PRINTER'S NO. 1058
No. 927 Session of 1985
INTRODUCED BY HUTCHINSON, APRIL 16, 1985
REFERRED TO COMMITTEE ON FINANCE, APRIL 16, 1985
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 classes of income.
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. Section 303(a)(1) and (2) of the act of March 4,
14 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971,
15 amended August 31, 1971 (P.L.362, No.93) and March 13, 1974
16 (P.L.179, No.32), are amended to read:
17 Section 303. Classes of Income.--(a) The classes of income
18 referred to above are as follows:
19 (1) Compensation. All salaries, wages, commissions, bonuses
20 and incentive payments whether based on profits or otherwise,
21 fees, tips and similar remuneration received for services
1 rendered whether directly or through an agent and whether in
2 cash or in property except income derived from the United States
3 Government for active duty outside the Commonwealth of
4 Pennsylvania as a member of its armed forces. "Compensation"
5 shall not include certain qualified retirement contributions as
6 defined and limited in section 219 of the Internal Revenue Code
7 of 1954 (68A Stat. 3, 26 U.S.C. § 219), as amended by the
8 Economic Recovery Tax Act of 1981 (Public Law 97-34, 95 Stat.
9 172).
10 (2) Net profits. The net income from the operation of a
11 business, profession, or other activity, after provision for all
12 costs and expenses incurred in the conduct thereof, determined
13 either on a cash or accrual basis in accordance with accepted
14 accounting principles and practices but without deduction of
15 taxes based on income. "Net profits" shall not include certain
16 qualified retirement contributions as defined and limited in
17 section 219 of the Internal Revenue Code as amended by the
18 Economic Recovery Tax Act of 1981.
19 * * *
20 Section 2. This act shall be retroactive in application to
21 January 1, 1983.
22 Section 3. This act shall take effect immediately.
B7L72DGS/19850H0927B1058 - 2 -