PRIOR PRINTER'S NOS. 1524, 2207 PRINTER'S NO. 2321
No. 1321 Session of 1991
INTRODUCED BY EVANS, MAY 7, 1991
AS REPORTED FROM COMMITTEE ON RULES, HOUSE OF REPRESENTATIVES, AS AMENDED, JULY 19, 1991
AN ACT 1 Making appropriations to the Department of Public Welfare and <-- 2 the Treasury Department; and providing for certain 3 allocations therefrom for the purpose of carrying out the 4 Public Assistance Law for the year beginning July 1, 1991, 5 for the payment of cash grants and medical assistance and for 6 the payment of general obligation debt service or arbitrage 7 rebates and expenses accrued or incurred prior to and 8 remaining unpaid on June 30, 1991. 9 AMENDING THE ACT OF MARCH 4, 1971 (P.L.6, NO.2), ENTITLED "AN <-- 10 ACT RELATING TO TAX REFORM AND STATE TAXATION BY CODIFYING 11 AND ENUMERATING CERTAIN SUBJECTS OF TAXATION AND IMPOSING 12 TAXES THEREON; PROVIDING PROCEDURES FOR THE PAYMENT, 13 COLLECTION, ADMINISTRATION AND ENFORCEMENT THEREOF; PROVIDING 14 FOR TAX CREDITS IN CERTAIN CASES; CONFERRING POWERS AND 15 IMPOSING DUTIES UPON THE DEPARTMENT OF REVENUE, CERTAIN 16 EMPLOYERS, FIDUCIARIES, INDIVIDUALS, PERSONS, CORPORATIONS 17 AND OTHER ENTITIES; PRESCRIBING CRIMES, OFFENSES AND 18 PENALTIES," FURTHER PROVIDING FOR THE IMPOSITION OF SALES AND 19 USE TAX ON CERTAIN SERVICES AND FOR THE REISSUANCE OF SALES 20 AND USE TAX LICENSES; PROVIDING FOR THE INCREASE OF PERSONAL 21 INCOME TAX, FOR POVERTY EXEMPTIONS TO THE TAX, FOR NOTICE OF 22 CERTAIN SALES AND TRANSFERS AND FOR THE WITHHOLDING OF 23 CERTAIN TAX ON SHARES; FURTHER PROVIDING FOR THE IMPOSITION, 24 RATE AND COLLECTION OF CORPORATE NET INCOME TAX AND CAPITAL 25 STOCK AND FRANCHISE TAX; FURTHER PROVIDING FOR THE COLLECTION 26 OF BANK SHARES TAX AND TITLE INSURANCE AND TRUST COMPANIES 27 TAX; EXTENDING THE UTILITIES GROSS RECEIPTS TAX; FURTHER 28 PROVIDING FOR THE COLLECTION OF THE PUBLIC UTILITY REALTY 29 TAX; INCREASING THE RATE OF THE CIGARETTE TAX, IMPOSING A 30 CIGARETTE FLOOR TAX; FURTHER PROVIDING FOR COMMISSIONS FOR 31 CIGARETTE TAX AGENTS, AND DEDICATING A PORTION OF THE 32 REVENUES FOR AGRICULTURAL FARMLAND PRESERVATION AND
1 CHILDREN'S HEALTH CARE; FURTHER PROVIDING FOR IMPOSITION, 2 COLLECTION, AND ADMINISTRATION OF TAX ON PROPERTY PASSING 3 UPON DEATH; FURTHER PROVIDING FOR THE REPORTS AND PAYMENTS OF 4 CERTAIN ESTIMATED TAXES; AND MAKING REPEALS. 5 The General Assembly of the Commonwealth of Pennsylvania 6 hereby enacts as follows: 7 Section 1. Department of Public <-- 8 Welfare.--The following amounts are 9 appropriated to the Department of 10 Public Welfare: Federal State 11 For cash assistance grants. 12 State appropriation........ 40,259,000 13 The following Federal amounts are 14 appropriated to supplement the sum 15 appropriated for cash assistance: 16 (1) "Maintenance Assistance - Cash 17 Grants." 18 Federal appropriation...... 20,755,000 19 For medical assistance payments - 20 outpatient services, exclusive of 21 outpatient services provided through 22 capitation plans. 23 State appropriation........ 22,880,000 24 The following Federal amounts are 25 appropriated to supplement the sum 26 appropriated for medical assistance - 27 outpatient: 28 (1) "Medical Assistance - 29 Outpatient." 30 Federal appropriation...... 21,150,000 31 For medical assistance payments - 19910H1321B2321 - 2 -
1 inpatient services, exclusive of 2 services provided through capitation 3 plans. 4 State appropriation........ 31,528,000 5 The following Federal amounts are 6 appropriated to supplement the sum 7 appropriated for medical assistance - 8 inpatient services: 9 (1) "Medical Assistance - 10 Inpatient." 11 Federal appropriation...... 20,492,000 12 For medical assistance - capitation 13 plans. For provision of outpatient 14 services and inpatient hospital 15 services to eligible persons enrolled 16 in an approved capitation plan. 17 State appropriation........ 16,081,000 18 The following Federal amounts are 19 appropriated to supplement the sum 20 appropriated for medical assistance - 21 capitation plans: 22 (1) "Medical Assistance - 23 Capitation Plans." 24 Federal appropriation...... 11,512,000 25 For medical assistance - long-term 26 care facilities. 27 State appropriation........ 22,795,000 28 The following Federal amounts are 29 appropriated to supplement the sum 30 appropriated for long-term care 19910H1321B2321 - 3 -
1 facilities: 2 (1) "Medical Assistance - Long- 3 Term Care Facilities." 4 Federal appropriation...... 31,125,000 5 Any rule, regulation or policy for 6 the State or Federal appropriations 7 for the cash assistance, outpatient, 8 inpatient, capitation and long-term 9 care programs adopted by the Secretary 10 of Public Welfare during the fiscal 11 period 1991-1992 which adds to the 12 cost of any public assistance program 13 shall be effective only from and after 14 the date upon which it is approved as 15 to the availability of funds by the 16 Governor. 17 Section 2. Treasury Department.-- 18 The following amounts are appropriated 19 to the Treasury Department: Federal State 20 For general obligation debt service 21 or to pay all arbitrage rebates to the 22 Federal Government required under 23 section 148 of the Internal Revenue 24 Code of 1986 (Public Law 99-514, 26 25 U.S.C. § 148). 26 State appropriation........ 45,000,000 27 Section 3. Effective date.--This act shall take effect July 28 1, 1991, or immediately, whichever is later. 29 SECTION 1. SECTION 201(B), (C), (D), (F), (G), (I), (K), <-- 30 (L), (M), (O) AND (T) OF THE ACT OF MARCH 4, 1971 (P.L.6, NO.2), 19910H1321B2321 - 4 -
1 KNOWN AS THE TAX REFORM CODE OF 1971, AMENDED AUGUST 31, 1971 2 (P.L.362, NO.93), SEPTEMBER 9, 1971 (P.L.437, NO.105), MAY 2, 3 1974 (P.L.269, NO.75), JULY 20, 1974 (P.L.563, NO.192), NOVEMBER 4 26, 1978 (P.L.1287, NO.306), DECEMBER 9, 1980 (P.L.1136, 5 NO.202), MAY 2, 1985 (P.L.28, NO.13) AND JULY 2, 1986 (P.L.318, 6 NO.77), ARE AMENDED AND THE SECTION IS AMENDED BY ADDING CLAUSES 7 TO READ: 8 SECTION 201. DEFINITIONS.--THE FOLLOWING WORDS, TERMS AND 9 PHRASES WHEN USED IN THIS ARTICLE II SHALL HAVE THE MEANING 10 ASCRIBED TO THEM IN THIS SECTION, EXCEPT WHERE THE CONTEXT 11 CLEARLY INDICATES A DIFFERENT MEANING: 12 * * * 13 (B) "MAINTAINING A PLACE OF BUSINESS IN THIS COMMONWEALTH." 14 (1) HAVING OR MAINTAINING WITHIN THIS COMMONWEALTH, DIRECTLY 15 OR BY A SUBSIDIARY, AN OFFICE, DISTRIBUTION HOUSE, SALES HOUSE, 16 WAREHOUSE, SERVICE ENTERPRISE OR OTHER PLACE OF BUSINESS, OR ANY 17 AGENT OF GENERAL OR RESTRICTED AUTHORITY IRRESPECTIVE OF WHETHER 18 THE PLACE OF BUSINESS OR AGENT IS LOCATED HERE PERMANENTLY OR 19 TEMPORARILY OR WHETHER THE PERSON OR SUBSIDIARY MAINTAINING SUCH 20 PLACE OF BUSINESS OR AGENT IS AUTHORIZED TO DO BUSINESS WITHIN 21 THIS COMMONWEALTH; OR 22 (2) THE ENGAGING IN ANY ACTIVITY AS A BUSINESS WITHIN THIS 23 COMMONWEALTH BY ANY PERSON, DIRECTLY OR BY A SUBSIDIARY, IN 24 CONNECTION WITH THE LEASE, SALE OR DELIVERY OF TANGIBLE PERSONAL 25 PROPERTY OR THE PERFORMANCE OF SERVICES THEREON FOR USE, STORAGE 26 OR CONSUMPTION OR IN CONNECTION WITH THE SALE OR DELIVERY FOR 27 USE OF THE SERVICES DESCRIBED IN SUBCLAUSES (11) THROUGH (23) OF 28 CLAUSE (K) OF THIS SECTION INCLUDING, BUT NOT LIMITED TO, 29 HAVING, MAINTAINING OR USING ANY OFFICE, DISTRIBUTION HOUSE, 30 SALES HOUSE, WAREHOUSE OR OTHER PLACE OF BUSINESS, ANY STOCK OF 19910H1321B2321 - 5 -
1 GOODS OR ANY SOLICITOR, SALESMAN, AGENT OR REPRESENTATIVE UNDER 2 ITS AUTHORITY, AT ITS DIRECTION OR WITH ITS PERMISSION, 3 REGARDLESS OF WHETHER THE PERSON OR SUBSIDIARY IS AUTHORIZED TO 4 DO BUSINESS IN THIS COMMONWEALTH. 5 (3) REGULARLY OR SUBSTANTIALLY SOLICITING ORDERS WITHIN THIS 6 COMMONWEALTH IN CONNECTION WITH THE LEASE, SALE OR DELIVERY OF 7 TANGIBLE PERSONAL PROPERTY TO OR THE PERFORMANCE THEREON OF 8 SERVICES OR IN CONNECTION WITH THE SALE OR DELIVERY OF THE 9 SERVICES DESCRIBED IN SUBCLAUSES (11) THROUGH (23) OF CLAUSE (K) 10 OF THIS SECTION FOR RESIDENTS OF THIS COMMONWEALTH BY MEANS OF 11 CATALOGUES OR OTHER ADVERTISING, WHETHER SUCH ORDERS ARE 12 ACCEPTED WITHIN OR WITHOUT THIS COMMONWEALTH. 13 (C) "MANUFACTURE." THE PERFORMANCE OF MANUFACTURING, 14 FABRICATING, COMPOUNDING, PROCESSING OR OTHER OPERATIONS, 15 ENGAGED IN AS A BUSINESS, WHICH PLACE ANY TANGIBLE PERSONAL 16 PROPERTY IN A FORM, COMPOSITION OR CHARACTER DIFFERENT FROM THAT 17 IN WHICH IT IS ACQUIRED WHETHER FOR SALE OR USE BY THE 18 MANUFACTURER, AND SHALL INCLUDE, BUT NOT LIMITED TO-- 19 (1) EVERY OPERATION COMMENCING WITH THE FIRST PRODUCTION 20 STAGE AND ENDING WITH THE COMPLETION OF TANGIBLE PERSONAL 21 PROPERTY HAVING THE PHYSICAL QUALITIES (INCLUDING PACKAGING, IF 22 ANY, PASSING TO THE ULTIMATE CONSUMER) WHICH IT HAS WHEN 23 TRANSFERRED BY THE MANUFACTURER TO ANOTHER; 24 (2) THE PUBLISHING OF BOOKS, NEWSPAPERS, MAGAZINES AND OTHER 25 PERIODICALS AND PRINTING; 26 (3) REFINING, BLASTING, EXPLORING, MINING AND QUARRYING FOR, 27 OR OTHERWISE EXTRACTING FROM THE EARTH OR FROM WASTE OR STOCK 28 PILES OR FROM PITS OR BANKS ANY NATURAL RESOURCES, MINERALS AND 29 MINERAL AGGREGATES INCLUDING BLAST FURNACE SLAG; 30 (4) BUILDING, REBUILDING, REPAIRING AND MAKING ADDITIONS TO, 19910H1321B2321 - 6 -
1 OR REPLACEMENTS IN OR UPON VESSELS DESIGNED FOR COMMERCIAL USE 2 OF REGISTERED TONNAGE OF FIFTY TONS OR MORE WHEN PRODUCED UPON 3 SPECIAL ORDER OF THE PURCHASER, OR WHEN REBUILT, REPAIRED OR 4 ENLARGED, OR WHEN REPLACEMENTS ARE MADE UPON ORDER OF, OR FOR 5 THE ACCOUNT OF THE OWNER; 6 (5) RESEARCH HAVING AS ITS OBJECTIVE THE PRODUCTION OF A NEW 7 OR AN IMPROVED (I) PRODUCT OR UTILITY SERVICE, OR (II) METHOD OF 8 PRODUCING A PRODUCT OR UTILITY SERVICE, BUT IN EITHER CASE NOT 9 INCLUDING MARKET RESEARCH OR RESEARCH HAVING AS ITS OBJECTIVE 10 THE IMPROVEMENT OF ADMINISTRATIVE EFFICIENCY. 11 THE TERM "MANUFACTURE," SHALL NOT INCLUDE CONSTRUCTING, 12 ALTERING, SERVICING, REPAIRING OR IMPROVING REAL ESTATE OR 13 REPAIRING, SERVICING OR INSTALLING TANGIBLE PERSONAL PROPERTY, 14 NOR THE COOKING, FREEZING OR BAKING OF FRUITS, VEGETABLES, 15 MUSHROOMS, FISH, SEAFOOD, MEATS, POULTRY OR BAKERY PRODUCTS. 16 * * * 17 (D) "PROCESSING." THE PERFORMANCE OF THE FOLLOWING 18 ACTIVITIES WHEN ENGAGED IN AS A BUSINESS ENTERPRISE: 19 (1) THE COOKING, BAKING OR FREEZING OF FRUITS, VEGETABLES, 20 MUSHROOMS, FISH, SEAFOOD, MEATS [OR], POULTRY OR BAKERY 21 PRODUCTS, WHEN THE PERSON ENGAGED IN SUCH BUSINESS PACKAGES SUCH 22 PROPERTY IN SEALED CONTAINERS FOR WHOLESALE DISTRIBUTION. 23 (2) THE SCOURING, CARBONIZING, CORDING, COMBING, THROWING, 24 TWISTING OR WINDING OF NATURAL OR SYNTHETIC FIBERS, OR THE 25 SPINNING, BLEACHING, DYEING, PRINTING OR FINISHING OF YARNS OR 26 FABRICS, WHEN SUCH ACTIVITIES ARE PERFORMED PRIOR TO SALE TO THE 27 ULTIMATE CONSUMER. 28 (3) THE ELECTROPLATING, GALVANIZING, ENAMELING, ANODIZING, 29 COLORING, FINISHING, IMPREGNATING OR HEAT TREATING OF METALS OR 30 PLASTICS FOR SALE OR IN THE PROCESS OF MANUFACTURING. 19910H1321B2321 - 7 -
1 (4) THE ROLLING, DRAWING OR EXTRUDING OF FERROUS AND NON- 2 FERROUS METALS. 3 (5) THE FABRICATION FOR SALE OF ORNAMENTAL OR STRUCTURAL 4 METAL OR OF METAL STAIRS, STAIRCASES, GRATINGS, FIRE ESCAPES OR 5 RAILINGS (NOT INCLUDING FABRICATION WORK DONE AT THE 6 CONSTRUCTION SITE). 7 (6) THE PREPARATION OF ANIMAL FEED OR POULTRY FEED FOR SALE. 8 (7) THE PRODUCTION, PROCESSING AND BOTTLING OF NON-ALCOHOLIC 9 BEVERAGES FOR WHOLESALE DISTRIBUTION. 10 (8) THE OPERATION OF A SAW MILL OR PLANING MILL FOR THE 11 PRODUCTION OF LUMBER OR LUMBER PRODUCTS FOR SALE. 12 (9) THE MILLING FOR SALE OF FLOUR OR MEAL FROM GRAINS. 13 (10) THE SLAUGHTERING AND DRESSING OF ANIMALS FOR MEAT TO BE 14 SOLD OR TO BE USED IN PREPARING MEAT PRODUCTS FOR SALE, AND THE 15 PREPARATION OF MEAT PRODUCTS INCLUDING LARD, TALLOW, GREASE, 16 COOKING AND INEDIBLE OILS FOR WHOLESALE DISTRIBUTION. 17 (11) THE PROCESSING OF USED LUBRICATING OILS. 18 (12) THE BROADCASTING OF RADIO AND TELEVISION PROGRAMS OF 19 LICENSED COMMERCIAL OR EDUCATIONAL STATIONS. 20 * * * 21 (F) "PURCHASE AT RETAIL." 22 (1) THE ACQUISITION FOR A CONSIDERATION OF THE OWNERSHIP, 23 CUSTODY OR POSSESSION OF TANGIBLE PERSONAL PROPERTY OTHER THAN 24 FOR RESALE BY THE PERSON ACQUIRING THE SAME WHEN SUCH 25 ACQUISITION IS MADE FOR THE PURPOSE OF CONSUMPTION OR USE, 26 WHETHER SUCH ACQUISITION SHALL BE ABSOLUTE OR CONDITIONAL, AND 27 BY WHATSOEVER MEANS THE SAME SHALL HAVE BEEN EFFECTED. 28 (2) THE ACQUISITION OF A LICENSE TO USE OR CONSUME, AND THE 29 RENTAL OR LEASE OF TANGIBLE PERSONAL PROPERTY, OTHER THAN FOR 30 RESALE REGARDLESS OF THE PERIOD OF TIME THE LESSEE HAS 19910H1321B2321 - 8 -
1 POSSESSION OR CUSTODY OF THE PROPERTY. 2 (3) THE OBTAINING FOR A CONSIDERATION OF THOSE SERVICES 3 DESCRIBED IN SUBCLAUSES (2), (3) AND (4) OF CLAUSE (K) OF THIS 4 SECTION OTHER THAN FOR RESALE. 5 (4) A RETENTION AFTER MARCH 7, 1956, OF POSSESSION, CUSTODY 6 OR A LICENSE TO USE OR CONSUME PURSUANT TO A RENTAL CONTRACT OR 7 OTHER LEASE ARRANGEMENT (OTHER THAN AS SECURITY), OTHER THAN FOR 8 RESALE. 9 (5) THE OBTAINING FOR A CONSIDERATION OF THOSE SERVICES 10 DESCRIBED IN SUBCLAUSES (11) THROUGH (23) OF CLAUSE (K) OF THIS 11 SECTION. 12 THE TERM "PURCHASE AT RETAIL" WITH RESPECT TO "LIQUOR" AND 13 "MALT OR BREWED BEVERAGES" SHALL INCLUDE THE PURCHASE OF 14 "LIQUOR" FROM ANY "PENNSYLVANIA LIQUOR STORE" BY ANY PERSON FOR 15 ANY PURPOSE, AND THE PURCHASE OF "MALT OR BREWED BEVERAGES" FROM 16 A "MANUFACTURER OF MALT OR BREWED BEVERAGES," "DISTRIBUTOR" OR 17 "IMPORTING DISTRIBUTOR" BY ANY PERSON FOR ANY PURPOSE, EXCEPT 18 PURCHASES FROM A "MANUFACTURER OF MALT OR BREWED BEVERAGES" BY A 19 "DISTRIBUTOR" OR "IMPORTING DISTRIBUTOR" OR PURCHASES FROM AN 20 "IMPORTING DISTRIBUTOR" BY A "DISTRIBUTOR" WITHIN THE MEANING OF 21 THE "LIQUOR CODE." THE TERM "PURCHASE AT RETAIL" SHALL NOT 22 INCLUDE ANY PURCHASE OF "MALT OR BREWED BEVERAGES" FROM A 23 "RETAIL DISPENSER" OR ANY PURCHASE OF "LIQUOR" OR "MALT OR 24 BREWED BEVERAGES" FROM A PERSON HOLDING A "RETAIL LIQUOR 25 LICENSE" WITHIN THE MEANING OF AND PURSUANT TO THE PROVISIONS OF 26 THE "LIQUOR CODE," BUT SHALL INCLUDE ANY PURCHASE OR ACQUISITION 27 OF "LIQUOR" OR "MALT OR BREWED BEVERAGES" OTHER THAN PURSUANT TO 28 THE PROVISIONS OF THE "LIQUOR CODE." 29 (G) "PURCHASE PRICE." 30 (1) THE TOTAL VALUE OF ANYTHING PAID OR DELIVERED, OR 19910H1321B2321 - 9 -
1 PROMISED TO BE PAID OR DELIVERED, WHETHER IT BE MONEY OR 2 OTHERWISE, IN COMPLETE PERFORMANCE OF A SALE AT RETAIL OR 3 PURCHASE AT RETAIL, AS HEREIN DEFINED, WITHOUT ANY DEDUCTION ON 4 ACCOUNT OF THE COST OR VALUE OF THE PROPERTY SOLD, COST OR VALUE 5 OF TRANSPORTATION, COST OR VALUE OF LABOR OR SERVICE, INTEREST 6 OR DISCOUNT PAID OR ALLOWED AFTER THE SALE IS CONSUMMATED, ANY 7 OTHER TAXES IMPOSED BY THE COMMONWEALTH OF PENNSYLVANIA OR ANY 8 OTHER EXPENSE EXCEPT THAT THERE SHALL BE EXCLUDED ANY GRATUITY 9 OR SEPARATELY STATED DEPOSIT CHARGE FOR RETURNABLE CONTAINERS. 10 (2) THERE SHALL BE DEDUCTED FROM THE PURCHASE PRICE THE 11 VALUE OF ANY TANGIBLE PERSONAL PROPERTY ACTUALLY TAKEN IN TRADE 12 OR EXCHANGE IN LIEU OF THE WHOLE OR ANY PART OF THE PURCHASE 13 PRICE. FOR THE PURPOSE OF THIS CLAUSE, THE AMOUNT ALLOWED BY 14 REASON OF TANGIBLE PERSONAL PROPERTY ACTUALLY TAKEN IN TRADE OR 15 EXCHANGE SHALL BE CONSIDERED THE VALUE OF SUCH PROPERTY. 16 (3) IN DETERMINING THE PURCHASE PRICE ON THE SALE OR USE OF 17 TAXABLE TANGIBLE PERSONAL PROPERTY OR A SERVICE WHERE, BECAUSE 18 OF AFFILIATION OF INTERESTS BETWEEN THE VENDOR AND PURCHASER, OR 19 IRRESPECTIVE OF ANY SUCH AFFILIATION, IF FOR ANY OTHER REASON 20 THE PURCHASE PRICE DECLARED BY THE VENDOR OR TAXPAYER ON THE 21 TAXABLE SALE OR USE OF SUCH TANGIBLE PERSONAL PROPERTY OR 22 SERVICE IS, IN THE OPINION OF THE DEPARTMENT, NOT INDICATIVE OF 23 THE TRUE VALUE OF THE ARTICLE OR SERVICE OR THE FAIR PRICE 24 THEREOF, THE DEPARTMENT SHALL, PURSUANT TO UNIFORM AND EQUITABLE 25 RULES, DETERMINE THE AMOUNT OF CONSTRUCTIVE PURCHASE PRICE UPON 26 THE BASIS OF WHICH THE TAX SHALL BE COMPUTED AND LEVIED. SUCH 27 RULES SHALL PROVIDE FOR A CONSTRUCTIVE AMOUNT OF PURCHASE PRICE 28 FOR EACH SUCH SALE OR USE WHICH WOULD NATURALLY AND FAIRLY BE 29 CHARGED IN AN ARMS-LENGTH TRANSACTION IN WHICH THE ELEMENT OF 30 COMMON INTEREST BETWEEN THE VENDOR OR PURCHASER IS ABSENT OR IF 19910H1321B2321 - 10 -
1 NO COMMON INTEREST EXISTS, ANY OTHER ELEMENT CAUSING A 2 DISTORTION OF THE PRICE OR VALUE IS LIKEWISE ABSENT. FOR THE 3 PURPOSE OF THIS CLAUSE WHERE A TAXABLE SALE OR PURCHASE AT 4 RETAIL TRANSACTION OCCURS BETWEEN A PARENT AND A SUBSIDIARY, 5 AFFILIATE OR CONTROLLED CORPORATION OF SUCH PARENT CORPORATION, 6 THERE SHALL BE A REBUTTABLE PRESUMPTION, THAT BECAUSE OF SUCH 7 COMMON INTEREST SUCH TRANSACTION WAS NOT AT ARMS-LENGTH. 8 (4) WHERE THERE IS A TRANSFER OR RETENTION OF POSSESSION OR 9 CUSTODY, WHETHER IT BE TERMED A RENTAL, LEASE, SERVICE OR 10 OTHERWISE, OF TANGIBLE PERSONAL PROPERTY INCLUDING, BUT NOT 11 LIMITED TO LINENS, APRONS, MOTOR VEHICLES, TRAILERS, TIRES, 12 INDUSTRIAL OFFICE AND CONSTRUCTION EQUIPMENT, AND BUSINESS 13 MACHINES THE FULL CONSIDERATION PAID OR DELIVERED TO THE VENDOR 14 OR LESSOR SHALL BE CONSIDERED THE PURCHASE PRICE, EVEN THOUGH 15 SUCH CONSIDERATION BE SEPARATELY STATED AND BE DESIGNATED AS 16 PAYMENT FOR PROCESSING, LAUNDERING, SERVICE, MAINTENANCE, 17 INSURANCE, REPAIRS, DEPRECIATION OR OTHERWISE. THE PRECEDING 18 SENTENCE SHALL NOT APPLY TO THE EXTENT THAT THE SEPARATELY 19 STATED PAYMENT IS DESIGNATED FOR A TAXABLE SERVICE DESCRIBED IN 20 SUBCLAUSES (11) THROUGH (23) OF CLAUSE (K) OF THIS SECTION. 21 WHERE THE VENDOR OR LESSOR SUPPLIES OR PROVIDES AN EMPLOYE TO 22 OPERATE SUCH TANGIBLE PERSONAL PROPERTY, THE VALUE OF THE LABOR 23 THUS SUPPLIED MAY BE EXCLUDED AND SHALL NOT BE CONSIDERED AS 24 PART OF THE PURCHASE PRICE IF SEPARATELY STATED. THERE SHALL 25 ALSO BE INCLUDED AS PART OF THE PURCHASE PRICE THE VALUE OF 26 ANYTHING PAID OR DELIVERED, OR PROMISED TO BE PAID OR DELIVERED 27 BY A LESSEE, WHETHER IT BE MONEY OR OTHERWISE, TO ANY PERSON 28 OTHER THAN THE VENDOR OR LESSOR BY REASON OF THE MAINTENANCE, 29 INSURANCE OR REPAIR OF THE TANGIBLE PERSONAL PROPERTY WHICH A 30 LESSEE HAS THE POSSESSION OR CUSTODY OF UNDER A RENTAL CONTRACT 19910H1321B2321 - 11 -
1 OR LEASE ARRANGEMENT. 2 (5) WITH RESPECT TO THE TAX IMPOSED BY SUBSECTION (B) OF 3 SECTION 202 UPON ANY TANGIBLE PERSONAL PROPERTY ORIGINALLY 4 PURCHASED BY THE USER OF SUCH PROPERTY SIX MONTHS OR LONGER 5 PRIOR TO THE FIRST TAXABLE USE OF SUCH PROPERTY WITHIN THE 6 COMMONWEALTH, SUCH USER MAY ELECT TO PAY TAX ON A SUBSTITUTED 7 BASE DETERMINED BY CONSIDERING THE PURCHASE PRICE OF SUCH 8 PROPERTY FOR TAX PURPOSES TO BE EQUAL TO THE PREVAILING MARKET 9 PRICE OF SIMILAR TANGIBLE PERSONAL PROPERTY AT THE TIME AND 10 PLACE OF SUCH FIRST USE WITHIN THE COMMONWEALTH. SUCH ELECTION 11 MUST BE MADE [BY FILING A NOTICE THEREOF IN THE FORM SPECIFIED 12 BY] AT THE TIME OF FILING A TAX RETURN WITH THE DEPARTMENT AND 13 REPORTING SUCH TAX LIABILITY AND PAYING THE PROPER TAX DUE PLUS 14 ALL ACCRUED PENALTIES AND INTEREST, IF THERE BE ANY, WITHIN [ONE 15 YEAR] SIX MONTHS OF THE DUE DATE OF SUCH REPORT AND PAYMENT, AS 16 PROVIDED FOR BY SUBSECTIONS (A) AND (C) OF SECTION 217 OF THIS 17 ARTICLE. 18 * * * 19 (I) "RESALE." 20 (1) ANY TRANSFER OF OWNERSHIP, CUSTODY OR POSSESSION OF 21 TANGIBLE PERSONAL PROPERTY FOR A CONSIDERATION, INCLUDING THE 22 GRANT OF A LICENSE TO USE OR CONSUME AND TRANSACTIONS WHERE THE 23 POSSESSION OF SUCH PROPERTY IS TRANSFERRED BUT WHERE THE 24 TRANSFEROR RETAINS TITLE ONLY AS SECURITY FOR PAYMENT OF THE 25 SELLING PRICE WHETHER SUCH TRANSACTION BE DESIGNATED AS BAILMENT 26 LEASE, CONDITIONAL SALE OR OTHERWISE. 27 (2) THE PHYSICAL INCORPORATION OF TANGIBLE PERSONAL PROPERTY 28 AS AN INGREDIENT OR CONSTITUENT INTO OTHER TANGIBLE PERSONAL 29 PROPERTY, WHICH IS TO BE SOLD IN THE REGULAR COURSE OF BUSINESS 30 OR THE PERFORMANCE OF THOSE SERVICES DESCRIBED IN SUBCLAUSES 19910H1321B2321 - 12 -
1 (2), (3) AND (4) OF CLAUSE (K) OF THIS SECTION UPON TANGIBLE 2 PERSONAL PROPERTY WHICH IS TO BE SOLD IN THE REGULAR COURSE OF 3 BUSINESS OR WHERE THE PERSON INCORPORATING SUCH PROPERTY HAS 4 UNDERTAKEN AT THE TIME OF PURCHASE TO CAUSE IT TO BE TRANSPORTED 5 IN INTERSTATE COMMERCE TO A DESTINATION OUTSIDE THIS 6 COMMONWEALTH. 7 (3) THE TERM "RESALE" SHALL ALSO INCLUDE TANGIBLE PERSONAL 8 PROPERTY PURCHASED OR HAVING A SITUS WITHIN THIS COMMONWEALTH 9 SOLELY FOR THE PURPOSE OF BEING PROCESSED, FABRICATED OR 10 MANUFACTURED INTO, ATTACHED TO OR INCORPORATED INTO TANGIBLE 11 PERSONAL PROPERTY AND THEREAFTER TRANSPORTED OUTSIDE THIS 12 COMMONWEALTH FOR USE EXCLUSIVELY OUTSIDE THIS COMMONWEALTH. 13 (4) THE TERM "RESALE" SHALL NOT INCLUDE ANY SALE OF "MALT OR 14 BREWED BEVERAGES" BY A "RETAIL DISPENSER," OR ANY SALE OF 15 "LIQUOR" OR "MALT OR BREWED BEVERAGES" BY A PERSON HOLDING A 16 "RETAIL LIQUOR LICENSE" WITHIN THE MEANING OF THE "LIQUOR CODE." 17 (5) THE PHYSICAL INCORPORATION OF TANGIBLE PERSONAL PROPERTY 18 AS AN INGREDIENT OR CONSTITUENT IN THE CONSTRUCTION OF 19 FOUNDATIONS FOR MACHINERY OR EQUIPMENT THE SALE OR USE OF WHICH 20 IS EXCLUDED FROM TAX UNDER THE PROVISIONS OF PARAGRAPHS (A), 21 (B), (C) AND (D) OF SUBCLAUSE (8) OF CLAUSE (K) AND 22 SUBPARAGRAPHS (I), (II), (III) AND (IV) OF PARAGRAPH (B) OF 23 SUBCLAUSE (4) OF CLAUSE (O) OF THIS SECTION, WHETHER SUCH 24 FOUNDATIONS AT THE TIME OF CONSTRUCTION OR TRANSFER CONSTITUTE 25 TANGIBLE PERSONAL PROPERTY OR REAL ESTATE. 26 * * * 27 (K) "SALE AT RETAIL." 28 (1) ANY TRANSFER, FOR A CONSIDERATION, OF THE OWNERSHIP, 29 CUSTODY OR POSSESSION OF TANGIBLE PERSONAL PROPERTY, INCLUDING 30 THE GRANT OF A LICENSE TO USE OR CONSUME WHETHER SUCH TRANSFER 19910H1321B2321 - 13 -
1 BE ABSOLUTE OR CONDITIONAL AND BY WHATSOEVER MEANS THE SAME
2 SHALL HAVE BEEN EFFECTED.
3 (2) THE RENDITION OF THE SERVICE OF PRINTING OR IMPRINTING
4 OF TANGIBLE PERSONAL PROPERTY FOR A CONSIDERATION FOR PERSONS
5 WHO FURNISH, EITHER DIRECTLY OR INDIRECTLY THE MATERIALS USED IN
6 THE PRINTING OR IMPRINTING.
7 (3) THE RENDITION FOR A CONSIDERATION OF THE SERVICE OF--
8 (I) WASHING, CLEANING, WAXING, POLISHING OR LUBRICATING OF
9 MOTOR VEHICLES OF ANOTHER, WHETHER OR NOT ANY TANGIBLE PERSONAL
10 PROPERTY IS TRANSFERRED IN CONJUNCTION THEREWITH; AND
11 (II) INSPECTING MOTOR VEHICLES PURSUANT TO THE MANDATORY
12 REQUIREMENTS OF "THE VEHICLE CODE."
13 (4) THE RENDITION FOR A CONSIDERATION OF THE SERVICE OF
14 REPAIRING, ALTERING, MENDING, PRESSING, FITTING, DYEING,
15 LAUNDERING, DRYCLEANING OR CLEANING TANGIBLE PERSONAL PROPERTY
16 OTHER THAN WEARING APPAREL OR SHOES, OR APPLYING OR INSTALLING
17 TANGIBLE PERSONAL PROPERTY AS A REPAIR OR REPLACEMENT PART OF
18 OTHER TANGIBLE PERSONAL PROPERTY EXCEPT WEARING APPAREL OR SHOES
19 FOR A CONSIDERATION, WHETHER OR NOT THE SERVICES ARE PERFORMED
20 DIRECTLY OR BY ANY MEANS OTHER THAN BY COIN-OPERATED SELF-
21 SERVICE LAUNDRY EQUIPMENT FOR WEARING APPAREL OR HOUSEHOLD GOODS
22 AND WHETHER OR NOT ANY TANGIBLE PERSONAL PROPERTY IS TRANSFERRED
23 IN CONJUNCTION THEREWITH, EXCEPT SUCH SERVICES AS ARE RENDERED
24 IN THE CONSTRUCTION, RECONSTRUCTION, REMODELING, REPAIR OR
25 MAINTENANCE OF REAL ESTATE: PROVIDED, HOWEVER, THAT THIS
26 SUBCLAUSE SHALL NOT BE DEEMED TO IMPOSE TAX UPON SUCH SERVICES
27 IN THE PREPARATION FOR SALE OF NEW ITEMS WHICH ARE EXCLUDED FROM
28 THE TAX UNDER CLAUSE (26) OF SECTION 204, OR UPON DIAPER
29 SERVICE.
30 [(5) ANY RETENTION AFTER MARCH 7, 1956, OF POSSESSION,
19910H1321B2321 - 14 -
1 CUSTODY OR A LICENSE TO USE OR CONSUME PURSUANT TO A RENTAL 2 CONTRACT OR OTHER LEASE ARRANGEMENT (OTHER THAN AS SECURITY). 3 (6) ANY RETENTION OF POSSESSION, CUSTODY OR A LICENSE TO USE 4 OR CONSUME TANGIBLE PERSONAL PROPERTY OR ANY FURTHER OBTAINING 5 OF SERVICES DESCRIBED IN SUBCLAUSES (2), (3) AND (4) OF THIS 6 CLAUSE AFTER APRIL 15, 1959, PURSUANT TO A RENTAL OR SERVICE 7 CONTRACT OR OTHER ARRANGEMENT (OTHER THAN AS SECURITY). 8 (7) ANY RETENTION OF POSSESSION, CUSTODY OR A LICENSE TO USE 9 OR CONSUME TANGIBLE PERSONAL PROPERTY OR ANY FURTHER OBTAINING 10 OF SERVICES DESCRIBED IN SUBCLAUSES (2), (3) AND (4) OF THIS 11 CLAUSE AFTER AUGUST 20, 1959, PURSUANT TO A RENTAL OR SERVICE 12 CONTRACT OR OTHER ARRANGEMENT (OTHER THAN AS SECURITY).] 13 (8) ANY RETENTION OF POSSESSION, CUSTODY OR A LICENSE TO USE 14 OR CONSUME TANGIBLE PERSONAL PROPERTY OR ANY FURTHER OBTAINING 15 OF SERVICES DESCRIBED IN SUBCLAUSES (2), (3) AND (4) OF THIS 16 CLAUSE PURSUANT TO A RENTAL OR SERVICE CONTRACT OR OTHER 17 ARRANGEMENT (OTHER THAN AS SECURITY). 18 THE TERM "SALE AT RETAIL" SHALL NOT INCLUDE (I) ANY SUCH 19 TRANSFER OF TANGIBLE PERSONAL PROPERTY OR RENDITION OF SERVICES 20 DESCRIBED IN SUBCLAUSES (2), (3) AND (4) OF THIS CLAUSE FOR THE 21 PURPOSE OF RESALE, OR (II) SUCH RENDITION OF SERVICES DESCRIBED 22 IN SUBCLAUSES (2), (3) AND (4) OF THIS CLAUSE OR THE TRANSFER OF 23 TANGIBLE PERSONAL PROPERTY INCLUDING, BUT NOT LIMITED TO, 24 MACHINERY AND EQUIPMENT AND PARTS THEREFOR AND SUPPLIES TO BE 25 USED OR CONSUMED BY THE PURCHASER DIRECTLY IN [ANY OF] THE 26 OPERATIONS OF-- 27 (A) THE MANUFACTURE OF TANGIBLE PERSONAL PROPERTY; 28 (B) FARMING, DAIRYING, AGRICULTURE, HORTICULTURE OR 29 FLORICULTURE WHEN ENGAGED IN AS A BUSINESS ENTERPRISE. THE TERM 30 "FARMING" SHALL INCLUDE THE PROPAGATION AND RAISING OF RANCH 19910H1321B2321 - 15 -
1 RAISED FUR-BEARING ANIMALS AND THE PROPAGATION OF GAME BIRDS FOR 2 COMMERCIAL PURPOSES BY HOLDERS OF PROPAGATION PERMITS ISSUED 3 UNDER [THE ACT OF JUNE 3, 1937 (P.L.1225), KNOWN AS "THE GAME 4 LAW"] 34 PA.C.S. (RELATING TO GAME); 5 (C) THE PRODUCING, DELIVERING OR RENDERING OF A PUBLIC 6 UTILITY SERVICE, OR IN CONSTRUCTING, RECONSTRUCTING, REMODELING, 7 REPAIRING OR MAINTAINING THE FACILITIES WHICH ARE DIRECTLY USED 8 IN PRODUCING, DELIVERING OR RENDERING SUCH SERVICE[;]. THIS 9 EXCLUSION SHALL NOT INCLUDE ANY TANGIBLE PERSONAL PROPERTY OR 10 SERVICES USED OR INSTALLED IN THE CONSTRUCTING, RECONSTRUCTING, 11 REMODELING, REPAIRING OR MAINTAINING OF ROADS, SIDEWALKS, 12 BUILDINGS OR ANY SIMILAR STRUCTURES NOTWITHSTANDING THEIR USE; 13 (D) [THE PROCESSING OF PERSONAL PROPERTY] PROCESSING AS 14 DEFINED IN CLAUSE (D) OF THIS SECTION[.]; 15 (E) THE EXCLUSIONS PROVIDED IN PARAGRAPHS (A), (B), (C) AND 16 (D) SHALL BE AVAILABLE ONLY TO PERSONS ACTUALLY ENGAGED IN THE 17 ACTIVITIES ENUMERATED IN PARAGRAPHS (A), (B), (C) AND (D). THE 18 EXCLUSIONS ENUMERATED IN PARAGRAPHS (A), (B), (C) AND (D) SHALL 19 NOT BE AVAILABLE TO PERSONS PERFORMING ACTIVITIES ON BEHALF OF 20 THOSE ENGAGED IN THE ACTIVITIES ENUMERATED IN PARAGRAPHS (A), 21 (B), (C) AND (D). 22 THE EXCLUSIONS PROVIDED IN PARAGRAPHS (A), (B), (C) AND (D) 23 SHALL NOT APPLY TO ANY VEHICLE REQUIRED TO BE REGISTERED UNDER 24 THE VEHICLE CODE, EXCEPT THOSE VEHICLES USED DIRECTLY BY A 25 PUBLIC UTILITY ENGAGED IN BUSINESS AS A COMMON CARRIER; TO 26 MAINTENANCE FACILITIES; OR TO MATERIALS, SUPPLIES OR EQUIPMENT 27 TO BE USED OR CONSUMED IN THE CONSTRUCTION, RECONSTRUCTION, 28 REMODELING, REPAIR OR MAINTENANCE OF REAL ESTATE OTHER THAN 29 DIRECTLY USED MACHINERY, EQUIPMENT, PARTS OR FOUNDATIONS 30 THEREFOR THAT MAY BE AFFIXED TO SUCH REAL ESTATE. 19910H1321B2321 - 16 -
1 THE EXCLUSIONS PROVIDED IN PARAGRAPHS (A), (B), (C) AND (D) 2 SHALL NOT APPLY TO TANGIBLE PERSONAL PROPERTY OR SERVICES TO BE 3 USED OR CONSUMED IN MANAGERIAL SALES OR OTHER NONOPERATIONAL 4 ACTIVITIES, NOR TO THE PURCHASE OR USE OF TANGIBLE PERSONAL 5 PROPERTY OR SERVICES BY ANY PERSON OTHER THAN THE PERSON 6 DIRECTLY USING THE SAME IN THE OPERATIONS DESCRIBED IN 7 PARAGRAPHS (A), (B), (C) AND (D) HEREIN. 8 THE EXCLUSION PROVIDED IN PARAGRAPH (C) SHALL NOT APPLY TO 9 (I) CONSTRUCTION MATERIALS, SUPPLIES OR EQUIPMENT USED [TO 10 CONSTRUCT, RECONSTRUCT, REMODEL, REPAIR OR MAINTAIN] OR 11 INSTALLED IN THE CONSTRUCTION, RECONSTRUCTION, REMODELING, 12 REPAIR OR MAINTENANCE OF FACILITIES NOT USED DIRECTLY BY THE 13 PURCHASER IN THE PRODUCTION, DELIVERING OR RENDITION OF PUBLIC 14 UTILITY SERVICE[,] OR (II) [CONSTRUCTION MATERIALS, SUPPLIES OR 15 EQUIPMENT USED TO CONSTRUCT, RECONSTRUCT, REMODEL, REPAIR OR 16 MAINTAIN A BUILDING, ROAD OR SIMILAR STRUCTURE, OR (III)] TOOLS 17 AND EQUIPMENT USED BUT NOT INSTALLED IN THE MAINTENANCE OF 18 FACILITIES USED DIRECTLY IN THE PRODUCTION, DELIVERING OR 19 RENDITION OF A PUBLIC UTILITY SERVICE. 20 THE EXCLUSIONS PROVIDED IN PARAGRAPHS (A), (B), (C) AND (D) 21 SHALL NOT APPLY TO THE SERVICES ENUMERATED IN CLAUSES (K)(11) 22 THROUGH (23), (W) THROUGH (VV) OF THIS SECTION. 23 (9) WHERE TANGIBLE PERSONAL PROPERTY OR SERVICES ARE 24 UTILIZED FOR PURPOSES CONSTITUTING A "SALE AT RETAIL" AND FOR 25 PURPOSES EXCLUDED FROM THE DEFINITION OF "SALE AT RETAIL," IT 26 SHALL BE PRESUMED THAT SUCH TANGIBLE PERSONAL PROPERTY OR 27 SERVICES ARE UTILIZED FOR PURPOSES CONSTITUTING A "SALE AT 28 RETAIL" AND SUBJECT TO TAX UNLESS THE USER THEREOF PROVES TO THE 29 DEPARTMENT THAT THE PREDOMINANT PURPOSES FOR WHICH SUCH TANGIBLE 30 PERSONAL PROPERTY OR SERVICES ARE UTILIZED DO NOT CONSTITUTE A 19910H1321B2321 - 17 -
1 "SALE AT RETAIL." 2 (10) THE TERM "SALE AT RETAIL" WITH RESPECT TO "LIQUOR" AND 3 "MALT OR BREWED BEVERAGES" SHALL INCLUDE THE SALE OF "LIQUOR" BY 4 ANY "PENNSYLVANIA LIQUOR STORE" TO ANY PERSON FOR ANY PURPOSE, 5 AND THE SALE OF "MALT OR BREWED BEVERAGES" BY A "MANUFACTURER OF 6 MALT OR BREWED BEVERAGES," "DISTRIBUTOR" OR "IMPORTING 7 DISTRIBUTOR" TO ANY PERSON FOR ANY PURPOSE, EXCEPT SALES BY A 8 "MANUFACTURER OF MALT OR BREWED BEVERAGES" TO A "DISTRIBUTOR" OR 9 "IMPORTING DISTRIBUTOR" OR SALES BY AN "IMPORTING DISTRIBUTOR" 10 TO A "DISTRIBUTOR" WITHIN THE MEANING OF THE "LIQUOR CODE." THE 11 TERM "SALE AT RETAIL" SHALL NOT INCLUDE ANY SALE OF "MALT OR 12 BREWED BEVERAGES" BY A "RETAIL DISPENSER" OR ANY SALE OF 13 "LIQUOR" OR "MALT OR BREWED BEVERAGES" BY A PERSON HOLDING A 14 "RETAIL LIQUOR LICENSE" WITHIN THE MEANING OF AND PURSUANT TO 15 THE PROVISIONS OF THE "LIQUOR CODE," BUT SHALL INCLUDE ANY SALE 16 OF "LIQUOR" OR "MALT OR BREWED BEVERAGES" OTHER THAN PURSUANT TO 17 THE PROVISIONS OF THE "LIQUOR CODE." 18 (11) THE RENDITION FOR A CONSIDERATION OF THE SERVICE OF 19 RESEARCH, OTHER THAN RESEARCH AS DEFINED IN CLAUSE (C)(5) OF 20 THIS SECTION. 21 (12) THE RENDITION FOR A CONSIDERATION OF MANAGEMENT 22 SERVICES, MANAGEMENT CONSULTING SERVICES, PUBLIC RELATIONS 23 SERVICES AND OTHER BUSINESS CONSULTING SERVICES. 24 (13) THE RENDITION FOR A CONSIDERATION OF ADJUSTMENT AND 25 COLLECTION SERVICES AND CREDIT REPORTING SERVICES. 26 (14) THE RENDITION FOR A CONSIDERATION OF SECRETARIAL AND 27 EDITING SERVICES. 28 (15) THE RENDITION FOR A CONSIDERATION OF DISINFECTING AND 29 PEST CONTROL SERVICES, AND OF BUILDING MAINTENANCE AND CLEANING 30 SERVICES. 19910H1321B2321 - 18 -
1 (16) THE RENDITION FOR A CONSIDERATION OF EMPLOYMENT AGENCY 2 SERVICES, HELP SUPPLY SERVICES OR OTHER PERSONNEL SUPPLY 3 SERVICES. 4 (17) THE RENDITION FOR A CONSIDERATION OF COMPUTER 5 PROGRAMMING AND OTHER COMPUTER-RELATED SERVICES, INCLUDING 6 PROVIDING COMPUTER INTEGRATED SYSTEMS DESIGN, COMPUTER 7 PROCESSING AND DATA PREPARATION AND PROCESSING, INFORMATION 8 RETRIEVAL SERVICES, COMPUTER FACILITIES MANAGEMENT SERVICES, 9 COMPUTER MAINTENANCE AND REPAIR. 10 (18) THE RENDITION FOR A CONSIDERATION OF DETECTIVE AND 11 OTHER PROTECTIVE SERVICES. 12 (19) THE RENDITION FOR A CONSIDERATION OF LEGAL SERVICES. 13 (20) THE RENDITION FOR A CONSIDERATION OF ACCOUNTING, 14 AUDITING AND BOOKKEEPING SERVICES. 15 (21) THE RENDITION FOR A CONSIDERATION OF PROFESSIONAL 16 ENGINEERING, ARCHITECTURAL AND SURVEYING SERVICES. 17 (22) THE RENDITION FOR A CONSIDERATION OF LAWN CARE 18 SERVICES. 19 (23) THE RENDITION FOR A CONSIDERATION OF PROVIDING STORAGE 20 SPACE. 21 (L) "STORAGE." ANY KEEPING OR RETENTION OF TANGIBLE 22 PERSONAL PROPERTY WITHIN THIS COMMONWEALTH FOR ANY PURPOSE 23 INCLUDING THE INTERIM KEEPING, RETAINING OR EXERCISING ANY RIGHT 24 OR POWER OVER SUCH TANGIBLE PERSONAL PROPERTY. THE TERM EXCLUDES 25 STORAGE SPACE. 26 (M) "TANGIBLE PERSONAL PROPERTY." CORPOREAL PERSONAL 27 PROPERTY INCLUDING, BUT NOT LIMITED TO, GOODS, WARES, 28 MERCHANDISE, STEAM AND NATURAL AND MANUFACTURED AND BOTTLED GAS 29 FOR NON-RESIDENTIAL USE, ELECTRICITY FOR NON-RESIDENTIAL USE, 30 [INTRASTATE TELEPHONE AND TELEGRAPH SERVICE FOR NON-RESIDENTIAL 19910H1321B2321 - 19 -
1 USE, SPIRITUOUS OR VINOUS LIQUOR AND MALT OR BREWED BEVERAGES 2 AND SOFT DRINKS; BUT THE TERM SHALL NOT INCLUDE HOUSEHOLD 3 SUPPLIES PURCHASED AT RETAIL ESTABLISHMENTS FOR RESIDENTIAL 4 CONSUMPTION, INCLUDING BUT NOT LIMITED TO, SOAPS, DETERGENTS, 5 CLEANING AND POLISHING PREPARATIONS, PAPER GOODS, HOUSEHOLD 6 WRAPPING SUPPLIES AND ITEMS OF SIMILAR NATURE, OR SANITARY 7 NAPKINS, TAMPONS OR SIMILAR ITEMS USED FOR FEMININE HYGIENE. NOR 8 SHALL SAID TERM INCLUDE STEAM, NATURAL AND MANUFACTURED AND 9 BOTTLED GAS, FUEL OIL, ELECTRICITY OR INTRASTATE TELEPHONE OR 10 TELEGRAPH SERVICE WHEN PURCHASED DIRECTLY BY THE USER THEREOF 11 SOLELY FOR HIS OWN RESIDENTIAL USE.] SPIRITUOUS OR VINOUS LIQUOR 12 AND MALT OR BREWED BEVERAGES AND SOFT DRINKS, INTERSTATE 13 TELEPHONE, TELEGRAPH AND TELECOMMUNICATIONS SERVICE ORIGINATING 14 OR TERMINATING IN THE COMMONWEALTH AND CHARGED TO A SERVICE 15 ADDRESS IN THIS COMMONWEALTH, INTRASTATE TELEPHONE, TELEGRAPH 16 AND TELECOMMUNICATIONS SERVICE WITH THE EXCEPTION OF SUBSCRIBER 17 LINE CHARGES AND BASIC LOCAL TELEPHONE SERVICE FOR RESIDENTIAL 18 USE, PROVIDED FURTHER, THE SERVICE ADDRESS OF ANY INTRASTATE 19 TELEPHONE, TELEGRAPH, OR TELECOMMUNICATIONS IS DEEMED TO BE 20 WITHIN THIS STATE, REGARDLESS OF HOW OR WHERE BILLED OR PAID. IN 21 THE CASE OF ANY SUCH INTERSTATE OR INTRASTATE TELEPHONE, 22 TELEGRAPH AND TELECOMMUNICATIONS SERVICE, ANY CHARGE PAID 23 THROUGH A CREDIT OR PAYMENT MECHANISM WHICH DOES NOT RELATE TO A 24 SERVICE ADDRESS, SUCH AS A BANK, TRAVEL, CREDIT OR DEBIT CARD, 25 IS DEEMED ATTRIBUTABLE TO THE ADDRESS OF ORIGINATION OF THE 26 TELEPHONE, TELEGRAPH, OR TELECOMMUNICATIONS. 27 * * * 28 (O) "USE." 29 (1) THE EXERCISE OF ANY RIGHT OR POWER INCIDENTAL TO THE 30 OWNERSHIP, CUSTODY OR POSSESSION OF TANGIBLE PERSONAL PROPERTY 19910H1321B2321 - 20 -
1 AND SHALL INCLUDE, BUT NOT BE LIMITED TO TRANSPORTATION, STORAGE
2 OR CONSUMPTION.
3 (2) THE OBTAINING BY A PURCHASER OF THE SERVICE OF PRINTING
4 OR IMPRINTING OF TANGIBLE PERSONAL PROPERTY WHEN SUCH PURCHASER
5 FURNISHES, EITHER DIRECTLY OR INDIRECTLY, THE ARTICLES USED IN
6 THE PRINTING OR IMPRINTING.
7 (3) THE OBTAINING BY A PURCHASER OF THE SERVICES OF (I)
