THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY DINNIMAN, COSTA, EICHELBERGER, FONTANA, SOLOBAY, STACK, TARTAGLIONE, BREWSTER, YUDICHAK AND BOSCOLA, MARCH 22, 2011

REFERRED TO FINANCE, MARCH 22, 2011  

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; providing procedures for the payment,

collection, administration and enforcement thereof; providing

for tax credits in certain cases; conferring powers and

imposing duties upon the Department of Revenue, certain

employers, fiduciaries, individuals, persons, corporations

and other entities; prescribing crimes, offenses and

penalties," further providing for the definition of "taxable

income."

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 401(3)2(a)(9) of the act of March 4, 1971

(P.L.6, No.2), known as the Tax Reform Code of 1971, amended

October 9, 2009 (P.L.451, No. 48), is amended to read:

Section 401.  Definitions.--The following words, terms, and

phrases, when used in this article, shall have the meaning

ascribed to them in this section, except where the context

clearly indicates a different meaning:

* * *

(3)  "Taxable income."  * * *

2.  In case the entire business of any corporation, other

than a corporation engaged in doing business as a regulated

investment company as defined by the Internal Revenue Code of

1986, is not transacted within this Commonwealth, the tax

imposed by this article shall be based upon such portion of the

taxable income of such corporation for the fiscal or calendar

year, as defined in subclause 1 hereof, and may be determined as

follows:

(a)  Division of Income.

* * *

(9)  (A)  Except as provided in subparagraph (B):

(i)  For taxable years beginning before January 1, 2007, all

business income shall be apportioned to this State by

multiplying the income by a fraction, the numerator of which is

the property factor plus the payroll factor plus three times the

sales factor and the denominator of which is five.

(ii)  For taxable years beginning after December 31, 2006,

all business income shall be apportioned to this State by

multiplying the income by a fraction, the numerator of which is

the sum of fifteen times the property factor, fifteen times the

payroll factor and seventy times the sales factor and the

denominator of which is one hundred.

(iii)  For taxable years beginning after December 31, 2008,

all business income shall be apportioned to this State by

multiplying the income by a fraction, the numerator of which is

the sum of eight and a half times the property factor, eight and

a half times the payroll factor and eighty-three times the sales

factor and the denominator of which is one hundred.

(iv)  For taxable years beginning after December 31, 2009,

all business income shall be apportioned to this State by

multiplying the income by a fraction, the numerator of which is

the sum of five times the property factor, five times the

payroll factor and ninety times the sales factor and the

denominator of which is one hundred.

(v)  For taxable years beginning after December 31, 2010, all

business income shall be apportioned by utilizing 100% of the

sales factor. The property factor and the payroll factor shall

not be used to apportion any business income.

(B)  For purposes of apportionment of the capital stock -

franchise tax as provided in section 602 of Article VI of this

act, the apportionment fraction shall be the property factor

plus the payroll factor plus the sales factor as the numerator,

and the denominator shall be three.

* * *

Section 2.  This act shall take effect immediately.