PRIOR PRINTER'S NOS. 1586, 2299 PRINTER'S NO. 2565
No. 176 Session of 2005
Report of the Committee of Conference
To the Members of the House of Representatives and Senate:
We, the undersigned, Committee of Conference on the part of
the House of Representatives and Senate for the purpose of
considering House Bill No. 176, entitled:
"An act amending the act of March 4, 1971 (P.L.6, No.2),
entitled 'An act relating to tax reform and State taxation by
codifying and enumerating certain subjects of taxation and
imposing taxes thereon; * * * prescribing crimes, offenses and
penalties,' further providing, in realty transfer tax, for
determination and notice of tax and review; providing, in realty
transfer tax, for sharing information; * * * providing, in local
real estate transfer tax, for regulations, for documentary
stamps, for collection agents, for disbursements, for judicial
sale proceeds, for stamps, for determination and review, for
liens, for refunds, for civil penalties, for violations and for
information; and making repeals,"
respectfully submit the following bill as our report:
SAMUEL H. SMITH
BRETT FEESE
DAVID K. LEVDANSKY
(Committee on the part of the House of Representatives.)
DAVID J. BRIGHTBILL
JOHN N. WOZNIAK
JANE M. EARLL
(Committee on the part of the Senate.)
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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, in sales and use tax, for
11 alternate imposition; providing, in personal income tax, for
12 definitions, for classes of income and for contributions to
13 the Olympics; providing, in personal income tax, for
14 contributions for military family relief assistance and for
15 operational provisions; further providing, in personal income
16 tax, for additions, penalties and fees; further providing, in
17 corporate net income tax, for definitions; further providing,
18 in capital stock franchise tax, for definitions and reports;
19 further providing, in realty transfer tax, for determination
20 and notice; providing, in realty transfer tax, for sharing
21 information; further providing, in local real estate transfer
22 tax, for imposition and for administration; providing, in
23 local real estate transfer tax, for regulations, for
24 documentary stamps, for collection agents, for disbursements,
25 for proceeds of judicial sale, for failure to affix stamps,
26 for determination and notice of tax, for liens, for refunds,
27 for civil penalties, for unlawful acts and penalties and for
28 information; further providing, in the research and
29 development tax credit, for definitions and for Pennsylvania
30 S Corporation pass-through; further providing, in the film
31 production tax credit, for definitions and for credit for
32 qualified film production expenses; providing, in the film
33 production tax credit, for credits; further providing in the
34 film production tax credit, for disposition and for
35 limitation; providing, in the film production tax credit, for
36 penalties; further providing, in the film production tax
37 credit, for pass-through entities and report; further
38 providing, in the neighborhood assistance tax credit, for
39 grant; further providing, in general provisions, for bad
40 checks; providing, in general provisions, for electronic
41 transmissions and for reimbursement for costs of collection;
42 continuing ordinances and resolutions relating to real
43 property tax transfers; and making repeals.
44 The General Assembly of the Commonwealth of Pennsylvania
45 hereby enacts as follows:
46 Section 1. Section 205(a) of the act of March 4, 1971
47 (P.L.6, No.2), known as the Tax Reform Code of 1971, amended
48 August 4, 1991 (P.L.97, No.22), is amended to read:
49 Section 205. Alternate Imposition of Tax; Credits.--(a) If
50 any person actively and principally engaged in the business of
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1 selling new or used motor vehicles, trailers or semi-trailers,
2 and registered with the department in the "dealer's class,"
3 acquires a motor vehicle, trailer or semi-trailer for the
4 purpose of resale, and prior to such resale, uses the motor
5 vehicle, trailer or semi-trailer for a taxable use under this
6 act [during a period not exceeding one year from the date of
7 acquisition to the date of resale], such person may [within ten
8 days of the commencement of such use, elect to] pay a tax equal
9 to six per cent of the fair rental value of the motor vehicle,
10 trailer or semi-trailer during such use. [Should such motor
11 vehicle, trailer or semi-trailer be used for a taxable use after
12 a period of one year, the taxpayer shall be liable for a tax on
13 the fair market value of such motor vehicle, trailer or semi-
14 trailer at the time of acquisition, but shall be allowed a
15 credit equal to the tax paid pursuant to the election provided
16 for in this section.] This section shall not apply to the use of
17 a vehicle as a wrecker, parts truck, delivery truck or courtesy
18 car.
19 * * *
20 Section 2. Section 301 introductory paragraph, (a) and (d)
21 of the act, amended December 23, 1983 (P.L.370, No.90), April
22 23, 1998 (P.L.239, No.45) and June 29, 2002 (P.L.559, No.89),
23 are amended to read:
24 Section 301. Definitions.--Any reference in this article to
25 the Internal Revenue Code of 1986 shall mean the Internal
26 Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.),
27 as amended to January 1, 1997, unless the reference contains the
28 phrase "as amended" and refers to no other date, in which case
29 the reference shall be to the Internal Revenue Code of 1986 as
30 it exists as of the time of application of this article. The
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1 following words, terms and phrases when used in this article
2 shall have the meaning ascribed to them in this section except
3 where the context clearly indicates a different meaning[, and,
4 unless specifically provided otherwise, any reference in this
5 article to the Internal Revenue Code of 1986 shall mean the
6 Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1
7 et seq.), as amended to January 1, 1997]:
8 (a) "Accepted accounting principles and practices" means,
9 unless otherwise explicitly provided for in this article, those
10 accounting principles, systems or practices, including the
11 installment sales method of reporting, which are acceptable by
12 standards of the accounting profession and which are not
13 inconsistent with the regulations of the department setting
14 forth such principles and practices.
15 * * *
16 (d) "Compensation" means and shall include salaries, wages,
17 commissions, bonuses and incentive payments whether based on
18 profits or otherwise, fees, tips and similar remuneration
19 received for services rendered, whether directly or through an
20 agent, and whether in cash or in property. The term
21 "compensation" shall include any part of a distribution under a
22 plan described in section 409A(d)(1) of the Internal Revenue
23 Code of 1986 (Public Law 99-514, 26 U.S.C. § 409A(d)(1)), as
24 amended, attributable to an elective deferral of income or the
25 income on any elective deferral of income, whether paid or
26 payable during employment or to a retired person upon or after
27 retirement from service.
28 The term "compensation" shall not mean or include: (i)
29 periodic payments for sickness and disability other than regular
30 wages received during a period of sickness or disability; or
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1 (ii) disability, retirement or other payments arising under
2 workmen's compensation acts, occupational disease acts and
3 similar legislation by any government; or (iii) payments
4 commonly recognized as old age or retirement benefits paid to
5 persons retired from service after reaching a specific age or
6 after a stated period of employment; or (iv) payments commonly
7 known as public assistance, or unemployment compensation
8 payments by any governmental agency; or (v) payments to
9 reimburse actual expenses; or (vi) payments made by employers or
10 labor unions, including payments made pursuant to a cafeteria
11 plan qualifying under section 125 of the Internal Revenue Code
12 of 1986 (Public Law 99-514, 26 U.S.C. § 125), for employe
13 benefit programs covering hospitalization, sickness, disability
14 or death, supplemental unemployment benefits or strike benefits:
15 Provided, That the program does not discriminate in favor of
16 highly compensated individuals as to eligibility to participate,
17 payments or program benefits; or (vii) any compensation received
18 by United States servicemen serving in a combat zone; or (viii)
19 payments received by a foster parent for in-home care of foster
20 children from an agency of the Commonwealth or a political
21 subdivision thereof or an organization exempt from Federal tax
22 under section 501(c)(3) of the Internal Revenue Code of 1954
23 which is licensed by the Commonwealth or a political subdivision
24 thereof as a placement agency; or (ix) payments made by
25 employers or labor unions for employe benefit programs covering
26 social security or retirement; or (x) personal use of an
27 employer's owned or leased property or of employer-provided
28 services.
29 * * *
30 Section 3. Section 303(a)(1) and (6) of the act, amended or
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1 added August 31, 1971 (P.L.362, No.93) and March 13, 1974
2 (P.L.179, No.32), are amended and the section is amended by
3 adding subsections to read:
4 Section 303. Classes of Income.--(a) The classes of income
5 referred to above are as follows:
6 (1) Compensation.
