PRIOR PRINTER'S NO. 1497 PRINTER'S NO. 1803
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,
THOMPSON, HOLL, BELL, GREENLEAF, GERLACH, WAUGH, BOSCOLA AND
KASUNIC, NOVEMBER 15, 1999
SENATOR LOEPER, RULES AND EXECUTIVE NOMINATIONS, RE-REPORTED AS
AMENDED, MARCH 20, 2000
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 MAKING PERMANENT THE PROVISIONS <--
11 for the calculation of the manufacturing, processing,
12 research and development 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) DECEMBER 15, 1999 (P.L.926, NO.63), is <--
18 amended to read:
19 Section 602. Imposition of Tax.--* * *
20 (b) (1) Every foreign entity from which a report is
1 required under section 601 hereof, shall be subject to and pay
2 to the department annually, a franchise tax which is the greater
3 of (i) the amount computed by multiplying each dollar of the
4 capital stock value as defined in section 601(a) by the
5 appropriate rate of tax as set forth in subsection (h); or (ii)
6 the minimum tax set forth in subsection (i), upon a taxable
7 value to be determined in the following manner. The capital
8 stock value shall be ascertained in the manner prescribed in
9 section 601(a) of this article. The taxable value shall then be
10 determined by employing the relevant apportionment factors set
11 forth in Article IV: Provided, That the manufacturing,
12 processing, research and development exemptions contained under
13 section 602(a) shall also apply to foreign corporations and in <--
14 determining the relevant apportionment factors the numerator of
15 the property[, payroll, or sales] or payroll factors shall not
16 include any property[, payroll or sales] or payroll attributable
17 to manufacturing, processing, research or development activities
18 in the Commonwealth[: and Provided further, That, except]. Any
19 property or payroll attributable to manufacturing, processing,
20 research or development activities outside of the Commonwealth
21 shall also be excluded from the numerator of the property or
22 payroll factors. Except. IN DETERMINING THE RELEVANT <--
23 APPORTIONMENT FACTORS, THE FOLLOWING SHALL APPLY:
24 (I) FOR [ALL] TAXABLE YEARS [OTHER THAN SPECIFICALLY SET
25 FORTH IN SUBCLAUSE (II)] BEGINNING BEFORE JANUARY 1, 1999, THE
26 NUMERATOR OF THE PROPERTY, PAYROLL OR SALES FACTORS SHALL NOT
27 INCLUDE ANY PROPERTY, PAYROLL OR SALES ATTRIBUTABLE TO
28 MANUFACTURING, PROCESSING, RESEARCH OR DEVELOPMENT ACTIVITIES IN
29 THE COMMONWEALTH;
30 (II) FOR [THE] TAXABLE YEARS BEGINNING AFTER DECEMBER 31,
19990S1200B1803 - 2 -
1 1998, [AND BEGINNING BEFORE JANUARY 1, 2001,] THE NUMERATOR OF
2 THE PROPERTY OR PAYROLL FACTORS SHALL NOT INCLUDE ANY PROPERTY
3 OR PAYROLL ATTRIBUTABLE TO MANUFACTURING, PROCESSING, RESEARCH
4 OR DEVELOPMENT ACTIVITIES IN THE COMMONWEALTH, AND ANY PROPERTY
5 OR PAYROLL ATTRIBUTABLE TO MANUFACTURING, PROCESSING, RESEARCH
6 OR DEVELOPMENT ACTIVITIES OUTSIDE OF THE COMMONWEALTH SHALL ALSO
7 BE EXCLUDED FROM THE NUMERATOR OF THE PROPERTY OR PAYROLL
8 FACTORS. EXCEPT for the imposition of the minimum tax set forth
9 in subsection (i), the provisions of this section shall not
10 apply to the taxation of so much of the capital stock value
11 attributable to student loan assets owned or held by an entity
12 created for the securitization of student loans or by a trustee
13 on its behalf. Any foreign corporation, joint-stock association,
14 limited partnership or company subject to the tax prescribed
15 herein may elect to compute and pay its tax under section
16 602(a): Provided, That any foreign corporation, joint-stock
17 association, limited partnership or company electing to compute
18 and pay its tax under section 602(a) shall be treated as if it
19 were a domestic corporation for the purpose of determining which
20 of its assets are exempt from taxation and for the purpose of
21 determining the proportion of the value of its capital stock
22 which is subject to taxation.
23 (2) The provisions of this article shall apply to the
24 taxation of entities organized for manufacturing, processing,
25 research or development purposes, but shall not apply to such
26 entities as enjoy and exercise the right of eminent domain.
27 * * *
28 Section 2. This act shall apply to tax years beginning after <--
29 December 31, 1998.
30 Section 3 2. This act shall take effect immediately. <--
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