PRIOR PRINTER'S NO. 3625 PRINTER'S NO. 3644
No. 2596 Session of 1986
INTRODUCED BY MANDERINO, PIEVSKY, TRELLO, IRVIS, O'DONNELL,
ITKIN, D. R. WRIGHT, DOMBROWSKI AND FEE, JUNE 10, 1986
AS REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF
REPRESENTATIVES, AS AMENDED, JUNE 11, 1986
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," providing for an unemployment compensation tax <--
11 credit. FURTHER PROVIDING FOR A REDUCTION IN THE PERSONAL <--
12 INCOME TAX AND CORPORATE NET INCOME TAX RATES AND A CHANGE IN
13 THE ESTIMATED TAX LIMIT; ADDING AN EXEMPTION TO THE CAPITAL
14 STOCK-FRANCHISE TAX DEFINITIONS; REDUCING TENTATIVE TAX
15 PAYMENTS FOR THE CAPITAL STOCK-FRANCHISE TAX; AND PROVIDING
16 FOR A JOB CREATION TAX CREDIT.
17 The General Assembly of the Commonwealth of Pennsylvania
18 hereby enacts as follows:
19 SECTION 1. SECTION 302 OF THE ACT OF MARCH 4, 1971 (P.L.6, <--
20 NO.2), KNOWN AS THE TAX REFORM CODE OF 1971, AMENDED JULY 1,
21 1985 (P.L.78, NO.29), IS AMENDED TO READ:
22 SECTION 302. IMPOSITION OF TAX.--(A) THERE IS HEREBY
23 IMPOSED A TAX TO BE PAID BY RESIDENT INDIVIDUALS, ESTATES OR
24 TRUSTS AT THE ANNUAL RATE OF TWO AND TWO-TENTHS PER CENT FOR
1 TAXABLE YEARS UP TO AND INCLUDING THE TAXABLE YEAR COMMENCING ON
2 OR AFTER JANUARY 1, 1982, AND AT THE ANNUAL RATE OF TWO AND
3 FORTY-FIVE HUNDREDTHS PER CENT FOR THE TAXABLE YEAR COMMENCING
4 ON OR AFTER JANUARY 1, 1983, AND FOR THE FIRST SIX MONTHS OF THE
5 TAXABLE YEAR COMMENCING ON OR AFTER JANUARY 1, 1984, AND AT THE
6 ANNUAL RATE OF TWO AND THIRTY-FIVE HUNDREDTHS PER CENT FOR THE
7 SECOND SIX MONTHS OF THE TAXABLE YEAR COMMENCING ON OR AFTER
8 JANUARY 1, 1984, AND FOR THE TAXABLE YEAR COMMENCING ON OR AFTER
9 JANUARY 1, 1985, AND AT THE ANNUAL RATE OF TWO AND TWO-TENTHS
10 PER CENT FOR THE FIRST SIX MONTHS OF THE TAXABLE YEAR COMMENCING
11 ON OR AFTER JANUARY 1, 1986, AND AT A RATE OF TWO AND ONE-TENTH
12 PER CENT FOR THE SECOND SIX MONTHS OF THE TAXABLE YEAR
13 COMMENCING ON OR AFTER JANUARY 1, 1986, AND FOR EACH TAXABLE
14 YEAR THEREAFTER ON THE PRIVILEGE OF RECEIVING EACH OF THE
15 CLASSES OF INCOME HEREINAFTER ENUMERATED IN SECTION 303.
16 (B) THERE IS HEREBY IMPOSED A TAX TO BE PAID BY NONRESIDENT
17 INDIVIDUALS, ESTATES OR TRUSTS AT THE ANNUAL RATE OF TWO AND
18 TWO-TENTHS PER CENT FOR TAXABLE YEARS UP TO AND INCLUDING THE
19 TAXABLE YEAR COMMENCING ON OR AFTER JANUARY 1, 1982, AND AT THE
20 ANNUAL RATE OF TWO AND FORTY-FIVE HUNDREDTHS PER CENT FOR THE
21 TAXABLE YEAR COMMENCING ON OR AFTER JANUARY 1, 1983, AND FOR THE
22 FIRST SIX MONTHS OF THE TAXABLE YEAR COMMENCING ON OR AFTER
23 JANUARY 1, 1984, AND AT THE ANNUAL RATE OF TWO AND THIRTY-FIVE
24 HUNDREDTHS PER CENT FOR THE SECOND SIX MONTHS OF THE TAXABLE
25 YEAR COMMENCING ON OR AFTER JANUARY 1, 1984, AND FOR THE TAXABLE
26 YEAR COMMENCING ON OR AFTER JANUARY 1, 1985, AND AT THE ANNUAL
27 RATE OF TWO AND TWO-TENTH PER CENT FOR THE FIRST SIX MONTHS OF
28 THE TAXABLE YEAR COMMENCING ON OR AFTER JANUARY 1, 1986, AND AT
29 A RATE OF TWO AND ONE-TENTH PER CENT OF THE SECOND SIX MONTHS OF
30 THE TAXABLE YEAR COMMENCING ON OR AFTER JANUARY 1, 1986, AND FOR
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1 EACH TAXABLE YEAR THEREAFTER ON THE PRIVILEGE OF RECEIVING EACH
