SENATE AMENDED PRIOR PRINTER'S NOS. 143, 269 PRINTER'S NO. 1484
No. 134 Session of 1997
INTRODUCED BY TRUE, SCHULER, PETTIT, THOMAS, VANCE, MANDERINO, BARLEY, RUBLEY, JOSEPHS, BROWN, MILLER, EGOLF, HERSHEY, ARMSTRONG, MASLAND, BEBKO-JONES, MUNDY, LAUGHLIN, YOUNGBLOOD, MAITLAND, BOYES, STRITTMATTER, GEORGE, HENNESSEY, MARSICO, WOJNAROSKI, WALKO, READSHAW, NAILOR, DALEY, GIGLIOTTI, CHADWICK, FLEAGLE, HALUSKA, ZUG, CAPPABIANCA, MELIO, FICHTER, SANTONI, KELLER, SAINATO, FARGO, MARKOSEK, FAIRCHILD, PESCI, JAROLIN, LAWLESS, PLATTS, RYAN, PERZEL, E. Z. TAYLOR, STERN, ROONEY, SHANER, OLASZ, BAKER, CURRY, BATTISTO, COY, McCALL, LaGROTTA, STURLA, TRAVAGLIO, TANGRETTI, ADOLPH, JAMES, LEH, HERMAN, LEVDANSKY, J. TAYLOR, COLAFELLA, CORNELL, STEELMAN, BARD, FEESE, LUCYK, TRELLO, LEDERER, BROWNE, PETRARCA, WAUGH, DeLUCA, D. W. SNYDER, C. WILLIAMS, CIVERA, ALLEN, DiGIROLAMO, DENT, HUTCHINSON, WILT, RAMOS, L. I. COHEN, PHILLIPS, BARRAR, WASHINGTON, ROHRER, FLICK, EACHUS, SCHRODER, SEYFERT, BELARDI, AND ROSS JANUARY 29, 1997
SENATOR HART, FINANCE, IN SENATE, AS AMENDED, APRIL 15, 1997
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 personal income tax definitions and for 12 special tax provisions on poverty; providing for income tax 13 refund checkoffs for breast and cervical cancer research; 14 further providing for realty transfer tax definitions, for 15 exclusions, FOR NEIGHBORHOOD ASSISTANCE TAX CREDITS AND FOR <-- 16 INHERITANCE TAX; EXCLUDING CERTAIN COMPUTER SERVICES FROM 17 SALES AND USE TAX; FURTHER DEFINING "CLAIMANT" AND 18 "DEPENDENT"; FURTHER PROVIDING FOR SPECIAL TAX PROVISIONS FOR 19 POVERTY, FOR THE DETERMINATION OF CAPITAL STOCK VALUE AND FOR
1 ALLOCATION OF CIGARETTE TAX RECEIPTS TO THE CHILDREN'S HEALTH 2 FUND; FURTHER DEFINING "COMPENSATION" FOR PERSONAL INCOME TAX 3 PURPOSES TO EXCLUDE CAFETERIA PLANS AND CERTAIN OTHER 4 BENEFITS; EXTENDING THE NEIGHBORHOOD ASSISTANCE TAX CREDIT TO 5 PERSONAL INCOME TAXES IMPOSED UNDER ARTICLE III; and making 6 repeals. 7 The General Assembly of the Commonwealth of Pennsylvania 8 hereby enacts as follows: 9 Section 1. Section 201(b), (c), (d), (f), (g), (k), (o) and 10 (jj) of the act of March 4, 1971 (P.L.6, No.2), known as the Tax 11 Reform Code of 1971, amended or added August 4, 1991 (P.L.97, 12 No.22), December 13, 1991 (P.L.373, No.40), June 16, 1994 13 (P.L.279, No.48) and June 30, 1995 (P.L.139, No.21), are amended 14 to read: 15 Section 201. Definitions.--The following words, terms and 16 phrases when used in this Article II shall have the meaning 17 ascribed to them in this section, except where the context 18 clearly indicates a different meaning: 19 * * * 20 (b) "Maintaining a place of business in this Commonwealth." 21 (1) Having or maintaining within this Commonwealth, directly 22 or by a subsidiary, an office, distribution house, sales house, 23 warehouse, service enterprise or other place of business, or any 24 agent of general or restricted authority irrespective of whether 25 the place of business or agent is located here permanently or 26 temporarily or whether the person or subsidiary maintaining such 27 place of business or agent is authorized to do business within 28 this Commonwealth; or 29 (2) The engaging in any activity as a business within this 30 Commonwealth by any person, directly or by a subsidiary, in 31 connection with the lease, sale or delivery of tangible personal 32 property or the performance of services thereon for use, storage 19970H0134B1484 - 2 -
1 or consumption or in connection with the sale or delivery for 2 use of the services described in subclauses (11) through (16) 3 and (18) of clause (k) of this section, including, but not 4 limited to, having, maintaining or using any office, 5 distribution house, sales house, warehouse or other place of 6 business, any stock of goods or any solicitor, salesman, agent 7 or representative under its authority, at its direction or with 8 its permission, regardless of whether the person or subsidiary 9 is authorized to do business in this Commonwealth. 10 (3) Regularly or substantially soliciting orders within this 11 Commonwealth in connection with the lease, sale or delivery of 12 tangible personal property to or the performance thereon of 13 services or in connection with the sale or delivery of the 14 services described in subclauses (11) through (16) and (18) of 15 clause (k) of this section for residents of this Commonwealth by 16 means of catalogues or other advertising, whether such orders 17 are accepted within or without this Commonwealth. 18 (c) "Manufacture." The performance of manufacturing, 19 fabricating, compounding, processing or other operations, 20 engaged in as a business, which place any tangible personal 21 property in a form, composition or character different from that 22 in which it is acquired whether for sale or use by the 23 manufacturer, and shall include, but not be limited to-- 24 (1) Every operation commencing with the first production 25 stage and ending with the completion of tangible personal 26 property having the physical qualities (including packaging, if 27 any, passing to the ultimate consumer) which it has when 28 transferred by the manufacturer to another; 29 (2) The publishing of books, newspapers, magazines and other 30 periodicals and printing; 19970H0134B1484 - 3 -
1 (3) Refining, blasting, exploring, mining and quarrying for, 2 or otherwise extracting from the earth or from waste or stock 3 piles or from pits or banks any natural resources, minerals and 4 mineral aggregates including blast furnace slag; 5 (4) Building, rebuilding, repairing and making additions to, 6 or replacements in or upon vessels designed for commercial use 7 of registered tonnage of fifty tons or more when produced upon 8 special order of the purchaser, or when rebuilt, repaired or 9 enlarged, or when replacements are made upon order of, or for 10 the account of the owner; 11 (5) Research having as its objective the production of a new 12 or an improved (i) product or utility service, or (ii) method of 13 producing a product or utility service, but in either case not 14 including market research or research having as its objective 15 the improvement of administrative efficiency. 16 (6) Remanufacture for wholesale distribution by a 17 remanufacturer of motor vehicle parts from used parts acquired 18 in bulk by the remanufacturer using an assembly line process 19 which involves the complete disassembly of such parts and 20 integration of the components of such parts with other used or 21 new components of parts, including the salvaging, recycling or 22 reclaiming of used parts by the remanufacturer. 23 (7) Remanufacture or retrofit by a manufacturer or 24 remanufacturer of aircraft, armored vehicles, other defense- 25 related vehicles having a finished value of at least fifty 26 thousand dollars ($50,000). Remanufacture or retrofit involves 27 the disassembly of such aircraft, vehicles, parts or components, 28 including electric or electronic components, the integration of 29 those parts and components with other used or new parts or 30 components, including the salvaging, recycling or reclaiming of 19970H0134B1484 - 4 -
1 the used parts or components and the assembly of the new or used 2 aircraft, vehicles, parts or components. For purposes of this 3 clause, the following terms or phrases have the following 4 meanings: 5 (i) "aircraft" means fixed-wing aircraft, helicopters, 6 powered aircraft, tilt-rotor or tilt-wing aircraft, unmanned 7 aircraft and gliders; 8 (ii) "armored vehicles" means tanks, armed personnel 9 carriers and all other armed track or semitrack vehicles; or 10 (iii) "other defense-related vehicles" means trucks, truck- 11 tractors, trailers, jeeps and other utility vehicles, including 12 any unmanned vehicles. 13 The term "manufacture[,]" shall not include constructing, 14 altering, servicing, repairing or improving real estate or 15 repairing, servicing or installing tangible personal property, 16 nor the cooking[,] or freezing [or baking] of fruits, 17 vegetables, mushrooms, fish, seafood, meats[,] or poultry [or 18 bakery products]. 19 * * * 20 (d) "Processing." The performance of the following 21 activities when engaged in as a business enterprise: 22 (1) The filtering or heating of honey, the cooking[, baking] 23 or freezing of fruits, vegetables, mushrooms, fish, seafood, 24 meats[,] or poultry [or bakery products], when the person 25 engaged in such business packages such property in sealed 26 containers for wholesale distribution. 27 (1.1) The processing of vegetables by cleaning, cutting, 28 coring or chopping and treating to preserve, sterilize or purify 29 and substantially extend the useful shelf life of the 30 vegetables, when the person engaged in such activity packages 19970H0134B1484 - 5 -
1 such property in sealed containers for wholesale distribution. 2 (2) The scouring, carbonizing, cording, combing, throwing, 3 twisting or winding of natural or synthetic fibers, or the 4 spinning, bleaching, dyeing, printing or finishing of yarns or 5 fabrics, when such activities are performed prior to sale to the 6 ultimate consumer. 7 (3) The electroplating, galvanizing, enameling, anodizing, 8 coloring, finishing, impregnating or heat treating of metals or 9 plastics for sale or in the process of manufacturing. 10 (4) The rolling, drawing or extruding of ferrous and non- 11 ferrous metals. 12 (5) The fabrication for sale of ornamental or structural 13 metal or of metal stairs, staircases, gratings, fire escapes or 14 railings (not including fabrication work done at the 15 construction site). 16 (6) The preparation of animal feed or poultry feed for sale. 17 (7) The production, processing and bottling of non-alcoholic 18 beverages for wholesale distribution. 19 (8) The operation of a saw mill or planing mill for the 20 production of lumber or lumber products for sale. 21 (9) The milling for sale of flour or meal from grains. 22 (10) The slaughtering and dressing of animals for meat to be 23 sold or to be used in preparing meat products for sale, and the 24 preparation of meat products including lard, tallow, grease, 25 cooking and inedible oils for wholesale distribution. 26 (11) The processing of used lubricating oils. 27 (12) The broadcasting of radio and television programs of 28 licensed commercial or educational stations. 29 * * * 30 (f) "Purchase at retail." 19970H0134B1484 - 6 -
1 (1) The acquisition for a consideration of the ownership,
2 custody or possession of tangible personal property other than
3 for resale by the person acquiring the same when such
4 acquisition is made for the purpose of consumption or use,
5 whether such acquisition shall be absolute or conditional, and
6 by whatsoever means the same shall have been effected.
7 (2) The acquisition of a license to use or consume, and the
8 rental or lease of tangible personal property, other than for
9 resale regardless of the period of time the lessee has
10 possession or custody of the property.
