PRINTER'S NO. 2055
No. 1707 Session of 1995
INTRODUCED BY DeLUCA, GIGLIOTTI, COWELL, TRELLO, BELFANTI,
TRICH, COLAIZZO, VAN HORNE, FAJT, MELIO, TRAVAGLIO,
TANGRETTI, SAINATO, LaGROTTA, PETRARCA, GEORGE, READSHAW,
BEBKO-JONES, COY, D. R. WRIGHT, DeWEESE, CAPPABIANCA, KAISER,
COLAFELLA, DERMODY, WALKO, YEWCIC, RAMOS, JAMES, RICHARDSON,
LAUGHLIN AND MARKOSEK, JUNE 7, 1995
REFERRED TO COMMITTEE ON FINANCE, JUNE 7, 1995
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," further providing for the imposition of personal
11 income tax and for the imposition of corporate net income
12 tax; and repealing the tax on annuity considerations.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Section 302 of the act of March 4, 1971 (P.L.6,
16 No.2), known as the Tax Reform Code of 1971, added August 4,
17 1991 (P.L.97, No.22), is amended to read:
18 Section 302. Imposition of Tax.--(a) Every resident
19 individual, estate or trust shall be subject to, and shall pay
20 for the privilege of receiving each of the classes of income
21 hereinafter enumerated in section 303, a tax upon each dollar of
1 income received by that resident during that resident's taxable
2 year at the following rates:
3 (1) Two and one-tenth per cent for taxable years commencing
4 with or within calendar year 1987 through the first half of the
5 taxable year commencing with or within calendar year 1991.
6 (2) Two and eight-tenths per cent for the second half of the
7 taxable year commencing with or within calendar year 1991
8 through the taxable year commencing with or within calendar year
9 1995.
10 (2.1) Two and six-tenths per cent for the taxable year
11 commencing with or within calendar year 1996 and each taxable
12 year thereafter.
13 (3) A temporary assessment equal to an additional three-
14 tenths per cent for the second half of the taxable year
15 commencing with or within calendar year 1991 through the first
16 half of the taxable year commencing with or within calendar year
17 1992.
18 (b) Every nonresident individual, estate or trust shall be
19 subject to, and shall pay for the privilege of receiving each of
20 the classes of income hereinafter enumerated in section 303 from
21 sources within this Commonwealth, a tax upon each dollar of
22 income received by that nonresident during that nonresident's
23 taxable year at the following rates:
24 (1) Two and one-tenth per cent for taxable years commencing
25 with or within calendar year 1987 through the first half of the
26 taxable year commencing with or within calendar year 1991.
27 (2) Two and eight-tenths per cent for the second half of the
28 taxable year commencing with or within calendar year 1991
29 through the taxable year commencing with or within calendar year
30 1995.
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1 (2.1) Two and six-tenths per cent for the taxable year
2 commencing with or within calendar year 1996 and each taxable
3 year thereafter.
4 (3) A temporary assessment equal to an additional three-
5 tenths per cent for the second half of the taxable year
6 commencing with or within calendar year 1991 through the first
7 half of the taxable year commencing with or within calendar year
8 1992.