2 OF THE CLASSES OF INCOME ENUMERATED IN SECTION 303 FROM SOURCES
3 WITHIN THIS COMMONWEALTH.
4 SECTION 2. SECTION 325(A), (D) AND (F) OF THE ACT, ADDED
5 AUGUST 31, 1971 (P.L.362, NO.93), ARE AMENDED TO READ:
6 SECTION 325. DECLARATIONS OF ESTIMATED TAX.--(A) EVERY
7 RESIDENT AND NONRESIDENT INDIVIDUAL SHALL AT THE TIME
8 HEREINAFTER PRESCRIBED MAKE A DECLARATION OF HIS ESTIMATED TAX
9 FOR THE TAXABLE YEAR, CONTAINING SUCH INFORMATION AS THE
10 DEPARTMENT MAY PRESCRIBE BY REGULATIONS, IF HIS INCOME, OTHER
11 THAN FROM COMPENSATION ON WHICH TAX IS WITHHELD UNDER THIS
12 ARTICLE, CAN REASONABLY BE EXPECTED TO EXCEED [ONE THOUSAND
13 DOLLARS ($1,000)] TWO THOUSAND FIVE HUNDRED DOLLARS ($2,500).
14 * * *
15 (D) EXCEPT AS HEREINAFTER PROVIDED, THE DATE FOR FILING A
16 DECLARATION OF ESTIMATED TAX SHALL DEPEND UPON WHEN THE RESIDENT
17 OR NONRESIDENT INDIVIDUAL DETERMINES THAT HIS INCOME ON WHICH NO
18 TAX HAS BEEN WITHHELD UNDER THIS ARTICLE CAN REASONABLY BE
19 EXPECTED TO EXCEED [ONE THOUSAND DOLLARS ($1,000)] TWO THOUSAND
20 FIVE HUNDRED DOLLARS ($2,500) IN THE TAXABLE YEAR, AS FOLLOWS:
21 (1) IF THE DETERMINATION IS MADE ON OR BEFORE APRIL 1 OF THE
22 TAXABLE YEAR, A DECLARATION OF ESTIMATED TAX SHALL BE FILED NO
23 LATER THAN APRIL 15 OF THE TAXABLE YEAR.
24 (2) IF THE DETERMINATION IS MADE AFTER APRIL 1 BUT BEFORE
25 JUNE 2 OF THE TAXABLE YEAR, THE DECLARATION SHALL BE FILED NO
26 LATER THAN JUNE 15 OF SUCH YEAR.
27 (3) IF THE DETERMINATION IS MADE AFTER JUNE 1 BUT BEFORE
28 SEPTEMBER 2 OF THE TAXABLE YEAR, THE DECLARATION SHALL BE FILED
29 NO LATER THAN SEPTEMBER 15 OF SUCH YEAR.
30 (4) IF THE DETERMINATION IS MADE AFTER SEPTEMBER 1 OF THE
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1 TAXABLE YEAR, THE DECLARATION SHALL BE FILED NO LATER THAN
2 JANUARY 15 OF THE YEAR SUCCEEDING THE TAXABLE YEAR.
3 * * *
4 (F) A DECLARATION OF ESTIMATED TAX OF AN INDIVIDUAL HAVING A
5 TOTAL ESTIMATED TAX FOR THE TAXABLE YEAR OF [FIFTY DOLLARS
6 ($50)] ONE HUNDRED DOLLARS ($100) OR LESS MAY BE FILED AT ANY
7 TIME ON OR BEFORE JANUARY 15 OF THE SUCCEEDING YEAR UNDER
8 REGULATIONS OF THE DEPARTMENT.
9 * * *
10 SECTION 3. SECTION 402 OF THE ACT, AMENDED JUNE 29, 1984
11 (P.L.445, NO.94), IS AMENDED TO READ:
12 SECTION 402. IMPOSITION OF TAX.--EVERY CORPORATION SHALL BE
13 SUBJECT TO, AND SHALL PAY FOR THE PRIVILEGE OF (I) DOING
14 BUSINESS IN THIS COMMONWEALTH; OR (II) CARRYING ON ACTIVITIES IN
15 THIS COMMONWEALTH; (III) HAVING CAPITAL OR PROPERTY EMPLOYED OR
16 USED IN THIS COMMONWEALTH; OR (IV) OWNING PROPERTY IN THIS
17 COMMONWEALTH, BY OR IN THE NAME OF ITSELF, OR ANY PERSON,
18 PARTNERSHIP, ASSOCIATION, LIMITED PARTNERSHIP, JOINT-STOCK
19 ASSOCIATION, OR CORPORATION, A STATE EXCISE TAX AT THE RATE OF
20 TWELVE PER CENT PER ANNUM UPON EACH DOLLAR OF TAXABLE INCOME OF
21 SUCH CORPORATION RECEIVED BY, AND ACCRUING TO, SUCH CORPORATION
22 DURING THE CALENDAR YEAR 1971 AND THE FIRST SIX MONTHS OF 1972
23 AND AT THE RATE OF ELEVEN PER CENT PER ANNUM UPON EACH DOLLAR OF
24 TAXABLE INCOME OF SUCH CORPORATION RECEIVED BY, AND ACCRUING TO,
25 SUCH CORPORATION DURING THE SECOND SIX MONTHS OF CALENDAR YEAR
26 1972 THROUGH THE CALENDAR YEAR 1973 AND AT THE RATE OF NINE AND
27 ONE-HALF PER CENT PER ANNUM UPON EACH DOLLAR OF TAXABLE INCOME
28 OF SUCH CORPORATION RECEIVED BY, AND ACCRUING TO, SUCH
29 CORPORATION DURING THE CALENDAR YEARS 1974, 1975 AND 1976 AND AT
30 THE RATE OF TEN AND ONE-HALF PER CENT PER ANNUM UPON EACH DOLLAR
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1 OF TAXABLE INCOME OF SUCH CORPORATION RECEIVED BY, AND ACCRUING
2 TO, SUCH CORPORATION DURING THE CALENDAR YEAR 1977 THROUGH THE
3 CALENDAR YEAR 1984 AND AT THE RATE OF NINE AND ONE-HALF PER CENT
4 PER ANNUM UPON EACH DOLLAR OF TAXABLE INCOME OF SUCH CORPORATION
5 RECEIVED BY AND ACCRUING TO SUCH CORPORATION DURING THE CALENDAR
6 YEAR 1985 THROUGH CALENDAR YEAR 1986 AND AT THE RATE OF EIGHT
7 AND ONE-HALF PER CENT PER ANNUM UPON EACH DOLLAR OF TAXABLE
8 INCOME OF SUCH CORPORATION RECEIVED BY AND ACCRUING TO SUCH
9 CORPORATION DURING THE CALENDAR YEAR 1987 AND EACH CALENDAR YEAR
10 THEREAFTER, EXCEPT WHERE A CORPORATION REPORTS TO THE FEDERAL
11 GOVERNMENT ON THE BASIS OF A FISCAL YEAR, AND HAS CERTIFIED SUCH
12 FACT TO THE DEPARTMENT AS REQUIRED BY SECTION 403 OF THIS
13 ARTICLE, IN WHICH CASE, SUCH TAX, AT THE RATE OF TWELVE PER
14 CENT, SHALL BE LEVIED, COLLECTED, AND PAID UPON ALL TAXABLE
15 INCOME RECEIVED BY, AND ACCRUING TO, SUCH CORPORATION DURING THE
16 FIRST SIX MONTHS OF THE FISCAL YEAR COMMENCING IN THE CALENDAR
17 YEAR 1972 AND AT THE RATE OF ELEVEN PER CENT, SHALL BE LEVIED,
18 COLLECTED, AND PAID UPON ALL TAXABLE INCOME RECEIVED BY, AND
19 ACCRUING TO, SUCH CORPORATION DURING THE SECOND SIX MONTHS OF
20 THE FISCAL YEAR COMMENCING IN THE CALENDAR YEAR 1972 AND DURING
21 THE FISCAL YEAR COMMENCING IN THE CALENDAR YEAR 1973 AND AT THE
22 RATE OF NINE AND ONE-HALF PER CENT, SHALL BE LEVIED, COLLECTED,
23 AND PAID UPON ALL TAXABLE INCOME RECEIVED BY, AND ACCRUING TO,
24 SUCH CORPORATION DURING THE FISCAL YEAR COMMENCING IN THE
25 CALENDAR YEARS 1974, 1975 AND 1976 AND AT THE RATE OF TEN AND
26 ONE-HALF PER CENT, SHALL BE LEVIED, COLLECTED, AND PAID UPON ALL
27 TAXABLE INCOME RECEIVED BY, AND ACCRUING TO, SUCH CORPORATION
28 DURING THE FISCAL YEAR COMMENCING IN THE CALENDAR YEAR 1977
29 THROUGH THE FISCAL YEAR COMMENCING IN 1984 AND AT THE RATE OF
30 NINE AND ONE-HALF PER CENT, SHALL BE LEVIED, COLLECTED, AND PAID
19860H2596B3644 - 5 -
1 UPON ALL TAXABLE INCOME RECEIVED BY AND ACCRUING TO SUCH
2 CORPORATION DURING THE FISCAL YEAR COMMENCING IN 1985 THROUGH
3 FISCAL YEAR 1986 AND AT THE RATE OF EIGHT AND ONE-HALF PER CENT
4 PER ANNUM UPON EACH DOLLAR OF TAXABLE INCOME OF SUCH CORPORATION
5 RECEIVED BY AND ACCRUING TO SUCH CORPORATION DURING THE FISCAL
6 YEAR 1987 AND DURING EACH FISCAL YEAR THEREAFTER. NO PENALTY
