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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY WILLIAMS AND SOLOBAY, MARCH 28, 2011 |
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| REFERRED TO FINANCE, MARCH 28, 2011 |
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| AN ACT |
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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 expiration for corporate net income |
11 | tax; establishing a commercial activity tax; and imposing |
12 | penalties. |
13 | The General Assembly of the Commonwealth of Pennsylvania |
14 | hereby enacts as follows: |
15 | Section 1. The act of March 4, 1971 (P.L.6, No.2), known as |
16 | the Tax Reform Code of 1971, is amended by adding a section to |
17 | read: |
18 | Section 413. Expiration.--This article shall expire three |
19 | years from the effective date of this section. |
20 | Section 2. The act is amended by adding an article to read: |
21 | ARTICLE IV-A |
22 | COMMERCIAL ACTIVITY TAX |
23 | Section 401-A. Definitions. |
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1 | The following words and phrases when used in this article |
2 | shall have the meanings given to them in this section unless the |
3 | context clearly indicates otherwise: |
4 | "Agent." A person authorized by another person to act on its |
5 | behalf to undertake a transaction for the other, including any |
6 | of the following: |
7 | (1) A person receiving a fee to sell financial instruments. |
8 | (2) A person retaining only a commission from a transaction |
9 | with the other proceeds from the transaction being remitted to |
10 | another person. |
11 | (3) A person issuing licenses and permits under 34 Pa.C.S. |
12 | § 2901 (relating to authority to issue permits). |
13 | (4) A lottery sales agent holding a valid license issued |
14 | under section 305 of the act of August 26, 1971 (P.L.351, |
15 | No.91), known as the State Lottery Law. |
16 | "Bank Holding Company Act." The Bank Holding Company Act of |
17 | 1956 (70 Stat. 133, 12 U.S.C. § 1841 et seq.). |
18 | "Bright-line presence." A condition which a person has in |
19 | this Commonwealth for a reporting period and for the remaining |
20 | portion of the calendar year if any of the following applies: |
21 | (1) The person owns at any time during the calendar year |
22 | property in this Commonwealth with an aggregate value of not |
23 | less than $50,000. For the purpose of this paragraph, owned |
24 | property is valued at original cost and rented property is |
25 | valued at eight times the net annual rental charge. |
26 | (2) The person has during the calendar year payroll in |
27 | this Commonwealth of not less than $50,000. |
28 | (3) The person has during the calendar year taxable |
29 | gross receipts of not less than $500,000. |
30 | (4) The person has at any time during the calendar year |
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1 | within this Commonwealth not less than 25% of the person's |
2 | total property, total payroll or total gross receipts. |
3 | (5) The person is domiciled in this Commonwealth as an |
4 | individual or for corporate, commercial or other business |
5 | purposes. |
6 | "Calendar quarter." |
7 | (1) Except as provided under paragraph (2), a three- |
8 | month period ending on the 31st day of March, the 30th day of |
9 | June, the 30th day of September or the 31st day of December. |
10 | (2) For fiscal year filers, the last day of the third |
11 | month of the taxpayer's fiscal year. |
12 | "Calendar quarter taxpayer." A taxpayer for which the tax |
13 | period is a calendar quarter. |
14 | "Calendar year taxpayer." A taxpayer for which the tax |
15 | period is a calendar year. |
16 | "Combined company." Any person engaged in the activity of an |
17 | electric company or rural electric company that is also engaged |
18 | in the activity of a heating company or a natural gas company, |
19 | or any combination thereof. |
20 | "Combined taxpayer." A group of two or more persons treated |
21 | as a single taxpayer. |
22 | "Consolidated elected taxpayer." A group of two or more |
23 | persons treated as a single taxpayer for purposes of this |
24 | article as the result of an election made under section 401.1-A. |
25 | "Dealer in intangibles." |
26 | (1) The term includes every person who keeps an office |
27 | or other place of business in this Commonwealth and engages |
28 | at the office or other place in a business whether on the |
29 | person's own account with a view to profit, or as agent or |
30 | broker for others, with a view to profit or personal earnings |
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1 | that consists primarily of: |
2 | (i) Lending money. |
3 | (ii) Discounting, buying or selling bills of |
4 | exchange, drafts, acceptances, notes, mortgages or other |
5 | evidences of indebtedness. |
6 | (iii) Buying or selling bonds, stocks or other |
7 | investment securities. |
