PRINTER'S NO. 1497
No. 1200 Session of 1999
INTRODUCED BY EARLL, HART, KUKOVICH, JUBELIRER, LOEPER, PICCOLA, SALVATORE, TOMLINSON, HELFRICK, WAGNER, DENT, BRIGHTBILL, TILGHMAN, CONTI, CORMAN, ROBBINS, MADIGAN, WENGER, MURPHY, SLOCUM, O'PAKE, MOWERY, ARMSTRONG, RHOADES, LEMMOND AND THOMPSON, NOVEMBER 15, 1999
REFERRED TO FINANCE, NOVEMBER 15, 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 the calculation of the 11 manufacturing, processing, research and development 12 exemptions. 13 The General Assembly of the Commonwealth of Pennsylvania 14 hereby enacts as follows: 15 Section 1. Section 602(b) of the act of March 4, 1971 16 (P.L.6, No.2), known as the Tax Reform Code of 1971, amended May 17 12, 1999 (P.L.26, No.4), is amended to read: 18 Section 602. Imposition of Tax.--* * * 19 (b) (1) Every foreign entity from which a report is 20 required under section 601 hereof, shall be subject to and pay 21 to the department annually, a franchise tax which is the greater
1 of (i) the amount computed by multiplying each dollar of the 2 capital stock value as defined in section 601(a) by the 3 appropriate rate of tax as set forth in subsection (h); or (ii) 4 the minimum tax set forth in subsection (i), upon a taxable 5 value to be determined in the following manner. The capital 6 stock value shall be ascertained in the manner prescribed in 7 section 601(a) of this article. The taxable value shall then be 8 determined by employing the relevant apportionment factors set 9 forth in Article IV: Provided, That the manufacturing, 10 processing, research and development exemptions contained under 11 section 602(a) shall also apply to foreign corporations and in 12 determining the relevant apportionment factors the numerator of 13 the property[, payroll, or sales] or payroll factors shall not 14 include any property[, payroll or sales] or payroll attributable 15 to manufacturing, processing, research or development activities 16 in the Commonwealth[: and Provided further, That, except]. Any 17 property or payroll attributable to manufacturing, processing, 18 research or development activities outside of the Commonwealth 19 shall also be excluded from the numerator of the property or 20 payroll factors. Except for the imposition of the minimum tax 21 set forth in subsection (i), the provisions of this section 22 shall not apply to the taxation of so much of the capital stock 23 value attributable to student loan assets owned or held by an 24 entity created for the securitization of student loans or by a 25 trustee on its behalf. Any foreign corporation, joint-stock 26 association, limited partnership or company subject to the tax 27 prescribed herein may elect to compute and pay its tax under 28 section 602(a): Provided, That any foreign corporation, joint- 29 stock association, limited partnership or company electing to 30 compute and pay its tax under section 602(a) shall be treated as 19990S1200B1497 - 2 -
1 if it were a domestic corporation for the purpose of determining 2 which of its assets are exempt from taxation and for the purpose 3 of determining the proportion of the value of its capital stock 4 which is subject to taxation. 5 (2) The provisions of this article shall apply to the 6 taxation of entities organized for manufacturing, processing, 7 research or development purposes, but shall not apply to such 8 entities as enjoy and exercise the right of eminent domain. 9 * * * 10 Section 2. This act shall apply to tax years beginning after 11 December 31, 1998. 12 Section 3. This act shall take effect immediately. K9L72RZ/19990S1200B1497 - 3 -