9 Section 2. Section 402 of the act, amended June 16, 1994
10 (P.L.279, No.48), is amended to read:
11 Section 402. Imposition of Tax.--Every corporation shall be
12 subject to, and shall pay for the privilege of (i) doing
13 business in this Commonwealth; or (ii) carrying on activities in
14 this Commonwealth; (iii) having capital or property employed or
15 used in this Commonwealth; or (iv) owning property in this
16 Commonwealth, by or in the name of itself, or any person,
17 partnership, association, limited partnership, joint-stock
18 association, or corporation, a State excise tax at the rate of
19 twelve per cent per annum upon each dollar of taxable income of
20 such corporation received by, and accruing to, such corporation
21 during the calendar year 1971 and the first six months of 1972
22 and at the rate of eleven per cent per annum upon each dollar of
23 taxable income of such corporation received by, and accruing to,
24 such corporation during the second six months of calendar year
25 1972 through the calendar year 1973 and at the rate of nine and
26 one-half per cent per annum upon each dollar of taxable income
27 of such corporation received by, and accruing to, such
28 corporation during the calendar years 1974, 1975 and 1976 and at
29 the rate of ten 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 calendar year 1977 through the
2 calendar year 1984 and at the rate of nine and one-half per cent
3 per annum upon each dollar of taxable income of such corporation
4 received by and accruing to such corporation during the calendar
5 year 1985 through calendar year 1986 and at the rate of eight
6 and one-half per cent per annum upon each dollar of taxable
7 income of such corporation received by and accruing to such
8 corporation during the calendar year 1987 through the calendar
9 year 1990 and at the rate of ten and one-half per cent per annum
10 upon each dollar of taxable income of such corporation received
11 by and accruing to such corporation during calendar year 1991
12 through the calendar year [1996] 1994 and at the rate of nine
13 and ninety-nine hundredths per cent per annum upon each dollar
14 of taxable income of such corporation received by and accruing
15 to such corporation during the calendar year [1997] 1995 and
16 during each calendar year thereafter, with an additional surtax
17 equal to one and seventy-five hundredths per cent per annum upon
18 each dollar of taxable income of such corporation received by
19 and accruing to such corporation during calendar year 1991 and
20 through calendar year 1993 and with an additional surtax equal
21 to one and forty-nine hundredths per cent per annum upon each
22 dollar of taxable income of such corporation received by and
23 accruing to such corporation during calendar year 1994 and with
24 [an additional surtax equal to forty-nine hundredths per cent
25 per annum upon each dollar of taxable income of such corporation
26 received by and accruing to such corporation during calendar
27 year 1995 and with an additional surtax equal to one-quarter of
28 one per cent per annum upon each dollar of taxable income of
29 such corporation received by and accruing to such corporation
30 during calendar year 1996 and with] no surtax during calendar
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1 year [1997] 1995 and each calendar year thereafter, except where
2 a corporation reports to the Federal Government on the basis of
3 a fiscal year, and has certified such fact to the department as
4 required by section 403 of this article, in which case, such
5 tax, at the rate of twelve per cent, shall be levied, collected,
6 and paid upon all taxable income received by, and accruing to,
7 such corporation during the first six months of the fiscal year
8 commencing in the calendar year 1972 and at the rate of eleven
9 per cent, shall be levied, collected, and paid upon all taxable
10 income received by, and accruing to, such corporation during the
11 second six months of the fiscal year commencing in the calendar
12 year 1972 and during the fiscal year commencing in the calendar
13 year 1973 and at the rate of nine and one-half per cent, shall
14 be levied, collected, and paid upon all taxable income received
15 by, and accruing to, such corporation during the fiscal year
16 commencing in the calendar years 1974, 1975 and 1976 and at the
17 rate of ten and one-half per cent, shall be levied, collected,
18 and paid upon all taxable income received by, and accruing to,
19 such corporation during the fiscal year commencing in the
20 calendar year 1977 through the fiscal year commencing in 1984
21 and at the rate of nine and one-half per cent, shall be levied,
22 collected, and paid upon all taxable income received by and
23 accruing to such corporation during the fiscal year commencing
24 in 1985 through the fiscal year commencing in 1986 and at the
25 rate of eight and one-half per cent per annum upon each dollar
26 of taxable income of such corporation received by and accruing
27 to such corporation during the fiscal year commencing in 1987
28 through the fiscal year commencing in 1990 and at the rate of
29 ten and one-half per cent per annum upon each dollar of taxable
30 income of such corporation received by and accruing to such
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1 corporation during the fiscal year commencing in 1991 through
2 the fiscal year commencing in [1996] 1994 and at the rate of
3 nine and ninety-nine hundredths per cent per annum upon each
4 dollar of taxable income of such corporation received by and
5 accruing to such corporation during the fiscal year commencing
6 in [1997] 1995 and during each fiscal year thereafter, with an
7 additional surtax equal to one and seventy-five hundredths per
8 cent per annum upon each dollar of taxable income of such
9 corporation received by and accruing to such corporation during
10 the fiscal year commencing in 1991 and through fiscal year 1993
11 and with an additional surtax equal to one and forty-nine
12 hundredths per cent per annum upon each dollar of taxable income
13 of such corporation received by and accruing to such corporation
14 during fiscal year 1994 and with [an additional surtax equal to
15 forty-nine hundredths per cent per annum upon each dollar of
16 taxable income of such corporation received by and accruing to
17 such corporation during the fiscal year commencing in 1995 and
18 with an additional surtax equal to one-quarter of one per cent
19 per annum upon each dollar of taxable income of such corporation
20 received by and accruing to such corporation during the fiscal
21 year commencing in 1996 and with] no surtax during the fiscal
22 year commencing in [1997] 1995 and each fiscal year thereafter.