8 WASHING, CLEANING, WAXING, POLISHING OR LUBRICATING OF MOTOR
9 VEHICLES WHETHER OR NOT ANY TANGIBLE PERSONAL PROPERTY IS
10 TRANSFERRED TO THE PURCHASER IN CONJUNCTION WITH SUCH SERVICES,
11 AND (II) INSPECTING MOTOR VEHICLES PURSUANT TO THE MANDATORY
12 REQUIREMENTS OF "THE VEHICLE CODE."
13 (4) THE OBTAINING BY A PURCHASER OF THE SERVICE OF
14 REPAIRING, ALTERING, MENDING, PRESSING, FITTING, DYEING,
15 LAUNDERING, DRYCLEANING OR CLEANING TANGIBLE PERSONAL PROPERTY
16 OTHER THAN WEARING APPAREL OR SHOES OR APPLYING OR INSTALLING
17 TANGIBLE PERSONAL PROPERTY AS A REPAIR OR REPLACEMENT PART OF
18 OTHER TANGIBLE PERSONAL PROPERTY OTHER THAN WEARING APPAREL OR
19 SHOES, WHETHER OR NOT THE SERVICES ARE PERFORMED DIRECTLY OR BY
20 ANY MEANS OTHER THAN BY MEANS OF COIN-OPERATED SELF-SERVICE
21 LAUNDRY EQUIPMENT FOR WEARING APPAREL OR HOUSEHOLD GOODS, AND
22 WHETHER OR NOT ANY TANGIBLE PERSONAL PROPERTY IS TRANSFERRED TO
23 THE PURCHASER IN CONJUNCTION THEREWITH, EXCEPT SUCH SERVICES AS
24 ARE OBTAINED IN THE CONSTRUCTION, RECONSTRUCTION, REMODELING,
25 REPAIR OR MAINTENANCE OF REAL ESTATE: PROVIDED, HOWEVER, THAT
26 THIS SUBCLAUSE SHALL NOT BE DEEMED TO IMPOSE TAX UPON SUCH
27 SERVICES IN THE PREPARATION FOR SALE OF NEW ITEMS WHICH ARE
28 EXCLUDED FROM THE TAX UNDER CLAUSE (26) OF SECTION 204, OR UPON
29 DIAPER SERVICE: AND PROVIDED FURTHER, THAT THE TERM "USE" SHALL
30 NOT INCLUDE--
19910H1321B2321 - 21 -
1 (A) ANY TANGIBLE PERSONAL PROPERTY ACQUIRED AND KEPT, 2 RETAINED OR OVER WHICH POWER IS EXERCISED WITHIN THIS 3 COMMONWEALTH ON WHICH THE TAXING OF THE STORAGE, USE OR OTHER 4 CONSUMPTION THEREOF IS EXPRESSLY PROHIBITED BY THE CONSTITUTION 5 OF THE UNITED STATES OR WHICH IS EXCLUDED FROM TAX UNDER OTHER 6 PROVISIONS OF THIS ARTICLE. 7 (B) THE USE OR CONSUMPTION OF TANGIBLE PERSONAL PROPERTY, 8 INCLUDING BUT NOT LIMITED TO MACHINERY AND EQUIPMENT AND PARTS 9 THEREFOR, AND SUPPLIES OR THE OBTAINING OF THE SERVICES 10 DESCRIBED IN SUBCLAUSES (2), (3) AND (4) OF THIS CLAUSE DIRECTLY 11 IN [ANY OF] THE OPERATIONS OF-- 12 (I) THE MANUFACTURE OF TANGIBLE PERSONAL PROPERTY; 13 (II) FARMING, DAIRYING, AGRICULTURE, HORTICULTURE OR 14 FLORICULTURE WHEN ENGAGED IN AS A BUSINESS ENTERPRISE[;]. THE 15 TERM "FARMING" SHALL INCLUDE THE PROPAGATION AND RAISING OF 16 RANCH RAISED FURBEARING ANIMALS AND THE PROPAGATION OF GAME 17 BIRDS FOR COMMERCIAL PURPOSES BY HOLDERS OF PROPAGATION PERMITS 18 ISSUED UNDER 34 PA.C.S. (RELATING TO GAME); 19 (III) THE PRODUCING, DELIVERING OR RENDERING OF A PUBLIC 20 UTILITY SERVICE, OR IN CONSTRUCTING, RECONSTRUCTING, REMODELING, 21 REPAIRING OR MAINTAINING THE FACILITIES WHICH ARE DIRECTLY USED 22 IN PRODUCING, DELIVERING OR RENDERING SUCH SERVICE[;]. THIS 23 EXCLUSION SHALL NOT INCLUDE ANY TANGIBLE PERSONAL PROPERTY OR 24 SERVICES USED OR INSTALLED IN THE CONSTRUCTING, RECONSTRUCTING, 25 REMODELING, REPAIRING OR MAINTAINING OF ROADS, SIDEWALKS, 26 BUILDINGS OR ANY SIMILAR STRUCTURES NOTWITHSTANDING THEIR USE; 27 (IV) [THE PROCESSING OF PERSONAL PROPERTY] PROCESSING AS 28 DEFINED IN SUBCLAUSE (D) OF THIS SECTION. 29 (V) THE EXCLUSIONS PROVIDED IN SUBPARAGRAPHS (I), (II), 30 (III) AND (IV) SHALL BE AVAILABLE ONLY TO PERSONS ACTUALLY 19910H1321B2321 - 22 -
1 ENGAGED IN THE ACTIVITIES ENUMERATED IN SUBPARAGRAPHS (I) (II), 2 (III) AND (IV). THE EXCLUSIONS ENUMERATED IN SUBPARAGRAPHS (I), 3 (II), (III) AND (IV) SHALL NOT BE AVAILABLE TO PERSONS 4 PERFORMING ACTIVITIES ON BEHALF OF THOSE ENGAGED IN THE 5 ACTIVITIES ENUMERATED IN SUBPARAGRAPHS (I), (II), (III) AND 6 (IV). 7 THE EXCLUSIONS PROVIDED IN SUBPARAGRAPHS (I), (II), (III) AND 8 (IV) SHALL NOT APPLY TO ANY VEHICLE REQUIRED TO BE REGISTERED 9 UNDER THE VEHICLE CODE EXCEPT THOSE VEHICLES DIRECTLY USED BY A 10 PUBLIC UTILITY ENGAGED IN THE BUSINESS AS A COMMON CARRIER; TO 11 MAINTENANCE FACILITIES; OR TO MATERIALS, SUPPLIES OR EQUIPMENT 12 TO BE USED OR CONSUMED IN THE CONSTRUCTION, RECONSTRUCTION, 13 REMODELING, REPAIR OR MAINTENANCE OF REAL ESTATE OTHER THAN 14 DIRECTLY USED MACHINERY, EQUIPMENT, PARTS OR FOUNDATIONS 15 THEREFOR THAT MAY BE AFFIXED TO SUCH REAL ESTATE. THE EXCLUSIONS 16 PROVIDED IN SUBPARAGRAPHS (I), (II), (III) AND (IV) SHALL NOT 17 APPLY TO TANGIBLE PERSONAL PROPERTY OR SERVICES TO BE USED OR 18 CONSUMED IN MANAGERIAL SALES OR OTHER NONOPERATIONAL ACTIVITIES, 19 NOR TO THE PURCHASE OR USE OF TANGIBLE PERSONAL PROPERTY OR 20 SERVICES BY ANY PERSON OTHER THAN THE PERSON DIRECTLY USING THE 21 SAME IN THE OPERATIONS DESCRIBED IN SUBPARAGRAPHS (I), (II), 22 (III) AND (IV). 23 THE EXCLUSION PROVIDED IN SUBPARAGRAPH (III) SHALL NOT APPLY 24 TO (A) CONSTRUCTION MATERIALS, SUPPLIES OR EQUIPMENT USED [TO 25 CONSTRUCT, RECONSTRUCT, REMODEL, REPAIR OR MAINTAIN] OR 26 INSTALLED IN THE CONSTRUCTION, RECONSTRUCTION, REMODELING, 27 REPAIR OR MAINTENANCE OF FACILITIES NOT USED DIRECTLY BY THE 28 PURCHASER IN THE PRODUCTION, DELIVERING OR RENDITION OF PUBLIC 29 UTILITY SERVICE[,] OR (B) [CONSTRUCTION MATERIALS, SUPPLIES OR 30 EQUIPMENT USED TO CONSTRUCT, RECONSTRUCT, REMODEL, REPAIR OR 19910H1321B2321 - 23 -
1 MAINTAIN A BUILDING, ROAD OR SIMILAR STRUCTURE, OR (C)] TOOLS 2 AND EQUIPMENT USED BUT NOT INSTALLED IN THE MAINTENANCE OF 3 FACILITIES USED DIRECTLY IN THE PRODUCTION, DELIVERING OR 4 RENDITION OF A PUBLIC UTILITY SERVICE. 5 THE EXCLUSION PROVIDED IN SUBPARAGRAPHS (I), (II), (III) AND 6 (IV) SHALL NOT APPLY TO THE SERVICES ENUMERATED IN CLAUSES 7 (O)(9) THROUGH (20), (W) THROUGH (UU) OF THIS SECTION. 8 (5) WHERE TANGIBLE PERSONAL PROPERTY OR SERVICES ARE 9 UTILIZED FOR PURPOSES CONSTITUTING A "USE," AS HEREIN DEFINED, 10 AND FOR PURPOSES EXCLUDED FROM THE DEFINITION OF "USE," IT SHALL 11 BE PRESUMED THAT SUCH PROPERTY OR SERVICES ARE UTILIZED FOR 12 PURPOSES CONSTITUTING A "SALE AT RETAIL" AND SUBJECT TO TAX 13 UNLESS THE USER THEREOF PROVES TO THE DEPARTMENT THAT THE 14 PREDOMINANT PURPOSES FOR WHICH SUCH PROPERTY OR SERVICES ARE 15 UTILIZED DO NOT CONSTITUTE A "SALE AT RETAIL." 16 (6) THE TERM "USE" WITH RESPECT TO "LIQUOR" AND "MALT OR 17 BREWED BEVERAGES" SHALL INCLUDE THE PURCHASE OF "LIQUOR" FROM 18 ANY "PENNSYLVANIA LIQUOR STORE" BY ANY PERSON FOR ANY PURPOSE 19 AND THE PURCHASE OF "MALT OR BREWED BEVERAGES" FROM A 20 "MANUFACTURER OF MALT OR BREWED BEVERAGES," "DISTRIBUTOR" OR 21 "IMPORTING DISTRIBUTOR" BY ANY PERSON FOR ANY PURPOSE, EXCEPT 22 PURCHASES FROM A "MANUFACTURER OF MALT OR BREWED BEVERAGES" BY A 23 "DISTRIBUTOR" OR "IMPORTING DISTRIBUTOR," OR PURCHASES FROM AN 24 "IMPORTING DISTRIBUTOR" BY A "DISTRIBUTOR" WITHIN THE MEANING OF 25 THE "LIQUOR CODE." THE TERM "USE" SHALL NOT INCLUDE ANY PURCHASE 26 OF "MALT OR BREWED BEVERAGES" FROM A "RETAIL DISPENSER" OR ANY 27 PURCHASE OF "LIQUOR" OR "MALT OR BREWED BEVERAGES" FROM A PERSON 28 HOLDING A "RETAIL LIQUOR LICENSE" WITHIN THE MEANING OF AND 29 PURSUANT TO THE PROVISIONS OF THE "LIQUOR CODE," BUT SHALL 30 INCLUDE THE EXERCISE OF ANY RIGHT OR POWER INCIDENTAL TO THE 19910H1321B2321 - 24 -
1 OWNERSHIP, CUSTODY OR POSSESSION OF "LIQUOR" OR "MALT OR BREWED 2 BEVERAGES" OBTAINED BY THE PERSON EXERCISING SUCH RIGHT OR POWER 3 IN ANY MANNER OTHER THAN PURSUANT TO THE PROVISIONS OF THE 4 "LIQUOR CODE." 5 (7) THE USE OF TANGIBLE PERSONAL PROPERTY PURCHASED AT 6 RETAIL UPON WHICH THE SERVICES DESCRIBED IN SUBCLAUSES (2), (3) 7 AND (4) OF THIS CLAUSE HAVE BEEN PERFORMED SHALL BE DEEMED TO BE 8 A USE OF SAID SERVICES BY THE PERSON USING SAID PROPERTY. 9 (8) THE TERM "USE" SHALL NOT INCLUDE THE PROVIDING OF A 10 MOTOR VEHICLE TO A NONPROFIT PRIVATE OR PUBLIC SCHOOL TO BE USED 11 BY SUCH A SCHOOL FOR THE SOLE PURPOSE OF DRIVER EDUCATION. 12 (9) THE OBTAINING BY THE PURCHASER OF THE SERVICE OF 13 RESEARCH, OTHER THAN RESEARCH AS DEFINED IN CLAUSE (C)(5) OF 14 THIS SECTION. 15 (10) THE OBTAINING BY THE PURCHASER OF MANAGEMENT SERVICES, 16 MANAGEMENT CONSULTING SERVICES, PUBLIC RELATIONS SERVICES AND 17 OTHER BUSINESS CONSULTING SERVICES. 18 (11) THE OBTAINING BY THE PURCHASER OF ADJUSTMENT AND 19 COLLECTION SERVICES AND CREDIT REPORTING SERVICES. 20 (12) THE OBTAINING BY THE PURCHASER OF SECRETARIAL AND 21 EDITING SERVICES. 22 (13) THE OBTAINING BY THE PURCHASER OF DISINFECTING AND PEST 23 CONTROL SERVICES, AND OF BUILDING MAINTENANCE AND CLEANING 24 SERVICES. 25 (14) THE OBTAINING BY THE PURCHASER OF EMPLOYMENT AGENCY 26 SERVICES, HELP SUPPLY SERVICES OR OTHER PERSONNEL SUPPLY 27 SERVICES. 28 (15) THE OBTAINING BY THE PURCHASER OF COMPUTER PROGRAMMING 29 AND OTHER COMPUTER RELATED SERVICES, INCLUDING PROVIDING 30 COMPUTER INTEGRATED SYSTEMS DESIGN, COMPUTER PROCESSING AND DATA 19910H1321B2321 - 25 -
1 PREPARATION AND PROCESSING, INFORMATION RETRIEVAL SERVICES, 2 COMPUTER FACILITIES MANAGEMENT SERVICES, COMPUTER MAINTENANCE 3 AND REPAIR. 4 (16) THE OBTAINING BY THE PURCHASER OF DETECTIVE AND OTHER 5 PROTECTIVE SERVICES. 6 (17) THE OBTAINING BY THE PURCHASER OF LEGAL SERVICES. 7 (18) THE OBTAINING BY THE PURCHASER OF ACCOUNTING, AUDITING 8 AND BOOKKEEPING SERVICES. 9 (19) THE OBTAINING BY THE PURCHASER OF PROFESSIONAL 10 ENGINEERING, ARCHITECTURAL AND SURVEYING SERVICES. 11 (20) THE OBTAINING BY THE PURCHASER OF LAWN SERVICE. 12 * * * 13 (T) "TRANSIENT VENDOR." 14 (1) ANY PERSON WHO-- 15 (I) BRINGS INTO THE COMMONWEALTH, BY AUTOMOBILE, TRUCK OR 16 OTHER MEANS OF TRANSPORTATION, OR PURCHASES IN THE COMMONWEALTH 17 TANGIBLE PERSONAL PROPERTY THE SALE OR USE OF WHICH IS SUBJECT 18 TO THE TAX IMPOSED BY THIS ARTICLE OR COMES INTO THE 19 COMMONWEALTH TO PERFORM SERVICES THE SALE OR USE OF WHICH IS 20 SUBJECT TO THE TAX IMPOSED BY THIS ARTICLE; 21 (II) OFFERS OR INTENDS TO OFFER SUCH TANGIBLE PERSONAL 22 PROPERTY OR SERVICES FOR SALE AT RETAIL WITHIN THE COMMONWEALTH; 23 AND 24 (III) DOES NOT MAINTAIN AN ESTABLISHED OFFICE, DISTRIBUTION 25 HOUSE, SALESHOUSE, WAREHOUSE, SERVICE ENTERPRISE, RESIDENCE FROM 26 WHICH BUSINESS IS CONDUCTED OR OTHER PLACE OF BUSINESS WITHIN 27 THE COMMONWEALTH. 28 (2) THE TERM SHALL NOT INCLUDE A PERSON WHO DELIVERS 29 TANGIBLE PERSONAL PROPERTY WITHIN THE COMMONWEALTH PURSUANT TO 30 ORDERS FOR SUCH PROPERTY WHICH WERE SOLICITED OR PLACED BY MAIL 19910H1321B2321 - 26 -
1 OR OTHER MEANS. 2 (3) THE TERM SHALL NOT INCLUDE A PERSON WHO HANDCRAFTS ITEMS 3 FOR SALE AT SPECIAL EVENTS, INCLUDING, BUT NOT LIMITED TO, 4 FAIRS, CARNIVALS, ART AND CRAFT SHOWS AND OTHER FESTIVALS AND 5 CELEBRATIONS WITHIN THIS COMMONWEALTH. 6 * * * 7 (W) "MANAGEMENT SERVICES." GENERAL OR SPECIALIZED 8 MANAGEMENT SERVICES ON A DAY TO DAY BASIS ON A CONTRACT, FEE OR 9 OTHER BASIS, INCLUDING, BUT NOT LIMITED TO, ADMINISTRATIVE 10 MANAGEMENT SERVICES, BUSINESS MANAGEMENT SERVICES, CONSTRUCTION 11 MANAGEMENT, MOTEL MANAGEMENT SERVICES AND OFFICE MANAGEMENT 12 SERVICES. 13 (X) "MANAGEMENT CONSULTING SERVICES." THE FURNISHING OF 14 ADVICE, ANALYSIS OR ASSISTANCE IN THE MANAGEMENT OF ENTITIES, 15 INCLUDING, BUT NOT LIMITED TO, STRATEGIC AND ORGANIZATIONAL 16 PLANNING, FINANCIAL PLANNING AND BUDGETING, MARKETING OBJECTIVES 17 AND POLICIES, COMPUTER AND INFORMATION SYSTEMS PLANNING, 18 EVALUATION AND SELECTION, HUMAN RESOURCES POLICIES AND PRACTICES 19 PLANNING, PRODUCTION SCHEDULING AND CONTROL PLANNING. 20 (Y) "PUBLIC RELATIONS SERVICES." THE PREPARATION OR 21 DISSEMINATION OF MATERIALS, WRITTEN OR SPOKEN AND ANY OTHER 22 ACTIVITIES INCLUDING LOBBYING WHICH ARE DESIGNED TO INFLUENCE 23 THE GENERAL PUBLIC OR OTHER GROUPS IN PROMOTING THE INTERESTS OF 24 THEIR CLIENTS. THE TERM SHALL NOT INCLUDE THE PURCHASE OF 25 ADVERTISING SPACE OR TIME FOR PRESENTATION OF A PROMOTIONAL 26 MESSAGE. 27 (Z) "ADJUSTMENT AND COLLECTION SERVICES." COLLECTING OR 28 ADJUSTING ACCOUNTS RECEIVABLE INCLUDING, BUT NOT LIMITED TO, 29 SERVICES OF THE TYPE PROVIDED BY ADJUSTMENT BUREAUS OR 30 COLLECTION AGENCIES. SUCH SERVICES DO NOT INCLUDE COLLECTING 19910H1321B2321 - 27 -
1 INSURANCE RECEIVABLES, OR PROVIDING CREDIT CARD SERVICE WITH 2 COLLECTION BY A CENTRAL AGENCY, OR PROVIDING DEBT COUNSELING OR 3 ADJUSTMENT SERVICES TO INDIVIDUALS. 4 (AA) "CREDIT REPORTING SERVICES." PROVIDING MERCANTILE AND 5 CONSUMER CREDIT REPORTING SERVICES INCLUDING, BUT NOT LIMITED 6 TO, SERVICES OF THE TYPE PROVIDED BY CONSUMER AND MERCANTILE 7 CREDIT REPORTING BUREAUS, CREDIT BUREAUS AND AGENCIES, CREDIT 8 CLEARINGHOUSES AND CREDIT INVESTIGATION SERVICES. 9 (BB) "SECRETARIAL AND EDITING SERVICES." PROVIDING SERVICES 10 WHICH INCLUDE, BUT ARE NOT LIMITED TO, EDITING, LETTER WRITING, 11 PROOFREADING, RESUME WRITING, SECRETARIAL SERVICES, TYPING AND 12 WORD PROCESSING. SUCH SERVICES SHALL NOT INCLUDE COURT REPORTING 13 AND STENOGRAPHIC SERVICES. 14 (CC) "DISINFECTING AND PEST CONTROL SERVICES." DISINFECTING 15 DWELLINGS AND OTHER BUILDINGS, AND CONTROLLING TERMITES, 16 INSECTS, RODENTS AND OTHER PESTS, GENERALLY, IN DWELLINGS AND 17 OTHER BUILDINGS. SUCH SERVICES INCLUDE, BUT ARE NOT LIMITED TO, 18 DEODORANT SERVICING OF REST ROOMS, WASHROOM SANITATION SERVICE, 19 REST ROOM CLEANING SERVICE, DISINFECTING SERVICE, BIRD PROOFING, 20 EXTERMINATION SERVICE, FUMIGATING SERVICES, TERMITE CONTROL AND 21 PEST CONTROL IN STRUCTURES. 22 (DD) "BUILDING MAINTENANCE AND CLEANING SERVICES." 23 PROVIDING SERVICES WHICH INCLUDE, BUT ARE NOT LIMITED TO, 24 JANITORIAL, MAID OR HOUSEKEEPING SERVICE ON A CONTRACT OR FEE 25 BASIS, OFFICE OR INTERIOR BUILDING CLEANING AND MAINTENANCE 26 SERVICE, WINDOW CLEANING SERVICE, FLOOR WAXING SERVICE, LIGHTING 27 MAINTENANCE SERVICE SUCH AS BULB REPLACEMENT AND CLEANING, 28 CHIMNEY CLEANING SERVICE, ACOUSTICAL TILE CLEANING SERVICE, 29 VENETIAN BLIND CLEANING, INCLUDING WORK DONE ON OWNER'S 30 PREMISES, CLEANING AND MAINTENANCE OF TELEPHONE BOOTHS, AND 19910H1321B2321 - 28 -
1 CLEANING AND DEGREASING OF SERVICE STATIONS. THIS TERM SHALL NOT 2 INCLUDE REPAIRS ON BUILDINGS AND OTHER STRUCTURES. 3 (EE) "EMPLOYMENT AGENCY SERVICES." PROVIDING EMPLOYMENT 4 SERVICES TO A PROSPECTIVE EMPLOYER OR EMPLOYE OTHER THAN 5 EMPLOYMENT SERVICES PROVIDED BY THEATRICAL EMPLOYMENT AGENCIES 6 AND MOTION PICTURE CASTING BUREAUS. SUCH SERVICES SHALL INCLUDE, 7 BUT ARE NOT LIMITED TO, SERVICES OF THE TYPE PROVIDED BY 8 EMPLOYMENT AGENCIES, EXECUTIVE PLACING SERVICES, LABOR 9 CONTRACTOR EMPLOYMENT AGENCIES OTHER THAN FARM LABOR, MAID, 10 TEACHER, CHAUFFEUR, SHIP CREW AND MODEL REGISTRIES, AND 11 EXECUTIVE PLACING SERVICES. 12 (FF) "HELP SUPPLY SERVICES." SUPPLYING TEMPORARY OR 13 CONTINUING HELP ON A CONTRACT, FEE OR SIMILAR BASIS. THE HELP 14 SUPPLIED IS ON THE PAYROLL OF THE SUPPLYING PERSON OR ENTITY, 15 BUT IS UNDER THE SUPERVISION OF THE BUSINESS TO WHICH HELP IS 16 FURNISHED. SUCH SERVICES INCLUDE, BUT ARE NOT LIMITED TO, 17 SERVICE OF A TYPE PROVIDED BY LABOR AND MANPOWER POOLS, EMPLOYE 18 LEASING SERVICES, OFFICE HELP SUPPLY SERVICES, TEMPORARY HELP 19 SERVICES, HELP SUPPLY SERVICES, USHER SERVICES, MODELING 20 SERVICES AND FASHION SHOW MODEL SUPPLY SERVICES. SUCH SERVICES 21 SHALL NOT INCLUDE PROVIDING FARM LABOR SERVICES. 22 (GG) "COMPUTER PROGRAMMING SERVICES." PROVIDING COMPUTER 23 PROGRAMMING SERVICES ON A CONTRACT OR FEE BASIS, AND PROVIDING 24 COMPUTER SOFTWARE DESIGN AND ANALYSIS, MODIFYING CUSTOM SOFTWARE 25 AND TRAINING IN THE USE OF CUSTOM SOFTWARE. SUCH SERVICES 26 INCLUDE, BUT ARE NOT LIMITED TO, SERVICES OF THE TYPE PROVIDED 27 BY OR THROUGH COMPUTER PROGRAMMING SERVICES, CUSTOMER COMPUTER 28 PROGRAMMING SERVICES, CUSTOM SOFTWARE PROGRAMMING, CUSTOM 29 COMPUTER PROGRAMS OR SYSTEM SOFTWARE DEVELOPMENT, CUSTOM 30 COMPUTER SOFTWARE SYSTEMS ANALYSIS AND DESIGN, CUSTOM 19910H1321B2321 - 29 -
1 APPLICATIONS SOFTWARE PROGRAMMING, COMPUTER CODE AUTHORS AND 2 FREE-LANCE COMPUTER SOFTWARE WRITERS. 3 (HH) "COMPUTER INTEGRATED SYSTEMS DESIGN." DEVELOPING OR 4 MODIFYING COMPUTER SOFTWARE AND PACKAGING OR BUNDLING THE 5 SOFTWARE WITH PURCHASED COMPUTER HARDWARE (COMPUTERS AND 6 COMPUTER PERIPHERAL EQUIPMENT) TO CREATE AND MARKET AN 7 INTEGRATED SYSTEM FOR SPECIFIC APPLICATION. A BUSINESS IS 8 PROVIDING SUCH SERVICES UNDER THIS SUBPARAGRAPH ONLY IF IT 9 PROVIDES EACH OF THE FOLLOWING SERVICES: 10 (1) THE DEVELOPMENT OR MODIFICATION OF THE COMPUTER 11 SOFTWARE; 12 (2) THE MARKETING OF PURCHASED COMPUTER HARDWARE; AND 13 (3) INVOLVEMENT IN ALL PHASES OF SYSTEMS DEVELOPMENT FROM 14 DESIGN THROUGH INSTALLATION. 15 SUCH SERVICES UNDER THIS CLAUSE INCLUDE, BUT ARE NOT LIMITED TO, 16 COMPUTER SYSTEMS INTEGRATION, COMPUTER NETWORK SYSTEMS 17 INTEGRATION, LOCAL AREA NETWORK (LAN) SYSTEMS INTEGRATION, 18 OFFICE AUTOMATION, COMPUTER SYSTEMS VALUE-ADDED RESELLERS, 19 COMPUTER SYSTEMS TURNKEY VENDORS, CAD/CAM SYSTEMS SERVICES, 20 COMPUTER-AIDED DESIGN (CAD) SYSTEMS SERVICES, COMPUTER-AIDED 21 ENGINEERING (CAE) SYSTEMS SERVICES AND COMPUTER-AIDED 22 MANUFACTURING (CAM) SYSTEMS SERVICES. 23 (II) "COMPUTER PROCESSING AND DATA PREPARATION AND 24 PROCESSING SERVICES." SUCH SERVICES INCLUDE, BUT ARE NOT 25 LIMITED TO, PROVIDING COMPLETE PROCESSING AND PREPARATION OF 26 REPORTS FROM DATA SUPPLIED BY THE CUSTOMER OR A SPECIALIZED 27 SERVICE, SUCH AS DATA ENTRY OR MAKING DATA PROCESSING EQUIPMENT 28 AVAILABLE ON AN HOURLY OR TIME-SHARING BASIS; COMPUTER TIME- 29 SHARING AND LEASING OR RENTAL OF COMPUTER TIME; COMPUTER 30 TABULATING AND CALCULATING SERVICES; COMPUTER SERVICE BUREAUS; 19910H1321B2321 - 30 -
1 DATA ENTRY, PROCESSING AND/OR VERIFICATION SERVICES; KEY-PUNCH 2 SERVICES AND OPTICAL SCANNING DATA SERVICES. 3 (JJ) "INFORMATION RETRIEVAL SERVICES." PROVIDING COMPUTER 4 ON-LINE INFORMATION RETRIEVAL SERVICES. SUCH INFORMATION IS 5 GENERALLY TAKEN FROM OTHER PRIMARY SOURCES AND MAY BE 6 REFORMATTED OR EDITED FOR DISTRIBUTION. SUCH SERVICES INCLUDE, 7 BUT ARE NOT LIMITED TO, DATA BASE INFORMATION RETRIEVAL 8 SERVICES, ON-LINE INFORMATION RETRIEVAL SERVICES, ON-LINE DATA 9 BASE INFORMATION RETRIEVAL SERVICES AND REMOTE DATA BASE 10 INFORMATION RETRIEVAL SERVICES. 11 (KK) "COMPUTER FACILITIES MANAGEMENT SERVICES." PROVIDING 12 ON-SITE MANAGEMENT AND OPERATION OF COMPUTER AND DATA PROCESSING 13 FACILITIES ON A CONTRACT OR FEE BASIS. 14 (LL) "COMPUTER MAINTENANCE AND REPAIR." PROVIDING 15 MAINTENANCE AND REPAIR SERVICES FOR COMPUTERS AND COMPUTER 16 PERIPHERAL EQUIPMENT. 17 (MM) "OTHER COMPUTER-RELATED SERVICES." SUPPLYING COMPUTER- 18 RELATED SERVICES NOT DESCRIBED ELSEWHERE IN CLAUSE (GG) THROUGH 19 (LL). SUCH SERVICES INCLUDE, BUT ARE NOT LIMITED TO, SERVICES 20 PROVIDED BY COMPUTER CONSULTANTS, DATA BASE DEVELOPERS AND DATA 21 PROCESSING CONSULTANTS, DISK AND DISKETTE CONVERSION SERVICES, 22 DISK AND DISKETTE RECERTIFICATION SERVICES, TAPE RECERTIFICATION 23 SERVICES AND COMPUTER HARDWARE AND SOFTWARE REQUIREMENTS 24 ANALYSIS, PREPARING SOFTWARE DOCUMENTATION FOR THE USER, 25 INSTALLING SOFTWARE FOR THE USER, TRAINING THE USER IN THE USE 26 OF SOFTWARE, REFORMATTING OR EDITING FOR DISTRIBUTION 27 INFORMATION TAKEN FROM OTHER PRIMARY SOURCES. 28 (NN) "ENGINEERING SERVICES." PROVIDING PROFESSIONAL 29 ENGINEERING SERVICES. SUCH SERVICES INCLUDE, BUT ARE NOT LIMITED 30 TO, INDUSTRIAL, CIVIL, ELECTRICAL, MECHANICAL, PETROLEUM, MARINE 19910H1321B2321 - 31 -
1 AND DESIGN ENGINEERING SERVICES; SHIP, BOAT AND MACHINE 2 ENGINEERING SERVICES; MACHINE TOOL DESIGN AND MACHINE TOOL 3 ALIGNMENT, AND PROVIDING SUPERVISING ENGINEERING STAFF ON 4 TEMPORARY CONTRACT TO OTHER FIRMS. 5 (OO) "ARCHITECTURAL SERVICES." PROVIDING PROFESSIONAL 6 ARCHITECTURAL SERVICES. SUCH SERVICES INCLUDE, BUT ARE NOT 7 LIMITED TO, ARCHITECTURAL SERVICES, ARCHITECTURAL ENGINEERING 8 SERVICES, AND SERVICES PROVIDED BY HOUSE DESIGNERS. 9 (PP) "SURVEYING SERVICES." PROVIDING PROFESSIONAL LAND, 10 WATER AND AERIAL SURVEYING SERVICES. SUCH SERVICES INCLUDE, BUT 11 ARE NOT LIMITED TO, LAND, WATER AND AERIAL SURVEYING SERVICES 12 AND PHOTOGRAMMETRIC ENGINEERING SERVICES. 13 (QQ) "LEGAL SERVICES." SUPPLYING LEGAL SERVICES FROM 14 ESTABLISHMENTS WHICH ARE HEADED BY MEMBERS OF THE BAR AND ARE 15 PRIMARILY ENGAGED IN OFFERING LEGAL ADVICE OR SERVICES. SUCH 16 TERM SHALL INCLUDE, BUT IS NOT LIMITED TO, ATTORNEYS, COUNSELORS 17 AT LAW, LAW OFFICES, LEGAL SERVICES, PARALEGAL SERVICES, PATENT 18 SOLICITORS' OFFICES AND REFEREES IN BANKRUPTCY. 19 (RR) "ACCOUNTING, AUDITING AND BOOKKEEPING SERVICES." SUCH 20 SERVICES INCLUDE, BUT ARE NOT LIMITED TO, ACCOUNTING SERVICES, 21 AUDITING SERVICES, BOOKKEEPING AND BILLING SERVICES, PAYROLL 22 ACCOUNTING AND TAX RETURN PREPARATION SERVICES. 23 (SS) "DETECTIVE AND OTHER PROTECTIVE SERVICES." SUCH 24 SERVICES INCLUDE, BUT ARE NOT LIMITED TO, PROVIDING DETECTIVE 25 AND ARMORED CAR SERVICES, RENTAL OF DOGS FOR PROTECTIVE 26 SERVICES, FINGERPRINT SERVICES, GUARD SERVICES, PRIVATE 27 INVESTIGATOR SERVICES, LIE DETECTION SERVICES, POLYGRAPH 28 SERVICES AND PROTECTIVE GUARD OR SECURITY GUARD SERVICES. 29 (TT) "LAWN CARE SERVICES." PROVIDING SERVICES FOR LAWN 30 UPKEEP INCLUDING, BUT NOT LIMITED TO, FERTILIZING SERVICES, LAWN 19910H1321B2321 - 32 -
1 MOWING SERVICES AND SHRUBBERY TRIMMING SERVICES. 2 (UU) "STORAGE SPACE." A BUILDING OR PORTION OF A BUILDING 3 OR SIMILAR STRUCTURE FOR PURPOSES OF STORING CORPOREAL PERSONAL 4 PROPERTY, INCLUDING, BUT NOT LIMITED TO, GOODS, WARES OR 5 MERCHANDISE, SPIRITOUS OR VINOUS LIQUOR AND MALT OR BREWED 6 BEVERAGES, FURNITURE AND HOUSEHOLD GOODS, AUTOMOBILES, FURS, 7 TEXTILES, PERISHABLE GOODS UNDER REFRIGERATION, FARM PRODUCTS, 8 COTTON COMPRESSES AND TOBACCO. THE TERM EXCLUDES STORAGE. 9 (VV) "RESEARCH." INCLUDES, BUT IS NOT LIMITED TO, ECONOMIC 10 RESEARCH AND FORECASTING, EDUCATIONAL RESEARCH, MARKET RESEARCH, 11 OPINION RESEARCH AND SOCIOLOGICAL RESEARCH. 12 SECTION 2. SECTION 202(C) OF THE ACT IS AMENDED TO READ: 13 SECTION 202. IMPOSITION OF TAX.--* * * 14 (C) NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS ARTICLE, 15 THE TAX WITH RESPECT TO [NON-RESIDENTIAL INTRASTATE TELEPHONE 16 SERVICE AND INTRASTATE] TELEPHONE, TELEGRAPH AND 17 TELECOMMUNICATIONS SERVICE WITHIN THE MEANING OF CLAUSE (M) OF 18 SECTION 201 OF THIS ARTICLE SHALL, EXCEPT FOR TELEGRAMS PAID FOR 19 IN CASH AT TELEGRAPH OFFICES, BE COMPUTED AT THE RATE OF SIX PER 20 CENT UPON THE TOTAL AMOUNT [BILLED] CHARGED TO CUSTOMERS 21 [PERIODICALLY] FOR SUCH SERVICES, IRRESPECTIVE OF WHETHER SUCH 22 [BILLING] CHARGE IS BASED UPON A FLAT RATE OR UPON A MESSAGE 23 UNIT CHARGE. TO PREVENT ACTUAL MULTI-STATE TAXATION OF 24 INTERSTATE TELEPHONE, TELEGRAPH OR TELECOMMUNICATIONS SERVICE, 25 ANY TAXPAYER, UPON PROOF THAT THE TAXPAYER HAS PAID A SIMILAR 26 TAX TO ANOTHER STATE ON THE SAME INTERSTATE TELEPHONE, TELEGRAPH 27 OR TELECOMMUNICATIONS SERVICE, SHALL BE ALLOWED A CREDIT AGAINST 28 THE TAX IMPOSED BY THIS SECTION ON THE SAME INTERSTATE 29 TELEPHONE, TELEGRAPH OR TELECOMMUNICATIONS SERVICE TO THE EXTENT 30 OF THE AMOUNT OF SUCH TAX PROPERLY DUE AND PAID TO SUCH OTHER 19910H1321B2321 - 33 -
1 STATE. 2 * * * 3 SECTION 3. SECTION 204(4), (5), (6), (7), (8), (9), (16), 4 (19), (20), (21), (22), (23) AND (29) OF THE ACT, AMENDED 5 SEPTEMBER 9, 1971 (P.L.437, NO.105), ARE AMENDED TO READ: 6 SECTION 204. EXCLUSIONS FROM TAX.--THE TAX IMPOSED BY 7 SECTION 202 SHALL NOT BE IMPOSED UPON 8 * * * 9 (4) [THE SALE AT RETAIL OR USE OF SUPPLIES AND MATERIALS TO 10 BE USED IN THE FULFILLMENT OF CONTRACTS FOR THE CONSTRUCTION, 11 RECONSTRUCTION, REMODELING, REPAIRING, MAINTENANCE OR SALE OF 12 REAL ESTATE WHEN SUCH CONTRACT WAS ENTERED INTO 13 (I) PRIOR TO MARCH 7, 1956, AND IS AT A FIXED PRICE NOT 14 SUBJECT TO CHANGE OR MODIFICATION BY REASON OF THE TAX IMPOSED 15 BY THE TAX ACT OF 1963 FOR EDUCATION; OR 16 (II) PURSUANT TO THE OBLIGATION OF A BID OR BIDS SUBMITTED 17 PRIOR TO MARCH 7, 1956, WHICH BID OR BIDS COULD NOT BE ALTERED 18 OR WITHDRAWN ON OR AFTER THAT DATE AND WHICH BID OR BIDS AND 19 CONTRACT ENTERED INTO PURSUANT THERETO ARE AT A FIXED PRICE NOT 20 SUBJECT TO CHANGE OR MODIFICATION BY REASON OF THE TAX IMPOSED 21 BY THE ACT IN EFFECT PRIOR TO THIS ARTICLE. 22 PROVIDED, HOWEVER, THAT NOTICE OF SUCH CONTRACT OR BID BY 23 REASON OF WHICH AN EXCLUSION IS CLAIMED UNDER THIS CLAUSE (4) 24 MUST BE GIVEN BY THE TAXPAYER TO THE DEPARTMENT ON OR BEFORE 25 JUNE 15, 1956.] THE SALE AT RETAIL OR USE OF TOILET PAPER, 26 SANITARY NAPKINS, TAMPONS OR SIMILAR ITEMS USED FOR FEMININE 27 HYGIENE. 28 (5) [THE SALE AT RETAIL OR USE OF MATERIALS TO BE 29 INCORPORATED INTO AND MADE A PART OF REAL ESTATE PURSUANT TO A 30 CONTRACT FOR THE CONSTRUCTION, RECONSTRUCTION, REMODELING, 19910H1321B2321 - 34 -
1 REPAIRING, MAINTENANCE OR SALE OF SUCH REAL ESTATE, WHEN THE 2 CONTRACT IS, EITHER AT A FIXED PRICE NOT SUBJECT TO CHANGE OR 3 MODIFICATION, OR ENTERED INTO PURSUANT TO THE OBLIGATION OF A 4 FORMAL WRITTEN BID WHICH CANNOT BE ALTERED OR WITHDRAWN, AND, IN 5 EITHER CASE, SUCH CONTRACT WAS ENTERED INTO OR SUCH BID MADE ON 6 OR AFTER MARCH 7, 1956, BUT PRIOR TO APRIL 15, 1959, SHALL BE 7 EXEMPT FROM THE ADDITIONAL ONE-HALF OF ONE PER CENT OF TAX 8 IMPOSED BY SECTION 201 OF THE TAX ACT OF 1963 FOR EDUCATION AS 9 AMENDED APRIL 15, 1959 (P.L.20), AND FROM THE ADDITIONAL ONE- 10 HALF OF ONE PER CENT OF TAX IMPOSED BY SECTION 201 OF THE TAX 11 ACT OF 1963 FOR EDUCATION AS AMENDED AUGUST 20, 1959 (P.L.729), 12 AND FROM THE ADDITIONAL ONE PER CENT OF TAX IMPOSED BY SECTION 13 201 OF THE TAX ACT OF 1963 FOR EDUCATION AS AMENDED MAY 29, 1963 14 (P.L.49) AND FROM THE ADDITIONAL ONE PER CENT OF TAX IMPOSED BY 15 SECTION 201 OF THE TAX ACT OF 1963 FOR EDUCATION AS AMENDED 16 JANUARY 1, 1968 (P.L.918): PROVIDED, HOWEVER, THAT THE EXEMPTION 17 GRANTED BY THIS CLAUSE SHALL NOT BE CLAIMED BY THE PURCHASER 18 FROM ANY VENDOR BUT SHALL BE CLAIMED ONLY BY THE FILING OF A 19 REFUND PETITION WITH THE DEPARTMENT.] THE SALE AT RETAIL OR USE 20 OF STEAM, NATURAL AND MANUFACTURED AND BOTTLED GAS, FUEL OIL, 21 ELECTRICITY OR INTRASTATE SUBSCRIBER LINE CHARGES AND BASIC 22 LOCAL TELEPHONE SERVICE OR TELEGRAPH SERVICE WHEN PURCHASED 23 DIRECTLY BY THE USER THEREOF SOLELY FOR HIS OWN RESIDENTIAL USE. 24 [(6) THE SALE AT RETAIL OR USE OF MATERIALS TO BE 25 INCORPORATED INTO AND MADE A PART OF REAL ESTATE PURSUANT TO A 26 CONTRACT FOR THE CONSTRUCTION, RECONSTRUCTION, REMODELING, 27 REPAIRING, MAINTENANCE OR SALE OF SUCH REAL ESTATE WHEN THE 28 CONTRACT IS, EITHER AT A FIXED PRICE NOT SUBJECT TO CHANGE OR 29 MODIFICATION, OR ENTERED INTO PURSUANT TO THE OBLIGATION OF A 30 FORMAL WRITTEN BID WHICH CANNOT BE ALTERED OR WITHDRAWN, AND, IN 19910H1321B2321 - 35 -
1 EITHER CASE, SUCH CONTRACT WAS ENTERED INTO OR SUCH BID MADE ON 2 OR AFTER APRIL 15, 1959, BUT PRIOR TO AUGUST 20, 1959, SHALL BE 3 EXEMPT FROM THE ADDITIONAL ONE-HALF OF ONE PER CENT OF TAX 4 IMPOSED BY SECTION 201 OF THE TAX ACT OF 1963 FOR EDUCATION AS 5 AMENDED AUGUST 20, 1959 (P.L.729), AND FROM THE ADDITIONAL ONE 6 PER CENT OF TAX IMPOSED BY SECTION 201 OF THE TAX ACT OF 1963 7 FOR EDUCATION AS AMENDED MAY 29, 1963 (P.L.49) AND FROM THE 8 ADDITIONAL ONE PER CENT OF TAX IMPOSED BY SECTION 201 OF THE TAX 9 ACT OF 1963 FOR EDUCATION AS AMENDED JANUARY 1, 1968 (P.L.918): 10 PROVIDED, HOWEVER, THAT THE EXEMPTION GRANTED BY THIS CLAUSE 11 SHALL NOT BE CLAIMED BY THE PURCHASER FROM ANY VENDOR BUT SHALL 12 BE CLAIMED ONLY BY THE FILING OF A REFUND PETITION WITH THE 13 DEPARTMENT. 14 (7) THE SALE AT RETAIL OR USE OF MATERIALS TO BE 15 INCORPORATED INTO AND MADE A PART OF REAL ESTATE PURSUANT TO A 16 CONTRACT FOR THE CONSTRUCTION, RECONSTRUCTION, REMODELING, 17 REPAIRING, MAINTENANCE OR SALE OF SUCH REAL ESTATE WHEN THE 18 CONTRACT IS, EITHER AT A FIXED PRICE NOT SUBJECT TO CHANGE OR 19 MODIFICATION, OR ENTERED INTO PURSUANT TO THE OBLIGATION OF A 20 FORMAL WRITTEN BID WHICH CANNOT BE ALTERED OR WITHDRAWN, AND, IN 21 EITHER CASE, SUCH CONTRACT WAS ENTERED INTO OR SUCH BID MADE ON 22 OR AFTER AUGUST 20, 1959, BUT PRIOR TO JUNE 1, 1963 SHALL BE 23 EXEMPT FROM THE ADDITIONAL ONE PER CENT OF TAX IMPOSED BY 24 SECTION 201 OF THE TAX ACT OF 1963 FOR EDUCATION AS AMENDED MAY 25 29, 1963 (P.L.49) AND FROM THE ADDITIONAL ONE PER CENT OF THE 26 TAX IMPOSED BY SECTION 201 OF THE TAX ACT OF 1963 FOR EDUCATION 27 AS AMENDED JANUARY 1, 1968 (P.L.918): PROVIDED, HOWEVER, THAT 28 THE EXEMPTION GRANTED BY THIS CLAUSE SHALL NOT BE CLAIMED BY THE 29 PURCHASER FROM ANY VENDOR BUT SHALL BE CLAIMED ONLY BY THE 30 FILING OF A REFUND PETITION WITH THE DEPARTMENT. 19910H1321B2321 - 36 -
1 (8) THE SALE AT RETAIL OR USE OF MATERIALS TO BE 2 INCORPORATED INTO AND MADE A PART OF REAL ESTATE PURSUANT TO A 3 CONTRACT FOR THE CONSTRUCTION, RECONSTRUCTION, REMODELING, 4 REPAIRING, MAINTENANCE OR SALE OF SUCH REAL ESTATE WHEN THE 5 CONTRACT IS, EITHER AT A FIXED PRICE NOT SUBJECT TO CHANGE OR 6 MODIFICATION, OR ENTERED INTO PURSUANT TO THE OBLIGATION OF A 7 FORMAL WRITTEN BID WHICH CANNOT BE ALTERED OR WITHDRAWN, AND, IN 8 EITHER CASE, SUCH CONTRACT WAS ENTERED INTO OR SUCH BID MADE ON 9 OR AFTER JUNE 1, 1963, BUT PRIOR TO JANUARY 1, 1968, SHALL BE 10 EXEMPT FROM THE ADDITIONAL ONE PER CENT OF TAX IMPOSED BY 11 SECTION 201 OF THE TAX ACT OF 1963 FOR EDUCATION AS AMENDED 12 JANUARY 1, 1968 (P.L.918): PROVIDED, HOWEVER, THAT THE EXEMPTION 13 GRANTED BY THIS CLAUSE SHALL NOT BE CLAIMED BY THE PURCHASER 14 FROM ANY VENDOR BUT SHALL BE CLAIMED ONLY BY THE FILING OF A 15 REFUND PETITION WITH THE DEPARTMENT. 16 (9) THE SALE AT RETAIL OR USE OF TANGIBLE PERSONAL PROPERTY 17 OR SERVICES SUBJECT TO TAX UNDER THIS ARTICLE, BUT WHICH PRIOR 18 TO THE EFFECTIVE DATE OF THIS ARTICLE WERE EXCLUDED FROM TAX 19 UNDER THE PROVISIONS OF THE "TAX ACT OF 1963 FOR EDUCATION" 20 SHALL BE EXCLUDED FROM THE TAX IMPOSED BY THIS ARTICLE, PROVIDED 21 SUCH SALE AT RETAIL OR USE OCCURRED PURSUANT TO AND IN 22 FULFILLMENT OF A WRITTEN FIXED PRICE SALES OR CONSTRUCTION 23 CONTRACT OR FORMAL BID ENTERED INTO PRIOR TO THE EFFECTIVE DATE 24 OF THIS ARTICLE BY THE PERSON WHO OTHERWISE WOULD BE SUBJECT TO 25 TAX UNDER THIS ARTICLE AND ANOTHER, AND WHICH CONTRACT OR BID 26 CANNOT BE ALTERED, MODIFIED OR WITHDRAWN BY THE PARTIES. THE 27 EXCLUSION FROM TAX PROVIDED HEREIN SHALL NOT BE CLAIMED BY ANY 28 PERSON FROM A VENDOR BUT SHALL BE CLAIMED ONLY BY THE FILING OF 29 A REFUND PETITION WITH THE DEPARTMENT AS PROVIDED IN THIS 30 ARTICLE.] 19910H1321B2321 - 37 -
1 * * * 2 (16) THE SALE AT RETAIL OR USE OF TANGIBLE PERSONAL PROPERTY 3 OR SERVICES TO BE USED OR CONSUMED FOR SHIP CLEANING OR 4 MAINTENANCE OR AS FUEL, SUPPLIES, SHIPS' EQUIPMENT, SHIPS' 5 STORES OR SEA STORES ON VESSELS DESIGNED FOR COMMERCIAL USE OF 6 REGISTERED TONNAGE OF FIFTY TONS OR MORE TO BE OPERATED 7 PRINCIPALLY OUTSIDE THE LIMITS OF THE COMMONWEALTH. 8 * * * 9 [(19) THE SALE AT RETAIL OR USE OF SUPPLIES AND MATERIALS TO 10 BE USED EXCLUSIVELY IN THE FULFILLMENT OF A CONTRACT FOR THE 11 CONSTRUCTION, RECONSTRUCTION, REMODELING, REPAIRING OR 12 MAINTENANCE OF REAL ESTATE, WHEN SUCH CONTRACT WAS ENTERED INTO 13 PRIOR TO MARCH 7, 1956, BETWEEN THE PERSON WHO WOULD OTHERWISE 14 BE SUBJECT TO THE TAX AND A MUNICIPAL AUTHORITY, INCORPORATED 15 UNDER THE "MUNICIPALITY AUTHORITIES ACT OF 1945": PROVIDED, THAT 16 NOTICE OF A CLAIM OF EXEMPTION UNDER THIS CLAUSE IS RECEIVED BY 17 THE DEPARTMENT WITHIN FIFTEEN DAYS AFTER THE EFFECTIVE DATE OF 18 THIS CLAUSE UNDER THE TAX ACT OF 1963 FOR EDUCATION. 19 (20) THE SALE AT RETAIL OR USE OF MATERIALS TO BE 20 INCORPORATED INTO AND MADE A PART OF REAL ESTATE PURSUANT TO A 21 CONTRACT FOR THE CONSTRUCTION, RECONSTRUCTION, REMODELING, 22 REPAIRING OR MAINTENANCE OF SUCH REAL ESTATE, WHEN THE CONTRACT 23 WAS ENTERED INTO ON OR AFTER MARCH 7, 1956, BUT PRIOR TO APRIL 24 15, 1959, BETWEEN THE PERSON WHO WOULD OTHERWISE BE SUBJECT TO 25 THE TAX AND A MUNICIPAL AUTHORITY, INCORPORATED UNDER THE 26 "MUNICIPALITY AUTHORITIES ACT OF 1945," SHALL BE EXEMPT FROM THE 27 ADDITIONAL ONE-HALF OF ONE PER CENT OF TAX IMPOSED BY SECTION 28 201 OF THE TAX ACT OF 1963 FOR EDUCATION AS AMENDED APRIL 15, 29 1959 (P.L.20), AND FROM THE ADDITIONAL ONE-HALF OF ONE PER CENT 30 OF TAX IMPOSED BY SECTION 201 OF THE TAX ACT OF 1963 FOR 19910H1321B2321 - 38 -
1 EDUCATION AS AMENDED AUGUST 20, 1959 (P.L.729), AND FROM THE 2 ADDITIONAL ONE PER CENT OF TAX IMPOSED BY SECTION 201 OF THE TAX 3 ACT OF 1963 FOR EDUCATION, AS AMENDED MAY 29, 1963 (P.L.49) AND 4 FROM THE ADDITIONAL ONE PER CENT OF TAX IMPOSED BY SECTION 201 5 OF THE TAX ACT OF 1963 FOR EDUCATION AS AMENDED JANUARY 1, 1968 6 (P.L.918): PROVIDED, HOWEVER, THAT THE EXEMPTION GRANTED BY THIS 7 CLAUSE SHALL NOT BE CLAIMED BY THE PURCHASER FROM ANY VENDOR BUT 8 SHALL BE CLAIMED ONLY BY THE FILING OF A REFUND PETITION WITH 9 THE DEPARTMENT. 10 (21) THE SALE AT RETAIL OR USE OF MATERIALS TO BE 11 INCORPORATED INTO AND MADE A PART OF REAL ESTATE PURSUANT TO A 12 CONTRACT FOR THE CONSTRUCTION, RECONSTRUCTION, REMODELING, 13 REPAIRING OR MAINTENANCE OF SUCH REAL ESTATE, WHEN THE CONTRACT 14 WAS ENTERED INTO ON OR AFTER APRIL 15, 1959, BUT PRIOR TO AUGUST 15 20, 1959, BETWEEN THE PERSON WHO WOULD OTHERWISE BE SUBJECT TO 16 THE TAX AND A MUNICIPAL AUTHORITY, INCORPORATED UNDER THE 17 "MUNICIPALITY AUTHORITIES ACT OF 1945," SHALL BE EXEMPT FROM THE 18 ADDITIONAL ONE-HALF OF ONE PER CENT OF TAX IMPOSED BY SECTION 19 201 OF THE TAX ACT OF 1963 FOR EDUCATION AS AMENDED AUGUST 20, 20 1959 (P.L.729), AND FROM THE ADDITIONAL ONE PER CENT OF TAX 21 IMPOSED BY SECTION 201 OF THE TAX ACT OF 1963 FOR EDUCATION, AS 22 AMENDED MAY 29, 1963 (P.L.49) AND FROM THE ADDITIONAL ONE PER 23 CENT OF TAX IMPOSED BY SECTION 201 OF THE TAX ACT OF 1963 FOR 24 EDUCATION AS AMENDED JANUARY 1, 1968 (P.L.918): PROVIDED, 25 HOWEVER, THAT THE EXEMPTION GRANTED BY THIS CLAUSE SHALL NOT BE 26 CLAIMED BY THE PURCHASER FROM ANY VENDOR BUT SHALL BE CLAIMED 27 ONLY BY THE FILING OF A REFUND PETITION WITH THE DEPARTMENT. 28 (22) THE SALE AT RETAIL OR USE OF MATERIALS TO BE 29 INCORPORATED INTO AND MADE A PART OF REAL ESTATE PURSUANT TO A 30 CONTRACT FOR THE CONSTRUCTION, RECONSTRUCTION, REMODELING, 19910H1321B2321 - 39 -