7 PRESCRIBED BY SUBSECTION (E) OF SECTION 3003 SHALL BE ASSESSED
8 AGAINST A CORPORATION FOR THE ADDITIONAL TAX WHICH MAY BE DUE AS
9 A RESULT OF THE INCREASE IN TAX RATE FROM NINE AND ONE-HALF PER
10 CENT TO TEN AND ONE-HALF PER CENT IMPOSED RETROACTIVELY BY THIS
11 SECTION FOR THE CALENDAR YEAR 1977 OR FOR THE FISCAL YEAR
12 COMMENCING IN 1977.
13 SECTION 4. THE DEFINITION OF "CAPITAL STOCK VALUE" IN
14 SECTION 601(A) OF THE ACT, AMENDED DECEMBER 23, 1983 (P.L.360,
15 NO.89), IS AMENDED TO READ:
16 SECTION 601. DEFINITIONS AND REPORTS.--(A) THE FOLLOWING
17 WORDS, TERMS AND PHRASES WHEN USED IN THIS ARTICLE VI SHALL HAVE
18 THE MEANING ASCRIBED TO THEM IN THIS SECTION, EXCEPT WHERE THE
19 CONTEXT CLEARLY INDICATES A DIFFERENT MEANING:
20 * * *
21 "CAPITAL STOCK VALUE." THE AMOUNT COMPUTED PURSUANT TO THE
22 FOLLOWING FORMULA: THE PRODUCT OF ONE-HALF TIMES THE SUM OF THE
23 AVERAGE NET INCOME CAPITALIZED AT THE RATE OF NINE AND ONE-HALF
24 PER CENT PLUS SEVENTY-FIVE PER CENT OF NET WORTH, FROM WHICH
25 PRODUCT SHALL BE SUBTRACTED FIFTY THOUSAND DOLLARS ($50,000),
26 THE ALGEBRAIC EQUIVALENT OF WHICH IS
27 (.5 X (AVERAGE NET INCOME/.095 + (.75)
28 (NET WORTH))) - $50,000
29 * * *
30 Section 1 5. The act of March 4, 1971 (P.L.6, No.2), known <--
19860H2596B3644 - 6 -
1 as the Tax Reform Code of 1971, is amended by adding an article
2 to read:
3 ARTICLE XVIII
4 UNEMPLOYMENT COMPENSATION TAX CREDIT <--
5 JOB CREATION TAX CREDIT <--
6 Section 1801. Short Title.--This article shall be known and
7 may be cited as the Unemployment Compensation JOB CREATION Tax <--
8 Credit Law.
9 Section 1802. Statement of Public Policy.--It is hereby
10 declared to be the public policy of the Commonwealth of
11 Pennsylvania to encourage the expansion of employment within
12 this Commonwealth. Cognizant of the fact that employers must pay
13 a Federal Unemployment Compensation Tax on the wages paid to
14 their employes and that, until the Commonwealth's debt to the
15 Federal Unemployment Trust Fund is repaid, Federal tax will
16 increase each year, and cognizant of the relative burden this
17 places upon employers to expand or locate employment in
18 Pennsylvania rather than in another state where such employment
19 would not be subject to additional Federal taxes, the General
20 Assembly has determined that the stated public policy can best
21 be achieved by providing a tax credit for employers equal to the
22 additional amount of Federal Unemployment Compensation Tax they
23 incur when expanding employment within this Commonwealth for the
24 duration of the period of the Commonwealth's indebtedness to the
25 Federal Unemployment Compensation Trust Fund. Additionally,
26 being cognizant of the burden placed upon a new employer to pay
27 unemployment compensation costs while the business is getting on
28 its feet, the General Assembly has further determined that the
29 stated public policy can best be achieved by providing a tax
30 credit for new employers equal to the amount of their State
19860H2596B3644 - 7 -
1 unemployment compensation contribution for the duration of the
2 period during which they are ineligible for an experience-based
3 rate and the Commonwealth indebtedness to the Federal
4 Unemployment Compensation Trust Fund remains unpaid.
5 Section 1803. Authorization of Credit.--Every employer who
6 provides new employment shall be eligible to receive a tax
7 credit, as provided in this article, against any tax due from
8 him under Articles II, IV or VI of this act, and against any
9 payment of estimated tax or payment of tentative tax due from
10 him on account of said taxes.
