PRINTER'S NO. 380
No. 334 Session of 2003
INTRODUCED BY MANN, BROWNE, GORDNER, WALKO, READSHAW, FLEAGLE,
J. EVANS, STABACK, HERMAN, STEIL, GODSHALL, SHANER, STERN,
WILT, SAINATO, CAPPELLI, R. MILLER, SATHER, S. MILLER,
YEWCIC, NICKOL, BAKER, HARHAI, METCALFE, HUTCHINSON, WRIGHT,
GRUCELA, SAYLOR, DALLY, MELIO, SEMMEL, LAUGHLIN, BENNINGHOFF,
GEIST, WATSON, WOJNAROSKI, HORSEY, TIGUE, SOLOBAY, VANCE,
MAHER, HENNESSEY, CORRIGAN, FRANKEL, RUBLEY, McCALL,
SAMUELSON, ROSS, ROONEY, JOSEPHS, REICHLEY, CIVERA, THOMAS
AND PALLONE, FEBRUARY 18, 2003
REFERRED TO COMMITTEE ON FINANCE, FEBRUARY 18, 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 providing for the apportionment of
11 business income for corporate net income tax purposes.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. Section 401(3)2(a)(9) of the act of March 4, 1971
15 (P.L.6, No.2), known as the Tax Reform Code of 1971, amended May
16 12, 1999 (P.L.26, No.4), is amended to read:
17 Section 401. 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
1 clearly indicates a different meaning:
2 * * *
3 (3) "Taxable income." * * *
4 2. In case the entire business of any corporation, other
5 than a corporation engaged in doing business as a regulated
6 investment company as defined by the Internal Revenue Code of
7 1954, as amended, is not transacted within this Commonwealth,
8 the tax imposed by this article shall be based upon such portion
9 of the taxable income of such corporation for the fiscal or
10 calendar year, as defined in subclause 1 hereof, and may be
11 determined as follows:
12 (a) Division of Income.
13 * * *
14 (9) (A) Except as provided in subparagraph (B):
15 (i) For the tax years beginning after December 31, 2002, and
16 before January 1, 2004, all business income shall be apportioned
17 to this State by multiplying the income by a fraction, the
18 numerator of which is the property factor multiplied by ten plus
19 the payroll factor multiplied by ten plus [three times] the
20 sales factor multiplied by eighty, and the denominator of which
21 is [five.] one hundred.
22 (ii) For tax years beginning after December 31, 2003, all
23 business income shall be apportioned to this State by
24 multiplying the income by the sales factor.
25 (B) For purposes of apportionment of the capital stock -
26 franchise tax as provided in section 602 of Article VI of this
27 act, the apportionment fraction shall be the property factor
28 plus the payroll factor plus the sales factor as the numerator,
29 and the denominator shall be three.
30 * * *
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1 Section 2. This act shall apply to taxable years beginning
2 after December 31, 2002.
3 Section 3. This act shall take effect immediately.
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