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PRINTER'S NO. 957
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
758
Session of
2019
INTRODUCED BY HAYWOOD, HUGHES, MUTH, STREET, COSTA, TARTAGLIONE,
LEACH AND KEARNEY, JUNE 12, 2019
REFERRED TO FINANCE, JUNE 12, 2019
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," in personal income tax, further providing for
imposition of tax and for amount of withholding tax.
The General Assembly finds and declares as follows:
(1) Section 1 of Article VIII of the Constitution of
Pennsylvania requires that all taxes be uniform upon the same
class of subjects.
(2) The Constitution of Pennsylvania allows the General
Assembly to impose nonuniform tax rates as long as the tax
rates are imposed uniformly on each class of subjects.
(3) Upon identifying legitimate distinctions among
various classes of subjects, the General Assembly can impose
a different tax rate on each class of subjects in compliance
with constitutional standards.
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(4) This act establishes different classes of subjects
and imposes different tax rates on each class.
(5) The Constitution of Pennsylvania makes it clear that
the imposition of different tax rates complies with section 1
of Article VIII of the Constitution of Pennsylvania insofar
as those tax rates are uniform on each class.
(6) This act does not violate section 1 of Article VIII
of the Constitution of Pennsylvania by imposing different tax
rates on different classes of subjects because the uniformity
clause prohibition on disparate tax rates is not implicated
when uniformity of taxation is maintained within each class.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Sections 302 and 324.1(a) of the act of March 4,
1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, are
amended to read:
Section 302. Imposition of Tax.--(a) [Every] For tax years
beginning after December 31, 2003, and ending on December 31,
2019, every resident individual, estate or trust shall be
subject to, and shall pay for the privilege of receiving each of
the classes of income hereinafter enumerated in section 303, a
tax upon each dollar of income received by that resident during
that resident's taxable year at the rate of three and seven
hundredths per cent.
(b) [Every] For tax years beginning after December 31, 2003,
and ending on December 31, 2019, every nonresident individual,
estate or trust shall be subject to, and shall pay for the
privilege of receiving each of the classes of income hereinafter
enumerated in section 303 from sources within this Commonwealth,
a tax upon each dollar of income received by that nonresident
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during that nonresident's taxable year at the rate of three and
seven hundredths per cent.
(c) For tax years beginning after December 31, 2019, every
resident individual, estate or trust shall be subject to and
shall pay a tax upon each dollar of income received by that
resident during that resident's taxable year at the rate of two
and eight-tenths per cent for the privilege of receiving the
following classes of income as enumerated in section 303:
(1) Compensation.
(2) Interest derived from obligations which are not
statutorily free from State or local taxation under any other
act of the General Assembly of the Commonwealth of Pennsylvania
or under the laws of the United States, any amount paid under
contract of life insurance or endowment or annuity contract
which is includable in gross income for Federal income tax
purposes and any amount paid out of the Archer Medical Savings
Account (Archer MSA) or health savings account that is
includable in the gross income of an account beneficiary for
Federal income tax purposes.
(d) For tax years beginning after December 31, 2019, every
resident individual, estate or trust shall be subject to, and
shall pay a tax upon each dollar of income received by that
resident during that resident's taxable year at the rate of six
and five-tenths per cent for the privilege of receiving the
following classes of income as enumerated in section 303:
(1) Net profits.
(2) Net gains or income from disposition of property.
(3) Net gains or income derived from or in the form of
rents, royalties, patents and copyrights.
(4) Dividends.
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(5) Gambling and lottery winnings other than noncash prizes
of the Pennsylvania State Lottery.
(6) Net gains or income derived through estates or trusts.
To the extent that income or gain is subject to tax under one of
the classes of income enumerated in this section such income or
gain shall not be subject to tax under another of such
enumerated classes.
(e) For tax years beginning after December 31, 2019, every
nonresident individual, estate or trust shall be subject to, and
shall pay a tax upon each dollar of income received by that
nonresident during that nonresident's taxable year at the rate
of two and eight-tenths per cent for the privilege of receiving
the following classes of income as enumerated in section 303:
(1) Compensation.
(2) Interest derived from obligations which are not
statutorily free from State or local taxation under any other
act of the General Assembly of the Commonwealth of Pennsylvania
or under the laws of the United States, any amount paid under
contract of life insurance or endowment or annuity contract
which is includable in gross income for Federal income tax
purposes and any amount paid out of the Archer Medical Savings
Account (Archer MSA) or health savings account that is
includable in the gross income of an account beneficiary for
Federal income tax purposes.
(f) For tax years beginning after December 31, 2019, every
nonresident individual, estate or trust shall be subject to and
shall pay a tax upon each dollar of income received by that
nonresident during that nonresident's taxable year at the rate
of six and five-tenths per cent for the privilege of receiving
the following classes of income as enumerated in section 303:
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(1) Net profits.
(2) Net gains or income from disposition of property.
(3) Net gains or income derived from or in the form of
rents, royalties, patents and copyrights.
(4) Dividends.
(5) Gambling and lottery winnings other than noncash prizes
of the Pennsylvania State Lottery.
(6) Net gains or income derived through estates or trusts.
To the extent that income or gain is subject to tax under one of
the classes of income enumerated in this section such income or
gain shall not be subject to tax under another of such
enumerated classes.
Section 324.1. Amount of Withholding Tax.--(a) The amount
of tax withheld from nonresidents and the amount of the
withholding tax payable under section 324 shall be equal to the
income from sources within this Commonwealth of the partnership,
association or Pennsylvania S corporation which is allocable to
nonresident partners, members or shareholders multiplied by the
tax rate specified in section [302(b)] 302 (f) .
* * *
Section 2. The amendment of sections 302 and 324.1(a) of the
act shall apply to taxable years beginning after December 31,
2019.
Section 3. This act shall take effect immediately.
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