PRINTER'S NO. 1203
No. 1057 Session of 1999
INTRODUCED BY S. MILLER, RUBLEY, SAYLOR, DEMPSEY, SAINATO,
LYNCH, GEORGE, COY, FAIRCHILD, GODSHALL, HALUSKA, YEWCIC,
NAILOR, ORIE, STERN, BELFANTI, SHANER, BARRAR, SERAFINI,
McILHINNEY, E. Z. TAYLOR, MAJOR, ARGALL, CORRIGAN, MICOZZIE,
VANCE, STEVENSON, HENNESSEY, PLATTS, STAIRS, METCALFE,
McILHATTAN, HUTCHINSON, WOGAN, FARGO, SOLOBAY, HESS,
COLAFELLA, ZUG, COSTA, ROBERTS, B. SMITH, FLICK, MARSICO,
LAUGHLIN, J. TAYLOR, BAKER, FORCIER, WILLIAMS, LUCYK,
SEYFERT, GEIST, YOUNGBLOOD, HERSHEY, MAHER, LEH, TRAVAGLIO,
WILT, ROHRER AND McCALL, MARCH 24, 1999
REFERRED TO COMMITTEE ON FINANCE, MARCH 24, 1999
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," providing for a phased reduction of the rate of
11 inheritance tax; and further providing for the calculation of
12 the estate tax.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Section 2106 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 2106. Imposition of Tax.--[An]
19 (1) Except as provided in paragraph (2), an inheritance tax
1 for the use of the Commonwealth is imposed upon every transfer
2 subject to tax under this article at the rates specified in
3 section 2116.
4 (2) The transfer of property for estates of decedents dying
5 after December 31, 2008, is not subject to the inheritance tax.
6 Section 2. Section 2116(a) of the act, amended June 16, 1994
7 (P.L.279, No.48) and June 30, 1995 (P.L.139, No.21), is amended
8 to read:
9 Section 2116. Inheritance Tax.--(a) (1) Inheritance tax
10 upon the transfer of property passing to or for the use of any
11 of the following shall be at the rate of six per cent[:] for the
12 estate of a decedent dying before or on December 31, 1999, at a
13 rate of five per cent for a decedent dying on or after January
14 1, 2000, and before January 1, 2002, at a rate of four per cent
15 for a decedent dying on or after January 1, 2002, and before
16 January 1, 2004, at a rate of three per cent for any decedent
17 dying on or after January 1, 2004 and before January 1, 2006, at
18 a rate of two percent for a decedent dying on or after January
19 1, 2006 and before January 1, 2008, at a rate of one per cent
20 for a decedent dying on or after January 1, 2008 and before
21 January 1, 2009 and at a rate of zero per cent for any decedent
22 dying on or after January 1, 2009.:
23 (i) grandfather, grandmother, father, mother and lineal
24 descendants; or
25 (ii) wife or widow and husband or widower of a child.
26 (1.1) Inheritance tax upon the transfer of property passing
27 to or for the use of a husband or wife shall be:
28 (i) At the rate of three per cent for estates of decedents
29 dying on or after July 1, 1994, and before January 1, 1995.
30 (ii) At a rate of zero per cent for estates of decedents
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1 dying on or after January 1, 1995.
2 (2) Inheritance tax upon the transfer of property passing to
3 or for the use of all persons other than those designated in
4 subclause (1) or (1.1) or exempt under section 2111(m) shall be
5 at the rate of fifteen per cent[.] for a decedent dying before
6 or on December 31, 1999, at a rate of thirteen per cent for a
7 decedent dying on or after January 1, 2000, and before January
8 1, 2002, at a rate of eleven per cent for a decedent dying on or
9 after January 1, 2002, and before January 1, 2004 at a rate of
10 nine per cent for a decedent dying on or after January 1, 2004
11 and before January 1, 2006, at a rate of six per cent for a
12 decedent dying on or after January 1, 2006 and before January 1,
13 2008, at a rate of three per cent for a decedent dying on or
14 after January 1, 2008 and before January 1, 2009 and at a rate
15 of zero per cent for any decedent dying on or after January 1,
16 2009.
17 (3) When property passes to or for the use of a husband and
18 wife with right of survivorship, one of whom is taxable at a
19 rate lower than the other, the lower rate of tax shall be
20 applied to the entire interest.
21 * * *
22 Section 3. Section 2117 of the act, added August 4, 1991
23 (P.L.97, No.22), is amended to read:
24 Section 2117. Estate Tax.--(a) In the event that a Federal
25 estate tax is payable to the Federal Government on the transfer
26 of the taxable estate of a decedent who was a resident of this
27 Commonwealth at the time of his death, and the inheritance tax,
28 if any, actually paid to the Commonwealth by reason of the death
29 of the decedent (disregarding interest or the amount of any
30 discount allowed under section 2142) is less than the maximum
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1 credit for State death taxes allowable under section 2011 of the
2 Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
3 2011), a tax equal to the difference is imposed. If a resident
4 decedent owned or had an interest in real property or tangible
5 personal property having a situs in another state, the tax so
6 imposed shall be reduced by the greater of:
7 (1) the amount of death taxes actually paid to the other
8 state with respect to the estate of the decedent, excluding any
9 death tax expressly imposed to receive the benefit of the credit
10 for state death taxes allowed under section 2011 of the Internal
11 Revenue Code of 1986; or
12 (2) an amount computed by multiplying the maximum credit for
13 state death taxes allowable under section 2011 of the Internal
14 Revenue code of 1986 by a fraction, the numerator of which is
15 the value of the real property and tangible personal property to
16 the extent included in the decedent's gross estate for Federal
17 estate tax purposes and having a situs in the other state and
18 the denominator of which is the value of the decedent's gross
19 estate for Federal estate tax purposes.
20 (b) In the event that a Federal estate tax is payable to the
21 Federal Government on the transfer of the taxable estate of a
22 decedent who was not a resident of this Commonwealth at the time
23 of his death but who owned or had an interest in real property
24 or tangible personal property having a situs in this
25 Commonwealth, a tax is imposed in an amount computed by
26 multiplying the maximum credit for State death taxes allowable
27 under section 2011 of the Internal Revenue Code of 1986 by a
28 fraction, the numerator of which is the value of the real
29 property and tangible personal property to the extent included
30 in the decedent's gross estate for Federal estate tax purposes
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1 having a situs in this Commonwealth and the denominator of which
2 is the value of the decedent's gross estate for Federal estate
3 tax purposes[, and deducting from that amount the inheritance
4 tax, if any, actually paid to the Commonwealth (disregarding
5 interest or the amount of any discount allowed under section
6 2142)].
7 (c) When an inheritance tax is imposed after an estate tax
8 imposed under subsection (a) or (b) has been paid, the estate
9 tax paid shall be credited against any inheritance tax later
10 imposed.
11 Section 4. This act shall take effect immediately.
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