PRINTER'S NO. 1057
No. 948 Session of 1999
INTRODUCED BY TANGRETTI, ARGALL, CORRIGAN, MAITLAND, SCHULER,
MARKOSEK, READSHAW, GEIST, BEBKO-JONES, BELFANTI, SCRIMENTI,
WOJNAROSKI, HALUSKA, PISTELLA, LAUGHLIN, CURRY, WALKO, PESCI,
TRELLO, STURLA, STABACK, McILHINNEY, MICOZZIE, VAN HORNE,
GIGLIOTTI, MELIO, RAMOS, McCALL, SOLOBAY, M. COHEN,
L. I. COHEN, GRUCELA, ORIE, SAINATO, JAMES, FREEMAN,
WILLIAMS, BELARDI, YOUNGBLOOD, BUNT, STEELMAN, PETRARCA,
HUTCHINSON, ROSS, CIVERA, JOSEPHS, HARHAI, STETLER, SERAFINI,
HERMAN, FRANKEL AND E. Z. TAYLOR, MARCH 22, 1999
REFERRED TO COMMITTEE ON FINANCE, MARCH 22, 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," further providing for sales and use tax
11 definitions, for sales and use tax exclusions, for sales and
12 use tax penalties, for personal income tax definitions, for
13 classes of personal income, for personal income tax
14 penalties, for realty transfer tax definitions, for realty
15 transfer tax exclusions and for realty transfer tax
16 penalties; and conferring powers and duties on the
17 Pennsylvania Historical and Museum Commission.
18 The General Assembly of the Commonwealth of Pennsylvania
19 hereby enacts as follows:
20 Section 1. Section 201 of the act of March 4, 1971 (P.L.6,
21 No.2), known as the Tax Reform Code of 1971, is amended by
22 adding definitions to read:
1 Section 201. Definitions.--The following words, terms and
2 phrases when used in this Article II shall have the meaning
3 ascribed to them in this section, except where the context
4 clearly indicates a different meaning:
5 * * *
6 (uu) "Historic homesite." A building which complies with
7 all of the following:
8 (1) The building has been in existence for at least fifty
9 years.
10 (2) The building is occupied by the owner as a principal
11 residence.
12 (3) If partially leased by the owner, the building is
13 divided into no more than three units, other than the owner's
14 principal residence, leased for:
15 (i) residential use on at least a monthly basis; or
16 (ii) commercial use.
17 (4) The building:
18 (i) has been designated by Federal, State or local
19 government as a historic property;
20 (ii) is located in an area designated by Federal, State or
21 local government as a historic district; or
22 (iii) is located in a residential conservation district.
23 (vv) "Residential conservation district." A zoning overlay
24 district intended, in selected areas of residential districts,
25 to encourage:
26 (1) infill development which respects the historic context
27 of the environment;
28 (2) rehabilitation of existing housing through the use of
29 sound maintenance and repair rather than replacement; and
30 (3) preservation, protection and enhancement of streetscapes
19990H0948B1057 - 2 -
1 and areas of architectural, historic or cultural importance.
2 Section 2. Section 204 of the act is amended by adding a
3 clause to read:
4 Section 204. Exclusions from Tax.--The tax imposed by
5 section 202 shall not be imposed upon
6 * * *
7 (58) The sale at retail or use of tangible personal property
8 or services which are valued in excess of one thousand dollars
9 ($1,000) and which are used in the conversion to or
10 rehabilitation of a historic homesite if all of the conditions
11 set forth in this clause apply. This clause includes costs
12 chargeable to the rehabilitation and restoration of the physical
13 elements of the building, such as historic decorative elements;
14 upgrading of the structural, mechanical, electrical and plumbing
15 systems to applicable code; and alterations associated with the
16 conversion to a historic homesite. This clause does not include
17 costs attributable to the acquisition of the property; the
18 enlargement of an existing building; landscaping, driveways and
19 other site features; outbuildings or garages; nor personal labor
20 performed by the owner. The following conditions must be met:
21 (i) By the date of purchase, the purchaser covenants all of
22 the following with the department:
23 (A) Within five years of the date of purchase, the
24 rehabilitation work will be completed to the satisfaction of the
25 Pennsylvania Historical and Museum Commission in accordance with
26 36 CFR 67.7 (relating to standards for rehabilitation).