1 REPAIRING OR MAINTENANCE OF SUCH REAL ESTATE WHEN THE CONTRACT 2 WAS ENTERED INTO ON OR AFTER AUGUST 20, 1959, BUT PRIOR TO JUNE 3 1, 1963, BETWEEN THE PERSON WHO WOULD OTHERWISE BE SUBJECT TO 4 THE TAX AND A MUNICIPAL AUTHORITY, INCORPORATED UNDER THE 5 "MUNICIPALITY AUTHORITIES ACT OF 1945," SHALL BE EXEMPT FROM THE 6 ADDITIONAL ONE PER CENT OF TAX IMPOSED BY SECTION 201 OF THE TAX 7 ACT OF 1963 FOR EDUCATION AS AMENDED MAY 29, 1963 (P.L.49) AND 8 FROM THE ADDITIONAL ONE PER CENT OF THE TAX IMPOSED BY SECTION 9 201 OF THE TAX ACT OF 1963 FOR EDUCATION, AS AMENDED JANUARY 1, 10 1968 (P.L.918): PROVIDED, HOWEVER, THAT THE EXEMPTION GRANTED BY 11 THIS CLAUSE SHALL NOT BE CLAIMED BY THE PURCHASER FROM ANY 12 VENDOR BUT SHALL BE CLAIMED ONLY BY THE FILING OF A REFUND 13 PETITION WITH THE DEPARTMENT. 14 (23) THE SALE AT RETAIL OR USE OF MATERIALS TO BE 15 INCORPORATED INTO AND MADE A PART OF REAL ESTATE PURSUANT TO A 16 CONTRACT FOR THE CONSTRUCTION, RECONSTRUCTION, REMODELING, 17 REPAIRING OR MAINTENANCE OF SUCH REAL ESTATE, WHEN THE CONTRACT 18 WAS ENTERED INTO ON OR AFTER JUNE 1, 1963, BUT PRIOR TO JANUARY 19 1, 1968, BETWEEN THE PERSON WHO WOULD OTHERWISE BE SUBJECT TO 20 THE TAX AND A MUNICIPAL AUTHORITY INCORPORATED UNDER THE 21 "MUNICIPALITY AUTHORITIES ACT OF 1945," SHALL BE EXEMPT FROM THE 22 ADDITIONAL ONE PER CENT OF TAX IMPOSED BY SECTION 201 OF THE TAX 23 ACT OF 1963 FOR EDUCATION, AS AMENDED JANUARY 1, 1968 (P.L.918): 24 PROVIDED, HOWEVER, THAT THE EXEMPTION GRANTED BY THIS CLAUSE 25 SHALL NOT BE CLAIMED BY THE PURCHASER FROM ANY VENDOR BUT SHALL 26 BE CLAIMED ONLY BY THE FILING OF A REFUND PETITION WITH THE 27 DEPARTMENT.] 28 * * * 29 (29) THE SALE AT RETAIL OR USE OF FOOD AND BEVERAGES FOR 30 HUMAN CONSUMPTION INCLUDING CANDY[, GUM AND SIMILAR CONFECTIONS] 19910H1321B2321 - 40 -
1 AND GUM, EXCEPT THAT THIS EXCLUSION SHALL NOT APPLY WITH RESPECT 2 TO-- 3 (I) SOFT DRINKS; 4 (II) MALT AND BREWED BEVERAGES AND SPIRITUOUS AND VINOUS 5 LIQUORS; 6 (III) FOOD [AND BEVERAGES (EXCEPT WHEN PURCHASED AT, OR FROM 7 A SCHOOL OR CHURCH IN THE ORDINARY COURSE OF ACTIVITIES OF SUCH 8 ORGANIZATION) WHEN THE PURCHASE PRICE OF THE TOTAL TRANSACTION 9 IS MORE THAN TEN CENTS (10¢)] OR BEVERAGES READY TO EAT AND 10 INTENDED FOR IMMEDIATE CONSUMPTION, WHETHER SOLD FOR CONSUMPTION 11 ON OR OFF THE PREMISES OR ON A "TAKE-OUT" OR "TO GO" BASIS OR 12 DELIVERED TO THE PURCHASER OR CONSUMER, WHEN PURCHASED (I) FROM 13 PERSONS ENGAGED IN THE BUSINESS OF CATERING, OR (II) FROM 14 PERSONS ENGAGED IN THE BUSINESS OF OPERATING ESTABLISHMENTS, 15 INCLUDING, BUT NOT LIMITED TO RESTAURANTS, CAFES, LUNCH 16 COUNTERS, PRIVATE AND SOCIAL CLUBS, TAVERNS, DINING CARS, HOTELS 17 [AND OTHER EATING PLACES. FOR THE PURPOSE OF THIS SUBCLAUSE 18 (III), BEVERAGES SHALL NOT INCLUDE MALT AND BREWED BEVERAGES AND 19 SPIRITUOUS AND VINOUS LIQUORS, BUT SHALL INCLUDE SOFT DRINKS, 20 AND THE PRICE OF SUCH SOFT DRINKS SHALL BE CONSIDERED TOGETHER 21 WITH THE PRICE OF OTHER BEVERAGES AND FOOD IN DETERMINING 22 WHETHER THE PURCHASE PRICE OF THE TOTAL TRANSACTION IS MORE THAN 23 TEN CENTS (10¢).], NIGHT CLUBS, FAST FOOD OPERATIONS, PIZZERIAS, 24 FAIRS, CARNIVALS, LUNCH CARTS, ICE CREAM STANDS, VENDING 25 MACHINES, SNACK BARS, CAFETERIAS, EMPLOYE CAFETERIAS, THEATERS, 26 STADIUMS, ARENAS, AMUSEMENT PARKS, CARRYOUT SHOPS, COFFEE SHOPS, 27 BAKERY, PASTRY AND DONUT SHOPS AND OTHER ESTABLISHMENTS WHETHER 28 MOBILE OR IMMOBILE FROM WHICH FOOD OR BEVERAGES READY TO EAT AND 29 INTENDED FOR IMMEDIATE CONSUMPTION ARE SOLD. FOR PURPOSES OF 30 THIS CLAUSE, A DELICATESSEN, GROCERY STORE, SUPERMARKET OR A 19910H1321B2321 - 41 -
1 CONVENIENCE STORE SHALL NOT BE CONSIDERED AN ESTABLISHMENT FROM 2 WHICH FOOD OR BEVERAGES READY TO EAT AND INTENDED FOR IMMEDIATE 3 CONSUMPTION ARE SOLD EXCEPT FOR THE SALE OF MEALS, COOKED 4 CHICKEN, SANDWICHES, PREPARED SALADS, SALAD BARS, PREPARED 5 DESSERTS, HOT SOUP, HOT PIZZA AND OTHER HOT FOOD ITEMS, BREWED 6 COFFEE AND HOT OR COLD BEVERAGES. THE SALE AT RETAIL OF FOOD AND 7 BEVERAGES AT OR FROM A SCHOOL OR CHURCH IN THE ORDINARY COURSE 8 OF THE ACTIVITIES OF SUCH ORGANIZATION IS NOT SUBJECT TO TAX. 9 * * * 10 SECTION 4. SECTION 205(A) OF THE ACT, AMENDED JUNE 9, 1978 11 (P.L.463, NO.62), IS AMENDED TO READ: 12 SECTION 205. ALTERNATE IMPOSITION OF TAX; CREDITS.--(A) IF 13 ANY PERSON ACTIVELY AND PRINCIPALLY ENGAGED IN THE BUSINESS OF 14 SELLING NEW OR USED MOTOR VEHICLES, TRAILERS OR SEMI-TRAILERS, 15 AND REGISTERED WITH THE DEPARTMENT IN THE "DEALER'S CLASS," 16 ACQUIRES A MOTOR VEHICLE, TRAILER OR SEMI-TRAILER FOR THE 17 PURPOSE OF RESALE, AND PRIOR TO SUCH RESALE, USES THE MOTOR 18 VEHICLE, TRAILER OR SEMI-TRAILER FOR A TAXABLE USE UNDER THIS 19 ACT DURING A PERIOD NOT EXCEEDING ONE YEAR FROM THE DATE OF 20 ACQUISITION TO THE DATE OF RESALE, SUCH PERSON MAY[, UPON NOTICE 21 TO THE DEPARTMENT] WITHIN TEN DAYS OF THE COMMENCEMENT OF SUCH 22 USE, ELECT TO PAY A TAX EQUAL TO SIX PER CENT OF THE FAIR RENTAL 23 VALUE OF THE MOTOR VEHICLE, TRAILER OR SEMI-TRAILER DURING SUCH 24 USE. SHOULD SUCH MOTOR VEHICLE, TRAILER OR SEMI-TRAILER BE USED 25 FOR A TAXABLE USE AFTER A PERIOD OF ONE YEAR, THE TAXPAYER SHALL 26 BE LIABLE FOR A TAX ON THE FAIR MARKET VALUE OF SUCH MOTOR 27 VEHICLE, TRAILER OR SEMI-TRAILER AT THE TIME OF ACQUISITION, BUT 28 SHALL BE ALLOWED A CREDIT EQUAL TO THE TAX PAID PURSUANT TO THE 29 ELECTION PROVIDED FOR IN THIS SECTION. THIS SECTION SHALL NOT 30 APPLY TO THE USE OF A VEHICLE AS A WRECKER, PARTS TRUCK, 19910H1321B2321 - 42 -
1 DELIVERY TRUCK OR COURTESY CAR. 2 * * * 3 SECTION 5. SECTION 208 OF THE ACT, AMENDED SEPTEMBER 9, 1971 4 (P.L.437, NO.105), IS AMENDED TO READ: 5 SECTION 208. LICENSES.--(A) EVERY PERSON MAINTAINING A 6 PLACE OF BUSINESS IN THIS COMMONWEALTH, SELLING OR LEASING 7 SERVICES OR TANGIBLE PERSONAL PROPERTY, THE SALE OR USE OF WHICH 8 IS SUBJECT TO TAX AND WHO HAS NOT HITHERTO OBTAINED A LICENSE 9 FROM THE DEPARTMENT, SHALL, PRIOR TO THE BEGINNING OF BUSINESS 10 THEREAFTER, MAKE APPLICATION TO THE DEPARTMENT, ON A FORM 11 PRESCRIBED BY THE DEPARTMENT, FOR A LICENSE. IF SUCH PERSON 12 MAINTAINS MORE THAN ONE PLACE OF BUSINESS IN THIS COMMONWEALTH, 13 THE LICENSE SHALL BE ISSUED FOR THE PRINCIPAL PLACE OF BUSINESS 14 IN THIS COMMONWEALTH. 15 (B) THE DEPARTMENT SHALL, AFTER THE RECEIPT OF AN 16 APPLICATION, ISSUE THE LICENSE APPLIED FOR UNDER SUBSECTION (A) 17 OF THIS SECTION[. THE LICENSE SHALL BE NONASSIGNABLE AND OF 18 PERMANENT DURATION.], PROVIDED SAID APPLICANT SHALL HAVE FILED 19 ALL REQUIRED STATE TAX REPORTS AND PAID ANY STATE TAXES NOT 20 SUBJECT TO A TIMELY PERFECTED ADMINISTRATIVE OR JUDICIAL APPEAL 21 OR SUBJECT TO A DULY AUTHORIZED DEFERRED PAYMENT PLAN. SUCH 22 LICENSE SHALL BE NONASSIGNABLE. ALL LICENSEES AS OF THE 23 EFFECTIVE DATE OF THIS SUBSECTION SHALL BE REQUIRED TO FILE FOR 24 RENEWAL OF SAID LICENSE ON OR BEFORE JANUARY 31, 1992. LICENSES 25 ISSUED THROUGH APRIL 30, 1992, SHALL BE BASED ON A STAGGERED 26 RENEWAL SYSTEM ESTABLISHED BY THE DEPARTMENT. THEREAFTER, ANY 27 LICENSE ISSUED SHALL BE VALID FOR A PERIOD OF FIVE YEARS. 28 (B.1) IF THE DEPARTMENT HAS ANY REASON TO BELIEVE THAT AN 29 APPLICANT FOR A LICENSE OR ANY PERSON HOLDING A LICENSE HAS NOT 30 FILED ALL REQUIRED STATE TAX REPORTS AND PAID ANY STATE TAXES 19910H1321B2321 - 43 -
1 NOT SUBJECT TO A TIMELY PERFECTED ADMINISTRATIVE OR JUDICIAL 2 APPEAL OR SUBJECT TO A DULY AUTHORIZED DEFERRED PAYMENT PLAN, 3 THE DEPARTMENT MAY REFUSE TO ISSUE, MAY SUSPEND OR MAY REVOKE 4 SAID LICENSE. THE DEPARTMENT SHALL NOTIFY THE APPLICANT OR 5 LICENSEE OF ANY REFUSAL, SUSPENSION OR REVOCATION. AN APPLICANT 6 OR LICENSEE AGGRIEVED BY THE DETERMINATION OF THE DEPARTMENT MAY 7 FILE AN APPEAL PURSUANT TO THE PROVISIONS FOR ADMINISTRATIVE 8 APPEALS IN THIS ARTICLE. 9 (C) ANY PERSON WHO, UPON THE EXPIRATION OF SIXTY DAYS AFTER 10 THE EFFECTIVE DATE OF THIS ARTICLE, SHALL MAINTAIN A PLACE OF 11 BUSINESS IN THIS COMMONWEALTH FOR THE PURPOSE OF SELLING OR 12 LEASING SERVICES OR TANGIBLE PERSONAL PROPERTY, THE SALE OR USE 13 OF WHICH IS SUBJECT TO TAX, WITHOUT HAVING FIRST BEEN LICENSED 14 BY THE DEPARTMENT, SHALL BE GUILTY OF A SUMMARY OFFENSE, AND 15 UPON CONVICTION THEREOF IN A SUMMARY PROCEEDING, SHALL BE 16 SENTENCED TO PAY A FINE OF NOT LESS THAN ONE HUNDRED DOLLARS 17 ($100) NOR MORE THAN [THREE HUNDRED DOLLARS ($300)] ONE THOUSAND 18 DOLLARS ($1,000), AND IN DEFAULT THEREOF, TO UNDERGO 19 IMPRISONMENT OF NOT LESS THAN FIVE DAYS NOR MORE THAN THIRTY 20 DAYS. THE PENALTIES IMPOSED BY THIS SECTION SHALL BE IN ADDITION 21 TO ANY OTHER PENALTIES IMPOSED BY THIS ARTICLE. 22 (D) FAILURE OF ANY PERSON TO OBTAIN A LICENSE SHALL NOT 23 RELIEVE HIM OF LIABILITY TO PAY THE TAX IMPOSED BY THIS ARTICLE. 24 SECTION 6. SECTIONS 252 AND 268 OF THE ACT ARE AMENDED TO 25 READ: 26 SECTION 252. REFUNDS.--THE DEPARTMENT SHALL, PURSUANT TO THE 27 PROVISIONS OF SECTIONS 253 AND 254, REFUND ALL TAXES, INTEREST 28 AND PENALTIES PAID TO THE COMMONWEALTH UNDER THE PROVISIONS OF 29 THIS ARTICLE AND TO WHICH THE COMMONWEALTH IS NOT RIGHTFULLY 30 ENTITLED. SUCH REFUNDS SHALL BE MADE TO THE PERSON, HIS HEIRS, 19910H1321B2321 - 44 -
1 SUCCESSORS, ASSIGNS OR OTHER PERSONAL REPRESENTATIVES, WHO 2 ACTUALLY PAID THE TAX, EXCEPT A REFUND GRANTED FOR TAX PAID IN 3 CONJUNCTION WITH A CONTRACT WITH A CHARITABLE ORGANIZATION, 4 VOLUNTEER FIREMEN'S ORGANIZATION, NONPROFIT EDUCATIONAL 5 INSTITUTION, RELIGIOUS ORGANIZATION, THE UNITED STATES, THIS 6 COMMONWEALTH OR ITS INSTRUMENTALITIES OR POLITICAL SUBDIVISIONS 7 SHALL BE MADE TO THE AFOREMENTIONED ENTITIES: PROVIDED, THAT NO 8 REFUND SHALL BE MADE UNDER THIS SECTION WITH RESPECT TO ANY 9 PAYMENT MADE BY REASON OF AN ASSESSMENT WITH RESPECT TO WHICH A 10 TAXPAYER HAS FILED A PETITION FOR REASSESSMENT PURSUANT TO 11 SECTION 232 OF THIS ARTICLE TO THE EXTENT THAT SAID PETITION HAS 12 BEEN DETERMINED ADVERSELY TO THE TAXPAYER BY A DECISION WHICH IS 13 NO LONGER SUBJECT TO FURTHER REVIEW OR APPEAL: PROVIDED FURTHER, 14 THAT NOTHING CONTAINED HEREIN SHALL BE DEEMED TO PROHIBIT A 15 TAXPAYER WHO HAS FILED A TIMELY PETITION FOR REASSESSMENT FROM 16 AMENDING IT TO A PETITION FOR REFUND WHERE THE PETITIONER HAS 17 PAID THE TAX ASSESSED. 18 SECTION 268. CRIMES.--(A) FRAUDULENT RETURN. ANY PERSON WHO 19 WITH INTENT TO DEFRAUD THE COMMONWEALTH SHALL WILFULLY MAKE, OR 20 CAUSE TO BE MADE, ANY RETURN REQUIRED BY THIS ARTICLE, WHICH IS 21 FALSE, SHALL BE GUILTY OF A MISDEMEANOR, AND, UPON CONVICTION 22 THEREOF, SHALL BE SENTENCED TO PAY A FINE NOT EXCEEDING TWO 23 THOUSAND DOLLARS ($2000), OR UNDERGO IMPRISONMENT NOT EXCEEDING 24 THREE YEARS, OR BOTH. 25 (B) OTHER CRIMES. EXCEPT AS OTHERWISE PROVIDED BY SUBSECTION 26 (A) OF THIS SECTION, ANY PERSON [MAINTAINING A PLACE OF BUSINESS 27 IN THIS COMMONWEALTH,] WHO ADVERTISES OR HOLDS OUT OR STATES TO 28 THE PUBLIC OR TO ANY PURCHASER OR USER, DIRECTLY OR INDIRECTLY, 29 THAT THE TAX OR ANY PART THEREOF IMPOSED BY THIS ARTICLE WILL BE 30 ABSORBED BY SUCH PERSON, OR THAT IT WILL NOT BE ADDED TO THE 19910H1321B2321 - 45 -
1 PURCHASE PRICE OF THE TANGIBLE PERSONAL PROPERTY OR SERVICES 2 DESCRIBED IN SUBCLAUSES (2), (3) [AND], (4), (11) THROUGH (23) 3 OF CLAUSE (K) OF SECTION 201 OF THIS ARTICLE SOLD OR, IF ADDED, 4 THAT THE TAX OR ANY PART THEREOF WILL BE REFUNDED, OTHER THAN 5 WHEN SUCH PERSON REFUNDS THE PURCHASE PRICE BECAUSE OF SUCH 6 PROPERTY BEING RETURNED TO THE VENDOR, AND ANY PERSON 7 [MAINTAINING A PLACE OF BUSINESS IN THIS COMMONWEALTH AND] 8 SELLING OR LEASING TANGIBLE PERSONAL PROPERTY OR SAID SERVICES 9 THE SALE OR USE OF WHICH BY THE PURCHASER IS SUBJECT TO TAX 10 HEREUNDER, WHO SHALL WILFULLY FAIL [OR REFUSE] TO COLLECT THE 11 TAX FROM THE PURCHASER AND TIMELY REMIT THE SAME TO THE 12 DEPARTMENT, AND ANY PERSON WHO SHALL WILFULLY FAIL[,] OR NEGLECT 13 [OR REFUSE] TO TIMELY FILE ANY RETURN OR REPORT REQUIRED BY THIS 14 ARTICLE OR ANY TAXPAYER WHO SHALL REFUSE TO TIMELY PAY ANY TAX, 15 PENALTY OR INTEREST IMPOSED OR PROVIDED FOR BY THIS ARTICLE, OR 16 WHO SHALL WILFULLY FAIL TO PRESERVE HIS BOOKS, PAPERS AND 17 RECORDS AS DIRECTED BY THE DEPARTMENT, OR ANY PERSON WHO SHALL 18 REFUSE TO PERMIT THE DEPARTMENT OR ANY OF ITS AUTHORIZED AGENTS 19 TO EXAMINE HIS BOOKS, RECORDS OR PAPERS, OR WHO SHALL KNOWINGLY 20 MAKE ANY INCOMPLETE, FALSE OR FRAUDULENT RETURN OR REPORT, OR 21 WHO SHALL DO, OR ATTEMPT TO DO, ANYTHING WHATEVER TO PREVENT THE 22 FULL DISCLOSURE OF THE AMOUNT OR CHARACTER OF TAXABLE SALES 23 PURCHASES OR USE MADE BY HIMSELF OR ANY OTHER PERSON, OR SHALL 24 PROVIDE ANY PERSON WITH A FALSE STATEMENT AS TO THE PAYMENT OF 25 TAX WITH RESPECT TO PARTICULAR TANGIBLE PERSONAL PROPERTY OR 26 SAID SERVICES, OR SHALL MAKE, UTTER OR ISSUE A FALSE OR 27 FRAUDULENT EXEMPTION CERTIFICATE, SHALL BE GUILTY OF A 28 MISDEMEANOR, AND, UPON CONVICTION THEREOF, SHALL BE SENTENCED TO 29 PAY A FINE NOT EXCEEDING ONE THOUSAND DOLLARS ($1000) AND COSTS 30 OF PROSECUTION, OR UNDERGO IMPRISONMENT NOT EXCEEDING ONE YEAR, 19910H1321B2321 - 46 -
1 OR BOTH: PROVIDED, HOWEVER, THAT ANY PERSON MAINTAINING A PLACE 2 OF BUSINESS OUTSIDE THIS COMMONWEALTH MAY ABSORB THE TAX WITH 3 RESPECT TO TAXABLE SALES MADE IN THE NORMAL COURSE OF BUSINESS 4 TO CUSTOMERS PRESENT AT SUCH PLACE OF BUSINESS WITHOUT BEING 5 SUBJECT TO THE ABOVE PENALTY AND FINES. THE PENALTIES IMPOSED BY 6 THIS SECTION SHALL BE IN ADDITION TO ANY OTHER PENALTIES IMPOSED 7 BY ANY PROVISION OF THIS ARTICLE. 8 SECTION 7. THE DEFINITIONS OF "CLAIMANT," "DEPENDENT," 9 "POVERTY INCOME" AND "SMALL CORPORATION" IN SECTION 301 OF THE 10 ACT, ADDED MARCH 13, 1974 (P.L.179, NO.32), ARE AMENDED AND THE 11 SECTION IS AMENDED BY ADDING DEFINITIONS TO READ: 12 SECTION 301. DEFINITIONS.--THE FOLLOWING WORDS, TERMS AND 13 PHRASES WHEN USED IN THIS ARTICLE SHALL HAVE THE MEANING 14 ASCRIBED TO THEM IN THIS SECTION EXCEPT WHERE THE CONTEXT 15 CLEARLY INDICATES A DIFFERENT MEANING. ANY REFERENCE IN THIS 16 ARTICLE TO THE INTERNAL REVENUE CODE SHALL INCLUDE THE INTERNAL 17 REVENUE CODE OF 1954, AS AMENDED TO THE DATE ON WHICH THIS 18 ARTICLE IS EFFECTIVE: 19 * * * 20 (C.2) "CLAIMANT" MEANS A PERSON WHO: 21 (1) IS SUBJECT TO THE TAX IMPOSED UNDER THIS ARTICLE, [IS 22 NOT A DEPENDENT OF ANOTHER PERSON,] BUT IS ENTITLED TO CLAIM 23 AGAINST SUCH TAX THE POVERTY TAX PROVISIONS AS PROVIDED BY THIS 24 ACT; 25 (2) HAS A TAXABLE YEAR OF NOT LESS THAN TWELVE MONTHS; AND 26 (3) WITH RESPECT TO WHOM NO DEDUCTION UNDER SECTION 151 OF 27 THE INTERNAL REVENUE CODE OF 1986 (PUBLIC LAW 99-514, 26 U.S.C. 28 § 1 ET SEQ.), AS AMENDED, IS ALLOWABLE TO ANY NONHOUSEHOLD 29 MEMBER FOR A TAXABLE YEAR BEGINNING IN THE CALENDAR YEAR IN 30 WHICH THE PERSON'S TAXABLE YEAR BEGINS. 19910H1321B2321 - 47 -
1 * * * 2 (E.1) "DEPENDENT" MEANS [A SPOUSE OR CHILD WHO DERIVES MORE 3 THAN ONE-HALF OF HIS TOTAL SUPPORT DURING THE ENTIRE TAXABLE 4 YEAR FROM A CLAIMANT ENTITLED TO CLAIM THE POVERTY EXEMPTION. 5 ANY PERSON WHO IS A DEPENDENT PURSUANT TO THE PROVISIONS OF THE 6 INTERNAL REVENUE CODE DURING A TAXABLE YEAR SHALL PRIMA FACIE BE 7 DEEMED A DEPENDENT FOR PURPOSES OF THIS ACT] ANY NONHOUSEHOLD 8 MEMBER WITH RESPECT TO WHOM A DEDUCTION UNDER SECTION 151 OF THE 9 INTERNAL REVENUE CODE OF 1986 (PUBLIC LAW 99-514, 26 U.S.C. § 1 10 ET SEQ.), AS AMENDED, IS ALLOWABLE TO THE CLAIMANT FOR THE 11 CLAIMANT'S TAXABLE YEAR OR TO A HOUSEHOLD MEMBER FOR THE 12 CLAIMANT'S TAXABLE YEAR. 13 * * * 14 (I.1) "TOTAL HOUSEHOLD INCOME" MEANS ALL POVERTY INCOME 15 RECEIVED BY A CLAIMANT AND EVERY OTHER HOUSEHOLD MEMBER FOR THE 16 TAXABLE YEAR OF THE CLAIMANT. 17 (I.2) "HOUSEHOLD MEMBER" MEANS ANY INDIVIDUAL WHO, FOR MORE 18 THAN ONE-HALF OF THE TAXABLE YEAR OF THE CLAIMANT, HAS AS HIS 19 PRINCIPAL PLACE OF ABODE THE SAME HOME AS THE CLAIMANT AND IS A 20 MEMBER OF THE SAME HOUSEHOLD AS THE CLAIMANT. 21 * * * 22 (O.2) "POVERTY INCOME" MEANS FOR THE PURPOSE OF DETERMINING 23 ELIGIBILITY FOR SPECIAL TAX PROVISIONS [ALL MONEYS OR PROPERTY 24 (INCLUDING INTEREST, GAINS OR INCOME DERIVED FROM OBLIGATIONS 25 WHICH ARE STATUTORILY FREE FROM STATE OR LOCAL TAXATION UNDER 26 ANY OTHER ACT OF THE GENERAL ASSEMBLY OF THE COMMONWEALTH OF 27 PENNSYLVANIA OR UNDER THE LAWS OF THE UNITED STATES) RECEIVED OF 28 WHATEVER NATURE AND FROM WHATEVER SOURCE DERIVED BUT NOT 29 INCLUDING (I) PERIODIC PAYMENTS FOR SICKNESS AND DISABILITY 30 OTHER THAN REGULAR WAGES RECEIVED DURING A PERIOD OF SICKNESS OR 19910H1321B2321 - 48 -
1 DISABILITY; OR (II) DISABILITY, RETIREMENT OR OTHER PAYMENTS 2 ARISING UNDER WORKMEN'S COMPENSATION ACTS, OCCUPATIONAL DISEASE 3 ACTS AND SIMILAR LEGISLATION BY ANY GOVERNMENT; OR (III) 4 PAYMENTS COMMONLY RECOGNIZED AS OLD AGE OR RETIREMENT BENEFITS 5 PAID TO PERSONS RETIRED FROM SERVICE AFTER REACHING A SPECIFIC 6 AGE OR AFTER A STATED PERIOD OF EMPLOYMENT; OR (IV) PAYMENTS 7 COMMONLY KNOWN AS PUBLIC ASSISTANCE, OR UNEMPLOYMENT 8 COMPENSATION PAYMENTS BY ANY GOVERNMENTAL AGENCY; OR (V) 9 PAYMENTS TO REIMBURSE ACTUAL EXPENSES; OR (VI) PAYMENTS MADE BY 10 EMPLOYERS OR LABOR UNIONS FOR PROGRAMS COVERING HOSPITALIZATION, 11 SICKNESS, DISABILITY OR DEATH, SUPPLEMENTAL UNEMPLOYMENT 12 BENEFITS, STRIKE BENEFITS, SOCIAL SECURITY AND RETIREMENT; OR 13 (VII) ANY COMPENSATION RECEIVED BY UNITED STATES SERVICEMEN 14 SERVING IN A COMBAT ZONE.] ALL TAXABLE AND NONTAXABLE INCOME 15 FROM WHATEVER SOURCE DERIVED, INCLUDING, BUT NOT LIMITED TO, 16 SALARIES, WAGES, BONUSES, COMMISSIONS, INCOME FROM SELF- 17 EMPLOYMENT, ALIMONY, SUPPORT MONEY, CASH PUBLIC ASSISTANCE AND 18 RELIEF, THE GROSS AMOUNT OF ANY PENSIONS OR ANNUITIES INCLUDING 19 RAILROAD RETIREMENT BENEFITS, ALL BENEFITS RECEIVED UNDER THE 20 FEDERAL SOCIAL SECURITY ACT (PUBLIC LAW 74-271, 42 U.S.C. § 301 21 ET SEQ.), EXCEPT MEDICARE BENEFITS, ALL BENEFITS RECEIVED UNDER 22 STATE UNEMPLOYMENT INSURANCE LAWS AND VETERANS' DISABILITY 23 PAYMENTS, ALL INTEREST RECEIVED FROM THE FEDERAL OR ANY STATE 24 GOVERNMENT, OR ANY INSTRUMENTALITY OR POLITICAL SUBDIVISION 25 THEREOF, REALIZED CAPITAL GAINS RENTALS, WORKMEN'S COMPENSATION 26 AND THE GROSS AMOUNT OF LOSS OF TIME INSURANCE BENEFITS, LIFE 27 INSURANCE BENEFITS AND PROCEEDS, EXCEPT THE FIRST FIVE THOUSAND 28 DOLLARS ($5,000) OF THE TOTAL OF DEATH BENEFIT PAYMENTS, AND 29 GIFTS OF CASH OR PROPERTY, OTHER THAN TRANSFERS BY GIFT BETWEEN 30 MEMBERS OF A HOUSEHOLD, IN EXCESS OF A TOTAL VALUE OF THREE 19910H1321B2321 - 49 -
1 HUNDRED DOLLARS ($300), BUT SHALL NOT INCLUDE SURPLUS FOOD OR 2 OTHER RELIEF IN KIND SUPPLIED BY A GOVERNMENTAL AGENCY OR 3 PROPERTY TAX OR RENT REBATE OR INFLATION DIVIDEND. 4 * * * 5 (S.2) "SMALL CORPORATION" MEANS ANY CORPORATION WHICH HAS A 6 VALID ELECTION IN EFFECT UNDER SUBCHAPTER S OF CHAPTER 1 OF THE 7 INTERNAL REVENUE CODE OF 1954, AS AMENDED AS OF JANUARY 1, 1983, 8 AND WHICH DOES NOT HAVE PASSIVE INVESTMENT INCOME IN EXCESS OF 9 TWENTY-FIVE PER CENT OF ITS GROSS RECEIPTS AND THE NET WORTH OF 10 WHICH IS LESS THAN FIVE HUNDRED THOUSAND DOLLARS ($500,000). FOR 11 PURPOSES OF THIS CLAUSE, "PASSIVE INVESTMENT INCOME" MEANS GROSS 12 RECEIPTS DERIVED FROM ROYALTIES, RENTS, DIVIDENDS, INTEREST, 13 ANNUITIES AND SALES OR EXCHANGES OF STOCK OR SECURITIES (GROSS 14 RECEIPTS FROM SUCH SALES OR EXCHANGES BEING TAKEN INTO ACCOUNT 15 ONLY TO THE EXTENT OF GAINS THEREFROM). FOR PURPOSES OF THIS 16 CLAUSE, THE "NET WORTH" OF THE CORPORATION SHALL BE EQUAL TO THE 17 AGGREGATE NET WORTH OF THE CORPORATION AND ALL AFFILIATED 18 CORPORATIONS WHICH ARE OR, BUT FOR THE NET WORTH LIMITATION OF 19 THIS CLAUSE, WOULD BE "SMALL CORPORATIONS" WITHIN THE MEANING OF 20 THIS CLAUSE. FOR PURPOSES OF THIS CLAUSE "AFFILIATED 21 CORPORATIONS" SHALL INCLUDE ALL CORPORATIONS WHICH WOULD BE 22 INCLUDED IN A "CONTROLLED GROUP OF CORPORATIONS" WITH THE 23 CORPORATION UNDER THE RULES OF SECTION 1563(A) OF THE INTERNAL 24 REVENUE CODE OF 1986, SUBSTITUTING FIFTY PER CENT FOR EIGHTY PER 25 CENT EACH TIME IT APPEARS IN THAT SECTION. 26 (1) THE "NET WORTH" OF A CORPORATION SHALL BE THE SUM OF THE 27 CORPORATION'S ISSUED AND OUTSTANDING CAPITAL STOCK, SURPLUS AND 28 UNDIVIDED PROFITS AS PER BOOKS SET FORTH FOR THE CLOSE OF SUCH 29 TAX YEAR ON THE INCOME TAX RETURN FILED BY THE CORPORATION WITH 30 THE FEDERAL GOVERNMENT FOR ITS IMMEDIATELY PRECEDING TAX YEAR 19910H1321B2321 - 50 -
1 OR, IF NO SUCH RETURN IS MADE, AS WOULD HAVE BEEN SET FORTH HAD 2 SUCH RETURN BEEN MADE, SUBJECT, HOWEVER, IN EITHER CASE, TO ANY 3 CORRECTION FOR FRAUD, EVASION OR ERROR, INCREASED BY THE GROSS 4 SALARIES PAID TO TEN PER CENT OR GREATER SHAREHOLDERS AND FAMILY 5 MEMBERS OF SUCH SHAREHOLDERS WITH RESPECT TO THE CURRENT TAX 6 YEAR. NET WORTH SHALL IN NO CASE BE LESS THAN ZERO. FOR PURPOSES 7 OF THIS SUBCLAUSE, THE GROSS SALARY SHALL BE THE SALARY AS 8 REPORTED BY THE CORPORATION ON THE FORM W-2 FILED WITH THE 9 FEDERAL GOVERNMENT FOR SUCH SHAREHOLDER OR FAMILY MEMBER FOR 10 SUCH TAXABLE YEAR OR, IF NO SUCH FORM IS FILED, AS WOULD HAVE 11 BEEN REPORTED HAD SUCH FORM BEEN FILED, SUBJECT, HOWEVER, IN 12 EITHER CASE TO ANY CORRECTION THEREOF, FOR FRAUD, EVASION OR 13 ERROR. FOR PURPOSES OF THIS SUBCLAUSE, "FAMILY MEMBERS" SHALL 14 INCLUDE THE SHAREHOLDER'S SPOUSE, AND ANCESTORS AND LINEAL 15 DESCENDANTS AND SPOUSES OF ANCESTORS AND LINEAL DESCENDANTS. 16 (2) IF NET WORTH AS ARRIVED AT UNDER SUBCLAUSE (1) FOR THE 17 PRECEDING TAX YEAR IS GREATER THAN TWICE OR LESS THAN ONE-HALF 18 OF THE NET WORTH WHICH WOULD HAVE BEEN CALCULATED UNDER 19 SUBCLAUSE (1) AS OF THE FIRST DAY OF SUCH TAX YEAR, THEN NET 20 WORTH FOR THE PRECEDING YEAR SHALL BE THE AVERAGE OF THESE TWO 21 AMOUNTS. 22 * * * 23 SECTION 8. THE ACT IS AMENDED BY ADDING A SECTION TO READ: 24 SECTION 302. IMPOSITION OF TAX.--(A) EVERY RESIDENT 25 INDIVIDUAL, ESTATE OR TRUST SHALL BE SUBJECT TO, AND SHALL PAY 26 FOR THE PRIVILEGE OF RECEIVING EACH OF THE CLASSES OF INCOME 27 HEREINAFTER ENUMERATED IN SECTION 303, A TAX AT THE RATE OF TWO 28 AND ONE-TENTH PER CENT UPON EACH DOLLAR OF INCOME RECEIVED BY 29 THAT RESIDENT DURING THAT RESIDENT'S TAXABLE YEAR COMMENCING 30 WITH OR WITHIN CALENDAR YEAR 1987 THROUGH THE SIXTH MONTH OF THE 19910H1321B2321 - 51 -
1 TAXABLE YEAR COMMENCING WITH OR WITHIN CALENDAR YEAR 1991 AND AT 2 THE RATE OF THREE AND ONE-TENTHS PER CENT UPON EACH DOLLAR OF 3 INCOME RECEIVED BY THAT RESIDENT DURING THAT RESIDENT'S TAXABLE 4 YEAR COMMENCING WITH THE SEVENTH MONTH OF THE TAXABLE YEAR 5 COMMENCING WITH OR WITHIN CALENDAR YEAR 1991, AND AT THE RATE OF 6 TWO AND SIXTY-FIVE HUNDREDTHS PER CENT UPON EACH DOLLAR OF 7 INCOME RECEIVED BY THAT RESIDENT DURING THAT RESIDENT'S TAXABLE 8 YEAR COMMENCING WITH OR WITHIN CALENDAR YEAR 1992 AND EACH 9 CALENDAR YEAR THEREAFTER. 10 (B) EVERY NONRESIDENT INDIVIDUAL ESTATE OR TRUST SHALL BE 11 SUBJECT TO AND SHALL PAY FOR THE PRIVILEGE OF RECEIVING EACH OF 12 THE CLASSES OF INCOME HEREINAFTER ENUMERATED IN SECTION 303 FROM 13 SOURCES WITHIN THIS COMMONWEALTH, A TAX AT THE RATE OF TWO AND 14 ONE-TENTH PER CENT UPON EACH DOLLAR OF INCOME FROM SOURCES 15 WITHIN THIS COMMONWEALTH RECEIVED BY THAT NONRESIDENT DURING 16 THAT NONRESIDENT'S TAXABLE YEAR COMMENCING WITH OR WITHIN 17 CALENDAR YEAR 1987 THROUGH THE SIXTH MONTH OF THE TAXABLE YEAR 18 COMMENCING WITH OR WITHIN CALENDAR YEAR 1991 AND AT THE RATE OF 19 THREE AND ONE-TENTHS PER CENT UPON EACH DOLLAR OF INCOME FROM 20 SOURCES WITHIN THIS COMMONWEALTH RECEIVED BY THAT NONRESIDENT 21 DURING THAT NONRESIDENT'S TAXABLE YEAR COMMENCING WITH THE 22 SEVENTH MONTH OF THE TAXABLE YEAR COMMENCING WITH OR WITHIN 23 CALENDAR YEAR 1991, AND AT THE RATE OF TWO AND SIXTY-FIVE 24 HUNDREDTHS PER CENT UPON EACH DOLLAR OF INCOME RECEIVED BY THAT 25 NONRESIDENT DURING THAT NONRESIDENT'S TAXABLE YEAR COMMENCING 26 WITH OR WITHIN CALENDAR YEAR 1992 AND EACH CALENDAR YEAR 27 THEREAFTER. 28 (C) IT IS THE INTENT OF THE GENERAL ASSEMBLY THAT DURING THE 29 LAST HALF OF TAXABLE YEARS BEGINNING IN 1991, THE ADDITIONAL 30 FORTY-FIVE HUNDREDTHS PER CENT ABOVE THE 1992 RATE OF TWO AND 19910H1321B2321 - 52 -
1 SIXTY-FIVE HUNDREDTHS PER CENT SHALL BE USED TO OFFSET THE 2 GENERAL FUND DEFICIT OCCURRING AT THE CLOSE OF THE 3 COMMONWEALTH'S FISCAL YEAR ENDING IN 1991. 4 SECTION 9. SECTION 302.2 OF THE ACT IS REPEALED. 5 SECTION 10. SECTION 304 OF THE ACT, AMENDED OR ADDED MARCH 6 13, 1974 (P.L.179, NO.32) AND OCTOBER 14, 1988 (P.L.737, 7 NO.106), IS AMENDED TO READ: 8 SECTION 304. SPECIAL TAX PROVISIONS FOR POVERTY.--(A) THE 9 GENERAL ASSEMBLY, IN RECOGNITION OF THE POWERS CONTAINED IN 10 SECTION 2(B)(II) OF ARTICLE VIII OF THE CONSTITUTION OF THE 11 COMMONWEALTH OF PENNSYLVANIA WHICH PROVIDES THEREIN FOR THE 12 ESTABLISHING AS A CLASS OR CLASSES OF SUBJECTS OF TAXATION THE 13 PROPERTY OR PRIVILEGES OF PERSONS WHO, BECAUSE OF POVERTY ARE 14 DETERMINED TO BE IN NEED OF SPECIAL TAX PROVISIONS HEREBY 15 DECLARES AS ITS LEGISLATIVE INTENT AND PURPOSE TO IMPLEMENT SUCH 16 POWER UNDER SUCH CONSTITUTIONAL PROVISION BY ESTABLISHING 17 SPECIAL TAX PROVISIONS AS HEREINAFTER PROVIDED IN THIS ACT. 18 (B) THE GENERAL ASSEMBLY HAVING DETERMINED THAT THERE ARE 19 PERSONS WITHIN THIS COMMONWEALTH WHOSE INCOMES ARE SUCH THAT 20 IMPOSITION OF A TAX THEREON WOULD DEPRIVE THEM AND THEIR 21 DEPENDENTS OF THE BARE NECESSITIES OF LIFE AND HAVING FURTHER 22 DETERMINED THAT POVERTY IS A RELATIVE CONCEPT INEXTRICABLY 23 JOINED WITH ACTUAL INCOME AND THE NUMBER OF PEOPLE DEPENDENT 24 UPON SUCH INCOME DEEMS IT TO BE A MATTER OF PUBLIC POLICY TO 25 PROVIDE SPECIAL TAX PROVISIONS FOR THAT CLASS OF PERSONS 26 HEREINAFTER DESIGNATED TO RELIEVE THEIR ECONOMIC BURDEN. 27 (C) FOR THE TAXABLE YEAR [1974] 1991 AND EACH YEAR 28 THEREAFTER ANY CLAIMANT WHO MEETS THE FOLLOWING STANDARDS OF 29 ELIGIBILITY ESTABLISHED BY THIS ACT AS THE TEST FOR POVERTY 30 SHALL BE DEEMED A SEPARATE CLASS OF SUBJECT OF TAXATION, AND, AS 19910H1321B2321 - 53 -
1 SUCH, SHALL BE ENTITLED TO THE BENEFIT OF THE SPECIAL PROVISIONS 2 OF THIS ACT. 3 (D) ANY CLAIM FOR SPECIAL TAX PROVISIONS HEREUNDER SHALL BE 4 DETERMINED IN ACCORDANCE WITH THE FOLLOWING: 5 (1) IF [THE POVERTY] TOTAL HOUSEHOLD INCOME [OF THE CLAIMANT 6 DURING AN ENTIRE TAXABLE YEAR] IS [SIX THOUSAND THREE HUNDRED 7 DOLLARS ($6,300)] SEVEN THOUSAND DOLLARS ($7,000) OR LESS, THE 8 CLAIMANT SHALL BE ENTITLED TO A REFUND OR FORGIVENESS OF ANY 9 MONEYS WHICH HAVE BEEN PAID OVER TO (OR WOULD EXCEPT FOR THE 10 PROVISIONS OF THIS ACT BE PAYABLE TO) THE COMMONWEALTH UNDER THE 11 PROVISIONS OF THIS ARTICLE, WITH AN ADDITIONAL INCOME ALLOWANCE 12 OF [ONE THOUSAND FIVE HUNDRED DOLLARS ($1,500) FOR THE FIRST 13 ADDITIONAL DEPENDENT AND AN ADDITIONAL INCOME ALLOWANCE OF ONE 14 THOUSAND DOLLARS ($1,000) FOR EACH ADDITIONAL DEPENDENT OF THE 15 CLAIMANT] TWO THOUSAND DOLLARS ($2,000) FOR EACH DEPENDENT AND 16 HOUSEHOLD MEMBER. 17 (2) IF [THE POVERTY] TOTAL HOUSEHOLD INCOME [OF THE CLAIMANT 18 DURING AN ENTIRE TAXABLE YEAR] DOES NOT EXCEED THE [POVERTY 19 INCOME] LIMITATIONS PRESCRIBED BY CLAUSE (1) BY MORE THAN THE 20 DOLLAR CATEGORY CONTAINED IN SUBCLAUSES (I), (II), (III), (IV), 21 (V), (VI), (VII), (VIII) OR (IX) OF THIS CLAUSE, THE CLAIMANT 22 SHALL BE ENTITLED TO A REFUND OR FORGIVENESS BASED ON THE PER 23 CENTAGE PRESCRIBED IN SUCH SUBCLAUSES OF ANY MONEYS WHICH HAVE 24 BEEN PAID OVER TO (OR WOULD EXCEPT FOR THE PROVISIONS HEREIN BE 25 PAYABLE TO) THE COMMONWEALTH UNDER THIS ARTICLE: 26 (I) NINETY PER CENT IF NOT IN EXCESS OF ONE HUNDRED DOLLARS 27 ($100). 28 (II) EIGHTY PER CENT IF NOT IN EXCESS OF TWO HUNDRED DOLLARS 29 ($200). 30 (III) SEVENTY PER CENT IF NOT IN EXCESS OF THREE HUNDRED 19910H1321B2321 - 54 -
1 DOLLARS ($300). 2 (IV) SIXTY PER CENT IF NOT IN EXCESS OF FOUR HUNDRED DOLLARS 3 ($400). 4 (V) FIFTY PER CENT IF NOT IN EXCESS OF FIVE HUNDRED DOLLARS 5 ($500). 6 (VI) FORTY PER CENT IF NOT IN EXCESS OF SIX HUNDRED DOLLARS 7 ($600). 8 (VII) THIRTY PER CENT IF NOT IN EXCESS OF SEVEN HUNDRED 9 DOLLARS ($700). 10 (VIII) TWENTY PER CENT IF NOT IN EXCESS OF EIGHT HUNDRED 11 DOLLARS ($800). 12 (IX) TEN PER CENT IF NOT IN EXCESS OF NINE HUNDRED DOLLARS 13 ($900). 14 SECTION 11. THE ACT IS AMENDED BY ADDING A SECTION AND A 15 PART TO READ: 16 SECTION 321.1. BULK AND AUCTION SALES AND TRANSFERS, 17 NOTICE.--(A) EVERY EMPLOYER, WHO IS LIABLE FOR FILING RETURNS 18 IN ACCORDANCE WITH THE PROVISIONS OF THIS PART AND WHO SHALL 19 SELL OR CAUSE TO BE SOLD AT AUCTION, OR WHO SHALL SELL OR 20 TRANSFER IN BULK, FIFTY-ONE PER CENT OR MORE OF ANY STOCK OF 21 GOODS, WARES OR MERCHANDISE OF ANY KIND, FIXTURES, MACHINERY, 22 EQUIPMENT, BUILDINGS OR REAL ESTATE HELD BY OR ON BEHALF OF SUCH 23 PERSON, SHALL GIVE THE DEPARTMENT TEN DAYS' WRITTEN NOTICE OF 24 THE SALE OR TRANSFER PRIOR TO THE COMPLETION OF THE TRANSFER OF 25 SUCH PROPERTY IN THE MANNER PRESCRIBED BY 13 PA.C.S. § 6107 26 (RELATING TO THE NOTICE). 27 (B) WHENEVER THE SELLER OR TRANSFEROR SHALL FAIL TO GIVE 28 SUCH NOTICE TO THE DEPARTMENT, OR WHENEVER THE DEPARTMENT SHALL 29 UPON WRITTEN NOTICE INFORM THE PURCHASER OR TRANSFEREE THAT A 30 POSSIBLE CLAIM FOR TAX IMPOSED BY THIS ACT EXISTS, ANY SUMS OF 19910H1321B2321 - 55 -
1 MONEY, PROPERTY OR CHOSES IN ACTION OR OTHER CONSIDERATION, 2 WHICH THE PURCHASER OR TRANSFEREE IS THEREAFTER REQUIRED TO 3 TRANSFER OVER TO THE SELLER OR TRANSFEROR, SHALL BE SUBJECT TO A 4 FIRST PRIORITY RIGHT AND LIEN FOR ANY SUCH TAXES THERETOFORE OR 5 THEREAFTER DETERMINED TO BE DUE FROM THE SELLER OR TRANSFEROR, 6 AND THE PURCHASER OR TRANSFEREE IS FORBIDDEN TO TRANSFER TO THE 7 SELLER OR TRANSFEROR ANY SUCH SUMS OF MONEY, PROPERTY OR CHOSES 8 IN ACTION OR OTHER CONSIDERATION TO THE EXTENT OF THE AMOUNT OF 9 THE COMMONWEALTH'S CLAIM. FOR FAILURE TO COMPLY WITH THE 10 PROVISIONS OF THIS SECTION, THE PURCHASER OR TRANSFEREE SHALL BE 11 LIABLE FOR THE PAYMENT TO THE COMMONWEALTH OF ANY SUCH TAXES 12 THERETOFORE OR THEREAFTER DETERMINED TO BE DUE FROM THE SELLER 13 OR TRANSFEROR, AND SUCH LIABILITY MAY BE ASSESSED AND ENFORCED 14 IN THE SAME MANNER AS THE LIABILITY FOR TAX UNDER THIS ARTICLE: 15 PROVIDED, THAT NOTHING CONTAINED IN THIS PROVISION SHALL APPLY 16 TO SALES OR TRANSFERS MADE UNDER ANY ORDER OF COURT: AND 17 PROVIDED FURTHER, THAT THE WRITTEN NOTICE REQUIRED TO BE FILED 18 WITH THE DEPARTMENT BY THIS PROVISION SHALL BE DEEMED TO BE 19 SATISFIED WHEN THE REQUIREMENTS OF 15 PA.C.S. § 139 (RELATING TO 20 TAX CLEARANCE OF CERTAIN FUNDAMENTAL TRANSACTIONS) AS TO TAXES 21 IMPOSED BY THIS ARTICLE ARE MET. 22 PART VII-A 23 WITHHOLDING TAX ON SHARES ON INCOME FROM SOURCES 24 WITHIN THIS COMMONWEALTH 25 SECTION 324. GENERAL RULE.--WHEN A PARTNERSHIP, ASSOCIATION 26 OR PENNSYLVANIA S CORPORATION RECEIVES INCOME FROM SOURCES 27 WITHIN THIS COMMONWEALTH FOR ANY TAXABLE YEAR, AND ANY PORTION 28 OF SUCH INCOME IS ALLOCABLE TO A NONRESIDENT PARTNER, MEMBER OR 29 SHAREHOLDER THEREOF; SUCH PARTNERSHIP, ASSOCIATION OR 30 PENNSYLVANIA S CORPORATION SHALL PAY A WITHHOLDING TAX UNDER 19910H1321B2321 - 56 -
1 THIS SECTION AT SUCH TIME AND IN SUCH MANNER AS THE DEPARTMENT 2 SHALL PRESCRIBE; HOWEVER, NOTWITHSTANDING ANY OTHER PROVISION OF 3 THIS ARTICLE, ALL SUCH WITHHOLDING TAX SHALL BE PAID OVER WITHIN 4 THIRTY DAYS FOLLOWING THE END OF THE TAXABLE YEAR. 5 SECTION 324.1. AMOUNT OF WITHHOLDING TAX.--(A) THE AMOUNT 6 OF TAX WITHHELD FROM NONRESIDENTS AND THE AMOUNT OF THE 7 WITHHOLDING TAX PAYABLE UNDER SECTION 324 SHALL BE EQUAL TO THE 8 INCOME FROM SOURCES WITHIN THIS COMMONWEALTH OF THE PARTNERSHIP, 9 ASSOCIATION OR PENNSYLVANIA S CORPORATION WHICH IS ALLOCABLE TO 10 NONRESIDENT PARTNERS, MEMBERS OR SHAREHOLDERS MULTIPLIED BY THE 11 TAX RATE SPECIFIED IN SECTION 302(B). 12 (B) THERE SHALL NOT BE TAKEN INTO ACCOUNT ANY ITEM OF 13 INCOME, GAIN, LOSS OR DEDUCTION TO THE EXTENT ALLOCABLE TO ANY 14 PARTNER, MEMBER OR SHAREHOLDER WHO IS NOT A NONRESIDENT. 15 SECTION 324.2. TREATMENT OF NONRESIDENT PARTNERS, MEMBERS OR 16 SHAREHOLDERS.--EACH NONRESIDENT PARTNER, MEMBER OR SHAREHOLDER 17 SHALL BE ALLOWED A CREDIT FOR SUCH PARTNER'S, MEMBER'S OR 18 SHAREHOLDER'S SHARE OF THE WITHHOLDING TAX PAID BY THE 19 PARTNERSHIP, ASSOCIATION OR PENNSYLVANIA S CORPORATION. SUCH 20 CREDIT SHALL BE ALLOWED FOR THE PARTNER'S, MEMBER'S OR 21 SHAREHOLDER'S TAXABLE YEAR IN WHICH, OR WITH WHICH, THE 22 PARTNERSHIP, ASSOCIATION OR PENNSYLVANIA S CORPORATION TAXABLE 23 YEAR (FOR WHICH SUCH TAX WAS PAID) ENDS. 24 SECTION 324.3. LIABILITY FOR TAX, INTEREST, PENALTIES AND 25 ADDITIONS.--IF A PARTNERSHIP, ASSOCIATION OR PENNSYLVANIA S 26 CORPORATION FAILS TO PAY WITHHOLDING TAX AS PRESCRIBED HEREIN 27 AND THEREAFTER SUCH TAX IS PAID, THE PARTNERSHIP, ASSOCIATION OR 28 PENNSYLVANIA S CORPORATION SHALL NOT BE RELIEVED OF THE 29 LIABILITY FOR ANY PENALTY, INTEREST OR ADDITION AS A RESULT OF 30 FAILURE TO PROPERLY WITHHOLD SUCH TAX. 19910H1321B2321 - 57 -
1 SECTION 12. SECTION 325 OF THE ACT, AMENDED OR ADDED AUGUST 2 31, 1971 (P.L.362, NO.93), JULY 2, 1986 (P.L.318, NO.77) AND 3 DECEMBER 22, 1989 (P.L.775, NO.110), IS AMENDED TO READ: 4 SECTION 325. DECLARATIONS OF ESTIMATED TAX.--(A) EVERY 5 RESIDENT AND NONRESIDENT INDIVIDUAL, TRUST AND ESTATE SHALL AT 6 THE TIME HEREINAFTER PRESCRIBED MAKE A DECLARATION OF HIS OR ITS 7 ESTIMATED TAX FOR THE TAXABLE YEAR, CONTAINING SUCH INFORMATION 8 AS THE DEPARTMENT MAY PRESCRIBE BY REGULATIONS, IF HIS OR ITS 9 INCOME, OTHER THAN FROM COMPENSATION ON WHICH TAX IS WITHHELD 10 UNDER THIS ARTICLE, CAN REASONABLY BE EXPECTED TO EXCEED TWO 11 THOUSAND FIVE HUNDRED DOLLARS ($2,500). 12 (B) FOR THE PURPOSES OF THIS ARTICLE, THE TERM "ESTIMATED 13 TAX" MEANS THE AMOUNT WHICH AN INDIVIDUAL, TRUST OR ESTATE 14 ESTIMATES TO BE HIS OR ITS TAX DUE UNDER THIS ARTICLE FOR THE 15 TAXABLE YEAR, LESS THE AMOUNT WHICH HE OR IT ESTIMATES TO BE THE 16 SUM OF ANY CREDITS ALLOWABLE AGAINST THE TAX UNDER THIS ARTICLE. 17 (C) A HUSBAND AND WIFE MAY MAKE A JOINT DECLARATION OF 18 ESTIMATED TAX HEREUNDER AS IF THEY WERE ONE TAXPAYER, IN WHICH 19 CASE THE LIABILITY WITH RESPECT TO THE ESTIMATED TAX SHALL BE 20 JOINT AND SEVERAL. IF A JOINT DECLARATION IS MADE BUT HUSBAND 21 AND WIFE ELECT TO DETERMINE THEIR TAXES SEPARATELY, THE 22 ESTIMATED TAX FOR SUCH YEAR MAY BE TREATED AS THE ESTIMATED TAX 23 OF EITHER HUSBAND OR WIFE, OR MAY BE DIVIDED BETWEEN THEM, AS 24 THEY MAY ELECT. 25 (D) EXCEPT AS HEREINAFTER PROVIDED, THE DATE FOR FILING A 26 DECLARATION OF ESTIMATED TAX SHALL DEPEND UPON WHEN THE RESIDENT 27 OR NONRESIDENT INDIVIDUAL, TRUST OR ESTATE DETERMINES THAT HIS 28 OR ITS INCOME ON WHICH NO TAX HAS BEEN WITHHELD UNDER THIS 29 ARTICLE CAN REASONABLY BE EXPECTED TO EXCEED TWO THOUSAND FIVE 30 HUNDRED DOLLARS ($2,500) IN THE TAXABLE YEAR, AS FOLLOWS: 19910H1321B2321 - 58 -