7 (i) All salaries, wages, commissions, bonuses and incentive
8 payments whether based on profits or otherwise, fees, tips and
9 similar remuneration received for services rendered whether
10 directly or through an agent and whether in cash or in property
11 except income derived from the United States Government for
12 active duty outside the Commonwealth of Pennsylvania as a member
13 of its armed forces.
14 (ii) Compensation of a cash basis taxpayer shall be
15 considered as received if the compensation is actually or
16 constructively received for Federal income tax purposes as
17 determined consistent with the United States Treasury
18 regulations and rulings under the Internal Revenue Code of 1986,
19 as amended, except that, for purposes of computing tax under
20 this article:
21 (A) Amounts lawfully deducted, not deferred, and withheld
22 from the compensation of employes shall be considered to have
23 been received by the employe as compensation at the time the
24 deduction is made.
25 (B) Contributions to an employes' trust, pooled fund, or
26 other arrangement which is not subject to the claims of
27 creditors of the employer made by an employer on behalf of an
28 employe or self-employed individual at the election of the
29 employe or self-employed individual pursuant to a cash or
30 deferred arrangement or salary reduction agreement shall be
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1 deemed to have been received by the employe or individual as
2 compensation at the time the contribution is made, regardless of
3 when the election is made or a payment is received.
4 (C) Any contribution to a plan by, on behalf of or
5 attributable to a self-employed person shall be deemed to have
6 been received at the time the contribution is made.
7 (D) Employer contributions to a Roth IRA custodial account
8 or employe annuity shall be deemed received, earned or acquired
9 only when distributed, when the plan fails to meet the
10 requirements of section 408A of the Internal Revenue Code of
11 1986 (26 U.S.C. § 408A), as amended, or when the plan is not
12 operated in accordance with such requirements.
13 (E) Employe contributions to an employes' trust or pooled
14 fund or custodial account or contract or employe annuity shall
15 not be deducted or excluded from compensation.
16 (iii) For purposes of determining when deferred compensation
17 of employes other than employes of exempt organizations and
18 State and local governments is required to be included in
19 income, the following apply:
20 (A) The rules of sections 83 and 451 of the Internal Revenue
21 Code of 1986 (26 U.S.C. §§ 83 and 451), as amended, shall apply.
22 (B) The rules of section 409A of the Internal Revenue Code
23 of 1986 (26 U.S.C. § 409A), as amended, shall apply.
24 (iv) For purposes of determining when deferred compensation
25 of employes of exempt organizations and State and local
26 governments is required to be included in income, the following
27 apply:
28 (A) The rules of sections 83, 451 and 457 of the Internal
29 Revenue Code of 1986, as amended, shall apply.
30 (B) The rules of section 409A of the Internal Revenue Code
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1 of 1986, as amended, shall apply.
2 * * *
3 (6) Interest derived from obligations which are not
4 statutorily free from State or local taxation under any other
5 act of the General Assembly of the Commonwealth of Pennsylvania
6 or under the laws of the United States and any amount paid under
7 contract of life insurance or endowment or annuity contract,
8 which is includable in gross income for Federal income tax
9 purposes.
10 * * *
11 (a.4) This article shall be subject to applicable Federal
12 limitations on state income taxation.
13 (a.5) The requirements of section 1035 of the Internal
14 Revenue Code of 1986 (26 U.S.C. § 1035), as amended, shall be
15 applicable.
16 * * *
17 Section 4. Section 315.5 of the act, added May 7, 1997
18 (P.L.85, No.7), is amended to read:
19 [Section 315.5. Contributions for Olympics.--(a) The
20 department shall provide a space on the Pennsylvania individual
21 income tax return form whereby an individual may voluntarily
22 designate a contribution of any amount desired to the United
23 States Olympic Committee, Pennsylvania Division.
24 (b) The amount so designated by an individual on the income
25 tax return form shall be deducted from the tax refund to which
26 such individual is entitled and shall not constitute a charge
27 against the income tax revenues due the Commonwealth.
28 (c) The department shall determine annually the total amount
29 designated pursuant to this section, less reasonable
30 administrative costs, and shall report such amount to the State
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1 Treasurer who shall transfer such amount from the General Fund
2 to the United States Olympic Committee, Pennsylvania Division.]
3 Section 5. The act is amended by adding sections to read:
4 Section 315.8. Contributions for Military Family Relief
5 Assistance.--(a) Beginning with taxable years ending after
6 December 31, 2004, the department shall provide a space on the
7 Pennsylvania individual income tax return form whereby an
8 individual may contribute to a fund for military family relief
9 assistance. Persons may do so by stating the amount of the
10 contribution, not less than one dollar ($1), on the return and
11 that the contribution will reduce the taxpayer's refund.
12 (b) The department shall determine annually the total amount
13 designated under this section, less reasonable administrative
14 costs, and shall report the amount to the State Treasurer who
15 shall transfer the amount to a restricted revenue account within
16 the General Fund to be used by the Department of Military and
17 Veterans Affairs for contributions to military family relief
18 assistance as provided by statute.
19 (c) The department shall provide adequate information
20 concerning the checkoff for military family relief assistance in
21 its instructions which accompany the Pennsylvania income tax
22 return forms. The information concerning the checkoff shall
23 include the listing of an address furnished by the Department of
24 Military and Veterans Affairs to which contributions may be sent
25 by taxpayers wishing to contribute to this effort but who do not
26 receive refunds.
27 (d) The Department of Military and Veterans Affairs shall
28 report annually to the respective committees of the Senate and
29 the House of Representatives which have jurisdiction over
30 military and veterans affairs on the amount received via the
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1 checkoff plan and how the funds were utilized.
2 Section 315.9. Operational Provisions.--(a) Except for the
3 checkoff established under sections 315.6 and 315.7 and except
4 as otherwise provided under subsection (b), the checkoffs
5 established under this part shall apply through taxable years
6 ending December 31, 2007.
7 (b) Any checkoff established under this part and applicable
8 for the first time in a taxable year beginning after December
9 31, 2003, shall expire four years after the beginning of such
10 first taxable year.
11 (c) Sections 315.2, 315.3 and 315.4 shall expire January 1,
12 2008.
13 Section 6. Section 352(d) and (f) of the act, amended August
14 4, 1991 (P.L.97, No.22), are amended to read:
15 Section 352. Additions, Penalties and Fees.--* * *
16 (d) (1) If any taxpayer fails to pay all or any part of an
17 installment of estimated tax, he shall be deemed to have made an
18 underpayment of estimated tax. There shall be added to the tax
19 for the taxable year an amount at the rate established pursuant
20 to section 806 of the act of April 9, 1929 (P.L.343, No.176),
21 known as "The Fiscal Code," upon the amount of the underpayment
22 for the period of the underpayment but not beyond the fifteenth
23 day of the fourth month following the close of the taxable year.
24 The amount of the underpayment shall be the excess of the amount
25 of the installment which would be required to be paid if the
26 estimated tax were equal to ninety per cent of the tax (two-
27 thirds in the case of an individual described in subsection (e)
28 of section 325) shown on the return for the taxable year (or if
29 no return was filed, of the tax for such year) over the amount,
30 if any, of the installments paid on or before the last day
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1 prescribed for such payment. No underpayment shall be deemed to
2 exist with respect to an installment otherwise due on or after
3 the taxpayer's death or, in the case of a decedent's estate or a
4 trust created by the decedent to receive the residue of the
5 decedent's estate, for a period of two years after the
6 decedent's death.
