PRINTER'S NO. 1409

THE GENERAL ASSEMBLY OF PENNSYLVANIA


SENATE BILL

No. 1190 Session of 1993


        INTRODUCED BY MELLOW, LINCOLN, FUMO, REIBMAN, AFFLERBACH,
           STAPLETON, O'PAKE, STEWART, PORTERFIELD, LAVALLE, SCHWARTZ,
           MUSTO, ANDREZESKI, STOUT, WILLIAMS, DAWIDA, FATTAH, LEWIS,
           BELAN, LYNCH, JONES, SCANLON AND MOWERY, JUNE 2, 1993

        REFERRED TO FINANCE, JUNE 2, 1993

                                     AN ACT

     1  Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
     2     act relating to tax reform and State taxation by codifying
     3     and enumerating certain subjects of taxation and imposing
     4     taxes thereon; providing procedures for the payment,
     5     collection, administration and enforcement thereof; providing
     6     for tax credits in certain cases; conferring powers and
     7     imposing duties upon the Department of Revenue, certain
     8     employers, fiduciaries, individuals, persons, corporations
     9     and other entities; prescribing crimes, offenses and
    10     penalties," reducing the rate of corporate net income tax;
    11     and including electric utilities on the increased gross
    12     receipts tax and additional surtax.

    13     The General Assembly of the Commonwealth of Pennsylvania
    14  hereby enacts as follows:
    15     Section 1.  Section 402 of the act of March 4, 1971 (P.L.6,
    16  No.2), known as the Tax Reform Code of 1971, amended August 4,
    17  1991 (P.L.97, No.22), is amended to read:
    18     Section 402.  Imposition of Tax.--Every corporation shall be
    19  subject to, and shall pay for the privilege of (i) doing
    20  business in this Commonwealth; or (ii) carrying on activities in
    21  this Commonwealth; (iii) having capital or property employed or
    22  used in this Commonwealth; or (iv) owning property in this

