PRIOR PRINTER'S NO. 564 PRINTER'S NO. 1457
No. 515 Session of 2005
INTRODUCED BY REED, TURZAI, HUTCHINSON, BOYD, BAKER, BASTIAN,
BENNINGHOFF, CAPPELLI, CAUSER, CLYMER, CREIGHTON, DALLY,
FAIRCHILD, GEIST, GERGELY, GINGRICH, GOOD, GOODMAN, HARRIS,
HERSHEY, KILLION, MACKERETH, MANN, McILHATTAN, METCALFE,
S. MILLER, MUNDY, MUSTIO, NICKOL, PICKETT, REICHLEY,
SAMUELSON, SCAVELLO, SEMMEL, STEIL, STERN, R. STEVENSON,
E. Z. TAYLOR, THOMAS, TIGUE, ZUG AND KAUFFMAN,
FEBRUARY 15, 2005
AS REPORTED FROM COMMITTEE ON FINANCE, HOUSE OF REPRESENTATIVES,
AS AMENDED, MARCH 30, 2005
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 apportionment of
11 business income for corporate net income tax purposes.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. Section 401(3)2(a)(9) of the act of March 4, 1971
15 (P.L.6, No.2), known as the Tax Reform Code of 1971, amended May
16 12, 1999 (P.L.26, No.4), is amended to read:
17 Section 401. Definitions.--The following words, terms, and
18 phrases, when used in this article, shall have the meaning
19 ascribed to them in this section, except where the context
1 clearly indicates a different meaning:
2 * * *
3 (3) "Taxable income." * * *
4 2. In case the entire business of any corporation, other
5 than a corporation engaged in doing business as a regulated
6 investment company as defined by the Internal Revenue Code of
7 1954, as amended, is not transacted within this Commonwealth,
8 the tax imposed by this article shall be based upon such portion
9 of the taxable income of such corporation for the fiscal or
10 calendar year, as defined in subclause 1 hereof, and may be
11 determined as follows:
12 (a) Division of Income.
13 * * *
14 (9) (A) Except as provided in subparagraph (B):
15 (i) For the tax years beginning ENDING BEFORE January 1, <--
16 2005, all business income shall be apportioned to this State by
17 multiplying the income by a fraction, the numerator of which is
18 the property factor plus the payroll factor three times the
19 sales factor, and the denominator of which is five.
20 (ii) For tax years beginning after December 31, 2004, all
21 business income shall be apportioned to this State by
22 multiplying the income by the sales factor.
23 (B) For purposes of apportionment of the capital stock -
24 franchise tax as provided in section 602 of Article VI of this
25 act, the apportionment fraction shall be the property factor
26 plus the payroll factor plus the sales factor as the numerator,
27 and the denominator shall be three.
28 * * *
29 Section 2. This act shall take effect in 60 days.
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