PRINTER'S NO. 1011
No. 911 Session of 1999
INTRODUCED BY L. I. COHEN, ADOLPH, ARMSTRONG, BAKER, BEBKO-
JONES, BISHOP, CAWLEY, CIVERA, COLAFELLA, CORRIGAN, DRUCE,
EGOLF, FAIRCHILD, FICHTER, FLICK, GANNON, GEIST, GLADECK,
GODSHALL, HERMAN, HUTCHINSON, JAMES, KENNEY, LAUGHLIN,
LEDERER, LEH, LUCYK, LYNCH, MAJOR, MARSICO, McCALL,
McILHATTAN, McILHINNEY, METCALFE, MYERS, ORIE, PETRARCA,
PLATTS, RAMOS, RAYMOND, READSHAW, RUBLEY, RUFFING, SAINATO,
SAYLOR, SCRIMENTI, SEMMEL, SERAFINI, SEYFERT, SOLOBAY,
STABACK, STERN, STEVENSON, E. Z. TAYLOR, TRAVAGLIO, TRELLO,
TRICH, TRUE, WILLIAMS, WOJNAROSKI, YOUNGBLOOD, ZIMMERMAN AND
ZUG, MARCH 17, 1999
REFERRED TO COMMITTEE ON FINANCE, MARCH 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," providing for a phased reduction of the rate of
11 inheritance tax; and further providing for the calculation of
12 the estate tax.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Section 2106 of the act of March 4, 1971 (P.L.6,
16 No.2), known as the Tax Reform Code of 1971, added August 4,
17 1991 (P.L.97, No.22), is amended to read:
18 Section 2106. Imposition of Tax.--[An]
1 (1) Except as provided in paragraph (2), an inheritance tax
2 for the use of the Commonwealth is imposed upon every transfer
3 subject to tax under this article at the rates specified in
4 section 2116.
5 (2) The transfer of property for estates of decedents dying
6 after December 31, 1999, is not subject to the inheritance tax.
7 Section 2. Section 2116(a) of the act, amended June 16, 1994
8 (P.L.279, No.48) and June 30, 1995 (P.L.139, No.21), is amended
9 to read:
10 Section 2116. Inheritance Tax.--(a) (1) Inheritance tax
11 upon the transfer of property passing to or for the use of any
12 of the following shall be at the rate of six per cent[:] for the
13 estate of a decedent dying before or on December 31, 1999, and
14 at a rate of zero per cent for any decedent dying on or after
15 January 1, 2000:
16 (i) grandfather, grandmother, father, mother and lineal
17 descendants; or
18 (ii) wife or widow and husband or widower of a child.
19 (1.1) Inheritance tax upon the transfer of property passing
20 to or for the use of a husband or wife shall be:
21 (i) At the rate of three per cent for estates of decedents
22 dying on or after July 1, 1994, and before January 1, 1995.
23 (ii) At a rate of zero per cent for estates of decedents
24 dying on or after January 1, 1995.
25 (2) Inheritance tax upon the transfer of property passing to
26 or for the use of all persons other than those designated in
27 subclause (1) or (1.1) or exempt under section 2111(m) shall be
28 at the rate of fifteen per cent[.] for a decedent dying before
29 or on December 31, 1999, and at a rate of zero per cent for a
30 decedent dying on or after January 1, 2000.
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1 (3) When property passes to or for the use of a husband and
2 wife with right of survivorship, one of whom is taxable at a
3 rate lower than the other, the lower rate of tax shall be
4 applied to the entire interest.
5 * * *
6 Section 3. Section 2117 of the act, added August 4, 1991
7 (P.L.97, No.22), is amended to read:
8 Section 2117. Estate Tax.--(a) In the event that a Federal
9 estate tax is payable to the Federal Government on the transfer
10 of the taxable estate of a decedent who was a resident of this
11 Commonwealth at the time of his death, [and the inheritance tax,
12 if any, actually paid to the Commonwealth by reason of the death
13 of the decedent (disregarding interest or the amount of any
14 discount allowed under section 2142) is less than] a State tax
15 equal to the maximum credit for State death taxes allowable
16 under section 2011 of the Internal Revenue Code of 1986 (Public
17 Law 99-514, 26 U.S.C. § 2011), [a tax equal to the difference]
18 is imposed. If a resident decedent owned or had an interest in
19 real property or tangible personal property having a situs in
20 another state, the tax so imposed shall be reduced by the
21 greater of:
22 (1) the amount of death taxes actually paid to the other
23 state with respect to the estate of the decedent, excluding any
24 death tax expressly imposed to receive the benefit of the credit
25 for state death taxes allowed under section 2011 of the Internal
26 Revenue Code of 1986; or
27 (2) an amount computed by multiplying the maximum credit for
28 state death taxes allowable under section 2011 of the Internal
29 Revenue code of 1986 by a fraction, the numerator of which is
30 the value of the real property and tangible personal property to
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1 the extent included in the decedent's gross estate for Federal
2 estate tax purposes and having a situs in the other state and
3 the denominator of which is the value of the decedent's gross
4 estate for Federal estate tax purposes.
5 (b) In the event that a Federal estate tax is payable to the
6 Federal Government on the transfer of the taxable estate of a
7 decedent who was not a resident of this Commonwealth at the time
8 of his death but who owned or had an interest in real property
9 or tangible personal property having a situs in this
10 Commonwealth, a tax is imposed in an amount computed by
11 multiplying the maximum credit for State death taxes allowable
12 under section 2011 of the Internal Revenue Code of 1986 by a
13 fraction, the numerator of which is the value of the real
14 property and tangible personal property to the extent included
15 in the decedent's gross estate for Federal estate tax purposes
16 having a situs in this Commonwealth and the denominator of which
17 is the value of the decedent's gross estate for Federal estate
18 tax purposes[, and deducting from that amount the inheritance
19 tax, if any, actually paid to the Commonwealth (disregarding
20 interest or the amount of any discount allowed under section
21 2142)].
22 (c) When an inheritance tax is imposed after an estate tax
23 imposed under subsection (a) or (b) has been paid, the estate
24 tax paid shall be credited against any inheritance tax later
25 imposed.
26 Section 4. This act shall take effect immediately.
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