreign
4 government, and doing business in this Commonwealth, and every
5 copartnership, person or persons owning, operating or leasing to
6 or from another corporation, company, association, joint-stock
7 association, limited partnership, copartnership, person or
8 persons, any railroad, pipeline, conduit, steamboat, canal,
9 slack water navigation, or other device for the transportation
10 of freight, passengers, baggage, or oil, except taxicabs, motor
11 buses and motor omnibuses, and every limited partnership,
12 association, joint-stock association, corporation or company
13 engaged in, or hereafter engaged in, the transportation of
14 freight or oil within this State, and every telephone company,
15 telegraph company, express company, [electric light company,
16 waterpower company, hydro-electric company,] gas company, palace
17 car company and sleeping car company, now or hereafter
18 incorporated or organized by or under any law of this
19 Commonwealth, or now or hereafter organized or incorporated by
20 any other state or by the United States or any foreign
21 government and doing business in this Commonwealth, and every
22 limited partnership, association, joint-stock association,
23 copartnership, person or persons, engaged in telephone,
24 telegraph, express, [electric light and power, waterpower,
25 hydro-electric,] gas, palace car or sleeping car business in
26 this Commonwealth, shall pay to the State Treasurer, through the
27 Department of Revenue, a tax of forty-five mills upon each
28 dollar of the gross receipts of the corporation, company or
29 association, limited partnership, joint-stock association,
30 copartnership, person or persons, received from passengers,
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1 baggage, and freight transported wholly within this State, from
2 telegraph or telephone messages transmitted wholly within this
3 State, from express, palace car or sleeping car business done
4 wholly within this State, or from the sales of [electric energy
5 or] gas, except gross receipts derived from sales [of gas] to
6 any municipality owned or operated public utility and except
7 gross receipts derived from the sales for resale [of electric
8 energy or gas], to persons, partnerships, associations,
9 corporations or political subdivisions subject to the tax
10 imposed by this act upon gross receipts derived from such resale
11 and from the transportation of oil done wholly within this
12 State. The gross receipts of gas companies shall include the
13 gross receipts from the sale of artificial and natural gas, but
14 shall not include gross receipts from the sale of liquefied
15 petroleum gas. [The said tax shall be paid within the time
16 prescribed by law, and for the purpose of ascertaining the
17 amount of the same, it shall be the duty of the treasurer or
18 other proper officer of the said company, copartnership, limited
19 partnership, association, joint-stock association or
20 corporation, or person or persons, to transmit to the Department
21 of Revenue on or before April 15 of each year an annual report,
22 and under oath or affirmation, of the amount of gross receipts
23 of the said companies, copartnerships, corporations,
24 associations, joint-stock associations, limited partnerships,
25 person or persons, derived from all sources, and of gross
26 receipts from business done wholly within this State, during the
27 period of twelve months immediately preceding January 1 of each
28 year. It shall be the further duty of the treasurer or other
29 proper officer of every such corporation or association and
30 every individual liable by law to report or pay said tax, except
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1 municipalities, to transmit to the Department of Revenue on or
2 before April 30 of each year, a tentative report in like form
3 and manner for each twelve month period beginning January 1, of
4 each year. The tentative report shall set forth (i) the amount
5 of gross receipts received in the period of twelve months next
6 preceding and reported in the annual report; or (ii) the gross
7 receipts received in the first three months of the current
8 period of twelve months; and (iii) such other information as the
9 Department of Revenue may require.
10 Upon the date its tentative report is required to be made,
11 the corporation, association or individual making the report
12 shall compute and pay to the Department of Revenue on account of
13 the tax due for the current period of twelve months, at its
14 election (i) for the year 1971 not less than twenty-nine and
15 one-third mills of the dollar amount of its gross receipts
16 reported for the entire preceding period of twelve months; or
17 (ii) for the year 1971 not less than one hundred and seventeen
18 and one-third mills of the dollar amount of its gross receipts
19 received within the first three months of the current period of
20 twelve months. Notwithstanding any other provision in this
21 section to the contrary, for the year 1972 and each year
22 thereafter the corporation, association or individual making a
23 tentative report shall transmit such report to the Department of
24 Revenue on account of the tax due for the current period of
25 twelve months and compute and make payment with such report
26 pursuant to the provisions of the act of March 16, 1970
27 (P.L.180, No.69).