7 (2) No addition to tax shall be imposed if the total amount
8 of all payments of estimated tax made on or before the last date
9 prescribed for the payment of such installment equals or exceeds
10 the lesser of:
11 (A) The amount which would have been required to be paid on
12 or before such date if the estimated tax were an amount equal to
13 the tax computed, at the rates applicable to the taxable year,
14 but otherwise on the basis of the facts shown on his return for,
15 and the law applicable to, the preceding taxable year; or
16 (B) An amount equal to ninety per cent of the tax computed,
17 at the rates applicable to the taxable year, on the basis of the
18 actual income for the months in the taxable year ending before
19 the month in which the installment is required to be paid[.],
20 or, in the case of a trust or estate, an amount equal to ninety
21 per cent of the applicable percentage of the tax for the taxable
22 year as determined pursuant to section 6654(d)(2)(C)(ii) of the
23 Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
24 6654), as amended, at rates applicable to the taxable year,
25 computed on an annualized basis in accordance with United States
26 Treasury regulations, based upon the actual income for the
27 months of the taxable year ending with the last day of the
28 second preceding month prior to the month in which the
29 installment is required to be paid.
30 * * *
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1 (f) (1) Any person required under the provisions of section
2 317 to furnish a statement to an employe who wilfully furnishes
3 a false or fraudulent statement, or who wilfully fails to
4 furnish a statement in the manner, at the time, and showing the
5 information required under section 317 and the regulations
6 prescribed thereunder, shall, for each such failure, be subject
7 to a penalty of fifty dollars ($50) for each employe.
8 (2) Any person required by regulation to furnish an
9 information return who furnishes a false or fraudulent return
10 shall for each failure be subject to a penalty of [fifty dollars
11 ($50)] two hundred fifty dollars ($250).
12 * * *
13 Section 7. Section 401(1) of the act, amended June 29, 2002
14 (P.L.559, No.89) and December 23, 2003 (P.L.250, No.46), is
15 amended to read:
16 Section 401. Definitions.--The following words, terms, and
17 phrases, when used in this article, shall have the meaning
18 ascribed to them in this section, except where the context
19 clearly indicates a different meaning:
20 (1) "Corporation." Any of the following:
21 (i) A corporation.
22 (ii) A joint-stock association.
23 (iii) A business trust, limited liability company or other
24 entity which for Federal income tax purposes is classified as a
25 corporation.
26 The term does not include:
27 1. A business trust which qualifies as a real estate
28 investment trust under section 856 of the Internal Revenue Code
29 of 1986 (Public Law 99-514, 26 U.S.C. § 856) or which is a
30 qualified real estate investment trust subsidiary under section
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1 856(i) of the Internal Revenue Code of 1986 (26 U.S.C. §
2 856(i)).
3 2. A business trust which qualifies as a regulated
4 investment company under section 851 of the Internal Revenue
5 Code of 1986 (26 U.S.C. § 856(i)) and which is registered with
6 the United States Securities and Exchange Commission under the
7 Investment Company Act of 1940 or a related business trust which
8 confines its activities in this Commonwealth to the maintenance,
9 administration and management of intangible investments and
10 activities of regulated investment companies.
11 3. A corporation, trust or other entity which is an exempt
12 organization as defined by section 501 of the Internal Revenue
13 Code of 1986 (26 U.S.C. § 501).
14 4. A corporation, trust or other entity organized as a not-
15 for-profit under the laws of this Commonwealth or the laws of
16 any other state which:
17 (i) would qualify as an exempt organization as defined by
18 section 501 of the Internal Revenue Code of 1986 (26 U.S.C. §
19 501);
20 (ii) would qualify as a homeowners association as defined by
21 section 528(c) of the Internal Revenue Code of 1986 (26 U.S.C. §
22 528(c)); [or]
23 (iii) is a membership organization subject to the Federal
24 limitations on deductions from taxable income under section 277
25 of the Internal Revenue Code of 1986 (26 U.S.C. § 277) but only
26 if no pecuniary gain or profit inures to any member or related
27 entity from the membership organization[.]; or
28 (iv) is a nonstock commodity or nonstock stock exchange.
29 * * *
30 Section 8. The definition of "corporation" in section 601(a)
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1 of the act, amended December 23, 2003 (P.L.250, No.46), is
2 amended to read:
3 Section 601. Definitions and Reports.--(a) The following
4 words, terms and phrases when used in this Article VI shall have
5 the meaning ascribed to them in this section, except where the
6 context clearly indicates a different meaning:
7 * * *
8 "Corporation." (A) Any of the following entities:
9 (1) A corporation.
10 (2) A joint-stock association.
11 (3) A business trust.
12 (4) A limited liability company. This clause excludes a
13 restricted professional company which is subject to 15 Pa.C.S.
14 Ch. 89 Subch. L (relating to restricted professional companies)
15 and which is deemed to be a limited partnership pursuant to 15
16 Pa.C.S. § 8997 (relating to taxation of restricted professional
17 companies).
18 (5) An entity which for Federal income tax purposes is
19 classified as a corporation.
20 (6) A business trust which is a real estate investment trust
21 as defined in section 856 of the Internal Revenue Code of 1986
22 (Public Law 99-514, 26 U.S.C. § 856) more than fifty per cent of
23 the voting power or value of the beneficial interests or shares
24 of which are owned or controlled, directly or indirectly, by a
25 single corporation that is not:
26 (i) a real estate investment trust as defined in section 856
27 of the Internal Revenue Code of 1986;
28 (ii) a qualified real estate investment trust subsidiary
29 under section 856(i) of the Internal Revenue Code of 1986;
30 (iii) a regulated financial institution as defined by
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1 section 401(6) of Article IV; or
2 (iv) formed as a holding company, subsidiary or affiliate of
3 a regulated financial institution prior to December 1, 2003.
4 (7) A business trust which is a qualified real estate
5 investment trust subsidiary under section 856(i) of the Internal
6 Revenue Code of 1986 owned, directly or indirectly, by a real
7 estate investment trust as defined in section 856 of the
8 Internal Revenue Code of 1986 more than fifty per cent of the
9 voting power or value of the beneficial interests or shares of
10 which are owned or controlled, directly or indirectly, by a
11 single corporation that is not:
12 (i) a real estate investment trust as defined in section 856
13 of the Internal Revenue Code of 1986;
14 (ii) a qualified real estate investment trust subsidiary
15 under section 856(i) of the Internal Revenue Code of 1986;
16 (iii) a regulated financial institution as defined by
17 section 401(6) of Article IV; or
18 (iv) formed as a holding company, subsidiary or affiliate of
19 a regulated financial institution prior to December 1, 2003.
20 (B) The term does not include any of the following:
21 (1) A business trust which qualifies as a real estate
22 investment trust under section 856 of the Internal Revenue Code
23 of 1986 (26 U.S.C. § 856) or which is a qualified real estate
24 investment trust subsidiary under section 856(i) of the Internal
25 Revenue Code of 1986 (26 U.S.C. § 856(i)).
26 (2) A business trust which qualifies as a regulated
27 investment company under section 851 of the Internal Revenue
28 Code of 1986 (26 U.S.C. § 851) and which is registered with the
29 United States Securities and Exchange Commission under the
30 Investment Company Act of 1940 (54 Stat. 789, 15 U.S.C. § 80a-1
20050H0176B2565 - 16 -
1 et seq.) or a related business trust which confines its
2 activities in this Commonwealth to the maintenance,
3 administration and management of intangible investments and
4 activities of regulated investment companies.
5 (3) A corporation, trust or other entity which is an exempt
6 organization as defined by section 501 of the Internal Revenue
7 Code of 1986 (26 U.S.C. § 501).
8 (4) A corporation, trust or other entity organized as a not-
9 for-profit organization under the laws of this Commonwealth or
10 the laws of any other state which:
11 (i) would qualify as an exempt organization as defined by
12 section 501 of the Internal Revenue Code of 1986 (26 U.S.C. §
13 501);
14 (ii) would qualify as a homeowners association as defined by
15 section 528(c) of the Internal Revenue Code of 1986 (26 U.S.C. §
16 528(c)); [or]
17 (iii) is a membership organization subject to the Federal
18 limitations on deductions from taxable income under section 277
19 of the Internal Revenue Code of 1986 (26 U.S.C. § 277) but only
20 if no pecuniary gain or profit inures to any member or related
21 entity from the membership organization[.]; or
22 (iv) is a nonstock commodity or a nonstock stock exchange.
23 (5) A cooperative agricultural association subject to 15
24 Pa.C.S. Ch. 75 (relating to cooperative agricultural
25 associations).
