PRIOR PRINTER'S NOS. 1524, 2207               PRINTER'S NO. 2321

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

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.










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