27 (B) The historic homesite:
28 (I) has been maintained, for a five-year period prior to the
29 date of purchase, as the principal residence of the purchaser;
30 (II) will be maintained, for a five-year period subsequent
19990H0948B1057 - 3 -
1 to the date of purchase, as the principal residence of the
2 purchaser or a successor in interest; or
3 (III) will have been maintained, for a total of five years
4 prior and subsequent to the date of purchase, as the principal
5 residence of the purchaser or a successor in interest.
6 (ii) The seller submits to the department the form which
7 provides for the exclusion under this clause.
8 (iii) The purchaser has not previously taken advantage of
9 the exemption under this clause for the same historic homesite.
10 Section 3. Section 267 of the act is amended to read:
11 Section 267. Penalties.--(a) Penalty Assessed as Tax. The
12 penalties, additions, interest and liabilities provided by this
13 article shall be paid upon notice and demand by the department,
14 and shall be assessed and collected in the same manner as taxes.
15 Except as otherwise provided, any reference in this article to
16 "tax" imposed by this article shall be deemed also to refer to
17 the penalties, additions, interest and liabilities provided by
18 this part.
19 (b) Attempt to Evade or Defeat Tax. Any person who wilfully
20 attempts, in any manner, to evade or defeat the tax imposed by
21 this article, or the payment thereof, or to assist any other
22 person to evade or defeat the tax imposed by this article, or
23 the payment thereof, or to receive a refund improperly, shall,
24 in addition to other penalties provided by law, be liable for a
25 penalty equal to one-half of the total amount of the tax evaded.
26 In any direct proceeding arising out of a petition for
27 reassessment or refund as provided in this article, in which an
28 issue of fact is raised with respect to whether a return is
29 fraudulent or with respect to the propriety of the imposition by
30 the department of the penalty prescribed in this subsection (b),
19990H0948B1057 - 4 -
1 the burden of proof with respect to such issue shall be upon the
2 department.
3 (c) Historic Homesite. If a purchaser fails to comply with
4 the covenant under section 204(58)(i), unless it determines that
5 the failure to comply is justified, the department shall assess
6 a penalty against the purchaser in the amount of twelve per cent
7 of the purchase price of the property.
8 Section 4. Section 301 introductory paragraph of the act is
9 amended and the section is amended by adding clauses to read:
10 Section 301. Definitions.--The following words, terms and
11 phrases when used in this article shall have the meaning
12 ascribed to them in this section except where the context
13 clearly indicates a different meaning[. Unless specifically
14 provided otherwise, any reference in this article to the
15 Internal Revenue Code shall include the Internal Revenue Code of
16 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.), as amended to
17 January 1, 1997]:
18 * * *
19 (i.3) "Historic homesite" means a building which complies
20 with all of the following:
21 (1) The building has been in existence for at least fifty
22 years.
23 (2) The building is divided into no more than four units
24 used or leased for:
25 (i) residential use on at least a monthly basis; or
26 (ii) commercial use.
27 (3) The building:
28 (i) has been designated by Federal, State or local
29 government as a historic property;
30 (ii) is located in an area designated by Federal, State or
19990H0948B1057 - 5 -
1 local government as a historic district; or
2 (iii) is located in a residential conservation district.
3 * * *
4 (o.4) "Residential conservation district" means a zoning
5 overlay district intended, in selected areas of residential
6 districts, to encourage:
7 (1) infill development which respects the historic context
8 of the environment;
9 (2) rehabilitation of existing housing through the use of
10 sound maintenance and repair rather than replacement; and
11 (3) preservation, protection and enhancement of streetscapes
12 and areas of architectural, historic or cultural importance.
13 * * *
14 Section 5. Section 303(a)(3)(vii) of the act, added April
15 23, 1998 (P.L.239, No.45), is amended and the paragraph is
16 amended by adding a subparagraph to read:
17 Section 303. Classes of Income.--(a) The classes of income
18 referred to above are as follows:
19 * * *
20 (3) Net gains or income from disposition of property. Net
21 gains or net income, less net losses, derived from the sale,
22 exchange or other disposition of property, including real
23 property, tangible personal property, intangible personal
24 property or obligations issued on or after the effective date of
25 this amendatory act by the Commonwealth; any public authority,
26 commission, board or other agency created by the Commonwealth;
27 any political subdivision of the Commonwealth or any public
28 authority created by any such political subdivision; or by the
29 Federal Government as determined in accordance with accepted
30 accounting principles and practices. For the purpose of this
19990H0948B1057 - 6 -
1 article:
2 * * *
3 (vii) The term "net gains or net income, less net losses,"
4 shall not include any gain or loss from the sale, exchange or
5 other disposition of the taxpayer's principal residence unless
6 the residence is a historic homesite.