11 Section 1804. Calculation of Tax Credit.--(a) The amount of
12 the tax credit available to an employer who provides new
13 employment shall be equal to the sum of:
14 (1) the amount by which the employer's excise tax liability
15 for the calendar year pursuant to section 523(a) and (b) of the
16 Federal Unemployment Tax Act (26 U.S.C. §§ 3301 and 3302)
17 increases as a result of wages paid by him during the calendar
18 year with respect to new employment as defined in this article;
19 and
20 (2) the amount by which the employer's contribution, if any,
21 at the rate specified in the first sentence of paragraph (4) of
22 section 301(a) of the act of December 5, 1936 (2nd Sp.Sess.,
23 1937 P.L.2897, No.1), known as the "Unemployment Compensation
24 Law," increases as a result of wages paid by him during the
25 calendar year with respect to new employment as defined in this
26 article.
27 (b) For purposes of this article, new employment shall mean
28 full-time employes added to the payroll on or after July 1,
29 1986, whose employment causes the employer's average employment
30 covered by the "Unemployment Compensation Law" during the
19860H2596B3644 - 8 -
1 calendar year to exceed the highest quarterly level of such
2 employment during calendar year 1985. Where an employer
3 maintains more than one place of employment in the same line of
4 business within this Commonwealth, all of the employes at the
5 several places of employment shall be combined in determining
6 the highest level of covered employment. Where an employer
7 maintains more than one place of employment within this
8 Commonwealth, and the several places of employment operate
9 separate and distinct lines of business, the Secretary of Labor
10 and Industry may authorize the determination of new employment
11 to be made by separately combining employment at those places
12 operating each of the employer's separate lines of business. NEW <--
13 EMPLOYMENT SHALL NOT INCLUDE THE RELOCATION OF EMPLOYES,
14 INCLUDING THOSE TRANSFERRED FROM ONE LINE OF BUSINESS TO
15 ANOTHER. In all cases, the Secretary of Labor and Industry shall
16 verify for the Secretary of Revenue the employment figures used
17 in the determination of new employment.
18 Section 1805. Time to Take Tax Credit.--During the calendar
19 year succeeding any calendar year in which an employer provides
20 new employment as described in this article, the employer may
21 use any tax credit to which he becomes entitled as a result of
22 new employment provided during the previous calendar year. For
23 purposes of this section, tax credits shall be deemed used if
24 applied by the employer in payment of any qualifying tax,
25 tentative tax, or estimated tax which becomes due during the
26 calendar year succeeding the year in which new employment was
27 provided. For purposes of this article, a liability for
28 estimated tax or tentative tax shall be deemed to exist to the
29 extent of the tax finally determined to be due. Tax credits not
30 used before the close of the calendar year succeeding the year
19860H2596B3644 - 9 -
1 in which the new employment was provided shall lapse.
2 Section 1806. Powers and Duties of the Secretary of
3 Revenue.--In addition to those created by any other act of the
4 General Assembly, the Secretary of Revenue shall have the power
5 and it shall be his duty to:
6 (1) Publish, no later than September 30, 1986, rules and
7 regulations as required to implement this act.
8 (2) Publish and disseminate, no later than October 30, 1986,
9 forms upon which taxpayers may apply for the tax credit
10 authorized by this article.
11 (3) Within ninety days after receipt of any application for
12 tax credit pursuant to this article, verify, in consultation
13 with the Secretary of Labor and Industry, the calculation of any
14 tax credit for which application has been made, apply the tax
15 credit as requested by the taxpayer, and mail notification of
16 the amount of the credit and its disposition to the taxpayer.
