PRIOR PRINTER'S NOS. 1409, 1433 PRINTER'S NO. 1503
No. 1190 Session of 1993
INTRODUCED BY MELLOW, LINCOLN, FUMO, REIBMAN, AFFLERBACH, STAPLETON, O'PAKE, STEWART, PORTERFIELD, LAVALLE, SCHWARTZ, MUSTO, ANDREZESKI, STOUT, WILLIAMS, DAWIDA, FATTAH, LEWIS, BELAN, LYNCH, JONES AND SCANLON, JUNE 2, 1993
SENATOR FUMO, APPROPRIATIONS, RE-REPORTED AS AMENDED, JUNE 21, 1993
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"; reducing the 11 rate of corporate net income tax; further defining "average 12 net income" for capital stock and franchise tax computations; 13 including electric utilities on the increased gross receipts 14 tax and additional surtax; and further providing for the 15 taxation of title insurance companies under Article IX. 16 The General Assembly of the Commonwealth of Pennsylvania 17 hereby enacts as follows: 18 Section 1. Section 401(3)4(a) and (c) of the act of March 4, 19 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, 20 amended July 1, 1985 (P.L.78, No.29) and August 4, 1991 (P.L.97, 21 No.22), are amended to read: 22 Section 401. Definitions.--The following words, terms, and 23 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." * * * 5 4. (a) For taxable years beginning in 1982 through taxable 6 years beginning in 1990 and for the taxable year beginning in 7 1993 and each year thereafter, a net loss deduction shall be 8 allowed from taxable income as arrived at under subclause 1 or, 9 if applicable, subclause 2. For taxable years beginning in 1991 10 [and thereafter] through taxable years beginning in 1992, the 11 net loss deduction allowed for years prior to 1991 shall be 12 suspended, and no carryover of net losses from taxable years 13 1988, 1989 and 1990 shall be utilized in calculating net income. 14 * * * 15 (c) The net loss deduction shall be the lesser of the amount 16 of the net loss or losses which may be carried over to the 17 taxable year or taxable income as determined under subclause 1 18 or, if applicable, subclause 2. A net loss for a taxable year 19 may only be carried over pursuant to the following schedule: 20 Taxable Year Carryover 21 1981 1 taxable year 22 1982 2 taxable years 23 [1983 and thereafter 3 taxable years] 24 1983 through 1987 3 taxable years 25 1988 2 taxable years 26 1989 1 taxable year 27 1990-1991 No carryover allowed 28 1992 and thereafter 1 taxable year 29 The earliest net loss shall be carried over to the earliest 30 taxable year to which it may be carried under this schedule. 19930S1190B1503 - 2 -
1 * * * 2 Section 2. Section 402 of the act, amended August 4, 1991 3 (P.L.97, No.22), is amended to read: 4 Section 402. Imposition of Tax.--Every corporation shall be 5 subject to, and shall pay for the privilege of (i) doing 6 business in this Commonwealth; or (ii) carrying on activities in 7 this Commonwealth; (iii) having capital or property employed or 8 used in this Commonwealth; or (iv) owning property in this 9 Commonwealth, by or in the name of itself, or any person, 10 partnership, association, limited partnership, joint-stock 11 association, or corporation, a State excise tax at the rate of 12 twelve per cent per annum upon each dollar of taxable income of 13 such corporation received by, and accruing to, such corporation 14 during the calendar year 1971 and the first six months of 1972 15 and at the rate of eleven per cent per annum upon each dollar of 16 taxable income of such corporation received by, and accruing to, 17 such corporation during the second six months of calendar year 18 1972 through the calendar year 1973 and at the rate of nine and 19 one-half per cent per annum upon each dollar of taxable income 20 of such corporation received by, and accruing to, such 21 corporation during the calendar years 1974, 1975 and 1976 and at 22 the rate of ten and one-half per cent per annum upon each dollar 23 of taxable income of such corporation received by, and accruing 24 to, such corporation during the calendar year 1977 through the 25 calendar year 1984 and at the rate of nine and one-half per cent 26 per annum upon each dollar of taxable income of such corporation 27 received by and accruing to such corporation during the calendar 28 year 1985 through calendar year 1986 and at the rate of eight 29 and one-half per cent per annum upon each dollar of taxable 30 income of such corporation received by and accruing to such 19930S1190B1503 - 3 -