11 (3) The obtaining for a consideration of those services
12 described in subclauses (2), (3) and (4) of clause (k) of this
13 section other than for resale.
14 (4) A retention after March 7, 1956, of possession, custody
15 or a license to use or consume pursuant to a rental contract or
16 other lease arrangement (other than as security), other than for
17 resale.
18 (5) The obtaining for a consideration of those services
19 described in subclauses (11) through (16) and (18) of clause (k)
20 of this section.
21 The term "purchase at retail" with respect to "liquor" and
22 "malt or brewed beverages" shall include the purchase of
23 "liquor" from any "Pennsylvania Liquor Store" by any person for
24 any purpose, and the purchase of "malt or brewed beverages" from
25 a "manufacturer of malt or brewed beverages," "distributor" or
26 "importing distributor" by any person for any purpose, except
27 purchases from a "manufacturer of malt or brewed beverages" by a
28 "distributor" or "importing distributor" or purchases from an
29 "importing distributor" by a "distributor" within the meaning of
30 the "Liquor Code." The term "purchase at retail" shall not
19970H0134B1484 - 7 -
1 include any purchase of "malt or brewed beverages" from a 2 "retail dispenser" or any purchase of "liquor" or "malt or 3 brewed beverages" from a person holding a "retail liquor 4 license" within the meaning of and pursuant to the provisions of 5 the "Liquor Code," but shall include any purchase or acquisition 6 of "liquor" or "malt or brewed beverages" other than pursuant to 7 the provisions of the "Liquor Code." 8 (g) "Purchase price." 9 (1) The total value of anything paid or delivered, or 10 promised to be paid or delivered, whether it be money or 11 otherwise, in complete performance of a sale at retail or 12 purchase at retail, as herein defined, without any deduction on 13 account of the cost or value of the property sold, cost or value 14 of transportation, cost or value of labor or service, interest 15 or discount paid or allowed after the sale is consummated, any 16 other taxes imposed by the Commonwealth of Pennsylvania or any 17 other expense except that there shall be excluded any gratuity 18 or separately stated deposit charge for returnable containers. 19 (2) There shall be deducted from the purchase price the 20 value of any tangible personal property actually taken in trade 21 or exchange in lieu of the whole or any part of the purchase 22 price. For the purpose of this clause, the amount allowed by 23 reason of tangible personal property actually taken in trade or 24 exchange shall be considered the value of such property. 25 (3) In determining the purchase price on the sale or use of 26 taxable tangible personal property or a service described in 27 subclauses (11) through (16) and (18) of clause (k) of this 28 section where, because of affiliation of interests between the 29 vendor and purchaser, or irrespective of any such affiliation, 30 if for any other reason the purchase price declared by the 19970H0134B1484 - 8 -
1 vendor or taxpayer on the taxable sale or use of such tangible 2 personal property or service is, in the opinion of the 3 department, not indicative of the true value of the article or 4 service or the fair price thereof, the department shall, 5 pursuant to uniform and equitable rules, determine the amount of 6 constructive purchase price upon the basis of which the tax 7 shall be computed and levied. Such rules shall provide for a 8 constructive amount of purchase price for each such sale or use 9 which would naturally and fairly be charged in an arms-length 10 transaction in which the element of common interest between the 11 vendor or purchaser is absent or if no common interest exists, 12 any other element causing a distortion of the price or value is 13 likewise absent. For the purpose of this clause where a taxable 14 sale or purchase at retail transaction occurs between a parent 15 and a subsidiary, affiliate or controlled corporation of such 16 parent corporation, there shall be a rebuttable presumption, 17 that because of such common interest such transaction was not at 18 arms-length. 19 (4) Where there is a transfer or retention of possession or 20 custody, whether it be termed a rental, lease, service or 21 otherwise, of tangible personal property including, but not 22 limited to linens, aprons, motor vehicles, trailers, tires, 23 industrial office and construction equipment, and business 24 machines the full consideration paid or delivered to the vendor 25 or lessor shall be considered the purchase price, even though 26 such consideration be separately stated and be designated as 27 payment for processing, laundering, service, maintenance, 28 insurance, repairs, depreciation or otherwise. Where the vendor 29 or lessor supplies or provides an employe to operate such 30 tangible personal property, the value of the labor thus supplied 19970H0134B1484 - 9 -
1 may be excluded and shall not be considered as part of the 2 purchase price if separately stated. There shall also be 3 included as part of the purchase price the value of anything 4 paid or delivered, or promised to be paid or delivered by a 5 lessee, whether it be money or otherwise, to any person other 6 than the vendor or lessor by reason of the maintenance, 7 insurance or repair of the tangible personal property which a 8 lessee has the possession or custody of under a rental contract 9 or lease arrangement. 10 (5) With respect to the tax imposed by subsection (b) of 11 section 202 upon any tangible personal property originally 12 purchased by the user of such property six months or longer 13 prior to the first taxable use of such property within the 14 Commonwealth, such user may elect to pay tax on a substituted 15 base determined by considering the purchase price of such 16 property for tax purposes to be equal to the prevailing market 17 price of similar tangible personal property at the time and 18 place of such first use within the Commonwealth. Such election 19 must be made at the time of filing a tax return with the 20 department and reporting such tax liability and paying the 21 proper tax due plus all accrued penalties and interest, if there 22 be any, within six months of the due date of such report and 23 payment, as provided for by subsections (a) and (c) of section 24 217 of this article. 25 (6) The purchase price of employment agency services and 26 help supply services shall be the service fee paid by the 27 purchaser to the vendor or supplying entity. The term "service 28 fee," as used in this subclause, shall be the total charge or 29 fee of the vendor or supplying entity minus the costs of the 30 supplied employe which costs are wages, salaries, bonuses and 19970H0134B1484 - 10 -
1 commissions, employment benefits, expense reimbursements and 2 payroll and withholding taxes, to the extent that these costs 3 are specifically itemized or that these costs in aggregate are 4 stated in billings from the vendor or supplying entity. To the 5 extent that these costs are not itemized or stated on the 6 billings, then the service fee shall be the total charge or fee 7 of the vendor or supplying entity. 8 (7) Unless the vendor separately states that portion of the 9 billing which applies to premium cable service as defined in 10 clause (ll) of this section, the total bill for the provision of 11 all cable services shall be the purchase price. 12 * * * 13 (k) "Sale at retail." 14 (1) Any transfer, for a consideration, of the ownership, 15 custody or possession of tangible personal property, including 16 the grant of a license to use or consume whether such transfer 17 be absolute or conditional and by whatsoever means the same 18 shall have been effected. 19 (2) The rendition of the service of printing or imprinting 20 of tangible personal property for a consideration for persons 21 who furnish, either directly or indirectly the materials used in 22 the printing or imprinting. 23 (3) The rendition for a consideration of the service of-- 24 (i) Washing, cleaning, waxing, polishing or lubricating of 25 motor vehicles of another, whether or not any tangible personal 26 property is transferred in conjunction therewith; and 27 (ii) Inspecting motor vehicles pursuant to the mandatory 28 requirements of "The Vehicle Code." 29 (4) The rendition for a consideration of the service of 30 repairing, altering, mending, pressing, fitting, dyeing, 19970H0134B1484 - 11 -
1 laundering, drycleaning or cleaning tangible personal property 2 other than wearing apparel or shoes, or applying or installing 3 tangible personal property as a repair or replacement part of 4 other tangible personal property except wearing apparel or shoes 5 for a consideration, whether or not the services are performed 6 directly or by any means other than by coin-operated self- 7 service laundry equipment for wearing apparel or household goods 8 and whether or not any tangible personal property is transferred 9 in conjunction therewith, except such services as are rendered 10 in the construction, reconstruction, remodeling, repair or 11 maintenance of real estate: Provided, however, That this 12 subclause shall not be deemed to impose tax upon such services 13 in the preparation for sale of new items which are excluded from 14 the tax under clause (26) of section 204, or upon diaper 15 service. 16 (8) Any retention of possession, custody or a license to use 17 or consume tangible personal property or any further obtaining 18 of services described in subclauses (2), (3) and (4) of this 19 clause pursuant to a rental or service contract or other 20 arrangement (other than as security). 21 The term "sale at retail" shall not include (i) any such 22 transfer of tangible personal property or rendition of services 23 for the purpose of resale, or (ii) such rendition of services or 24 the transfer of tangible personal property including, but not 25 limited to, machinery and equipment and parts therefor and 26 supplies to be used or consumed by the purchaser directly in the 27 operations of-- 28 (A) The manufacture of tangible personal property; 29 (B) Farming, dairying, agriculture, horticulture or 30 floriculture when engaged in as a business enterprise. The term 19970H0134B1484 - 12 -