8 | (2) The term does not include institutions used |
9 | exclusively for charitable purposes, insurance companies and |
10 | financial institutions. The investment of funds as personal |
11 | accumulations or as business reserves or as working capital |
12 | does not constitute engaging in a business within the meaning |
13 | of this paragraph, except that a person who, having engaged |
14 | in a business that consists primarily of lending money or |
15 | discounting, buying or selling bills of exchange, drafts, |
16 | acceptances, notes, mortgages or other evidences of |
17 | indebtedness on the person's own account, remains in business |
18 | primarily for the purpose of realizing upon the assets of the |
19 | business is deemed a dealer in intangibles, though not |
20 | presently engaged in a business that consists primarily of |
21 | lending money or discounting or buying the securities. |
22 | "Department." The Department of Revenue of the Commonwealth. |
23 | "Doing business." Engaging in any activity, whether legal or |
24 | illegal, that is conducted for or results in gain, profit or |
25 | income, at any time during the calendar year. |
26 | "Excluded person." Any of the following: |
27 | (1) Any person with not more than $150,000 of taxable |
28 | gross receipts during the calendar year. The term does not |
29 | include a person that is a member of a consolidated elected |
30 | taxpayer. |
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1 | (2) A public utility that paid the excise tax imposed |
2 | under section 1101 based on one or more measurement periods |
3 | that include the entire tax period under this article. A |
4 | public utility that is a combined company is a taxpayer with |
5 | regard to the following gross receipts: |
6 | (i) Taxable gross receipts directly attributed to a |
7 | public utility activity, but not directly attributed to |
8 | an activity that is subject to the excise tax imposed by |
9 | section 1101. |
10 | (ii) Taxable gross receipts that cannot be directly |
11 | attributed to any activity, multiplied by a fraction |
12 | whose numerator is the taxable gross receipts described |
13 | under subparagraph (i) and whose denominator is the total |
14 | taxable gross receipts that can be directly attributed to |
15 | any activity. |
16 | (iii) Except for any differences resulting from the |
17 | use of an accrual basis method of accounting for purposes |
18 | of determining gross receipts under this article and the |
19 | use of the cash basis method of accounting for purposes |
20 | of determining gross receipts under section 1101, the |
21 | gross receipts directly attributed to the activity of a |
22 | natural gas company shall be determined in a manner |
23 | consistent with section 1101. |
24 | (iv) As used in paragraph (2), the term "public |
25 | utility" shall have the same meanings as in section |
26 | 1101‑A. |
27 | (3) A financial institution, as defined in section 2 of |
28 | the act of December 1, 1959 (P.L.1647, No.606), known as the |
29 | Business Development Credit Corporation Law, that paid the |
30 | corporation franchise tax imposed under section 602 based on |
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1 | one or more taxable years that include the entire tax period |
2 | under this article. |
3 | (4) A dealer in intangibles based on one or more |
4 | measurement periods that include the entire tax period under |
5 | this article. |
6 | (5) A financial holding company as defined in the Bank |
7 | Holding Company Act. |
8 | (6) A bank holding company as defined in the Bank |
9 | Holding Company Act. |
10 | (7) A savings and loan holding company as defined in the |
11 | Home Owners' Loan Act that is engaging only in activities or |
12 | investments permissible for a financial holding company under |
13 | section 4 of the Bank Holding Company Act (12 U.S.C. § |
14 | 1843(k)). |
15 | (8) A person directly or indirectly owned by one or more |
16 | financial institutions, financial holding companies, bank |
17 | holding companies or savings and loan holding companies |
18 | described under paragraph (3), (5), (6) or (7) that is |
19 | engaged in activities permissible for a financial holding |
20 | company under section 4(k) of the Bank Holding Company Act |
21 | (12 U.S.C. § 1843(k)). A person held under merchant banking |
22 | authority under section 4(k)(4)(H) or (I) of the Bank Holding |
23 | Company Act (12 U.S.C. § 1843(k)(4)(H) or (I)) is not an |
24 | excluded person, or a person directly or indirectly owned by |
25 | one or more insurance companies described under paragraph (9) |
26 | that is authorized to do the business of insurance in this |
27 | Commonwealth. For the purposes of this paragraph, a person |
28 | owns another person under the following circumstances: |
29 | (i) In the case of corporations issuing capital |
30 | stock, one corporation owns another corporation if it |