1 corporation during the calendar year 1987 through the calendar 2 year 1990 and at the rate of ten and one-half per cent per annum 3 upon each dollar of taxable income of such corporation received 4 by and accruing to such corporation during calendar year 1991 5 and during each calendar year thereafter, with an additional 6 surtax equal to one and seventy-five hundredths per cent per 7 annum upon each dollar of taxable income of such corporation 8 received by and accruing to such corporation during calendar 9 [year 1991 and during each calendar year thereafter] years 1991 10 and 1992 and an additional surtax of one and forty-nine 11 hundredths per cent per annum upon each dollar of taxable income 12 of such corporation received by and accruing to such corporation 13 during calendar year 1993 and each year thereafter, except where 14 a corporation reports to the Federal Government on the basis of 15 a fiscal year, and has certified such fact to the department as 16 required by section 403 of this article, in which case, such 17 tax, at the rate of twelve per cent, shall be levied, collected, 18 and paid upon all taxable income received by, and accruing to, 19 such corporation during the first six months of the fiscal year 20 commencing in the calendar year 1972 and at the rate of eleven 21 per cent, shall be levied, collected, and paid upon all taxable 22 income received by, and accruing to, such corporation during the 23 second six months of the fiscal year commencing in the calendar 24 year 1972 and during the fiscal year commencing in the calendar 25 year 1973 and at the rate of nine and one-half per cent, shall 26 be levied, collected, and paid upon all taxable income received 27 by, and accruing to, such corporation during the fiscal year 28 commencing in the calendar years 1974, 1975 and 1976 and at the 29 rate of ten and one-half per cent, shall be levied, collected, 30 and paid upon all taxable income received by, and accruing to, 19930S1190B1503 - 4 -
1 such corporation during the fiscal year commencing in the 2 calendar year 1977 through the fiscal year commencing in 1984 3 and at the rate of nine and one-half per cent, shall be levied, 4 collected, and paid upon all taxable income received by and 5 accruing to such corporation during the fiscal year commencing 6 in 1985 through the fiscal year commencing in 1986 and at the 7 rate of eight and one-half per cent per annum upon each dollar 8 of taxable income of such corporation received by and accruing 9 to such corporation during the fiscal year commencing in 1987 10 through the fiscal year commencing in 1990 and at the rate of 11 ten and one-half per cent per annum upon each dollar of taxable 12 income of such corporation received by and accruing to such 13 corporation during the fiscal year commencing in 1991 and during 14 each fiscal year thereafter, with an additional surtax equal to 15 one and seventy-five hundredths per cent per annum upon each 16 dollar of taxable income of such corporation received by and 17 accruing to such corporation during the fiscal year commencing 18 in 1991 [and during each fiscal year thereafter] and 1992 and an 19 additional surtax of one and forty-nine hundredths per cent per 20 annum upon each dollar of taxable income of such corporation 21 received by and accruing to such corporation during the fiscal 22 year commencing in 1993 and during 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. The definition of "average net income" in section 30 601(a) of the act, amended December 23, 1983 (P.L.360, No.89), 19930S1190B1503 - 5 -
1 is amended to read: 2 Section 601. Definitions and Reports.--(a) The following 3 words, terms and phrases when used in this Article VI shall have 4 the meaning ascribed to them in this section, except where the 5 context clearly indicates a different meaning: 6 "Average net income." The sum of the net income or loss for 7 each of the current and immediately preceding four years, 8 divided by five. If the entity has not been in existence for a 9 period of five years, the average net income shall be the 10 average net income for the number of years that the entity has 11 actually been in existence. In computing average net income, 12 losses shall be entered as computed, but in no case shall 13 average net income be less than zero. The net income or loss of 14 the entity for any taxable year shall be computed by taking the 15 amount set forth as income per books on the income tax return 16 filed by the entity with the Federal Government for such taxable 17 year, or if no such return is made, as would have been set forth 18 had such a return been made, subject, however, in either case to 19 any correction thereof, for fraud, evasion or error[.] and 20 adding to such amount the amount of any dividends received from 21 any subsidiary or investee corporation, which dividends are not 22 already included in said income per books due to the application 23 of consolidation or use of, the equity method of accounting or 24 any other accounting method which would under value average net 25 income unless such dividends are not specifically added to the 26 income. In the case of any entity which has an investment in 27 another corporation, the net income or loss shall be computed on 28 an unconsolidated basis exclusive of the net income or loss of 29 such other corporation. 30 * * * 19930S1190B1503 - 6 -