1 "farming" shall include the propagation and raising of ranch 2 raised fur-bearing animals and the propagation of game birds for 3 commercial purposes by holders of propagation permits issued 4 under 34 Pa.C.S. (relating to game); 5 (C) The producing, delivering or rendering of a public 6 utility service, or in constructing, reconstructing, remodeling, 7 repairing or maintaining the facilities which are directly used 8 in producing, delivering or rendering such service; 9 (D) Processing as defined in clause (d) of this section. 10 The exclusions provided in paragraphs (A), (B), (C) and (D) 11 shall not apply to any vehicle required to be registered under 12 The Vehicle Code, except those vehicles used directly by a 13 public utility engaged in business as a common carrier; to 14 maintenance facilities; or to materials, supplies or equipment 15 to be used or consumed in the construction, reconstruction, 16 remodeling, repair or maintenance of real estate other than 17 directly used machinery, equipment, parts or foundations 18 therefor that may be affixed to such real estate. 19 The exclusions provided in paragraphs (A), (B), (C) and (D) 20 shall not apply to tangible personal property or services to be 21 used or consumed in managerial sales or other nonoperational 22 activities, nor to the purchase or use of tangible personal 23 property or services by any person other than the person 24 directly using the same in the operations described in 25 paragraphs (A), (B), (C) and (D) herein. 26 The exclusion provided in paragraph (C) shall not apply to 27 (i) construction materials, supplies or equipment used to 28 construct, reconstruct, remodel, repair or maintain facilities 29 not used directly by the purchaser in the production, delivering 30 or rendition of public utility service, (ii) construction 19970H0134B1484 - 13 -
1 materials, supplies or equipment used to construct, reconstruct, 2 remodel, repair or maintain a building, road or similar 3 structure, or (iii) tools and equipment used but not installed 4 in the maintenance of facilities used directly in the 5 production, delivering or rendition of a public utility service. 6 The exclusions provided in paragraphs (A), (B), (C) and (D) 7 shall not apply to the services enumerated in clauses (k)(11) 8 through (16) and (18) and (w) through (ii) and (kk), except that <-- 9 the exclusion provided in this subclause for farming, dairying 10 and agriculture shall apply to the service enumerated in clause 11 (z). 12 (9) Where tangible personal property or services are 13 utilized for purposes constituting a "sale at retail" and for 14 purposes excluded from the definition of "sale at retail," it 15 shall be presumed that such tangible personal property or 16 services are utilized for purposes constituting a "sale at 17 retail" and subject to tax unless the user thereof proves to the 18 department that the predominant purposes for which such tangible 19 personal property or services are utilized do not constitute a 20 "sale at retail." 21 (10) The term "sale at retail" with respect to "liquor" and 22 "malt or brewed beverages" shall include the sale of "liquor" by 23 any "Pennsylvania liquor store" to any person for any purpose, 24 and the sale of "malt or brewed beverages" by a "manufacturer of 25 malt or brewed beverages," "distributor" or "importing 26 distributor" to any person for any purpose, except sales by a 27 "manufacturer of malt or brewed beverages" to a "distributor" or 28 "importing distributor" or sales by an "importing distributor" 29 to a "distributor" within the meaning of the "Liquor Code." The 30 term "sale at retail" shall not include any sale of "malt or 19970H0134B1484 - 14 -
1 brewed beverages" by a "retail dispenser" or any sale of 2 "liquor" or "malt or brewed beverages" by a person holding a 3 "retail liquor license" within the meaning of and pursuant to 4 the provisions of the "Liquor Code," but shall include any sale 5 of "liquor" or "malt or brewed beverages" other than pursuant to 6 the provisions of the "Liquor Code." 7 (11) The rendition for a consideration of lobbying services. 8 (12) The rendition for a consideration of adjustment 9 services, collection services or credit reporting services. 10 (13) The rendition for a consideration of secretarial or 11 editing services. 12 (14) The rendition for a consideration of disinfecting or 13 pest control services, building maintenance or cleaning 14 services. 15 (15) The rendition for a consideration of employment agency 16 services or help supply services. 17 (16) The rendition for a consideration of computer 18 programming services; computer-integrated systems design 19 services; computer processing, data preparation or processing 20 services; information retrieval services; computer facilities 21 management services; or other computer-related services. At a 22 minimum, such services shall not include services that are part 23 of electronic fund transfers, electronic financial transactions 24 or services, banking or trust services, or management or 25 administrative services, including transfer agency, shareholder, 26 custodial and portfolio accounting services, provided directly 27 to any entity that duly qualifies to be taxed as a regulated 28 investment company or a real estate investment trust under the 29 provisions of the Internal Revenue Code of 1986 (Public Law 99- 30 514, 26 U.S.C. § 1 et seq.) or to an entity that provides such 19970H0134B1484 - 15 -
1 services to an entity so qualifying. 2 [(17) The rendition for a consideration of lawn care 3 service.] 4 (18) The rendition for a consideration of self-storage 5 service. 6 * * * 7 (o) "Use." 8 (1) The exercise of any right or power incidental to the 9 ownership, custody or possession of tangible personal property 10 and shall include, but not be limited to transportation, storage 11 or consumption. 12 (2) The obtaining by a purchaser of the service of printing 13 or imprinting of tangible personal property when such purchaser 14 furnishes, either directly or indirectly, the articles used in 15 the printing or imprinting. 16 (3) The obtaining by a purchaser of the services of (i) 17 washing, cleaning, waxing, polishing or lubricating of motor 18 vehicles whether or not any tangible personal property is 19 transferred to the purchaser in conjunction with such services, 20 and (ii) inspecting motor vehicles pursuant to the mandatory 21 requirements of "The Vehicle Code." 22 (4) The obtaining by a purchaser of the service of 23 repairing, altering, mending, pressing, fitting, dyeing, 24 laundering, drycleaning or cleaning tangible personal property 25 other than wearing apparel or shoes or applying or installing 26 tangible personal property as a repair or replacement part of 27 other tangible personal property other than wearing apparel or 28 shoes, whether or not the services are performed directly or by 29 any means other than by means of coin-operated self-service 30 laundry equipment for wearing apparel or household goods, and 19970H0134B1484 - 16 -
1 whether or not any tangible personal property is transferred to 2 the purchaser in conjunction therewith, except such services as 3 are obtained in the construction, reconstruction, remodeling, 4 repair or maintenance of real estate: Provided, however, That 5 this subclause shall not be deemed to impose tax upon such 6 services in the preparation for sale of new items which are 7 excluded from the tax under clause (26) of section 204, or upon 8 diaper service: And provided further, That the term "use" shall 9 not include-- 10 (A) Any tangible personal property acquired and kept, 11 retained or over which power is exercised within this 12 Commonwealth on which the taxing of the storage, use or other 13 consumption thereof is expressly prohibited by the Constitution 14 of the United States or which is excluded from tax under other 15 provisions of this article. 16 (B) The use or consumption of tangible personal property, 17 including but not limited to machinery and equipment and parts 18 therefor, and supplies or the obtaining of the services 19 described in subclauses (2), (3) and (4) of this clause directly 20 in the operations of-- 21 (i) The manufacture of tangible personal property; 22 (ii) Farming, dairying, agriculture, horticulture or 23 floriculture when engaged in as a business enterprise. The term 24 "farming" shall include the propagation and raising of ranch- 25 raised furbearing animals and the propagation of game birds for 26 commercial purposes by holders of propagation permits issued 27 under 34 Pa.C.S. (relating to game); 28 (iii) The producing, delivering or rendering of a public 29 utility service, or in constructing, reconstructing, remodeling, 30 repairing or maintaining the facilities which are directly used 19970H0134B1484 - 17 -