7 (A) For purposes of this subparagraph, the term "principal
8 residence" shall mean the property that has been owned and used
9 by the taxpayer as the taxpayer's principal residence for
10 periods aggregating two years or more during the five-year
11 period ending on the date of the sale, exchange or disposition:
12 Provided, however, That the following shall apply:
13 (I) In the case of property only a portion of which, during
14 the five-year period ending on the date of the sale, exchange or
15 disposition, has been owned or used by the taxpayer as the
16 taxpayer's principal residence for periods aggregating two years
17 or more, this subparagraph shall apply with respect to so much
18 of the gain from the sale, exchange or disposition of such
19 property as is determined under regulations prescribed by the
20 department to be attributable to that portion.
21 (II) In the case of a principal residence only a portion of
22 which has never been subject to the allowance for depreciation,
23 this subparagraph shall apply with respect to so much of the
24 gain from the sale, exchange or disposition of such property as
25 is determined under regulations prescribed by the department to
26 be attributable to that portion.
27 (B) The provisions of this subparagraph shall not apply to a
28 sale, exchange or disposition if, during the two-year period
29 ending upon the date of the sale, exchange or disposition, there
30 was a prior sale, exchange or disposition by the taxpayer of a
19990H0948B1057 - 7 -
1 principal residence unless the sale, exchange or disposition is
2 by reason of a change in employment, health or, to the extent
3 provided in regulations, unforeseen circumstances.
4 (C) The provisions of this subparagraph shall not apply to
5 any sale, exchange or disposition made prior to January 1, 1998.
6 (viii) The term "net gains or income" shall not include the
7 net gain on the sale of a historic homesite if all of the
8 following apply:
9 (A) By the date of transfer of title to the property, the
10 purchaser covenants with the Pennsylvania Historical and Museum
11 Commission to:
12 (I) within five years of the date of transfer of title to
13 the property complete, to the satisfaction of the commission,
14 the rehabilitation work in accordance with 36 CFR 67.7 (relating
15 to standards for rehabilitation) and occupy the premises as the
16 principal residence of the purchaser or a successor in interest;
17 (II) maintain the premises as the principal residence of the
18 purchaser or a successor in interest for at least five years
19 after the occupation begins; and
20 (III) if part of the premises is leased, divide the premises
21 into no more than three units, in addition to the unit
22 maintained as a residence by the purchaser or successor in
23 interest, leased for residential use on a monthly basis or for
24 commercial use.
25 (B) At the time of purchase, the purchaser provides a copy
26 of the covenant under clause (A) to the seller.
27 (C) The seller submits to the department a copy of the
28 covenant under clause (A) and the form which provides for the
29 exclusion under this subparagraph (vii).
30 (ix) The term "net gains or income" shall exclude twenty per
19990H0948B1057 - 8 -
1 cent of the cost of rehabilitating a historic homesite if all of
2 the following apply:
3 (A) The cost of the rehabilitation is in excess of one
4 thousand dollars ($1,000).
5 (B) Before commencing rehabilitation of the property, the
6 purchaser covenants with the department to:
7 (I) complete, to the satisfaction of the Pennsylvania
8 Historical and Museum Commission, the rehabilitation work in
9 accordance with 36 CFR 67.7 (relating to standards for
10 rehabilitation) within five years and occupy the premises as the
11 principal residence of the purchaser or a successor in interest;
12 (II) maintain the residence as the principal residence of
13 the purchaser or a successor in interest for at least five years
14 after the occupation begins; and
15 (III) if part of the premises is leased, divide the premises
16 into no more than three units, in addition to the unit
17 maintained as a residence by the purchaser or successor in
18 interest, leased for residential use on a monthly basis or for
19 commercial use.
20 (C) The seller submits to the department the form which
21 provides for the exclusion under this subparagraph (viii).
22 * * *
23 Section 6. Section 352 of the act is amended by adding a
24 subsection to read:
25 Section 352. Additions, Penalties and Fees.--* * *
26 (k) If a purchaser fails to comply with the covenant under
27 section 303(a)(3)(viii)(B), unless it determines that the
28 failure to comply is justified, the department shall assess a
29 penalty against the purchaser in the amount of ten per cent of
30 the assessed value of the property.
