PRINTER'S NO. 2971
No. 2183 Session of 2003
INTRODUCED BY BROWNE, NOVEMBER 24, 2003
REFERRED TO COMMITTEE ON FINANCE, NOVEMBER 24, 2003
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 "corporation" for purposes of
11 capital stock and franchise tax.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. The definition "corporation" in section 601 of
15 the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform
16 Code of 1971, amended June 29, 2002 (P.L.559, No.89), is amended
17 to read:
18 Section 601. Definitions and Reports.--(a) The following
19 words, terms and phrases when used in this Article VI shall have
20 the meaning ascribed to them in this section, except where the
21 context clearly indicates a different meaning:
22 * * *
1 "Corporation." (A) Any of the following entities:
2 (1) A corporation.
3 (2) A joint-stock association.
4 (3) A business trust.
5 (4) A limited liability company, other than a restricted
6 professional company which is subject to 15 Pa.C.S. Ch. 89
7 Subch. L (relating to restricted professional companies), which
8 is deemed to be a limited partnership pursuant to 15 Pa.C.S. §
9 8997 (relating to taxation of restricted professional companies)
10 or a sole proprietorship.
11 (5) An entity which for Federal income tax purposes is
12 classified as a corporation.
13 (B) The term does not include any of the following:
14 (1) A business trust which qualifies as a real estate
15 investment trust under section 856 of the Internal Revenue Code
16 of 1986 (26 U.S.C. § 856) or which is a qualified real estate
17 investment trust subsidiary under section 856(i) of the Internal
18 Revenue Code of 1986 (26 U.S.C. § 856(i)) or a related business
19 trust which confines its activities in this Commonwealth to the
20 maintenance, administration and management of intangible
21 investments and activities of real estate investment trusts or
22 qualified real estate investment trust subsidiaries. A business
23 trust which is a qualified real estate investment trust
24 subsidiary under section 856(i) of the Internal Revenue Code of
25 1986 (26 U.S.C. § 856(i)) shall be treated as part of the real
26 estate investment trust which owns all of the stock of the
27 qualified real estate investment trust subsidiary.
28 (2) A business trust which qualifies as a regulated
29 investment company under section 851 of the Internal Revenue
30 Code of 1986 (26 U.S.C. § 851) and which is registered with the
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1 United States Securities and Exchange Commission under the
2 Investment Company Act of 1940 (54 Stat. 789, 15 U.S.C. § 80a-1
3 et seq.) or a related business trust which confines its
4 activities in this Commonwealth to the maintenance,
5 administration and management of intangible investments and
6 activities of regulated investment companies.
7 (3) A corporation, trust or other entity which is an exempt
8 organization as defined by section 501 of the Internal Revenue
9 Code of 1986 (26 U.S.C. § 501).
10 (4) A corporation, trust or other entity organized as a not-
11 for-profit organization under the laws of this Commonwealth or
12 the laws of any other state which:
13 (i) would qualify as an exempt organization as defined by
14 section 501 of the Internal Revenue Code of 1986 (26 U.S.C. §
15 501);
16 (ii) would qualify as a homeowners association as defined by
17 section 528(c) of the Internal Revenue Code of 1986 (26 U.S.C. §
18 528(c)); or
19 (iii) is a membership organization subject to the Federal
20 limitations on deductions from taxable income under section 277
21 of the Internal Revenue Code of 1986 (26 U.S.C. § 277) but only
22 if no pecuniary gain or profit inures to any member or related
23 entity from the membership organization.
24 (5) A cooperative agricultural association subject to 15
25 Pa.C.S. Ch. 75 (relating to cooperative agricultural
26 associations).
27 (6) A business trust if the trust is all of the following:
28 (i) Created or managed by an entity which is subject to the
29 tax imposed by Article VII or XV or which is an affiliate of the
30 entity which shares at least eighty per cent common ownership.
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1 (ii) Created and managed for the purpose of facilitating the
2 securitization of intangible assets.
3 (iii) Classified as a partnership or a disregarded entity
4 for Federal income tax purposes.
5 * * *
6 Section 2. This act shall apply to taxable years beginning
7 after December 31, 2003.
8 Section 3. This act shall take effect immediately.
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