1 in producing, delivering or rendering such service; 2 (iv) Processing as defined in subclause (d) of this section. 3 The exclusions provided in subparagraphs (i), (ii), (iii) and 4 (iv) shall not apply to any vehicle required to be registered 5 under The Vehicle Code except those vehicles directly used by a 6 public utility engaged in the business as a common carrier; to 7 maintenance facilities; or to materials, supplies or equipment 8 to be used or consumed in the construction, reconstruction, 9 remodeling, repair or maintenance of real estate other than 10 directly used machinery, equipment, parts or foundations 11 therefor that may be affixed to such real estate. The exclusions 12 provided in subparagraphs (i), (ii), (iii) and (iv) shall not 13 apply to tangible personal property or services to be used or 14 consumed in managerial sales or other nonoperational activities, 15 nor to the purchase or use of tangible personal property or 16 services by any person other than the person directly using the 17 same in the operations described in subparagraphs (i), (ii), 18 (iii) and (iv). 19 The exclusion provided in subparagraph (iii) shall not apply 20 to (A) construction materials, supplies or equipment used to 21 construct, reconstruct, remodel, repair or maintain facilities 22 not used directly by the purchaser in the production, delivering 23 or rendition of public utility service or (B) tools and 24 equipment used but not installed in the maintenance of 25 facilities used directly in the production, delivering or 26 rendition of a public utility service. 27 The exclusion provided in subparagraphs (i), (ii), (iii) and 28 (iv) shall not apply to the services enumerated in clauses 29 (o)(9) through (14) and (16) and (w) through (ii) and (kk), <-- 30 except that the exclusion provided in subparagraph (ii) for 19970H0134B1484 - 18 -
1 farming, dairying and agriculture shall apply to the service 2 enumerated in clause (z). 3 (5) Where tangible personal property or services are 4 utilized for purposes constituting a "use," as herein defined, 5 and for purposes excluded from the definition of "use," it shall 6 be presumed that such property or services are utilized for 7 purposes constituting a "sale at retail" and subject to tax 8 unless the user thereof proves to the department that the 9 predominant purposes for which such property or services are 10 utilized do not constitute a "sale at retail." 11 (6) The term "use" with respect to "liquor" and "malt or 12 brewed beverages" shall include the purchase of "liquor" from 13 any "Pennsylvania liquor store" by any person for any purpose 14 and the purchase of "malt or brewed beverages" from a 15 "manufacturer of malt or brewed beverages," "distributor" or 16 "importing distributor" by any person for any purpose, except 17 purchases from a "manufacturer of malt or brewed beverages" by a 18 "distributor" or "importing distributor," or purchases from an 19 "importing distributor" by a "distributor" within the meaning of 20 the "Liquor Code." The term "use" shall not include any purchase 21 of "malt or brewed beverages" from a "retail dispenser" or any 22 purchase of "liquor" or "malt or brewed beverages" from a person 23 holding a "retail liquor license" within the meaning of and 24 pursuant to the provisions of the "Liquor Code," but shall 25 include the exercise of any right or power incidental to the 26 ownership, custody or possession of "liquor" or "malt or brewed 27 beverages" obtained by the person exercising such right or power 28 in any manner other than pursuant to the provisions of the 29 "Liquor Code." 30 (7) The use of tangible personal property purchased at 19970H0134B1484 - 19 -
1 retail upon which the services described in subclauses (2), (3) 2 and (4) of this clause have been performed shall be deemed to be 3 a use of said services by the person using said property. 4 (8) The term "use" shall not include the providing of a 5 motor vehicle to a nonprofit private or public school to be used 6 by such a school for the sole purpose of driver education. 7 (9) The obtaining by the purchaser of lobbying services. 8 (10) The obtaining by the purchaser of adjustment services, 9 collection services or credit reporting services. 10 (11) The obtaining by the purchaser of secretarial or 11 editing services. 12 (12) The obtaining by the purchaser of disinfecting or pest 13 control services, building maintenance or cleaning services. 14 (13) The obtaining by the purchaser of employment agency 15 services or help supply services. 16 (14) The obtaining by the purchaser of computer programming 17 services; computer-integrated systems design services; computer 18 processing, data preparation or processing services; information 19 retrieval services; computer facilities management services; or 20 other computer-related services. At a minimum, such services 21 shall not include services that are part of electronic fund 22 transfers, electronic financial transactions or services, 23 banking or trust services, or management or administrative 24 services, including transfer agency, shareholder, custodial and 25 portfolio accounting services, provided directly to any entity 26 that duly qualifies to be taxed as a regulated investment 27 company or a real estate investment trust under the provisions 28 of the Internal Revenue Code of 1986 (Public Law 99-514, 26 29 U.S.C. § 1 et seq.) or to an entity that provides such services 30 to an entity so qualifying. 19970H0134B1484 - 20 -
1 [(15) The obtaining by the purchaser of lawn care service.] 2 (16) The obtaining by the purchaser of self-storage service. 3 * * * 4 [(jj) "Lawn care service." Providing services for lawn 5 upkeep, including, but not limited to, fertilizing, lawn mowing, 6 shrubbery trimming or other lawn treatment services.] 7 * * * 8 Section 2. Section 301 introductory paragraph and (s.2) of <-- 9 the act, amended or added August 31, 1971 (P.L.362, No.93) and 10 December 23, 1983 (P.L.370, No.90), are amended to read: 11 SECTION 2. SECTION 204 OF THE ACT IS AMENDED BY ADDING A <-- 12 CLAUSE TO READ: 13 SECTION 204. EXCLUSIONS FROM TAX.--THE TAX IMPOSED BY 14 SECTION 202 SHALL NOT BE IMPOSED UPON 15 * * * 16 (53) THE SALE AT RETAIL TO OR USE BY A HOTEL, AS THE WORD IS 17 DEFINED UNDER SECTION 209 OF THIS ARTICLE, OF COMPUTER 18 PROGRAMMING SERVICES, COMPUTER-INTEGRATED SYSTEMS DESIGN, 19 COMPUTER PROCESSING, DATA PREPARATION OR PROCESSING SERVICES, 20 INFORMATION RETRIEVAL SERVICES, COMPUTER FACILITIES MANAGEMENT 21 SERVICES, OR OTHER COMPUTER-RELATED SERVICES THAT WILL BE USED 22 TO MAKE ROOM RESERVATIONS. 23 SECTION 3. SECTION 301 INTRODUCTORY PARAGRAPH, (C.2), (D), 24 (E.1) AND (S.2) OF THE ACT, AMENDED OR ADDED AUGUST 31, 1971 25 (P.L.362, NO.93), DECEMBER 23, 1983 (P.L.370, NO.90), NOVEMBER 26 4, 1991 (P.L.97, NO.22), DECEMBER 13, 1991 (P.L.373, NO.40) AND 27 JUNE 30, 1995 (P.L.139, NO.21), ARE AMENDED TO READ: 28 Section 301. Definitions.--The following words, terms and 29 phrases when used in this article shall have the meaning 30 ascribed to them in this section except where the context 19970H0134B1484 - 21 -
1 clearly indicates a different meaning. [Any] Unless specifically 2 provided otherwise, any reference in this article to the 3 Internal Revenue Code shall include the Internal Revenue Code of 4 1954, as amended to the date on which this article is effective: 5 * * * 6 (C.2) "CLAIMANT" MEANS A PERSON WHO IS SUBJECT TO THE TAX <-- 7 IMPOSED UNDER THIS ARTICLE, IS NOT A DEPENDENT OF ANOTHER 8 [PERSON] TAXPAYER FOR PURPOSES OF SECTION 151 OF THE INTERNAL 9 REVENUE CODE OF 1986 (PUBLIC LAW 99-514, 26 U.S.C. § 151), BUT 10 IS ENTITLED TO CLAIM AGAINST SUCH TAX THE POVERTY TAX PROVISIONS 11 AS PROVIDED BY THIS ACT. 12 (D) "COMPENSATION" MEANS AND SHALL INCLUDE SALARIES, WAGES, 13 COMMISSIONS, BONUSES AND INCENTIVE PAYMENTS WHETHER BASED ON 14 PROFITS OR OTHERWISE, FEES, TIPS AND SIMILAR REMUNERATION 15 RECEIVED FOR SERVICES RENDERED, WHETHER DIRECTLY OR THROUGH AN 16 AGENT, AND WHETHER IN CASH OR IN PROPERTY. 17 THE TERM "COMPENSATION" SHALL NOT MEAN OR INCLUDE: (I) 18 PERIODIC PAYMENTS FOR SICKNESS AND DISABILITY OTHER THAN REGULAR 19 WAGES RECEIVED DURING A PERIOD OF SICKNESS OR DISABILITY; OR 20 (II) DISABILITY, RETIREMENT OR OTHER PAYMENTS ARISING UNDER 21 WORKMEN'S COMPENSATION ACTS, OCCUPATIONAL DISEASE ACTS AND 22 SIMILAR LEGISLATION BY ANY GOVERNMENT; OR (III) PAYMENTS 23 COMMONLY RECOGNIZED AS OLD AGE OR RETIREMENT BENEFITS PAID TO 24 PERSONS RETIRED FROM SERVICE AFTER REACHING A SPECIFIC AGE OR 25 AFTER A STATED PERIOD OF EMPLOYMENT; OR (IV) PAYMENTS COMMONLY 26 KNOWN AS PUBLIC ASSISTANCE, OR UNEMPLOYMENT COMPENSATION 27 PAYMENTS BY ANY GOVERNMENTAL AGENCY; OR (V) PAYMENTS TO 28 REIMBURSE ACTUAL EXPENSES; OR (VI) PAYMENTS MADE BY EMPLOYERS OR 29 LABOR UNIONS [FOR], INCLUDING PAYMENTS MADE PURSUANT TO A 30 CAFETERIA PLAN QUALIFYING UNDER SECTION 125 OF THE INTERNAL 19970H0134B1484 - 22 -