19990H0948B1057 - 9 -
1 Section 7. Section 1101-C of the act is amended by adding
2 definitions to read:
3 Section 1101-C. Definitions.--The following words when used
4 in this article shall have the meanings ascribed to them in this
5 section:
6 * * *
7 "Historic homesite." A building which complies with all of
8 the following:
9 (1) The building has been in existence for at least fifty
10 years.
11 (2) The building is divided into no more than four units
12 leased for:
13 (i) residential use on at least a monthly basis; or
14 (ii) commercial use.
15 (3) The building:
16 (i) has been designated by Federal, State or local
17 government as a historic property;
18 (ii) is located in an area designated by Federal, State or
19 local government as a historic district; or
20 (iii) is located in a residential conservation district.
21 * * *
22 "Residential conservation district." A zoning overlay
23 district intended, in selected areas of residential districts,
24 to encourage:
25 (1) infill development which respects the historic context
26 of the environment;
27 (2) rehabilitation of existing housing through the use of
28 sound maintenance and repair rather than replacement; and
29 (3) preservation, protection and enhancement of streetscapes
30 and areas of architectural, historic or cultural importance.
19990H0948B1057 - 10 -
1 * * *
2 Section 8. Section 1102-C.3 of the act, amended or added
3 July 2, 1986 (P.L.318, No.77), June 16, 1994 (P.L.279, No.48)
4 and May 7, 1997 (P.L.85, No.7), is amended to read:
5 Section 1102-C.3. Excluded Transactions.--(a) The tax
6 imposed by section 1102-C shall not be imposed upon:
7 (1) A transfer to the Commonwealth or to any of its
8 instrumentalities, agencies or political subdivisions by gift,
9 dedication or deed in lieu of condemnation or deed of
10 confirmation in connection with condemnation proceedings, or a
11 reconveyance by the condemning body of the property condemned to
12 the owner of record at the time of condemnation, which
13 reconveyance may include property line adjustments provided said
14 reconveyance is made within one year from the date of
15 condemnation.
16 (2) A document which the Commonwealth is prohibited from
17 taxing under the Constitution or statutes of the United States.
18 (3) A conveyance to a municipality, township, school
19 district or county pursuant to acquisition by the municipality,
20 township, school district or county of a tax delinquent property
21 at sheriff sale or tax claim bureau sale.
22 (4) A transfer for no or nominal actual consideration which
23 corrects or confirms a transfer previously recorded, but which
24 does not extend or limit existing record legal title or
25 interest.
26 (5) A transfer of division in kind for no or nominal actual
27 consideration of property passed by testate or intestate
28 succession and held by cotenants; however, if any of the parties
29 take shares greater in value than their undivided interest, tax
30 is due on the excess.
19990H0948B1057 - 11 -
1 (6) A transfer between husband and wife, between persons who
2 were previously husband and wife who have since been divorced,
3 provided the property or interest therein subject to such
4 transfer was acquired by the husband and wife or husband or wife
5 prior to the granting of the final decree in divorce, between
6 parent and child or the spouse of such child, between brother or
7 sister or spouse of a brother or sister and brother or sister or
8 the spouse of a brother or sister and between a grandparent and
9 grandchild or the spouse of such grandchild, except that a
10 subsequent transfer by the grantee within one year shall be
11 subject to tax as if the grantor were making such transfer.
12 (7) A transfer for no or nominal actual consideration of
13 property passing by testate or intestate succession from a
14 personal representative of a decedent to the decedent's devisee
15 or heir.
16 (8) A transfer for no or nominal actual consideration to a
17 trustee of an ordinary trust where the transfer of the same
18 property would be exempt if the transfer was made directly from
19 the grantor to all of the possible beneficiaries that are
20 entitled to receive the property or proceeds from the sale of
21 the property under the trust, whether or not such beneficiaries
22 are contingent or specifically named. A trust clause which
23 identifies the contingent beneficiaries by reference to the
24 heirs of the trust settlor as determined by the laws of the
25 intestate succession shall not disqualify a transfer from the
26 exclusion provided by this clause. No such exemption shall be
27 granted unless the recorder of deeds is presented with a copy of
28 the trust instrument that clearly identifies the grantor and all
29 possible beneficiaries.
30 (8.1) A transfer for no or nominal actual consideration to a
19990H0948B1057 - 12 -
1 trustee of a living trust from the settlor of the living trust.
2 No such exemption shall be granted unless the recorder of deeds
3 is presented with a copy of the living trust instrument.