26 (6) A business trust if the trust is all of the following:
27 (i) Created or managed by an entity which is subject to the
28 tax imposed by Article VII or XV or which is an affiliate of the
29 entity which shares at least eighty per cent common ownership.
30 (ii) Created and managed for the purpose of facilitating the
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1 securitization of intangible assets.
2 (iii) Classified as a partnership or a disregarded entity
3 for Federal income tax purposes.
4 * * *
5 Section 9. Section 1111-C(a) of the act, amended July 2,
6 1986 (P.L.318, No.77), is amended to read:
7 Section 1111-C. Determination and Notice of Tax; Review.--
8 (a) If any person shall fail to pay any tax imposed by this
9 article for which he is liable, the department is hereby
10 authorized and empowered to make a determination of additional
11 tax and interest due by such person based upon any information
12 within its possession or that shall come into its possession.
13 All of such determinations shall be made within three years
14 after the date of the recording of the document[.], subject to
15 the following:
16 (1) If the taxpayer underpays the correct amount of the tax
17 by twenty-five per cent or more, the tax may be assessed at any
18 time within six years after the date of the recording of the
19 document.
20 (2) If any part of an underpayment of tax is due to fraud or
21 an undisclosed, intentional disregard of rules and regulations,
22 the full amount of the tax may be assessed at any time.
23 * * *
24 Section 10. The act is amended by adding a section to read:
25 Section 1114-C. Sharing Information.--Notwithstanding the
26 provisions of any other act, the department may divulge to the
27 proper officer of a political subdivision imposing a local real
28 estate transfer tax, or the authorized representative of that
29 officer, information gained pursuant to the department's
30 administration or collection respecting the collection of realty
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1 transfer tax under this article.
2 Section 11. Sections 1101-D and 1102-D of the act, added
3 July 2, 1986 (P.L.318, No.77), are amended to read:
4 Section 1101-D. Imposition.--The duly constituted
5 authorities of the following political subdivisions--cities of
6 the second class, cities of the second class A, cities of the
7 third class, boroughs, incorporated towns, townships of the
8 first class, townships of the second class, school districts of
9 the first class A, school districts of the second class, school
10 districts of the third class and school districts of the fourth
11 class, in all cases including independent school districts--may,
12 in their discretion, by ordinance or resolution, for general
13 revenue purposes, levy, assess and collect or provide for the
14 levying, assessment and collection of a tax upon a transfer of
15 real property or an interest in real property within the limits
16 of the political subdivision, regardless of where the
17 instruments making the transfers are made, executed or delivered
18 or where the actual settlements on the transfer take place, to
19 the extent that the transactions are subject to the tax imposed
20 by Article XI-C. [In addition, such political subdivision may
21 impose a local real estate transfer tax upon additional classes
22 or types of transactions if the tax was imposed by the political
23 subdivision under the act of December 31, 1965 (P.L.1257,
24 No.511), known as "The Local Tax Enabling Act," prior to the
25 effective date of this article.] A tax imposed under this
26 article shall be subject to rate limitations provided by section
27 5, section 8 and section 17 of the act of December 31, 1965
28 (P.L.1257, No.511), known as "The Local Tax Enabling Act."
29 Section 1102-D. Administration.--[A] (a) The tax [imposed]
30 authorized under this article shall be administered, collected
20050H0176B2565 - 19 -
1 and enforced under the act of December 31, 1965 (P.L.1257,
2 No.511), known as "The Local Tax Enabling Act[.]," provided,
3 however, that, if the correct amount of the tax is not paid by
4 the last date prescribed for timely payment as provided for in
5 section 1102-C, the department may determine the tax, interest
6 and penalty as provided for in section 1109-D and may collect
7 and enforce the tax, interest and penalty in the same manner as
8 tax, interest and penalty imposed by Article XI-C.
9 (b) Whenever a declaration is required to be filed under
10 Article XI-C, a declaration is also required to be filed under
11 this article.
12 Section 12. The act is amended by adding sections to read:
13 Section 1103-D. Regulations.--(a) The regulations
14 promulgated under Article XI-C shall be applicable to the taxes
15 imposed under this article.
16 (b) The Department of Revenue may promulgate and enforce
17 regulations not inconsistent with the provisions of this
18 article.
19 (c) The department, to cover its costs of administration,
20 shall retain an amount equal to costs but not to exceed ten per
21 cent of the tax, interest, and penalty collected and enforced by
22 the department under section 1102-D.
23 Section 1104-D. Documentary Stamps.--(a) The payment of the
24 tax imposed under this article shall be evidenced by the
25 affixing of a documentary stamp or stamps to every document by
26 the person making, executing, delivering or presenting for
27 recording such document. The stamps shall be affixed in such
28 manner that their removal will require the continued application
29 of steam or water, and the person using or affixing the stamps
30 shall write, stamp or cause to be written or stamped thereon the
20050H0176B2565 - 20 -
1 initials of that person's name and the date upon which the
2 stamps are affixed or used so that the stamps may not again be
3 used; provided that the Department of Revenue may prescribe such
4 other method of cancellation as it may deem expedient.
5 (b) The department may, in its discretion, use documentary
6 license meter impressions or similar indicia of payment in lieu
7 of stamps.
8 Section 1105-D. Collection Agent.--The recorder of deeds
9 shall be the collection agent for any political subdivision
10 levying a local real estate transfer tax under this article. The
11 recorder of deeds shall pay tax, interest and penalty collected
12 under this article over to the appropriate political subdivision
13 in accordance with section 6(c) of the act of November 1, 1971
14 (P.L.495, No.113), entitled, as amended, "An act providing for
15 the compensation of county officers in counties of the second
16 through eighth classes, for compensation of district attorneys
17 in cities and counties of the first class, for compensation of
18 district election officers in all counties, for the disposition
19 of fees, for filing of bonds in certain cases and for duties of
20 certain officers."
21 Section 1106-D. Disbursements.--The tax, interest and
22 penalty that the Department of Revenue collects under this
23 article shall be remitted in the manner provided by law to the
24 appropriate recorder of deeds along with the "State Tax Payment
25 Imprint Receipt" which shall provide sufficient information for
26 the recorder of deeds to determine which political subdivisions
27 are entitled to the collections. The recorder of deeds shall
28 record the "State Tax Payment Imprint Receipt" whether or not
29 signed and acknowledged by the Department of Revenue and shall
30 index in the grantor/grantee index to the original document upon
20050H0176B2565 - 21 -
1 which the tax has been paid. The department shall collect from
2 the taxpayer as part of its determination process the county
3 recording fee for the recording of the "State Tax Payment
4 Imprint Receipt."
5 Section 1107-D. Proceeds of Judicial Sale.--The tax imposed
6 under this article shall be fully paid and have priority out of
7 the proceeds of any judicial sale of real estate before any
8 other obligation, claim, lien, judgment, estate or costs of the
9 sale and of the writ upon which the sale is made. The sheriff or
10 other officer conducting the sale shall pay the tax imposed
11 under this article out of the first moneys paid to the sheriff
12 or officer in connection therewith. If the proceeds of the sale
13 are insufficient to pay the entire tax imposed under this
14 article, the purchaser shall be liable for the remaining tax.
15 Section 1108-D. Failure to Affix Stamps.--No document upon
16 which tax is imposed under this article shall at any time be
17 made the basis of any action or other legal proceeding, nor
18 shall proof thereof be offered or received in evidence in any
19 court of this Commonwealth or recorded in the office of any
20 recorder of deeds of any county of this Commonwealth unless a
21 documentary stamp or stamps as provided in this article have
22 been affixed thereto.
23 Section 1109-D. Determination and Notice of Tax; Review.--
24 (a) If any person fails to pay any tax imposed under this
25 article for which that person is liable, a political subdivision
26 may authorize the Department of Revenue to make a determination
27 of additional tax, penalty and interest due under this section
28 by the person. The determination will be based upon any
29 information which is within the possession or which will come
30 into the possession of the department. The determination will be
20050H0176B2565 - 22 -
1 made within three years after the date of the recording of the
2 document, subject to the following:
3 (1) If the taxpayer underpays the correct amount of the tax
4 by twenty-five per cent or more, the tax may be assessed at any
5 time within six years after the date of the recording of the
6 document.