1 REVENUE CODE OF 1986 (PUBLIC LAW 99-514, 26 U.S.C. § 125 ET 2 SEQ.), FOR EMPLOYE BENEFIT PROGRAMS COVERING HOSPITALIZATION, 3 SICKNESS, DISABILITY OR DEATH, SUPPLEMENTAL UNEMPLOYMENT 4 BENEFITS[,] OR STRIKE BENEFITS[, SOCIAL SECURITY AND 5 RETIREMENT]: PROVIDED, THAT THE PROGRAM DOES NOT DISCRIMINATE IN 6 FAVOR OF HIGHLY COMPENSATED INDIVIDUALS AS TO ELIGIBILITY TO 7 PARTICIPATE, PAYMENTS OR PROGRAM BENEFITS; OR (VII) ANY 8 COMPENSATION RECEIVED BY UNITED STATES SERVICEMEN SERVING IN A 9 COMBAT ZONE; OR (VIII) PAYMENTS RECEIVED BY A FOSTER PARENT FOR 10 IN-HOME CARE OF FOSTER CHILDREN FROM AN AGENCY OF THE 11 COMMONWEALTH OR A POLITICAL SUBDIVISION THEREOF OR AN 12 ORGANIZATION EXEMPT FROM FEDERAL TAX UNDER SECTION 501(C)(3) OF 13 THE INTERNAL REVENUE CODE OF 1954 WHICH IS LICENSED BY THE 14 COMMONWEALTH OR A POLITICAL SUBDIVISION THEREOF AS A PLACEMENT 15 AGENCY[.]; OR (IX) PAYMENTS MADE BY EMPLOYERS OR LABOR UNIONS 16 FOR EMPLOYE BENEFIT PROGRAMS COVERING SOCIAL SECURITY OR 17 RETIREMENT. 18 * * * 19 (E.1) "DEPENDENT" MEANS A [SPOUSE OR CHILD WHO DERIVES MORE 20 THAN ONE-HALF OF HIS TOTAL SUPPORT DURING THE ENTIRE TAXABLE 21 YEAR FROM A CLAIMANT ENTITLED TO CLAIM THE POVERTY EXEMPTION. 22 ANY PERSON WHO IS A DEPENDENT PURSUANT TO THE PROVISIONS OF THE 23 INTERNAL REVENUE CODE DURING A TAXABLE YEAR SHALL PRIMA FACIE BE 24 DEEMED A DEPENDENT FOR PURPOSES OF THIS ACT.] CHILD WHO IS THE 25 DEPENDENT OF A CLAIMANT FOR PURPOSES OF SECTION 151 OF THE 26 INTERNAL REVENUE CODE OF 1986 (PUBLIC LAW 99-514, 26 U.S.C. § 27 151). 28 * * * 29 (s.2) "Small corporation" means any corporation which has a 30 valid election in effect under subchapter S of Chapter 1 of the 19970H0134B1484 - 23 -
1 [Internal Revenue Code of 1954, as amended as of January 1, 2 1983] Internal Revenue Code of 1986, as amended by the act of 3 August 20, 1996, (Public Law 104-188), and which does not have 4 passive investment income in excess of twenty-five per cent of 5 its gross receipts. For purposes of this clause, "passive 6 investment income" means gross receipts derived from royalties, 7 rents, dividends, interest, annuities and sales or exchanges of 8 stock or securities (gross receipts from such sales or exchanges 9 being taken into account only to the extent of gains therefrom). 10 * * * 11 Section 3. Section 304(d)(1) of the act, amended June 16, <-- 12 1994 (P.L.279, No.48), is amended to read: 13 SECTION 4. SECTION 304(D) OF THE ACT, AMENDED DECEMBER 13, <-- 14 1991 (P.L.373, NO.40) AND JUNE 16, 1994 (P.L.279, NO.48), IS 15 AMENDED TO READ: 16 Section 304. Special Tax Provisions for Poverty.--* * * 17 (d) Any claim for special tax provisions hereunder shall be 18 determined in accordance with the following: 19 (1) If the poverty income of the claimant during an entire 20 taxable year is [six thousand three hundred dollars ($6,300)] 21 seven thousand three hundred dollars ($7,300) or less, OR, IN <-- 22 THE CASE OF A MARRIED CLAIMANT, IF THE JOINT POVERTY INCOME OF 23 THE CLAIMANT AND THE CLAIMANT'S SPOUSE DURING AN ENTIRE TAXABLE 24 YEAR IS FOURTEEN THOUSAND SIX HUNDRED DOLLARS ($14,600) OR LESS, 25 the claimant shall be entitled to a refund or forgiveness of any 26 moneys which have been paid over to (or would except for the 27 provisions of this act be payable to) the Commonwealth under the 28 provisions of this article, with an additional income allowance 29 of [three thousand dollars ($3,000)] four thousand dollars 30 ($4,000) for the first additional dependent and an additional 19970H0134B1484 - 24 -
1 income allowance of [three thousand dollars ($3,000)] four 2 thousand dollars ($4,000) for each additional dependent of the 3 claimant. FOR PURPOSES OF THIS SUBSECTION, A CLAIMANT SHALL NOT <-- 4 BE CONSIDERED TO BE MARRIED IF: 5 (I) THE CLAIMANT AND THE CLAIMANT'S SPOUSE FILE SEPARATE 6 RETURNS; AND 7 (II) THE CLAIMANT AND THE CLAIMANT'S SPOUSE LIVE APART AT 8 ALL TIMES DURING THE LAST SIX MONTHS OF THE TAXABLE YEAR OR ARE 9 SEPARATED PURSUANT TO A WRITTEN SEPARATION AGREEMENT. 10 (2) IF THE POVERTY INCOME OF THE CLAIMANT DURING AN ENTIRE 11 TAXABLE YEAR DOES NOT EXCEED THE POVERTY INCOME LIMITATIONS 12 PRESCRIBED BY CLAUSE (1) BY MORE THAN THE DOLLAR CATEGORY 13 CONTAINED IN SUBCLAUSES (I), (II), (III), (IV), (V), (VI), 14 (VII), (VIII) OR (IX) OF THIS CLAUSE, THE CLAIMANT SHALL BE 15 ENTITLED TO A REFUND OR FORGIVENESS BASED ON THE PER CENTAGE 16 PRESCRIBED IN SUCH SUBCLAUSES OF ANY MONEYS WHICH HAVE BEEN PAID 17 OVER TO (OR WOULD EXCEPT FOR THE PROVISIONS HEREIN BE PAYABLE 18 TO) THE COMMONWEALTH UNDER THIS ARTICLE: 19 (I) NINETY PER CENT IF NOT IN EXCESS OF ONE HUNDRED DOLLARS 20 ($100). 21 (II) EIGHTY PER CENT IF NOT IN EXCESS OF TWO HUNDRED DOLLARS 22 ($200). 23 (III) SEVENTY PER CENT IF NOT IN EXCESS OF THREE HUNDRED 24 DOLLARS ($300). 25 (IV) SIXTY PER CENT IF NOT IN EXCESS OF FOUR HUNDRED DOLLARS 26 ($400). 27 (V) FIFTY PER CENT IF NOT IN EXCESS OF FIVE HUNDRED DOLLARS 28 ($500). 29 (VI) FORTY PER CENT IF NOT IN EXCESS OF SIX HUNDRED DOLLARS 30 ($600). 19970H0134B1484 - 25 -
1 (VII) THIRTY PER CENT IF NOT IN EXCESS OF SEVEN HUNDRED 2 DOLLARS ($700). 3 (VIII) TWENTY PER CENT IF NOT IN EXCESS OF EIGHT HUNDRED 4 DOLLARS ($800). 5 (IX) TEN PER CENT IF NOT IN EXCESS OF NINE HUNDRED DOLLARS 6 ($900). 7 (3) IF AN INDIVIDUAL HAS A TAXABLE YEAR OF LESS THAN TWELVE 8 MONTHS, THE POVERTY INCOME THEREOF SHALL BE ANNUALIZED IN SUCH 9 MANNER AS THE DEPARTMENT MAY PRESCRIBE. 10 * * * <-- 11 Section 4 5. Article III of the act is amended by adding a <-- 12 part to read: 13 PART VI-A 14 CONTRIBUTIONS OF REFUNDS BY CHECKOFF 15 Section 315.1. Definitions.--The following words, terms and 16 phrases, when used in this part, shall have the meanings 17 ascribed to them in this section, except where the context 18 clearly indicates a different meaning: 19 "Department." The Department of Revenue of the Commonwealth. 20 "Individual income tax." The tax imposed under this article. 21 Section 315.2. Contributions to Breast and Cervical Cancer 22 Research.--(a) The department shall provide a space on the face 23 of the Pennsylvania individual income tax return form whereby an 24 individual may voluntarily designate a contribution of any 25 amount desired to be utilized for breast and cervical cancer 26 research in the Department of Health. 27 (b) The amount so designated on the individual income tax 28 return form shall be deducted from the tax refund to which the 29 individual is entitled and shall not constitute a charge against 30 the income tax revenues due to the Commonwealth. 19970H0134B1484 - 26 -
1 (c) The department shall determine annually the total amount 2 designated under this section, less reasonable administrative 3 costs, and shall report the amount to the State Treasurer, who 4 shall transfer the amount from the General Fund to the 5 Pennsylvania Cancer Control, Prevention and Research Advisory 6 Board within the Department of Health. 7 (d) The department shall provide adequate information 8 concerning the checkoff for breast and cervical cancer research 9 in its instructions which accompany State income tax return 10 forms. The information concerning the checkoff shall include the 11 listing of an address furnished by the Department of Health, to 12 which contributions may be sent by taxpayers wishing to 13 contribute to this effort, but who do not receive refunds. 14 Additionally, the Department of Health shall be charged with the 15 duty to conduct a public information campaign on the 16 availability of this opportunity to Pennsylvania taxpayers. 17 (e) The Department of Health shall report annually to the 18 respective committees of the Senate and the House of 19 Representatives which have jurisdiction over health matters on 20 the amount received via the checkoff plan and how the funds were 21 utilized. 22 (f) The General Assembly may, from time to time, appropriate 23 funds for breast and cervical cancer research within the 24 Department of Health. 25 Section 315.3. Contributions for Wild Resource 26 Conservation.--(a) The department shall provide a space on the 27 face of the Pennsylvania individual income tax return form 28 whereby an individual may voluntarily designate a contribution 29 of any amount desired, to the Wild Resource Conservation Fund 30 established under section 5 of the act of June 23, 1982 19970H0134B1484 - 27 -
1 (P.L.597, No.170), known as the "Wild Resource Conservation 2 Act." 3 (b) The amount so designated by an individual on the income 4 tax return form shall be deducted from the tax refund to which 5 such individual is entitled and shall not constitute a charge 6 against the income tax revenues due the Commonwealth. 7 (c) The department shall determine annually the total amount 8 designated pursuant to this section and shall report such amount 9 to the State Treasurer, who shall transfer such amount from the 10 General Fund to the Wild Resource Conservation Fund for use as 11 provided in the "Wild Resource Conservation Act." The department 12 shall be reimbursed from the fund for any administrative costs 13 incurred above and beyond the cost savings it realizes as a 14 result of individual total refund designations. 15 (d) The department shall provide adequate information 16 concerning the Wild Resource Conservation Fund in its 17 instructions which accompany State income tax return forms, 18 which shall include the listing of an address, furnished to it 19 by the Wild Resource Conservation Board, to which contributions 20 may be sent by those taxpayers wishing to contribute to said 21 fund but who do not receive refunds. 22 (e) This section shall apply to taxable years beginning on 23 or after January 1, 1997. 24 Section 315.4. Contributions for Organ Donation Awareness.-- 25 (a) The department shall provide a space on the face of the 26 Pennsylvania individual income tax return form for the 1997 tax <-- 27 year and the 2000 tax year whereby an individual may voluntarily 28 designate a contribution of any amount desired to the Organ 29 Donation Awareness Trust Fund established under 20 Pa.C.S. § 30 8622 (relating to Organ Donation Awareness Trust Fund). 19970H0134B1484 - 28 -