1 (1) IF THE DETERMINATION IS MADE ON OR BEFORE APRIL 1 OF THE 2 TAXABLE YEAR, A DECLARATION OF ESTIMATED TAX SHALL BE FILED NO 3 LATER THAN APRIL 15 OF THE TAXABLE YEAR. 4 (2) IF THE DETERMINATION IS MADE AFTER APRIL 1 BUT BEFORE 5 JUNE 2 OF THE TAXABLE YEAR, THE DECLARATION SHALL BE FILED NO 6 LATER THAN JUNE 15 OF SUCH YEAR. 7 (3) IF THE DETERMINATION IS MADE AFTER JUNE 1 BUT BEFORE 8 SEPTEMBER 2 OF THE TAXABLE YEAR, THE DECLARATION SHALL BE FILED 9 NO LATER THAN SEPTEMBER 15 OF SUCH YEAR. 10 (4) IF THE DETERMINATION IS MADE AFTER SEPTEMBER 1 OF THE 11 TAXABLE YEAR, THE DECLARATION SHALL BE FILED NO LATER THAN 12 JANUARY 15 OF THE YEAR SUCCEEDING THE TAXABLE YEAR. 13 (E) NOTWITHSTANDING SUBSECTION (D) OF THIS SECTION, A 14 DECLARATION OF ESTIMATED TAX OF AN INDIVIDUAL HAVING AN 15 ESTIMATED GROSS INCOME FROM FARMING FOR THE TAXABLE YEAR WHICH 16 IS AT LEAST TWO-THIRDS OF HIS TOTAL ESTIMATED GROSS INCOME FOR 17 THE TAXABLE YEAR MAY BE FILED AT ANY TIME ON OR BEFORE JANUARY 18 15 OF THE SUCCEEDING YEAR, BUT IF THE FARMER FILES A FINAL 19 RETURN AND PAYS THE ENTIRE TAX BY MARCH 1, THE RETURN MAY BE 20 CONSIDERED AS HIS DECLARATION DUE ON OR BEFORE JANUARY 15. 21 (F) A DECLARATION OF ESTIMATED TAX OF AN INDIVIDUAL, TRUST 22 OR ESTATE HAVING A TOTAL ESTIMATED TAX FOR THE TAXABLE YEAR OF 23 ONE HUNDRED DOLLARS ($100) OR LESS MAY BE FILED AT ANY TIME ON 24 OR BEFORE JANUARY 15 OF THE SUCCEEDING YEAR UNDER REGULATIONS OF 25 THE DEPARTMENT. 26 (G) AN INDIVIDUAL, TRUST OR ESTATE MAY AMEND A DECLARATION 27 UNDER REGULATIONS OF THE DEPARTMENT. 28 (H) IF ON OR BEFORE JANUARY 31 OF THE YEAR SUCCEEDING A 29 TAXABLE YEAR, AN INDIVIDUAL [FILES HIS], TRUST OR ESTATE FILES 30 HIS OR ITS RETURN FOR THE ENTIRE TAXABLE YEAR FOR WHICH A 19910H1321B2321 - 59 -
1 DECLARATION WAS REQUIRED TO BE FILED WITHIN THE TIME PRESCRIBED 2 BY SUBSECTION (D)(4) OF THIS SECTION AND PAYS THEREWITH THE FULL 3 AMOUNT OF THE TAX SHOWN TO BE DUE ON THE RETURN: 4 (1) SUCH RETURN SHALL BE CONSIDERED AS HIS OR ITS 5 DECLARATION WHICH WAS REQUIRED TO BE FILED NO LATER THAN JANUARY 6 15. 7 (2) SUCH RETURN SHALL BE CONSIDERED AS THE AMENDMENT 8 PERMITTED BY SUBSECTION (G) TO BE FILED ON OR BEFORE JANUARY 15 9 PROVIDED THE AMOUNT OF THE TAX SHOWN ON THE RETURN IS GREATER 10 THAN THE AMOUNT OF THE ESTIMATED TAX SHOWN IN A DECLARATION 11 PREVIOUSLY MADE. 12 (I) THIS ARTICLE SHALL APPLY TO A TAXABLE YEAR OTHER THAN A 13 CALENDAR YEAR BY THE SUBSTITUTION OF THE MONTHS OF SUCH FISCAL 14 YEAR FOR THE CORRESPONDING MONTHS SPECIFIED IN THIS SECTION. 15 (J) THIS ARTICLE SHALL APPLY TO AN INDIVIDUAL, TRUST OR 16 ESTATE HAVING A TAXABLE YEAR OF LESS THAN TWELVE MONTHS IN 17 ACCORDANCE WITH PROCEDURES PRESCRIBED IN REGULATIONS OF THE 18 DEPARTMENT. 19 SECTION 13. SECTION 345(B) OF THE ACT, AMENDED JULY 1, 1978 20 (P.L.594, NO.114), IS AMENDED TO READ: 21 SECTION 345. LIEN FOR TAX.--* * * 22 (B) THE DEPARTMENT MAY, AT ANY TIME, TRANSMIT TO THE 23 PROTHONOTARIES OF THE RESPECTIVE COUNTIES CERTIFIED COPIES OF 24 ALL LIENS FOR TAXES IMPOSED BY THIS ARTICLE. IT SHALL BE THE 25 DUTY OF EACH PROTHONOTARY RECEIVING SUCH LIEN TO ENTER AND 26 DOCKET THE SAME OF RECORD IN HIS OFFICE, WHICH LIEN SHALL BE 27 INDEXED AS JUDGMENTS ARE NOW INDEXED. ALL SUCH LIENS SHALL HAVE 28 PRIORITY TO, AND BE FULLY PAID BEFORE, ANY OTHER OBLIGATION, 29 JUDGMENT, CLAIM, LIEN OR ESTATE PAID AND SATISFIED OUT OF THE 30 JUDICIAL SALE OF SAID REAL [ESTATE] AND PERSONAL PROPERTY WITH 19910H1321B2321 - 60 -
1 WHICH SAID [REAL ESTATE] PROPERTY MAY SUBSEQUENTLY BECOME 2 CHARGED, OR FOR WHICH IT MAY SUBSEQUENTLY BECOME LIABLE, 3 SUBJECT, HOWEVER, TO MORTGAGE OR OTHER LIENS EXISTING AND DULY 4 RECORDED AT THE TIME SUCH TAX LIEN IS RECORDED, SAVE AND EXCEPT 5 THE COST OF SALE AND OF THE WRIT UPON WHICH IT IS MADE AND REAL 6 ESTATE TAXES IMPOSED OR ASSESSED UPON SAID PROPERTY. [THE LIEN 7 OF SAID TAXES SHALL CONTINUE FOR FIVE YEARS FROM THE DATE OF 8 ENTRY AND MAY BE REVIVED AND CONTINUED, IN THE MANNER NOW OR 9 HEREAFTER PROVIDED FOR RENEWAL OF JUDGMENTS, AND A] A WRIT OF 10 EXECUTION MAY DIRECTLY ISSUE UPON SUCH LIEN WITHOUT THE ISSUANCE 11 AND PROSECUTION TO JUDGMENT OF A WRIT OF SCIRE FACIAS: PROVIDED, 12 THAT NOT LESS THAN TEN DAYS BEFORE ISSUANCE OF ANY EXECUTION ON 13 THE LIEN, NOTICE OF THE FILING AND EFFECT OF THE LIEN SHALL BE 14 SENT BY CERTIFIED MAIL TO THE TAXPAYER AT HIS LAST KNOWN POST 15 OFFICE ADDRESS: AND PROVIDED FURTHER, THAT THE SAID LIEN SHALL 16 HAVE NO EFFECT UPON ANY STOCK OF GOODS, WARE OR MERCHANDISE 17 REGULARLY SOLD OR LEASED IN THE ORDINARY COURSE OF BUSINESS BY 18 THE PERSON AGAINST WHOM SAID LIEN HAD BEEN ENTERED, UNLESS AND 19 UNTIL A WRIT OF EXECUTION HAS BEEN ISSUED AND A LEVY MADE UPON 20 SAID STOCK OF GOODS, WARES AND MERCHANDISE. 21 * * * 22 SECTION 14. SECTION 352(B), (D) AND (F) OF THE ACT, AMENDED 23 JUNE 29, 1984 (P.L.445, NO.94), ARE AMENDED AND THE SECTION IS 24 AMENDED BY ADDING A SUBSECTION TO READ: 25 SECTION 352. ADDITIONS, PENALTIES AND FEES.--* * * 26 (B) (1) IF ANY PART OF ANY UNDERPAYMENT OF ANY TAX IMPOSED 27 BY PART II OF THIS ARTICLE IS DUE TO NEGLIGENCE OR INTENTIONAL 28 DISREGARD OF RULES AND REGULATIONS, BUT WITHOUT INTENT TO 29 DEFRAUD, THERE SHALL BE ADDED TO THE TAX AN AMOUNT EQUAL TO FIVE 30 PER CENT OF THE UNDERPAYMENT. 19910H1321B2321 - 61 -
1 (2) IF ANY PART OF ANY UNDERPAYMENT OF ANY TAX IMPOSED BY 2 PART II OF THIS ARTICLE IS DUE TO NEGLIGENCE OR INTENTIONAL 3 DISREGARD OF RULES AND REGULATIONS, BUT WITHOUT INTENT TO 4 DEFRAUD, AND THE UNDER PAYMENT IS FROM A TAXPAYER OMITTING FROM 5 INCOME AN AMOUNT PROPERLY INCLUDABLE THEREIN WHICH IS IN EXCESS 6 OF TWENTY-FIVE PER CENT OF THE AMOUNT OF INCOME STATED ON THE 7 TAXPAYER'S RETURN, THERE SHALL BE ADDED TO THE TAX AN AMOUNT 8 EQUAL TO TWENTY-FIVE PER CENT OF THE UNDERPAYMENT. 9 * * * 10 (D) (1) IF ANY TAXPAYER FAILS [TO FILE A DECLARATION OF 11 ESTIMATED TAX OR FAILS] TO PAY ALL OR ANY PART OF AN INSTALLMENT 12 OF ESTIMATED TAX, HE SHALL BE DEEMED TO HAVE MADE AN 13 UNDERPAYMENT OF ESTIMATED TAX. THERE SHALL BE ADDED TO THE TAX 14 FOR THE TAXABLE YEAR AN AMOUNT AT THE RATE ESTABLISHED PURSUANT 15 TO SECTION 806 OF THE ACT OF APRIL 9, 1929 (P.L.343, NO.176), 16 KNOWN AS "THE FISCAL CODE," UPON THE AMOUNT OF THE UNDERPAYMENT 17 FOR THE PERIOD OF THE UNDERPAYMENT BUT NOT BEYOND THE FIFTEENTH 18 DAY OF THE FOURTH MONTH FOLLOWING THE CLOSE OF THE TAXABLE YEAR. 19 THE AMOUNT OF THE UNDERPAYMENT SHALL BE THE EXCESS OF THE AMOUNT 20 OF THE INSTALLMENT WHICH WOULD BE REQUIRED TO BE PAID IF THE 21 ESTIMATED TAX WERE EQUAL TO [EIGHTY] NINETY PER CENT OF THE TAX 22 (TWO-THIRDS IN THE CASE OF AN INDIVIDUAL DESCRIBED IN SUBSECTION 23 (E) OF SECTION 325) SHOWN ON THE RETURN FOR THE TAXABLE YEAR (OR 24 IF NO RETURN WAS FILED, OF THE TAX FOR SUCH YEAR) OVER THE 25 AMOUNT, IF ANY, OF THE INSTALLMENTS PAID ON OR BEFORE THE LAST 26 DAY PRESCRIBED FOR SUCH PAYMENT. NO UNDERPAYMENT SHALL BE DEEMED 27 TO EXIST WITH RESPECT TO [A DECLARATION OR] AN INSTALLMENT 28 OTHERWISE DUE ON OR AFTER THE TAXPAYER'S DEATH. 29 (2) NO ADDITION TO TAX SHALL BE IMPOSED IF THE TOTAL AMOUNT 30 OF ALL PAYMENTS OF ESTIMATED TAX MADE ON OR BEFORE THE LAST DATE 19910H1321B2321 - 62 -
1 PRESCRIBED FOR THE PAYMENT OF SUCH INSTALLMENT EQUALS OR EXCEEDS 2 THE LESSER OF: 3 (A) THE AMOUNT WHICH WOULD HAVE BEEN REQUIRED TO BE PAID ON 4 OR BEFORE SUCH DATE IF THE ESTIMATED TAX WERE[: 5 (I) THE TAX SHOWN ON THE RETURN OF THE INDIVIDUAL FOR THE 6 PRECEDING TAXABLE YEAR, IF A RETURN SHOWING A LIABILITY FOR TAX 7 WAS FILED BY THE INDIVIDUAL FOR THE PRECEDING TAXABLE YEAR AND 8 SUCH PRECEDING YEAR WAS A TAXABLE YEAR OF TWELVE MONTHS, OR 9 (II)] AN AMOUNT EQUAL TO THE TAX COMPUTED, AT THE RATES 10 APPLICABLE TO THE TAXABLE YEAR, BUT OTHERWISE ON THE BASIS OF 11 THE FACTS SHOWN ON HIS RETURN FOR, AND THE LAW APPLICABLE TO, 12 THE PRECEDING TAXABLE YEAR; OR 13 (B) AN AMOUNT EQUAL TO NINETY PER CENT OF THE TAX COMPUTED, 14 AT THE RATES APPLICABLE TO THE TAXABLE YEAR, ON THE BASIS OF THE 15 ACTUAL INCOME FOR THE MONTHS IN THE TAXABLE YEAR ENDING BEFORE 16 THE MONTH IN WHICH THE INSTALLMENT IS REQUIRED TO BE PAID. 17 * * * 18 (F) (1) ANY PERSON REQUIRED UNDER THE PROVISIONS OF SECTION 19 317 TO FURNISH A STATEMENT TO AN EMPLOYE WHO WILFULLY FURNISHES 20 A FALSE OR FRAUDULENT STATEMENT, OR WHO WILFULLY FAILS TO 21 FURNISH A STATEMENT IN THE MANNER, AT THE TIME, AND SHOWING THE 22 INFORMATION REQUIRED UNDER SECTION 317 AND THE REGULATIONS 23 PRESCRIBED THEREUNDER, SHALL, FOR EACH SUCH FAILURE, BE SUBJECT 24 TO A PENALTY OF FIFTY DOLLARS ($50) FOR EACH EMPLOYE. 25 (2) ANY PERSON REQUIRED BY REGULATION TO FURNISH AN 26 INFORMATION RETURN WHO FURNISHES A FALSE OR FRAUDULENT RETURN 27 SHALL FOR EACH FAILURE BE SUBJECT TO A PENALTY OF FIFTY DOLLARS 28 ($50). 29 (3) EVERY PENNSYLVANIA S CORPORATION REQUIRED TO FILE A 30 RETURN WITH THE DEPARTMENT UNDER THE PROVISIONS OF SECTION 330.1 19910H1321B2321 - 63 -
1 WHO FURNISHES A FALSE OR FRAUDULENT RETURN OR WHO FAILS TO FILE 2 THE RETURN IN THE MANNER AND AT THE TIME REQUIRED UNDER SECTION 3 330.1 SHALL BE SUBJECT TO A PENALTY OF $250 FOR EACH FAILURE. 4 * * * 5 (I) IF ANY INDIVIDUAL, ESTATE OR TRUST FILES WHAT PURPORTS 6 TO BE A RETURN REQUIRED UNDER SECTION 330 BUT WHICH DOES NOT 7 CONTAIN INFORMATION ON WHICH THE SUBSTANTIAL CORRECTNESS OF THE 8 SELF-ASSESSMENT MAY BE JUDGED, OR CONTAINS INFORMATION THAT ON 9 ITS FACE INDICATES THAT THE SELF-ASSESSMENT IS SUBSTANTIALLY 10 INCORRECT; AND THE SELF-ASSESSMENT IS DUE TO A POSITION WHICH IS 11 FRIVOLOUS, OR DUE TO A DESIRE (WHICH APPEARS ON THE PURPORTED 12 RETURN) TO DELAY OR IMPEDE THE ADMINISTRATION OF PENNSYLVANIA 13 INCOME TAX LAWS, THEN SUCH INDIVIDUAL, ESTATE OR TRUST SHALL PAY 14 A PENALTY OF FIVE HUNDRED DOLLARS ($500). THE PENALTY IMPOSED BY 15 THIS SUBSECTION SHALL BE IN ADDITION TO ANY OTHER PENALTY 16 PROVIDED BY LAW. 17 SECTION 15. SECTION 401(3)1(B) AND 2(A)(18) OF THE ACT, 18 AMENDED SEPTEMBER 9, 1971 (P.L.437, NO.105) AND DECEMBER 23, 19 1983 (P.L.370, NO.90), ARE AMENDED AND A SUBCLAUSE IS ADDED TO 20 READ: 21 SECTION 401. DEFINITIONS.--THE FOLLOWING WORDS, TERMS, AND 22 PHRASES, WHEN USED IN THIS ARTICLE, SHALL HAVE THE MEANING 23 ASCRIBED TO THEM IN THIS SECTION, EXCEPT WHERE THE CONTEXT 24 CLEARLY INDICATES A DIFFERENT MEANING: 25 * * * 26 (3) "TAXABLE INCOME." 1. * * * 27 (B) ADDITIONAL DEDUCTIONS SHALL BE ALLOWED FROM TAXABLE 28 INCOME ON ACCOUNT OF ANY DIVIDENDS RECEIVED FROM ANY OTHER 29 CORPORATION BUT ONLY TO THE EXTENT THAT SUCH DIVIDENDS ARE 30 INCLUDED IN TAXABLE INCOME AS RETURNED TO AND ASCERTAINED BY THE 19910H1321B2321 - 64 -
1 FEDERAL GOVERNMENT. FOR TAX YEARS BEGINNING ON OR AFTER JANUARY 2 1, 1991, NO ADDITIONAL DEDUCTION SHALL BE ALLOWED FOR DIVIDENDS 3 RECEIVED FROM ANY OTHER CORPORATION. 4 (B.1) AN ADDITIONAL DEDUCTION SHALL BE ALLOWED FROM TAXABLE 5 INCOME IN THE AMOUNT OF ANY INTEREST INCOME FROM SECURITIES 6 ISSUED BY THE UNITED STATES OR AGENCIES OR INSTRUMENTALITIES 7 THEREOF, TO THE EXTENT INCLUDED IN FEDERAL TAXABLE INCOME BUT 8 EXEMPT FROM THE TAX IMPOSED BY THIS ARTICLE UNDER THE LAWS OF 9 THE UNITED STATES, BUT REDUCED BY ANY INTEREST ON INDEBTEDNESS 10 INCURRED TO CARRY THE SECURITIES, ANY EXPENSES INCURRED IN THE 11 PRODUCTION OF SUCH INTEREST INCOME, AND ANY OTHER EXPENSES 12 DEDUCTED ON THE FEDERAL INCOME TAX RETURN THAT WOULD NOT HAVE 13 BEEN ALLOWED UNDER SECTION 265 OF THE INTERNAL REVENUE CODE IF 14 THE INTEREST WERE EXEMPT FROM FEDERAL INCOME TAX. 15 * * * 16 2. IN CASE THE ENTIRE BUSINESS OF ANY CORPORATION, OTHER 17 THAN A CORPORATION ENGAGED IN DOING BUSINESS AS A REGULATED 18 INVESTMENT COMPANY AS DEFINED BY THE INTERNAL REVENUE CODE OF 19 1954, AS AMENDED, IS NOT TRANSACTED WITHIN THIS COMMONWEALTH, 20 THE TAX IMPOSED BY THIS ARTICLE SHALL BE BASED UPON SUCH PORTION 21 OF THE TAXABLE INCOME OF SUCH CORPORATION FOR THE FISCAL OR 22 CALENDAR YEAR, AS DEFINED IN SUBCLAUSE 1 HEREOF, AND MAY BE 23 DETERMINED AS FOLLOWS: 24 (A) DIVISION OF INCOME. 25 * * * 26 (18) IF THE ALLOCATION AND APPORTIONMENT PROVISIONS OF THIS 27 DEFINITION DO NOT FAIRLY REPRESENT THE EXTENT OF THE TAXPAYER'S 28 BUSINESS ACTIVITY IN THIS STATE, THE TAXPAYER MAY PETITION THE 29 SECRETARY OF REVENUE OR THE SECRETARY OF REVENUE MAY REQUIRE, IN 30 RESPECT TO ALL OR ANY PART OF THE TAXPAYER'S BUSINESS ACTIVITY: 19910H1321B2321 - 65 -
1 (A) SEPARATE ACCOUNTING; 2 (B) THE EXCLUSION OF ANY ONE OR MORE OF THE FACTORS; 3 (C) THE INCLUSION OF ONE OR MORE ADDITIONAL FACTORS WHICH 4 WILL FAIRLY REPRESENT THE TAXPAYER'S BUSINESS ACTIVITY IN THIS 5 STATE; OR 6 (D) THE EMPLOYMENT OF ANY OTHER METHOD TO EFFECTUATE AN 7 EQUITABLE ALLOCATION AND APPORTIONMENT OF THE TAXPAYER'S INCOME. 8 IN DETERMINING THE FAIRNESS OF ANY ALLOCATION OR APPORTIONMENT, 9 THE SECRETARY OF REVENUE MAY GIVE CONSIDERATION TO THE 10 TAXPAYER'S PREVIOUS REPORTING AND ITS CONSISTENCY WITH THE 11 REQUESTED RELIEF. 12 * * * 13 SECTION 16. SECTION 402 OF THE ACT, AMENDED JULY 2, 1986 14 (P.L.318, NO.77), IS AMENDED TO READ: 15 SECTION 402. IMPOSITION OF TAX.--EVERY CORPORATION SHALL BE 16 SUBJECT TO, AND SHALL PAY FOR THE PRIVILEGE OF (I) DOING 17 BUSINESS IN THIS COMMONWEALTH; OR (II) CARRYING ON ACTIVITIES IN 18 THIS COMMONWEALTH; (III) HAVING CAPITAL OR PROPERTY EMPLOYED OR 19 USED IN THIS COMMONWEALTH; OR (IV) OWNING PROPERTY IN THIS 20 COMMONWEALTH, BY OR IN THE NAME OF ITSELF, OR ANY PERSON, 21 PARTNERSHIP, ASSOCIATION, LIMITED PARTNERSHIP, JOINT-STOCK 22 ASSOCIATION, OR CORPORATION, A STATE EXCISE TAX AT THE RATE OF 23 TWELVE PER CENT PER ANNUM UPON EACH DOLLAR OF TAXABLE INCOME OF 24 SUCH CORPORATION RECEIVED BY, AND ACCRUING TO, SUCH CORPORATION 25 DURING THE CALENDAR YEAR 1971 AND THE FIRST SIX MONTHS OF 1972 26 AND AT THE RATE OF ELEVEN PER CENT PER ANNUM UPON EACH DOLLAR OF 27 TAXABLE INCOME OF SUCH CORPORATION RECEIVED BY, AND ACCRUING TO, 28 SUCH CORPORATION DURING THE SECOND SIX MONTHS OF CALENDAR YEAR 29 1972 THROUGH THE CALENDAR YEAR 1973 AND AT THE RATE OF NINE AND 30 ONE-HALF PER CENT PER ANNUM UPON EACH DOLLAR OF TAXABLE INCOME 19910H1321B2321 - 66 -
1 OF SUCH CORPORATION RECEIVED BY, AND ACCRUING TO, SUCH 2 CORPORATION DURING THE CALENDAR YEARS 1974, 1975 AND 1976 AND AT 3 THE RATE OF TEN AND ONE-HALF PER CENT PER ANNUM UPON EACH DOLLAR 4 OF TAXABLE INCOME OF SUCH CORPORATION RECEIVED BY, AND ACCRUING 5 TO, SUCH CORPORATION DURING THE CALENDAR YEAR 1977 THROUGH THE 6 CALENDAR YEAR 1984 AND AT THE RATE OF NINE AND ONE-HALF PER CENT 7 PER ANNUM UPON EACH DOLLAR OF TAXABLE INCOME OF SUCH CORPORATION 8 RECEIVED BY AND ACCRUING TO SUCH CORPORATION DURING THE CALENDAR 9 YEAR 1985 THROUGH CALENDAR YEAR 1986 AND AT THE RATE OF EIGHT 10 AND ONE-HALF PER CENT PER ANNUM UPON EACH DOLLAR OF TAXABLE 11 INCOME OF SUCH CORPORATION RECEIVED BY AND ACCRUING TO SUCH 12 CORPORATION DURING THE CALENDAR YEAR 1987 THROUGH THE CALENDAR 13 YEAR 1990 AND AT THE RATE OF TEN AND ONE-HALF PER CENT PER ANNUM 14 UPON EACH DOLLAR OF TAXABLE INCOME OF SUCH CORPORATION RECEIVED 15 BY AND ACCRUING TO SUCH CORPORATION DURING CALENDAR YEAR 1991 16 AND DURING EACH CALENDAR YEAR THEREAFTER, EXCEPT WHERE A 17 CORPORATION REPORTS TO THE FEDERAL GOVERNMENT ON THE BASIS OF A 18 FISCAL YEAR, AND HAS CERTIFIED SUCH FACT TO THE DEPARTMENT AS 19 REQUIRED BY SECTION 403 OF THIS ARTICLE, IN WHICH CASE, SUCH 20 TAX, AT THE RATE OF TWELVE PER CENT, SHALL BE LEVIED, COLLECTED, 21 AND PAID UPON ALL TAXABLE INCOME RECEIVED BY, AND ACCRUING TO, 22 SUCH CORPORATION DURING THE FIRST SIX MONTHS OF THE FISCAL YEAR 23 COMMENCING IN THE CALENDAR YEAR 1972 AND AT THE RATE OF ELEVEN 24 PER CENT, SHALL BE LEVIED, COLLECTED, AND PAID UPON ALL TAXABLE 25 INCOME RECEIVED BY, AND ACCRUING TO, SUCH CORPORATION DURING THE 26 SECOND SIX MONTHS OF THE FISCAL YEAR COMMENCING IN THE CALENDAR 27 YEAR 1972 AND DURING THE FISCAL YEAR COMMENCING IN THE CALENDAR 28 YEAR 1973 AND AT THE RATE OF NINE AND ONE-HALF PER CENT, SHALL 29 BE LEVIED, COLLECTED, AND PAID UPON ALL TAXABLE INCOME RECEIVED 30 BY, AND ACCRUING TO, SUCH CORPORATION DURING THE FISCAL YEAR 19910H1321B2321 - 67 -
1 COMMENCING IN THE CALENDAR YEARS 1974, 1975 AND 1976 AND AT THE 2 RATE OF TEN AND ONE-HALF PER CENT, SHALL BE LEVIED, COLLECTED, 3 AND PAID UPON ALL TAXABLE INCOME RECEIVED BY, AND ACCRUING TO, 4 SUCH CORPORATION DURING THE FISCAL YEAR COMMENCING IN THE 5 CALENDAR YEAR 1977 THROUGH THE FISCAL YEAR COMMENCING IN 1984 6 AND AT THE RATE OF NINE AND ONE-HALF PER CENT, SHALL BE LEVIED, 7 COLLECTED, AND PAID UPON ALL TAXABLE INCOME RECEIVED BY AND 8 ACCRUING TO SUCH CORPORATION DURING THE FISCAL YEAR COMMENCING 9 IN 1985 THROUGH THE FISCAL YEAR COMMENCING IN 1986 AND AT THE 10 RATE OF EIGHT AND ONE-HALF PER CENT PER ANNUM UPON EACH DOLLAR 11 OF TAXABLE INCOME OF SUCH CORPORATION RECEIVED BY AND ACCRUING 12 TO SUCH CORPORATION DURING THE FISCAL YEAR COMMENCING IN 1987 13 THROUGH THE FISCAL YEAR COMMENCING IN 1990 AND AT THE RATE OF 14 TEN AND ONE-HALF PER CENT PER ANNUM UPON EACH DOLLAR OF TAXABLE 15 INCOME OF SUCH CORPORATION RECEIVED BY AND ACCRUING TO SUCH 16 CORPORATION DURING THE FISCAL YEAR COMMENCING IN 1991 AND DURING 17 EACH FISCAL YEAR THEREAFTER. NO PENALTY PRESCRIBED BY SUBSECTION 18 (E) OF SECTION 3003 SHALL BE ASSESSED AGAINST A CORPORATION FOR 19 THE ADDITIONAL TAX WHICH MAY BE DUE AS A RESULT OF THE INCREASE 20 IN TAX RATE FROM NINE AND ONE-HALF PER CENT TO TEN AND ONE-HALF 21 PER CENT IMPOSED RETROACTIVELY BY THIS SECTION FOR THE CALENDAR 22 YEAR 1977 OR FOR THE FISCAL YEAR COMMENCING IN 1977. 23 SECTION 17. THE ACT IS AMENDED BY ADDING A SECTION TO READ: 24 SECTION 402.1. ALLOCATION OF TAX.--FOR THE FISCAL YEAR 25 BEGINNING JULY 1, 1991, AND FOR EACH FISCAL YEAR THROUGH AND 26 INCLUDING THE FISCAL YEAR BEGINNING JULY 1, 1994, THE SECRETARY 27 OF THE BUDGET SHALL TRANSFER SEVENTY MILLION DOLLARS 28 ($70,000,000) FROM REVENUES RECEIVED UNDER THIS ARTICLE TO THE 29 INDUSTRIAL DEVELOPMENT FUND. SUCH TRANSFER SHALL BE INITIATED 30 PRIOR TO MAY 1 OF EACH FISCAL YEAR. 19910H1321B2321 - 68 -
1 SECTION 18. SECTION 407 OF THE ACT, AMENDED SEPTEMBER 9, 2 1971 (P.L.437, NO.105), DECEMBER 3, 1975 (P.L.476, NO.140) AND 3 DECEMBER 21, 1977 (P.L.330, NO.98) AND REPEALED IN PART APRIL 4 28, 1978 (P.L.202, NO.53), IS AMENDED TO READ: 5 SECTION 407. SETTLEMENT AND RESETTLEMENT.--(A) ALL TAXES 6 DUE UNDER THIS ARTICLE SHALL BE SETTLED BY THE DEPARTMENT, AND 7 SUCH SETTLEMENT SHALL BE SUBJECT TO AUDIT AND APPROVAL BY THE 8 DEPARTMENT OF THE AUDITOR GENERAL, AND SHALL, SO FAR AS 9 POSSIBLE, BE MADE SO THAT NOTICE THEREOF MAY REACH THE TAXPAYER 10 WITHIN EIGHTEEN MONTHS AFTER THE TAX REPORT WAS REQUIRED TO BE 11 MADE. THE SECRETARY OF REVENUE, AFTER CONSULTATION WITH THE 12 AUDITOR GENERAL, MAY DEVELOP AND IMPLEMENT PROCEDURES FOR THE 13 SETTLEMENT OF TAXES EMPLOYING, AMONG OTHER MEANS, AUTOMATIC DATA 14 PROCESSING, STATISTICAL ANALYSIS, COMPUTER ANALYSIS, MECHANICAL 15 HANDLING AND ISSUANCE OF SETTLEMENT DOCUMENTS, INCLUDING 16 OMISSION OF ORIGINAL SIGNATURES, SUCH THAT WILL FACILITATE WHAT 17 HE DETERMINES TO BE THE MOST EFFICIENT AND PRODUCTIVE USE OF THE 18 RESOURCES WITHIN HIS CONTROL REQUIRED TO ADEQUATELY AND 19 REASONABLY ENSURE THE PROPER COLLECTION OF TAXES. 20 (B) IF, WITHIN A PERIOD OF [ONE YEAR] THREE YEARS AFTER THE 21 DATE OF ANY SETTLEMENT, THE DEPARTMENT IS NOT SATISFIED WITH 22 SUCH SETTLEMENT, OR IF AT ANY TIME THE NET INCOME AS RETURNED BY 23 ANY CORPORATION TO THE FEDERAL GOVERNMENT IS FINALLY CHANGED OR 24 CORRECTED BY THE COMMISSIONER OF INTERNAL REVENUE OR BY ANY 25 OTHER AGENCY OR COURT OF THE UNITED STATES WITH THE RESULT THAT 26 TAX, IN ADDITION TO THE AMOUNT PAID, IS DUE UNDER THIS ARTICLE, 27 THE DEPARTMENT IS HEREBY AUTHORIZED AND EMPOWERED TO MAKE A 28 RESETTLEMENT OF THE TAX DUE BY SUCH CORPORATION, BASED UPON THE 29 FACTS CONTAINED IN THE REPORT, OR UPON ANY INFORMATION WITHIN 30 ITS POSSESSION OR THAT SHALL COME INTO ITS POSSESSION. 19910H1321B2321 - 69 -
1 WHENEVER A RESETTLEMENT SHALL HAVE BEEN MADE HEREUNDER, THE 2 DEPARTMENT SHALL RESETTLE THE ACCOUNT ACCORDING TO LAW AND SHALL 3 CREDIT OR CHARGE, AS THE CASE MAY BE, THE AMOUNT RESULTING FROM 4 SUCH RESETTLEMENT UPON THE CURRENT ACCOUNTS OF THE CORPORATION 5 WITH WHICH IT IS MADE. 6 THE RESETTLEMENT SHALL BE SUBJECT TO AUDIT AND APPROVAL BY 7 THE DEPARTMENT OF THE AUDITOR GENERAL AS IN THE CASE OF ORIGINAL 8 SETTLEMENT, AND IN CASE OF THE FAILURE OF THE TWO DEPARTMENTS TO 9 AGREE, THE RESETTLEMENT SHALL BE SUBMITTED TO THE BOARD OF 10 FINANCE AND REVENUE AS IN THE CASE OF ORIGINAL SETTLEMENTS. 11 (C) PROMPTLY AFTER THE DATE OF ANY SUCH SETTLEMENT, THE 12 DEPARTMENT SHALL SEND, BY MAIL OR OTHERWISE, A COPY THEREOF TO 13 SUCH CORPORATION. THE TAX, INTEREST, AND PENALTY IMPOSED BY THIS 14 ARTICLE SHALL BE SUBJECT TO THE RIGHT OF RESETTLEMENT, REVIEW, 15 AND REFUND WITHIN THE TIME AND IN THE MANNER NOW OR HEREAFTER 16 PROVIDED FOR BY LAW FOR PETITIONS FOR RESETTLEMENT, REVIEW AND 17 REFUND AND TO THE RIGHT OF APPEAL IN THE MANNER NOW OR HEREAFTER 18 PROVIDED FOR BY LAW FOR APPEALS IN THE CASE OF TAX SETTLEMENTS. 19 (D) IF ANY CORPORATION SHALL NEGLECT OR REFUSE TO MAKE ANY 20 REPORT AND PAYMENT OF TAX REQUIRED BY THIS ARTICLE, THE 21 DEPARTMENT SHALL ESTIMATE THE TAX DUE BY SUCH CORPORATION AND 22 SUBJECT TO AUDIT AND APPROVAL BY THE DEPARTMENT OF THE AUDITOR 23 GENERAL, SETTLE THE AMOUNT DUE BY IT FOR TAXES, PENALTIES, AND 24 INTEREST THEREON AS PRESCRIBED HEREIN, FROM WHICH SETTLEMENT 25 THERE SHALL BE NO RIGHT OF REVIEW OR APPEAL, BUT THE DEPARTMENT, 26 WITH THE APPROVAL OF THE DEPARTMENT OF THE AUDITOR GENERAL, MAY 27 REQUIRE A REPORT TO BE FILED, AND THEREUPON MAKE A SETTLEMENT 28 BASED UPON SUCH REPORT AND CANCEL THE ESTIMATED SETTLEMENT. 29 (E) IF ANY TAXPAYER, PURSUANT TO PETITION OR APPEAL, IS 30 GRANTED A RESETTLEMENT OR ISSUED AN ORDER OF COURT OR A JUDGMENT 19910H1321B2321 - 70 -
1 BASING THE TAXPAYER'S TAX FOR ANY TAXABLE YEAR UPON THE 2 PRINCIPLES OF MULTIFORMITY OR UNRELATED ASSETS RESULTING FROM A 3 FINAL DECISION UPON THE TAXPAYER'S PETITION OR APPEAL, OR ANY 4 STIPULATION FOR JUDGMENT IN SETTLEMENT OF LITIGATION THEREON, 5 THEN ANY TAXABLE YEAR OF THE TAXPAYER WITHIN A THREE-YEAR PERIOD 6 PRIOR TO THE TAXABLE YEAR IN ISSUE OR ANY TAXABLE YEAR 7 THEREAFTER MAY BE RESETTLED CONSISTENT WITH SUCH PRINCIPLES 8 WITHIN ONE YEAR OF SUCH RESETTLEMENT, ORDER OF COURT OR 9 JUDGMENT. 10 SECTION 19. THE DEFINITION OF "CAPITAL STOCK VALUE" AND 11 "PROCESSING" IN SECTION 601(A) OF THE ACT, AMENDED OR ADDED JULY 12 1, 1985 (P.L.78, NO.29) AND JULY 13, 1987 (P.L.317, NO.58), ARE 13 AMENDED AND A DEFINITION IS ADDED TO READ: 14 SECTION 601. DEFINITIONS AND REPORTS.--(A) THE FOLLOWING 15 WORDS, TERMS AND PHRASES WHEN USED IN THIS ARTICLE VI SHALL HAVE 16 THE MEANING ASCRIBED TO THEM IN THIS SECTION, EXCEPT WHERE THE 17 CONTEXT CLEARLY INDICATES A DIFFERENT MEANING: 18 * * * 19 "CAPITAL STOCK VALUE." THE AMOUNT COMPUTED PURSUANT TO THE 20 FOLLOWING FORMULA: THE PRODUCT OF ONE-HALF TIMES THE SUM OF THE 21 AVERAGE NET INCOME CAPITALIZED AT THE RATE OF NINE AND ONE-HALF 22 PER CENT PLUS SEVENTY-FIVE PER CENT OF NET WORTH, FROM WHICH 23 PRODUCT SHALL BE SUBTRACTED [ONE HUNDRED THOUSAND DOLLARS 24 ($100,000)] FIFTY THOUSAND DOLLARS ($50,000), THE ALGEBRAIC 25 EQUIVALENT OF WHICH IS 26 (.5 X (AVERAGE NET INCOME/.095 + (.75) 27 (NET WORTH))) - [$100,000] $50,000 28 * * * 29 "DIRECTLY USED." THE TERM SHALL MEAN THAT THE TANGIBLE 30 PERSONAL PROPERTY ACTIVELY CONTRIBUTES TO THE CHANGING OF RAW 19910H1321B2321 - 71 -
1 MATERIALS INTO A NEW, DIFFERENT, AND USEFUL ARTICLE OF COMMERCE. 2 THE TERM INCLUDES, BUT IS NOT LIMITED TO, MANUFACTURING MACHINES 3 AND EQUIPMENT, RAW MATERIALS SUFFICIENT FOR ONE YEAR OF 4 OPERATION, REAL PROPERTY DIRECTLY ASSOCIATED WITH THE CONDUCT OF 5 MANUFACTURING, PROCESSING, OR RESEARCH AND DEVELOPMENT. THE TERM 6 DOES NOT INCLUDE REAL OR TANGIBLE PERSONAL PROPERTY USED FOR 7 ADMINISTRATIVE PURPOSES, STORAGE OF FINISHED PRODUCTS OR RAW 8 MATERIALS IN EXCESS OF THOSE REQUIRED FOR ONE YEAR, SALES AND 9 DELIVERY ACTIVITIES. INTANGIBLE PERSONAL PROPERTY, CASH, AND 10 TANGIBLE PERSONAL PROPERTY WHICH HAS BEEN FULLY DEPRECIATED 11 SHALL NOT BE CONSIDERED TO BE DIRECTLY USED IN ANY 12 MANUFACTURING, PROCESSING, OR RESEARCH OR DEVELOPMENT. 13 * * * 14 "PROCESSING." THE FOLLOWING ACTIVITIES WHEN ENGAGED IN AS A 15 BUSINESS ENTERPRISE: 16 (1) THE COOKING OR FREEZING OF FRUITS, VEGETABLES, 17 MUSHROOMS, FISH, SEAFOOD, MEATS OR POULTRY, WHEN THE PERSON 18 ENGAGED IN SUCH BUSINESS PACKAGES SUCH PROPERTY IN SEALED 19 CONTAINERS FOR WHOLESALE DISTRIBUTION. 20 (2) THE SCOURING, CARBONIZING, CORDING, COMBING, THROWING, 21 TWISTING OR WINDING OF NATURAL OR SYNTHETIC FIBERS, OR THE 22 SPINNING, BLEACHING, DYEING, PRINTING OR FINISHING OF YARNS OR 23 FABRICS, WHEN SUCH ACTIVITIES ARE PERFORMED PRIOR TO SALE TO THE 24 ULTIMATE CONSUMER. 25 (3) THE ELECTROPLATING, GALVANIZING, ENAMELING, ANODIZING, 26 COLORING, FINISHING, IMPREGNATING OR HEAT TREATING OF METALS OR 27 PLASTICS FOR SALE OR IN THE PROCESS OF MANUFACTURING. 28 (4) THE ROLLING, DRAWING OR EXTRUDING OF FERROUS AND 29 NONFERROUS METALS. 30 (5) THE FABRICATION FOR SALE OF ORNAMENTAL OR STRUCTURAL 19910H1321B2321 - 72 -
1 METAL OR METAL STAIRS, STAIRCASES, GRATINGS, FIRE ESCAPES OR 2 RAILINGS (NOT INCLUDING FABRICATION WORK DONE AT THE 3 CONSTRUCTION SITE). 4 (6) THE PREPARATION OF ANIMAL FEED OR POULTRY FEED FOR SALE. 5 (7) THE PRODUCTION, PROCESSING AND BOTTLING OF NONALCOHOLIC 6 BEVERAGES FOR WHOLESALE DISTRIBUTION. 7 (8) THE SLAUGHTERING AND DRESSING OF ANIMALS FOR MEAT TO BE 8 SOLD OR TO BE USED IN PREPARING MEAT PRODUCTS FOR SALE, AND THE 9 PREPARATION OF MEAT PRODUCTS, INCLUDING LARD, TALLOW, GREASE, 10 COOKING AND INEDIBLE OILS FOR WHOLESALE DISTRIBUTION. 11 (9) THE OPERATION OF A SAWMILL OR PLANING MILL FOR THE 12 PRODUCTION OF LUMBER OR LUMBER PRODUCTS FOR SALE. 13 (10) THE MILLING FOR SALE OF FLOUR OR MEAL FROM GRAINS. 14 (11) THE PUBLISHING OF BOOKS, NEWSPAPERS, MAGAZINES OR OTHER 15 PERIODICALS, PRINTING AND BROADCASTING RADIO AND TELEVISION 16 PROGRAMS BY LICENSED COMMERCIAL OR EDUCATIONAL STATIONS. 17 (12) THE PROCESSING OF USED LUBRICATING OILS. 18 (13) THE BLENDING, RECTIFICATION OR PRODUCTION BY 19 DISTILLATION OR OTHERWISE OF ALCOHOL OR ALCOHOLIC LIQUORS, 20 EXCEPT THE DISTILLATION OF ALCOHOL FROM BYPRODUCTS OF WINEMAKING 21 FOR THE SOLE PURPOSE OF FORTIFYING WINE. 22 (14) THE SALVAGING, RECYCLING OR RECLAIMING OF USED 23 MATERIALS TO BE RECYCLED INTO A MANUFACTURING PROCESS. 24 (15) THE DEVELOPMENT OR SUBSTANTIAL MODIFICATION OF COMPUTER 25 PROGRAMS OR SOFTWARE FOR SALE TO UNRELATED PERSONS FOR THEIR 26 DIRECT AND INDEPENDENT USE. 27 * * * 28 SECTION 20. SECTION 602 OF THE ACT, AMENDED DECEMBER 23, 29 1983 (P.L.360, NO.89), DECEMBER 23, 1983 (P.L.370, NO.90), JULY 30 1, 1985 (P.L.78, NO.29), DECEMBER 19, 1985 (P.L.356, NO.102), 19910H1321B2321 - 73 -
1 JULY 13, 1987 (P.L.317, NO.58) AND REPEALED IN PART OCTOBER 18, 2 1988 (P.L.756, NO.108), IS AMENDED TO READ: 3 SECTION 602. IMPOSITION OF TAX.--(A) THAT EVERY DOMESTIC 4 ENTITY FROM WHICH A REPORT IS REQUIRED UNDER SECTION 601 HEREOF, 5 SHALL BE SUBJECT TO, AND PAY TO THE DEPARTMENT ANNUALLY, A TAX 6 WHICH IS THE GREATER OF (I) [SEVENTY-FIVE DOLLARS ($75)] THREE 7 HUNDRED DOLLARS ($300) OR (II) THE AMOUNT COMPUTED AT THE RATE 8 OF TEN MILLS UPON EACH DOLLAR OF THE CAPITAL STOCK VALUE AS 9 DEFINED IN SECTION 601(A) FOR THE CALENDAR YEAR 1971 AND THE 10 FISCAL YEAR BEGINNING IN 1971 THROUGH CALENDAR YEAR 1986 AND 11 FISCAL YEARS BEGINNING IN 1986, AT THE RATE OF NINE MILLS UPON 12 EACH DOLLAR OF THE CAPITAL STOCK VALUE AS DEFINED IN SECTION 13 601(A) FOR THE CALENDAR YEAR 1987 AND FISCAL YEARS BEGINNING IN 14 1987 [AND], AT THE RATE OF NINE AND ONE-HALF MILLS UPON EACH 15 DOLLAR OF THE CAPITAL STOCK VALUE AS DEFINED IN SECTION 601(A) 16 FOR THE CALENDAR YEAR 1988 AND FISCAL YEARS BEGINNING IN 1988 17 THROUGH CALENDAR YEAR 1990 AND FISCAL YEARS BEGINNING IN 1990 18 AND AT THE RATE OF TEN AND ONE-HALF MILLS UPON EACH DOLLAR OF 19 THE CAPITAL STOCK VALUE AS DEFINED IN SECTION 601(A) FOR THE 20 CALENDAR YEAR 1991 AND FISCAL YEARS BEGINNING IN 1991 AND EACH 21 YEAR THEREAFTER, EXCEPT THAT ANY DOMESTIC ENTITY OR COMPANY 22 SUBJECT TO THE TAX PRESCRIBED HEREIN MAY ELECT TO COMPUTE AND 23 PAY ITS TAX UNDER AND IN ACCORDANCE WITH THE PROVISIONS OF 24 SUBSECTION (B) OF THIS SECTION 602: PROVIDED, THAT, EXCEPT FOR 25 THE IMPOSITION OF THE [SEVENTY-FIVE DOLLAR ($75)] THREE HUNDRED 26 ($300) MINIMUM TAX, THE PROVISIONS OF THIS SECTION SHALL NOT 27 APPLY TO THE TAXATION OF THE CAPITAL STOCK OF ENTITIES ORGANIZED 28 FOR MANUFACTURING, PROCESSING, RESEARCH OR DEVELOPMENT PURPOSES, 29 WHICH IS INVESTED IN [AND ACTUALLY AND EXCLUSIVELY EMPLOYED IN 30 CARRYING ON] REAL AND TANGIBLE PERSONAL PROPERTY ACTUALLY, 19910H1321B2321 - 74 -
1 EXCLUSIVELY AND DIRECTLY USED IN MANUFACTURING, PROCESSING, 2 RESEARCH OR DEVELOPMENT WITHIN THE STATE, EXCEPT SUCH ENTITIES 3 AS ENJOY AND EXERCISE THE RIGHT OF EMINENT DOMAIN, BUT EVERY 4 ENTITY ORGANIZED FOR THE PURPOSE OF MANUFACTURING, PROCESSING, 5 RESEARCH OR DEVELOPMENT EXCEPT SUCH ENTITIES AS ENJOY AND 6 EXERCISE THE RIGHT OF EMINENT DOMAIN SHALL PAY THE STATE TAX OF 7 THE GREATER OF (I) [SEVENTY-FIVE DOLLARS ($75)] THREE HUNDRED 8 ($300) OR (II) THE AMOUNT COMPUTED AT THE RATE OF TEN MILLS UPON 9 EACH DOLLAR OF THE CAPITAL STOCK VALUE AS DEFINED IN SECTION 10 601(A) FOR THE CALENDAR YEAR 1971 AND THE FISCAL YEAR BEGINNING 11 IN 1971 THROUGH CALENDAR YEAR 1986 AND FISCAL YEARS BEGINNING IN 12 1986, AT THE RATE OF NINE MILLS UPON EACH DOLLAR OF THE CAPITAL 13 STOCK VALUE AS DEFINED IN SECTION 601(A) FOR THE CALENDAR YEAR 14 1987 AND FISCAL YEARS BEGINNING IN 1987 AND AT THE RATE OF NINE 15 AND ONE-HALF MILLS UPON EACH DOLLAR OF THE CAPITAL STOCK VALUE 16 AS DEFINED IN SECTION 601(A) FOR THE CALENDAR YEAR 1988 AND 17 FISCAL YEARS BEGINNING IN 1988 THROUGH CALENDAR YEAR 1990 AND 18 FISCAL YEARS BEGINNING IN 1990 AND AT THE RATE OF TEN AND ONE- 19 HALF MILLS UPON EACH DOLLAR OF THE CAPITAL STOCK VALUE AS 20 DEFINED IN SECTION 601(A) FOR THE CALENDAR YEAR 1991 AND FISCAL 21 YEARS BEGINNING IN 1991 AND EACH YEAR THEREAFTER, UPON SUCH 22 PROPORTION OF ITS CAPITAL STOCK, IF ANY, AS MAY BE INVESTED IN 23 ANY PROPERTY OR BUSINESS NOT [STRICTLY INCIDENT OR APPURTENANT 24 TO THE] DIRECTLY USED IN MANUFACTURING, PROCESSING, RESEARCH OR 25 DEVELOPMENT [BUSINESS], IN ADDITION TO THE LOCAL TAXES ASSESSED 26 UPON ITS PROPERTY IN THE DISTRICT WHERE LOCATED, IT BEING THE 27 OBJECT OF THIS PROVISION TO RELIEVE FROM STATE TAXATION, EXCEPT 28 FOR IMPOSITION OF THE [SEVENTY-FIVE DOLLAR ($75)] THREE HUNDRED 29 DOLLAR ($300) MINIMUM TAX UNDER THIS SECTION, ONLY SO MUCH OF 30 THE CAPITAL STOCK AS IS INVESTED PURELY IN [THE] REAL AND 19910H1321B2321 - 75 -
1 TANGIBLE PERSONAL PROPERTY DIRECTLY USED IN MANUFACTURING, 2 PROCESSING, RESEARCH OR DEVELOPMENT [PLANT AND BUSINESS]. 3 (B) (1) EVERY FOREIGN ENTITY FROM WHICH A REPORT IS 4 REQUIRED UNDER SECTION 601 HEREOF, SHALL BE SUBJECT TO AND PAY 5 TO THE DEPARTMENT ANNUALLY, A FRANCHISE TAX WHICH IS THE GREATER 6 OF (I) [SEVENTY-FIVE DOLLARS ($75)] THREE HUNDRED DOLLARS ($300) 7 OR (II) THE AMOUNT COMPUTED AT THE RATE OF TEN MILLS FOR THE 8 CALENDAR YEAR 1971 AND THE FISCAL YEARS BEGINNING IN 1971 9 THROUGH CALENDAR YEAR 1986 AND FISCAL YEARS BEGINNING IN 1986, 10 AT THE RATE OF NINE MILLS FOR THE CALENDAR YEAR 1987 AND FOR 11 FISCAL YEARS BEGINNING IN 1987 [AND], AT THE RATE OF NINE AND 12 ONE-HALF MILLS FOR CALENDAR YEAR 1988 AND FISCAL YEARS BEGINNING 13 IN 1988 THROUGH CALENDAR YEAR 1990 AND FISCAL YEARS BEGINNING IN 14 1990 AND AT THE RATE OF TEN AND ONE-HALF MILLS UPON EACH DOLLAR 15 OF THE CAPITAL STOCK VALUE AS DEFINED IN SECTION 601(A) FOR THE 16 CALENDAR YEAR 1991 AND FISCAL YEARS BEGINNING IN 1991 AND EACH 17 YEAR THEREAFTER, UPON A TAXABLE VALUE TO BE DETERMINED IN THE 18 FOLLOWING MANNER. THE CAPITAL STOCK VALUE SHALL BE ASCERTAINED 19 IN THE MANNER PRESCRIBED IN SECTION 601(A) OF THIS ARTICLE. THE 20 TAXABLE VALUE SHALL THEN BE DETERMINED BY EMPLOYING THE RELEVANT 21 APPORTIONMENT FACTORS SET FORTH IN ARTICLE IV: PROVIDED, THAT 22 THE MANUFACTURING, PROCESSING, RESEARCH AND DEVELOPMENT 23 EXEMPTIONS CONTAINED UNDER SECTION 602(A) SHALL ALSO APPLY TO 24 FOREIGN CORPORATIONS AND IN DETERMINING THE RELEVANT 25 APPORTIONMENT FACTORS THE NUMERATOR OF THE PROPERTY[, PAYROLL, 26 OR SALES FACTORS] FACTOR SHALL NOT INCLUDE ANY PROPERTY[, 27 PAYROLL OR SALES ATTRIBUTABLE TO] DIRECTLY USED IN 28 MANUFACTURING, PROCESSING, RESEARCH OR DEVELOPMENT ACTIVITIES IN 29 THE COMMONWEALTH. ANY FOREIGN CORPORATION, JOINT-STOCK 30 ASSOCIATION, LIMITED PARTNERSHIP OR COMPANY SUBJECT TO THE TAX 19910H1321B2321 - 76 -
1 PRESCRIBED HEREIN MAY ELECT TO COMPUTE AND PAY ITS TAX UNDER 2 SECTION 602(A): PROVIDED, THAT ANY FOREIGN CORPORATION, JOINT- 3 STOCK ASSOCIATION, LIMITED PARTNERSHIP OR COMPANY ELECTING TO 4 COMPUTE AND PAY ITS TAX UNDER SECTION 602(A) SHALL BE TREATED AS 5 IF IT WERE A DOMESTIC CORPORATION FOR THE PURPOSE OF DETERMINING 6 WHICH OF ITS ASSETS ARE EXEMPT FROM TAXATION AND FOR THE PURPOSE 7 OF DETERMINING THE PROPORTION OF THE VALUE OF ITS CAPITAL STOCK 8 WHICH IS SUBJECT TO TAXATION. 9 (2) THE PROVISIONS OF THIS ARTICLE SHALL APPLY TO THE 10 TAXATION OF ENTITIES ORGANIZED FOR MANUFACTURING, PROCESSING, 11 RESEARCH OR DEVELOPMENT PURPOSES, BUT SHALL NOT APPLY TO SUCH 12 ENTITIES AS ENJOY AND EXERCISE THE RIGHT OF EMINENT DOMAIN. 13 [(C) ANY ENTITY SUBJECT TO A TAX IMPOSED BY THIS ARTICLE 14 SHALL BE PERMITTED TO ELECT AN ALTERNATIVE CAPITAL STOCK VALUE, 15 WHICH SHALL BE USED IN LIEU OF THE CAPITAL STOCK VALUE DEFINED 16 IN SECTION 601(A) FOR PURPOSES OF SUBSECTIONS (A) AND (B) 17 HEREOF, FOR CALENDAR YEARS 1984, 1985 AND 1986, AND FOR FISCAL 18 YEARS BEGINNING IN 1984, 1985 AND 1986. THE ELECTION SHALL BE 19 AVAILABLE TO ALL ENTITIES, SUBJECT TO THE LIMITATIONS OF THIS 20 SUBSECTION AND SHALL BE AVAILABLE FOR EACH SUCH YEAR WITHOUT 21 REGARD TO WHETHER THE ALTERNATIVE CAPITAL STOCK VALUE WAS 22 ELECTED IN ANY OTHER YEAR. FOR THE CALENDAR YEAR 1984 AND FISCAL 23 YEARS BEGINNING IN 1984, THE ALTERNATIVE CAPITAL STOCK VALUE 24 SHALL BE ONE HUNDRED AND THIRTY PER CENT OF THE VALUE OF SUCH 25 ENTITY'S CAPITAL STOCK AS WAS SETTLED BY THE DEPARTMENT PRIOR TO 26 ANY APPORTIONMENT OR EXEMPTION FOR THE CALENDAR YEAR 1982 OR THE 27 FISCAL YEAR BEGINNING IN 1982. FOR THE CALENDAR YEAR 1985 AND 28 FISCAL YEARS BEGINNING IN 1985, THE ALTERNATIVE CAPITAL STOCK 29 VALUE SHALL BE ONE HUNDRED AND THIRTY PER CENT OF THE VALUE OF 30 SUCH ENTITY'S CAPITAL STOCK AS WAS SETTLED BY THE DEPARTMENT 19910H1321B2321 - 77 -