1 Section 4. Section 1101(b) of the act, amended July 13, 1987 <-- 2 (P.L.317, No.58), is amended to read: 3 Section 1101. Imposition of Tax.--* * * 4 (b) Electric Light, Waterpower and Hydro-electric 5 Utilities.--Every electric light company, waterpower company and 6 hydro-electric company now or hereafter incorporated or 7 organized by or under any law of this Commonwealth, or now or 8 hereafter organized or incorporated by any other state or by the 9 United States or any foreign government and doing business in 10 this Commonwealth, and every limited partnership, association, 11 joint-stock association, copartnership, person or persons, 12 engaged in electric light and power business, waterpower 13 business and hydro-electric business in this Commonwealth, shall 14 pay to the State Treasurer, through the Department of Revenue, a 15 tax of [forty-four] forty-five mills with a surtax equal to five 16 mills upon each dollar of the gross receipts of the corporation, 17 company or association, limited partnership, joint-stock 18 association, copartnership, person or persons, received from: 19 (1) the sales of electric energy within this State, except 20 gross receipts derived from the sales for resale of electric 21 energy to persons, partnerships, associations, corporations or 22 political subdivisions subject to the tax imposed by this 23 subsection upon gross receipts derived from such resale; and 24 (2) the sales of electric energy produced in Pennsylvania 25 and made outside of Pennsylvania in a state that has taken 26 action since December 21, 1977 which results in higher costs for 27 electric energy produced in that state and sold in Pennsylvania 28 unless the action that was taken after December 21, 1977 is 29 rescinded according to the following apportionment formula: 30 except for gross receipts derived from sales under clause (1), 19930S1190B1503 - 7 -
1 the gross receipts from all sales of electricity of the producer 2 shall be apportioned to the Commonwealth of Pennsylvania by the 3 ratio of the producer's operating and maintenance expenses in 4 Pennsylvania and depreciation attributable to property in 5 Pennsylvania to the producer's total operating and maintenance 6 expenses and depreciation. 7 * * * 8 Section 5 4. The heading of Article VIII of the act is <-- 9 amended to read: 10 ARTICLE VIII 11 [TITLE INSURANCE AND] TRUST COMPANIES SHARES TAX 12 Section 6 5. Section 801 of the act, amended August 4, 1991 <-- 13 (P.L.97, No.22), is amended to read: 14 Section 801. Imposition of Tax.--Every [company incorporated 15 under the provisions of section 29 of an act, entitled "An act 16 to provide for the incorporation and regulation of certain 17 corporations," approved April 29, 1874, and its supplements, or 18 any other act of Assembly heretofore or hereafter approved, for 19 the insurance of owners of real estate, mortgages, and others 20 interested in real estate, from loss by reason of defective 21 titles, liens, and encumbrances, and every] company entitled to 22 benefits of, and every company having any of the powers of, 23 companies entitled to the benefits of an act, entitled "An act 24 conferring upon certain fidelity, insurance, safety deposit, 25 trust, and savings companies, the powers and privileges of 26 companies incorporated under the provisions of section 29 of an 27 act, entitled 'An act to provide for the incorporation and 28 regulation of certain corporations,' approved April 29, 1874, 29 and of the supplements thereto," approved June 27, 1895, 30 commonly known as [title insurance or] trust companies, and 19930S1190B1503 - 8 -