7 (2) If any part of an underpayment of tax is due to fraud or
8 an undisclosed, intentional disregard of rules and regulations,
9 the full amount of the tax may be assessed at any time.
10 (b) (1) Promptly after the date of such determination, the
11 department shall send by mail a copy thereof to the person
12 against whom it was made. Within ninety days after the date upon
13 which the copy of the determination was mailed, the person may
14 file with the department a petition for redetermination of the
15 taxes.
16 (2) Every petition for redetermination must state
17 specifically the reasons which the petitioner believes to be
18 entitled to redetermination and shall be supported by
19 affirmation that it is not made for the purpose of delay and
20 that the facts set forth therein are true.
21 (3) The department, within six months after the date of
22 filing of a petition for redetermination, shall dispose of the
23 petition. Notice of the action taken upon a petition for
24 redetermination shall be given to the petitioner promptly after
25 the date of redetermination by the department.
26 (c) A person shall have the right to review by the Board of
27 Finance and Revenue and appeal in the same manner and within the
28 same time as provided by law in the case of capital stock and
29 franchise taxes imposed upon corporations.
30 (d) (1) Notice of the action of the Board of Finance and
20050H0176B2565 - 23 -
1 Revenue shall be given by mail to the political subdivision. A
2 political subdivision shall have the right to appeal in the same
3 manner and within the same time as provided by law for the
4 Commonwealth in the case of capital stock and franchise taxes
5 imposed upon corporations.
6 (2) The political subdivision may request in writing the
7 Office of General Counsel to render such legal advice and such
8 representation as are required concerning every matter and issue
9 arising in connection with an appeal from a decision of the
10 Board of Finance and Revenue.
11 Section 1110-D. Lien.--(a) Any tax that the Department of
12 Revenue determines to be due under this article and remains
13 unpaid after demand for the same, and all penalties and interest
14 thereon, shall be a lien in favor of the affected political
15 subdivision upon the property, both real and personal, of the
16 person but only after the lien has been entered and docketed of
17 record by the prothonotary of the county where such property is
18 situated.
19 (b) (1) At any time after it makes a determination of
20 additional tax, penalty or interest under this article, the
21 department may transmit to the prothonotaries of the respective
22 counties certified copies of all liens for the taxes, penalties
23 and interest under this article or copies of all liens under
24 Article XI-C and this article on a single form.
25 (2) A prothonotary receiving the lien shall enter and docket
26 the lien of record in the prothonotary's office, which lien
27 shall be indexed as judgments are now indexed.
28 (3) After the department's determination becomes final, a
29 writ of execution may directly issue upon the lien without the
30 issuance and prosecution to judgment of a writ of scire facias;
20050H0176B2565 - 24 -
1 provided that not less than ten days before issuance of any
2 execution on the lien, notice shall be sent by certified mail to
3 the taxpayer at the taxpayer's last known post office address.
4 No prothonotary shall require as a condition precedent to the
5 entry of the liens, the payment of any costs incident thereto.
6 (c) (1) The lien imposed under this section shall have
7 priority from the date of its recording and shall be fully paid
8 and satisfied out of the proceeds of any judicial sale of
9 property subject thereto before any other obligation, judgment,
10 claim, lien or estate to which the property may subsequently
11 become subject, except costs of the sale and of the writ upon
12 which the sale was made, and real estate taxes and municipal
13 claims against such property, but shall be subordinate to
14 mortgages and other liens existing and duly recorded or entered
15 of record prior to the recording of the tax lien.
16 (2) In the case of a judicial sale of property subject to a
17 lien imposed under this section upon a lien or claim over which
18 the lien has priority, the sale shall discharge the lien to the
19 extent only that the proceeds are applied to its payment and the
20 lien shall continue in full force and effect as to the balance
21 remaining unpaid.
22 (d) A lien imposed under this article shall be equal in
23 priority to the lien imposed under Article XI-C.
24 Section 1111-D. Refunds.--(a) Whenever the amount due upon
25 determination, redetermination or review is less than the amount
26 paid on account thereof, the political subdivision shall refund
27 the difference.
28 (b) Where there has been no determination of unpaid tax,
29 application for refund shall be made to the political
30 subdivision in the manner prescribed by the act of December 31,
20050H0176B2565 - 25 -
1 1965 (P.L.1257, No.511), known as "The Local Tax Enabling Act,"
2 53 Pa.C.S. Ch. 84 Subch. C (relating to local taxpayers bill of
3 rights) or as otherwise provided by law.
4 Section 1112-D. Civil Penalties.--(a) If any part of any
5 underpayment of tax imposed under this article is due to fraud,
6 an amount equal to fifty per cent of the underpayment shall be
7 added to the tax.
8 (b) In the case of failure to record a declaration required
9 under this article on the date prescribed therefor, unless it is
10 shown that such failure is due to reasonable cause, five per
11 cent of the amount of such tax shall be added to the tax if the
12 failure is for not more than one month, with an additional five
13 per cent for each additional month or fraction thereof during
14 which the failure continues, not exceeding fifty per cent in the
15 aggregate.
16 Section 1113-D. Unlawful Acts and Penalty.--(a) It shall be
17 unlawful for any person to:
18 (1) accept or present for recording or cause to be accepted
19 or presented for recording any document without the full amount
20 of tax thereon being duly paid;
21 (2) make use of any documentary stamp to denote payment of
22 any tax imposed under this article without cancelling such stamp
23 as required by this article or as prescribed by the Department
24 of Revenue;
25 (3) fail, neglect or refuse to comply with or violate the
26 rules and regulations prescribed, adopted and promulgated by the
27 department under this article;
28 (4) fraudulently cut, tear or remove from a document any
29 documentary stamp;
30 (5) fraudulently affix to any document upon which tax is
20050H0176B2565 - 26 -
1 imposed under this article any documentary stamp which has been
2 cut, torn or removed from any other document upon which tax is
3 imposed under this article, or any documentary stamp of
4 insufficient value, or any forged or counterfeited stamp, or any
5 impression of any forged or counterfeited stamp, die, plate or
6 other article;
7 (6) wilfully remove or alter the cancellation marks of any
8 documentary stamp, or restore any such documentary stamp, with
9 intent to use or cause the same to be used after it has already
10 been used, or knowingly buy, sell, offer for sale, or give away
11 such altered or restored stamp to any person for use, or
12 knowingly use the same;
13 (7) knowingly have in his possession any altered or restored
14 documentary stamp which has been removed from any document upon
15 which a tax is imposed under this article, provided that the
16 possession of such stamps shall be prima facie evidence of an
17 intent to violate the provisions of this clause; or
18 (8) knowingly or wilfully prepare, keep, sell, offer for
19 sale, or have in his possession any forged or counterfeited
20 documentary stamps.
21 (b) (1) Except as otherwise provided in clause (2), a
22 person who violates subsection (a) commits a misdemeanor of the
23 second degree.
24 (2) A person who violates subsection (a)(1), (2) or (3)
25 commits a summary offense.
26 (c) A person who makes a false statement of value or
27 declaration of acquisition, not believing the statement or
28 declaration to be true, commits a misdemeanor of the second
29 degree.
30 Section 1114-D. Information.--Notwithstanding the provisions
20050H0176B2565 - 27 -
1 of any other act, the officer of a political subdivision
2 imposing a local real estate transfer tax or the authorized
3 representative of the officer may divulge to the Department of
4 Revenue information concerning the administration or collection
5 of local real estate transfer tax authorized by this article.
6 Section 13. The definition of "qualified tax liability" in
7 section 1702-B of the act, added May 7, 1997 (P.L.85, No.7), is
8 amended and the section is amended by adding a definition to
9 read:
10 Section 1702-B. Definitions.--The following words and
11 phrases, when used in this article, shall have the meanings
12 given to them in this section, except where the context clearly
13 indicates a different meaning:
14 * * *
15 "Pass-through entity." A partnership as defined in section
16 301(n.0) or a Pennsylvania S corporation as defined in section
17 301(n.1).