1 PRIOR TO ANY APPORTIONMENT OR EXEMPTION FOR THE CALENDAR YEAR 2 1983 OR THE FISCAL YEAR BEGINNING IN 1983. FOR THE CALENDAR YEAR 3 1986 AND FISCAL YEARS BEGINNING IN 1986, THE ALTERNATIVE CAPITAL 4 STOCK VALUE SHALL BE ONE HUNDRED AND THIRTY PER CENT OF SUCH 5 ENTITY'S CAPITAL STOCK VALUE AS WAS SETTLED BY THE DEPARTMENT 6 PRIOR TO ANY APPORTIONMENT OR EXEMPTION FOR THE CALENDAR YEAR 7 1984 OR THE FISCAL YEAR BEGINNING IN 1984: PROVIDED, THAT IN NO 8 CASE SHALL THE TAX DUE USING THE ALTERNATIVE CAPITAL STOCK VALUE 9 BE REDUCED MORE THAN FIVE HUNDRED DOLLARS ($500) FROM THAT 10 OBTAINED BY USING THE FORMULA SET FORTH IN SECTION 601(A), AND 11 IN NO CASE SHALL THE TAX DUE BE LESS THAN SEVENTY-FIVE DOLLARS 12 ($75). THE ELECTION TO USE THE ALTERNATIVE CAPITAL STOCK VALUE 13 FOR THE CALENDAR YEAR 1984 AND FISCAL YEARS BEGINNING IN 1984 14 SHALL BE LIMITED TO THOSE ENTITIES WHICH WERE SUBJECT TO A TAX 15 IMPOSED BY THIS ARTICLE FOR THE CALENDAR YEAR 1982 OR FISCAL 16 YEARS BEGINNING IN 1982, THE ELECTION OF THE ALTERNATIVE CAPITAL 17 STOCK VALUE FOR THE CALENDAR YEAR 1985 AND FISCAL YEARS 18 BEGINNING IN 1985 SHALL BE LIMITED TO ENTITIES WHICH WERE 19 SUBJECT TO A TAX IMPOSED BY THIS ARTICLE FOR THE CALENDAR YEAR 20 1983 OR FISCAL YEARS BEGINNING IN 1983 AND THE ELECTION TO USE 21 THE ALTERNATIVE CAPITAL STOCK VALUE FOR THE CALENDAR YEAR 1986 22 AND FISCAL YEARS BEGINNING IN 1986 SHALL BE LIMITED TO THOSE 23 ENTITIES WHICH WERE SUBJECT TO A TAX IMPOSED BY THIS ARTICLE FOR 24 THE CALENDAR YEAR 1984 OR FISCAL YEARS BEGINNING IN 1984. THE 25 SECRETARY OF REVENUE IS HEREBY DIRECTED TO UNDERTAKE A STUDY OF 26 THE INCIDENCE OF THE FIXED-FORMULA TAX ON VARIOUS SIZES AND 27 TYPES OF BUSINESSES WHICH INCUR SIGNIFICANTLY GREATER TAX 28 LIABILITY UNDER THE FIXED FORMULA. THE FINDINGS AND CONCLUSIONS 29 OF THE SECRETARY SHALL BE SUBMITTED TO THE GENERAL ASSEMBLY NOT 30 LATER THAN SEPTEMBER 15, 1986.] 19910H1321B2321 - 78 -
1 (D) IT SHALL BE THE DUTY OF THE TREASURER OR OTHER OFFICERS 2 HAVING CHARGE OF ANY DOMESTIC OR FOREIGN ENTITY, UPON WHICH A 3 TAX IS IMPOSED BY THIS SECTION, TO TRANSMIT THE AMOUNT OF TAX TO 4 THE DEPARTMENT WITHIN THE TIME PRESCRIBED BY LAW: PROVIDED, THAT 5 FOR THE PURPOSES OF THIS ACT INTEREST IN LIMITED PARTNERSHIPS OR 6 JOINT-STOCK ASSOCIATIONS SHALL BE DEEMED TO BE CAPITAL STOCK, 7 AND TAXABLE ACCORDINGLY: PROVIDED, FURTHER, THAT ENTITIES LIABLE 8 TO A TAX UNDER THIS SECTION, SHALL NOT BE REQUIRED TO PAY ANY 9 FURTHER TAX ON THE MORTGAGES, BONDS, AND OTHER SECURITIES OWNED 10 BY THEM AND IN WHICH THE WHOLE BODY OF STOCKHOLDERS OR MEMBERS, 11 AS SUCH, HAVE THE ENTIRE EQUITABLE INTEREST IN REMAINDER; BUT 12 ENTITIES OWNING OR HOLDING SUCH SECURITIES AS TRUSTEES, 13 EXECUTORS, ADMINISTRATORS, GUARDIANS, OR IN ANY OTHER MANNER 14 THAN FOR THE WHOLE BODY OF STOCKHOLDERS OR MEMBERS THEREOF AS 15 SOLE EQUITABLE OWNERS IN REMAINDER, SHALL RETURN AND PAY THE TAX 16 IMPOSED BY THIS ACT UPON ALL SECURITIES SO OWNED OR HELD BY 17 THEM, AS IN THE CASE OF INDIVIDUALS. 18 (E) ANY HOLDING COMPANY SUBJECT TO THE CAPITAL STOCK TAX OR 19 THE FRANCHISE TAX IMPOSED BY THIS SECTION MAY ELECT TO COMPUTE 20 THE CAPITAL STOCK OR FRANCHISE TAX BY APPLYING THE RATE OF TAX 21 OF TEN MILLS FOR THE CALENDAR YEAR 1971 AND THE FISCAL YEAR 22 BEGINNING IN 1971 THROUGH THE CALENDAR YEAR 1986 AND FISCAL 23 YEARS BEGINNING IN 1986, AT THE RATE OF NINE MILLS FOR THE 24 CALENDAR YEAR 1987 AND FISCAL YEARS BEGINNING IN 1987, AT THE 25 RATE OF NINE AND ONE-HALF MILLS FOR CALENDAR YEAR 1988 AND 26 FISCAL YEARS BEGINNING IN 1988 THROUGH CALENDAR YEAR 1990 AND 27 FISCAL YEARS BEGINNING IN 1990 AND AT THE RATE OF TEN AND ONE- 28 HALF MILLS FOR CALENDAR YEAR 1991 AND FISCAL YEARS BEGINNING IN 29 1991 AND EACH YEAR THEREAFTER, UPON EACH DOLLAR TO TEN PER CENT 30 OF THE CAPITAL STOCK VALUE, BUT IN NO CASE SHALL THE TAX SO 19910H1321B2321 - 79 -
1 COMPUTED BE LESS THAN [SEVENTY-FIVE DOLLARS ($75)] THREE HUNDRED 2 DOLLARS ($300). IF EXERCISED, THIS ELECTION SHALL BE IN LIEU OF 3 ANY OTHER APPORTIONMENT OR ALLOCATION TO WHICH SUCH COMPANY 4 WOULD OTHERWISE BE ENTITLED. 5 (F) EVERY DOMESTIC CORPORATION AND EVERY FOREIGN CORPORATION 6 (I) REGISTERED TO DO BUSINESS IN PENNSYLVANIA; (II) WHICH 7 MAINTAINS AN OFFICE IN PENNSYLVANIA; (III) WHICH HAS FILED A 8 TIMELY ELECTION TO BE TAXED AS A REGULATED INVESTMENT COMPANY 9 WITH THE FEDERAL GOVERNMENT; AND (IV) WHICH DULY QUALIFIES TO BE 10 TAXED AS A REGULATED INVESTMENT COMPANY UNDER THE PROVISIONS OF 11 THE INTERNAL REVENUE CODE OF 1954 AS AMENDED, SHALL BE TAXED AS 12 A REGULATED INVESTMENT COMPANY AND SHALL BE SUBJECT TO THE 13 CAPITAL STOCK OR FRANCHISE TAX IMPOSED BY SECTION 602, IN EITHER 14 CASE FOR THE PRIVILEGE OF HAVING AN OFFICE IN PENNSYLVANIA, 15 WHICH TAX SHALL BE COMPUTED PURSUANT TO THE PROVISIONS OF THIS 16 SUBSECTION IN LIEU OF ALL OTHER PROVISIONS OF THIS SECTION 602. 17 THE TAX SHALL BE IN AN AMOUNT WHICH IS THE GREATER OF THREE 18 HUNDRED DOLLARS ($300) OR THE SUM OF THE AMOUNTS DETERMINED 19 PURSUANT TO CLAUSES (1) AND (2): 20 (1) THE AMOUNT DETERMINED PURSUANT TO THIS CLAUSE SHALL BE 21 SEVENTY-FIVE DOLLARS ($75) TIMES THAT NUMBER WHICH IS THE RESULT 22 OF DIVIDING THE NET ASSET VALUE OF THE REGULATED INVESTMENT 23 COMPANY BY ONE MILLION, ROUNDED TO THE NEAREST MULTIPLE OF 24 SEVENTY-FIVE DOLLARS ($75). NET ASSET VALUE SHALL BE DETERMINED 25 BY ADDING THE MONTHLY NET ASSET VALUES AS OF THE LAST DAY OF 26 EACH MONTH DURING THE TAXABLE PERIOD AND DIVIDING THE TOTAL SUM 27 BY THE NUMBER OF MONTHS INVOLVED. EACH SUCH MONTHLY NET ASSET 28 VALUE SHALL BE THE ACTUAL MARKET VALUE OF ALL ASSETS OWNED 29 WITHOUT ANY EXEMPTIONS OR EXCLUSIONS, LESS ALL LIABILITIES, 30 DEBTS AND OTHER OBLIGATIONS. 19910H1321B2321 - 80 -
1 (2) THE AMOUNT DETERMINED PURSUANT TO THIS CLAUSE SHALL BE 2 THE AMOUNT WHICH IS THE RESULT OF MULTIPLYING THE RATE OF 3 TAXATION APPLICABLE FOR PURPOSES OF THE PERSONAL INCOME TAX 4 DURING THE SAME TAXABLE YEAR TIMES THE APPORTIONED UNDISTRIBUTED 5 PERSONAL INCOME TAX INCOME OF THE REGULATED INVESTMENT COMPANY. 6 FOR THE PURPOSES OF THIS CLAUSE: 7 (A) PERSONAL INCOME TAX INCOME SHALL MEAN INCOME TO THE 8 EXTENT ENUMERATED AND CLASSIFIED IN SECTION 303. 9 (B) UNDISTRIBUTED PERSONAL INCOME TAX INCOME SHALL MEAN ALL 10 PERSONAL INCOME TAX INCOME OTHER THAN PERSONAL INCOME TAX INCOME 11 UNDISTRIBUTED ON ACCOUNT OF THE CAPITAL STOCK OR FOREIGN 12 FRANCHISE TAX, LESS ALL PERSONAL INCOME TAX INCOME DISTRIBUTED 13 TO SHAREHOLDERS. AT THE ELECTION OF THE COMPANY, INCOME 14 DISTRIBUTED AFTER THE CLOSE OF A TAXABLE YEAR, BUT DEEMED 15 DISTRIBUTED DURING THE TAXABLE YEAR FOR FEDERAL INCOME TAX 16 PURPOSES, SHALL BE DEEMED DISTRIBUTED DURING THAT YEAR FOR 17 PURPOSES OF THIS CLAUSE. IF A COMPANY IN A TAXABLE YEAR HAS BOTH 18 CURRENT INCOME AND INCOME ACCUMULATED FROM A PRIOR YEAR, 19 DISTRIBUTIONS DURING THE YEAR SHALL BE DEEMED TO HAVE BEEN MADE 20 FIRST FROM CURRENT INCOME. 21 (C) UNDISTRIBUTED PERSONAL INCOME TAX INCOME SHALL BE 22 APPORTIONED TO PENNSYLVANIA BY A FRACTION, THE NUMERATOR OF 23 WHICH IS ALL INCOME DISTRIBUTED DURING THE TAXABLE PERIOD TO 24 SHAREHOLDERS WHO ARE RESIDENT INDIVIDUALS, ESTATES OR TRUSTS AND 25 THE DENOMINATOR OF WHICH IS ALL INCOME DISTRIBUTED DURING THE 26 TAXABLE PERIOD. RESIDENT TRUSTS SHALL NOT INCLUDE CHARITABLE, 27 PENSION OR PROFIT-SHARING, OR RETIREMENT TRUSTS. 28 (D) PERSONAL INCOME TAX INCOME AND OTHER INCOME OF A COMPANY 29 SHALL EACH BE DEEMED TO BE EITHER DISTRIBUTED TO SHAREHOLDERS OR 30 UNDISTRIBUTED IN THE PROPORTION EACH CATEGORY BEARS TO ALL 19910H1321B2321 - 81 -
1 INCOME RECEIVED BY THE COMPANY DURING THE TAXABLE YEAR. 2 (G) IN THE EVENT THAT A DOMESTIC OR FOREIGN ENTITY IS 3 REQUIRED TO FILE A REPORT PURSUANT TO SECTION 601(B) ON OTHER 4 THAN AN ANNUAL BASIS, THE TAX IMPOSED BY THIS SECTION, INCLUDING 5 THE [SEVENTY-FIVE DOLLARS ($75)] THREE HUNDRED DOLLARS ($300) 6 MINIMUM TAX, SHALL BE PRORATED TO REFLECT THE PORTION OF A 7 TAXABLE YEAR FOR WHICH THE REPORT IS FILED BY MULTIPLYING THE 8 TAX LIABILITY BY A FRACTION EQUAL TO THE NUMBER OF DAYS IN THE 9 TAXABLE YEAR DIVIDED BY THREE HUNDRED SIXTY-FIVE DAYS. 10 SECTION 21. SECTION 602.1 OF THE ACT, ADDED AUGUST 31, 1971 11 (P.L.362, NO.93), IS AMENDED TO READ: 12 SECTION 602.1. POLLUTION CONTROL DEVICES.--NOTWITHSTANDING 13 THE FOREGOING PROVISIONS OF SECTION 602, TO THE CONTRARY, 14 EQUIPMENT, MACHINERY[, FACILITIES] AND OTHER [ASSETS] TANGIBLE 15 PROPERTY, OTHER THAN A BUILDING AND ITS STRUCTURAL COMPONENTS, 16 UNLESS THE BUILDING IS EXCLUSIVELY USED IN POLLUTION CONTROL, 17 EMPLOYED OR UTILIZED WITHIN THE COMMONWEALTH OF PENNSYLVANIA FOR 18 WATER AND AIR POLLUTION CONTROL OR ABATEMENT [DEVICES WHICH ARE 19 BEING EMPLOYED OR UTILIZED] FOR THE BENEFIT OF THE GENERAL 20 PUBLIC SHALL BE EXEMPT FROM THE TAX IMPOSED UNDER THIS ARTICLE 21 VI. IN ORDER TO QUALIFY FOR SUCH EXEMPTION THE EQUIPMENT, 22 MACHINERY AND TANGIBLE PROPERTY SHALL BE INSTALLED AND COMPLETED 23 AND OPERATING IN PLACE. HOWEVER, IF INSTALLED SOLELY FOR THE 24 SAFETY, HEALTH, PROTECTION OR BENEFIT, OR ANY COMBINATION 25 THEREOF, OF PERSONNEL, OR IF INSTALLED SOLELY FOR THE ABATEMENT 26 OR CONTROL OF POLLUTION UPON AN ENTITY'S OWN PREMISES, SUCH 27 EXEMPTION SHALL NOT APPLY. THE DEPARTMENT OF REVENUE SHALL HAVE 28 THE POWER, BY REGULATION, TO PRESCRIBE THE MANNER AND METHOD BY 29 WHICH SUCH EXEMPTION SHALL BE [CLAIMED.] GRANTED AND CLAIMED, 30 EXCEPT THAT ANY EQUIPMENT, MACHINERY AND OTHER TANGIBLE 19910H1321B2321 - 82 -
1 PROPERTY, THE COST OF WHICH WILL BE RECOVERED OVER ITS ACTUAL 2 USEFUL LIFE FROM EARNINGS DERIVED THROUGH THE RECOVERY OF WASTES 3 OR OTHERWISE IN THE OPERATION OF SUCH PROPERTY, SHALL NOT BE 4 EXEMPT. 5 SECTION 22. SECTION 602.3 OF THE ACT, ADDED JULY 13, 1987 6 (P.L.317, NO.58), IS AMENDED TO READ: 7 SECTION 602.3. DEPOSIT OF PROCEEDS; APPROPRIATION.--(A) THE 8 PROCEEDS RESULTING FROM [THE INCREASE IN THE TAX RATE FROM NINE 9 MILLS TO NINE AND ONE-HALF MILLS, EFFECTIVE FOR CALENDAR YEAR 10 1988 AND FISCAL YEARS BEGINNING IN 1988 THROUGH CALENDAR YEAR 11 1991 AND FISCAL YEARS BEGINNING IN 1991,] ONE-HALF MILL OF THE 12 TAX IMPOSED PURSUANT TO THIS ARTICLE AS DETERMINED BY THE 13 SECRETARY OF REVENUE USING THE PROVISIONS OF THIS ARTICLE AS IT 14 EXISTED ON JANUARY 1, 1990 SHALL BE TRANSFERRED TO THE HAZARDOUS 15 SITES CLEANUP FUND WHICH IS HEREBY CREATED. 16 (B) THE PROCEEDS RESULTING FROM ONE-HALF MILL OF THE TAX 17 IMPOSED PURSUANT TO THIS ARTICLE AS DETERMINED BY THE SECRETARY 18 OF REVENUE USING THE PROVISIONS OF THIS ARTICLE AS IT EXISTED ON 19 JANUARY 1, 1990 SHALL BE TRANSFERRED TO THE TAX STABILIZATION 20 RESERVE FUND ESTABLISHED BY CHAPTER II OF THE ACT OF JULY 1, 21 1985 (P.L.120, NO.32), KNOWN AS THE TAX STABILIZATION RESERVE 22 FUND ACT. 23 [(B)] (C) THE FUNDS DEPOSITED IN THE HAZARDOUS SITES CLEANUP 24 FUND ARE HEREBY APPROPRIATED OUT OF THIS ACCOUNT UPON 25 AUTHORIZATION BY THE GOVERNOR. 26 SECTION 23. SECTIONS 701 AND 801 OF THE ACT, AMENDED JULY 1, 27 1989 (P.L.95, NO.21), ARE AMENDED TO READ: 28 SECTION 701. IMPOSITION OF TAX.--EVERY BANK HAVING CAPITAL 29 STOCK, INCORPORATED BY OR UNDER ANY LAW OF THIS COMMONWEALTH OR 30 UNDER ANY LAW OF THE UNITED STATES, AND LOCATED WITHIN THIS 19910H1321B2321 - 83 -
1 COMMONWEALTH, SHALL, ON OR BEFORE APRIL 15 IN EACH AND EVERY 2 YEAR, MAKE TO THE DEPARTMENT OF REVENUE A REPORT IN WRITING, 3 VERIFIED AS REQUIRED BY LAW, SETTING FORTH THE FULL NUMBER OF 4 SHARES OF THE CAPITAL STOCK SUBSCRIBED FOR OR ISSUED, AS OF THE 5 PRECEDING JANUARY 1, BY SUCH BANK HAVING CAPITAL STOCK, AND THE 6 TAXABLE AMOUNT OF SUCH SHARES OF CAPITAL STOCK DETERMINED 7 PURSUANT TO SECTION 701.1. IT SHALL BE THE DUTY OF THE 8 DEPARTMENT OF REVENUE TO ASSESS SUCH SHARES FOR THE CALENDAR 9 YEARS BEGINNING JANUARY 1, 1971 THROUGH JANUARY 1, 1983, AT THE 10 RATE OF FIFTEEN MILLS AND FOR THE CALENDAR YEARS BEGINNING 11 JANUARY 1, 1984 THROUGH JANUARY 1, 1988, AT THE RATE OF ONE AND 12 SEVENTY-FIVE ONE THOUSANDTHS PER CENT AND FOR THE CALENDAR YEAR 13 BEGINNING JANUARY 1, 1989, AT THE RATE OF 10.77 PER CENT AND FOR 14 THE CALENDAR YEAR BEGINNING JANUARY 1, 1990, AND EACH CALENDAR 15 YEAR THEREAFTER AT THE RATE OF 1.25 PER CENT UPON EACH DOLLAR OF 16 TAXABLE AMOUNT THEREOF, THE TAXABLE AMOUNT OF EACH SHARE OF 17 STOCK TO BE ASCERTAINED AND FIXED PURSUANT TO SECTION 701.1, AND 18 DIVIDING THIS AMOUNT BY THE NUMBER OF SHARES. IT SHALL BE THE 19 DUTY OF EVERY BANK HAVING CAPITAL STOCK, AT THE TIME OF MAKING 20 EVERY REPORT REQUIRED BY THIS SECTION, TO COMPUTE THE TAX AND TO 21 PAY THE AMOUNT OF SAID TAX TO THE STATE TREASURER, THROUGH THE 22 DEPARTMENT OF REVENUE EITHER FROM ITS GENERAL FUND, OR FROM THE 23 AMOUNT OF SAID TAX COLLECTED FROM ITS SHAREHOLDERS: PROVIDED, 24 THAT FOR THE CALENDAR [YEAR] YEARS BEGINNING JANUARY 1, 1971[, 25 AND EACH YEAR THEREAFTER] THROUGH JANUARY 1, 1991, SUCH BANK 26 HAVING CAPITAL STOCK, UPON THE DATE ITS REPORT, HEREIN REQUIRED 27 IS MADE FOR SUCH CALENDAR [YEAR] YEARS BEGINNING JANUARY 1, 28 1971[, AND EACH YEAR THEREAFTER] THROUGH JANUARY 1, 1991, SHALL 29 PAY TO THE DEPARTMENT OF REVENUE NOT LESS THAN EIGHTY PER CENT 30 OF THE TAX DUE TO THE COMMONWEALTH BY IT FOR SUCH CALENDAR YEAR, 19910H1321B2321 - 84 -
1 AND THE REMAINING TAX DUE SHALL BE PAID AT THE TIME WHEN THE 2 REPORT HEREIN REQUIRED FOR THE YEAR NEXT SUCCEEDING IS MADE: 3 PROVIDED, THAT IN CASE ANY BANK HAVING CAPITAL STOCK, 4 INCORPORATED UNDER THE LAW OF THIS STATE OR OF THE UNITED 5 STATES, SHALL COLLECT, ANNUALLY, FROM THE SHAREHOLDERS THEREOF 6 SAID TAX, ACCORDING TO THE PROVISIONS OF THIS ARTICLE, THAT HAVE 7 BEEN SUBSCRIBED FOR OR ISSUED, AND PAY THE SAME INTO THE STATE 8 TREASURY, THROUGH THE DEPARTMENT OF REVENUE, THE SHARES, AND SO 9 MUCH OF THE CAPITAL AND PROFITS OF SUCH BANK HAVING CAPITAL 10 STOCK AS SHALL NOT BE INVESTED IN REAL ESTATE, SHALL BE EXEMPT 11 FROM LOCAL TAXATION UNDER THE LAWS OF THIS COMMONWEALTH; AND 12 SUCH BANK HAVING CAPITAL STOCK SHALL NOT BE REQUIRED TO MAKE ANY 13 REPORT TO THE LOCAL ASSESSOR OR COUNTY COMMISSIONERS OF ITS 14 PERSONAL PROPERTY OWNED BY IT IN ITS OWN RIGHT FOR PURPOSES OF 15 TAXATION AND SHALL NOT BE REQUIRED TO PAY ANY TAX THEREON. 16 SECTION 801. IMPOSITION OF TAX.--EVERY COMPANY INCORPORATED 17 UNDER THE PROVISIONS OF SECTION 29 OF AN ACT, ENTITLED "AN ACT 18 TO PROVIDE FOR THE INCORPORATION AND REGULATION OF CERTAIN 19 CORPORATIONS," APPROVED APRIL 29, 1874, AND ITS SUPPLEMENTS, OR 20 ANY OTHER ACT OF ASSEMBLY HERETOFORE OR HEREAFTER APPROVED, FOR 21 THE INSURANCE OF OWNERS OF REAL ESTATE, MORTGAGES, AND OTHERS 22 INTERESTED IN REAL ESTATE, FROM LOSS BY REASON OF DEFECTIVE 23 TITLES, LIENS, AND ENCUMBRANCES, AND EVERY COMPANY ENTITLED TO 24 BENEFITS OF, AND EVERY COMPANY HAVING ANY OF THE POWERS OF, 25 COMPANIES ENTITLED TO THE BENEFITS OF AN ACT, ENTITLED "AN ACT 26 CONFERRING UPON CERTAIN FIDELITY, INSURANCE, SAFETY DEPOSIT, 27 TRUST, AND SAVINGS COMPANIES, THE POWERS AND PRIVILEGES OF 28 COMPANIES INCORPORATED UNDER THE PROVISIONS OF SECTION 29 OF AN 29 ACT, ENTITLED 'AN ACT TO PROVIDE FOR THE INCORPORATION AND 30 REGULATION OF CERTAIN CORPORATIONS,' APPROVED APRIL 29, 1874, 19910H1321B2321 - 85 -
1 AND OF THE SUPPLEMENTS THERETO," APPROVED JUNE 27, 1895, 2 COMMONLY KNOWN AS TITLE INSURANCE OR TRUST COMPANIES, AND EVERY 3 COMPANY ORGANIZED AS A BANK AND TRUST COMPANY OR AS A TRUST 4 COMPANY UNDER ANY ACT OF ASSEMBLY HERETOFORE OR HEREAFTER 5 APPROVED, EXCEPT ANY SUCH COMPANIES, ALL OF THE SHARES OF 6 CAPITAL STOCK OF WHICH (OTHER THAN SHARES NECESSARY TO QUALIFY 7 DIRECTORS) ARE OWNED BY A COMPANY WHICH IS LIABLE TO PAY TO THE 8 COMMONWEALTH A TAX ON SHARES, SHALL, ON OR BEFORE APRIL 15 IN 9 EACH AND EVERY YEAR, MAKE TO THE DEPARTMENT OF REVENUE A REPORT 10 IN WRITING, SETTING FORTH THE FULL NUMBER OF SHARES OF THE 11 CAPITAL STOCK SUBSCRIBED FOR OR ISSUED BY SUCH COMPANY, AND THE 12 TAXABLE AMOUNT OF SUCH SHARES OF CAPITAL STOCK DETERMINED 13 PURSUANT TO SECTION 801.1. IT SHALL BE THE DUTY OF THE 14 DEPARTMENT OF REVENUE, TO ASSESS SUCH SHARES FOR TAXATION FOR 15 CALENDAR YEARS BEGINNING JANUARY 1, 1971 THROUGH JANUARY 1, 16 1983, AT THE RATE OF FIFTEEN MILLS AND FOR THE CALENDAR YEARS 17 BEGINNING JANUARY 1, 1984, THROUGH JANUARY 1, 1988, AT THE RATE 18 OF ONE AND SEVENTY-FIVE ONE THOUSANDTHS PER CENT AND FOR THE 19 CALENDAR YEAR BEGINNING JANUARY 1, 1989, AT THE RATE OF 10.77 20 PER CENT AND FOR THE CALENDAR YEAR BEGINNING JANUARY 1, 1990, 21 AND EACH CALENDAR YEAR THEREAFTER AT THE RATE OF 1.25 PER CENT 22 UPON EACH DOLLAR OF THE TAXABLE AMOUNT THEREOF, THE TAXABLE 23 AMOUNT OF EACH SHARE OF STOCK TO BE ASCERTAINED AND FIXED 24 PURSUANT TO SECTION 801.1, AND DIVIDING THIS AMOUNT BY THE 25 NUMBER OF SHARES. 26 IT SHALL BE THE DUTY OF EVERY SUCH COMPANY, AT THE TIME OF 27 MAKING EVERY REPORT REQUIRED BY THIS SECTION, TO COMPUTE THE TAX 28 AND TO PAY THE AMOUNT OF SAID TAX TO THE STATE TREASURER, 29 THROUGH THE DEPARTMENT OF REVENUE, EITHER FROM ITS GENERAL FUND, 30 OR FROM THE AMOUNT OF SAID TAX COLLECTED FROM ITS SHAREHOLDERS: 19910H1321B2321 - 86 -
1 PROVIDED, THAT FOR THE CALENDAR [YEAR] YEARS BEGINNING JANUARY 2 1, 1971[, AND EACH YEAR THEREAFTER] THROUGH JANUARY 1, 1991, 3 EVERY SUCH COMPANY SHALL, AT THE TIME OF MAKING ITS REPORT FOR 4 THE CALENDAR [YEAR] YEARS BEGINNING JANUARY 1, 1971[, AND EACH 5 YEAR THEREAFTER] THROUGH JANUARY 1, 1991, COMPUTE THE TAX AND 6 PAY TO THE STATE TREASURER, THROUGH THE DEPARTMENT OF REVENUE, 7 EITHER FROM ITS GENERAL FUND, OR FROM THE AMOUNT OF SAID TAX 8 COLLECTED FROM ITS SHAREHOLDERS, NOT LESS THAN EIGHTY PER CENT 9 OF THE TAX DUE TO THE COMMONWEALTH BY IT FOR SUCH CALENDAR YEAR 10 AND THE REMAINING TAX DUE SHALL BE PAID AT THE TIME WHEN THE 11 REPORT HEREIN REQUIRED FOR THE YEAR NEXT SUCCEEDING IS MADE: 12 PROVIDED, THAT UPON THE PAYMENT OF THE TAX FIXED BY THIS ACT 13 INTO THE STATE TREASURY, THROUGH THE DEPARTMENT OF REVENUE, THE 14 SHARES AND SO MUCH OF THE CAPITAL STOCK, SURPLUS, PROFITS, AND 15 DEPOSITS OF SUCH COMPANY AS SHALL NOT BE INVESTED IN REAL 16 ESTATE, SHALL BE EXEMPT FROM ALL OTHER TAXATION UNDER THE LAWS 17 OF THIS COMMONWEALTH. THE PROCEDURE, IN CASE THE DEPARTMENT OF 18 REVENUE BE NOT SATISFIED WITH THE REPORT MADE BY ANY TITLE 19 INSURANCE OR TRUST COMPANY, AND THE PENALTIES FOR FAILING TO 20 MAKE SUCH REPORT AND PAY THE TAX, SHALL BE AS PROVIDED BY LAW. 21 SECTION 24. SECTION 1101(A) OF THE ACT, AMENDED JULY 13, 22 1987 (P.L.317, NO.58), IS AMENDED TO READ: 23 SECTION 1101. IMPOSITION OF TAX.--(A) GENERAL RULE.--EVERY 24 RAILROAD COMPANY, PIPELINE COMPANY, CONDUIT COMPANY, STEAMBOAT 25 COMPANY, CANAL COMPANY, SLACK WATER NAVIGATION COMPANY, 26 TRANSPORTATION COMPANY, AND EVERY OTHER COMPANY, ASSOCIATION, 27 JOINT-STOCK ASSOCIATION, OR LIMITED PARTNERSHIP, NOW OR 28 HEREAFTER INCORPORATED OR ORGANIZED BY OR UNDER ANY LAW OF THIS 29 COMMONWEALTH, OR NOW OR HEREAFTER ORGANIZED OR INCORPORATED BY 30 ANY OTHER STATE OR BY THE UNITED STATES OR ANY FOREIGN 19910H1321B2321 - 87 -
1 GOVERNMENT, AND DOING BUSINESS IN THIS COMMONWEALTH, AND EVERY 2 COPARTNERSHIP, PERSON OR PERSONS OWNING, OPERATING OR LEASING TO 3 OR FROM ANOTHER CORPORATION, COMPANY, ASSOCIATION, JOINT-STOCK 4 ASSOCIATION, LIMITED PARTNERSHIP, COPARTNERSHIP, PERSON OR 5 PERSONS, ANY RAILROAD, PIPELINE, CONDUIT, STEAMBOAT, CANAL, 6 SLACK WATER NAVIGATION, OR OTHER DEVICE FOR THE TRANSPORTATION 7 OF FREIGHT, PASSENGERS, BAGGAGE, OR OIL, EXCEPT TAXICABS, MOTOR 8 BUSES AND MOTOR OMNIBUSES, AND EVERY LIMITED PARTNERSHIP, 9 ASSOCIATION, JOINT-STOCK ASSOCIATION, CORPORATION OR COMPANY 10 ENGAGED IN, OR HEREAFTER ENGAGED IN, THE TRANSPORTATION OF 11 FREIGHT OR OIL WITHIN THIS STATE, AND EVERY TELEPHONE COMPANY, 12 TELEGRAPH COMPANY, EXPRESS COMPANY, GAS COMPANY, PALACE CAR 13 COMPANY AND SLEEPING CAR COMPANY, NOW OR HEREAFTER INCORPORATED 14 OR ORGANIZED BY OR UNDER ANY LAW OF THIS COMMONWEALTH, OR NOW OR 15 HEREAFTER ORGANIZED OR INCORPORATED BY ANY OTHER STATE OR BY THE 16 UNITED STATES OR ANY FOREIGN GOVERNMENT AND DOING BUSINESS IN 17 THIS COMMONWEALTH, AND EVERY LIMITED PARTNERSHIP, ASSOCIATION, 18 JOINT-STOCK ASSOCIATION, COPARTNERSHIP, PERSON OR PERSONS, 19 ENGAGED IN TELEPHONE, TELEGRAPH, EXPRESS, GAS, PALACE CAR OR 20 SLEEPING CAR BUSINESS IN THIS COMMONWEALTH, SHALL PAY TO THE 21 STATE TREASURER, THROUGH THE DEPARTMENT OF REVENUE, A TAX OF 22 FORTY-FOUR MILLS UPON EACH DOLLAR OF THE GROSS RECEIPTS OF THE 23 CORPORATION, COMPANY OR ASSOCIATION, LIMITED PARTNERSHIP, JOINT- 24 STOCK ASSOCIATION, COPARTNERSHIP, PERSON OR PERSONS, RECEIVED 25 FROM PASSENGERS, BAGGAGE, AND FREIGHT TRANSPORTED WHOLLY WITHIN 26 THIS STATE, FROM TELEGRAPH OR TELEPHONE MESSAGES TRANSMITTED 27 WHOLLY WITHIN THIS STATE, FROM EXPRESS, PALACE CAR OR SLEEPING 28 CAR BUSINESS DONE WHOLLY WITHIN THIS STATE, OR FROM THE SALES OF 29 GAS, EXCEPT GROSS RECEIPTS DERIVED FROM SALES TO ANY 30 MUNICIPALITY OWNED OR OPERATED PUBLIC UTILITY AND EXCEPT GROSS 19910H1321B2321 - 88 -
1 RECEIPTS DERIVED FROM THE SALES FOR RESALE, TO PERSONS, 2 PARTNERSHIPS, ASSOCIATIONS, CORPORATIONS OR POLITICAL 3 SUBDIVISIONS SUBJECT TO THE TAX IMPOSED BY THIS ACT UPON GROSS 4 RECEIPTS DERIVED FROM SUCH RESALE AND FROM THE TRANSPORTATION OF 5 OIL DONE WHOLLY WITHIN THIS STATE. THE GROSS RECEIPTS OF GAS 6 COMPANIES SHALL INCLUDE THE GROSS RECEIPTS FROM THE SALE OF 7 ARTIFICIAL AND NATURAL GAS, BUT SHALL NOT INCLUDE GROSS RECEIPTS 8 FROM THE SALE OF LIQUEFIED PETROLEUM GAS. THE GROSS RECEIPTS OF 9 TELEPHONE COMPANIES SHALL ALSO INCLUDE RECEIPTS ATTRIBUTABLE TO 10 CARRIER ACCESS CHARGES RECEIVED BY A TELEPHONE COMPANY FROM 11 ANOTHER TELEPHONE COMPANY OR FROM A PROVIDER OF 12 TELECOMMUNICATIONS SERVICE FOR THE USE OF THE TELEPHONE 13 COMPANY'S FACILITIES TO ORIGINATE OR TERMINATE TELEPHONE CALLS 14 OR TELECOMMUNICATIONS SERVICE. 15 * * * 16 SECTION 25. SECTION 1102-A(A) OF THE ACT, AMENDED JULY 21, 17 1983 (P.L.63, NO.29), IS AMENDED TO READ: 18 SECTION 1102-A. IMPOSITION OF TAX; REPORT; INTEREST AND 19 PENALTIES.--(A) ON OR BEFORE THE FIRST DAY OF JUNE OF 1970 AND 20 OF EACH YEAR THEREAFTER UNTIL AND INCLUDING JUNE 1, 1983, EVERY 21 PUBLIC UTILITY SHALL PAY TO THE STATE TREASURER, THROUGH THE 22 DEPARTMENT OF REVENUE, A TAX AT THE RATE OF THIRTY MILLS UPON 23 EACH DOLLAR OF THE STATE TAXABLE VALUE OF ITS UTILITY REALTY AT 24 THE END OF THE PRECEDING CALENDAR YEAR. 25 (1) ON OR BEFORE APRIL 15, 1984, FOR TAX YEAR 1983, EVERY 26 PUBLIC UTILITY SHALL REPORT TAX LIABILITY AT THE RATE OF THIRTY 27 MILLS UPON EACH DOLLAR OF THE STATE TAXABLE VALUE OF ITS UTILITY 28 REALTY AT THE END OF CALENDAR YEAR 1983 AND SHALL PAY SUCH TAX 29 ON OR BEFORE JUNE 1, 1984. 30 (2) ON OR BEFORE APRIL 15, 1984, AND EACH YEAR THEREAFTER, 19910H1321B2321 - 89 -
1 EVERY PUBLIC UTILITY SHALL REPORT TENTATIVE TAX LIABILITY FOR 2 THE CURRENT TAX YEAR EQUAL TO NINETY PER CENT OF THE TAX 3 LIABILITY OF THE IMMEDIATE PRIOR YEAR, AND UNTIL DECEMBER 31, 4 1991, PAY TWENTY-FIVE PER CENT OF SUCH AMOUNT ON APRIL 15, JUNE 5 15, SEPTEMBER 15 AND DECEMBER 15 OF EACH YEAR. FOR TAX YEARS 6 BEGINNING WITH 1992 AND EACH YEAR THEREAFTER, SAID TENTATIVE TAX 7 SHALL BE PAID ON APRIL 15 OF EACH YEAR. 8 (3) ON OR BEFORE APRIL 15, 1985, AND EVERY YEAR THEREAFTER, 9 EVERY PUBLIC UTILITY SHALL PAY THE REMAINING PORTION, IF ANY, OF 10 THE THIRTY MILLS TAX DUE UPON EACH DOLLAR OF THE STATE TAXABLE 11 VALUE OF ITS UTILITY REALTY AT THE END OF THE PRECEDING CALENDAR 12 YEAR, AFTER ACCOUNTING FOR ANY TENTATIVE TAX PAYMENTS MADE 13 PURSUANT TO THIS ACT. 14 * * * 15 SECTION 26. SECTION 1206 OF THE ACT, ADDED DECEMBER 21, 1981 16 (P.L.482, NO.141), IS AMENDED TO READ: 17 SECTION 1206. INCIDENCE AND RATE OF TAX.--AN EXCISE TAX IS 18 HEREBY IMPOSED AND ASSESSED UPON THE SALE OR POSSESSION OF 19 CIGARETTES WITHIN THIS COMMONWEALTH AT THE RATE OF [NINE-TENTHS] 20 ONE AND SEVEN-TENTHS OF A CENT PER CIGARETTE. 21 SECTION 27. THE ACT IS AMENDED BY ADDING A SECTION TO READ: 22 SECTION 1206.1. FLOOR TAX.--ANY PERSON WHO POSSESSES 23 CIGARETTES ON WHICH THE TAX IMPOSED BY SECTION 1206 OF THIS 24 ARTICLE HAS BEEN PAID AS OF THE EFFECTIVE DATE OF THIS SECTION 25 SHALL PAY AN ADDITIONAL TAX AT A RATE OF EIGHTY HUNDREDTH CENTS 26 PER CIGARETTE. THE TAX SHALL BE REPORTED AND PAID ON A FORM 27 PRESCRIBED BY THE DEPARTMENT. IN ADDITION TO THE INTEREST AND 28 PENALTIES PROVIDED IN SECTION 1278 OF THIS ARTICLE, FAILURE TO 29 FILE SAID REPORT AND PAY SAID TAX WITHIN THIRTY DAYS OF THE 30 EFFECTIVE DATE OF THIS SECTION MAY RESULT IN A PENALTY OF TWO 19910H1321B2321 - 90 -
1 HUNDRED FIFTY DOLLARS ($250). THIS PENALTY SHALL BE ADDED TO THE 2 TAX AND ASSESSED AND COLLECTED AT THE SAME TIME IN THE SAME 3 MANNER AND AS A PART OF THE TAX. 4 SECTION 28. SECTION 1216 OF THE ACT, ADDED DECEMBER 21, 1981 5 (P.L.482, NO.141), IS AMENDED TO READ: 6 SECTION 1216. COMMISSIONS ON SALES.--CIGARETTE STAMPING 7 AGENCIES SHALL BE ENTITLED TO A COMMISSION OF [THREE] TWO PER 8 CENT OF THE VALUE OF ALL PENNSYLVANIA CIGARETTE TAX STAMPS 9 PURCHASED BY THEM FROM THE DEPARTMENT OR ITS AUTHORIZED AGENTS 10 TO BE USED BY THEM IN THE STAMPING OF PACKAGES OF CIGARETTES FOR 11 SALE WITHIN THE COMMONWEALTH OF PENNSYLVANIA, SAID COMMISSION TO 12 BE PAID TO THE CIGARETTE STAMPING AGENT AS COMPENSATION FOR HIS 13 OR HER SERVICES AND EXPENSES AS AGENT IN AFFIXING SUCH STAMPS. 14 SAID CIGARETTE STAMPING AGENCIES SHALL BE ENTITLED TO DEDUCT 15 FROM THE MONEYS TO BE PAID BY THEM FOR SUCH STAMPS AN AMOUNT, 16 EQUAL TO THREE PER CENT OF THE VALUE OF SAID STAMPS PURCHASED BY 17 THEM WHEN SUCH CIGARETTE STAMPING AGENCIES HAVE PURCHASED SAID 18 PENNSYLVANIA CIGARETTE TAX STAMPS DIRECTLY FROM THE DEPARTMENT 19 OR ITS AUTHORIZED AGENTS. THIS SECTION SHALL NOT APPLY TO 20 PURCHASES OF STAMPS BY A CIGARETTE STAMPING AGENCY IN AN AMOUNT 21 LESS THAN ONE HUNDRED DOLLARS ($100). 22 SECTION 29. SECTION 1221 OF THE ACT IS AMENDED BY ADDING A 23 SUBSECTION TO READ: 24 SECTION 1221. LICENSING OF CIGARETTE DEALERS.--* * * 25 (C) ANY PERSON WHO IS A "WHOLESALER" PURSUANT TO SECTION 26 1201 OF THIS ARTICLE SHALL BE REQUIRED TO OBTAIN A WHOLESALE 27 LICENSE. 28 SECTION 30. SECTIONS 1222(A), 1223, 1224, 1278(C), 1285(C) 29 AND 1296 OF THE ACT, ADDED DECEMBER 21, 1981 (P.L.482, NO.141), 30 ARE AMENDED TO READ: 19910H1321B2321 - 91 -
1 SECTION 1222. LICENSING OF CIGARETTE STAMPING AGENTS.--(A) 2 THE DEPARTMENT MAY LICENSE AS ITS AGENT FOR A ONE YEAR PERIOD 3 (AND MAY RENEW SAID LICENSE FOR FURTHER PERIODS OF ONE YEAR) ANY 4 PERSON OF GOOD MORAL CHARACTER WHO SHALL MEET THE REQUIREMENTS 5 IMPOSED BY THE FOLLOWING PROVISIONS FOR THE PRIVILEGE OF 6 OPERATING AS A CIGARETTE STAMPING AGENCY: 7 (1) SAID APPLICANT SHALL BE A WHOLESALE CIGARETTE DEALER 8 LICENSED BY THE COMMONWEALTH OF PENNSYLVANIA. 9 (2) THE PREMISES IN WHICH SAID APPLICANT PROPOSES TO CONDUCT 10 HIS OR HER BUSINESS ARE ADEQUATE TO PROTECT THE REVENUE. 11 (3) THE SAID APPLICANT IS A PERSON OF GOOD MORAL CHARACTER, 12 OF REASONABLE FINANCIAL STABILITY AND REASONABLY EXPERIENCED IN 13 THE WHOLESALE CIGARETTE BUSINESS. 14 (4) THE APPLICANT, OR ANY SHAREHOLDER CONTROLLING MORE THAN 15 TEN PER CENT OF THE STOCK IF SAID APPLICANT IS A CORPORATION OR 16 ANY OFFICER OR DIRECTOR IF SAID APPLICANT IS A CORPORATION, 17 SHALL NOT HAVE BEEN CONVICTED OF ANY CRIME INVOLVING MORAL 18 TURPITUDE. 19 (5) THE APPLICANT SHALL HAVE FILED ALL REQUIRED STATE TAX 20 REPORTS AND PAID ANY STATE TAXES NOT SUBJECT TO A TIMELY 21 PERFECTED ADMINISTRATIVE OR JUDICIAL APPEAL OR SUBJECT TO A DULY 22 AUTHORIZED DEFERRED PAYMENT PLAN. 23 * * * 24 SECTION 1223. LICENSING OF WHOLESALERS.--APPLICANTS FOR A 25 WHOLESALE LICENSE OR RENEWAL THEREOF SHALL MEET THE FOLLOWING 26 REQUIREMENTS: 27 (1) THE PREMISES ON WHICH SAID APPLICANT PROPOSES TO CONDUCT 28 HIS OR HER BUSINESS ARE ADEQUATE TO PROTECT THE REVENUE. 29 (2) SAID APPLICANT IS A PERSON OF REASONABLE FINANCIAL 30 STABILITY AND REASONABLE BUSINESS EXPERIENCE. THE APPLICANT OR 19910H1321B2321 - 92 -
1 ANY SHAREHOLDER CONTROLLING MORE THAN TEN PER CENT OF THE STOCK, 2 IF THE APPLICANT IS A CORPORATION OR ANY OFFICER OR DIRECTOR IF 3 SAID APPLICANT IS A CORPORATION, SHALL NOT HAVE BEEN CONVICTED 4 OF ANY CRIME INVOLVING MORAL TURPITUDE. 5 (3) SAID APPLICANT SHALL NOT HAVE FAILED TO DISCLOSE ANY 6 MATERIAL INFORMATION REQUIRED BY THE DEPARTMENT. 7 (4) SAID APPLICANT SHALL NOT HAVE MADE ANY MATERIAL FALSE 8 STATEMENT IN HIS APPLICATION. 9 (5) SAID APPLICANT SHALL NOT HAVE VIOLATED ANY PROVISION OF 10 THIS ARTICLE. 11 (6) THE WHOLESALE DEALER'S LICENSE SHALL BE VALID FOR ONE 12 SPECIFIC LOCATION ONLY. 13 (7) SAID APPLICANT SHALL HAVE FILED ALL REQUIRED STATE TAX 14 REPORTS AND PAID ANY STATE TAXES NOT SUBJECT TO A TIMELY 15 PERFECTED ADMINISTRATIVE OR JUDICIAL APPEAL OR SUBJECT TO A DULY 16 AUTHORIZED DEFERRED PAYMENT PLAN. 17 SECTION 1224. LICENSING OF RETAILERS.--APPLICANT FOR RETAIL 18 LICENSE OR RENEWAL THEREOF SHALL MEET THE FOLLOWING 19 REQUIREMENTS: 20 (1) THE PREMISES IN WHICH SAID APPLICANT PROPOSES TO CONDUCT 21 HIS BUSINESS ARE ADEQUATE TO PROTECT THE REVENUES. 22 (2) SAID APPLICANT SHALL NOT HAVE FAILED TO DISCLOSE ANY 23 MATERIAL INFORMATION REQUIRED BY THE DEPARTMENT. 24 (3) SAID APPLICANT SHALL NOT HAVE ANY MATERIAL FALSE 25 STATEMENT IN HIS APPLICATION. 26 (4) SAID APPLICANT SHALL NOT HAVE VIOLATED ANY PROVISION OF 27 THIS ARTICLE. 28 (5) SAID APPLICANT SHALL HAVE FILED ALL REQUIRED STATE TAX 29 REPORTS AND PAID ANY STATE TAXES NOT SUBJECT TO A TIMELY 30 PERFECTED ADMINISTRATIVE OR JUDICIAL APPEAL OR SUBJECT TO A DULY 19910H1321B2321 - 93 -
1 AUTHORIZED DEFERRED PAYMENT PLAN. 2 SECTION 1278. OTHER VIOLATIONS.--* * * 3 (C) ANY PERSON WHO FAILS TO PAY TAX AT THE TIME PRESCRIBED 4 SHALL, IN ADDITION TO ANY OTHER PENALTY PROVIDED IN THIS 5 ARTICLE, BE LIABLE TO A PENALTY OF FIVE PER CENT OF THE TAX DUE 6 BUT UNPAID, FOR EACH MONTH OR FRACTION THEREOF THE TAX REMAINS 7 UNPAID TOGETHER WITH THE INTEREST AT THE RATE [OF SIX PER CENT 8 PER ANNUM] ESTABLISHED PURSUANT TO SECTION 806 OF THE ACT OF 9 APRIL 9, 1929 (P.L.343, NO.176), KNOWN AS "THE FISCAL CODE" ON 10 SUCH TAX FROM THE TIME THE TAX BECAME DUE, BUT NO INTEREST FOR A 11 FRACTION OF A MONTH SHALL BE DEMANDED. THE PENALTIES PROVIDED IN 12 THIS SUBSECTION SHALL BE ADDED TO THE TAX AND ASSESSED AND 13 COLLECTED AT THE SAME TIME IN THE SAME MANNER AND AS A PART OF 14 THE TAX. 15 SECTION 1285. PROPERTY RIGHTS.--* * * 16 (C) NO PROPERTY RIGHTS SHALL EXIST IN ANY PACKAGES OF 17 CIGARETTES WHICH HAVE BEEN TAKEN FROM ANY PERSON WHO HAS BEEN 18 FOUND IN VIOLATION OF THE PROVISIONS OF SECTION 1273, OR ANY 19 CIGARETTES SOLD OR OFFERED FOR SALE BY ANY PERSON WITHOUT A 20 PROPER LICENSE, OR ANY CIGARETTES SOLD OR OFFERED FOR SALE BY 21 ANY PERSON NOT POSSESSING PROPER DOCUMENTATION SHOWING LEGAL 22 PURCHASE OF SAID CIGARETTES AND ALL SUCH PACKAGES OF CIGARETTES 23 SHALL BE DEEMED CONTRABAND, SHALL BE CONFISCATED AND SHALL BE 24 FORFEITED TO THE COMMONWEALTH WITHOUT FURTHER PROCEEDINGS AND 25 SHALL BE DELIVERED TO THE AGENTS OF THE DEPARTMENT AT THE TIME 26 OF CONVICTION BY THE JUDGE, JUSTICE OF THE PEACE, MAGISTRATE OR 27 ALDERMAN. 28 * * * 29 SECTION 1296. DISPOSITION OF CERTAIN FUNDS.--ALL CIGARETTE 30 TAX REVENUES COLLECTED BY THE DEPARTMENT OF REVENUE UNDER THIS 19910H1321B2321 - 94 -
1 ARTICLE AND HERETOFORE PAID INTO THE PARENT REIMBURSEMENT FUND 2 IN ACCORDANCE WITH THE ACT OF AUGUST 27, 1971 (P.L.358, NO.92), 3 KNOWN AS THE "PARENT REIMBURSEMENT ACT FOR NONPUBLIC EDUCATION," 4 SHALL BE TRANSFERRED INTO THE GENERAL FUND[, AND]. OF ALL SUCH 5 REVENUES HEREINAFTER COLLECTED, ONE-TENTH OF A CENT PER 6 CIGARETTE SHALL BE PAID INTO A RESTRICTED ACCOUNT FOR 7 AGRICULTURAL FARMLAND PRESERVATION, ONE-TENTH OF A CENT PER 8 CIGARETTE SHALL BE PAID INTO A RESTRICTED ACCOUNT TO BE KNOWN AS 9 THE CHILDREN'S HEALTH FUND FOR HEALTH CARE FOR INDIGENT CHILDREN 10 AND THE REMAINDER SHALL BE PAID INTO THE GENERAL FUND. MONEYS IN 11 THE CHILDREN'S HEALTH FUND SHALL NOT BE EXPENDED UNTIL THE 12 ENACTMENT OF LEGISLATION TO IMPLEMENT A PROGRAM OF EXPANDED 13 ACCESS TO HEALTH CARE FOR CHILDREN. 14 SECTION 31. THE ACT IS AMENDED BY ADDING AN ARTICLE TO READ: 15 ARTICLE XXI 16 INHERITANCE TAX 17 PART I 18 PRELIMINARY PROVISIONS 19 SECTION 2101. SHORT TITLE.--THIS ARTICLE SHALL BE KNOWN AND 20 MAY BE CITED AS THE "INHERITANCE AND ESTATE TAX ACT." 21 SECTION 2102. DEFINITIONS.--THE FOLLOWING WORDS, TERMS AND 22 PHRASES, WHEN USED IN THIS ARTICLE, SHALL HAVE THE MEANINGS 23 ASCRIBED TO THEM IN THIS SECTION, EXCEPT WHERE THE CONTEXT 24 CLEARLY INDICATES A DIFFERENT MEANING: 25 "ADVERSE INTEREST." A SUBSTANTIAL BENEFICIAL INTEREST IN THE 26 PROPERTY TRANSFERRED WHICH MIGHT BE ADVERSELY AFFECTED BY THE 27 EXERCISE OR NONEXERCISE OF THE POWER OR RIGHT RESERVED OR 28 POSSESSED BY THE TRANSFEROR. 29 "CHILDREN." INCLUDES ADOPTED CHILDREN, STEPCHILDREN, ALL 30 CHILDREN OF THE NATURAL PARENTS AND THE CHILDREN OF THE NATURAL 19910H1321B2321 - 95 -
1 PARENT WHO ARE ADOPTED BY HIS SPOUSE. EXCEPT AS OTHERWISE 2 SPECIFICALLY PROVIDED IN THIS DEFINITION, CHILDREN DOES NOT 3 INCLUDE ADOPTED CHILDREN IN THE NATURAL FAMILY. 4 "CLERK." THE CLERK OF THE ORPHANS' COURT DIVISION OF THE 5 COURT OF COMMON PLEAS HAVING JURISDICTION. 6 "COURT." THE ORPHANS' COURT DIVISION OF THE COURT OF COMMON 7 PLEAS OF: 8 (1) THE COUNTY IN WHICH THE DECEDENT RESIDED AT THE TIME OF 9 HIS DEATH. 10 (2) THE COUNTY IN WHICH LETTERS, IF ANY, ARE GRANTED IF THE 11 DECEDENT WAS A NONRESIDENT OF THIS COMMONWEALTH. 12 (3) DAUPHIN COUNTY IN ALL OTHER CASES. 13 "DATE OF DEATH." THE DATE OF ACTUAL DEATH OR, IN THE CASE OF 14 A PRESUMED DECEDENT, THE DATE FOUND BY THE FINAL DECREE TO BE 15 THE DATE OF THE ABSENTEE'S PRESUMED DEATH. FOR THE PURPOSE OF 16 DETERMINING INTEREST AND DISCOUNT, DATE OF DEATH MEANS THE DATE 17 UPON WHICH THE COURT ENTERS ITS FINAL DECREE OF PRESUMPTIVE 18 DEATH. 19 "DEATH TAXES." INCLUDES INHERITANCE, SUCCESSION, TRANSFER 20 AND ESTATE TAXES AND ANY OTHER TAXES LEVIED AGAINST THE ESTATE 21 OF A DECEDENT BY REASON OF HIS DEATH. 22 "DECEDENT" OR "TRANSFEROR." ANY PERSON BY OR FROM WHOM A 23 TRANSFER IS MADE AND INCLUDES ANY TESTATOR, INTESTATE, GRANTOR, 24 SETTLOR, BARGAINOR, VENDOR, ASSIGNOR, DONOR, JOINT TENANT AND 25 INSURED. 26 "DEPARTMENT." THE DEPARTMENT OF REVENUE OF THE COMMONWEALTH. 27 "EXEMPTION INCOME." ALL MONEYS OR PROPERTY, INCLUDING, 28 WITHOUT LIMITATION, INTEREST, GAINS OR INCOME DERIVED FROM 29 OBLIGATIONS WHICH ARE STATUTORILY FREE FROM STATE OR LOCAL 30 TAXATION UNDER ANY OTHER FEDERAL OR STATE LAWS, RECEIVED OF 19910H1321B2321 - 96 -