1 every company organized as a bank and trust company or as a 2 trust company under any act of Assembly heretofore or hereafter 3 approved, except any such companies, all of the shares of 4 capital stock of which (other than shares necessary to qualify 5 directors) are owned by a company which is liable to pay to the 6 Commonwealth a tax on shares, shall, on or before March 15 in 7 each and every year, make to the Department of Revenue a report 8 in writing, setting forth the full number of shares of the 9 capital stock subscribed for or issued by such company, and the 10 taxable amount of such shares of capital stock determined 11 pursuant to section 801.1. It shall be the duty of the 12 Department of Revenue, to assess such shares for taxation for 13 calendar years beginning January 1, 1971 through January 1, 14 1983, at the rate of fifteen mills and for the calendar years 15 beginning January 1, 1984, through January 1, 1988, at the rate 16 of one and seventy-five one thousandths per cent and for the 17 calendar year beginning January 1, 1989, at the rate of 10.77 18 per cent and for the calendar year beginning January 1, 1990, 19 and each calendar year thereafter at the rate of 1.25 per cent 20 upon each dollar of the taxable amount thereof, the taxable 21 amount of each share of stock to be ascertained and fixed 22 pursuant to section 801.1, and dividing this amount by the 23 number of shares. 24 It shall be the duty of every such company, at the time of 25 making every report required by this section, to compute the tax 26 and to pay the amount of said tax to the State Treasurer, 27 through the Department of Revenue, either from its general fund, 28 or from the amount of said tax collected from its shareholders: 29 Provided, That for the calendar years beginning January 1, 1971 30 through January 1, 1991, every such company shall, at the time 19930S1190B1503 - 9 -
1 of making its report for the calendar years beginning January 1,
2 1971 through January 1, 1991, compute the tax and pay to the
3 State Treasurer, through the Department of Revenue, either from
4 its general fund, or from the amount of said tax collected from
5 its shareholders, not less than eighty per cent of the tax due
6 to the Commonwealth by it for such calendar year and the
7 remaining tax due shall be paid at the time when the report
8 herein required for the year next succeeding is made: Provided,
9 That upon the payment of the tax fixed by this act into the
10 State Treasury, through the Department of Revenue, the shares
11 and so much of the capital stock, surplus, profits, and deposits
12 of such company as shall not be invested in real estate, shall
13 be exempt from all other taxation under the laws of this
14 Commonwealth. The procedure, in case the Department of Revenue
15 be not satisfied with the report made by any [title insurance
16 or] trust company, and the penalties for failing to make such
17 report and pay the tax, shall be as provided by law.
18 Section 7 6. Section 801.1 of the act, amended July 1, 1989 <--
19 (P.L.95, No.21), is amended to read:
20 Section 801.1. Ascertainment of Taxable Amount; Exclusion of
21 United States Obligations.--(a) The taxable amount of shares
22 shall be ascertained and fixed by adding together the value
23 determined under subsection (b) for the current and preceding
24 five years and dividing the resulting sum by six. If a company
25 has not been in existence for a period of six years, the taxable
26 amount of shares shall be ascertained and fixed by adding
27 together the value determined under subsection (b) for the
28 number of years the company has been in existence and dividing
29 the resulting sum by such number of years.
30 (b) The value for each year required by subsection (a) shall
19930S1190B1503 - 10 -
1 be determined by adding together the book value of capital stock 2 paid in, the book value of the surplus, the book value of 3 undivided profits and the book value of the unearned premium 4 reserve with a deduction from the total thereof of an amount 5 equal to the same percentage of such total as the book value of 6 obligations of the United States bears to the book value of the 7 total assets. For purposes of this subsection, in the case of 8 banks and bank and trust companies, book values and the 9 deduction for United States obligations for each year shall be 10 determined by the Reports of Condition made in each calendar 11 quarter in the preceding calendar year in accordance with the 12 requirements of the Board of Governors of the Federal Reserve 13 System, the Comptroller of the Currency, the Federal Deposit 14 Insurance Corporation or other applicable regulatory authority 15 and in the case of [title insurance and] trust companies which 16 do not file such Reports of Condition, book values and the 17 deduction for United States obligations for each