18 * * *
19 "Qualified tax liability." The liability for taxes imposed
20 under Article III, IV or VI of this act. The term shall not
21 include [the liability for taxes imposed under Article III on a
22 shareholder of a Pennsylvania S corporation] any tax withheld by
23 an employer from an employe under Article III.
24 * * *
25 Section 14. Section 1710-B of the act, added May 7, 1997
26 (P.L.85, No.7), is amended to read:
27 Section 1710-B. [Pennsylvania S Corporation Shareholder]
28 Pass-Through Entity.--(a) If a [Pennsylvania S corporation does
29 not have an eligible tax liability against which the research
30 and development tax credit may be applied, a shareholder of the
20050H0176B2565 - 28 -
1 Pennsylvania S corporation is entitled to a research and
2 development tax credit equal to the research and development tax
3 credit determined for the Pennsylvania S corporation for the
4 taxable year multiplied by the percentage of the Pennsylvania S
5 corporation's] pass-through entity has any unused tax credit
6 under section 1704-B, the entity may elect, in writing,
7 according to the department's procedures to transfer all or a
8 portion of the credit to shareholders, members or partners in
9 proportion to the share of the entity's distributive income to
10 which the shareholder, member or partner is entitled.
11 (b) The credit provided under subsection (a) is in addition
12 to any research and development tax credit to which a
13 shareholder, member or partner of a [Pennsylvania S corporation]
14 pass-through entity is otherwise entitled under this article.
15 However, a [Pennsylvania S corporation] pass-through entity and
16 a shareholder, member or partner of a [Pennsylvania S
17 corporation] pass-through entity may not claim a credit under
18 this article for the same qualified research and development
19 expense.
20 (c) A shareholder, member or partner of a pass-through
21 entity to whom credit is transferred under subsection (a) must
22 immediately claim the credit in the taxable year in which the
23 transfer is made. The shareholder, member or partner may not
24 carry forward, carry back, obtain a refund of or sell or assign
25 the credit.
26 Section 15. The definitions of "film," "Pennsylvania
27 production expense," "production expense" and "taxpayer" in
28 section 1702-C of the act, added July 20, 2004 (P.L.801, No.95),
29 are amended and the section is amended by adding a definition
30 read:
20050H0176B2565 - 29 -
1 Section 1702-C. Definitions.
2 The following words and phrases when used in this article
3 shall have the meanings given to them in this section unless the
4 context clearly indicates otherwise:
5 * * *
6 "Film." [The term includes a] A feature film, a television
7 film, a television pilot or each episode of a television series
8 [and a television show of 15 minutes or more in length,
9 intended], which is intended as programming for a national
10 audience. The term does not include a production featuring news,
11 current events, weather and market reports, or public
12 programming, talk show, game show, sports event, awards show or
13 other gala event, a production that solicits funds, a production
14 that primarily markets a product or service, a production
15 containing obscene material or performances as defined in 18
16 Pa.C.S. § 5903(b) (relating to obscene and other sexual
17 materials and performances) or a production primarily for
18 private, political, industrial, corporate or institutional
19 purposes.
20 * * *
21 "Pennsylvania production expense." A production expense
22 incurred in this Commonwealth. The term includes only wages and
23 salaries on which the taxes imposed by Article III or IV will be
24 paid or accrued.
25 "Production expense." An expense incurred in the production
26 of a film. The term includes the aggregate amount of wages and
27 salaries of individuals each of whom receive less than
28 $1,000,000 and are employed in the production of [a film on
29 which the taxes imposed by Article III or IV have been paid or
30 accrued] the film; the costs of construction, operations,
20050H0176B2565 - 30 -
1 editing, photography, sound synchronization, lighting, wardrobe
2 and accessories; and the cost of rental of facilities and
3 equipment. The term does not include expenses incurred in
4 purchasing story rights, music rights, development costs,
5 marketing or advertising a film.
6 * * *
7 "Start date." The first day of principal photography in the
8 Commonwealth.
9 "Taxpayer." [An entity] A film production company subject to
10 tax under Article III, IV or VI. The term does not include
11 contractors or subcontractors of a film production company.
12 Section 16. Section 1703-C of the act, added July 20, 2004
13 (P.L.801, No.95), is amended to read:
14 Section 1703-C. Credit for qualified film production expenses.
15 [(a) General rule.--A taxpayer who incurs a qualified film
16 production expense in a taxable year may apply for a film
17 production tax credit as provided in this article. A taxpayer
18 seeking a credit under this article must submit an application
19 to the department by February 15 for qualified film production
20 expenses incurred in the taxable year that ended in the prior
21 calendar year.
22 (b) Amount of credit.--A taxpayer that is qualified under
23 subsection (a) shall receive a film production tax credit for
24 the taxable year in the amount of 20% of the qualified film
25 production expenses.
26 (c) Notification.--By August 15 of the calendar year
27 following the close of the taxable year during which the
28 qualified film production expense was incurred, the department
29 shall notify the taxpayer of the amount of the taxpayer's film
30 production tax credit approved by the department.]
20050H0176B2565 - 31 -
1 (a) Application.--A taxpayer may apply to the Department of
2 Community and Economic Development for a film production tax
3 credit. The application shall be on the form required by the
4 Department of Community and Economic Development.
5 (b) Review and approval.--The Department of Community and
6 Economic Development shall review the application. Upon
7 determining the qualified film production expense amount for the
8 taxpayer, the Department of Community and Economic Development
9 may approve the taxpayer for a film production tax credit. The
10 Department of Community and Economic Development shall give
11 priority considerations to applications with the earliest start
12 date.
13 (c) Contract.--If the Department of Community and Economic
14 Development approves the taxpayer's application under subsection
15 (b), the Department of Community and Economic Development and
16 the taxpayer shall enter into a contract containing the
17 following:
18 (1) An itemized list of production expenses to be
19 incurred.
20 (2) An itemized list of Pennsylvania production expenses
21 to be incurred.
22 (3) A commitment by the taxpayer to incur the qualified
23 film production expenses as itemized.
24 (4) The start date.
25 (5) Any other information the Department of Community
26 and Economic Development deems appropriate.
27 (d) Certificate.--Upon execution of the contract required by
28 subsection (c), the Department of Community and Economic
29 Development shall award the taxpayer a film production tax
30 credit and issue the taxpayer a film production tax credit
20050H0176B2565 - 32 -
1 certificate.
2 (e) Limitations.--
3 (1) The aggregate amount of film production tax credits
4 awarded by the Department of Community and Economic
5 Development under subsection (d) shall not exceed $10,000,000
6 in any fiscal year.
7 (2) The aggregate amount of film production tax credits
8 awarded by the Department of Community and Economic
9 Development under subsection (d) to a taxpayer for a film may
10 not exceed 20% of the qualified film production expenses to
11 be incurred.
12 (3) For the 2005-2006 fiscal year, the first year in
13 which the credit is to be awarded, the amount of film
14 production tax credits to be approved under this article
15 shall not exceed $10,000,000, including the film production
16 tax credits to be awarded by the department by August 15,
17 2005, for expenses incurred for the period July 1, 2004, to
18 December 31, 2004, under this article.
19 Section 17. The act is amended by adding a section to read:
20 Section 1703.1-C. Film production tax credits.
21 (a) Claim.--In accordance with subsection (b), a taxpayer
22 may claim a film production tax credit against the qualified tax
23 liability of the taxpayer.
24 (b) Cap.--The aggregate amount of film production tax
25 credits claimed by a taxpayer under subsection (a) may not
26 exceed the amount awarded by the Department of Community and
27 Economic Development under section 1703-C(d) for the taxpayer
28 for that taxable year.
29 Section 18. Sections 1704-C and 1707-C of the act, added
30 July 20, 2004 (P.L.801, No.95), are amended to read:
20050H0176B2565 - 33 -
1 Section 1704-C. Carryover, carryback, refund and assignment of
2 credit.