     1  Commonwealth, by or in the name of itself, or any person,
     2  partnership, association, limited partnership, joint-stock
     3  association, or corporation, a State excise tax at the rate of
     4  twelve per cent per annum upon each dollar of taxable income of
     5  such corporation received by, and accruing to, such corporation
     6  during the calendar year 1971 and the first six months of 1972
     7  and at the rate of eleven per cent per annum upon each dollar of
     8  taxable income of such corporation received by, and accruing to,
     9  such corporation during the second six months of calendar year
    10  1972 through the calendar year 1973 and at the rate of nine and
    11  one-half per cent per annum upon each dollar of taxable income
    12  of such corporation received by, and accruing to, such
    13  corporation during the calendar years 1974, 1975 and 1976 and at
    14  the rate of ten and one-half per cent per annum upon each dollar
    15  of taxable income of such corporation received by, and accruing
    16  to, such corporation during the calendar year 1977 through the
    17  calendar year 1984 and at the rate of nine and one-half per cent
    18  per annum upon each dollar of taxable income of such corporation
    19  received by and accruing to such corporation during the calendar
    20  year 1985 through calendar year 1986 and at the rate of eight
    21  and one-half per cent per annum upon each dollar of taxable
    22  income of such corporation received by and accruing to such
    23  corporation during the calendar year 1987 through the calendar
    24  year 1990 and at the rate of ten and one-half per cent per annum
    25  upon each dollar of taxable income of such corporation received
    26  by and accruing to such corporation during calendar year 1991
    27  and during each calendar year thereafter, with an additional
    28  surtax equal to one and seventy-five hundredths per cent per
    29  annum upon each dollar of taxable income of such corporation
    30  received by and accruing to such corporation during calendar
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     1  [year 1991 and during each calendar year thereafter] years 1991
     2  and 1992 and an additional surtax of nine-tenths of one per cent
     3  per annum upon each dollar of taxable income of such corporation
     4  received by and accruing to such corporation during calendar
     5  year 1993 and each year thereafter, except where a corporation
     6  reports to the Federal Government on the basis of a fiscal year,
     7  and has certified such fact to the department as required by
     8  section 403 of this article, in which case, such tax, at the
     9  rate of twelve per cent, shall be levied, collected, and paid
    10  upon all taxable income received by, and accruing to, such
    11  corporation during the first six months of the fiscal year
    12  commencing in the calendar year 1972 and at the rate of eleven
    13  per cent, shall be levied, collected, and paid upon all taxable
    14  income received by, and accruing to, such corporation during the
    15  second six months of the fiscal year commencing in the calendar
    16  year 1972 and during the fiscal year commencing in the calendar
    17  year 1973 and at the rate of nine and one-half per cent, shall
    18  be levied, collected, and paid upon all taxable income received
    19  by, and accruing to, such corporation during the fiscal year
    20  commencing in the calendar years 1974, 1975 and 1976 and at the
    21  rate of ten and one-half per cent, shall be levied, collected,
    22  and paid upon all taxable income received by, and accruing to,
    23  such corporation during the fiscal year commencing in the
    24  calendar year 1977 through the fiscal year commencing in 1984
    25  and at the rate of nine and one-half per cent, shall be levied,
    26  collected, and paid upon all taxable income received by and
    27  accruing to such corporation during the fiscal year commencing
    28  in 1985 through the fiscal year commencing in 1986 and at the
    29  rate of eight and one-half per cent per annum upon each dollar
    30  of taxable income of such corporation received by and accruing
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     1  to such corporation during the fiscal year commencing in 1987
     2  through the fiscal year commencing in 1990 and at the rate of
     3  ten and one-half per cent per annum upon each dollar of taxable
     4  income of such corporation received by and accruing to such
     5  corporation during the fiscal year commencing in 1991 and during
     6  each fiscal year thereafter, with an additional surtax equal to
     7  one and seventy-five hundredths per cent per annum upon each
     8  dollar of taxable income of such corporation received by and
     9  accruing to such corporation during the fiscal year commencing
    10  in 1991 [and during each fiscal year thereafter] and 1992 and an
    11  additional surtax of nine-tenths of one per cent per annum upon
    12  each dollar of taxable income of such corporation received by
    13  and accruing to such corporation during the fiscal year
    14  commencing in 1993 and during each fiscal year thereafter. No
    15  penalty prescribed by subsection (e) of section 3003 shall be
    16  assessed against a corporation for the additional tax which may
    17  be due as a result of the increase in tax rate from nine and
    18  one-half per cent to ten and one-half per cent imposed
    19  retroactively by this section for the calendar year 1977 or for
    20  the fiscal year commencing in 1977.
    21     Section 2.  Section 1101(b) of the act, amended July 13, 1987
    22  (P.L.317, No.58), is amended to read:
    23     Section 1101.  Imposition of Tax.--* * *
    24     (b)  Electric Light, Waterpower and Hydro-electric
    25  Utilities.--Every electric light company, waterpower company and
    26  hydro-electric company now or hereafter incorporated or
    27  organized by or under any law of this Commonwealth, or now or
    28  hereafter organized or incorporated by any other state or by the
    29  United States or any foreign government and doing business in
    30  this Commonwealth, and every limited partnership, association,
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     1  joint-stock association, copartnership, person or persons,
     2  engaged in electric light and power business, waterpower
     3  business and hydro-electric business in this Commonwealth, shall
     4  pay to the State Treasurer, through the Department of Revenue, a
     5  tax of [forty-four] forty-five mills with a surtax equal to five
     6  mills upon each dollar of the gross receipts of the corporation,
     7  company or association, limited partnership, joint-stock
     8  association, copartnership, person or persons, received from:
     9     (1)  the sales of electric energy within this State, except
    10  gross receipts derived from the sales for resale of electric
    11  energy to persons, partnerships, associations, corporations or
    12  political subdivisions subject to the tax imposed by this
    13  subsection upon gross receipts derived from such resale; and
    14     (2)  the sales of electric energy produced in Pennsylvania
    15  and made outside of Pennsylvania in a state that has taken
    16  action since December 21, 1977 which results in higher costs for
    17  electric energy produced in that state and sold in Pennsylvania
    18  unless the action that was taken after December 21, 1977 is
    19  rescinded according to the following apportionment formula:
    20  except for gross receipts derived from sales under clause (1),
    21  the gross receipts from all sales of electricity of the producer
    22  shall be apportioned to the Commonwealth of Pennsylvania by the
    23  ratio of the producer's operating and maintenance expenses in
    24  Pennsylvania and depreciation attributable to property in
    25  Pennsylvania to the producer's total operating and maintenance
    26  expenses and depreciation.
    27     * * *
    28     Section 3.  This act shall be retroactive to the tax years
    29  beginning on or after January 1, 1993.
    30     Section 4.  This act shall take effect immediately.
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