1 (b) The amount so designated by an individual on the 2 Pennsylvania individual income tax return form shall be deducted 3 from the tax refund to which the individual is entitled and 4 shall not constitute a charge against the income tax revenues 5 due the Commonwealth. 6 (c) The department shall annually determine the total amount 7 designated pursuant to this section and shall report that amount 8 to the State Treasurer who shall transfer that amount to the 9 Organ Donation Awareness Trust Fund. 10 (d) The department shall, in all taxable years following the 11 effective date of this section, provide on its forms or in its 12 instructions which accompany Pennsylvania individual income tax 13 return forms adequate information concerning the Organ Donation 14 Awareness Trust Fund which shall include the listing of an 15 address, furnished to it by the Organ Donation Advisory 16 Committee, to which contributions may be sent by those taxpayers 17 wishing to contribute to the fund but who do not receive 18 refunds. 19 (e) This section shall apply to taxable years beginning on 20 or after January 1, 1997. 21 Section 315.5. Contributions for Olympics.--(a) The 22 department shall provide a space on the face of the Pennsylvania 23 individual income tax return form whereby an individual may 24 voluntarily designate a contribution of any amount desired to 25 the United States Olympic Committee, Pennsylvania Division. 26 (b) The amount so designated by an individual on the income 27 tax return form shall be deducted from the tax refund to which 28 such individual is entitled and shall not constitute a charge 29 against the income tax revenues due the Commonwealth. 30 (c) The department shall determine annually the total amount 19970H0134B1484 - 29 -
1 designated pursuant to this section, less reasonable 2 administrative costs, and shall report such amount to the State 3 Treasurer, who shall transfer such amount from the General Fund 4 to the United States Olympic Committee, Pennsylvania Division. 5 Section 315.6. Contributions to Korea/Vietnam Memorial 6 National Education Center.--(a) For tax years 1997, 1998, 1999 7 and 2000, the department shall provide a space on the face of 8 the Pennsylvania individual income tax return form whereby an 9 individual may voluntarily designate a contribution of any 10 amount from the individual's tax refund to KVM. 11 (b) The amount designated by an individual on the 12 Pennsylvania individual income tax return form shall be deducted 13 from the tax refund to which such individual is entitled and 14 shall not constitute a charge against the income tax revenues 15 due the Commonwealth. 16 (c) The department shall determine annually the total amount 17 designated by individual taxpayers under this section and shall 18 report the amount to the State Treasurer who shall prepare the 19 appropriate documentation and transfer the designated amount 20 from the General Fund to KVM for use as provided in section 21 2507(b) of the act of April 9, 1929 (P.L.177, No.175), known as 22 "The Administrative Code of 1929." 23 (d) The department shall provide adequate information 24 regarding the center and its purposes in its instructions for 25 tax years 1997, 1998, 1999 and 2000 which accompany Pennsylvania 26 individual income tax return forms to include the address of KVM 27 to which contributions may be sent by taxpayers who wish to make 28 additional contributions to the center. 29 (e) This subsection shall apply solely to taxable years 30 1997, 1998, 1999 and 2000. 19970H0134B1484 - 30 -
1 SECTION 6. THE DEFINITION OF "CAPITAL STOCK VALUE" IN <-- 2 SECTION 601 OF THE ACT, AMENDED JUNE 30, 1995 (P.L.139, NO.21), 3 IS AMENDED TO READ: 4 SECTION 601. DEFINITIONS AND REPORTS.--(A) THE FOLLOWING 5 WORDS, TERMS AND PHRASES WHEN USED IN THIS ARTICLE VI SHALL HAVE 6 THE MEANING ASCRIBED TO THEM IN THIS SECTION, EXCEPT WHERE THE 7 CONTEXT CLEARLY INDICATES A DIFFERENT MEANING: 8 * * * 9 "CAPITAL STOCK VALUE." THE AMOUNT COMPUTED PURSUANT TO THE 10 FOLLOWING FORMULA: THE PRODUCT OF ONE-HALF TIMES THE SUM OF THE 11 AVERAGE NET INCOME CAPITALIZED AT THE RATE OF NINE AND ONE-HALF 12 PER CENT PLUS SEVENTY-FIVE PER CENT OF NET WORTH, FROM WHICH 13 PRODUCT SHALL BE SUBTRACTED SEVENTY-FIVE PER CENT OF NET WORTH, 14 FROM WHICH PRODUCT SHALL BE SUBTRACTED [ONE HUNDRED THOUSAND 15 DOLLARS ($100,000)] ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS 16 ($125,000), THE ALGEBRAIC EQUIVALENT OF WHICH IS 17 (.5 X (AVERAGE NET INCOME/.095 + (.75) 18 (NET WORTH))) - [$100,000] $125,000 19 Section 5 7. Section 1101-C of the act is amended by adding <-- 20 definitions to read: 21 Section 1101-C. Definitions.--The following words when used 22 in this article shall have the meanings ascribed to them in this 23 section: 24 * * * 25 "Living trust." Any trust, other than a business trust, 26 intended as a will substitute by the settlor which becomes 27 effective during the lifetime of the settlor, but from which 28 trust distributions cannot be made to any beneficiaries other 29 than the settlor prior to the death of the settlor. 30 * * * 19970H0134B1484 - 31 -
1 "Ordinary trust." Any trust, other than a business trust or 2 a living trust, which takes effect during the lifetime of the 3 settlor and for which the trustees of the trust take title to 4 property primarily for the purpose of protecting, managing or 5 conserving it until distribution to the named beneficiaries of 6 the trust. An ordinary trust does not include a trust that has 7 an objective to carry on business and divide gains nor does it 8 either expressly or impliedly have any of the following 9 features: the treatment of beneficiaries as associates, the 10 treatment of the interests in the trust as personal property, 11 the free transferability of beneficial interests in the trust, 12 centralized management by the trustee or the beneficiaries, or 13 continuity of life. 14 * * * 15 Section 6 8. Section 1102-C.3(8) and (9) of the act, added <-- 16 July 2, 1986 (P.L.318, No.77), are amended and the section is 17 amended by adding clauses to read: 18 Section 1102-C.3. Excluded Transactions.--The tax imposed by 19 section 1102-C shall not be imposed upon: 20 * * * 21 (8) A transfer for no or nominal actual consideration to a 22 trustee of an ordinary trust where the transfer of the same 23 property would be exempt if the transfer was made directly from 24 the grantor to all of the possible beneficiaries that are 25 entitled to receive the property or proceeds from the sale of 26 the property under the trust, whether or not such beneficiaries 27 are contingent or specifically named. A trust clause which 28 identifies the contingent beneficiaries by reference to the 29 heirs of the trust settlor as determined by the laws of the 30 intestate succession shall not disqualify a transfer from the 19970H0134B1484 - 32 -
1 exclusion provided by this clause. No such exemption shall be 2 granted unless the recorder of deeds is presented with a copy of 3 the trust instrument that clearly identifies the grantor and all 4 possible beneficiaries. 5 (8.1) A transfer for no or nominal actual consideration to a 6 trustee of a living trust from the settlor of the living trust. 7 No such exemption shall be granted unless the recorder of deed 8 is presented with a copy of the living trust instrument. 9 (9) A transfer for no or nominal actual consideration from a 10 trustee [to a beneficiary of an ordinary trust.] of an ordinary 11 trust to a specifically named beneficiary that is entitled to 12 receive the property under the recorded trust instrument or to a 13 contingent beneficiary where the transfer of the same property 14 would be exempt if the transfer was made by the grantor of the 15 property into the trust to that beneficiary. However, any 16 transfer of real estate from a living trust during the settlor's 17 lifetime shall be considered for the purposes of this article as 18 if such transfer were made directly from the settlor to the 19 grantee. 20 (9.1) A transfer for no or nominal actual consideration from 21 a trustee of a living trust after the death of the settlor of 22 the trust or from a trustee of a trust created pursuant to the 23 will of a decedent to a beneficiary to whom the property is 24 devised or bequeathed. 25 (9.2) A transfer for no or nominal actual consideration from 26 the trustee of a living trust to the settlor of the living trust 27 if such property was originally conveyed to the trustee by the 28 settlor. 29 * * * 30 SECTION 9. SECTION 1296 OF THE ACT, AMENDED AUGUST 4, 1991 <-- 19970H0134B1484 - 33 -