1 WHATEVER NATURE AND FROM WHATEVER SOURCE DERIVED. 2 "FINANCIAL INSTITUTION." A BANK, A BANK AND TRUST COMPANY, A 3 TRUST COMPANY, A SAVINGS AND LOAN ASSOCIATION, A BUILDING AND 4 LOAN ASSOCIATION, A CREDIT UNION, A SAVINGS BANK AND A NATIONAL 5 BANK. 6 "FUTURE INTEREST." INCLUDES A SUCCESSIVE LIFE INTEREST AND A 7 SUCCESSIVE INTEREST FOR A TERM CERTAIN. 8 "LINEAL DESCENDANTS." ALL CHILDREN OF THE NATURAL PARENTS 9 AND THEIR DESCENDANTS, ADOPTED DESCENDANTS AND THEIR 10 DESCENDANTS, STEPCHILDREN AND THEIR DESCENDANTS AND CHILDREN AND 11 THEIR DESCENDANTS OF THE NATURAL PARENT WHO ARE ADOPTED BY HIS 12 SPOUSE. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS 13 DEFINITION, LINEAL DESCENDANTS DO NOT INCLUDE DESCENDANTS OF 14 STEPCHILDREN OR ADOPTED CHILDREN AND THEIR DESCENDANTS IN THE 15 NATURAL FAMILY. 16 "NOTICE." WRITTEN NOTICE. 17 "PRESUMED DECEDENT." A PERSON FOUND TO BE PRESUMPTIVELY DEAD 18 UNDER THE PROVISIONS OF 20 PA.C.S. CH. 57 (RELATING TO ABSENTEES 19 AND PRESUMED DECEDENTS) OR, IF A NONRESIDENT OF THIS 20 COMMONWEALTH, UNDER THE LAWS OF HIS DOMICILE. 21 "PROPERTY" OR "ESTATE." INCLUDES THE FOLLOWING: 22 (1) ALL REAL PROPERTY AND ALL TANGIBLE PERSONAL PROPERTY OF 23 A RESIDENT DECEDENT OR TRANSFEROR HAVING ITS SITUS IN THIS 24 COMMONWEALTH. 25 (2) ALL INTANGIBLE PERSONAL PROPERTY OF A RESIDENT DECEDENT 26 OR TRANSFEROR. 27 (3) ALL REAL PROPERTY AND ALL TANGIBLE PERSONAL PROPERTY OF 28 A RESIDENT DECEDENT HAVING ITS SITUS OUTSIDE THIS COMMONWEALTH, 29 WHICH THE DECEDENT HAD CONTRACTED TO SELL, PROVIDED THE 30 JURISDICTION IN WHICH THE PROPERTY HAS ITS SITUS DOES NOT 19910H1321B2321 - 97 -
1 SUBJECT IT TO DEATH TAX. 2 (4) ALL REAL PROPERTY AND ALL TANGIBLE PERSONAL PROPERTY OF 3 A NONRESIDENT DECEDENT OR TRANSFEROR HAVING ITS SITUS IN THIS 4 COMMONWEALTH, INCLUDING PROPERTY HELD IN TRUST. 5 (5) A LIQUOR LICENSE ISSUED BY THE COMMONWEALTH. 6 "REGISTER." THE REGISTER OF WILLS HAVING JURISDICTION TO 7 GRANT LETTERS TESTAMENTARY OR OF ADMINISTRATION IN THE ESTATE OF 8 THE DECEDENT OR TRANSFEROR. 9 "SAFE DEPOSIT BOX OF A DECEDENT." A SAFE DEPOSIT BOX IN A 10 FINANCIAL INSTITUTION LOCATED WITHIN THIS COMMONWEALTH IN THE 11 NAME OF THE DECEDENT ALONE OR IN THE NAMES OF THE DECEDENT AND 12 ONE OR MORE PERSONS OTHER THAN THE SPOUSE OF THE DECEDENT. 13 "SECRETARY." THE SECRETARY OF REVENUE OF THE COMMONWEALTH. 14 "TERRITORY." INCLUDES THE DISTRICT OF COLUMBIA AND ALL 15 POSSESSIONS OF THE UNITED STATES. 16 "TRANSFER." INCLUDES THE PASSAGE OF OWNERSHIP OF PROPERTY, 17 OR INTEREST IN PROPERTY OR INCOME FROM PROPERTY, IN POSSESSION 18 OR ENJOYMENT, PRESENT OR FUTURE, IN TRUST OR OTHERWISE. 19 "TRANSFEREE." ANY PERSON TO WHOM A TRANSFER IS MADE AND 20 INCLUDES ANY LEGATEE, DEVISEE, HEIR, NEXT OF KIN, GRANTEE, 21 BENEFICIARY, VENDEE, ASSIGNEE, DONEE, SURVIVING JOINT TENANT AND 22 INSURANCE BENEFICIARY. 23 "VALUE." THE PRICE AT WHICH THE PROPERTY WOULD BE SOLD BY A 24 WILLING SELLER, NOT COMPELLED TO SELL, TO A WILLING BUYER, NOT 25 COMPELLED TO BUY, BOTH OF WHOM HAVE REASONABLE KNOWLEDGE OF THE 26 RELEVANT FACTS. IN DETERMINING THE VALUE OF PROPERTY, NO 27 REDUCTION SHALL BE MADE ON ACCOUNT OF INCOME, EXCISE OR OTHER 28 TAXES WHICH MAY BECOME PAYABLE SUBSEQUENT TO THE VALUATION DATE 29 BY THE TRANSFEREE OR OUT OF THE PROPERTY. VALUE AS TO LAND IN 30 AGRICULTURAL USE, AGRICULTURAL RESERVE OR FOREST RESERVE MEANS 19910H1321B2321 - 98 -
1 THE VALUE WHICH THE LAND HAS FOR ITS PARTICULAR USE ACCORDING TO 2 THE STANDARDS PROVIDED IN SECTION 2122. 3 SECTION 2103. POWERS OF DEPARTMENT.--(A) THE DEPARTMENT MAY 4 ADOPT AND ENFORCE RULES AND REGULATIONS FOR THE JUST 5 ADMINISTRATION OF THIS ARTICLE. 6 (B) THE DEPARTMENT SHALL HAVE COMPLETE SUPERVISION OF THE 7 MAKING OF APPRAISEMENTS, THE ALLOWANCE OF DEDUCTIONS AND THE 8 ASSESSMENT OF TAX INCLUDING, BUT NOT LIMITED TO, THE POWER TO 9 REGULATE THE ACTIONS OF REGISTERS IN THE ALLOWANCE AND 10 DISALLOWANCE OF DEDUCTIONS AND ASSESSMENT OF TAX. THE 11 DEPARTMENT'S SUPERVISION OF THE MAKING OF APPRAISEMENTS INCLUDES 12 THE EMPLOYMENT AND COMPENSATION OF INVESTIGATORS, APPRAISERS AND 13 EXPERT APPRAISERS. THE COMPENSATION OF INVESTIGATORS, APPRAISERS 14 AND EXPERT APPRAISERS SHALL BE PAID FROM THE INHERITANCE TAX 15 COLLECTIONS IN THE RESPECTIVE COUNTIES. 16 (C) THE DEPARTMENT SHALL, IN THE EVENT THAT THE REGISTER 17 FAILS TO TAKE THE NECESSARY PROCEEDINGS IN CONNECTION WITH THE 18 APPRAISEMENT, ALLOWANCE OF DEDUCTIONS, ASSESSMENT OF TAX OR 19 COLLECTION OF TAX, HAVE ALL THE POWERS VESTED IN THE REGISTER IN 20 THIS ARTICLE AND, AT ITS OPTION, MAY TAKE THE NECESSARY ACTION 21 AND SHALL CHARGE TO THE REGISTER AND DEDUCT FROM ANY COMMISSIONS 22 OR FEES OTHERWISE DUE HIM ALL COSTS AND EXPENSES INCURRED BY THE 23 DEPARTMENT IN CONNECTION WITH THE PROCEEDINGS. 24 PART II 25 TRANSFERS SUBJECT TO TAX 26 SECTION 2106. IMPOSITION OF TAX.--AN INHERITANCE TAX FOR THE 27 USE OF THE COMMONWEALTH IS IMPOSED UPON EVERY TRANSFER SUBJECT 28 TO TAX UNDER THIS ARTICLE AT THE RATES SPECIFIED IN SECTION 29 2116. 30 SECTION 2107. TRANSFERS SUBJECT TO TAX.--(A) THE TRANSFERS 19910H1321B2321 - 99 -
1 ENUMERATED IN THIS SECTION ARE SUBJECT TO THE TAX IMPOSED BY 2 SECTION 2106. 3 (B) ALL TRANSFERS OF PROPERTY BY WILL, BY THE INTESTATE LAWS 4 OF THIS COMMONWEALTH OR, IN THE CASE OF A TRANSFER FROM A 5 NONRESIDENT, BY THE LAWS OF SUCCESSION OF ANOTHER JURISDICTION 6 ARE SUBJECT TO TAX. THE TRANSFER OF PROPERTY OF A PERSON 7 DETERMINED BY DECREE OF A COURT OF COMPETENT JURISDICTION TO BE 8 A PRESUMED DECEDENT IS SUBJECT TO TAX WITHIN THE MEANING OF THIS 9 SECTION AND SECTION 2108. 10 (C) (1) ALL TRANSFERS OF PROPERTY SPECIFIED IN SUBCLAUSES 11 (3) THROUGH (7) WHICH ARE MADE BY A RESIDENT OR A NONRESIDENT 12 DURING HIS LIFETIME ARE SUBJECT TO TAX TO THE EXTENT THAT THEY 13 ARE MADE WITHOUT VALUABLE AND ADEQUATE CONSIDERATION IN MONEY OR 14 MONEY'S WORTH AT THE TIME OF TRANSFER. 15 (2) WHEN THE DECEDENT RETAINED OR RESERVED AN INTEREST OR 16 POWER WITH RESPECT TO ONLY A PART OF THE PROPERTY TRANSFERRED, 17 IN CONSEQUENCE OF WHICH A TAX IS IMPOSED UNDER SUBCLAUSES (4) 18 THROUGH (7), THE AMOUNT OF THE TAXABLE TRANSFER IS ONLY THE 19 VALUE OF THAT PORTION OF THE PROPERTY TRANSFERRED WHICH IS 20 SUBJECT TO THE RETAINED OR RESERVED INTEREST OR POWER. 21 (3) A TRANSFER CONFORMING TO SUBCLAUSE (1) AND MADE WITHIN 22 ONE YEAR OF THE DEATH OF THE TRANSFEROR IS SUBJECT TO TAX ONLY 23 TO THE EXTENT THAT THE VALUE AT THE TIME OF THE TRANSFER OR 24 TRANSFERS IN THE AGGREGATE TO OR FOR THE BENEFIT OF THE 25 TRANSFEREE EXCEEDS THREE THOUSAND DOLLARS ($3,000) DURING ANY 26 CALENDAR YEAR. 27 (4) A TRANSFER CONFORMING TO SUBCLAUSE (1) WHICH TAKES 28 EFFECT IN POSSESSION OR ENJOYMENT AT OR AFTER THE DEATH OF THE 29 TRANSFEROR AND UNDER WHICH THE TRANSFEROR HAS RETAINED A 30 REVERSIONARY INTEREST IN THE PROPERTY, THE VALUE OF WHICH 19910H1321B2321 - 100 -
1 INTEREST IMMEDIATELY BEFORE THE DEATH OF THE TRANSFEROR EXCEEDS 2 FIVE PER CENT OF THE VALUE OF THE PROPERTY TRANSFERRED, IS 3 SUBJECT TO TAX. THE TERM "REVERSIONARY INTEREST" INCLUDES A 4 POSSIBILITY THAT PROPERTY TRANSFERRED MAY RETURN TO THE 5 TRANSFEROR OR HIS ESTATE, OR MAY BE SUBJECT TO A POWER OF 6 DISPOSITION BY HIM, BUT THE TERM DOES NOT INCLUDE A POSSIBILITY 7 THAT THE INCOME ALONE FROM THE PROPERTY MAY RETURN TO HIM OR 8 BECOME SUBJECT TO A POWER OF DISPOSITION BY HIM. 9 (5) A TRANSFER CONFORMING TO SUBCLAUSE (1), AND UNDER WHICH 10 THE TRANSFEROR EXPRESSLY OR IMPLIEDLY RESERVES FOR HIS LIFE OR 11 ANY PERIOD WHICH DOES NOT IN FACT END BEFORE HIS DEATH, THE 12 POSSESSION OR ENJOYMENT OF, OR THE RIGHT TO THE INCOME FROM, THE 13 PROPERTY TRANSFERRED, OR THE RIGHT, EITHER ALONE OR IN 14 CONJUNCTION WITH ANY PERSON NOT HAVING AN ADVERSE INTEREST, TO 15 DESIGNATE THE PERSONS WHO SHALL POSSESS OR ENJOY THE PROPERTY 16 TRANSFERRED OR THE INCOME FROM THE PROPERTY, IS SUBJECT TO TAX. 17 (6) A TRANSFER CONFORMING TO SUBCLAUSE (1), AND UNDER WHICH 18 THE TRANSFEREE PROMISES TO MAKE PAYMENTS TO, OR FOR THE BENEFIT 19 OF, THE TRANSFEROR OR TO CARE FOR THE TRANSFEROR DURING THE 20 REMAINDER OF THE TRANSFEROR'S LIFE, IS SUBJECT TO TAX. 21 (7) A TRANSFER CONFORMING TO SUBCLAUSE (1), AND UNDER WHICH 22 THE TRANSFEROR HAS AT HIS DEATH, EITHER IN HIMSELF ALONE OR IN 23 CONJUNCTION WITH ANY PERSON NOT HAVING AN ADVERSE INTEREST, A 24 POWER TO ALTER, AMEND OR REVOKE THE INTEREST OF THE BENEFICIARY, 25 IS SUBJECT TO TAX. SIMILARLY, THE RELINQUISHMENT OF SUCH A POWER 26 IS A TRANSFER SUBJECT TO TAX EXCEPT AS OTHERWISE PROVIDED IN 27 SUBCLAUSE (3). 28 SECTION 2108. JOINT TENANCY.--(A) WHEN ANY PROPERTY IS HELD 29 IN THE NAMES OF TWO OR MORE PERSONS, OR IS DEPOSITED IN A 30 FINANCIAL INSTITUTION IN THE NAMES OF TWO OR MORE PERSONS, SO 19910H1321B2321 - 101 -
1 THAT, UPON THE DEATH OF ONE OF THEM, THE SURVIVOR OR SURVIVORS 2 HAVE A RIGHT TO THE IMMEDIATE OWNERSHIP OR POSSESSION AND 3 ENJOYMENT OF THE WHOLE PROPERTY, THE ACCRUAL OF SUCH RIGHT, UPON 4 THE DEATH OF ONE OF THEM, SHALL BE DEEMED A TRANSFER SUBJECT TO 5 TAX, OF A FRACTIONAL PORTION OF SUCH PROPERTY TO BE DETERMINED 6 BY DIVIDING THE VALUE OF THE WHOLE PROPERTY BY THE NUMBER OF 7 JOINT TENANTS IN EXISTENCE IMMEDIATELY PRECEDING THE DEATH OF 8 THE DECEASED JOINT TENANT. 9 (B) EXCEPT AS PROVIDED IN SUBSECTION (C), THIS SECTION SHALL 10 NOT APPLY TO PROPERTY AND INTERESTS IN PROPERTY PASSING BY RIGHT 11 OF SURVIVORSHIP TO THE SURVIVOR OF HUSBAND AND WIFE. 12 (C) IF THE CO-OWNERSHIP WAS CREATED WITHIN ONE YEAR PRIOR TO 13 THE DEATH OF THE CO-TENANT, THE ENTIRE INTEREST TRANSFERRED 14 SHALL BE SUBJECT TO TAX ONLY UNDER, AND TO THE EXTENT STATED IN, 15 SUBSECTION (C)(3) OF SECTION 2107 AS THOUGH A PART OF THE ESTATE 16 OF THE PERSON WHO CREATED THE CO-OWNERSHIP. 17 PART III 18 TRANSFERS NOT SUBJECT TO TAX 19 SECTION 2111. TRANSFERS NOT SUBJECT TO TAX.--(A) THE 20 TRANSFERS ENUMERATED IN THIS SECTION ARE NOT SUBJECT TO THE TAX 21 IMPOSED BY THIS ARTICLE. 22 (B) TRANSFERS OF PROPERTY TO OR FOR THE USE OF ANY OF THE 23 FOLLOWING ARE EXEMPT FROM INHERITANCE TAX: 24 (1) THE UNITED STATES OF AMERICA. 25 (2) THE COMMONWEALTH OF PENNSYLVANIA. 26 (3) A POLITICAL SUBDIVISION OF THE COMMONWEALTH OF 27 PENNSYLVANIA. 28 (C) TRANSFERS OF PROPERTY TO OR FOR THE USE OF ANY OF THE 29 FOLLOWING ARE EXEMPT FROM INHERITANCE TAX: 30 (1) ANY CORPORATION, UNINCORPORATED ASSOCIATION OR SOCIETY 19910H1321B2321 - 102 -
1 ORGANIZED AND OPERATED EXCLUSIVELY FOR RELIGIOUS, CHARITABLE, 2 SCIENTIFIC, LITERARY OR EDUCATIONAL PURPOSES, INCLUDING THE 3 ENCOURAGEMENT OF ART AND THE PREVENTION OF CRUELTY TO CHILDREN 4 OR ANIMALS, NO PART OF THE NET EARNINGS OF WHICH INURES TO THE 5 BENEFIT OF ANY PRIVATE STOCKHOLDER OR INDIVIDUAL AND NO 6 SUBSTANTIAL PART OF THE ACTIVITIES OF WHICH IS CARRYING ON 7 PROPAGANDA OR OTHERWISE ATTEMPTING TO INFLUENCE LEGISLATION. 8 (2) ANY TRUSTEE OR TRUSTEES, OR ANY FRATERNAL SOCIETY, ORDER 9 OR ASSOCIATION OPERATING UNDER THE LODGE SYSTEM, BUT ONLY IF THE 10 PROPERTY TRANSFERRED IS TO BE USED BY THE TRUSTEE OR TRUSTEES, 11 OR BY THE FRATERNAL SOCIETY, ORDER OR ASSOCIATION, EXCLUSIVELY 12 FOR RELIGIOUS, CHARITABLE, SCIENTIFIC, LITERARY OR EDUCATIONAL 13 PURPOSES, OR FOR THE PREVENTION OF CRUELTY TO CHILDREN OR 14 ANIMALS, AND NO SUBSTANTIAL PART OF THE ACTIVITIES OF THE 15 TRUSTEE OR TRUSTEES, OR OF THE FRATERNAL SOCIETY, ORDER OR 16 ASSOCIATION, IS CARRYING ON PROPAGANDA OR OTHERWISE ATTEMPTING 17 TO INFLUENCE LEGISLATION. 18 (3) ANY VETERANS' ORGANIZATION INCORPORATED BY ACT OF 19 CONGRESS, OR ITS DEPARTMENTS OR LOCAL CHAPTERS OR POSTS, NO PART 20 OF THE NET EARNINGS OF WHICH INURES TO THE BENEFIT OF ANY 21 PRIVATE SHAREHOLDER OR INDIVIDUAL. 22 (D) ALL PROCEEDS OF INSURANCE ON THE LIFE OF THE DECEDENT 23 ARE EXEMPT FROM INHERITANCE TAX. REFUNDS OF UNEARNED PREMIUMS 24 FOR THE CURRENT POLICY PERIOD AND POST MORTEM DIVIDENDS SHALL BE 25 CONSIDERED EXEMPT PROCEEDS. 26 (E) ALL PROCEEDS OF ANY FEDERAL WAR RISK INSURANCE, NATIONAL 27 SERVICE LIFE INSURANCE OR SIMILAR GOVERNMENTAL INSURANCE ARE 28 EXEMPT FROM INHERITANCE TAX. REFUNDS OF UNEARNED PREMIUMS FOR 29 THE CURRENT POLICY PERIOD AND POST MORTEM DIVIDENDS SHALL BE 30 CONSIDERED EXEMPT PROCEEDS. 19910H1321B2321 - 103 -
1 (F) THE PAY AND ALLOWANCES DETERMINED BY THE UNITED STATES 2 TO BE DUE A MEMBER OF ITS ARMED FORCES FOR SERVICE IN THE 3 VIETNAM CONFLICT AFTER AUGUST 5, 1964, FOR THE PERIOD BETWEEN 4 THE DATE DECLARED BY IT AS THE BEGINNING OF HIS MISSING IN 5 ACTION STATUS TO THE DATE DETERMINED BY IT TO BE THE DATE OF HIS 6 DEATH, ARE EXEMPT FROM INHERITANCE TAX. 7 (G) INTER VIVOS TRANSFERS AS DEFINED IN SUBSECTION (C) OF 8 SECTION 2107 WHICH MIGHT OTHERWISE BE SUBJECT TO INHERITANCE TAX 9 ARE EXEMPT WHERE THE TRANSFEREE IS A GOVERNMENTAL BODY AS 10 PROVIDED IN SUBSECTION (B) OR A CHARITY AS PROVIDED IN 11 SUBSECTION (C). 12 (H) INTANGIBLE PERSONAL PROPERTY HELD BY, FOR OR FOR THE 13 BENEFIT OF A DECEDENT WHO, AT THE TIME OF HIS DEATH, WAS A 14 NONRESIDENT IS EXEMPT FROM INHERITANCE TAX. 15 (I) A TRANSFER MADE AS AN ADVANCEMENT OF OR ON ACCOUNT OF AN 16 INTESTATE SHARE OR IN SATISFACTION OR PARTIAL SATISFACTION OF A 17 GIFT BY WILL, BUT NOT WITHIN THE MEANING OF SUBSECTION (C)(3) OF 18 SECTION 2107, IS EXEMPT FROM INHERITANCE TAX. 19 (J) ADJUSTED SERVICE CERTIFICATES ISSUED UNDER THE ACT OF 20 CONGRESS OF MAY 19, 1924, AND ADJUSTED SERVICE BONDS ISSUED 21 UNDER THE ACT OF CONGRESS OF JANUARY 27, 1936, ARE EXEMPT FROM 22 INHERITANCE TAX. 23 (K) PROPERTY SUBJECT TO A POWER OF APPOINTMENT, WHETHER OR 24 NOT THE POWER IS EXERCISED, AND NOTWITHSTANDING ANY BLENDING OF 25 SUCH PROPERTY WITH THE PROPERTY OF THE DONEE, IS EXEMPT FROM 26 INHERITANCE TAX IN THE ESTATE OF THE DONEE OF THE POWER OF 27 APPOINTMENT. 28 (L) PROPERTY AWARDED TO THE COMMONWEALTH AS STATUTORY HEIR 29 BY ESCHEAT OR WITHOUT ESCHEAT, OTHERWISE THAN AS CUSTODIAN FOR A 30 KNOWN DISTRIBUTEE, IS EXEMPT FROM INHERITANCE TAX. INHERITANCE 19910H1321B2321 - 104 -
1 TAX SHALL BE DEDUCTED AT THE APPLICABLE RATE WITHOUT INTEREST 2 FROM ANY SUCH EXEMPT FUNDS THEREAFTER DISTRIBUTED BY THE 3 COMMONWEALTH. 4 (M) PROPERTY OWNED BY HUSBAND AND WIFE WITH RIGHT OF 5 SURVIVORSHIP IS EXEMPT FROM INHERITANCE TAX. IF THE OWNERSHIP 6 WAS CREATED WITHIN THE MEANING OF SECTION 2107(C)(3) THE ENTIRE 7 INTEREST TRANSFERRED SHALL BE SUBJECT TO TAX UNDER SECTION 8 2107(C)(3) AS THOUGH A PART OF THE ESTATE OF THE SPOUSE WHO 9 CREATED THE CO-OWNERSHIP. 10 (N) PROPERTY HELD IN THE NAME OF A DECEDENT WHO HAD NO 11 BENEFICIAL INTEREST IN THE PROPERTY IS EXEMPT FROM INHERITANCE 12 TAX. 13 (O) OBLIGATIONS OWING TO THE DECEDENT WHICH ARE WORTHLESS 14 IMMEDIATELY BEFORE DEATH ARE EXEMPT FROM INHERITANCE TAX 15 ALTHOUGH COLLECTIBLE FROM THE OBLIGOR'S DISTRIBUTIVE SHARE OF 16 THE ESTATE. 17 (P) THE LUMP-SUM DEATH PAYMENT FROM THE UNITED STATES SOCIAL 18 SECURITY ADMINISTRATION OR ANY PAYMENT MADE IN LIEU OF THE 19 SOCIAL SECURITY ADMINISTRATION PAYMENT BY ANOTHER AGENCY OF THE 20 UNITED STATES, WHETHER OR NOT PAID TO THE DECEDENT'S ESTATE, IS 21 EXEMPT FROM INHERITANCE TAX. 22 (Q) THE LUMP-SUM BURIAL BENEFIT FROM THE UNITED STATES 23 RAILROAD RETIREMENT BOARD, WHETHER OR NOT PAID TO THE DECEDENT'S 24 ESTATE, IS EXEMPT FROM INHERITANCE TAX. 25 (R) PAYMENTS UNDER PENSION, STOCK BONUS, PROFIT-SHARING AND 26 OTHER RETIREMENT PLANS INCLUDING, BUT NOT LIMITED TO, H.R.10 27 PLANS, INDIVIDUAL RETIREMENT ACCOUNTS, INDIVIDUAL RETIREMENT 28 ANNUITIES AND INDIVIDUAL RETIREMENT BONDS TO DISTRIBUTEES 29 DESIGNATED BY DECEDENT OR DESIGNATED IN ACCORDANCE WITH THE 30 TERMS OF THE PLAN, ARE EXEMPT FROM INHERITANCE TAX TO THE EXTENT 19910H1321B2321 - 105 -
1 THAT DECEDENT BEFORE HIS DEATH DID NOT OTHERWISE HAVE THE RIGHT 2 TO POSSESS (INCLUDING PROPRIETARY RIGHTS AT TERMINATION OF 3 EMPLOYMENT), ENJOY, ASSIGN OR ANTICIPATE THE PAYMENT MADE. IN 4 ADDITION TO THIS EXEMPTION, WHETHER OR NOT THE DECEDENT 5 POSSESSED ANY OF THESE RIGHTS, THE PAYMENTS ARE EXEMPT FROM 6 INHERITANCE TAX TO THE SAME EXTENT THAT THEY ARE EXEMPT FROM 7 FEDERAL ESTATE TAX UNDER THE PROVISIONS OF THE INTERNAL REVENUE 8 CODE OF 1986 (PUBLIC LAW 99-514, 26 U.S.C. § 1 ET SEQ.), AS 9 AMENDED, ANY SUPPLEMENT TO THE CODE, OR ANY SIMILAR PROVISION IN 10 EFFECT FROM TIME TO TIME FOR FEDERAL ESTATE TAX PURPOSES, EXCEPT 11 THAT A PAYMENT, WHICH WOULD OTHERWISE BE EXEMPT FOR FEDERAL 12 ESTATE TAX PURPOSES IF IT HAD NOT BEEN MADE IN A LUMP-SUM OR 13 OTHER NONEXEMPT FORM OF PAYMENT, SHALL BE EXEMPT FROM 14 INHERITANCE TAX EVEN THOUGH PAID IN A LUMP-SUM OR OTHER FORM OF 15 PAYMENT. THE PROCEEDS OF LIFE INSURANCE OTHERWISE EXEMPT UNDER 16 SUBSECTION (D) SHALL NOT BE SUBJECT TO INHERITANCE TAX BECAUSE 17 THEY ARE PAID UNDER A PENSION, STOCK BONUS, PROFIT-SHARING, 18 H.R.10 OR OTHER RETIREMENT PLAN. 19 SECTION 2112. EXEMPTION FOR POVERTY.--(A) THE GENERAL 20 ASSEMBLY, IN RECOGNITION OF THE POWERS CONTAINED IN SECTION 21 2(B)(II) OF ARTICLE VIII OF THE CONSTITUTION OF PENNSYLVANIA 22 WHICH PROVIDES THEREIN FOR THE ESTABLISHING AS A CLASS OR 23 CLASSES OF SUBJECTS OF TAXATION THE PROPERTY OR PRIVILEGES OF 24 PERSONS WHO BECAUSE OF POVERTY ARE DETERMINED TO BE IN NEED OF 25 SPECIAL TAX PROVISIONS OR TAX EXEMPTIONS, HEREBY DECLARES AS ITS 26 LEGISLATIVE INTENT AND PURPOSE TO IMPLEMENT SUCH POWERS UNDER 27 SUCH CONSTITUTIONAL PROVISION BY ESTABLISHING A TAX EXEMPTION AS 28 HEREINAFTER PROVIDED IN THIS SECTION. 29 (B) THE GENERAL ASSEMBLY, HAVING DETERMINED THAT THERE ARE 30 PERSONS WITHIN THIS COMMONWEALTH THE VALUE OF WHOSE INCOMES AND 19910H1321B2321 - 106 -
1 ESTATES ARE SUCH THAT THE IMPOSITION OF AN INHERITANCE TAX UNDER 2 THIS ARTICLE WOULD CAUSE THEM HARDSHIP AND ECONOMIC BURDEN AND 3 HAVING FURTHER DETERMINED THAT POVERTY IS A RELATIVE CONCEPT 4 INEXTRICABLY JOINED WITH THE ABILITY TO MAINTAIN ASSETS 5 INHERITED UPON THE DEATH OF A SPOUSE, DEEMS IT TO BE A MATTER OF 6 PUBLIC POLICY TO PROVIDE AN EXEMPTION FROM TAXATION FOR 7 TRANSFERS OF PROPERTY TO OR FOR THE USE OF THAT CLASS OF PERSONS 8 HEREINAFTER DESIGNATED IN ORDER TO RELIEVE THEIR HARDSHIP AND 9 ECONOMIC BURDEN. 10 (C) ANY CLAIM FOR A TAX EXEMPTION HEREUNDER SHALL BE 11 DETERMINED IN ACCORDANCE WITH THE FOLLOWING: 12 (1) THE TRANSFEREE IS THE SPOUSE OF THE DECEDENT AT THE DATE 13 OF DEATH OF THE DECEDENT. 14 (2) THE VALUE OF THE ESTATE OF THE DECEDENT DOES NOT EXCEED 15 TWO HUNDRED THOUSAND DOLLARS ($200,000) AFTER REDUCTION FOR 16 ACTUAL LIABILITIES OF THE DECEDENT AS EVIDENCED BY A WRITTEN 17 AGREEMENT. 18 (3) THE AVERAGE OF THE JOINT EXEMPTION INCOME OF THE 19 DECEDENT AND THE TRANSFEREE FOR THE THREE TAXABLE YEARS, AS 20 DEFINED IN ARTICLE III, IMMEDIATELY PRECEDING THE DATE OF DEATH 21 OF THE DECEDENT DOES NOT EXCEED FORTY THOUSAND DOLLARS 22 ($40,000). 23 (D) NOTWITHSTANDING ANY OTHER PROVISION OF THIS ARTICLE, 24 TRANSFERS OF PROPERTY TO OR FOR THE USE OF ANY ELIGIBLE 25 TRANSFEREE WHO MEETS THE STANDARDS OF ELIGIBILITY ESTABLISHED BY 26 THIS SECTION AS THE TEST FOR POVERTY SHALL BE DEEMED A SEPARATE 27 CLASS OF SUBJECT OF TAXATION, AND, AS SUCH, SHALL BE ENTITLED TO 28 THE BENEFIT OF THE FOLLOWING EXEMPTIONS FROM TAXATION ON 29 TRANSFERS OF PROPERTY AS A CREDIT AGAINST THE TAX IMPOSED BY 30 THIS ARTICLE: 19910H1321B2321 - 107 -
1 (1) FOR DECEDENTS DYING ON OR AFTER JANUARY 1, 1992, AND 2 BEFORE JANUARY 1, 1993, THE LESSER OF: 3 (I) TWO PER CENT OF THE TAXABLE VALUE OF THE PROPERTY OF THE 4 DECEDENT TRANSFERRED TO OR FOR THE USE OF THE TRANSFEREE. 5 (II) TWO PER CENT OF ONE HUNDRED THOUSAND DOLLARS ($100,000) 6 OF THE TAXABLE VALUE OF THE PROPERTY OF THE DECEDENT TRANSFERRED 7 TO OR FOR THE USE OF THE TRANSFEREE. 8 (2) FOR DECEDENTS DYING ON OR AFTER JANUARY 1, 1993, AND 9 BEFORE JANUARY 1, 1994, THE LESSER OF: 10 (I) FOUR PER CENT OF THE TAXABLE VALUE OF THE PROPERTY OF 11 THE DECEDENT TRANSFERRED TO OR FOR THE USE OF THE TRANSFEREE. 12 (II) FOUR PER CENT OF ONE HUNDRED THOUSAND DOLLARS 13 ($100,000) OF THE TAXABLE VALUE OF THE PROPERTY OF THE DECEDENT 14 TRANSFERRED TO OR FOR THE USE OF THE TRANSFEREE. 15 (3) FOR DECEDENTS DYING ON OR AFTER JANUARY 1, 1994, THE 16 LESSER OF: 17 (I) SIX PER CENT OF THE TAXABLE VALUE OF THE PROPERTY OF THE 18 DECEDENT TRANSFERRED TO OR FOR THE USE OF THE TRANSFEREE. 19 (II) SIX PER CENT OF ONE HUNDRED THOUSAND DOLLARS ($100,000) 20 OF THE TAXABLE VALUE OF THE PROPERTY OF THE DECEDENT TRANSFERRED 21 TO OR FOR THE USE OF THE TRANSFEREE. 22 (E) FOR NONRESIDENT DECEDENTS, THE CREDIT PROVIDED IN THIS 23 SECTION SHALL BEAR THE SAME RATIO AS THAT OF THE DECEDENT'S 24 ESTATE IN THIS COMMONWEALTH BEARS TO THE DECEDENT'S TOTAL ESTATE 25 WITHOUT REGARD TO SITUS. 26 PART IV 27 RATE OF TAX 28 SECTION 2116. INHERITANCE TAX.--(A) (1) INHERITANCE TAX 29 UPON THE TRANSFER OF PROPERTY PASSING TO OR FOR THE USE OF ANY 30 OF THE FOLLOWING SHALL BE AT THE RATE OF SIX PER CENT: 19910H1321B2321 - 108 -
1 (I) GRANDFATHER, GRANDMOTHER, FATHER, MOTHER, HUSBAND, WIFE 2 AND LINEAL DESCENDANTS; OR 3 (II) WIFE OR WIDOW AND HUSBAND OR WIDOWER OF A CHILD. 4 (2) INHERITANCE TAX UPON THE TRANSFER OF PROPERTY PASSING TO 5 OR FOR THE USE OF ALL PERSONS OTHER THAN THOSE DESIGNATED IN 6 SUBCLAUSE (1) SHALL BE AT THE RATE OF FIFTEEN PER CENT. 7 (3) WHEN PROPERTY PASSES TO OR FOR THE USE OF A HUSBAND AND 8 WIFE WITH RIGHT OF SURVIVORSHIP, ONE OF WHOM IS TAXABLE AT A 9 RATE LOWER THAN THE OTHER, THE LOWER RATE OF TAX SHALL BE 10 APPLIED TO THE ENTIRE INTEREST. 11 (B) (1) WHEN THE DECEDENT WAS A RESIDENT, THE TAX SHALL BE 12 COMPUTED UPON THE VALUE OF THE PROPERTY, IN EXCESS OF THE 13 DEDUCTIONS SPECIFIED IN PART VI, AT THE RATES IN EFFECT AT THE 14 TRANSFEROR'S DEATH. 15 (2) WHEN THE DECEDENT WAS A NONRESIDENT, THE TAX SHALL BE 16 COMPUTED UPON THE VALUE OF REAL PROPERTY AND TANGIBLE PERSONAL 17 PROPERTY HAVING ITS SITUS IN THIS COMMONWEALTH, IN EXCESS OF 18 UNPAID PROPERTY TAXES ASSESSED ON THE PROPERTY AND ANY 19 INDEBTEDNESS FOR WHICH IT IS LIENED, MORTGAGED OR PLEDGED, AT 20 THE RATES IN EFFECT AT THE TRANSFEROR'S DEATH. THE PERSON LIABLE 21 TO MAKE THE RETURN UNDER SECTION 2136 MAY ELECT TO HAVE THE TAX 22 COMPUTED AS IF THE DECEDENT WAS A RESIDENT AND HIS ENTIRE ESTATE 23 WAS PROPERTY HAVING ITS SITUS IN THIS COMMONWEALTH AND THE TAX 24 DUE SHALL BE THE AMOUNT WHICH BEARS THE SAME RATIO TO THE TAX 25 THUS COMPUTED AS THE REAL PROPERTY AND TANGIBLE PERSONAL 26 PROPERTY LOCATED IN THIS COMMONWEALTH BEARS TO THE ENTIRE ESTATE 27 OF THE DECEDENT. 28 (C) WHEN ANY PERSON ENTITLED TO A DISTRIBUTIVE SHARE OF AN 29 ESTATE, WHETHER UNDER AN INTER VIVOS TRUST, A WILL OR THE 30 INTESTATE LAW, RENOUNCES HIS RIGHT TO RECEIVE THE DISTRIBUTIVE 19910H1321B2321 - 109 -
1 SHARE RECEIVING THEREFOR NO CONSIDERATION, OR EXERCISES HIS 2 ELECTIVE RIGHTS UNDER 20 PA.C.S. CH. 22 (RELATING TO ELECTIVE 3 SHARE OF SURVIVING SPOUSE) RECEIVING THEREFOR NO CONSIDERATION 4 OTHER THAN THE INTEREST IN ASSETS PASSING TO HIM AS THE ELECTING 5 SPOUSE, THE TAX SHALL BE COMPUTED AS THOUGH THE PERSONS WHO 6 BENEFIT BY SUCH RENUNCIATION OR ELECTION WERE ORIGINALLY 7 DESIGNATED TO BE THE DISTRIBUTEES, CONDITIONED UPON AN 8 ADJUDICATION OR DECREE OF DISTRIBUTION EXPRESSLY CONFIRMING 9 DISTRIBUTION TO SUCH DISTRIBUTEES. THE RENUNCIATION SHALL BE 10 MADE WITHIN NINE MONTHS AFTER THE DEATH OF THE DECEDENT OR, IN 11 THE CASE OF A SURVIVING SPOUSE, WITHIN THE TIME FOR ELECTION AND 12 ANY EXTENSION THEREOF UNDER 20 PA.C.S. § 2210(B) (RELATING TO 13 PROCEDURE FOR ELECTION; TIME LIMIT). NOTICE OF THE FILING OF THE 14 ACCOUNT AND OF ITS CALL FOR AUDIT OR CONFIRMATION SHALL INCLUDE 15 NOTICE OF THE RENUNCIATION OR ELECTION TO THE DEPARTMENT. WHEN 16 AN UNCONDITIONAL VESTING OF A FUTURE INTEREST DOES NOT OCCUR AT 17 THE DECEDENT'S DEATH, THE RENUNCIATION SPECIFIED IN THIS 18 SUBSECTION OF THE FUTURE INTEREST MAY BE MADE WITHIN THREE 19 MONTHS AFTER THE OCCURRENCE OF THE EVENT OR CONTINGENCY WHICH 20 RESOLVES THE VESTING OF THE INTEREST IN POSSESSION AND 21 ENJOYMENT. 22 (D) IN CASE OF A COMPROMISE OF A DISPUTE REGARDING RIGHTS 23 AND INTERESTS OF TRANSFEREES, MADE IN GOOD FAITH, THE TAX SHALL 24 BE COMPUTED AS THOUGH THE PERSONS SO RECEIVING DISTRIBUTION WERE 25 ORIGINALLY ENTITLED TO IT AS TRANSFEREES OF THE PROPERTY 26 RECEIVED IN THE COMPROMISE, CONDITIONED UPON AN ADJUDICATION OR 27 DECREE OF DISTRIBUTION EXPRESSLY CONFIRMING DISTRIBUTION TO SUCH 28 DISTRIBUTEES. NOTICE OF THE FILING OF THE ACCOUNT AND OF ITS 29 CALL FOR AUDIT OR CONFIRMATION SHALL INCLUDE NOTICE TO THE 30 DEPARTMENT. 19910H1321B2321 - 110 -
1 (E) IF THE RATE OF TAX WHICH WILL BE APPLICABLE WHEN A 2 FUTURE INTEREST VESTS IN POSSESSION AND ENJOYMENT CANNOT BE 3 ESTABLISHED WITH CERTAINTY, THE DEPARTMENT, AFTER CONSIDERATION 4 OF RELEVANT ACTUARIAL FACTORS, VALUATIONS AND OTHER PERTINENT 5 CIRCUMSTANCES, MAY ENTER INTO AN AGREEMENT WITH THE PERSON 6 RESPONSIBLE FOR PAYMENT TO ESTABLISH A SPECIFIED AMOUNT OF TAX 7 WHICH, WHEN PAID WITHIN SIXTY DAYS AFTER THE AGREEMENT, SHALL 8 CONSTITUTE FULL PAYMENT OF ALL TAX OTHERWISE DUE UPON SUCH 9 TRANSFER. 10 (F) PROPERTY SUBJECT TO A POWER OF APPOINTMENT, WHETHER OR 11 NOT THE POWER IS EXERCISED AND NOTWITHSTANDING ANY BLENDING OF 12 THE PROPERTY WITH THE PROPERTY OF THE DONEE, SHALL BE TAXED ONLY 13 AS PART OF THE ESTATE OF THE DONOR. 14 SECTION 2117. ESTATE TAX.--(A) IN THE EVENT THAT A FEDERAL 15 ESTATE TAX IS PAYABLE TO THE UNITED STATES ON THE ESTATE OF A 16 DECEDENT WHO WAS A RESIDENT OF THIS COMMONWEALTH AT THE TIME OF 17 HIS DEATH AND THE INHERITANCE TAX, IF ANY, PAID TO THE 18 COMMONWEALTH (DISREGARDING INTEREST OR THE AMOUNT OF ANY 19 DISCOUNT ALLOWED UNDER SECTION 2142), PLUS THE DEATH TAXES (NOT 20 INCLUDING ANY DEATH TAX EXPRESSLY IMPOSED TO RECEIVE THE BENEFIT 21 OF THE CREDIT FOR STATE DEATH TAXES ALLOWED BY THE FEDERAL 22 ESTATE TAX LAW) PAID TO OTHER STATES OR TERRITORIES IN RESPECT 23 TO THE PROPERTY OF THE DECEDENT, IS LESS THAN THE MAXIMUM CREDIT 24 FOR STATE TAXES ALLOWED BY THE FEDERAL ESTATE TAX LAW, A TAX 25 EQUAL TO THE DIFFERENCE IS IMPOSED. 26 (B) IN THE EVENT THAT A FEDERAL ESTATE TAX IS PAYABLE TO THE 27 UNITED STATES ON THE ESTATE OF A DECEDENT WHO WAS NOT A RESIDENT 28 OF THE UNITED STATES OR ITS TERRITORIES AT THE TIME OF HIS DEATH 29 AND THE INHERITANCE TAX, IF ANY, PAID TO THE COMMONWEALTH 30 (DISREGARDING INTEREST OR THE AMOUNT OF ANY DISCOUNT ALLOWED 19910H1321B2321 - 111 -
1 UNDER SECTION 2142) IS LESS THAN THE MAXIMUM CREDIT FOR STATE 2 TAXES ALLOWED BY THE FEDERAL ESTATE TAX LAW, A TAX IS HEREBY 3 IMPOSED, TO BE COMPUTED BY DEDUCTING THE PENNSYLVANIA 4 INHERITANCE TAX, IF ANY, PAID FROM AN AMOUNT WHICH BEARS THE 5 SAME RATIO TO THE MAXIMUM CREDIT FOR STATE TAXES ALLOWED BY THE 6 FEDERAL ESTATE TAX LAW, AS THE TRANSFER OF PROPERTY SUBJECT TO 7 INHERITANCE TAX AND INCLUDED IN THE DECEDENT'S GROSS ESTATE FOR 8 FEDERAL ESTATE TAX PURPOSES BEARS TO THE DECEDENT'S GROSS ESTATE 9 LOCATED WITHIN THE UNITED STATES AND ITS TERRITORIES FOR FEDERAL 10 ESTATE TAX PURPOSES. 11 (C) WHEN AN INHERITANCE TAX IS IMPOSED AFTER AN ESTATE TAX 12 IMPOSED UNDER SUBSECTION (A) OR (B) HAS BEEN PAID, THE ESTATE 13 TAX PAID SHALL BE CREDITED AGAINST ANY INHERITANCE TAX LATER 14 IMPOSED. 15 PART V 16 VALUATION 17 SECTION 2121. VALUATION.--(A) EXCEPT AS OTHERWISE PROVIDED 18 IN THIS PART, THE VALUATION DATE SHALL BE THE DATE OF THE 19 TRANSFEROR'S DEATH. WHEN THE TRANSFER WAS MADE DURING LIFETIME 20 AND WAS NOT IN TRUST, THE PROPERTY TRANSFERRED SHALL BE VALUED 21 AT THE TRANSFEROR'S DEATH. WHEN THE TRANSFER WAS TO AN INTER 22 VIVOS TRUST, THE PROPERTY TO BE VALUED SHALL BE THAT COMPRISING 23 THE PORTION OF THE TRUST, IF ANY, WHICH EXISTS AT THE 24 TRANSFEROR'S DEATH AND WHICH PORTION IS TRACEABLE FROM PROPERTY 25 THE TRANSFER OF WHICH IS SUBJECT TO TAX UNDER THIS ARTICLE. 26 (B) THE VALUE OF A LIFE INTEREST SHALL BE DETERMINED IN 27 ACCORDANCE WITH RULES AND REGULATIONS PROMULGATED BY THE 28 DEPARTMENT. UNTIL THE PROMULGATION OF RULES AND REGULATIONS TO 29 THE CONTRARY, THE REGULATIONS IN EFFECT FOR FEDERAL ESTATE TAX 30 PURPOSES SHALL APPLY. 19910H1321B2321 - 112 -
1 (C) THE VALUE OF AN INTEREST FOR A TERM CERTAIN SHALL BE 2 DETERMINED IN ACCORDANCE WITH RULES AND REGULATIONS PROMULGATED 3 BY THE DEPARTMENT. UNTIL THE PROMULGATION OF RULES AND 4 REGULATIONS TO THE CONTRARY, THE REGULATIONS IN EFFECT FOR 5 FEDERAL ESTATE TAX PURPOSES SHALL APPLY. 6 (D) IF AN ANNUITY OR A LIFE ESTATE IS TERMINATED BY THE 7 DEATH OF THE ANNUITANT OR LIFE TENANT OR BY THE HAPPENING OF A 8 CONTINGENCY WITHIN NINE MONTHS AFTER THE DEATH OF THE 9 TRANSFEROR, THE VALUE OF THE ANNUITY OR ESTATE SHALL BE THE 10 VALUE, AT THE DATE OF THE TRANSFEROR'S DEATH, OF THE AMOUNT OF 11 THE ANNUITY OR INCOME ACTUALLY PAID OR PAYABLE TO THE ANNUITANT 12 OR LIFE TENANT DURING THE PERIOD HE WAS ENTITLED TO THE ANNUITY 13 OR WAS IN POSSESSION OF THE ESTATE. IF AN APPRAISEMENT OF AN 14 ANNUITY OR LIFE ESTATE HAS BEEN FILED BEFORE THE TERMINATION, 15 THE APPRAISEMENT AND ANY ASSESSMENT BASED ON THE APPRAISEMENT 16 SHALL BE REVISED IN ACCORDANCE WITH THIS SECTION UPON REQUEST OF 17 ANY PARTY IN INTEREST, INCLUDING THE COMMONWEALTH AND THE 18 PERSONAL REPRESENTATIVE, INSOFAR AS THE APPRAISEMENT AND ANY 19 ASSESSMENT BASED ON THE APPRAISEMENT RELATES TO THE VALUATION OF 20 THE TERMINATED ANNUITY OR LIFE ESTATE, WITHOUT THE NECESSITY OF 21 THE PARTY IN INTEREST FOLLOWING ANY PROCEDURE DESCRIBED IN PART 22 XI. 23 (E) THE VALUE OF A FUTURE INTEREST SHALL BE DETERMINED IN 24 ACCORDANCE WITH RULES AND REGULATIONS PROMULGATED BY THE 25 DEPARTMENT. UNTIL THE PROMULGATION OF RULES AND REGULATIONS TO 26 THE CONTRARY, THE REGULATIONS IN EFFECT FOR FEDERAL ESTATE TAX 27 PURPOSES SHALL APPLY. 28 (F) WHEN A DECEDENT'S PROPERTY IS SUBJECT, DURING HIS 29 LIFETIME AND AT THE TIME OF HIS DEATH, TO A BINDING OPTION OR 30 AGREEMENT TO SELL, THE APPRAISED VALUE OF THE PROPERTY SHALL NOT 19910H1321B2321 - 113 -
1 EXCEED THE AMOUNT OF THE ESTABLISHED PRICE PAYABLE FOR IT 2 PROVIDED THE OPTION OR AGREEMENT IS A BONA FIDE ARRANGEMENT AND 3 NOT A DEVICE TO TRANSFER THE PROPERTY FOR LESS THAN AN ADEQUATE 4 AND FULL CONSIDERATION IN MONEY OR MONEY'S WORTH. IF THE OPTION 5 OR AGREEMENT IS NOT EXERCISED AND CONSUMMATED, THE VALUE AT 6 WHICH THE PROPERTY IS APPRAISED SHALL NOT BE LIMITED TO THE 7 ESTABLISHED PRICE PAYABLE FOR THE PROPERTY AND IT SHALL NOT 8 EXCEED THE VALUE OF THE PROPERTY ON THE DATE OF THE TRANSFEROR'S 9 DEATH. WHEN TAX HAS BEEN ASSESSED ON THE BASIS OF AN ESTABLISHED 10 PRICE AND THE OPTION OR AGREEMENT IS NOT EXERCISED AND 11 CONSUMMATED OR AN AMOUNT GREATER THAN THE ESTABLISHED PRICE IS 12 RECEIVED FOR THE PROPERTY, THE FIDUCIARY OR TRANSFEREE SHALL 13 FILE A SUPPLEMENTAL RETURN REPORTING THE FACTS. 14 SECTION 2122. VALUATION OF CERTAIN FARMLAND.--(A) THE 15 FOLLOWING WORDS AND PHRASES WHEN USED IN THIS SECTION, SHALL 16 HAVE THE MEANING ASCRIBED TO THEM IN THIS SECTION, EXCEPT WHERE 17 THE CONTEXT CLEARLY INDICATES A DIFFERENT MEANING: 18 "AGRICULTURAL COMMODITY." ANY AND ALL PLANT AND ANIMAL 19 PRODUCTS INCLUDING CHRISTMAS TREES PRODUCED IN THIS COMMONWEALTH 20 FOR COMMERCIAL PURPOSES. 21 "AGRICULTURAL RESERVE." NONCOMMERCIAL OPEN SPACE LANDS USED 22 FOR OUTDOOR RECREATION OR THE ENJOYMENT OF SCENIC OR NATURAL 23 BEAUTY AND OPEN TO THE PUBLIC FOR SUCH USE, WITHOUT CHARGE OR 24 FEE, ON A NONDISCRIMINATORY BASIS. 25 "AGRICULTURAL USE." USE OF THE LAND FOR THE PURPOSE OF 26 PRODUCING AN AGRICULTURAL COMMODITY OR WHEN DEVOTED TO AND 27 MEETING THE REQUIREMENTS AND QUALIFICATIONS FOR PAYMENTS OR 28 OTHER COMPENSATION PURSUANT TO A SOIL CONSERVATION PROGRAM UNDER 29 AN AGREEMENT WITH AN AGENCY OF THE FEDERAL GOVERNMENT. 30 "FOREST RESERVE." LAND, TEN ACRES OR MORE, STOCKED BY FOREST 19910H1321B2321 - 114 -
1 TREES OF ANY SIZE AND CAPABLE OF PRODUCING TIMBER OR OTHER WOOD 2 PRODUCTS. 3 "SEPARATION." A DIVISION, BY CONVEYANCE OR OTHER ACTION OF 4 THE OWNER, OF LANDS DEVOTED TO AGRICULTURAL USE, AGRICULTURAL 5 RESERVE OR FOREST RESERVE AND PREFERENTIALLY ASSESSED UNDER THE 6 PROVISIONS OF THIS SECTION INTO TWO OR MORE TRACTS OF LAND WHICH 7 CONTINUE TO BE AGRICULTURAL USE, AGRICULTURAL RESERVE OR FOREST 8 RESERVE AND ALL TRACTS SO FORMED MEET THE REQUIREMENTS OF 9 SECTION 3 OF THE ACT OF DECEMBER 19, 1974 (P.L.973, NO.319), 10 KNOWN AS THE "PENNSYLVANIA FARMLAND AND FOREST LAND ASSESSMENT 11 ACT OF 1974." 12 "SPLIT-OFF." A DIVISION, BY CONVEYANCE OR OTHER ACTION OF 13 THE OWNER, OF LANDS DEVOTED TO AGRICULTURAL USE, AGRICULTURAL 14 RESERVE OR FOREST RESERVE AND PREFERENTIALLY ASSESSED UNDER THE 15 PROVISIONS OF THIS SECTION INTO TWO OR MORE TRACTS OF LAND, THE 16 USE OF WHICH ON ONE OR MORE OF SUCH TRACTS DOES NOT MEET THE 17 REQUIREMENTS OF SECTION 3 OF THE "PENNSYLVANIA FARMLAND AND 18 FOREST LAND ASSESSMENT ACT OF 1974." 19 (B) (1) THE VALUE FOR TRANSFER INHERITANCE TAX PURPOSES OF 20 LAND OR AN INTEREST IN LAND WHICH IS OWNED BY A DECEDENT AND 21 DEVOTED TO AGRICULTURAL USE, AGRICULTURAL RESERVE OR FOREST 22 RESERVE SHALL BE THAT VALUE WHICH SUCH LAND HAS FOR ITS 23 PARTICULAR USE IF IT ALSO MEETS THE FOLLOWING CONDITIONS: 24 (I) IN THE CASE OF LAND DEVOTED TO AGRICULTURAL USE, THE 25 LAND WAS DEVOTED TO SUCH AGRICULTURAL USE FOR THE THREE YEARS 26 PRECEDING THE DEATH OF SUCH DECEDENT AND IS NOT LESS THAN TEN 27 CONTIGUOUS ACRES IN AREA OR HAS AN ANTICIPATED YEARLY GROSS 28 INCOME DERIVED FROM AGRICULTURAL USE OF TWO THOUSAND DOLLARS 29 ($2,000); 30 (II) IN THE CASE OF LAND DEVOTED TO AGRICULTURAL RESERVE, 19910H1321B2321 - 115 -
1 THE LAND IS NOT LESS THAN TEN CONTIGUOUS ACRES IN AREA; 2 (III) IN THE CASE OF LAND PRESENTLY DEVOTED TO FOREST 3 RESERVE, THE LAND IS NOT LESS THAN TEN CONTIGUOUS ACRES IN AREA; 4 OR 5 (IV) THE CONTIGUOUS TRACT OF LAND FOR WHICH APPLICATION IS 6 MADE IS NOT LESS THAN THE ENTIRE CONTIGUOUS AREA OF THE OWNER 7 USED FOR AGRICULTURAL USE, AGRICULTURAL RESERVE OR FOREST 8 RESERVE PURPOSES. 9 (2) IN DETERMINING THE VALUE OF LAND IN AGRICULTURAL USE, 10 AGRICULTURAL RESERVE OR FOREST RESERVE FOR ITS PARTICULAR USE, 11 CONSIDERATION SHALL BE GIVEN TO AVAILABLE EVIDENCE OF SUCH 12 LAND'S CAPABILITY FOR ITS PARTICULAR USE AS DERIVED FROM THE 13 SOIL SURVEY AT THE PENNSYLVANIA STATE UNIVERSITY, THE NATIONAL 14 COOPERATIVE SOIL SURVEY, THE UNITED STATES CENSUS OF 15 AGRICULTURAL CATEGORIES OF LAND USE CLASSES AND OTHER EVIDENCE 16 OF THE CAPABILITY OF THE LAND DEVOTED TO SUCH USE AND ALSO, IF 17 THE LAND IS ASSESSED UNDER THE PROVISIONS OF THE "PENNSYLVANIA 18 FARMLAND AND FOREST LAND ASSESSMENT ACT OF 1974," TO THE 19 VALUATION DETERMINED BY THE LOCAL COUNTY ASSESSOR THEREUNDER. 20 (C) (1) IF ANY TRACT OF LAND IN AGRICULTURAL USE, 21 AGRICULTURAL RESERVE OR FOREST RESERVE, WHICH IS VALUED FOR 22 INHERITANCE TAX PURPOSES UNDER THE PROVISIONS OF THIS PART, IS 23 APPLIED TO A USE OTHER THAN AGRICULTURAL USE, AGRICULTURAL 24 RESERVE OR FOREST RESERVE OR FOR ANY OTHER REASON, EXCEPT 25 CONDEMNATION THEREOF, IS REMOVED FROM THE CATEGORY OF LAND 26 PREFERENTIALLY VALUED UNDER THIS PART WITHIN SEVEN YEARS 27 FOLLOWING THE DEATH OF SUCH DECEDENT, THE OWNER AT SUCH TIME THE 28 LAND IS SO REMOVED SHALL BE SUBJECT AND LIABLE TO TAX DUE THE 29 COMMONWEALTH IN AN AMOUNT EQUAL TO THE DIFFERENCE, IF ANY, 30 BETWEEN THE TAXES PAID OR PAYABLE ON THE BASIS OF THE VALUATION 19910H1321B2321 - 116 -