23 No penalty prescribed by subsection (e) of section 3003 shall be
24 assessed against a corporation for the additional tax which may
25 be due as a result of the increase in tax rate from nine and
26 one-half per cent to ten and one-half per cent imposed
27 retroactively by this section for the calendar year 1977 or for
28 the fiscal year commencing in 1977.
29 Section 3. Section 901(3) of the act is repealed.
30 Section 4. Sections 902 and 903 of the act, amended August
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1 4, 1991 (P.L.97, No.22), are amended to read:
2 Section 902. (a) Imposition of Tax.--Every insurance
3 company, as herein defined, transacting business in the
4 Commonwealth of Pennsylvania, shall pay to the department, a tax
5 at the rate of two per cent of the gross premiums [and annuity
6 considerations] received from business done within this
7 Commonwealth during each calendar year, except that any
8 insurance company which was not subject to this tax prior to
9 1971 shall be taxed at the rate of one per cent for the year
10 1971 and thereafter at the rate of two per cent.
11 (b) Disposition of Taxes.--
12 (1) The taxes paid by foreign fire insurance companies under
13 this act shall continue to be distributed and used for firemen's
14 relief pension or retirement purposes, as provided by section
15 two of the act, approved the twenty-eighth day of June, one
16 thousand eight hundred ninety-five (Pamphlet Laws 408), as
17 amended; and the taxes paid by foreign casualty insurance
18 companies under this act shall continue to be distributed and
19 used for police pension, retirement or disability purposes as
20 provided by the act, approved the twelfth day of May, one
21 thousand nine hundred forty-three (Pamphlet Laws 259), as
22 amended.
23 (2) All other taxes received under this act shall be
24 credited to the General Fund for general revenue purposes.
25 Section 903. Annual Report.--Every insurance company shall
26 make a report to the department on a form prescribed by it on or
27 before April 15 of each year, showing the gross premiums [and
28 annuity considerations] received from business transacted in the
29 Commonwealth during the year ending December 31 preceding. When
30 making such report, the insurance company shall compute and pay
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1 to the Commonwealth the tax upon the gross premiums [and annuity
2 considerations] received from business transacted within this
3 Commonwealth during such preceding year.
4 Section 5. The amendment of section 402 of the act shall
5 apply to the calendar year beginning January 1, 1995, and each
6 calendar year thereafter and to the fiscal year beginning on or
7 after January 1, 1995, and each fiscal year thereafter.
8 Section 6. Tentative tax payments required under section
9 3003 of the act on or after the effective date of this section
10 shall be computed by applying the current tax rate to 90% of the
11 tax base, excluding annuity business for the full immediate
12 prior year.
13 Section 7. This act shall take effect as follows:
14 (1) The amendment or repeal of sections 901(3), 902 and
15 903 of the act shall take effect January 1, 1996.
16 (2) Section 6 of this act shall take effect January 1,
17 1996.
18 (3) The remainder of this act shall take effect
19 immediately.
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