1 (P.L.97, NO.22), IS AMENDED TO READ: 2 SECTION 1296. DISPOSITION OF CERTAIN FUNDS.--ALL CIGARETTE 3 TAX REVENUES COLLECTED BY THE DEPARTMENT OF REVENUE UNDER THIS 4 ARTICLE AND HERETOFORE PAID INTO THE PARENT REIMBURSEMENT FUND 5 IN ACCORDANCE WITH THE ACT OF AUGUST 27, 1971 (P.L.358, NO.92), 6 KNOWN AS THE "PARENT REIMBURSEMENT ACT FOR NONPUBLIC EDUCATION," 7 SHALL BE TRANSFERRED INTO THE GENERAL FUND. BEGINNING JULY 1, 8 1993, TWO THIRTY-FIRSTS OF CIGARETTE TAX RECEIPTS SHALL BE 9 TRANSFERRED INTO THE AGRICULTURAL CONSERVATION EASEMENT PURCHASE 10 FUND, AND BEGINNING [JULY 1, 1992, TWO THIRTY-FIRSTS] JANUARY 1, 11 1997, THREE THIRTY-FIRSTS OF CIGARETTE TAX RECEIPTS SHALL BE 12 PAID INTO A RESTRICTED ACCOUNT TO BE KNOWN AS THE CHILDREN'S 13 HEALTH FUND FOR HEALTH CARE FOR INDIGENT CHILDREN, AND THE 14 REMAINDER SHALL BE PAID INTO THE GENERAL FUND. MONEYS IN THE 15 CHILDREN'S HEALTH FUND SHALL NOT BE EXPENDED UNTIL THE ENACTMENT 16 OF LEGISLATION TO IMPLEMENT A PROGRAM OF EXPANDED ACCESS TO 17 HEALTH CARE FOR CHILDREN. THE TRANSFERS REQUIRED BY THIS SECTION 18 SHALL BE MADE BY JULY 15 FOR THE PRECEDING SIX MONTHS AND BY 19 JANUARY 15 FOR THE PRECEDING SIX MONTHS. 20 SECTION 10. THE DEFINITION OF "BUSINESS FIRM" IN SECTION 21 1902-A OF THE ACT, AMENDED JULY 1, 1994 (P.L.413, NO.67), IS 22 AMENDED TO READ: 23 SECTION 1902-A. DEFINITIONS.--THE FOLLOWING WORDS, TERMS AND 24 PHRASES, WHEN USED IN THIS ARTICLE, SHALL HAVE THE MEANINGS 25 ASCRIBED TO THEM IN THIS SECTION, EXCEPT WHERE THE CONTEXT 26 CLEARLY INDICATES A DIFFERENT MEANING: 27 "BUSINESS FIRM." ANY BUSINESS ENTITY AUTHORIZED TO DO 28 BUSINESS IN THIS COMMONWEALTH AND SUBJECT TO TAXES IMPOSED BY 29 ARTICLE IV, VI, VII, VII-A, VIII, VIII-A, IX, X OR XV OF THIS 30 ACT. THE TERM ALSO INCLUDES BUSINESSES OPERATING AS S 19970H0134B1484 - 34 -
1 CORPORATIONS, SOLE PROPRIETORSHIPS OR PARTNERSHIPS WHICH ARE 2 SUBJECT TO TAXES IMPOSED UNDER ARTICLE III OF THIS ACT. 3 * * * 4 SECTION 11. SECTION 1902-A OF THE ACT, AMENDED OR ADDED JUNE 5 16, 1994 (P.L.279, NO.48) AND JULY 1, 1994 (P.L.413, NO.67), IS 6 AMENDED TO READ: 7 SECTION 1902-A. DEFINITIONS.--THE FOLLOWING WORDS, TERMS AND 8 PHRASES, WHEN USED IN THIS ARTICLE, SHALL HAVE THE MEANINGS 9 ASCRIBED TO THEM IN THIS SECTION, EXCEPT WHERE THE CONTEXT 10 CLEARLY INDICATES A DIFFERENT MEANING: 11 "BUSINESS FIRM." ANY BUSINESS ENTITY AUTHORIZED TO DO 12 BUSINESS IN THIS COMMONWEALTH AND SUBJECT TO TAXES IMPOSED BY 13 ARTICLE III, IV, VI, VII, VII-A, VIII, VIII-A, IX, X OR XV OF 14 THIS ACT. 15 "COMMUNITY SERVICES." ANY TYPE OF COUNSELING AND ADVICE, 16 EMERGENCY ASSISTANCE, ENERGY ASSISTANCE OR MEDICAL CARE 17 FURNISHED TO INDIVIDUALS OR GROUPS IN AN IMPOVERISHED AREA. THE 18 TERM INCLUDES FOOD ASSISTANCE AND NUTRITION SERVICES OFFERED BY 19 ORGANIZATIONS SUCH AS FOOD BANKS. 20 "COMPREHENSIVE SERVICE PLAN." A STRATEGY DEVELOPED JOINTLY 21 BY A NEIGHBORHOOD ORGANIZATION AND A SPONSORING BUSINESS FIRM OR 22 PRIVATE COMPANY FOR THE STABILIZATION AND IMPROVEMENT OF AN 23 IMPOVERISHED AREA WITHIN AN URBAN NEIGHBORHOOD OR RURAL 24 COMMUNITY. 25 "COMPREHENSIVE SERVICE PROJECT." ANY ACTIVITY CONDUCTED 26 JOINTLY BY A NEIGHBORHOOD ORGANIZATION AND A SPONSORING BUSINESS 27 FIRM WHICH IMPLEMENTS A COMPREHENSIVE SERVICE PLAN. 28 "CRIME PREVENTION." ANY ACTIVITY WHICH AIDS IN THE REDUCTION 29 OF CRIME IN AN IMPOVERISHED AREA. 30 "EDUCATION." ANY TYPE OF SCHOLASTIC INSTRUCTION OR 19970H0134B1484 - 35 -
1 SCHOLARSHIP ASSISTANCE TO AN INDIVIDUAL WHO RESIDES IN AN 2 IMPOVERISHED AREA THAT ENABLES [HIM TO PREPARE HIMSELF] THAT 3 INDIVIDUAL TO PREPARE FOR BETTER LIFE OPPORTUNITIES. 4 "ENTERPRISE ZONES." SPECIFIC LOCATIONS WITH IDENTIFIABLE 5 BOUNDARIES WITHIN IMPOVERISHED AREAS WHICH ARE DESIGNATED AS 6 ENTERPRISE ZONES BY THE [SECRETARY OF COMMUNITY AFFAIRS] 7 SECRETARY OF COMMUNITY AND ECONOMIC DEVELOPMENT. 8 "IMPOVERISHED AREA." ANY AREA IN THIS COMMONWEALTH WHICH IS 9 CERTIFIED AS SUCH BY THE [DEPARTMENT OF COMMUNITY AFFAIRS] 10 DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT AND THE 11 CERTIFICATION IS APPROVED BY THE GOVERNOR. SUCH CERTIFICATION 12 SHALL BE MADE ON THE BASIS OF FEDERAL CENSUS STUDIES AND CURRENT 13 INDICES OF SOCIAL AND ECONOMIC CONDITIONS. 14 "JOB TRAINING." ANY TYPE OF INSTRUCTION TO AN INDIVIDUAL WHO 15 RESIDES IN AN IMPOVERISHED AREA THAT ENABLES [HIM] THAT 16 INDIVIDUAL TO ACQUIRE VOCATIONAL SKILLS SO THAT [HE] THE 17 INDIVIDUAL CAN BECOME EMPLOYABLE OR BE ABLE TO SEEK A HIGHER 18 GRADE OF EMPLOYMENT. 19 "NEIGHBORHOOD ASSISTANCE." FURNISHING FINANCIAL ASSISTANCE, 20 LABOR, MATERIAL AND TECHNICAL ADVICE TO AID IN THE PHYSICAL 21 IMPROVEMENT OF ANY PART OR ALL OF AN IMPOVERISHED AREA. 22 "NEIGHBORHOOD ORGANIZATION." ANY ORGANIZATION PERFORMING 23 COMMUNITY SERVICES, OFFERING NEIGHBORHOOD ASSISTANCE OR 24 PROVIDING JOB TRAINING, EDUCATION OR CRIME PREVENTION IN AN 25 IMPOVERISHED AREA, HOLDING A RULING FROM THE INTERNAL REVENUE 26 SERVICE OF THE UNITED STATES DEPARTMENT OF THE TREASURY THAT THE 27 ORGANIZATION IS EXEMPT FROM INCOME TAXATION UNDER THE PROVISIONS 28 OF THE INTERNAL REVENUE CODE OF 1986 (PUBLIC LAW 99-514, 26 29 U.S.C. § 1 ET SEQ.) AND APPROVED BY THE DEPARTMENT OF COMMUNITY 30 AFFAIRS. 19970H0134B1484 - 36 -
1 "PRIVATE COMPANY." ANY AGRICULTURAL, INDUSTRIAL, 2 MANUFACTURING OR RESEARCH AND DEVELOPMENT ENTERPRISE AS DEFINED 3 IN SECTION 3 OF THE ACT OF MAY 17, 1956 (1955 P.L.1609, NO.537), 4 KNOWN AS THE "PENNSYLVANIA INDUSTRIAL DEVELOPMENT AUTHORITY 5 ACT," OR ANY COMMERCIAL ENTERPRISE AS DEFINED IN SECTION 3 OF 6 THE ACT OF AUGUST 23, 1967 (P.L.251, NO.102), KNOWN AS THE 7 "ECONOMIC DEVELOPMENT FINANCING LAW." 8 "QUALIFIED INVESTMENTS." ANY INVESTMENTS MADE BY A PRIVATE 9 COMPANY WHICH PROMOTE COMMUNITY ECONOMIC DEVELOPMENT PURSUANT TO 10 A PLAN WHICH HAS BEEN DEVELOPED IN COOPERATION WITH AND APPROVED 11 BY A NEIGHBORHOOD ORGANIZATION OPERATING PURSUANT TO A PLAN FOR 12 THE ADMINISTRATION OF TAX CREDITS APPROVED BY THE [DEPARTMENT OF 13 COMMUNITY AFFAIRS] DEPARTMENT OF COMMUNITY AND ECONOMIC 14 DEVELOPMENT. 15 "SECRETARY." THE SECRETARY OF COMMUNITY AND ECONOMIC 16 DEVELOPMENT OF THE COMMONWEALTH. 17 SECTION 12. SECTIONS 1904-A AND 1905-A OF THE ACT, AMENDED 18 JUNE 30, 1995 (P.L.139, NO.21), ARE AMENDED TO READ: 19 SECTION 1904-A. TAX CREDIT.--(A) ANY BUSINESS FIRM WHICH 20 ENGAGES OR CONTRIBUTES TO A NEIGHBORHOOD ORGANIZATION WHICH 21 ENGAGES IN THE ACTIVITIES OF PROVIDING NEIGHBORHOOD ASSISTANCE, 22 JOB TRAINING OR EDUCATION FOR INDIVIDUALS, COMMUNITY SERVICES OR 23 CRIME PREVENTION IN AN IMPOVERISHED AREA OR PRIVATE COMPANY 24 WHICH MAKES QUALIFIED INVESTMENT TO REHABILITATE, EXPAND OR 25 IMPROVE BUILDINGS OR LAND LOCATED WITHIN PORTIONS OF 26 IMPOVERISHED AREAS WHICH HAVE BEEN DESIGNATED AS ENTERPRISE 27 ZONES SHALL RECEIVE A TAX CREDIT AS PROVIDED IN SECTION 1905-A 28 IF THE [SECRETARY OF COMMUNITY AFFAIRS] SECRETARY ANNUALLY 29 APPROVES THE PROPOSAL OF SUCH BUSINESS FIRM OR PRIVATE COMPANY. 30 THE PROPOSAL SHALL SET FORTH THE PROGRAM TO BE CONDUCTED, THE 19970H0134B1484 - 37 -
1 IMPOVERISHED AREA SELECTED, THE ESTIMATED AMOUNT TO BE INVESTED 2 IN THE PROGRAM AND THE PLANS FOR IMPLEMENTING THE PROGRAM. 3 (B) THE [SECRETARY OF COMMUNITY AFFAIRS] SECRETARY IS HEREBY 4 AUTHORIZED TO PROMULGATE RULES AND REGULATIONS FOR THE APPROVAL 5 OR DISAPPROVAL OF SUCH PROPOSALS BY BUSINESS FIRMS OR PRIVATE 6 COMPANIES AND PROVIDE A LISTING OF ALL APPLICATIONS RECEIVED AND 7 THEIR DISPOSITION IN EACH FISCAL YEAR TO THE GENERAL ASSEMBLY BY 8 OCTOBER 1 OF THE FOLLOWING FISCAL YEAR. 9 (C) THE TOTAL AMOUNT OF TAX CREDIT GRANTED FOR PROGRAMS 10 APPROVED UNDER THIS ACT SHALL NOT EXCEED [SIXTEEN MILLION SEVEN 11 HUNDRED FIFTY THOUSAND DOLLARS ($16,750,000)] TWENTY MILLION 12 SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($20,750,000) OF TAX CREDIT 13 IN ANY FISCAL YEAR, SUBJECT TO THE FOLLOWING: 14 (1) [TWO MILLION DOLLARS ($2,000,000)] FIVE MILLION DOLLARS 15 ($5,000,000) OF THE TOTAL AMOUNT OF TAX CREDIT SHALL BE 16 ALLOCATED FOR COMPREHENSIVE SERVICE PROJECTS, BUT THE SECRETARY 17 OF COMMUNITY AFFAIRS MAY REALLOCATE ANY UNUSED PORTION OF THE 18 [TWO MILLION DOLLARS ($2,000,000)] FIVE MILLION DOLLARS 19 ($5,000,000) FOR ANY OTHER PROGRAM AUTHORIZED BY THIS ACT IF 20 INSUFFICIENT APPLICATIONS ARE MADE FOR COMPREHENSIVE SERVICE 21 PROJECTS; AND 22 (2) [FOUR MILLION DOLLARS ($4,000,000)] SEVEN MILLION 23 DOLLARS ($7,000,000) OF THE TOTAL AMOUNT OF TAX CREDIT SHALL BE 24 SET ASIDE EXCLUSIVELY FOR PRIVATE COMPANIES WHICH MAKE QUALIFIED 25 INVESTMENTS TO REHABILITATE, EXPAND OR IMPROVE BUILDINGS OR LAND 26 WHICH PROMOTE COMMUNITY ECONOMIC DEVELOPMENT AND WHICH OCCUR IN 27 PORTIONS OF IMPOVERISHED AREAS WHICH HAVE BEEN DESIGNATED AS 28 ENTERPRISE ZONES. 29 SECTION 1905-A. GRANT OF TAX CREDIT.--THE DEPARTMENT OF 30 REVENUE SHALL GRANT A TAX CREDIT AGAINST ANY TAX DUE UNDER 19970H0134B1484 - 38 -
1 ARTICLE III, IV, VI, VII, VII-A, VIII, VIII-A, IX, X OR XV OF 2 THIS ACT, OR ANY TAX SUBSTITUTED IN LIEU THEREOF IN AN AMOUNT 3 WHICH SHALL NOT EXCEED FIFTY PER CENT OF THE TOTAL AMOUNT 4 INVESTED DURING THE TAXABLE YEAR BY THE BUSINESS FIRM OR TWENTY 5 PER CENT OF QUALIFIED INVESTMENTS BY A PRIVATE COMPANY IN 6 PROGRAMS APPROVED PURSUANT TO SECTION 1904-A OF THIS ACT: 7 PROVIDED, THAT A TAX CREDIT OF UP TO SEVENTY PER CENT OF THE 8 TOTAL AMOUNT INVESTED DURING THE TAXABLE YEAR BY A BUSINESS FIRM 9 OR UP TO THIRTY PER CENT OF THE AMOUNT OF QUALIFIED INVESTMENTS 10 BY A PRIVATE COMPANY MAY BE ALLOWED FOR INVESTMENT IN PROGRAMS 11 WHERE ACTIVITIES FALL WITHIN THE SCOPE OF SPECIAL PROGRAM 12 PRIORITIES AS DEFINED WITH THE APPROVAL OF THE GOVERNOR IN 13 REGULATIONS PROMULGATED BY THE [SECRETARY OF THE DEPARTMENT OF 14 COMMUNITY AFFAIRS] SECRETARY. REGULATIONS ESTABLISHING SPECIAL 15 PROGRAM PRIORITIES ARE TO BE PROMULGATED DURING THE FIRST MONTH 16 OF EACH FISCAL YEAR AND AT SUCH TIMES DURING THE YEAR AS THE 17 PUBLIC INTEREST DICTATES. SUCH CREDIT SHALL NOT EXCEED [TWO 18 HUNDRED FIFTY THOUSAND DOLLARS ($250,000)] FIVE HUNDRED THOUSAND 19 DOLLARS ($500,000) ANNUALLY, EXCEPT IN THE CASE OF COMPREHENSIVE 20 SERVICE PROJECTS WHICH SHALL BE ALLOWED AN ADDITIONAL CREDIT 21 EQUAL TO SEVENTY PER CENT OF THE QUALIFYING INVESTMENTS MADE IN 22 COMPREHENSIVE SERVICE PROJECTS; HOWEVER, SUCH ADDITIONAL CREDIT 23 SHALL NOT EXCEED ONE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS 24 ($175,000) ANNUALLY. NO TAX CREDIT SHALL BE GRANTED TO ANY BANK, 25 BANK AND TRUST COMPANY, INSURANCE COMPANY, TRUST COMPANY, 26 NATIONAL BANK, SAVINGS ASSOCIATION, MUTUAL SAVINGS BANK OR 27 BUILDING AND LOAN ASSOCIATION FOR ACTIVITIES THAT ARE A PART OF 28 ITS NORMAL COURSE OF BUSINESS. ANY TAX CREDIT NOT USED IN THE 29 PERIOD THE INVESTMENT WAS MADE MAY BE CARRIED OVER FOR THE NEXT 30 [FIVE] TEN SUCCEEDING CALENDAR OR FISCAL YEARS UNTIL THE FULL 19970H0134B1484 - 39 -