28 The time for filing reports may be extended, estimated
29 settlements may be made by the Department of Revenue if reports
30 are not filed, and the penalties for failing to file reports and
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1 pay the tax shall be as prescribed by the laws defining the
2 powers and duties of the Department of Revenue. In any case
3 where the works of any corporation, company, copartnership,
4 association, joint-stock association, limited partnership,
5 person or persons are operated by another corporation, company,
6 copartnership, association, joint-stock association, limited
7 partnership, person or persons, the taxes imposed by this
8 section shall be apportioned between the corporations,
9 companies, copartnerships, associations, joint-stock
10 associations, limited partnerships, person or persons in
11 accordance with the terms of their respective leases or
12 agreements, but for the payment of the said taxes the
13 Commonwealth shall first look to the corporation, company,
14 copartnership, association, joint-stock association, limited
15 partnership, person or persons operating the works, and upon
16 payment by the said company, corporation, copartnership,
17 association, joint-stock association, limited partnership,
18 person or persons of a tax upon the receipts, as herein
19 provided, derived from the operation thereof, no other
20 corporation, company, copartnership, association, joint-stock
21 association, limited partnership, person or persons shall be
22 held liable under this section for any tax upon the proportion
23 of said receipts received by said corporation, company,
24 copartnership, association, joint-stock association, limited
25 partnership, person or persons for the use of said works.
26 This article shall be construed to apply to municipalities,
27 and to impose a tax upon the gross receipts derived from any
28 municipality owned or operated public utility or from any public
29 utility service furnished by any municipality, except that gross
30 receipts shall be exempt from the tax, to the extent that such
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1 gross receipts are derived from business done inside the limits
2 of the municipality, owning or operating the public utility or
3 furnishing the public utility service.]
4 (b) Electric Light, Waterpower and Hydro-electric
5 Utilities.--Every electric light company, water power company
6 and hydro-electric company now or hereafter incorporated or
7 organized by or under any law of this Commonwealth, or now or
8 hereafter organized or incorporated by any other state or by the
9 United States or any foreign government and doing business in
10 this Commonwealth, and every limited partnership, association,
11 joint-stock association, copartnership, person or persons,
12 engaged in electric light and power business, water power
13 business and hydro-electric business in this Commonwealth, shall
14 pay to the State Treasurer, through the Department of Revenue, a
15 tax of forty-five mills upon each dollar of the gross receipts
16 of the corporation, company or association, limited partnership,
17 joint-stock association copartnership, person or persons,
18 received from:
19 (1) the sales of electric energy within this State, except
20 gross receipts derived from the sales for resale of electric
21 energy to persons, partnerships, associations, corporations or
22 political subdivisions subject to the tax imposed by this
23 subsection upon gross receipts derived from such resale; and
24 (2) the sales of electric energy produced in Pennsylvania
25 and made outside of Pennsylvania according to the following
26 apportionment formula: except for gross receipts derived from
27 sales under clause (1), the gross receipts from all sales of
28 electricity of the producer shall be apportioned to the
29 Commonwealth of Pennsylvania by the ratio of the producer's
30 operating and maintenance expenses in Pennsylvania and
19770S0782B0834 - 6 -
1 depreciation attributable to property in Pennsylvania to the
2 producer's total operating and maintenance expenses and
3 depreciation.
