PRINTER'S NO. 3515
No. 2463 Session of 2004
INTRODUCED BY DENLINGER, ARGALL, ARMSTRONG, BALDWIN, BARRAR,
BOYD, CAPPELLI, CLYMER, CRAHALLA, CREIGHTON, DALLY,
FAIRCHILD, GINGRICH, GOOD, HABAY, HERSHEY, HICKERNELL,
HUTCHINSON, KILLION, KIRKLAND, LEH, MAHER, MARKOSEK,
METCALFE, MILLARD, MUSTIO, NICKOL, PICKETT, REED, REICHLEY,
ROHRER, RUBLEY, SAYLOR, SCHRODER, SEMMEL, STERN,
R. STEVENSON, T. STEVENSON, THOMAS, TURZAI, WEBER AND WILT,
MARCH 23, 2004
REFERRED TO COMMITTEE ON FINANCE, MARCH 23, 2004
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 defining "taxable income" for purposes of
11 the corporate net income tax.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. Section 401(3)1(r) and (s) of the act of March 4,
15 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, added
16 June 29, 2002 (P.L.559, No.89), are amended and the subclause is
17 amended by adding paragraphs to read:
18 Section 401. Definitions.--The following words, terms, and
19 phrases, when used in this article, shall have the meaning
1 ascribed to them in this section, except where the context
2 clearly indicates a different meaning:
3 * * *
4 (3) "Taxable income." 1. * * *
5 (r) Notwithstanding paragraph (a), if a deduction for
6 depreciation of qualified property was included in taxable
7 income in accordance with paragraph (q), an additional deduction
8 for depreciation of the qualified property shall be allowed from
9 taxable income until the total amount included as taxable income
10 under paragraph (q) has been claimed. [The additional deduction]
11 (r.1) With respect to qualified property on which the thirty
12 per cent bonus depreciation under section 168(k)(1) of the
13 Internal Revenue Code of 1986 (26 U.S.C. § 168(k)(1)) is
14 allowable and has been claimed, the additional deduction under
15 paragraph (r) shall be equal to the product of taking three
16 sevenths of the amount of the deduction for depreciation of
17 [the] such qualified property allowable under section 167 of the
18 Internal Revenue Code of 1986 (26 U.S.C. § 167), not including
19 the amount of the deduction for depreciation of [the] such
20 qualified property claimed and allowable under section 168(k) of
21 the Internal Revenue Code of 1986 (26 U.S.C. § 168(k)), for the
22 tax year.
23 (r.2) With respect to qualified property on which the fifty
24 per cent bonus depreciation under section 168(k)(4) (26 U.S.C. §
25 168(k)(4)) of the Internal Revenue Code of 1986 is allowable and
26 has been claimed, the additional deduction under paragraph (r)
27 shall be equal to one hundred per cent of the amount of the
28 deduction for depreciation of such qualified property allowable
29 under section 167 of the Internal Revenue Code of 1986 (26
30 U.S.C. § 167), not including the amount of the deduction for
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1 depreciation of such qualified property claimed and allowable
2 under section 168(k) of the Internal Revenue Code of 1986 (26
3 U.S.C. § 168(k)), for the tax year.
4 (s) With respect to qualified property which is sold or
5 otherwise disposed of during a taxable year by a taxpayer and
6 for which depreciation was included as taxable income under
7 paragraph (q), an additional deduction shall be allowed from
8 taxable income to the extent the amount of depreciation claimed
9 under section 168(k) of the Internal Revenue Code of 1986 (26
10 U.S.C. § 168(k)) on the qualified property has not been
11 recovered through the additional deductions provided by
12 [paragraph (r)] paragraphs (r), (r.1) and (r.2).
13 * * *
14 Section 2. This act shall apply retroactively to taxable
15 years beginning after December 31, 2001.
16 Section 3. This act shall take effect immediately.
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