PRINTER'S NO. 635
No. 607 Session of 1999
INTRODUCED BY COY, TRELLO, SOLOBAY, GRUCELA, STABACK, MANDERINO,
LUCYK, NAILOR, WALKO, HERMAN, DeWEESE, BELFANTI, HANNA,
PESCI, GORDNER, McCALL, GODSHALL, M. COHEN, BARRAR, SAINATO,
VAN HORNE, GEORGE, YOUNGBLOOD, HARHAI, DALEY, MANN AND
WILLIAMS, FEBRUARY 17, 1999
REFERRED TO COMMITTEE ON FINANCE, FEBRUARY 17, 1999
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," further defining "compensation" for personal
11 income tax purposes.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. Section 301(d) of the act of March 4, 1971
15 (P.L.6, No.2), known as the Tax Reform Code of 1971, amended
16 April 23, 1998 (P.L.239, No.45), is amended to read:
17 Section 301. 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
20 clearly indicates a different meaning. Unless specifically
21 provided otherwise, any reference in this article to the
1 Internal Revenue Code shall include the Internal Revenue Code of
2 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.), as amended to
3 January 1, 1997:
4 * * *
5 (d) "Compensation" means and shall include salaries, wages,
6 commissions, bonuses and incentive payments whether based on
7 profits or otherwise, fees, tips and similar remuneration
8 received for services rendered, whether directly or through an
9 agent, and whether in cash or in property.
10 The term "compensation" shall not mean or include: (i)
11 periodic payments for sickness and disability other than regular
12 wages received during a period of sickness or disability; or
13 (ii) disability, retirement or other payments arising under
14 workmen's compensation acts, occupational disease acts and
15 similar legislation by any government; or (iii) payments
16 commonly recognized as old age or retirement benefits paid to
17 persons retired from service after reaching a specific age or
18 after a stated period of employment; or (iv) payments commonly
19 known as public assistance, or unemployment compensation
20 payments by any governmental agency; or (v) payments to
21 reimburse actual expenses; or (vi) payments made by employers or
22 labor unions, including payments made pursuant to a cafeteria
23 plan qualifying under section 125 of the Internal Revenue Code
24 of 1986 (Public Law 99-514, 26 U.S.C. § 125), for employe
25 benefit programs covering hospitalization, sickness, disability
26 or death, supplemental unemployment benefits or strike benefits:
27 Provided, That the program does not discriminate in favor of
28 highly compensated individuals as to eligibility to participate,
29 payments or program benefits; or (vii) any compensation received
30 by United States servicemen serving in a combat zone; or (viii)
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1 payments received by a foster parent for in-home care of foster
2 children from an agency of the Commonwealth or a political
3 subdivision thereof or an organization exempt from Federal tax
4 under section 501(c)(3) of the Internal Revenue Code of 1954
5 which is licensed by the Commonwealth or a political subdivision
6 thereof as a placement agency; or (ix) payments made by
7 employers or labor unions for employe benefit programs covering
8 social security or retirement; or (x) personal use of an
9 employer's owned or leased property or of employer-provided
10 services; or (xi) qualified contributions received from a Roth
11 IRA under section 408A of the Internal Revenue Code of 1986
12 (Public Law 99-154, 26 U.S.C. § 408A).
13 * * *
14 Section 2. This act shall take effect in 60 days.
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