PRINTER'S NO. 2041
No. 1602 Session of 2007
INTRODUCED BY REED, PAYNE, BAKER, BASTIAN, BEAR, BENNINGHOFF,
BENNINGTON, BOYD, BROOKS, CALTAGIRONE, CAPPELLI, CAUSER,
CLYMER, CREIGHTON, DALLY, DENLINGER, ELLIS, EVERETT,
FAIRCHILD, GEIST, GINGRICH, GRELL, HARHART, HARRIS,
HENNESSEY, HERSHEY, HESS, HUTCHINSON, KAUFFMAN, M. KELLER,
KILLION, MANN, MARSHALL, MARSICO, McILHATTAN, METCALFE,
MILLARD, MILNE, MOYER, MUSTIO, NAILOR, NICKOL, O'NEILL,
PEIFER, PICKETT, PYLE, QUIGLEY, RAPP, REICHLEY, ROAE, ROHRER,
ROSS, RUBLEY, SAYLOR, SCAVELLO, SCHRODER, SONNEY, STERN,
R. STEVENSON, TURZAI, VULAKOVICH AND WATSON, JUNE 21, 2007
REFERRED TO COMMITTEE ON FINANCE, JUNE 21, 2007
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," providing for apportionment of business income.
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. Section 401(3)2(a)(9) of the act of March 4, 1971
14 (P.L.6, No.2), known as the Tax Reform Code of 1971, amended
15 July 12, 2006 (P.L.1137, No.116), is amended to read:
16 Section 401. Definitions.--The following words, terms, and
17 phrases, when used in this article, shall have the meaning
18 ascribed to them in this section, except where the context
1 clearly indicates a different meaning:
2 * * *
3 (3) "Taxable income." * * *
4 2. In case the entire business of any corporation, other
5 than a corporation engaged in doing business as a regulated
6 investment company as defined by the Internal Revenue Code of
7 1986, is not transacted within this Commonwealth, the tax
8 imposed by this article shall be based upon such portion of the
9 taxable income of such corporation for the fiscal or calendar
10 year, as defined in subclause 1 hereof, and may be determined as
11 follows:
12 (a) Division of Income.
13 * * *
14 (9) (A) Except as provided in subparagraph (B):
15 (i) For taxable years beginning before January 1, [2007]
16 2006, all business income shall be apportioned to this State by
17 multiplying the income by a fraction, the numerator of which is
18 the property factor plus the payroll factor plus three times the
19 sales factor and the denominator of which is five.
20 (ii) For taxable years beginning after December 31, 2006,
21 all business income shall be apportioned to this State by
22 multiplying the income by [a fraction, the numerator of which is
23 the sum of fifteen times the property factor, fifteen times the
24 payroll factor and seventy times the sales factor and the
25 denominator of which is one hundred] the sales factor.
26 (B) For purposes of apportionment of the capital stock -
27 franchise tax as provided in section 602 of Article VI of this
28 act, the apportionment fraction shall be the property factor
29 plus the payroll factor plus the sales factor as the numerator,
30 and the denominator shall be three.
20070H1602B2041 - 2 -
1 * * *
2 Section 2. This act shall take effect in 60 days.
E8L72MSP/20070H1602B2041 - 3 -