PRIOR PRINTER'S NO. 542 PRINTER'S NO. 1303
No. 518 Session of 1989
INTRODUCED BY SHAFFER, HOPPER, CORMAN, PETERSON, WENGER,
GREENWOOD, MUSTO, JUBELIRER, SHUMAKER, FATTAH, O'PAKE,
LOEPER, AFFLERBACH, HELFRICK, ANDREZESKI, REGOLI, SALVATORE,
ARMSTRONG, WILT, LEMMOND, BAKER AND PUNT, FEBRUARY 13, 1989
AS AMENDED ON THIRD CONSIDERATION, JUNE 19, 1989
AN ACT
1 Providing for the development of shared foreign sales
2 corporations; providing tax exemptions for these
3 corporations; and conferring powers and duties on the
4 Department of Commerce and the Department of Revenue.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Short title.
8 This act shall be known and may be cited as the Shared
9 Foreign Sales Corporation Act.
10 Section 2. Definitions.
11 The following words and phrases when used in this act shall
12 have the meanings given to them in this section unless the
13 context clearly indicates otherwise:
14 "Department." The Department of Commerce of the
15 Commonwealth.
16 "Related in terms of management." Having officers or
17 directors in common with another corporation.
18 "Related in terms of stock ownership." Being a parent
1 corporation of another corporation, being a subsidiary
2 corporation of another corporation or owning at least 10% of the
3 outstanding stock of another corporation.
4 "Shared foreign sales corporation." A corporation that:
5 (1) consists of not more than 25 corporations which are
6 not related in terms of stock ownership or management; and
7 (2) is incorporated solely for the purpose of promoting
8 exports by small businesses in this Commonwealth.
9 "Small business." A business that employs not more than 500
10 employees.
11 Section 3. Department.
12 The department has the following powers and duties:
13 (1) Promulgate regulations establishing criteria for the
14 development of shared foreign sales corporations.
15 (2) Assist in the development of shared foreign sales
16 corporations for exporters, port authorities and trade
17 associations.
18 (3) Certify shared foreign sales corporations which meet
19 the criteria under paragraph (1).
20 Section 4. Tax exemption.
21 (a) General rule.--The profits derived from a shared foreign
22 sales corporation which is certified under section 3(3) shall be
23 excluded from taxable income under Article IV of the act of
24 March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
25 1971.
26 (b) Administration.--The Department of Revenue shall
27 promulgate regulations to administer this section.
28 (C) LIMITATION.--THE TOTAL TAX INCOME EXCLUDED FROM TAXATION <--
29 UNDER THIS SECTION SHALL NOT EXCEED $500,000 IN ANY FISCAL YEAR.
30 Section 5. Effective date.
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1 This act shall take effect as follows:
2 (1) Sections 3(1) and 4(b) shall take effect in 60 days.
3 (2) The remainder of this act shall take effect in 180
4 days.
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