1 AUTHORIZED UNDER THIS SECTION AND THE TAXES THAT WOULD HAVE BEEN 2 PAID OR PAYABLE HAD THAT LAND BEEN VALUED AND TAXED ON THE BASIS 3 OF ITS MARKET VALUE AT THE DEATH OF THE DECEDENT, PLUS INTEREST 4 THEREON FOR THE PERIOD FROM THE DATE OF DEATH TO THE CHANGE OF 5 USE AT THE RATE ESTABLISHED IN SECTION 2143. 6 (2) THE TAX SHALL BE A LIEN UPON THE PROPERTY IN FAVOR OF 7 THE COMMONWEALTH, COLLECTIBLE IN THE MANNER PROVIDED BY LAW FOR 8 THE COLLECTION OF DELINQUENT REAL ESTATE TAXES, AS WELL AS THE 9 PERSONAL OBLIGATION OF THE OWNER AT THE TIME OF SUCH CHANGE OF 10 USE. THE TAX SHALL BECOME DUE ON THE DATE OF CHANGE OF USE. 11 (3) EVERY OWNER OF LAND PREFERENTIALLY VALUED UNDER THIS 12 SECTION SHALL NOTIFY THE REGISTER OF WILLS OF THE COUNTY OR 13 COUNTIES IN WHICH THE LAND IS LOCATED OF ANY CHANGE OR PROPOSED 14 CHANGE IN THE USE OF THE LAND. ANY OWNER FAILING TO MAKE 15 NOTIFICATION COMMITS A MISDEMEANOR OF THE THIRD DEGREE. 16 (D) (1) THE SPLIT-OFF OF A PART OF THE LAND WHICH HAS BEEN 17 VALUED, ASSESSED AND TAXED UNDER THIS ARTICLE FOR A USE OTHER 18 THAN AGRICULTURAL USE, AGRICULTURAL RESERVE OR FOREST RESERVE 19 WITHIN THE SEVEN-YEAR PERIOD PROVIDED FOR BY SUBSECTION (C) 20 SHALL, EXCEPT WHEN THE SPLIT-OFF OCCURS THROUGH CONDEMNATION, 21 SUBJECT THE LAND DIVIDED AND THE ENTIRE PARCEL FROM WHICH THE 22 LAND WAS DIVIDED TO LIABILITY FOR TAXES AS OTHERWISE SET FORTH 23 IN THIS ARTICLE EXCEPT AS PROVIDED IN SUBCLAUSE (2). 24 (2) THE OWNER OF PROPERTY SUBJECT TO A PREFERENTIAL TAX 25 ASSESSMENT MAY SPLIT-OFF LAND COVERED BY THE PREFERENTIAL TAX 26 ASSESSMENT WITHIN THE SEVEN-YEAR PERIOD. THE TRACT OF LAND SO 27 SPLIT-OFF SHALL NOT EXCEED TWO ACRES ANNUALLY AND MAY ONLY BE 28 USED FOR RESIDENTIAL USE, AGRICULTURAL USE, AGRICULTURAL RESERVE 29 OR FOREST RESERVE AND THE CONSTRUCTION OF A RESIDENTIAL DWELLING 30 TO BE OCCUPIED BY THE PERSON TO WHOM THE LAND IS TRANSFERRED. 19910H1321B2321 - 117 -
1 THE TOTAL PARCEL OR PARCELS OF LAND SPLIT-OFF UNDER THE 2 PROVISIONS OF THIS SUBSECTION SHALL NOT EXCEED TEN PER CENT OR 3 TEN ACRES, WHICHEVER IS LESS, OF THE ENTIRE TRACT SUBJECT TO THE 4 PREFERENTIAL TAX ASSESSMENT. THE SPLIT-OFF OF A PARCEL OF LAND 5 WHICH MEETS THE REQUIREMENTS OF THIS SUBSECTION SHALL NOT 6 INVALIDATE THE PREFERENTIAL TAX ASSESSMENT IF IT CONTINUES TO 7 MEET THE REQUIREMENTS OF SUBSECTION (B). 8 (3) THE OWNER OF PROPERTY SUBJECT TO A PREFERENTIAL USE 9 ASSESSMENT MAY SEPARATE LAND COVERED BY THE PREFERENTIAL USE 10 ASSESSMENT. THE SEPARATION SHALL NOT INVALIDATE THE PREFERENTIAL 11 TAX ASSESSMENT UNLESS A SUBSEQUENT ABANDONMENT OF PREFERENTIAL 12 USE OCCURS WITHIN SEVEN YEARS OF THE SEPARATION. THE ABANDONMENT 13 SHALL SUBJECT THE ENTIRE TRACT OF LAND SEPARATED TO LIABILITY 14 FOR TAXES, WHICH ARE TO BE PAID BY THE PERSON CHANGING THE USE, 15 AS SET FORTH IN THIS ARTICLE. 16 (4) WHEN PROPERTY SUBJECT TO PREFERENTIAL TAX ASSESSMENT IS 17 SEPARATED AMONG THE BENEFICIARIES TAXED UNDER SUBSECTION (A)(1) 18 OF SECTION 2116, A SUBSEQUENT CHANGE WITHIN THE SEVEN-YEAR 19 PERIOD PROVIDED FOR IN SUBSECTION (B) IN THE USE OF ONE 20 BENEFICIARY'S PORTION OF THE PROPERTY SHALL SUBJECT ONLY THAT 21 TRACT HELD BY THE BENEFICIARY WHO CHANGES THE USE TO LIABILITY 22 UNDER THIS ARTICLE. 23 PART VI 24 DEDUCTIONS 25 SECTION 2126. DEDUCTIONS GENERALLY.--THE ONLY DEDUCTIONS 26 FROM THE VALUE OF THE PROPERTY TRANSFERRED SHALL BE THOSE SET 27 FORTH IN THIS PART. EXCEPT AS OTHERWISE PROVIDED IN THIS 28 ARTICLE, THEY SHALL BE DEDUCTIBLE REGARDLESS OF WHETHER OR NOT 29 ASSETS COMPRISING THE DECEDENT'S TAXABLE ESTATE ARE EMPLOYED IN 30 THE PAYMENT OR DISCHARGE OF THE DEDUCTIBLE ITEMS. WHEN A TAX IS 19910H1321B2321 - 118 -
1 IMPOSED UPON A TRANSFER DESCRIBED IN SUBSECTION (C) OF SECTION 2 2107 AND SECTION 2108, THE DEDUCTIONS SHALL BE ALLOWED TO THE 3 TRANSFEREE ONLY TO THE EXTENT THAT THE TRANSFEREE HAS ACTUALLY 4 PAID THE DEDUCTIBLE ITEMS AND EITHER THE TRANSFEREE WAS LEGALLY 5 OBLIGATED TO PAY THE DEDUCTIBLE ITEMS OR THE ESTATE SUBJECT TO 6 ADMINISTRATION BY A PERSONAL REPRESENTATIVE IS INSUFFICIENT TO 7 PAY THE DEDUCTIBLE ITEMS. 8 SECTION 2127. EXPENSES.--(A) THE FOLLOWING EXPENSES MAY BE 9 DEDUCTED FROM THE VALUE OF THE PROPERTY TRANSFERRED. 10 (B) ADMINISTRATION EXPENSES. ALL REASONABLE EXPENSES OF 11 ADMINISTRATION OF THE DECEDENT'S ESTATE AND OF THE ASSETS 12 INCLUDABLE IN THE DECEDENT'S TAXABLE ESTATE ARE DEDUCTIBLE. 13 (C) BEQUEST TO FIDUCIARY OR ATTORNEY IN LIEU OF FEES. A 14 TRANSFER TO AN EXECUTOR, TRUSTEE OR ATTORNEY IN LIEU OF 15 COMPENSATION FOR SERVICES IS DEDUCTIBLE TO THE EXTENT IT DOES 16 NOT EXCEED REASONABLE COMPENSATION FOR THE SERVICES TO BE 17 PERFORMED. 18 (D) FAMILY EXEMPTION. THE FAMILY EXEMPTION IS DEDUCTIBLE. 19 (E) FUNERAL AND BURIAL EXPENSES. REASONABLE AND CUSTOMARY 20 FUNERAL EXPENSES, INCLUDING THE COST OF A FAMILY BURIAL LOT OR 21 OTHER RESTING PLACE, ARE DEDUCTIBLE. 22 (F) TOMBSTONES AND GRAVEMARKERS. REASONABLE AND CUSTOMARY 23 EXPENSES FOR THE PURCHASE AND ERECTION OF A MONUMENT, GRAVESTONE 24 OR MARKER ON DECEDENT'S BURIAL LOT OR FINAL RESTING PLACE ARE 25 DEDUCTIBLE. 26 (G) BURIAL TRUSTS OR CONTRACTS. BEQUESTS OR DEVISES IN 27 TRUST, OR FUNDS PLACED IN TRUST AFTER DECEDENT'S DEATH, OR FUNDS 28 PAID UNDER A CONTRACT AFTER DECEDENT'S DEATH, IN REASONABLE 29 AMOUNTS, TO THE EXTENT THAT THE FUNDS OR INCOME FROM THE FUNDS 30 IS TO BE APPLIED TO THE CARE AND PRESERVATION OF THE FAMILY 19910H1321B2321 - 119 -
1 BURIAL LOT OR OTHER FINAL RESTING PLACE IN WHICH THE DECEDENT IS 2 BURIED OR THE REMAINS OF THE DECEDENT REPOSE AND THE STRUCTURE 3 ON THE BURIAL LOT OR OTHER FINAL RESTING PLACE, ARE DEDUCTIBLE. 4 (H) BEQUESTS FOR RELIGIOUS SERVICES. BEQUESTS IN REASONABLE 5 AMOUNTS FOR THE PERFORMANCE OR CELEBRATION OF RELIGIOUS RITES, 6 RITUALS, SERVICES OR CEREMONIES, IN CONSEQUENCE OF THE DEATH OF 7 THE DECEDENT, SHALL BE DEDUCTIBLE. 8 SECTION 2128. TAXES.--(A) THE FOLLOWING TAXES MAY BE 9 DEDUCTED FROM THE VALUE OF THE PROPERTY TRANSFERRED: 10 (B) PROPERTY TAXES. TAXES IMPOSED AGAINST THE DECEDENT OR 11 AGAINST ANY PROPERTY CONSTITUTING A PART OF DECEDENT'S GROSS 12 TAXABLE ESTATE, AND WHICH ARE OWING PRIOR TO DECEDENT'S DEATH, 13 ARE DEDUCTIBLE. HOWEVER, TAXES FOR WHICH DECEDENT IS NOT 14 PERSONALLY LIABLE SHALL NOT BE DEDUCTIBLE IN AN AMOUNT EXCEEDING 15 THE VALUE OF THE PROPERTY AGAINST WHICH THE TAXES ARE LIENED. 16 (C) STATE AND FOREIGN DEATH TAXES. DEATH TAXES OTHER THAN 17 THE FEDERAL ESTATE TAX, DISREGARDING INTEREST AND PENALTY, PAID 18 TO OTHER STATES AND TERRITORIES OF THE UNITED STATES AND TO 19 TAXING JURISDICTIONS OUTSIDE THE UNITED STATES AND ITS 20 TERRITORIES ON ASSETS, THE TRANSFER OF WHICH IS SUBJECT TO TAX 21 UNDER THIS ARTICLE, IF THE TAXES ARE REQUIRED TO BE PAID TO 22 BRING THE ASSETS INTO THIS COMMONWEALTH, OR TO TRANSFER THEM TO 23 THE NEW OWNER, ARE DEDUCTIBLE. 24 SECTION 2129. LIABILITIES.--(A) ALL LIABILITIES OF THE 25 DECEDENT SHALL BE DEDUCTIBLE SUBJECT TO THE LIMITATIONS SET 26 FORTH IN THIS SECTION. 27 (B) EXCEPT AS OTHERWISE PROVIDED IN SUBSECTIONS (H) AND (I), 28 THE DEDUCTIONS FOR INDEBTEDNESS OF THE DECEDENT, WHEN FOUNDED 29 UPON A PROMISE OR AGREEMENT, SHALL BE LIMITED TO THE EXTENT THAT 30 IT WAS CONTRACTED BONA FIDE AND FOR AN ADEQUATE AND FULL 19910H1321B2321 - 120 -
1 CONSIDERATION IN MONEY OR MONEY'S WORTH. 2 (C) EXCEPT AS PROVIDED BY SUBSECTION (4) OF SECTION 2130, 3 INDEBTEDNESS OWING BY THE DECEDENT UPON A SECURED LOAN IS 4 DEDUCTIBLE WHETHER OR NOT THE SECURITY IS A PART OF THE GROSS 5 TAXABLE ESTATE. 6 (D) EXCEPT AS PROVIDED BY SUBSECTION (4) OF SECTION 2130, 7 THE DECEDENT'S LIABILITY (NET OF ALL COLLECTIBLE CONTRIBUTION) 8 ON A JOINT OBLIGATION IS DEDUCTIBLE WHETHER OR NOT PAYMENT OF 9 THE OBLIGATION IS SECURED BY ENTIRETIES PROPERTY OR PROPERTY 10 WHICH PASSES TO ANOTHER UNDER THE RIGHT OF SURVIVORSHIP. 11 (E) INDEBTEDNESS ARISING FROM A CONTRACT FOR THE SUPPORT OF 12 THE DECEDENT IS DEDUCTIBLE. 13 (F) DECEDENT'S OBLIGATION IS DEDUCTIBLE WHETHER OR NOT 14 DISCHARGED BY TESTAMENTARY GIFT. 15 (G) DECEDENT'S DEBT, WHICH IS UNENFORCEABLE BECAUSE OF ANY 16 STATUTE OF LIMITATIONS, IS DEDUCTIBLE IF PAID BY THE ESTATE. 17 (H) A PLEDGE TO A TRANSFEREE EXEMPT UNDER THE PROVISIONS OF 18 SUBSECTION (C) OF SECTION 2111 IS DEDUCTIBLE IF PAID BY THE 19 ESTATE, WHETHER OR NOT IT IS LEGALLY ENFORCEABLE. 20 (I) LIABILITIES ARISING FROM THE DECEDENT'S TORT OR FROM 21 DECEDENT'S STATUS AS AN ACCOMMODATION ENDORSER, GUARANTOR OR 22 SURETY ARE DEDUCTIBLE, EXCEPT TO THE EXTENT THAT IT CAN BE 23 REASONABLY ANTICIPATED THAT DECEDENT'S ESTATE WILL BE EXONERATED 24 OR REIMBURSED BY OTHERS PRIMARILY LIABLE OR SUBJECT TO 25 CONTRIBUTION. 26 (J) THE FACT THAT A SURVIVING SPOUSE IS LEGALLY LIABLE AND 27 FINANCIALLY ABLE TO PAY ANY ITEM WHICH, IF THE DECEASED SPOUSE 28 WERE UNMARRIED, WOULD QUALIFY AS A DEDUCTION UNDER THIS PART 29 SHALL NOT RESULT IN THE DISALLOWANCE OF SUCH ITEM AS A 30 DEDUCTION. 19910H1321B2321 - 121 -
1 (K) OBLIGATIONS FOR DECEDENT'S MEDICAL EXPENSES ARE NOT 2 DEDUCTIBLE TO THE EXTENT DECEDENT'S ESTATE WILL BE EXONERATED OR 3 REIMBURSED FOR SUCH EXPENSES FROM OTHER SOURCES. 4 SECTION 2130. DEDUCTIONS NOT ALLOWED.--THE FOLLOWING ARE NOT 5 DEDUCTIBLE: 6 (1) THE VALUE OF ASSETS CLAIMED FOR THE SPOUSE'S ALLOWANCE 7 UNDER 20 PA.C.S. § 2102 (RELATING TO SHARE OF SURVIVING SPOUSE). 8 (2) CLAIMS OF A FORMER OR SURVIVING SPOUSE, OR OTHERS, UNDER 9 AN AGREEMENT BETWEEN THE FORMER OR SURVIVING SPOUSE AND THE 10 DECEDENT, INSOFAR AS THEY ARISE IN CONSIDERATION OF A 11 RELINQUISHMENT OR PROMISED RELINQUISHMENT OF MARITAL OR SUPPORT 12 RIGHTS. 13 (3) LITIGATION EXPENSES OF BENEFICIARIES. 14 (4) INDEBTEDNESS SECURED BY REAL PROPERTY, OR TANGIBLE 15 PERSONAL PROPERTY, ALL OF WHICH HAS ITS SITUS OUTSIDE OF THIS 16 COMMONWEALTH, EXCEPT TO THE EXTENT THE INDEBTEDNESS EXCEEDS THE 17 VALUE OF THE PROPERTY. 18 PART VII 19 PAYMENT OF TAX 20 SECTION 2136. RETURNS.--(A) THE FOLLOWING PERSONS SHALL 21 MAKE A RETURN: 22 (1) THE PERSONAL REPRESENTATIVE OF THE ESTATE OF THE 23 DECEDENT AS TO PROPERTY OF THE DECEDENT ADMINISTERED BY HIM AND 24 ADDITIONAL PROPERTY WHICH IS OR MAY BE SUBJECT TO INHERITANCE 25 TAX OF WHICH HE SHALL HAVE OR ACQUIRE KNOWLEDGE. 26 (2) THE TRANSFEREE OF PROPERTY UPON THE TRANSFER OF WHICH 27 INHERITANCE TAX IS OR MAY BE IMPOSED BY THIS ARTICLE INCLUDING A 28 TRUSTEE OF PROPERTY TRANSFERRED IN TRUST. NO SEPARATE RETURN 29 NEED BE MADE BY THE TRANSFEREE OF PROPERTY INCLUDED IN THE 30 RETURN OF A PERSONAL REPRESENTATIVE. 19910H1321B2321 - 122 -
1 (B) THE INCLUSION OF PROPERTY IN THE RETURN SHALL NOT 2 CONSTITUTE AN ADMISSION THAT ITS TRANSFER IS TAXABLE. 3 (C) ANY PERSON REQUIRED TO FILE A RETURN UNDER SUBSECTION 4 (A) SHALL PROMPTLY FILE A SUPPLEMENTAL RETURN WITH RESPECT TO 5 ADDITIONAL ASSETS AND TRANSFERS WHICH COME TO HIS KNOWLEDGE 6 AFTER THE ORIGINAL RETURN HAS BEEN FILED. 7 (D) THE RETURNS REQUIRED BY SUBSECTION (A) SHALL BE FILED 8 WITHIN NINE MONTHS AFTER THE DEATH OF THE DECEDENT. AT ANY TIME 9 PRIOR TO THE EXPIRATION OF THE NINE-MONTH PERIOD, THE 10 DEPARTMENT, IN ITS DISCRETION, MAY GRANT AN EXTENSION OF THE 11 TIME FOR FILING A RETURN FOR AN ADDITIONAL PERIOD OF SIX MONTHS. 12 (E) THE RETURNS REQUIRED BY SUBSECTIONS (A) AND (C) SHALL BE 13 MADE IN THE FORM PRESCRIBED BY THE DEPARTMENT. 14 (F) WHEN THE DECEDENT WAS A RESIDENT, THE RETURNS SHALL BE 15 FILED WITH THE REGISTER. WHEN THE DECEDENT WAS A NONRESIDENT, 16 THE RETURNS SHALL BE FILED WITH THE REGISTER WHO ISSUED LETTERS, 17 IF ANY, IN THIS COMMONWEALTH; OTHERWISE, THE RETURNS SHALL BE 18 FILED WITH THE DEPARTMENT. 19 SECTION 2137. APPRAISEMENT.--THE DEPARTMENT SHALL HAVE 20 SUPERVISION OVER, AND MAKE OR CAUSE TO BE MADE, FAIR AND 21 CONSCIONABLE APPRAISEMENTS OF PROPERTY THE TRANSFER OF WHICH IS 22 SUBJECT TO TAX UNDER THIS ARTICLE. THE APPRAISEMENT, UNLESS 23 SUSPENDED UNTIL AUDIT, SHALL BE MADE WITHIN SIX MONTHS AFTER THE 24 RETURN HAS BEEN FILED AND, IF NOT SO MADE, SHALL BE MADE WITHIN 25 AN ADDITIONAL PERIOD AS THE COURT, UPON APPLICATION OF ANY PARTY 26 IN INTEREST, INCLUDING THE PERSONAL REPRESENTATIVE, SHALL FIX. 27 SECTION 2138. DEDUCTIONS.--THE OFFICIAL WITH WHOM THE RETURN 28 IS REQUIRED BY SUBSECTION (F) OF SECTION 2136 TO BE FILED SHALL 29 DETERMINE THE ALLOWANCE OR DISALLOWANCE OF ALL DEDUCTIONS 30 CLAIMED. THE DETERMINATION, UNLESS SUSPENDED UNTIL AUDIT, SHALL 19910H1321B2321 - 123 -
1 BE MADE WITHIN SIX MONTHS AFTER THE CLAIM FOR ALLOWANCE HAS BEEN 2 FILED AND, IF NOT SO MADE, SHALL BE MADE WITHIN SUCH FURTHER 3 PERIOD AS THE COURT, UPON APPLICATION BY ANY PARTY IN INTEREST, 4 INCLUDING THE PERSONAL REPRESENTATIVE, SHALL FIX. HOWEVER, THE 5 COURT, AT THE REQUEST OF THE FIDUCIARY AT THE AUDIT OF HIS 6 ACCOUNT, MAY DETERMINE AND ALLOW, AS DEDUCTIONS, ALL PROPERLY 7 DEDUCTIBLE CREDITS CLAIMED IN THE ACCOUNT OR ALLOWED AT THE 8 AUDIT WITHOUT REQUIRING THE FILING OF A SEPARATE CLAIM FOR THEM 9 AND THE COURT MAY THEN FIX THE AMOUNT OF THE TAX AND DECREE 10 PAYMENT OF THE TAX. DEDUCTIONS EXCEEDING ONE HUNDRED DOLLARS 11 ($100) IN THE AGGREGATE SHALL NOT BE ALLOWED BY THE COURT UNLESS 12 THE COMMONWEALTH IS REPRESENTED AT THE AUDIT BY COUNSEL OR 13 UNLESS THERE IS PROOF THAT THE REGISTER HAS HAD AT LEAST THIRTY 14 DAYS NOTICE OF THE CLAIM. 15 SECTION 2139. ASSESSMENT OF TAX.--AFTER THE APPRAISEMENT HAS 16 BEEN MADE AND THE ALLOWANCE OR DISALLOWANCE OF DEDUCTIONS 17 DETERMINED, THE INHERITANCE TAX, AS AFFECTED BY THE COURT'S 18 DETERMINATION OF THE ALLOWANCE OR DISALLOWANCE OF DEDUCTIONS AS 19 PROVIDED IN SECTION 2138, SHALL BE ASSESSED BY THE OFFICIAL WITH 20 WHOM THE RETURN IS REQUIRED TO BE FILED UNDER SUBSECTION (F) OF 21 SECTION 2136. THE ASSESSMENT, UNLESS SUSPENDED UNTIL AUDIT, 22 SHALL BE MADE WITHIN ONE MONTH AFTER THE FILING OF THE 23 APPRAISEMENT OR DETERMINATION OF DEDUCTIONS, WHICHEVER OCCURS 24 LATER, AND, IF NOT SO MADE, SHALL BE MADE WITHIN AN ADDITIONAL 25 PERIOD AS THE COURT, UPON APPLICATION BY ANY PARTY IN INTEREST, 26 INCLUDING THE PERSONAL REPRESENTATIVE, SHALL FIX. 27 SECTION 2140. NOTICE.--THE DEPARTMENT SHALL GIVE, OR CAUSE 28 TO BE GIVEN, NOTICE OF THE FILING OF THE APPRAISEMENT, THE 29 DETERMINATION OF THE ALLOWANCE OR DISALLOWANCE OF DEDUCTIONS AND 30 THE AMOUNT OF TAX ASSESSED, AND ALL SUPPLEMENTS, TO THE PERSONAL 19910H1321B2321 - 124 -
1 REPRESENTATIVE AND TO ANY TRANSFEREE WHO FILED A TAX RETURN OR 2 TO THEIR RESPECTIVE ATTORNEYS. 3 SECTION 2141. FAILURE TO FILE RETURNS NOT A BAR TO 4 ASSESSMENT OF TAX.--FAILURE TO FILE A RETURN OF A TAXABLE 5 TRANSFER SHALL NOT BAR THE MAKING OF AN APPRAISEMENT OR 6 SUPPLEMENTAL APPRAISEMENT OR ASSESSMENT OF TAX OR SUPPLEMENTAL 7 ASSESSMENT OF TAX BASED UPON TAXABLE TRANSFERS NOT RETURNED 8 UNDER THE PROVISIONS OF THIS ARTICLE. 9 SECTION 2142. PAYMENT DATE AND DISCOUNT.--INHERITANCE TAX IS 10 DUE AT THE DATE OF THE DECEDENT'S DEATH AND SHALL BECOME 11 DELINQUENT AT THE EXPIRATION OF NINE MONTHS AFTER THE DECEDENT'S 12 DEATH. TO THE EXTENT THAT THE INHERITANCE TAX IS PAID WITHIN 13 THREE MONTHS AFTER THE DEATH OF THE DECEDENT, A DISCOUNT OF FIVE 14 PER CENT SHALL BE ALLOWED. 15 SECTION 2143. INTEREST.--IF THE INHERITANCE TAX IS NOT PAID 16 BEFORE THE DATE IT BECOMES DELINQUENT, INTEREST ON THE UNPAID 17 TAX SHALL BE CHARGED AFTER THE DATE OF DELINQUENCY AT THE RATE 18 ESTABLISHED PURSUANT TO SECTION 806 OF THE ACT OF APRIL 9, 1929 19 (P.L.343, NO.176), KNOWN AS "THE FISCAL CODE." WHEN PAYMENT OF 20 INHERITANCE TAX IS NOT MADE BECAUSE OF LITIGATION OR OTHER 21 UNAVOIDABLE CAUSE OF DELAY, AND THE PROPERTY ON WHICH THE TAX 22 HAS BEEN CALCULATED HAS REMAINED IN THE HANDS OF A FIDUCIARY AND 23 HAS NOT PRODUCED A NET INCOME EQUAL TO THE RATE OF INTEREST 24 PROVIDED IN THIS SECTION ANNUALLY, INTEREST FOR SUCH PERIOD 25 SHALL BE CALCULATED AT THE RATE OF THE NET INCOME PRODUCED BY 26 THE PROPERTY. ANY PAYMENT ON DELINQUENT INHERITANCE TAX SHALL BE 27 APPLIED, FIRST, TO ANY INTEREST DUE ON THE TAX AT THE DATE OF 28 PAYMENT, AND THEN, IF THERE IS ANY BALANCE, TO THE TAX ITSELF. 29 SECTION 2144. SOURCE OF PAYMENT.--(A) IN THE ABSENCE OF A 30 CONTRARY INTENT APPEARING IN THE WILL, THE INHERITANCE TAX, 19910H1321B2321 - 125 -
1 INCLUDING INTEREST, ON THE TRANSFER OF PROPERTY WHICH PASSES BY 2 WILL ABSOLUTELY AND IN FEE, AND WHICH IS NOT PART OF THE 3 RESIDUARY ESTATE, SHALL BE PAID OUT OF THE RESIDUARY ESTATE AND 4 CHARGED IN THE SAME MANNER AS A GENERAL ADMINISTRATION EXPENSE 5 OF THE ESTATE. THE PAYMENTS SHALL BE MADE BY THE PERSONAL 6 REPRESENTATIVE AND, IF NOT SO PAID, SHALL BE MADE BY THE 7 TRANSFEREE OF THE RESIDUARY ESTATE. 8 (B) IN THE ABSENCE OF A CONTRARY INTENT APPEARING IN THE 9 INTER VIVOS TRUST, THE INHERITANCE TAX, INCLUDING INTEREST, ON 10 THE TRANSFER OF PROPERTY WHICH PASSES ABSOLUTELY AND IN FEE BY 11 INTER VIVOS TRUST, AND WHICH IS NOT PART OF THE RESIDUE OF THE 12 INTER VIVOS TRUST, SHALL BE PAID OUT OF THE RESIDUE OF THE TRUST 13 AND CHARGED IN THE SAME MANNER AS A GENERAL ADMINISTRATION 14 EXPENSE OF THE TRUST. THE PAYMENT SHALL BE MADE BY THE TRUSTEE 15 AND, IF NOT SO PAID, SHALL BE MADE BY THE TRANSFEREE OF THE 16 RESIDUE OF THE TRUST. 17 (C) IN THE ABSENCE OF A CONTRARY INTENT APPEARING IN THE 18 WILL, THE INHERITANCE TAX, INCLUDING INTEREST, ON THE TRANSFER 19 OF PROPERTY WHICH PASSES BY WILL OTHER THAN ABSOLUTELY AND IN 20 FEE, AND WHICH IS NOT PART OF THE RESIDUARY ESTATE, SHALL BE 21 PAID OUT OF THE RESIDUARY ESTATE AND CHARGED IN THE SAME MANNER 22 AS A GENERAL ADMINISTRATION EXPENSE OF THE ESTATE. THE PAYMENT 23 SHALL BE MADE BY THE PERSONAL REPRESENTATIVE AND, IF NOT SO 24 PAID, SHALL BE MADE BY THE TRANSFEREE OF THE RESIDUARY ESTATE. 25 (D) IN THE ABSENCE OF A CONTRARY INTENT APPEARING IN THE 26 INTER VIVOS TRUST, THE INHERITANCE TAX, INCLUDING INTEREST, ON 27 THE TRANSFER OF PROPERTY WHICH PASSES OTHER THAN ABSOLUTELY AND 28 IN FEE BY INTER VIVOS TRUST, AND WHICH IS NOT PART OF THE 29 RESIDUE OF THE INTER VIVOS TRUST, SHALL BE PAID OUT OF THE 30 RESIDUE OF THE TRUST AND CHARGED IN THE SAME MANNER AS A GENERAL 19910H1321B2321 - 126 -
1 ADMINISTRATION EXPENSE OF THE TRUST. THE PAYMENT SHALL BE MADE 2 BY THE TRUSTEE AND, IF NOT SO PAID, SHALL BE MADE BY THE 3 TRANSFEREE OF THE RESIDUE OF THE TRUST. 4 (E) IN THE ABSENCE OF A CONTRARY INTENT APPEARING IN THE 5 WILL OR OTHER INSTRUMENT OF TRANSFER, THE INHERITANCE TAX, IN 6 THE CASE OF A TRANSFER OF ANY ESTATE, INCOME OR INTEREST FOR A 7 TERM OF YEARS, FOR LIFE OR FOR OTHER LIMITED PERIOD, SHALL BE 8 PAID OUT OF THE PRINCIPAL OF THE PROPERTY BY WHICH THE ESTATE, 9 INCOME OR INTEREST IS SUPPORTED, EXCEPT AS OTHERWISE PROVIDED IN 10 SUBSECTION (C) OR (D). THE PAYMENT SHALL BE MADE BY THE PERSONAL 11 REPRESENTATIVE OR TRUSTEE AND, IF NOT SO PAID, SHALL BE MADE BY 12 THE TRANSFEREE OF SUCH PRINCIPAL. 13 (F) IN THE ABSENCE OF A CONTRARY INTENT APPEARING IN THE 14 WILL OR OTHER INSTRUMENT OF TRANSFER AND EXCEPT AS OTHERWISE 15 PROVIDED IN THIS SECTION, THE ULTIMATE LIABILITY FOR THE 16 INHERITANCE TAX, INCLUDING INTEREST, SHALL BE UPON EACH 17 TRANSFEREE. 18 SECTION 2145. ESTATE TAX.--(A) THE PERSON OR PERSONS 19 REQUIRED BY SECTION 2136 TO MAKE THE INHERITANCE TAX RETURN 20 SHALL BE INITIALLY LIABLE FOR PAYMENT OF THE ESTATE TAX. 21 (B) THE PERSONAL REPRESENTATIVE OF EVERY DECEDENT OR, IF 22 THERE IS NO PERSONAL REPRESENTATIVE, ANY OTHER FIDUCIARY CHARGED 23 BY LAW WITH THE DUTY OF FILING A FEDERAL ESTATE TAX RETURN, 24 WITHIN ONE MONTH OF THE FILING OR RECEIPT OF THE RETURN SHALL 25 FILE WITH THE REGISTER OR, IF THE DECEDENT WAS A NONRESIDENT, 26 WITH THE REGISTER WHO ISSUED LETTERS, IF ANY, IN THIS 27 COMMONWEALTH, OR OTHERWISE WITH THE DEPARTMENT, A COPY OF HIS 28 FEDERAL ESTATE TAX RETURN AND OF ANY COMMUNICATION FROM THE 29 FEDERAL GOVERNMENT MAKING ANY FINAL CHANGE IN THE RETURN OR OF 30 THE TAX DUE. THE ASSESSMENT OF ESTATE TAX SHALL BE MADE BY THE 19910H1321B2321 - 127 -
1 REGISTER OR DEPARTMENT WITHIN THREE MONTHS AFTER THE FILING OF 2 THE DOCUMENTS REQUIRED TO BE FILED AND, IF NOT SO MADE, SHALL BE 3 MADE WITHIN AN ADDITIONAL PERIOD AS THE COURT, UPON APPLICATION 4 OF ANY PARTY IN INTEREST, INCLUDING THE PERSONAL REPRESENTATIVE, 5 SHALL FIX. 6 (C) THE ESTATE TAX IS DUE AT THE DATE OF THE DECEDENT'S 7 DEATH BUT SHALL NOT BECOME DELINQUENT UNTIL THE EXPIRATION OF 8 EIGHTEEN MONTHS AFTER DECEDENT'S DEATH. ANY ESTATE TAX 9 OCCASIONED BY A FINAL CHANGE IN THE FEDERAL RETURN OR OF THE TAX 10 DUE SHALL NOT BECOME DELINQUENT UNTIL THE EXPIRATION OF ONE 11 MONTH AFTER THE PERSON OR PERSONS LIABLE TO PAY THE TAX HAVE 12 RECEIVED FINAL NOTICE OF THE INCREASE IN THE FEDERAL ESTATE TAX. 13 (D) NO DISCOUNT SHALL BE ALLOWED IN PAYING THE ESTATE TAX. 14 (E) IF THE ESTATE TAX IS NOT PAID BEFORE THE DATE IT BECOMES 15 DELINQUENT UNDER SUBSECTION (C), INTEREST ON THE UNPAID TAX 16 SHALL BE CHARGED AFTER THE DATE OF DELINQUENCY AT THE RATE 17 ESTABLISHED IN SECTION 2143. 18 (F) THE ESTATE TAX SHALL BE APPORTIONED AND ULTIMATELY BORNE 19 IN ACCORDANCE WITH THE PROVISIONS OF 20 PA.C.S. CH. 37 (RELATING 20 TO APPORTIONMENT OF DEATH TAXES) UNLESS OTHERWISE PROVIDED BY 21 THIS ARTICLE OR IN THE INSTRUMENT OF TRANSFER. 22 (G) WHEN THE DECEDENT WAS A RESIDENT, THE ESTATE TAX SHALL 23 BE PAID TO THE REGISTER. WHEN THE DECEDENT WAS A NONRESIDENT, 24 THE ESTATE TAX SHALL BE PAID TO THE REGISTER WHO ISSUED LETTERS, 25 IF ANY, IN THIS COMMONWEALTH; OTHERWISE IT SHALL BE PAID TO THE 26 DEPARTMENT. 27 SECTION 2146. DEDUCTION AND COLLECTION OF TAX BY PERSONAL 28 REPRESENTATIVE OR OTHER FIDUCIARY.--SUBJECT TO THE PROVISIONS OF 29 SECTIONS 2144 AND 2154, EVERY PERSONAL REPRESENTATIVE OR OTHER 30 FIDUCIARY (OTHER THAN A TRUSTEE OF A PENSION, STOCK-BONUS, 19910H1321B2321 - 128 -
1 PROFIT-SHARING, RETIREMENT ANNUITY, DEFERRED COMPENSATION, 2 DISABILITY, DEATH BENEFIT, OR OTHER EMPLOYE BENEFIT PLAN) IN 3 CHARGE OF OR IN POSSESSION OF ANY PROPERTY, OR INSTRUMENT 4 EVIDENCING OWNERSHIP OF PROPERTY, THE TRANSFER OF WHICH IS 5 SUBJECT TO A TAX IMPOSED BY THIS ARTICLE OTHER THAN A TAX ON A 6 FUTURE INTEREST NOT YET DELINQUENT, SHALL DEDUCT THE TAX FROM 7 THE PROPERTY, IF MONEY, OR SHALL COLLECT THE TAX FROM THE 8 TRANSFEREE. ANY DELIVERY OF PROPERTY OR INSTRUMENT BY THE 9 FIDUCIARY TO A TRANSFEREE, EXCEPT IN ACCORDANCE WITH A DECREE OF 10 DISTRIBUTION OF THE COURT, OR PURSUANT TO A DULY EXECUTED NOTICE 11 OF ELECTION FILED UNDER SECTION 2154, SHALL NOT RELIEVE HIM OF 12 PERSONAL LIABILITY FOR A TAX IMPOSED BY THIS ARTICLE. NO 13 PERSONAL REPRESENTATIVE OR OTHER FIDUCIARY IN CHARGE OF OR IN 14 POSSESSION OF ANY PROPERTY SUBJECT TO THIS ARTICLE SHALL BE 15 COMPELLED TO PAY OR DELIVER IT TO THE TRANSFEREE EXCEPT UPON 16 PAYMENT TO HIM OF THE TAX DUE OTHER THAN TAX ON A FUTURE 17 INTEREST NOT YET DELINQUENT. IF THE TRANSFEREE NEGLECTS OR 18 REFUSES TO PAY THE TAX, THE PERSONAL REPRESENTATIVE OR OTHER 19 FIDUCIARY MAY SELL THE PROPERTY SUBJECT TO THE TAX, OR SO MUCH 20 OF THE PROPERTY AS IS NECESSARY, UNDER DIRECTION OF THE COURT. 21 ALL MONEY RETAINED BY THE PERSONAL REPRESENTATIVE OR OTHER 22 FIDUCIARY, OR PAID TO HIM ON ACCOUNT OF THE TAXES IMPOSED BY 23 THIS ARTICLE, SHALL BE REMITTED BY HIM BEFORE THE TAX BECOMES 24 DELINQUENT OR, IF RECEIVED AFTER THE TAX BECOMES DELINQUENT, 25 SHALL BE REMITTED BY HIM PROMPTLY UPON ITS RECEIPT. 26 SECTION 2147. DUTIES OF DEPOSITORIES.--WHEN MONEY IS 27 DEPOSITED OR INVESTED IN A FINANCIAL INSTITUTION LOCATED IN THIS 28 COMMONWEALTH IN THE NAMES OF TWO OR MORE PERSONS, OTHER THAN 29 HUSBAND AND WIFE, OR IN THE NAME OF A PERSON OR PERSONS IN TRUST 30 FOR ANOTHER OR OTHERS, AND ONE OF THE PARTIES TO THE DEPOSIT OR 19910H1321B2321 - 129 -
1 INVESTMENT DIES, IT SHALL BE THE DUTY OF THE FINANCIAL 2 INSTITUTION, WITHIN TEN DAYS AFTER KNOWLEDGE OF THE DEATH, TO 3 NOTIFY THE DEPARTMENT, GIVING THE NAME OF THE DECEASED PERSON, 4 THE DATE OF THE CREATION OF THE JOINT OR TRUST DEPOSIT OR 5 INVESTMENT, THE AMOUNT INVESTED OR ON DEPOSIT AT THE DATE OF 6 DEATH WITH THE FINANCIAL INSTITUTION AND THE NAME AND ADDRESS OF 7 THE SURVIVOR OR SURVIVORS TO THE ACCOUNT. NO NOTIFICATION SHALL 8 BE REQUIRED IN REGARD TO THE ACCOUNT WHEN THE DEPOSIT AT THE 9 TIME OF DEATH DOES NOT EXCEED THREE HUNDRED DOLLARS ($300). 10 SECTION 2148. COMPROMISE BY DEPARTMENT.--THE DEPARTMENT, 11 WITH THE APPROVAL OF THE ATTORNEY GENERAL, MAY COMPROMISE IN 12 WRITING, WITH THE PERSON LIABLE, THE TAX, INCLUDING INTEREST ON 13 THE TAX, PAYABLE ON ANY TRANSFER OF PROPERTY INCLUDED IN THE 14 ESTATE OF ANY DECEDENT WHO IT IS ALLEGED WAS A NONRESIDENT AT 15 THE TIME OF HIS DEATH. A COPY OF THE COMPROMISE AGREEMENT SHALL 16 BE FILED WITH THE REGISTER WHO ISSUED LETTERS, IF ANY, IN THIS 17 COMMONWEALTH; OTHERWISE IT SHALL BE FILED WITH THE DEPARTMENT. 18 THE COMPROMISE AGREEMENT SHALL CONSTITUTE A FINAL DETERMINATION 19 OF THE MATTERS COVERED BY IT AND THE PAYMENT OF THE TAX, AS 20 FIXED BY THE AGREEMENT, SHALL DISCHARGE ALL PERSONS AND PROPERTY 21 FROM LIABILITY WITH RESPECT TO THE TAX. 22 SECTION 2149. INTERSTATE COMPROMISE AND ARBITRATION OF 23 INHERITANCE TAXES.--WHEN THE REGISTER OR THE DEPARTMENT ALLEGES 24 THAT A DECEDENT WAS A RESIDENT OF THIS COMMONWEALTH AT THE TIME 25 OF HIS DEATH, AND THE TAXING AUTHORITIES OF ANOTHER STATE OR 26 TERRITORY MAKE A LIKE CLAIM ON BEHALF OF THEIR STATE OR 27 TERRITORY, A WRITTEN AGREEMENT OF COMPROMISE OR A WRITTEN 28 AGREEMENT TO SUBMIT THE CONTROVERSY TO A BOARD OF ARBITRATORS 29 MAY BE MADE UNDER PART VIII. 30 SECTION 2150. EXTENSION OF TIME FOR PAYMENT.--THE DEPARTMENT 19910H1321B2321 - 130 -
1 MAY, FOR REASONABLE CAUSE, EXTEND THE TIME FOR PAYMENT OF ANY 2 PART OF THE INHERITANCE TAX AND MAY, IF DEEMED NECESSARY FOR THE 3 PROTECTION OF THE INTEREST OF THIS COMMONWEALTH, REQUIRE THE 4 TRANSFEREE IN PRESENT POSSESSION OR, IF A TRUST IS INVOLVED, THE 5 TRUSTEE, TO FILE A BOND IN THE NAME OF THE COMMONWEALTH WITH 6 SUFFICIENT SURETY, IN AN AMOUNT NOT EXCEEDING TWICE THE TAX 7 COMPUTED WHEN THE BOND IS GIVEN AT THE HIGHEST RATE POSSIBLE IN 8 THE SPECIFIC CONTINGENCIES INVOLVED (REDUCED BY THE AMOUNT OF 9 ANY PARTIAL PAYMENT MADE) AND CONDITIONED FOR THE PAYMENT OF THE 10 TAX AT SUCH POSTPONED DUE DATE, TOGETHER WITH INTEREST FROM THE 11 DUE DATE TO THE PAYMENT DATE. NO BOND SHALL BE REQUIRED UNDER 12 THIS SECTION IF THE TRUSTEE OR ONE OF THE TRUSTEES IS A BANK AND 13 TRUST COMPANY OR A TRUST COMPANY INCORPORATED IN THIS 14 COMMONWEALTH OR A NATIONAL BANKING ASSOCIATION HAVING ITS 15 PRINCIPAL OFFICE IN THIS COMMONWEALTH. THE BOND REQUIRED SHALL 16 BE FILED IN THE OFFICE OF THE REGISTER. 17 SECTION 2151. BOND FOR DELINQUENT TAX.--THE COURT, IN ITS 18 DISCRETION, AT ANY TIME AFTER A TAX IMPOSED BY THIS ARTICLE 19 BECOMES DELINQUENT, UPON APPLICATION OF THE DEPARTMENT, MAY 20 REQUIRE ANY PERSON LIABLE FOR A TAX IMPOSED BY THIS ARTICLE TO 21 GIVE A BOND FOR ITS PAYMENT. THE BOND SHALL BE IN THE NAME OF 22 THE COMMONWEALTH, IN SUCH AMOUNT AND WITH SUCH SURETY AS THE 23 COURT APPROVES AND CONDITIONED FOR THE PAYMENT OF THE TAX, PLUS 24 INTEREST AT THE SAME RATE AS THE INTEREST RATE ON DEFICIENCIES 25 PROVIDED FOR IN SECTION 2143, COMMENCING ON THE DATE THE TAX 26 BECAME DELINQUENT, WITHIN A TIME CERTAIN TO BE FIXED BY THE 27 COURT AND SPECIFIED IN THE BOND. THE BOND REQUIRED SHALL BE 28 FILED IN THE OFFICE OF THE REGISTER. 29 SECTION 2152. EVIDENCE OF PAYMENT OF TAX FOR REAL ESTATE IN 30 ANOTHER COUNTY.--WHEN ANY TAX IS IMPOSED AND PAID UNDER THIS 19910H1321B2321 - 131 -
1 ARTICLE ON REAL ESTATE LOCATED IN A COUNTY OTHER THAN THAT OF 2 THE REGISTER WHO RECEIVED PAYMENT, THE REGISTER SHALL 3 IMMEDIATELY FORWARD TO THE REGISTER OF THE COUNTY WHERE THE REAL 4 ESTATE IS LOCATED A CERTIFICATE OF THE PAYMENT OF THE TAX ON THE 5 REAL ESTATE WHICH SHALL BE ENTERED OF RECORD IN HIS OFFICE. THE 6 REGISTER OF THE COUNTY WHERE THE REAL ESTATE IS LOCATED SHALL BE 7 ENTITLED TO A FEE OF TWO DOLLARS ($2) FOR ENTERING THE RECORD OF 8 PAYMENT TO BE PAID AS A PART OF THE ADMINISTRATION EXPENSES OF 9 THE DECEDENT'S ESTATE. 10 SECTION 2153. PENALTIES.--(A) ANY PERSON WHO WILLFULLY 11 FAILS TO FILE A RETURN OR OTHER REPORT REQUIRED OF HIM UNDER THE 12 PROVISIONS OF SECTIONS 2136 AND 2145 SHALL BE PERSONALLY LIABLE, 13 IN ADDITION TO ANY LIABILITY IMPOSED ELSEWHERE IN THIS ARTICLE, 14 TO A PENALTY OF TWENTY-FIVE PER CENT OF THE TAX ULTIMATELY FOUND 15 TO BE DUE OR ONE THOUSAND DOLLARS ($1,000), WHICHEVER IS LESS, 16 TO BE RECOVERED BY THE DEPARTMENT AS DEBTS OF LIKE AMOUNT ARE 17 RECOVERABLE BY LAW. 18 (B) ANY FINANCIAL INSTITUTION WHICH FAILS TO GIVE THE NOTICE 19 REQUIRED BY SECTION 2147 SHALL BE LIABLE TO A PENALTY OF ONE 20 HUNDRED DOLLARS ($100) TO BE RECOVERED BY THE DEPARTMENT AS 21 DEBTS OF LIKE AMOUNT ARE RECOVERABLE BY LAW. 22 (C) ANY PERSON WHO WILLFULLY MAKES A FALSE RETURN OR REPORT 23 REQUIRED OF HIM UNDER THE PROVISIONS OF THIS ARTICLE, IN 24 ADDITION TO ANY LIABILITY IMPOSED ELSEWHERE IN THIS ARTICLE, 25 COMMITS A MISDEMEANOR OF THE THIRD DEGREE. 26 SECTION 2154. PAYMENT OF TAX FOR SMALL BUSINESS TRANSFERS.-- 27 (A) NOTWITHSTANDING THE PROVISIONS OF SECTION 2142, THE 28 INHERITANCE TAX DUE UNDER THIS ARTICLE ON THE TRANSFER OF A 29 SMALL BUSINESS INTEREST MAY BE PAID BY THE QUALIFIED TRANSFEREE 30 IN CONSECUTIVE QUARTERLY INSTALLMENTS BEGINNING IMMEDIATELY 19910H1321B2321 - 132 -
1 FOLLOWING THE EXPIRATION OF NINE MONTHS AFTER THE DECEDENT'S 2 DEATH, THE TAX MAY BE PAID IN TWENTY CONSECUTIVE QUARTERLY 3 INSTALLMENTS. 4 (B) THE TAX SHALL BE PAID IN CONSECUTIVE QUARTERLY 5 INSTALLMENTS DUE ON MARCH 31, JUNE 30, SEPTEMBER 30 AND DECEMBER 6 31 OF EACH YEAR, PROVIDED THE RETURN REQUIRED BY SECTION 2136 IS 7 TIMELY FILED, ALONG WITH A NOTICE OF ELECTION EXECUTED BY THE 8 QUALIFIED TRANSFEREE AND JOINED IN BY THE PERSONAL 9 REPRESENTATIVE WHICH SHALL RELIEVE THE PERSONAL REPRESENTATIVE 10 OR OTHER FIDUCIARY OF LIABILITY FOR THE COLLECTION AND PAYMENT 11 OF TAX UNDER SECTION 2146. THE NOTICE OF ELECTION SHALL BE 12 COMPLETED ON A FORM PRESCRIBED BY THE DEPARTMENT CONTAINING AT 13 LEAST THE FOLLOWING INFORMATION: 14 (1) THE NAME OF THE DECEDENT AND DATE OF DEATH. 15 (2) THE NAME OR NAMES OF THE PERSONAL REPRESENTATIVE OR 16 OTHER FIDUCIARY. 17 (3) THE NAME OR NAMES OF THE QUALIFIED TRANSFEREES FILING 18 THE ELECTION. 19 (4) A DESCRIPTION AND ESTIMATED VALUATION OF THE BUSINESS 20 INTEREST ON WHICH TAX IS DUE. 21 (5) A STATEMENT THAT THE QUALIFIED TRANSFEREES ASSUME FULL 22 PERSONAL RESPONSIBILITY FOR THE TAX. EACH NOTICE OF ELECTION 23 SHALL BE AFFIRMED BEFORE AN OFFICER EMPOWERED TO ADMINISTER 24 OATHS. THE INSTALLMENT PAYMENT OF TAX SHALL BEAR INTEREST AT THE 25 RATE OF NINE PER CENT PER ANNUM. 26 (C) IN THE EVENT ANY PORTION OF A SMALL BUSINESS INTEREST ON 27 WHICH THE INSTALLMENT PAYMENT OF TAX HAS BEEN ELECTED IS SOLD, 28 EXCHANGED OR OTHERWISE DISPOSED OF PRIOR TO THE EXPIRATION OF 29 FIVE YEARS FOLLOWING THE DATE OF DEATH AND THAT PORTION EQUALS 30 OR EXCEEDS FIFTY PER CENT OF THE TOTAL VALUE OF THE SMALL 19910H1321B2321 - 133 -
1 BUSINESS INTEREST RECEIVED BY THE QUALIFIED TRANSFEREE, THE 2 TRANSFEREE SHALL IMMEDIATELY PROVIDE WRITTEN NOTICE OF THE SALE, 3 EXCHANGE OR DISPOSITION TO THE DEPARTMENT AND THE FULL AMOUNT OF 4 THE TAX THEN OUTSTANDING ON THAT PORTION SHALL BECOME DUE AND 5 PAYABLE AT THE EXPIRATION OF SIXTY DAYS FOLLOWING THE DATE OF 6 SALE, EXCHANGE OR OTHER DISPOSITION. 7 (D) FOR PURPOSES OF THIS SECTION, THE TERM "SMALL BUSINESS 8 INTEREST" MEANS AN INTEREST IN AN OPERATING TRADE OR BUSINESS 9 ENTITY THE PRINCIPAL PURPOSE OF WHICH IS NOT THE MANAGEMENT OF 10 INVESTMENTS OR INCOME PRODUCING ASSETS OWNED BY THE ENTITY WHICH 11 HAS EMPLOYED AN AVERAGE OF LESS THAN FIFTY FULL-TIME EMPLOYES 12 DURING THE TWELVE MONTHS IMMEDIATELY PRECEDING THE DATE OF DEATH 13 AND WHICH MEETS ONE OF THE FOLLOWING CRITERIA: 14 (1) AN INTEREST AS A PROPRIETOR IN A TRADE OR BUSINESS 15 CARRIED ON AS A PROPRIETORSHIP. 16 (2) AN INTEREST AS A PARTNER IN A PARTNERSHIP CARRYING ON A 17 TRADE OR BUSINESS IF: 18 (I) TWENTY PER CENT OR MORE OF THE TOTAL CAPITAL INTEREST IN 19 THE PARTNERSHIP IS INCLUDED IN DETERMINING THE GROSS ESTATE OF 20 THE DECEDENT; OR 21 (II) THE PARTNERSHIP HAD TEN OR LESS PARTNERS. 22 (3) STOCK IN A CORPORATION CARRYING ON A TRADE OR BUSINESS 23 IF: 24 (I) TWENTY PER CENT OR MORE IN VALUE OF THE VOTING STOCK OF 25 THE CORPORATION IS INCLUDED IN DETERMINING THE GROSS ESTATE OF 26 THE DECEDENT; OR 27 (II) THE CORPORATION HAD TEN OR LESS SHAREHOLDERS. 28 (E) QUALIFIED TRANSFEREE DEFINED.--FOR PURPOSES OF THIS 29 SECTION, THE TERM "QUALIFIED TRANSFEREE" MEANS A LEGATEE OR 30 OTHER TRANSFEREE RECEIVING: 19910H1321B2321 - 134 -
1 (1) TEN PER CENT OR MORE OF THE VALUE OF A PROPRIETORSHIP 2 QUALIFYING AS A SMALL BUSINESS INTEREST AS DEFINED IN SUBSECTION 3 (D); 4 (2) TEN PER CENT OR MORE OF THE TOTAL CAPITAL INTEREST IN A 5 PARTNERSHIP QUALIFYING AS A SMALL BUSINESS INTEREST AS DEFINED 6 IN SUBSECTION (D); OR 7 (3) TEN PER CENT OR MORE IN VALUE OF THE VOTING STOCK OF A 8 CORPORATION QUALIFYING AS A SMALL BUSINESS INTEREST AS DEFINED 9 IN SUBSECTION (D). 10 PART VIII 11 UNIFORM ACT ON INTERSTATE COMPROMISE AND 12 ARBITRATION OF INHERITANCE TAXES 13 SECTION 2156. SHORT TITLE.--THIS PART SHALL BE KNOWN AND MAY 14 BE CITED AS THE "UNIFORM ACT ON INTERSTATE COMPROMISE AND 15 ARBITRATION OF INHERITANCE TAXES." 16 SECTION 2157. COMPROMISE AGREEMENT AND FILING, INTEREST OR 17 PENALTY FOR NONPAYMENT OF TAXES.--WHEN THE DEPARTMENT OR THE 18 REGISTER CLAIMS A DECEDENT WAS DOMICILED IN THIS COMMONWEALTH AT 19 THE TIME OF HIS DEATH AND THE TAXING AUTHORITY OF ANOTHER STATE 20 MAKES A LIKE CLAIM ON BEHALF OF ITS STATE, THE DEPARTMENT MAY, 21 WITH THE APPROVAL OF THE ATTORNEY GENERAL, MAKE A WRITTEN 22 AGREEMENT OF COMPROMISE WITH THE OTHER TAXING AUTHORITY AND THE 23 EXECUTOR OR ADMINISTRATOR OF THE DECEDENT THAT A CERTAIN SUM 24 SHALL BE ACCEPTED IN FULL SATISFACTION OF ANY AND ALL 25 INHERITANCE TAXES IMPOSED BY THIS COMMONWEALTH, INCLUDING ANY 26 INTEREST OR PENALTIES TO THE DATE OF SIGNING THE AGREEMENT. THE 27 AGREEMENT SHALL ALSO FIX THE AMOUNT TO BE ACCEPTED BY THE OTHER 28 STATE IN FULL SATISFACTION OF INHERITANCE TAXES. THE EXECUTOR OR 29 ADMINISTRATOR OF THE DECEDENT IS AUTHORIZED TO MAKE THE 30 AGREEMENT. THE AGREEMENT SHALL CONCLUSIVELY FIX THE AMOUNT OF 19910H1321B2321 - 135 -