year shall be 18 determined by generally accepted accounting principles as of the 19 end of each calendar quarter in the preceding calendar year and 20 book values shall in all cases be averaged as calculated by 21 averaging book values as determined by such Reports of Condition 22 or as determined at the end of each calendar quarter in the case 23 of [title insurance and] trust companies which do not file such 24 Reports of Condition. For the purposes of this article, United 25 States obligations shall be obligations coming within the scope 26 of 31 U.S.C. § 3124. For any year in which a bank or bank and 27 trust company does not file four quarterly Reports of Condition, 28 book values and deductions for United States obligations shall 29 be determined by adding together the book values and deductions 30 for United States obligations from each quarterly Reports of 19930S1190B1503 - 11 -
1 Condition filed for such year and dividing the resulting sums by 2 the number of such Reports of Condition. For any year in which a 3 [title insurance company or] trust company is not in existence 4 for the full year, book values and deductions for United States 5 obligations shall be determined by adding together the book 6 values and deductions for United States obligations as of the 7 end of each calendar quarter in which the company was in 8 existence at the end of such calendar quarter and dividing the 9 resulting sums by the number of such calendar quarters. For 10 purposes of this section, a partial year shall be treated as a 11 full year. 12 (c) For purposes of this section: 13 (1) a mere change in identity, form or place of organization 14 of one company, however effected, shall be treated as if a 15 single company had been in existence prior to as well as after 16 such change; and 17 (2) the combination of two or more companies into one shall 18 be treated as if the constituent companies had been a single 19 company in existence prior to as well as after the combination 20 and the book values and deductions for United States obligations 21 from the Reports of Condition or as determined by generally 22 accepted accounting principles as of the end or each calendar 23 quarter of the constituent companies shall be combined. For 24 purposes of the preceding sentence, a combination shall include 25 any acquisition required to be accounted for by the surviving 26 company under the pooling of interest method in accordance with 27 generally accepted accounting principles or a statutory merger 28 or consolidation. 29 Section 8. Article VIII-A heading and sections 801-A and <-- 30 802-A of the act, added July 1, 1989 (P.L.95, No.21), are 19930S1190B1503 - 12 -
1 amended to read:
2 SECTION 7. THE HEADING OF ARTICLE VIII-A OF THE ACT, ADDED <--
3 JULY 1, 1989 (P.L.95, NO.21), IS AMENDED TO READ:
4 ARTICLE VIII-A
5 ALTERNATIVE [TITLE INSURANCE AND]
6 TRUST COMPANIES SHARES TAX
7 PART I
8 IMPOSITION OF TAX
9 SECTION 8. SECTIONS 801-A AND 802-A OF THE ACT, ADDED JULY <--
10 1, 1989 (P.L.95, NO.21), ARE AMENDED TO READ:
11 Section 801-A. Imposition of Tax.--(a) Except as modified
12 by subsection (b), [every company incorporated under the
13 provisions of section 29 of the act of April 29, 1874 (P.L.73,
14 No.32), known as the "Corporation Act of 1874," and its
15 supplements, or any other act of Assembly heretofore or
16 hereafter approved, for the insurance of owners of real estate,
17 mortgages, and others interested in real estate, from loss by
18 reason of defective titles, liens and encumbrances, and every
19 company entitled to benefits of, and] every company having any
20 of the powers of, companies entitled to the benefits of the act
21 of June 27, 1895 (P.L.399, No.286), entitled "An act conferring
22 upon certain fidelity, insurance, safety deposit, trust and
23 savings companies the powers and privileges of companies
24 incorporated under the provisions of section twenty-nine of an
25 act, entitled 'An act to provide for the incorporation and
26 regulation of certain corporations,' approved April 29, 1874,
27 and of the supplements thereto," approved June 27, 1895,
28 commonly known as [title insurance or] trust companies, and
29 every company organized as a bank and trust company or as a
30 trust company under any act of Assembly heretofore or hereafter
19930S1190B1503 - 13 -