3 (a) General rule.--If the taxpayer cannot use the entire
4 amount of the film production tax credit for the taxable year in
5 which the film production tax credit is first approved, then the
6 excess may be carried over to succeeding taxable years and used
7 as a credit against the qualified tax liability of the taxpayer
8 for those taxable years. Each time that the film production tax
9 credit is carried over to a succeeding taxable year, it shall be
10 reduced by the amount that was used as a credit during the
11 immediately preceding taxable year. The film production tax
12 credit provided by this article may be carried over and applied
13 to succeeding taxable years for no more than three taxable years
14 following the first taxable year for which the taxpayer was
15 entitled to claim the credit.
16 (b) Application.--A film production tax credit approved by
17 the Department of [Revenue] Community and Economic Development
18 for qualified film production expenses in a taxable year first
19 shall be applied against the taxpayer's qualified tax liability
20 for the current taxable year as of the date on which the credit
21 was approved before the film production tax credit can be
22 applied against any tax liability under subsection (a).
23 (c) No carryback.--A taxpayer is not entitled to carry back
24 or obtain a refund of an unused film production tax credit.
25 (d) Sale or assignment.--
26 (1) A taxpayer, upon application to and approval by the
27 Department of Community and Economic Development, may sell or
28 assign, in whole or in part, a film production tax credit
29 granted to the taxpayer under this article.
30 (2) The Department of Community and Economic Development
20050H0176B2565 - 34 -
1 and the department shall jointly promulgate regulations for
2 the approval of applications under this subsection.
3 (3) Before an application is approved, the department
4 must make a finding that the applicant has filed all required
5 State tax reports [for the taxable year for which the
6 qualified expenses were approved] and returns for all
7 applicable taxable years and paid any balance of State tax
8 due as determined at settlement, assessment or determination
9 by the department.
10 (4) Notwithstanding any other provision of law, the
11 department shall settle, assess or determine the tax of an
12 applicant under this subsection within 90 days of the filing
13 of all required final returns or reports in accordance with
14 section 806.1(a)(5) of the act of April 9, 1929 (P.L.343,
15 No.176), known as The Fiscal Code.
16 (e) Purchasers and assignees.--The purchaser or assignee of
17 a portion of a film production tax credit under subsection (d)
18 shall immediately claim the credit in the taxable year in which
19 the purchase or assignment is made. The amount of the film
20 production credit that a purchaser or assignee may use against
21 any one qualified tax liability may not exceed 50% of such
22 qualified tax liability for the taxable year. The purchaser or
23 assignee may not carry over, carry back, obtain a refund of or
24 sell or assign the film production tax credit. The purchaser or
25 assignee shall notify the Department of Revenue of the seller or
26 assignor of the film production tax credit in compliance with
27 procedures specified by the Department of Revenue.
28 [Section 1707-C. Limitation on credits.
29 (a) General rule.--The total amount of credits approved by
30 the department shall not exceed $10,000,000 in any fiscal year.
20050H0176B2565 - 35 -
1 (b) Exception.--If the total amount of film production tax
2 credits applied for by all taxpayers exceeds the amount
3 allocated for those credits, then the film production tax credit
4 to be received by each applicant shall be the product of the
5 allocated amount multiplied by the quotient of the film
6 production tax credit applied for by the applicant divided by
7 the total of all film production credits applied for by all
8 applicants, the algebraic equivalent of which is:
9 taxpayer's film production tax credit = amount allocated
10 for those credits X (film production tax credit applied
11 for by the applicant/total of all film production tax
12 credits applied for by all applicants).]
13 Section 19. The act is amended by adding a section to read:
14 Section 1707.1-C. Penalty.
15 A taxpayer which claims a film production tax credit and
16 fails to incur the amount of qualified film production expense
17 agreed to in section 1703-C(c)(3) for a film in that taxable
18 year shall refund to the Commonwealth the film production tax
19 credit claimed under this article for the film.
20 Section 20. Sections 1708-C and 1709-C of the act, added
21 July 20, 2004 (P.L.801, No.95) are amended to read:
22 Section 1708-C. Pass-through entity.
23 (a) General rule.--If a pass-through entity has any unused
24 tax credit under section 1704-C, it may elect in writing,
25 according to procedures established by the department, to
26 transfer all or a portion of the credit to shareholders, members
27 or partners in proportion to the share of its distributive
28 income to which the shareholder, member or partner is entitled.
29 (b) Limitation.--The credit provided under subsection (a) is
30 in addition to any film production tax credit to which a
20050H0176B2565 - 36 -
1 shareholder, member or partner of a pass-through entity is
2 otherwise entitled under this article. However, a pass-through
3 entity and a shareholder, member or partner of a pass-through
4 entity may not claim a credit under this article for the same
5 qualified film production expense.
6 (c) Application.--A shareholder, member or partner of a
7 pass-through entity to whom a credit is transferred under
8 subsection (a) shall immediately claim the credit in the taxable
9 year in which the transfer is made. [A credit transferred to a
10 natural person may be applied only against the income referred
11 to under section 303(a)(2).] The shareholder, member or partner
12 may not carry forward, carry back, obtain a refund of or sell or
13 assign the credit.
14 Section 1709-C. Report to General Assembly.
15 The [secretary] Secretary of Community and Economic
16 Development shall submit an annual report to the General
17 Assembly indicating the effectiveness of the film production tax
18 credit provided by this article no later than April 1 following
19 the year in which the credits were approved. The report shall
20 include the names of all taxpayers utilizing the credit as of
21 the date of the report and the amount of credits approved and
22 utilized by each taxpayer. Notwithstanding any law providing for
23 the confidentiality of tax records, the department may provide
24 to the Department of Community and Economic Development tax
25 information necessary to complete the report; and the
26 information contained in the report shall be public information.
27 The report may also include any recommendations for changes in
28 the calculation or administration of the credit.
29 Section 21. Sections 1905-A and 3003.9 of the act, amended
30 May 7, 1997 (P.L.85, No.7), are amended to read:
20050H0176B2565 - 37 -
1 Section 1905-A. Grant of Tax Credit.--The Department of
2 Revenue shall grant a tax credit against any tax due under
3 Article IV, VI, VII, VII-A, VIII, VIII-A, IX, X or XV of this
4 act, or any tax substituted in lieu thereof in an amount which
5 shall not exceed fifty per cent of the total amount invested
6 during the taxable year by the business firm or twenty per cent
7 of qualified investments by a private company in programs
8 approved pursuant to section 1904-A of this act: Provided, That
9 a tax credit of up to seventy per cent of the total amount
10 invested during the taxable year by a business firm or up to
11 thirty per cent of the amount of qualified investments by a
12 private company may be allowed for investment in programs where
13 activities fall within the scope of special program priorities
14 as defined with the approval of the Governor in regulations
15 promulgated by the secretary. [Regulations establishing special
16 program priorities are to be promulgated during the first month
17 of each fiscal year and at such times during the year as the
18 public interest dictates.] Such credit shall not exceed two
19 hundred fifty thousand dollars ($250,000) annually, except in
20 the case of comprehensive service projects which shall be
21 allowed an additional credit equal to seventy per cent of the
22 qualifying investments made in comprehensive service projects;
23 however, such additional credit shall not exceed three hundred
24 fifty thousand dollars ($350,000) annually. No tax credit shall
25 be granted to any bank, bank and trust company, insurance
26 company, trust company, national bank, savings association,
27 mutual savings bank or building and loan association for
28 activities that are a part of its normal course of business. Any
29 tax credit not used in the period the investment was made may be
30 carried over for the next five succeeding calendar or fiscal
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1 years until the full credit has been allowed. The total amount
2 of all tax credits allowed pursuant to this act shall not exceed
3 eighteen million dollars ($18,000,000) in any one fiscal year.
4 Section 3003.9. Bad Checks; and Electronic Funds Transfers
5 Not Credited Upon Transmission; Additions to Tax.--(a) If any
6 check in payment of any amount receivable under the laws of this
7 Commonwealth administered by the department is not paid upon
8 presentment, or any electronic funds transfer as payment of any
9 amount receivable under the laws of this Commonwealth
10 administered by the department is not credited upon
11 transmission, in addition to any interest or penalties provided
12 by law, the department shall charge the person who tendered the
13 check or authorized the electronic transmission an addition to
14 tax equal to ten per cent of the face amount of the check or
15 electronic funds transfer, plus interest and protest fees,
16 provided that the addition imposed by this section shall not
17 exceed [five hundred dollars ($500)] one thousand dollars
18 ($1,000) nor be less than twenty-five dollars ($25).