4 (9) A transfer for no or nominal actual consideration from a
5 trustee of an ordinary trust to a specifically named beneficiary
6 that is entitled to receive the property under the recorded
7 trust instrument or to a contingent beneficiary where the
8 transfer of the same property would be exempt if the transfer
9 was made by the grantor of the property into the trust to that
10 beneficiary. However, any transfer of real estate from a living
11 trust during the settlor's lifetime shall be considered for the
12 purposes of this article as if such transfer were made directly
13 from the settlor to the grantee.
14 (9.1) A transfer for no or nominal actual consideration from
15 a trustee of a living trust after the death of the settlor of
16 the trust or from a trustee of a trust created pursuant to the
17 will of a decedent to a beneficiary to whom the property is
18 devised or bequeathed.
19 (9.2) A transfer for no or nominal actual consideration from
20 the trustee of a living trust to the settlor of the living trust
21 if such property was originally conveyed to the trustee by the
22 settlor.
23 (10) A transfer for no or nominal actual consideration from
24 trustee to successor trustee.
25 (11) A transfer:
26 (i) for no or nominal actual consideration between principal
27 and agent or straw party; or
28 (ii) from or to an agent or straw party where, if the agent
29 or straw party were his principal, no tax would be imposed under
30 this article.
19990H0948B1057 - 13 -
1 Where the document by which title is acquired by a grantee or
2 statement of value fails to set forth that the property was
3 acquired by the grantee from, or for the benefit of, his
4 principal, there is a rebuttable presumption that the property
5 is the property of the grantee in his individual capacity if the
6 grantee claims an exemption from taxation under this clause.
7 (12) A transfer made pursuant to the statutory merger or
8 consolidation of a corporation or statutory division of a
9 nonprofit corporation, except where the department reasonably
10 determines that the primary intent for such merger,
11 consolidation or division is avoidance of the tax imposed by
12 this article.
13 (13) A transfer from a corporation or association of real
14 estate held of record in the name of the corporation or
15 association where the grantee owns stock of the corporation or
16 an interest in the association in the same proportion as his
17 interest in or ownership of the real estate being conveyed and
18 where the stock of the corporation or the interest in the
19 association has been held by the grantee for more than two
20 years.
21 (14) A transfer from a nonprofit industrial development
22 agency or authority to a grantee of property conveyed by the
23 grantee to that agency or authority as security for a debt of
24 the grantee or a transfer to a nonprofit industrial development
25 agency or authority.
26 (15) A transfer from a nonprofit industrial development
27 agency or authority to a grantee purchasing directly from it,
28 but only if:
29 (i) the grantee shall directly use such real estate for the
30 primary purpose of manufacturing, fabricating, compounding,
19990H0948B1057 - 14 -
1 processing, publishing, research and development,
2 transportation, energy conversion, energy production, pollution
3 control, warehousing or agriculture; and
4 (ii) the agency or authority has the full ownership interest
5 in the real estate transferred.
6 (16) A transfer by a mortgagor to the holder of a bona fide
7 mortgage in default in lieu of a foreclosure or a transfer
8 pursuant to a judicial sale in which the successful bidder is
9 the bona fide holder of a mortgage, unless the holder assigns
10 the bid to another person.
11 (17) Any transfer between religious organizations or other
12 bodies or persons holding title for a religious organization if
13 such real estate is not being or has not been used by such
14 transferor for commercial purposes.
15 (18) A transfer to a conservancy which possesses a tax-
16 exempt status pursuant to section 501(c)(3) of the Internal
17 Revenue Code of 1954 (68A Stat. 3, 26 U.S.C. § 501(c)(3)) and
18 which has as its primary purpose preservation of land for
19 historic, recreational, scenic, agricultural or open-space
20 opportunities; or a transfer from such a conservancy to the
21 United States, the Commonwealth or to any of their
22 instrumentalities, agencies or political subdivisions; or any
23 transfer from such a conservancy where the real estate is
24 encumbered by a perpetual agricultural conservation easement as
25 defined by the act of June 30, 1981 (P.L.128, No.43), known as
26 the "Agricultural Area Security Law," and such conservancy has
27 owned the real estate for at least two years immediately prior
28 to the transfer.
29 (19) A transfer of real estate devoted to the business of
30 agriculture to a family farm corporation by a member of the same
19990H0948B1057 - 15 -
1 family which directly owns at least seventy-five per cent of
2 each class of the stock thereof.
3 (19.1) A transfer of real estate devoted to the business of
4 agriculture to a family farm partnership by a member of the same
5 family, which family directly owns at least seventy-five per
6 cent of the interests in the partnership.