17 (4) Within five months after the close of any calendar year
18 during which tax credits granted pursuant to this article were
19 used, furnish to the members of the General Assembly an annual
20 report providing, as to each employer who used credits during
21 the preceding calendar year pursuant to this article, the
22 employer's name and address, the amount of new employment and <--
23 the total amount of tax credits granted. EMPLOYER'S NAME, <--
24 ADDRESS, STANDARD INDUSTRIAL CLASSIFICATION CODE, THE AMOUNT OF
25 NEW EMPLOYMENT, AND THE AMOUNT OF TAX CREDITS GRANTED PURSUANT
26 TO EACH SUBSECTION OF SECTION 1804.
27 (5) THE PROVISIONS OF SECTION 408(B) OF THIS ACT RELATING TO
28 CONFIDENTIALITY OF INFORMATION, AND ANY OTHER PROVISIONS OF LAW
29 PREVENTING THE DISCLOSURE OF INFORMATION REQUIRED PURSUANT TO
30 CLAUSE (4) OF THIS SECTION, SHALL NOT APPLY WHEN THE INFORMATION
19860H2596B3644 - 10 -
1 IS DIVULGED FOR THE PURPOSES OF CLAUSE (4) OF THIS SECTION.
2 Section 1807. Expiration of Tax Credit.--Any tax credit
3 granted pursuant to this article must be used before the end of
4 the calendar year succeeding the calendar year during which the
5 Commonwealth's indebtedness to the Federal Unemployment
6 Compensation Trust Fund is repaid. No employer shall be eligible
7 for a tax credit in respect of new employment provided during
8 the calendar year succeeding the year during which the
9 Commonwealth's indebtedness to the Federal Unemployment
10 Compensation Trust Fund is repaid, or for any year thereafter.
11 Section 1808. Sunset.--This article shall expire thirty-six
12 months after the close of the calendar year during which the
13 Commonwealth's indebtedness to the Federal Unemployment
14 Compensation Trust Fund is repaid.
15 Section 2. This act shall take effect July 1, 1986. <--
16 SECTION 6. SECTION 3003(B.1) OF THE ACT, ADDED JULY 1, 1985 <--
17 (P.L.78, NO.29), IS AMENDED AND THE SECTION IS AMENDED BY ADDING
18 A SUBSECTION TO READ:
19 SECTION 3003. PREPAYMENT OF TAX.--* * *
20 (B.1) NOTWITHSTANDING THE PROVISIONS OF SUBSECTIONS (A) AND
21 (B), THE TENTATIVE TAX DUE WITH RESPECT TO THE CAPITAL STOCK AND
22 FRANCHISE TAX FOR TAXABLE YEARS COMMENCING [WITH] DURING
23 CALENDAR YEAR 1986 [AND FOR EACH TAXABLE YEAR THEREAFTER] SHALL
24 BE COMPUTED BY APPLYING THE CURRENT TAX RATE TO EIGHTY-FIVE PER
25 CENT OF SUCH TAX BASE FROM THE YEAR PRECEDING THE IMMEDIATE
26 PRIOR YEAR.
27 (B.2) NOTWITHSTANDING THE PROVISIONS OF SUBSECTIONS (A), (B)
28 AND (B.1), THE TENTATIVE TAX DUE WITH RESPECT TO THE CAPITAL
29 STOCK AND FRANCHISE TAX FOR TAXABLE YEARS COMMENCING WITH
30 CALENDAR YEAR 1987 AND FOR EACH TAXABLE YEAR THEREAFTER SHALL BE
19860H2596B3644 - 11 -
1 COMPUTED BY APPLYING THE CURRENT TAX RATE TO EIGHTY PER CENT OF
2 SUCH TAX BASE FROM THE YEAR PRECEDING THE IMMEDIATE PRIOR YEAR.
3 * * *
4 SECTION 7. IF THE AMENDMENT TO THE DEFINITION OF "CAPITAL
5 STOCK VALUE" AS PROVIDED BY SECTION 4, OR THE APPLICATION
6 THEREOF TO ANY PERSON OR CIRCUMSTANCE IS HELD INVALID, IT IS THE
7 INTENT OF THE GENERAL ASSEMBLY THAT SUCH AMENDMENT SHALL BE
8 SEVERABLE AND "CAPITAL STOCK VALUE" SHALL BE DEFINED AS IF THIS
9 AMENDMENT HAD NEVER BEEN ENACTED.
10 SECTION 8. THIS ACT SHALL APPLY RETROACTIVELY TO TAXABLE
11 YEARS BEGINNING ON OR AFTER JANUARY 1, 1986.
12 SECTION 9. THIS ACT SHALL TAKE EFFECT IMMEDIATELY.
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