1 CREDIT HAS BEEN ALLOWED. THE TOTAL AMOUNT OF ALL TAX CREDITS 2 ALLOWED PURSUANT TO THIS ACT SHALL NOT EXCEED [SIXTEEN MILLION 3 SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($16,750,000)] TWENTY 4 MILLION SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($20,750,000) IN 5 ANY ONE FISCAL YEAR. 6 SECTION 13. SECTION 1906-A OF THE ACT, ADDED JUNE 16, 1994 7 (P.L.279, NO.48), IS AMENDED TO READ: 8 SECTION 1906-A. DECISION IN WRITING.--THE DECISION OF THE 9 [SECRETARY OF COMMUNITY AFFAIRS] SECRETARY TO APPROVE OR 10 DISAPPROVE A PROPOSAL PURSUANT TO SECTION 1904-A OF THIS ACT 11 SHALL BE IN WRITING, AND, IF IT APPROVES THE PROPOSAL, IT SHALL 12 STATE THE MAXIMUM CREDIT ALLOWABLE TO THE BUSINESS FIRM. A COPY 13 OF THE DECISION OF THE [SECRETARY OF COMMUNITY AFFAIRS] 14 SECRETARY SHALL BE TRANSMITTED TO THE GOVERNOR AND TO THE 15 SECRETARY OF REVENUE. 16 SECTION 14. SECTION 2116 OF THE ACT, AMENDED OR ADDED AUGUST 17 4, 1991 (P.L.97, NO.22), JUNE 16, 1994 (P.L.279, NO.48) AND JUNE 18 30, 1995 (P.L.139, NO.21), IS AMENDED TO READ: 19 SECTION 2116. INHERITANCE TAX.--(A) (1) [INHERITANCE] 20 EXCEPT AS PROVIDED IN SUBSECTION (G), INHERITANCE TAX UPON THE 21 TRANSFER OF PROPERTY PASSING TO OR FOR THE USE OF ANY OF THE 22 FOLLOWING SHALL BE AT THE RATE OF SIX PER CENT: 23 (I) GRANDFATHER, GRANDMOTHER, FATHER, MOTHER AND LINEAL 24 DESCENDANTS; OR 25 (II) WIFE OR WIDOW AND HUSBAND OR WIDOWER OF A CHILD. 26 (1.1) [INHERITANCE] EXCEPT AS PROVIDED IN SUBSECTION (G), 27 INHERITANCE TAX UPON THE TRANSFER OF PROPERTY PASSING TO OR FOR 28 THE USE OF A HUSBAND OR WIFE SHALL BE: 29 (I) AT THE RATE OF THREE PER CENT FOR ESTATES OF DECEDENTS 30 DYING ON OR AFTER JULY 1, 1994, AND BEFORE JANUARY 1, 1995. 19970H0134B1484 - 40 -
1 (II) AT THE RATE OF ZERO PER CENT FOR ESTATES OF DECEDENTS 2 DYING ON OR AFTER JANUARY 1, 1995. 3 (2) [INHERITANCE] EXCEPT AS PROVIDED IN SUBSECTION (G), 4 INHERITANCE TAX UPON THE TRANSFER OF PROPERTY PASSING TO OR FOR 5 THE USE OF ALL PERSONS OTHER THAN THOSE DESIGNATED IN SUBCLAUSE 6 (1) OR (1.1) OR EXEMPT UNDER SECTION 2111(M) SHALL BE AT THE 7 RATE OF FIFTEEN PER CENT. 8 (3) WHEN PROPERTY PASSES TO OR FOR THE USE OF A HUSBAND AND 9 WIFE WITH RIGHT OF SURVIVORSHIP, ONE OF WHOM IS TAXABLE AT A 10 RATE LOWER THAN THE OTHER, THE LOWER RATE OF TAX SHALL BE 11 APPLIED TO THE ENTIRE INTEREST. 12 (B) (1) WHEN THE DECEDENT WAS A RESIDENT, THE TAX SHALL BE 13 COMPUTED UPON THE VALUE OF THE PROPERTY, IN EXCESS OF THE 14 DEDUCTIONS SPECIFIED IN PART VI, AT THE RATES IN EFFECT AT THE 15 TRANSFEROR'S DEATH. 16 (2) WHEN THE DECEDENT WAS A NONRESIDENT, THE TAX SHALL BE 17 COMPUTED UPON THE VALUE OF REAL PROPERTY AND TANGIBLE PERSONAL 18 PROPERTY HAVING ITS SITUS IN THIS COMMONWEALTH, IN EXCESS OF 19 UNPAID PROPERTY TAXES ASSESSED ON THE PROPERTY AND ANY 20 INDEBTEDNESS FOR WHICH IT IS LIENED, MORTGAGED OR PLEDGED, AT 21 THE RATES IN EFFECT AT THE TRANSFEROR'S DEATH. THE PERSON LIABLE 22 TO MAKE THE RETURN UNDER SECTION 2136 MAY ELECT TO HAVE THE TAX 23 COMPUTED AS IF THE DECEDENT WAS A RESIDENT AND HIS ENTIRE ESTATE 24 WAS PROPERTY HAVING ITS SITUS IN THIS COMMONWEALTH, AND THE TAX 25 DUE SHALL BE THE AMOUNT WHICH BEARS THE SAME RATIO TO THE TAX 26 THUS COMPUTED AS THE REAL PROPERTY AND TANGIBLE PERSONAL 27 PROPERTY LOCATED IN THIS COMMONWEALTH BEARS TO THE ENTIRE ESTATE 28 OF THE DECEDENT. 29 (B.1) THE INHERITANCE TAX DUE UPON THE TRANSFER OF PROPERTY 30 PASSING TO OR FOR THE USE OF A HUSBAND OR WIFE SHALL BE THE 19970H0134B1484 - 41 -
1 LESSER OF THE TAX IMPOSED UNDER SUBSECTION (A)(1.1) OR THE TAX 2 DUE AFTER THE ALLOWANCE OF THE CREDIT PROVIDED FOR UNDER SECTION 3 2112. 4 (C) WHEN ANY PERSON ENTITLED TO A DISTRIBUTIVE SHARE OF AN 5 ESTATE, WHETHER UNDER AN INTER VIVOS TRUST, A WILL OR THE 6 INTESTATE LAW, RENOUNCES HIS RIGHT TO RECEIVE THE DISTRIBUTIVE 7 SHARE RECEIVING THEREFOR NO CONSIDERATION, OR EXERCISES HIS 8 ELECTIVE RIGHTS UNDER 20 PA.C.S. CH. 22 (RELATING TO ELECTIVE 9 SHARE OF SURVIVING SPOUSE) RECEIVING THEREFOR NO CONSIDERATION 10 OTHER THAN THE INTEREST IN ASSETS PASSING TO HIM AS THE ELECTING 11 SPOUSE, THE TAX SHALL BE COMPUTED AS THOUGH THE PERSONS WHO 12 BENEFIT BY SUCH RENUNCIATION OR ELECTION WERE ORIGINALLY 13 DESIGNATED TO BE THE DISTRIBUTEES, CONDITIONED UPON AN 14 ADJUDICATION OR DECREE OF DISTRIBUTION EXPRESSLY CONFIRMING 15 DISTRIBUTION TO SUCH DISTRIBUTEES. THE RENUNCIATION SHALL BE 16 MADE WITHIN NINE MONTHS AFTER THE DEATH OF THE DECEDENT OR, IN 17 THE CASE OF A SURVIVING SPOUSE, WITHIN THE TIME FOR ELECTION AND 18 ANY EXTENSION THEREOF UNDER 20 PA.C.S. § 2210(B) (RELATING TO 19 PROCEDURE FOR ELECTION; TIME LIMIT). NOTICE OF THE FILING OF THE 20 ACCOUNT AND OF ITS CALL FOR AUDIT OR CONFIRMATION SHALL INCLUDE 21 NOTICE OF THE RENUNCIATION OR ELECTION TO THE DEPARTMENT. WHEN 22 AN UNCONDITIONAL VESTING OF A FUTURE INTEREST DOES NOT OCCUR AT 23 THE DECEDENT'S DEATH, THE RENUNCIATION SPECIFIED IN THIS 24 SUBSECTION OF THE FUTURE INTEREST MAY BE MADE WITHIN THREE 25 MONTHS AFTER THE OCCURRENCE OF THE EVENT OR CONTINGENCY WHICH 26 RESOLVES THE VESTING OF THE INTEREST IN POSSESSION AND 27 ENJOYMENT. 28 (D) IN CASE OF A COMPROMISE OF A DISPUTE REGARDING RIGHTS 29 AND INTERESTS OF TRANSFEREES, MADE IN GOOD FAITH, THE TAX SHALL 30 BE COMPUTED AS THOUGH THE PERSONS SO RECEIVING DISTRIBUTION WERE 19970H0134B1484 - 42 -
1 ORIGINALLY ENTITLED TO IT AS TRANSFEREES OF THE PROPERTY 2 RECEIVED IN THE COMPROMISE, CONDITIONED UPON AN ADJUDICATION OR 3 DECREE OF DISTRIBUTION EXPRESSLY CONFIRMING DISTRIBUTION TO SUCH 4 DISTRIBUTEES. NOTICE OF THE FILING OF THE ACCOUNT AND OF ITS 5 CALL FOR AUDIT OR CONFIRMATION SHALL INCLUDE NOTICE TO THE 6 DEPARTMENT. 7 (E) IF THE RATE OF TAX WHICH WILL BE APPLICABLE WHEN AN 8 INTEREST VESTS IN POSSESSION AND ENJOYMENT CANNOT BE ESTABLISHED 9 WITH CERTAINTY, THE DEPARTMENT, AFTER CONSIDERATION OF RELEVANT 10 ACTUARIAL FACTORS, VALUATIONS AND OTHER PERTINENT CIRCUMSTANCES, 11 MAY ENTER INTO AN AGREEMENT WITH THE PERSON RESPONSIBLE FOR 12 PAYMENT TO ESTABLISH A SPECIFIED AMOUNT OF TAX WHICH, WHEN PAID 13 WITHIN SIXTY DAYS AFTER THE AGREEMENT, SHALL CONSTITUTE FULL 14 PAYMENT OF ALL TAX OTHERWISE DUE UPON SUCH TRANSFER. RIGHTS OF 15 WITHDRAWAL OF A SURVIVING SPOUSE NOT EXERCISED WITHIN NINE 16 MONTHS OF THE TRANSFEROR'S DEATH SHALL BE IGNORED IN MAKING SUCH 17 CALCULATIONS. 18 (F) PROPERTY SUBJECT TO A POWER OF APPOINTMENT, WHETHER OR 19 NOT THE POWER IS EXERCISED AND NOTWITHSTANDING ANY BLENDING OF 20 THE PROPERTY WITH THE PROPERTY OF THE DONEE, SHALL BE TAXED ONLY 21 AS PART OF THE ESTATE OF THE DONOR. 22 (G) THE FIRST ONE HUNDRED THOUSAND DOLLARS ($100,000) OF THE 23 TAXABLE VALUE OF PROPERTY SOLELY OWNED BY THE DECEDENT THAT IS 24 TRANSFERRED IS EXEMPT FROM THE TAX IMPOSED UNDER SUBSECTION 25 (A)(1), (1.1) OR (2). 26 Section 7 15. (a) The following acts and parts of acts are <-- 27 repealed: 28 Sections 2506 and 2507(a) of the act of April 9, 1929 29 (P.L.177, No.175), known as The Administrative Code of 1929. 30 Section 4 of the act of June 23, 1982 (P.L.597, No.170), 19970H0134B1484 - 43 -
1 known as the Wild Resource Conservation Act. 2 20 Pa.C.S. § 8618. 3 (b) Section 12 of the act of June 23, 1982 (P.L.597, 4 No.170), known as the Wild Resource Conservation Act, is 5 repealed insofar as it is inconsistent with this act. 6 Section 8 16. This act shall apply as follows: <-- 7 (1) The following provisions shall apply to taxable 8 years beginning on or after January 1, 1997: 9 (i) The amendment of section 301 introductory 10 paragraph, (C.2), (E.1) and (s.2) of the act. <-- 11 (ii) The amendment of section 304(d)(1) 304(D) of <-- 12 the act. 13 (iii) The addition of Part VI-A of Article III of 14 the act. 15 (iv) Section 7 of this act. <-- 16 (IV) THE AMENDMENT OF THE DEFINITION OF "CAPITAL <-- 17 STOCK VALUE" IN SECTION 601 OF THE ACT. 18 (V) SECTION 15 OF THIS ACT. 19 (2) The amendment of section 201(c) and (d) SECTIONS <-- 20 201(C), (D), (K)(8) AND (O)(4), 204, 1902-A, 1904-A, 1905-A 21 AND 1906-A of the act shall apply on and after July 1, 1997. 22 (3) THE AMENDMENT OF SECTION 301(D) OF THE ACT SHALL <-- 23 APPLY TO TAX YEARS BEGINNING ON OR AFTER JANUARY 1, 1998. 24 (3) (4) The amendment of sections 1101-C and 1102-C.3 of <-- 25 the act shall apply to any document made, executed, 26 delivered, accepted or presented for recording after the 27 effective date of this act. 28 Section 9. This act shall take effect immediately. <-- 29 SECTION 17. THE AMENDMENT OF SECTIONS 1296, 1902-A AND 1905- <-- 30 A OF THE ACT SHALL BE RETROACTIVE TO JANUARY 1, 1997. 19970H0134B1484 - 44 -
1 SECTION 18. THIS ACT SHALL TAKE EFFECT AS FOLLOWS: 2 (1) THE AMENDMENT OR ADDITION OF SECTIONS 201(B), (C), 3 (D), (F), (G), (K), (O) AND (JJ) AND 204(53) OF THE ACT SHALL 4 TAKE EFFECT JULY 1, 1997. 5 (2) THE REMAINDER OF THIS ACT SHALL TAKE EFFECT 6 IMMEDIATELY. A22L72JAM/19970H0134B1484 - 45 -