1 approved, except any such companies, all of the shares of 2 capital stock of which (other than shares necessary to qualify 3 directors) are owned by a company which is liable to pay to the 4 Commonwealth a tax on shares, shall, on or before April 15 in 5 each and every year, make to the Department of Revenue a report 6 in writing setting forth the full number of shares of the 7 capital stock subscribed for or issued by such company, and the 8 value thereof as of January 1 preceding, which shall be 9 ascertained as hereinafter provided. It shall be the duty of the 10 Department of Revenue, to assess such shares for taxation at the 11 rate specified by subsection (c) upon each dollar of the value 12 thereof, the value of each share of stock to be ascertained and 13 fixed by adding together the amount of capital stock paid in, 14 the surplus, the undivided profits and the unearned premium 15 reserve, and dividing this amount by the number of shares. 16 It shall be the duty of every such company, at the time of 17 making every report required by this section, to compute the tax 18 and to pay the amount of said tax to the State Treasurer, 19 through the Department of Revenue, either from its general fund, 20 or from the amount of said tax collected from its shareholders: 21 Provided, That every such company shall, at the time of making 22 its report for each calendar year, compute the tax and pay to 23 the State Treasurer, through the Department of Revenue, either 24 from its general fund, or from the amount of said tax collected 25 from its shareholders, not less than eighty per cent of the tax 26 due shall be paid at the time when the report herein required 27 for the year next succeeding is made: Provided, That upon the 28 payment of the tax fixed by this act into the State Treasury, 29 through the Department of Revenue, the shares and so much of the 30 capital stock, surplus, profits and deposits of such company as 19930S1190B1503 - 14 -
1 shall not be invested in real estate, shall be exempt from all 2 other taxation under the laws of this Commonwealth. The 3 procedure, in case the Department of Revenue be not satisfied 4 with the report made by any [title insurance or] trust company, 5 and the penalties for failing to make such report and pay the 6 tax, shall be as provided by law. 7 (b) Every company subject to tax under this article shall, 8 within one hundred twenty days of the date this article becomes 9 effective: 10 (1) Make a report for the calendar year to which this 11 article first applies and pay such tax as may be due in 12 accordance with this section. 13 (2) Make a report for the second calendar year to which this 14 article applies and pay such tax as may be due in accordance 15 with this section. 16 (c) The rate of tax imposed under this article for the first 17 calendar year to which this article applies and the succeeding 18 two calendar years shall be 3.85 per cent. The rate of tax 19 imposed under this article for each calendar year thereafter 20 shall be 1.075 per cent. 21 Section 802-A. Ascertainment of Value; Exclusion of United 22 States Obligations.--The value of shares shall be ascertained 23 and fixed pursuant to section 801-A by adding together the book 24 value of capital stock paid in, the book value of the surplus, 25 the book value of undivided profits and the book value of the 26 unearned premium reserve with a deduction from the total thereof 27 of an amount equal to the same percentage of such total as the 28 book value of obligations of the United States bears to the book 29 value of the total assets. For purposes of this section, in the 30 case of banks and bank and trust companies, book values shall be 19930S1190B1503 - 15 -
1 determined by the Reports of Condition made in each calendar 2 quarter in the preceding calendar year in accordance with the 3 requirements of the Board of Governors of the Federal Reserve 4 System, the Comptroller of the Currency, the Federal Deposit 5 Insurance Corporation or other applicable regulatory authority 6 and in the case of [title insurance and] trust companies which 7 do not file such Reports of Condition, book values shall be 8 determined by generally accepted accounting principles as of the 9 end of each calendar quarter in the preceding calendar year and 10 book values shall in all cases be averaged as calculated by 11 averaging book values as determined by such Reports of Condition 12 or as determined at the end of each calendar quarter in the case 13 of [title insurance and] trust companies which do not file such 14 Reports of Condition. For the purposes of this article, United 15 States obligations shall be obligations coming within the scope 16 of 31 U.S.C. § 3124. 