1 TAX PAYABLE TO THE COMMONWEALTH WITHOUT REGARD TO ANY OTHER 2 PROVISION OF THE LAWS OF THIS COMMONWEALTH. UNLESS THE TAX 3 AGREED UPON IS PAID WITHIN SIXTY DAYS AFTER THE SIGNING OF THE 4 AGREEMENT, INTEREST OR PENALTIES SHALL ACCRUE UPON THE AMOUNT 5 FIXED IN THE AGREEMENT BUT THE TIME BETWEEN THE DECEDENT'S DEATH 6 AND THE SIGNING OF THE AGREEMENT SHALL NOT BE INCLUDED IN 7 COMPUTING THE INTEREST OR PENALTIES. IN THE EVENT THE AGGREGATE 8 AMOUNT PAYABLE UNDER THE AGREEMENT TO THE STATES INVOLVED IS 9 LESS THAN THE MAXIMUM CREDIT ALLOWABLE TO THE ESTATE AGAINST THE 10 FEDERAL ESTATE TAX IMPOSED WITH RESPECT TO THE ESTATE, THE 11 PERSONAL REPRESENTATIVES SHALL ALSO PAY TO THE DEPARTMENT SO 12 MUCH OF THE DIFFERENCE BETWEEN THE AGGREGATE AMOUNT AND THE 13 AMOUNT OF SUCH CREDIT AS THE AMOUNT PAYABLE TO THE DEPARTMENT 14 UNDER THE AGREEMENT BEARS TO THE AGGREGATE AMOUNT. A COPY OF THE 15 AGREEMENT SHALL BE FILED IN THE OFFICE OF THE PROPER REGISTER 16 AND ANY EXISTING APPRAISEMENT SHALL BE DEEMED MODIFIED ACCORDING 17 TO THE AGREEMENT. IN THE EVENT NO APPRAISEMENT HAS BEEN MADE AND 18 FILED PRIOR TO THE AGREEMENT, THE DEPARTMENT SHALL DIRECT AN 19 APPRAISEMENT TO BE MADE AND FILED IN THE OFFICE OF THE PROPER 20 REGISTER IN ACCORDANCE WITH THE AGREEMENT. 21 SECTION 2158. ARBITRATION AGREEMENT.--WHEN THE DEPARTMENT OR 22 THE REGISTER CLAIMS THAT A DECEDENT WAS DOMICILED IN THIS 23 COMMONWEALTH AT THE TIME OF HIS DEATH AND THE TAXING AUTHORITY 24 OF ANOTHER STATE MAKES A LIKE CLAIM ON BEHALF OF ITS STATE, THE 25 DEPARTMENT MAY, WITH THE APPROVAL OF THE ATTORNEY GENERAL, MAKE 26 A WRITTEN AGREEMENT WITH THE OTHER TAXING AUTHORITY AND WITH THE 27 EXECUTOR OR ADMINISTRATOR OF THE DECEDENT TO SUBMIT THE 28 CONTROVERSY TO THE DECISION OF A BOARD CONSISTING OF ONE OR ANY 29 UNEVEN NUMBER OF ARBITRATORS. THE EXECUTOR OR ADMINISTRATOR OF 30 THE DECEDENT IS AUTHORIZED TO MAKE THE AGREEMENT. THE PARTIES TO 19910H1321B2321 - 136 -
1 THE AGREEMENT SHALL SELECT THE ARBITRATOR OR ARBITRATORS. 2 SECTION 2159. ARBITRATION BOARD.--(A) THE BOARD SHALL HAVE 3 THE POWER TO ADMINISTER OATHS, TAKE TESTIMONY, SUBPOENA AND 4 REQUIRE THE ATTENDANCE OF WITNESSES AND THE PRODUCTION OF BOOKS, 5 PAPERS AND DOCUMENTS, AND ISSUE COMMISSIONS TO TAKE TESTIMONY. 6 SUBPOENAS MAY BE SIGNED BY ANY MEMBER OF THE BOARD. IN CASE OF 7 FAILURE TO OBEY A SUBPOENA, ANY JUDGE OF A COURT OF RECORD OF 8 THIS COMMONWEALTH, UPON APPLICATION BY THE BOARD, MAY MAKE AN 9 ORDER REQUIRING COMPLIANCE WITH THE SUBPOENA AND THE COURT MAY 10 PUNISH FAILURE TO OBEY THE ORDER AS A CONTEMPT. 11 (B) THE BOARD SHALL HOLD HEARINGS AT A TIME AND PLACE IT MAY 12 DETERMINE, UPON REASONABLE NOTICE TO THE PARTIES TO THE 13 AGREEMENT, ALL OF WHOM SHALL BE ENTITLED TO BE HEARD, TO PRESENT 14 EVIDENCE AND TO EXAMINE AND CROSS-EXAMINE WITNESSES. 15 (C) EXCEPT AS PROVIDED IN SUBSECTION (A) IN RESPECT TO THE 16 ISSUANCE OF SUBPOENAS, ALL QUESTIONS ARISING IN THE COURSE OF 17 THE PROCEEDINGS SHALL BE DETERMINED BY A MAJORITY VOTE OF THE 18 BOARD. 19 (D) THE BOARD SHALL, BY A MAJORITY VOTE, DETERMINE THE 20 DOMICILE OF THE DECEDENT AT THE TIME OF HIS DEATH. THIS 21 DETERMINATION SHALL BE FINAL FOR THE PURPOSE OF IMPOSING AND 22 COLLECTING INHERITANCE TAXES BUT FOR NO OTHER PURPOSE. 23 (E) THE COMPENSATION AND EXPENSES OF THE MEMBERS OF THE 24 BOARD AND ITS EMPLOYES MAY BE AGREED UPON AMONG THE MEMBERS AND 25 THE EXECUTOR OR ADMINISTRATOR AND IF THEY CANNOT AGREE SHALL BE 26 FIXED BY ANY COURT HAVING JURISDICTION OVER PROBATE MATTERS OF 27 THE STATE DETERMINED BY THE BOARD TO BE THE DOMICILE OF THE 28 DECEDENT. THE AMOUNTS SO AGREED UPON OR FIXED SHALL BE DEEMED AN 29 ADMINISTRATION EXPENSE AND SHALL BE PAYABLE BY THE EXECUTOR OR 30 ADMINISTRATOR. 19910H1321B2321 - 137 -
1 SECTION 2160. FILING OF DETERMINATION OF DOMICILE AND OTHER 2 DOCUMENTS.--THE DEPARTMENT, REGISTER OR BOARD, OR THE EXECUTOR 3 OR ADMINISTRATOR OF THE DECEDENT, SHALL FILE THE DETERMINATION 4 OF THE BOARD AS TO DOMICILE, THE RECORD OF THE BOARD'S 5 PROCEEDINGS AND THE AGREEMENT, OR A DUPLICATE, MADE PURSUANT TO 6 SECTION 2158 WITH THE AUTHORITY HAVING JURISDICTION TO ASSESS OR 7 DETERMINE THE INHERITANCE TAXES IN THE STATE DETERMINED BY THE 8 BOARD TO BE THE DOMICILE OF THE DECEDENT AND SHALL FILE COPIES 9 OF THE DOCUMENTS WITH THE AUTHORITIES THAT WOULD HAVE BEEN 10 EMPOWERED TO ASSESS OR DETERMINE THE INHERITANCE TAXES IN EACH 11 OF THE OTHER STATES INVOLVED. 12 SECTION 2161. INTEREST OR PENALTIES FOR NONPAYMENT OF 13 TAXES.--IN ANY CASE WHERE IT IS DETERMINED BY THE BOARD THAT THE 14 DECEDENT DIED DOMICILED IN THIS COMMONWEALTH, INTEREST OR 15 PENALTIES, IF OTHERWISE IMPOSED BY LAW, FOR NONPAYMENT OF 16 INHERITANCE TAXES BETWEEN THE DATE OF THE AGREEMENT AND OF 17 FILING OF THE DETERMINATION OF THE BOARD AS TO DOMICILE, SHALL 18 NOT EXCEED THE RATE PROVIDED FOR IN SECTION 2143. 19 SECTION 2162. COMPROMISE BY PARTIES TO ARBITRATION 20 AGREEMENT.--THE PROVISIONS OF THIS PART SHALL NOT PREVENT AT ANY 21 TIME A WRITTEN COMPROMISE, IF OTHERWISE LAWFUL, BY ALL PARTIES 22 TO THE AGREEMENT MADE PURSUANT TO SECTION 2157, FIXING THE 23 AMOUNTS TO BE ACCEPTED BY THIS COMMONWEALTH AND ANY OTHER STATE 24 INVOLVED, IN FULL SATISFACTION OF INHERITANCE TAXES. 25 SECTION 2163. RECIPROCAL APPLICATION.--THE PROVISIONS OF 26 THIS PART RELATIVE TO ARBITRATION SHALL APPLY ONLY TO CASES IN 27 WHICH AND SO FAR AS EACH OF THE STATES INVOLVED HAS A LAW 28 IDENTICAL OR SUBSTANTIALLY SIMILAR TO THIS PART. 29 PART IX 30 COLLECTION OF TAX 19910H1321B2321 - 138 -
1 SECTION 2166. TIMELY MAILING TREATED AS TIMELY FILING AND 2 PAYMENT.--NOTWITHSTANDING THE PROVISIONS OF ANY STATE TAX LAW TO 3 THE CONTRARY, WHENEVER A REPORT OR PAYMENT OF ALL OR ANY PORTION 4 OF A STATE TAX IS REQUIRED BY LAW TO BE RECEIVED BY THE 5 DEPARTMENT OR OTHER AGENCY OF THE COMMONWEALTH ON OR BEFORE A 6 DAY CERTAIN, THE TAXPAYER SHALL BE DEEMED TO HAVE COMPLIED WITH 7 THE LAW IF THE LETTER TRANSMITTING THE REPORT OR PAYMENT OF THE 8 TAX WHICH HAS BEEN RECEIVED BY THE DEPARTMENT IS POSTMARKED BY 9 THE UNITED STATES POSTAL SERVICE ON OR PRIOR TO THE FINAL DAY ON 10 WHICH THE PAYMENT IS TO BE RECEIVED. FOR THE PURPOSES OF THIS 11 ARTICLE, PRESENTATION OF A RECEIPT INDICATING THAT THE REPORT OR 12 PAYMENT WAS MAILED BY REGISTERED OR CERTIFIED MAIL ON OR BEFORE 13 THE DUE DATE SHALL BE EVIDENCE OF TIMELY FILING AND PAYMENT. 14 SECTION 2167. LIEN AND DURATION OF LIEN.--THE TAXES IMPOSED 15 BY THIS ARTICLE, TOGETHER WITH ANY INTEREST ON THE TAXES, SHALL 16 BE A LIEN UPON THE REAL PROPERTY INCLUDED IN THE TRANSFER ON 17 WHICH THE TAXES ARE IMPOSED. EXCEPT AS OTHERWISE PROVIDED IN 18 THIS PART, THE LIEN SHALL REMAIN UNTIL THE TAXES AND INTEREST 19 ARE PAID IN FULL. 20 SECTION 2168. LIMITED AND FUTURE INTERESTS.--IN THE CASE OF 21 A TRANSFER OF ANY ESTATE, INCOME OR INTEREST FOR A TERM OF 22 YEARS, FOR LIFE OR FOR OTHER LIMITED PERIOD, OR CONSTITUTING A 23 FUTURE INTEREST, THE TAXES IMPOSED BY THIS ARTICLE, TOGETHER 24 WITH ANY INTEREST ON THE TAX, SHALL REMAIN A LIEN UNTIL PAID 25 UPON THE ENTIRE REAL PROPERTY BY WHICH THE ESTATE, INCOME OR 26 INTEREST IS SUPPORTED, OR OF WHICH IT IS A PART, AND THE LIEN 27 SHALL BE LIMITED TO THE REAL PROPERTY SO TRANSFERRED. 28 SECTION 2169. PURCHASER, MORTGAGEE OR LESSEE.--UNLESS SUIT 29 FOR COLLECTION OF THE TAXES IMPOSED BY THIS ARTICLE IS 30 INSTITUTED WITHIN TWENTY YEARS AFTER ANY TAX BECOMES DELINQUENT, 19910H1321B2321 - 139 -
1 THE LIEN SHALL CEASE AS TO ANY PURCHASER, MORTGAGEE OR LESSEE OF 2 A DEVISEE OR HEIR OF, OR A BENEFICIARY UNDER A DEED OF TRUST OF, 3 THE REAL PROPERTY SUBJECT TO THE LIEN. ANY TIME WITHIN THE 4 TWENTY-YEAR PERIOD, IF ANY TAX ON THE REAL PROPERTY IS NOT PAID, 5 THE DEPARTMENT SHALL HAVE POWER TO FILE A CERTIFICATE, UNDER ITS 6 SEAL, CERTIFYING TO NONPAYMENT WHICH, WHEN FILED IN THE OFFICE 7 OF THE CLERK OF THE COUNTY WHERE THE REAL PROPERTY IS SITUATED, 8 SHALL CONTINUE THE LIEN AGAINST DECEDENT'S REAL PROPERTY FOR AN 9 ADDITIONAL PERIOD OF FIVE YEARS FROM THE DATE OF THE FILING AND 10 THE LIEN SHALL BE INDEXED IN THE OFFICE OF THE CLERK. IF THE 11 TAXES ON THE REAL PROPERTY ARE NOT PAID WITHIN THE ADDITIONAL 12 PERIOD OF FIVE YEARS, THE DEPARTMENT SHALL HAVE POWER TO EXTEND 13 THE LIEN FOR ADDITIONAL PERIODS OF FIVE YEARS BY FILING A 14 CERTIFICATE IN THE MANNER PROVIDED IN THIS SECTION. 15 SECTION 2170. SALE BY FIDUCIARY.--IF REAL PROPERTY SUBJECT 16 TO THE LIEN OF TAXES IMPOSED BY THIS ARTICLE IS SOLD OR 17 EXCHANGED BY A FIDUCIARY WHO IS SUBJECT TO THE JURISDICTION OF 18 THE COURT AND WHO HAS GIVEN BOND AS REQUIRED BY 20 PA.C.S. 19 (RELATING TO DECEDENTS, ESTATES AND FIDUCIARIES), OR IS A 20 CORPORATE FIDUCIARY WHICH NEED NOT FILE BOND UNDER TITLE 20, THE 21 LIEN ON THE PROPERTY SOLD SHALL CEASE. 22 SECTION 2171. SALE BY HEIR, DEVISEE OR FIDUCIARY.--IF REAL 23 PROPERTY SUBJECT TO THE LIEN OF TAXES IMPOSED BY THIS ARTICLE IS 24 SOLD OR EXCHANGED OR OTHERWISE DISPOSED OF BY AN HEIR, DEVISEE 25 OR FIDUCIARY, AND IF THE INHERITANCE TAX, TOGETHER WITH 26 INTEREST, IS PAID ON ALL PROPERTY REPORTED IN THE TAX RETURN, 27 INCLUDING THE PROPERTY SOLD, WHICH PROPERTY HAS BEEN APPRAISED 28 AND TAX ASSESSED, THE LIEN OF ANY UNPAID TAX IMPOSED BY THIS 29 ARTICLE SHALL CEASE AS TO THE PROPERTY SOLD. 30 SECTION 2172. SALE OF PROPERTY TRANSFERRED INTER VIVOS.-- 19910H1321B2321 - 140 -
1 WHEN REAL PROPERTY OR ANY INCOME OR INTEREST IN THE REAL 2 PROPERTY OR INCOME HAS BEEN TRANSFERRED WITHIN THE MEANING OF 3 SUBSECTION (C) OF SECTION 2107 AND THE TRANSFEREE HAS SOLD, 4 MORTGAGED OR LEASED THE PROPERTY, OR ANY INCOME OR INTEREST IN 5 THE PROPERTY, THE INTEREST OF A BONA FIDE PURCHASER, MORTGAGEE 6 OR LESSEE IN THE PROPERTY SHALL NOT BE SUBJECT TO ANY LIEN FOR 7 THE TAXES IMPOSED BY THIS ARTICLE. 8 SECTION 2173. SUBORDINATION OF LIEN.--IF REAL PROPERTY 9 SUBJECT TO THE LIEN IS MORTGAGED OR LEASED BY A FIDUCIARY WHO IS 10 SUBJECT TO THE JURISDICTION OF THE COURT AND WHO HAS GIVEN A 11 BOND AS REQUIRED BY 20 PA.C.S. (RELATING TO DECEDENTS, ESTATES 12 AND FIDUCIARIES), OR IS A CORPORATE FIDUCIARY WHICH NEED NOT 13 FILE BOND UNDER TITLE 20, THE LIEN SHALL BECOME SUBJECT AND 14 SUBORDINATE TO THE RIGHTS AND INTERESTS OF THE MORTGAGEE, LESSEE 15 OR OTHER PERSON SO SECURED. 16 SECTION 2174. CESSATION UPON APPROVAL OF BOND.--UPON 17 APPROVAL OF A BOND FOR THE PAYMENT OF TAXES IMPOSED UPON A 18 TRANSFER, THE LIEN UPON THE REAL PROPERTY SHALL CEASE. THE 19 AMOUNT OF THE BOND SHALL NOT EXCEED THE VALUE OF THE REAL 20 PROPERTY TRANSFERRED. 21 SECTION 2175. RELEASE OF LIEN.--(A) IN CASE OF A TRANSFER, 22 OTHER THAN BY WILL OR INTESTACY, THE DEPARTMENT, UPON 23 SATISFACTORY PROOF THAT NO TAXES ARE DUE WHICH WOULD BE A LIEN 24 ON THE REAL PROPERTY TRANSFERRED BY REASON OF THE DEATH OF THE 25 TRANSFEROR, MAY RELEASE ALL OR ANY PORTION OF THE PROPERTY FROM 26 ANY LIEN IMPOSED BY THIS ARTICLE TO WHICH THE PROPERTY OTHERWISE 27 MIGHT BE SUBJECT. 28 (B) THE DEPARTMENT MAY, AT ANY TIME, RELEASE ALL OR ANY 29 PORTION OF THE REAL PROPERTY SUBJECT TO ANY LIEN IMPOSED BY THIS 30 ARTICLE FROM SUCH LIEN, OR SUBORDINATE SUCH LIEN TO OTHER LIENS 19910H1321B2321 - 141 -
1 AND ENCUMBRANCES, IF IT DETERMINES THAT THE TAXES ARE 2 SUFFICIENTLY SECURED BY A LIEN ON OTHER PROPERTY OF THE DECEDENT 3 OR THAT THE RELEASE OR SUBORDINATION OF THE LIEN WILL NOT 4 ENDANGER OR JEOPARDIZE THE COLLECTION OF THE TAXES. 5 (C) WHEN INHERITANCE TAX IN RESPECT TO THE TRANSFER OF 6 PARTICULAR REAL PROPERTY IS PAID ON THE VALUE OF THE PROPERTY 7 WITHOUT DIMINUTION FOR ANY DEDUCTIONS AUTHORIZED BY THIS 8 ARTICLE, OTHER THAN A MORTGAGE ON THE PROPERTY EXISTING AT THE 9 DATE OF THE DECEDENT'S DEATH, THE DEPARTMENT, UPON REQUEST OF A 10 PARTY IN INTEREST, SHALL ISSUE A CERTIFICATE EVIDENCING THE 11 RELEASE OF THE PROPERTY FROM THE LIEN OF TAX. 12 (D) A CERTIFICATE BY THE DEPARTMENT TO THE EFFECT THAT ANY 13 REAL PROPERTY OR INTEREST IN REAL PROPERTY SUBJECT TO ANY LIEN 14 IMPOSED BY THIS ARTICLE HAS BEEN RELEASED FROM THE LIEN, OR THAT 15 THE LIEN HAS BEEN SUBORDINATED TO OTHER LIENS AND ENCUMBRANCES, 16 SHALL BE CONCLUSIVE EVIDENCE AS TO ANY BONA FIDE PURCHASER, 17 ENCUMBRANCER OR LESSEE THAT THE LIEN HAS BEEN RELEASED OR 18 SUBORDINATED. 19 SECTION 2176. ENFORCEMENT PROCEDURE.--(A) THE COURT, AT THE 20 REQUEST OF THE REGISTER, DEPARTMENT OR OFFICE OF ATTORNEY 21 GENERAL, SHALL ISSUE A CITATION, DIRECTED TO THOSE LIABLE FOR 22 THE PAYMENT OF THE TAXES OR SUBJECT TO ANY OTHER DUTY IMPOSED BY 23 THIS ARTICLE, COMMANDING THE PERSON OR PERSONS TO APPEAR AND 24 SHOW CAUSE WHY THE REQUIREMENTS OF THIS ARTICLE SHOULD NOT BE 25 MET. 26 (B) THE COURT MAY ISSUE ANY DECREE WARRANTED BY THE FACTS, 27 ACCORDING TO EQUITY. 28 (C) A CITATION TO ENFORCE PAYMENT OF TAXES DUE UNDER THIS 29 ARTICLE OR COMPLIANCE WITH THE DUTIES REQUIRED BY THIS ARTICLE 30 SHALL BE ISSUED BY THE COURT UPON APPLICATION OF THE REGISTER, 19910H1321B2321 - 142 -
1 DEPARTMENT OR OFFICE OF ATTORNEY GENERAL WHENEVER ANY OF THE 2 FOLLOWING OCCURS: 3 (1) A TAX RETURN IS NOT FILED WITHIN THE TIME REQUIRED BY 4 THIS ARTICLE. 5 (2) ANY TAX DUE UNDER THIS ARTICLE REMAINS DELINQUENT. 6 (3) A FEDERAL ESTATE TAX RETURN HAS BEEN FILED BUT A COPY OF 7 THE RETURN, OR A COMMUNICATION MAKING A FINAL CHANGE ON THE 8 RETURN, HAS NOT BEEN FILED AS REQUIRED BY SECTION 2145. 9 (4) ANY OTHER DUTY IMPOSED BY THIS ARTICLE REMAINS 10 UNPERFORMED. 11 (D) THE REGISTER OR DEPARTMENT MAY ISSUE SUBPOENAS TO COMPEL 12 THE PRODUCTION OF DOCUMENTS AND THE ATTENDANCE OF WITNESSES 13 NECESSARY FOR THE ADMINISTRATION OF THIS ARTICLE. 14 (E) EXECUTION MAY BE ISSUED BY THE COURT AGAINST ANY REAL 15 PROPERTY IN THE DECEDENT'S ESTATE ON WHICH A LIEN FOR THE 16 PAYMENT OF THE TAXES IMPOSED BY THIS ARTICLE EXISTS OR AGAINST 17 ANY PROPERTY BELONGING TO A TRANSFEREE LIABLE FOR THE TAX. 18 (F) THE DEPARTMENT MAY BRING SUITS IN THE COURTS OF OTHER 19 STATES TO COLLECT DEATH TAXES (INCLUDING INTEREST AND PENALTIES 20 ON THE TAXES) IMPOSED BY THIS ARTICLE. AN OFFICIAL OF ANOTHER 21 STATE WHICH EXTENDS A LIKE COMITY TO THE COMMONWEALTH MAY SUE 22 FOR THE COLLECTION OF DEATH TAXES (INCLUDING INTEREST AND 23 PENALTIES ON THE TAXES) IN THE COURTS OF THIS COMMONWEALTH. A 24 CERTIFICATE BY THE SECRETARY OF STATE OF ANOTHER STATE, UNDER 25 THE SEAL OF THAT STATE, THAT AN OFFICIAL HAS AUTHORITY TO 26 COLLECT ITS DEATH TAXES SHALL BE CONCLUSIVE EVIDENCE OF THE 27 AUTHORITY OF THE OFFICIAL IN ANY SUIT FOR THE COLLECTION OF THE 28 TAXES IN ANY COURT OF THIS COMMONWEALTH. 29 PART X 30 REFUND OF TAX 19910H1321B2321 - 143 -
1 SECTION 2181. REFUND OF TAX.--(A) A REFUND SHALL BE MADE OF 2 ANY TAX TO WHICH THE COMMONWEALTH IS NOT RIGHTFULLY OR EQUITABLY 3 ENTITLED PROVIDED THE COMMONWEALTH DETERMINES THE REFUND IS DUE 4 OR APPLICATION FOR REFUND IS MADE WITHIN THE APPROPRIATE TIME 5 LIMIT AS SET FORTH IN SUBSECTION (D). 6 (B) INTEREST SHALL BE PAID ON REFUNDABLE TAX AT THE SAME 7 RATE AS THE INTEREST RATE ON DEFICIENCIES PROVIDED FOR IN 8 SECTION 2143. 9 (C) REFUND SHALL BE MADE IN CASH TO THE PARTY WHO PAID THE 10 TAX OR TO HIS ASSIGNEE OR AS DIRECTED BY THE COURT. 11 (D) APPLICATION FOR REFUND OF TAX SHALL BE MADE WITHIN TWO 12 YEARS AFTER: 13 (1) THE COURT HAS RESCINDED ITS ORDER AND ADJUDICATION OF 14 PRESUMED DEATH WHEN THE REFUND IS CLAIMED FOR TAX PAID ON THE 15 TRANSFER OF THE ESTATE OF A PRESUMED DECEDENT WHO IS LATER 16 DETERMINED TO BE ALIVE; 17 (2) TERMINATION OF LITIGATION ESTABLISHING A RIGHT TO A 18 REFUND, NO APPLICATION FOR REFUND SHALL BE NECESSARY WHEN THE 19 LITIGATION HAS BEEN WITH THE COMMONWEALTH OVER LIABILITY FOR THE 20 TAX OR THE AMOUNT OF TAX DUE; 21 (3) IT HAS BEEN FINALLY DETERMINED THAT THE WHOLE OR ANY 22 PART OF AN ALLEGED DEFICIENCY TAX, ASSERTED BY THE FEDERAL 23 GOVERNMENT BEYOND THAT ADMITTED TO BE PAYABLE, AND IN 24 CONSEQUENCE OF WHICH AN ESTATE TAX WAS PAID UNDER SECTION 2117 25 WAS NOT PAYABLE; 26 (4) A FINAL JUDGMENT HOLDING THAT A PROVISION OF THIS 27 ARTICLE UNDER WHICH TAX HAS BEEN PAID IS UNCONSTITUTIONAL OR 28 THAT THE INTERPRETATION OF A PROVISION OF THIS ARTICLE UNDER 29 WHICH TAX HAS BEEN PAID WAS ERRONEOUS; OR 30 (5) THE DATE OF PAYMENT, OR THE DATE OF THE NOTICE OF THE 19910H1321B2321 - 144 -
1 ASSESSMENT OF THE TAX, OR THE DATE THE TAX BECOMES DELINQUENT, 2 WHICHEVER OCCURS LATER, IN ALL OTHER CASES. 3 (E) AN APPLICATION FOR REFUND OF TAX SHALL BE MADE TO THE 4 BOARD OF FINANCE AND REVENUE. 5 (F) THE ACTION OF THE BOARD OF FINANCE AND REVENUE ON ALL 6 APPLICATIONS FOR REFUND OF TAX MAY BE APPEALED AS PROVIDED FOR 7 IN 42 PA.C.S. § 933 (RELATING TO APPEALS FROM GOVERNMENT 8 AGENCIES). 9 (G) AS MUCH OF THE MONEYS RECEIVED AS PAYMENT OF TAX UNDER 10 THIS ARTICLE AS SHALL BE NECESSARY FOR THE PAYMENT OF THE 11 REFUNDS PROVIDED FOR IN THIS ARTICLE WITH INTEREST IS 12 APPROPRIATED FOR THE PAYMENT OF SUCH REFUNDS. 13 PART XI 14 DISPUTED TAX 15 SECTION 2186. PROTEST, NOTICE AND APPEAL.--(A) ANY PARTY IN 16 INTEREST, INCLUDING THE COMMONWEALTH AND THE PERSONAL 17 REPRESENTATIVE, NOT SATISFIED WITH THE APPRAISEMENT, THE 18 ALLOWANCE OR DISALLOWANCE OF DEDUCTIONS, THE ASSESSMENT OF TAX, 19 OR SUPPLEMENTS OR ANY OTHER MATTER RELATING TO ANY TAX IMPOSED 20 BY THIS ARTICLE, WITHIN SIXTY DAYS AFTER RECEIPT OF NOTICE OF 21 THE ACTION COMPLAINED OF MAY: 22 (1) FILE WITH THE DEPARTMENT A WRITTEN PROTEST, SENDING A 23 COPY THEREOF TO THE OFFICE OF ATTORNEY GENERAL; 24 (2) NOTIFY THE REGISTER IN WRITING THAT HE ELECTS TO HAVE 25 THE CORRECTNESS OF THE ACTION COMPLAINED OF DETERMINED AT THE 26 AUDIT OF THE ACCOUNT OF THE PERSONAL REPRESENTATIVE; OR 27 (3) APPEAL TO THE COURT TO HAVE THE CORRECTNESS OF THE 28 ACTION COMPLAINED OF DETERMINED AT THE AUDIT OF THE ACCOUNT OF 29 THE PERSONAL REPRESENTATIVE, OR AT A TIME THE COURT SHALL FIX. 30 THE PROTEST, NOTIFICATION OR APPEAL SHALL SPECIFY ALL THE 19910H1321B2321 - 145 -
1 OBJECTIONS TO THE ACTION COMPLAINED OF. WHEN THE PROTEST, 2 NOTIFICATION OR APPEAL IS FILED BY THE COMMONWEALTH, A COPY 3 SHALL ALSO BE SENT TO THE PERSONAL REPRESENTATIVE AND TO ALL 4 OTHER PERSONS WHO FILED A TAX RETURN. 5 (B) IF A NOTIFICATION OR APPEAL HAS BEEN FILED FROM AN 6 ASSESSMENT OF TAX WHERE IT IS CONTENDED THAT THE RATE OF TAX 7 WHICH WILL BE APPLICABLE WHEN A FUTURE INTEREST VESTS IN 8 POSSESSION AND ENJOYMENT CANNOT PRESENTLY BE ESTABLISHED WITH 9 CERTAINTY, AND NO COMPROMISE HAS BEEN ENTERED INTO PURSUANT TO 10 SUBSECTION (E) OF SECTION 2116, THE COURT, AFTER CONSIDERATION 11 OF RELEVANT ACTUARIAL FACTORS, VALUATIONS AND OTHER PERTINENT 12 CIRCUMSTANCES, SHALL DETERMINE WHAT PORTION OF THE TRANSFER IS 13 TO BECOME TAXED AT EACH OF THE RATES WHICH MIGHT BE APPLICABLE. 14 (C) WHENEVER ANY APPEAL OR PROTEST IS BROUGHT PURSUANT TO 15 THIS PART AND THE SUBJECT MATTER OF THE APPEAL CONCERNS THE 16 VALUATION OF CERTAIN FARMLAND AS SET FORTH IN SECTION 2122 THE 17 FORUM DESIGNATED BY THE DEPARTMENT TO HEAR THE APPEAL OR PROTEST 18 SHALL INCLUDE AT LEAST TWO FARMERS AND THE SECRETARY OF 19 AGRICULTURE. THE FARMERS AND THE SECRETARY OF AGRICULTURE SHALL 20 BE ACCORDED FULL POWERS WITHIN THE FORUM WITH FULL VOTING 21 RIGHTS. 22 SECTION 2187. BOND.--NO BOND SHALL BE REQUIRED OF ANY PARTY 23 IN INTEREST WHO FILES A PROTEST OR NOTIFICATION AGAINST, OR 24 APPEALS FROM, AN APPRAISEMENT, ALLOWANCE OR DISALLOWANCE OF A 25 DEDUCTION, ASSESSMENT OF TAX, OR SUPPLEMENTS, OR OTHER MATTER 26 RELATING TO THE TAX, OR FROM THE DECISION OF THE DEPARTMENT 27 FOLLOWING A PROTEST, OR WHO PETITIONS FOR REMOVAL OF THE RECORD 28 TO THE COURT. 29 SECTION 2188. APPEAL AND REMOVAL FROM DEPARTMENT.--(A) ANY 30 PARTY IN INTEREST, INCLUDING THE COMMONWEALTH AND THE PERSONAL 19910H1321B2321 - 146 -
1 REPRESENTATIVE, NOT SATISFIED WITH THE DECISION OF THE 2 DEPARTMENT UPON A PROTEST MAY APPEAL FROM THE DEPARTMENT TO THE 3 COURT WITHIN SIXTY DAYS AFTER RECEIPT OF NOTICE OF THE ENTRY OF 4 THE DECISION OF THE DEPARTMENT. WHEN NO DECISION HAS BEEN 5 RENDERED BY THE DEPARTMENT WITHIN THIRTY DAYS AFTER THE PROTEST 6 HAS BEEN FILED WITH THE DEPARTMENT, THE COURT UPON PETITION OF 7 ANY PARTY IN INTEREST MAY DIRECT THE DEPARTMENT TO TRANSMIT THE 8 ENTIRE RECORD TO THE COURT. WHEN AN APPEAL IS TAKEN FROM THE 9 DECISION OF THE DEPARTMENT, OR THE COURT DIRECTS THE DEPARTMENT 10 TO TRANSMIT THE ENTIRE RECORD TO THE COURT, THE COURT SHALL 11 EITHER PROCEED TO A DETERMINATION OF THE ISSUES PROTESTED TO THE 12 DEPARTMENT OR SUSPEND THE DETERMINATION UNTIL THE AUDIT OF THE 13 ACCOUNT OF THE PERSONAL REPRESENTATIVE. 14 (B) IF THE APPEAL OR REMOVAL ARISES FROM AN ASSESSMENT OF 15 TAX WHERE IT IS CONTENDED THAT THE RATE OF TAX WHICH WILL BE 16 APPLICABLE WHEN A FUTURE INTEREST VESTS IN POSSESSION AND 17 ENJOYMENT CANNOT PRESENTLY BE ESTABLISHED WITH CERTAINTY, AND NO 18 COMPROMISE HAS BEEN ENTERED INTO PURSUANT TO SUBSECTION (E) OF 19 SECTION 2116, THE COURT AFTER CONSIDERATION OF RELEVANT 20 ACTUARIAL FACTORS, VALUATIONS AND OTHER PERTINENT CIRCUMSTANCES 21 SHALL DETERMINE WHAT PORTION OF THE TRANSFER IS TO BECOME TAXED 22 AT EACH OF THE RATES WHICH MIGHT BE APPLICABLE. 23 PART XII 24 ENTRY INTO SAFE DEPOSIT BOX 25 SECTION 2191. ENTRY PROHIBITED.--UNLESS PROVIDED OTHERWISE 26 IN THIS PART, NO PERSON HAVING ACTUAL KNOWLEDGE OF THE DEATH OF 27 A DECEDENT SHALL ENTER A SAFE DEPOSIT BOX OF THE DECEDENT. THIS 28 PART SHALL NOT BE CONSTRUED TO CONFER UPON ANY PERSON ANY RIGHT 29 OF ENTRY INTO A SAFE DEPOSIT BOX OF A DECEDENT WHICH HE DOES NOT 30 OTHERWISE HAVE. 19910H1321B2321 - 147 -
1 SECTION 2192. ENTRY WITHOUT NOTICE TO DEPARTMENT.--(A) A 2 SAFE DEPOSIT BOX OF A DECEDENT MAY BE ENTERED, AND ANY OR ALL OF 3 THE CONTENTS REMOVED IN THE PRESENCE OF AN EMPLOYE OF THE 4 FINANCIAL INSTITUTION IN WHICH THE BOX IS LOCATED. THE EMPLOYE 5 SHALL MAKE, OR CAUSE TO BE MADE, A RECORD OF THE CONTENTS OF THE 6 BOX, WHICH RECORD HE SHALL ATTEST UNDER PENALTY OF PERJURY TO BE 7 CORRECT AND COMPLETE. THE FINANCIAL INSTITUTION MAY MAKE A 8 REASONABLE CHARGE FOR THE ATTENDANCE OF ITS EMPLOYE AT THE ENTRY 9 OF THE BOX AND THE LISTING OF THE CONTENTS, WHICH CHARGE SHALL 10 BE DEDUCTIBLE AS AN ADMINISTRATION EXPENSE UNDER SUBSECTION (B) 11 OF SECTION 2117. 12 (B) A SAFE DEPOSIT BOX OF A DECEDENT MAY BE ENTERED, AND ANY 13 OR ALL OF THE CONTENTS REMOVED, IN THE PRESENCE OF A 14 REPRESENTATIVE OF THE DEPARTMENT AUTHORIZED BY THE SECRETARY. 15 THE DEPARTMENT SHALL AUTHORIZE AT LEAST ONE SUCH REPRESENTATIVE 16 IN AND FOR EACH COUNTY OF THIS COMMONWEALTH. THE REPRESENTATIVE 17 PRESENT AT THE TIME OF ENTRY INTO THE BOX SHALL MAKE OR CAUSE TO 18 BE MADE A RECORD OF THE CONTENTS OF THE BOX. 19 (C) THE COURT FOR CAUSE SHOWN MAY ORDER THAT A DESIGNATED 20 PERSON OR PERSONS BE PERMITTED TO ENTER A SAFE DEPOSIT BOX OF A 21 DECEDENT AND REMOVE THE CONTENTS DESCRIBED IN THE ORDER, UNDER 22 SUPERVISION AS THE COURT MAY DIRECT. THE ORDER MAY ALSO REQUIRE 23 THAT A RECORD BE MADE OF THE CONTENTS OF THE BOX. 24 (D) NOTWITHSTANDING ANY OF THE PROVISIONS OF THIS PART, THE 25 DEPARTMENT, AT ANY TIME AND WITHOUT RELATION TO THE DEATH OF A 26 SPECIFIC DECEDENT, BY A CERTIFICATE ISSUED TO A FIRM WHOSE 27 BUSINESS REQUIRES READY ACCESS TO SAFE DEPOSIT BOXES, MAY ISSUE 28 A GENERAL AUTHORIZATION FOR THE ENTRY INTO, AND REMOVAL OF THE 29 CONTENTS OF, A SAFE DEPOSIT BOX OF A DECEDENT, UNDER TERMS AND 30 CONDITIONS AS IT MAY PRESCRIBE. A FINANCIAL INSTITUTION MAY 19910H1321B2321 - 148 -
1 PERMIT SUCH ENTRY AND REMOVAL UPON PRESENTATION TO IT OF SUCH 2 CERTIFICATES ISSUED BY THE DEPARTMENT. 3 (E) NOTHING IN THIS PART SHALL PROHIBIT A FINANCIAL 4 INSTITUTION FROM PERMITTING ENTRY INTO A SAFE DEPOSIT BOX OF A 5 DECEDENT FOR THE SOLE PURPOSE OF REMOVING THE DECEDENT'S WILL 6 AND EVIDENCE OF OWNERSHIP OF THE BURIAL LOT IN WHICH THE 7 DECEDENT IS TO BE INTERRED. AN EMPLOYE OF THE FINANCIAL 8 INSTITUTION MUST BE PRESENT AT THE OPENING OF THE BOX AND MAKE 9 OR CAUSE TO BE MADE A RECORD OF THE DOCUMENTS REMOVED FROM THE 10 SAFE DEPOSIT BOX DURING THE ENTRY AND ATTEST THE RECORD TO BE 11 CORRECT AND COMPLETE UNDER PENALTY OF PERJURY. 12 SECTION 2193. ENTRY UPON NOTICE TO DEPARTMENT.--(A) WHEN 13 ENTRY INTO A SAFE DEPOSIT BOX OF A DECEDENT IS NOT, OR CANNOT BE 14 MADE UNDER THE PROVISIONS OF SUBSECTION (A), (B), (C) OR (D) OF 15 SECTION 2192, A SAFE DEPOSIT BOX OF A DECEDENT MAY BE ENTERED AT 16 THE TIME FIXED IN A NOTICE MAILED TO THE DEPARTMENT OF REVENUE, 17 HARRISBURG, PENNSYLVANIA, AND TO THE FINANCIAL INSTITUTION IN 18 WHICH THE BOX IS LOCATED, IN THE MANNER SPECIFIED IN THIS 19 SECTION. THE DATE FIXED FOR ENTRY AND CONTAINED IN THE NOTICE 20 SHALL NOT BE LESS THAN SEVEN DAYS AFTER THE DATE OF NOTICE IS 21 MAILED. A REPRESENTATIVE OF THE DEPARTMENT MAY BE PRESENT AT THE 22 TIME FIXED FOR ENTRY AND MAY MAKE OR CAUSE TO BE MADE A RECORD 23 OF THE CONTENTS OF THE BOX. 24 (B) THE NOTICE REQUIRED UNDER SUBSECTION (A) SHALL BE 25 DELIVERED TO THE UNITED STATES POSTAL SERVICE FOR MAILING IN A 26 MANNER THAT WILL PROVIDE FOR A RECORD OF THE MAILING BEING MADE 27 BY THE UNITED STATES POSTAL SERVICE AND A RECEIPT BEING 28 FURNISHED TO THE SENDER. AN EXACT COPY OF THE NOTICE SHALL BE 29 TRANSMITTED TO THE FINANCIAL INSTITUTION IN WHICH THE BOX IS 30 LOCATED. 19910H1321B2321 - 149 -
1 (C) AT THE TIME FIXED IN THE NOTICE REQUIRED BY SUBSECTION 2 (A), ALTHOUGH NO REPRESENTATIVE OF THE DEPARTMENT IS PRESENT, IT 3 SHALL BE LAWFUL FOR A FINANCIAL INSTITUTION IN WHICH A SAFE 4 DEPOSIT BOX OF A DECEDENT IS LOCATED TO PERMIT, AND IT SHALL 5 PERMIT, ENTRY INTO THE BOX AND REMOVAL OF ITS CONTENTS BY A 6 PERSON WHO FURNISHES A SIGNED STATEMENT UNDER PENALTY OF PERJURY 7 THAT HE OR SOMEONE IN HIS BEHALF HAS GIVEN SUCH NOTICE. 8 SECTION 2194. SUBSEQUENT ENTRIES.--NOTHING IN THIS PART 9 SHALL BE CONSTRUED TO IMPOSE ANY RESTRICTION UPON REENTRY INTO A 10 SAFE DEPOSIT BOX OF A DECEDENT AT ANY TIME SUBSEQUENT TO AN 11 ENTRY MADE IN ACCORDANCE WITH ANY OF THE PROVISIONS OF THIS PART 12 OTHER THAN SUBSECTION (E) OF SECTION 2192. 13 SECTION 2195. CONFIDENTIAL NATURE OF CONTENTS.--ANY 14 INFORMATION GAINED FROM THE CONTENTS OF A SAFE DEPOSIT BOX OF A 15 DECEDENT BY A PERSON WHOSE ATTENDANCE AT THE ENTRY INTO THE BOX 16 WAS REQUIRED BY THIS PART SHALL BE CONFIDENTIAL AND SHALL NOT BE 17 DISCLOSED FOR OTHER THAN OFFICIAL PURPOSES TO COLLECT THE TAXES 18 IMPOSED BY THIS ARTICLE. 19 SECTION 2196. PENALTIES.--(A) ANY EMPLOYE OF A FINANCIAL 20 INSTITUTION IN WHICH THE SAFE DEPOSIT BOX OF A DECEDENT IS 21 LOCATED WHO, HAVING ACTUAL KNOWLEDGE OF THE DEATH OF THE 22 DECEDENT, ENTERS OR PERMITS THE ENTRY BY ANY PERSON INTO A SAFE 23 DEPOSIT BOX OF THE DECEDENT IN VIOLATION OF THE PROVISIONS OF 24 THIS PART COMMITS A MISDEMEANOR OF THE THIRD DEGREE. 25 (B) ANY PERSON, OTHER THAN AN EMPLOYE OF A FINANCIAL 26 INSTITUTION IN WHICH THE SAFE DEPOSIT BOX OF A DECEDENT IS 27 LOCATED, WHO, HAVING ACTUAL KNOWLEDGE OF THE DEATH OF A 28 DECEDENT, ENTERS A SAFE DEPOSIT BOX OF THE DECEDENT IN VIOLATION 29 OF THE PROVISIONS OF THIS PART COMMITS A MISDEMEANOR OF THE 30 THIRD DEGREE. 19910H1321B2321 - 150 -
1 (C) ANY PERSON WHO VIOLATES THE PROVISIONS OF SECTION 2195 2 COMMITS A MISDEMEANOR OF THE THIRD DEGREE. 3 SECTION 32. SECTION 3003.3(D) OF THE ACT, AMENDED OCTOBER 4 14, 1988 (P.L.737, NO.106), IS AMENDED AND THE SECTION IS 5 AMENDED BY ADDING A SUBSECTION TO READ: 6 SECTION 3003.3. UNDERPAYMENT OF ESTIMATED TAX.--* * * 7 (D) NOTWITHSTANDING THE PROVISIONS OF THE PRECEDING 8 SUBSECTIONS, THE ADDITION TO THE TAX WITH RESPECT TO ANY 9 UNDERPAYMENT OF ANY INSTALLMENT OF ESTIMATED TAX SHALL NOT BE 10 IMPOSED IF THE TOTAL AMOUNT OF ALL PAYMENTS OF ESTIMATED TAX 11 MADE ON OR BEFORE THE LAST DATE PRESCRIBED FOR THE PAYMENT OF 12 SUCH INSTALLMENT EQUALS OR EXCEEDS THE AMOUNT WHICH WOULD HAVE 13 BEEN REQUIRED TO BE PAID ON OR BEFORE SUCH DATE IF THE ESTIMATED 14 TAX WERE AN AMOUNT EQUAL TO THE TAX COMPUTED AT THE RATES 15 APPLICABLE TO THE TAXABLE YEAR, INCLUDING ANY MINIMUM TAX 16 IMPOSED, BUT OTHERWISE ON THE BASIS OF THE FACTS SHOWN ON THE 17 REPORT OF THE TAXPAYER FOR, AND THE LAW APPLICABLE TO, THE 18 SECOND PRECEDING TAXABLE YEAR, ADJUSTED FOR ANY CHANGES TO 19 SECTIONS 401, 601 AND 602 ENACTED FOR TAX YEARS BEGINNING ON OR 20 AFTER JANUARY 1, 1991, IF A REPORT SHOWING A LIABILITY FOR TAX 21 WAS FILED BY THE TAXPAYER FOR THE SECOND PRECEDING TAXABLE YEAR 22 AND SUCH SECOND PRECEDING YEAR WAS A TAXABLE YEAR OF TWELVE 23 MONTHS. IF THE TOTAL AMOUNT OF ALL PAYMENTS OF ESTIMATED TAX 24 MADE ON OR BEFORE THE LAST DATE PRESCRIBED FOR THE PAYMENT OF 25 SUCH INSTALLMENT DOES NOT EQUAL OR EXCEED THE AMOUNT REQUIRED TO 26 BE PAID PER THE PRECEDING SENTENCE, BUT SUCH AMOUNT IS PAID 27 AFTER THE DATE THE INSTALLMENT WAS REQUIRED TO BE PAID, THEN THE 28 PERIOD OF UNDERPAYMENT SHALL RUN FROM THE DATE THE INSTALLMENT 29 WAS REQUIRED TO BE PAID TO THE DATE THE AMOUNT REQUIRED TO BE 30 PAID PER THE PRECEDING SENTENCE WAS PAID. FOR TAXPAYERS THAT 19910H1321B2321 - 151 -
1 HAVE FILED ONLY ONE OR TWO PREVIOUS RETURNS, IF THE SECOND 2 PRECEDING TAXABLE YEAR IS LESS THEN TWELVE MONTHS, THEN THE 3 FIRST PRECEDING TAXABLE YEAR SHALL BE USED; OR IF THERE IS NO 4 SECOND PRECEDING TAXABLE YEAR THEN THE FIRST PRECEDING TAXABLE 5 YEAR SHALL BE USED. IF THE FIRST PRECEDING TAXABLE YEAR IS LESS 6 THAN TWELVE MONTHS, THEN THE ANNUALIZED FIRST PRECEDING TAXABLE 7 YEAR SHALL BE USED. PROVIDED, HOWEVER, THAT IF THE SETTLED TAX 8 FOR THE SECOND PRECEDING YEAR EXCEEDS THE TAX SHOWN ON SUCH 9 REPORT BY TEN PER CENT OR MORE, THE SETTLED TAX ADJUSTED TO 10 REFLECT THE CURRENT TAX RATE SHALL BE USED FOR PURPOSES OF THIS 11 SUBSECTION, EXCEPT THAT, IF THE SETTLED TAX IS SUBSEQUENTLY 12 RESETTLED, THE AMOUNT OF TAX AS RESETTLED SHALL BE UTILIZED IN 13 THE APPLICATION OF THIS SUBSECTION WITHOUT THE NECESSITY OF THE 14 FILING OF ANY PETITION BY THE DEPARTMENT OR BY THE TAXPAYER. IN 15 THE EVENT THAT THE SETTLED OR RESETTLED TAX FOR THE SECOND 16 PRECEDING YEAR EXCEEDS THE TAX SHOWN ON THE REPORT BY TEN PER 17 CENT OR MORE, AN ADDITION TO THE TAX RESULTING FROM THE 18 UTILIZATION OF SUCH SETTLED OR RESETTLED TAX IN THE APPLICATION 19 OF THE PROVISIONS OF THIS SUBSECTION SHALL NOT BE IMPOSED IF, 20 WITHIN FORTY-FIVE DAYS OF THE MAILING DATE OF SUCH SETTLEMENT OR 21 RESETTLEMENT, PAYMENTS ARE MADE SUCH THAT THE TOTAL AMOUNT OF 22 ALL PAYMENTS OF ESTIMATED TAX EQUALS OR EXCEEDS THE AMOUNT WHICH 23 WOULD HAVE BEEN REQUIRED TO BE PAID ON OR BEFORE SUCH DATE IF 24 THE ESTIMATED TAX WERE AN AMOUNT EQUAL TO SUCH SETTLED OR 25 RESETTLED TAX ADJUSTED TO REFLECT THE CURRENT TAX RATE. IN ANY 26 CASE IN WHICH THE TAXABLE YEAR FOR WHICH AN UNDERPAYMENT OF 27 ESTIMATED TAX MAY EXIST IS A SHORT TAXABLE YEAR, IN DETERMINING 28 THE TAX SHOWN ON THE REPORT OR THE SETTLED OR RESETTLED TAX FOR 29 THE SECOND PRECEDING TAXABLE YEAR, THE TAX WILL BE REDUCED BY 30 MULTIPLYING IT BY THE NUMBER OF DAYS IN THE SHORT TAXABLE YEAR 19910H1321B2321 - 152 -
1 AND DIVIDING THE RESULTING AMOUNT BY THREE HUNDRED SIXTY-FIVE. 2 (E) (1) WHEN THE AMENDMENTS TO SECTIONS 401, 601, 602 AND 3 3003.3(D) RESULT IN AN INCREASE OF A TAXPAYER'S ESTIMATED TAXES 4 FOR 1991 AND 1992 OR THE REQUIRED SAFE HARBOR AMOUNT, THE 5 ADDITIONAL REQUIRED INSTALLMENT PAYMENTS OF ESTIMATED TAX AS 6 WELL AS THE ADDITIONAL AMOUNT OF THE REQUIRED INSTALLMENT 7 PAYMENTS TO MEET THE "SAFE HARBOR" SHALL BE TREATED AS PROVIDED 8 BY THIS SUBSECTION FOR ADDITIONAL ESTIMATED PAYMENTS, SAFE 9 HARBOR PAYMENTS AND THE RECOMPUTATION AND PRESERVATION OF THE 10 SAFE HARBOR. 11 (2) (I) FOR PURPOSES OF COMPUTING THE ESTIMATED TAX "SAFE 12 HARBOR" PURSUANT TO SECTION 3003.3(D) FOR TAX YEARS 1991 AND 13 1992, THE SECOND PRECEDING TAXABLE YEAR (BASE YEAR), FOR 14 ESTIMATED CAPITAL STOCK AND FRANCHISE TAX PURPOSES, SHALL BE 15 RECOMPUTED WITH THE AMENDED MANUFACTURING, PROCESSING OR 16 RESEARCH AND DEVELOPMENT EXEMPTIONS, AND WITH THE AMENDED 17 DEFINITION OF "CAPITAL STOCK VALUE" IN SECTION 601, AND WITH THE 18 AMENDED MINIMUM TAX; AND, FOR ESTIMATED CORPORATE NET INCOME TAX 19 PURPOSES, WITHOUT THE ADDITIONAL DEDUCTIONS FOR DIVIDENDS. 20 (II) ANY TAXPAYER WHOSE "SAFE HARBOR" IS AFFECTED BY THIS 21 SECTION MUST FILE A RECOMPUTATION OF ITS SAFE HARBOR YEAR, 22 WITHIN SIXTY DAYS OF THE EFFECTIVE DATE OF THIS ACT FOR CALENDAR 23 YEAR 1991 OR TAXABLE YEARS BEGINNING IN 1991, AND WITHIN ONE 24 HUNDRED FIVE DAYS OF THE BEGINNING OF ITS YEAR FOR CALENDAR YEAR 25 1992 OR TAXABLE YEARS BEGINNING IN 1992. THE RECOMPUTATION SHALL 26 BE ON FORMS AS PRESCRIBED BY THE DEPARTMENT OF REVENUE. ANY 27 TAXPAYER FAILING TO FILE A RECOMPUTATION AS REQUIRED SHALL BE 28 DENIED THE USE OF THE "SAFE HARBOR" PROVISIONS OF SECTION 29 3003.3(D). 30 (3) TO THE EXTENT THE AMENDMENTS TO SECTIONS 401, 601, 602 19910H1321B2321 - 153 -
1 AND 3003.3(D) RESULT IN AN INCREASE IN THE CORPORATION'S 2 ESTIMATED TAX OR THE SAFE HARBOR AMOUNT, INSTALLMENTS DUE AFTER 3 THE EFFECTIVE DATE OF THIS ACT SHALL BE MADE PURSUANT TO 4 SECTIONS 3003.2 AND 3003.3 EXCEPT: 5 (I) ADDITIONAL AMOUNTS ASSOCIATED WITH INSTALLMENT PAYMENT 6 OF ESTIMATED TAX DUE PRIOR TO THE EFFECTIVE DATE OF THIS ACT 7 UNDER SECTION 3003.2 OR 3003.3(D) SHALL BE CONSIDERED TIMELY 8 PAID IF PAID WITHIN SIXTY DAYS OF THE EFFECTIVE DATE OF THIS ACT 9 OR ON THE DUE DATE OF THE NEXT INSTALLMENT. 10 (II) ADDITIONAL AMOUNTS ASSOCIATED WITH INSTALLMENT PAYMENT 11 OF ESTIMATED TAX DUE WITHIN SIXTY DAYS OF THE EFFECTIVE DATE OF 12 THIS ACT UNDER SECTION 3003.2 OR 3003.3(D) SHALL BE CONSIDERED 13 TIMELY PAID IF PAID WITHIN SIXTY DAYS OF THE EFFECTIVE DATE OF 14 THIS ACT OR ON THE DUE DATE OF THE NEXT INSTALLMENT. 15 SECTION 33. THE FOLLOWING ACTS AND PARTS OF ACTS ARE 16 REPEALED: 17 THE ACT OF MAY 20, 1949 (P.L.1584, NO.478), KNOWN AS THE 18 UNFAIR CIGARETTE SALES ACT. 19 72 PA.C.S. CH. 17. 20 SECTION 34. THIS ACT SHALL APPLY AS FOLLOWS: 21 (1) THE AMENDMENT OF SECTIONS 401(3)1(B) AND (B.1), 402, 22 602, 602.1, 602.3 AND 3003.3(D) OF THE ACT SHALL APPLY 23 RETROACTIVELY TO THE TAXABLE YEARS BEGINNING ON OR AFTER 24 JANUARY 1, 1991. 25 (2) THE AMENDMENT OF SECTION 1101(A) OF THE ACT SHALL 26 APPLY TO GROSS RECEIPTS REALIZED ON OR AFTER JULY 1, 1991. 27 (3) THE ADDITION OF ARTICLE XXI SHALL APPLY TO THE 28 ESTATE OF DECEDENTS DYING ON OR AFTER THE EFFECTIVE DATE OF 29 ARTICLE XXI AND TO INTER VIVOS TRANSFERS MADE BY DECEDENTS 30 DYING ON OR AFTER THE EFFECTIVE DATE OF ARTICLE XXI 19910H1321B2321 - 154 -
1 REGARDLESS OF THE DATE OF TRANSFER. 2 SECTION 35. (A) THE AMENDMENT, ADDITION OR REPEAL OF 3 SECTIONS 301 AND 304 SHALL BE RETROACTIVE TO JANUARY 1, 1991. 4 (B) THE AMENDMENT, ADDITION OR REPEAL OF SECTIONS 302, 302.2 5 AND 402.1 SHALL BE RETROACTIVE TO JULY 1, 1991. 6 SECTION 36. THIS ACT SHALL TAKE EFFECT AS FOLLOWS: 7 (1) THE AMENDMENT OR ADDITION OF SECTIONS 324, 324.1, 8 324.2, 324.3, 325 AND 352(B), (D) AND (F) OF THE ACT SHALL 9 TAKE EFFECT JANUARY 1, 1992. 10 (2) THE ADDITION OF ARTICLE XXI AND THE REPEAL OF 72 11 PA.C.S. CH. 17 SHALL TAKE EFFECT IN 60 DAYS. 12 (3) THE AMENDMENT OR ADDITION OF SECTIONS 1206, 1206.1, 13 1221, 1222(A), 1223, 1224, 1278(C) AND 1285(C) OF THE ACT 14 SHALL TAKE EFFECT IN 15 DAYS. 15 (4) THE REMAINDER OF THIS ACT SHALL TAKE EFFECT 16 IMMEDIATELY. D5L84RZ/19910H1321B2321 - 155 -