7 (20) A transfer between members of the same family of an
8 ownership interest in a real estate company, family farm
9 corporation or family farm partnership which owns real estate.
10 (21) A transaction wherein the tax due is one dollar ($1) or
11 less.
12 (22) Leases for the production or extraction of coal, oil,
13 natural gas or minerals and assignments thereof.
14 In order to exercise any exclusion provided in this section, the
15 true, full and complete value of the transfer shall be shown on
16 the statement of value. For leases of coal, oil, natural gas or
17 minerals, the statement of value may be limited to an
18 explanation of the reason such document is not subject to tax
19 under this article.
20 (b) The State tax imposed by section 1102-C shall not be
21 imposed upon a sale of a historic homesite as follows:
22 (1) To qualify for an exclusion under this subsection, all
23 of the following must apply:
24 (i) By the date of transfer of title to the property, the
25 purchaser covenants with the department to:
26 (A) within five years of the date of transfer of title to
27 the property complete, to the satisfaction of the Pennsylvania
28 Historical and Museum Commission, the rehabilitation work in
29 accordance with 36 CFR 67.7 (relating to standards for
30 rehabilitation) and occupy the premises as the principal
19990H0948B1057 - 16 -
1 residence of the purchaser or a successor in interest;
2 (B) maintain the residence as the principal residence of the
3 purchaser or a successor in interest for at least five years
4 after the occupation begins; and
5 (C) if part of the premises is leased, divide the premises
6 into no more than three units, in addition to the unit
7 maintained as a residence by the purchaser or successor in
8 interest, leased for residential use on a monthly basis or for
9 commercial use.
10 (ii) At the time of purchase, the purchaser provides a copy
11 of the covenant under subclause (i) to the seller.
12 (2) A taxpayer who has paid the tax and who is eligible for
13 exclusion under clause (1) is entitled to a refund.
14 (3) By July 31, a taxpayer requesting a refund under clause
15 (2) for the prior fiscal year must submit to the department
16 proof of all of the following:
17 (i) Payment of the tax.
18 (ii) Eligibility for exclusion under clause (1).
19 (4) Within ninety days of submission of proof under clause
20 (3), the department must approve or deny a refund. Failure to
21 meet time requirement of this clause shall be deemed an approval
22 of the refund.
23 (5) By August 31, the department shall compute the total
24 amount of approved refunds under clause (4).
25 (6) Refunds shall be made as follows:
26 (i) The department shall compute ten per cent of the tax
27 collected under section 1102-C for the prior fiscal year which,
28 after allocation to the Keystone Recreation, Park and
29 Conservation Fund, is allocated to the General Fund.
30 (ii) If the total amount of approved refunds is not more
19990H0948B1057 - 17 -
1 than the amount computed under subclause (i), the department
2 shall make, out of the amount computed under subclause (i), full
3 refunds.
4 (iii) If the total amount of approved refunds is more than
5 the amount computed under subclause (i), the department shall
6 make, out of the amount computed under subclause (i),
7 proportionate refunds in the ratio that each approved refund
8 bears to the total amount of approved refunds.
9 Section 9. Section 1109-C.1 of the act, added July 2, 1986
10 (P.L.318, No.77), is amended to read:
11 Section 1109-C.1. Civil Penalties.--(a) If any part of any
12 underpayment of tax imposed by this article is due to fraud,
13 there shall be added to the tax an amount equal to fifty per
14 cent of the underpayment.
15 (b) In the case of failure to record a declaration required
16 under this article on the date prescribed therefor, unless it is
17 shown that such failure is due to reasonable cause, there shall
18 be added to the tax five per cent of the amount of such tax if
19 the failure is for not more than one month, with an additional
20 five per cent for each additional month or fraction thereof
21 during which such failure continues, not exceeding fifty per
22 cent in the aggregate.
23 (c) If a purchaser fails to comply with the covenant under
24 section 1102-C.3(b)(1)(i), unless it determines that the failure
25 to comply is justified, the department shall assess a penalty
26 against the purchaser in the amount of ten per cent of the
27 assessed value of the property.
28 Section 10. The Pennsylvania Historical and Museum
29 Commission may promulgate regulations to administer this act.
30 Section 11. The amendment or addition of sections
19990H0948B1057 - 18 -
1 303(a)(3)(vii), (viii) and (ix) and 352(k) of the act shall
2 apply to taxable years beginning after December 31, 1998.
3 Section 12. This act shall take effect in 60 days.
B16L72VDL/19990H0948B1057 - 19 -