4 (c) Payment of Tax; Reports.--The said taxes imposed under
5 subsection (a) and (b) shall be paid within the time prescribed
6 by law, and for the purpose of ascertaining the amount of the
7 same, it shall be the duty of the treasurer or other proper
8 officer of the said company, copartnership, limited partnership,
9 association, joint-stock association or corporation, or person
10 or persons, to transmit to the Department of Revenue on or
11 before April 15 of each year an annual report, and under oath or
12 affirmation, of the amount of gross receipts of the said
13 companies, copartnerships, corporations, associations, joint-
14 stock associations, limited partnerships, person or persons,
15 derived from all sources, and of gross receipts from business
16 done wholly within this State and in the case of electric energy
17 producers that transmit energy to other states, a compilation of
18 the relevant information regarding operating and maintenance
19 expenses and depreciation, during the period of twelve months
20 immediately preceding January 1 of each year. It shall be the
21 further duty of the treasurer or other proper officer of every
22 such corporation or association and every individual liable by
23 law to report or pay said taxes imposed under subsections (a)
24 and (b) except municipalities to transmit to the Department of
25 Revenue on or before April 30 of each year, a tentative report
26 in like form and manner for each twelve-month period beginning
27 January 1, of each year. The tentative report shall set forth
28 (i) the amount of gross receipts received in the period of
29 twelve months next preceding and reported in the annual report;
30 or (ii) the gross receipts received in the first three months of
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1 the current period of twelve months; and (iii) such other
2 information as the Department of Revenue may require.
3 (d) Tax Computation.--Upon the date its tentative report is
4 required to be made, for the year 1972 and each year thereafter
5 the corporation, association or individual making a tentative
6 report shall transmit such report to the Department of Revenue
7 on account of the tax due for the current period of twelve
8 months and compute and make payment of the tenative tax with
9 such report pursuant to the provisions of the act of March 16,
10 1970 (P.L.180, No.69).
11 (e) Time to File Reports.--The time for filing annual
12 reports may be extended, estimated settlements may be made by
13 the Department of Revenue if reports are not filed, and the
14 penalties for failing to file reports and pay the taxes imposed
15 under subsections (a) and (b) shall be as prescribed by the laws
16 defining the powers and duties of the Department of Revenue. In
17 any case where the works of any corporation, company,
18 copartnership, association, joint-stock association, limited
19 partnership, person or persons are operated by another
20 corporation, company, copartnership, association, joint-stock
21 association, limited partnership, person or persons, the taxes
22 imposed under subsection (a) and (b) shall be apportioned
23 between the corporations, companies, copartnerships,
24 associations, joint-stock associations, limited partnerships,
25 person or persons in accordance with the terms of their
26 respective leases or agreements, but for the payment of the said
27 taxes the Commonwealth shall first look to the corporation,
28 company, copartnership, association, joint-stock association,
29 limited partnership, person or persons operating the works, and
30 upon payment by the said company, corporation, copartnership,
19770S0782B0834 - 8 -
1 association, joint-stock association, limited partnership,
2 person or persons of a tax upon the receipts, as herein
3 provided, derived from the operation thereof, no other
4 corporation, company, copartnership, association, joint-stock
5 association, limited partnership, person or persons shall be
6 held liable for any tax imposed under subsections (a) and (b)
7 upon the proportion of said receipts received by said
8 corporation, company, copartnership, association, joint-stock
9 association, limited partnership, person or persons for the use
10 of said works.
11 (f) Application to Municipalities.--This article shall be
12 construed to apply to municipalities, and to impose a tax upon
13 the gross receipts derived from any municipality owned or
14 operated public utility or from any public utility service
15 furnished by any municipality, except that gross receipts shall
16 be exempt from the tax, to the extent that such gross receipts
17 are derived from business done inside the limits of the
18 municipality, owning or operating the public utility or
19 furnishing the public utility service.
20 Section 2. This act shall take effect January 1, 1978 and
21 shall be applicable to gross receipts for calendar year 1978.
22 For the purpose of reporting and paying the tax for calendar
23 year 1978, where no tax base for the immediate prior year is
24 available, the tentative tax computations shall be annualized as
25 provided by the act of March 16, 1970 (P.L.180, No.69), or shall
26 be computed as if the tax base for such immediate prior year had
27 been determined under the applicable provisions of the act of
28 March 4, 1971 (P.L.6, No.2), known as the "Tax Reform Code of
29 1971."
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