19 (b) This section shall apply to all checks presented for
20 payment [after December 31, 1997.] and all electronic funds
21 transfers authorized for payment.
22 Section 22. The act is amended by adding sections to read:
23 Section 3003.16. Electronic Transmissions.--Notwithstanding
24 the provisions of the act of December 16, 1999 (P.L.971, No.69),
25 known as the "Electronic Transactions Act," the department may,
26 at any time, transmit, by electronic or any other means, to the
27 prothonotaries of the respective counties of the Commonwealth,
28 to be entered of record by them, certified copies of all liens
29 imposed by this act. Notwithstanding the provisions of the
30 "Electronic Transactions Act," the department may pay for and
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1 satisfy such liens by electronic or any other means.
2 Section 3003.17. Reimbursement for Costs of Collection.--(a)
3 All costs of collection incurred by the department or the Office
4 of Attorney General on tax liability for taxes administered by
5 the department, other than fuel tax liabilities and motor
6 carrier road tax liabilities, including interest, penalties and
7 fees, must be paid before the liability is extinguished unless
8 collection costs are discharged by operation of law. For
9 purposes of this section, costs of collection include only lien
10 filing costs, costs imposed under a Federal or other State tax
11 refund offset program and cost incurred by paying commissions or
12 other remuneration to private agencies paid by the department or
13 the Office of Attorney General to collect department tax
14 liabilities.
15 (b) The cost of collection shall be added to the amount of
16 the liability for taxes administered by the department and shall
17 constitute a lien against the real or personal property of the
18 person. The unpaid costs may be collected by the department, the
19 Office of Attorney General or a private collection agency in any
20 way that the underlying tax liability could have been collected.
21 Section 23. Any ordinance or resolution providing for the
22 levying, assessment or collection of a tax upon a transfer of
23 real property or an interest in real property which has been
24 enacted by a political subdivision prior to the effective date
25 of this section shall continue in full force and effect, without
26 reenactment, insofar as the transactions upon which the tax is
27 levied, assessed or collected are also subject to the tax
28 imposed by Article XI-C of the act. The ordinance or resolution
29 shall continue in full force and effect with respect to
30 documents made, executed and delivered prior to the effective
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1 date of this section.
2 Section 24. This act shall apply as follows:
3 (1) The following provisions shall apply to taxable
4 years beginning after December 31, 1997:
5 (i) The amendment of section 401(1)4 of the act.
6 (ii) The amendment of the definition of
7 "corporation" in section 601(a) of the act.
8 (2) Except as provided in paragraphs (6) and (7)(ii),
9 the following provisions shall apply to taxable years
10 beginning after December 31, 2002:
11 (i) The amendment of section 301(a) of the act.
12 (ii) The amendment of section 303(a)(1) of the act.
13 (3) The following provisions shall apply to film
14 production expenses incurred after December 31, 2004:
15 (i) The amendment or addition of the definitions of
16 "film," "Pennsylvania production expense," "production
17 expense," "start date" and "taxpayer" in section 1702-C
18 of the act.
19 (ii) The amendment of section 1703-C of the act.
20 (iii) The addition of section 1703.1-C of the act.
21 (iv) The amendment of section 1704-C of the act.
22 (v) The amendment of section 1707-C of the act.
23 (vi) The addition of section 1707.1-C of the act.
24 (vii) The amendment of section 1708-C of the act.
25 (viii) The amendment of section 1709-C of the act.
26 (4) The provisions referred to in paragraph (3) shall
27 not affect:
28 (i) film production tax credits for production
29 expenses incurred after June 30, 2004, and before January
30 1, 2005; or
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1 (ii) the process for the approval and awarding of
2 the film production tax credits for these expenses as
3 provided for in the act of July 20, 2004 (P.L.801,
4 No.95), entitled "An act amending the act of March 4,
5 1971 (P.L.6, No.2), entitled 'An act relating to tax
6 reform and State taxation by codifying and enumerating
7 certain subjects of taxation and imposing taxes thereon;
8 providing procedures for the payment, collection,
9 administration and enforcement thereof; providing for tax
10 credits in certain cases; conferring powers and imposing
11 duties upon the Department of Revenue, certain employers,
12 fiduciaries, individuals, persons, corporations and other
13 entities; prescribing crimes, offenses and penalties,'
14 authorizing a film production tax credit; and providing
15 for the powers and duties of the Department of Community
16 and Economic Development and the Department of Revenue."
17 (5) The following provisions shall apply to any document
18 made, executed, delivered, accepted or presented for
19 recording 90 days after the effective date of this paragraph:
20 (i) The amendment of section 1111-C of the act.
21 (ii) The amendment of section 1101-D of the act.
22 (iii) The amendment of section 1102-D of the act.
23 (iv) The addition of section 1103-D of the act.
24 (v) The addition of section 1104-D of the act.
25 (vi) The addition of section 1105-D of the act.
26 (vii) The addition of section 1106-D of the act.
27 (viii) The addition of section 1107-D of the act.
28 (ix) The addition of section 1108-D of the act.
29 (x) The addition of section 1109-D of the act.
30 (xi) The addition of section 1110-D of the act.
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1 (xii) The addition of section 1111-D of the act.
2 (xiii) The addition of section 1112-D of the act.
3 (xiv) The addition of section 1113-D of the act.
4 (6) The amendment of sections 301(d) and 303(a)(1) of
5 the act shall apply to appeals which arise prior to or after
6 the effective date of this paragraph.
7 (7) The following provisions shall apply to taxable
8 years beginning after December 31, 2004:
9 (i) The amendment of section 301(d).
10 (ii) The addition of section 303(a)(1)(iii)(B) and
11 (iv)(B).
12 (8) The amendment of section 303(a)(6) of the act shall
13 apply to taxable years beginning after December 31, 2004.
14 (9) The following provisions shall apply to taxable
15 years beginning after December 31, 2004:
16 (i) The amendment of section 315.5 of the act.
17 (ii) The addition of section 315.8 of the act.
18 (10) The amendment of sections 1702-B and 1710-B shall
19 apply to taxable years beginning after December 31, 2005.
20 (11) The amendment of section 352(d) of the act shall
21 apply to payments made after June 30, 2006.
22 Section 25. Repeals are as follows:
23 (1) The following acts and parts of acts are repealed as
24 set forth in paragraph (2):
25 (i) Section 2 of the act of December 31, 1965
26 (P.L.1257, No.511), known as The Local Tax Enabling Act.
27 (ii) Section 652.1(a)(4) of the act of March 10,
28 1949 (P.L.30, No.14), known as the Public School Code of
29 1949.
30 (2) The acts and parts of acts referred to in paragraph
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1 (1) are repealed insofar as they are inconsistent with the
2 following provisions:
3 (i) The amendment of section 1111-C of the act.
4 (ii) The addition of section 1114-C of the act.
5 (iii) The amendment of section 1101-D of the act.
6 (iv) The amendment of section 1102-D of the act.
7 (v) The addition of section 1103-D of the act.
8 (vi) The addition of section 1104-D of the act.
9 (vii) The addition of section 1105-D of the act.
10 (viii) The addition of section 1106-D of the act.
11 (ix) The addition of section 1107-D of the act.
12 (x) The addition of section 1108-D of the act.
13 (xi) The addition of section 1109-D of the act.
14 (xii) The addition of section 1110-D of the act.
15 (xiii) The addition of section 1111-D of the act.
16 (xiv) The addition of section 1112-D of the act.
17 (xv) The addition of section 1113-D of the act.
18 (xvi) The addition of section 1114-D of the act.
19 Section 26. This act shall take effect as follows:
20 (1) Section 205(a) of the act shall take effect in 60
21 days.
22 (2) Section 23 of this act shall take effect in 90 days.
23 (3) The remainder of this act shall take effect
24 immediately.
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