17 Section 9. The definition of "insurance company" in section 18 901 of the act, amended December 1, 1983 (P.L.228, No.66), is 19 amended to read: 20 Section 901. Definitions.--The following terms, when used in 21 this act, shall have the meaning ascribed to them in this 22 section: 23 (1) "Insurance company" means every insurance company, 24 association or exchange, incorporated or organized by or under 25 the laws of this Commonwealth, the United States, territories, 26 dependencies, other states, or foreign governments, and engaged 27 in transacting insurance business of any kind or classification 28 within this Commonwealth, [except title insurance companies 29 subject to tax under Article VIII or XVI of this act, as the 30 case may be,] except purely mutual beneficial associations whose 19930S1190B1503 - 16 -
1 funds for the benefit of members and families or heirs are made 2 up entirely of the weekly, monthly, quarterly, semi-annual or 3 annual contributions to their members and the accumulated 4 interest thereon and corporations organized under the act of 5 June 21, 1937 (P.L.1948), known as the "Nonprofit Hospital Plan 6 Act," and the act of June 27, 1939 (P.L.1125), known as the 7 "Nonprofit Medical, Osteopathic, Dental and Podiatry Service 8 Corporation Act." The term "insurance company" shall include any 9 company incorporated under the former provisions of section 29 10 of the act of April 29, 1874 (P.L.73, No.32), entitled "An act 11 to provide for the incorporation and regulation of certain 12 corporations." 13 * * * 14 SECTION 10. SECTION 1101(B) OF THE ACT, AMENDED JULY 13, <-- 15 1987 (P.L.317, NO.58), IS AMENDED TO READ: 16 SECTION 1101. IMPOSITION OF TAX.--* * * 17 (B) ELECTRIC LIGHT, WATERPOWER AND HYDRO-ELECTRIC 18 UTILITIES.--EVERY ELECTRIC LIGHT COMPANY, WATERPOWER COMPANY AND 19 HYDRO-ELECTRIC COMPANY NOW OR HEREAFTER INCORPORATED OR 20 ORGANIZED BY OR UNDER ANY LAW OF THIS COMMONWEALTH, OR NOW OR 21 HEREAFTER ORGANIZED OR INCORPORATED BY ANY OTHER STATE OR BY THE 22 UNITED STATES OR ANY FOREIGN GOVERNMENT AND DOING BUSINESS IN 23 THIS COMMONWEALTH, AND EVERY LIMITED PARTNERSHIP, ASSOCIATION, 24 JOINT-STOCK ASSOCIATION, COPARTNERSHIP, PERSON OR PERSONS, 25 ENGAGED IN ELECTRIC LIGHT AND POWER BUSINESS, WATERPOWER 26 BUSINESS AND HYDRO-ELECTRIC BUSINESS IN THIS COMMONWEALTH, SHALL 27 PAY TO THE STATE TREASURER, THROUGH THE DEPARTMENT OF REVENUE, A 28 TAX OF [FORTY-FOUR] FORTY-FIVE MILLS WITH A SURTAX EQUAL TO FIVE 29 MILLS UPON EACH DOLLAR OF THE GROSS RECEIPTS OF THE CORPORATION, 30 COMPANY OR ASSOCIATION, LIMITED PARTNERSHIP, JOINT-STOCK 19930S1190B1503 - 17 -
1 ASSOCIATION, COPARTNERSHIP, PERSON OR PERSONS, RECEIVED FROM: 2 (1) THE SALES OF ELECTRIC ENERGY WITHIN THIS STATE, EXCEPT 3 GROSS RECEIPTS DERIVED FROM THE SALES FOR RESALE OF ELECTRIC 4 ENERGY TO PERSONS, PARTNERSHIPS, ASSOCIATIONS, CORPORATIONS OR 5 POLITICAL SUBDIVISIONS SUBJECT TO THE TAX IMPOSED BY THIS 6 SUBSECTION UPON GROSS RECEIPTS DERIVED FROM SUCH RESALE; AND 7 (2) THE SALES OF ELECTRIC ENERGY PRODUCED IN PENNSYLVANIA 8 AND MADE OUTSIDE OF PENNSYLVANIA IN A STATE THAT HAS TAKEN 9 ACTION SINCE DECEMBER 21, 1977 WHICH RESULTS IN HIGHER COSTS FOR 10 ELECTRIC ENERGY PRODUCED IN THAT STATE AND SOLD IN PENNSYLVANIA 11 UNLESS THE ACTION THAT WAS TAKEN AFTER DECEMBER 21, 1977 IS 12 RESCINDED ACCORDING TO THE FOLLOWING APPORTIONMENT FORMULA: 13 EXCEPT FOR GROSS RECEIPTS DERIVED FROM SALES UNDER CLAUSE (1), 14 THE GROSS RECEIPTS FROM ALL SALES OF ELECTRICITY OF THE PRODUCER 15 SHALL BE APPORTIONED TO THE COMMONWEALTH OF PENNSYLVANIA BY THE 16 RATIO OF THE PRODUCER'S OPERATING AND MAINTENANCE EXPENSES IN 17 PENNSYLVANIA AND DEPRECIATION ATTRIBUTABLE TO PROPERTY IN 18 PENNSYLVANIA TO THE PRODUCER'S TOTAL OPERATING AND MAINTENANCE 19 EXPENSES AND DEPRECIATION. 20 * * * 21 SECTION 11. THE AUTOMATIC ADJUSTMENT OF RATES PROVIDED FOR 22 IN 66 PA.C.S. § 1307 SHALL NOT INCLUDE NOR APPLY TO THE GROSS 23 RECEIPTS TAXES PAID UNDER SECTION 1101(B) OF THE ACT. HOWEVER, 24 THIS EXCLUSION SHALL NOT APPLY IF THE GROSS RECEIPTS TAX PAID 25 UNDER SECTION 1101(B) OF THE ACT IS SUBSEQUENTLY CHANGED BY THE 26 GENERAL ASSEMBLY. 27 Section 10 12. The amendments affecting AMENDMENT OF <-- 28 Articles VIII, VIII-A and IX OF THE ACT shall apply to the tax <-- 29 years beginning on or after January 1, 1994. 30 Section 11. The provisions 13. THE AMENDMENT of sections <-- 19930S1190B1503 - 18 -
1 401, 402, 601 and 1101 of the act shall be retroactive to the
2 tax years beginning on or after January 1, 1993.
3 Section 12 14. This act shall take effect immediately. <--
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