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1 | owns 50% or more of the other corporation's capital stock |
2 | with current voting rights. |
3 | (ii) In the case of a limited liability company, one |
4 | person owns the company if that person's membership |
5 | interest, as defined in 15 Pa.C.S. § 8903 (relating to |
6 | definitions and index of definitions), is 50% or more of |
7 | the combined membership interests of all persons owning |
8 | the interests in the company. |
9 | (iii) In the case of a partnership, trust or other |
10 | unincorporated business organization other than a limited |
11 | liability company, one person owns the organization if, |
12 | under the articles of organization or other instrument |
13 | governing the affairs of the organization, that person |
14 | has a beneficial interest in the organization's profits, |
15 | surpluses, losses or distributions of 50% or more of the |
16 | combined beneficial interests of all persons having that |
17 | interest in the organization. |
18 | (iv) In the case of multiple ownership, the |
19 | ownership interests of more than one person may be |
20 | aggregated to meet the 50% ownership tests only when each |
21 | owner is described under paragraph (3), (5), (6) or (7) |
22 | and is engaged in activities permissible for a financial |
23 | holding company under section 4(k) of the Bank Holding |
24 | Company Act (12 U.S.C. § 1843(k)) or is a person directly |
25 | or indirectly owned by one or more insurance companies |
26 | described under paragraph (9) that is authorized to do |
27 | the business of insurance in this Commonwealth. |
28 | (9) A domestic insurance company or foreign insurance |
29 | company that paid the insurance company premiums tax imposed |
30 | under section 2 of the act of May 12, 1943 (P.L.259, No.120), |
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1 | referred to as the Foreign Casualty Insurance Premium Tax |
2 | Allocation Law, based on one or more measurement periods that |
3 | include the entire tax period under this article. |
4 | (10) A person that solely facilitates or services one or |
5 | more securitizations or similar transactions for any person |
6 | described under paragraph (3), (5), (6), (7), (8) or (9). For |
7 | purposes of this definition, "securitization" means |
8 | transferring one or more assets to one or more persons and |
9 | then issuing securities backed by the right to receive |
10 | payment from the asset or assets so transferred. |
11 | (11) (Reserved). |
12 | (12) Nonprofit organizations or the Commonwealth and its |
13 | agencies, instrumentalities or political subdivisions. |
14 | "Gross receipts." Except as provided under this definition, |
15 | the total amount realized by a person, without deduction for the |
16 | cost of goods sold or other expenses incurred, that contributes |
17 | to the production of gross income of the person, including the |
18 | fair market value of any property and any services received, and |
19 | any debt transferred or forgiven as consideration. |
20 | (1) The following are examples of gross receipts: |
21 | (i) Amounts realized from the sale, exchange or |
22 | other disposition of the taxpayer's property to or with |
23 | another person. |
24 | (ii) Amounts realized from the taxpayer's |
25 | performance of services for another person. |
26 | (iii) Amounts realized from another's use or |
27 | possession of the taxpayer's property or capital. |
28 | (iv) Any combination of subparagraphs (i), (ii) and |
29 | (iii). |
30 | (2) The following amounts are excluded from gross |
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1 | receipts: |
2 | (i) Interest income except interest on credit sales. |
3 | (ii) Dividends and distributions from corporations, |
4 | and distributive or proportionate shares of receipts and |
5 | income from a pass-through entity as defined under |
6 | section 1702. |
7 | (iii) Receipts from the sale, exchange or other |
8 | disposition of an asset described under section 1221 or |
9 | 1231 of the Internal Revenue Code, without regard to the |
10 | length of time the person held the asset. Notwithstanding |
11 | section 1221 of the Internal Revenue Code, receipts from |
12 | hedging transactions also are excluded to the extent the |
13 | transactions are entered into primarily to protect a |
14 | financial position, such as managing the risk of exposure |
15 | to: |
16 | (A) foreign currency fluctuations that affect |
17 | assets, liabilities, profits, losses, equity, or |
18 | investments in foreign operations; |
19 | (B) interest rate fluctuations; or |
20 | (C) commodity price fluctuations. |
21 | As used in this paragraph, "hedging transaction" has the |
22 | same meaning as used in section 1221 of the Internal Revenue |
23 | Code. The actual transfer of title of real or tangible |
24 | personal property to another entity is not a hedging |
25 | transaction. |
26 | (iv) Proceeds received attributable to the |
27 | repayment, maturity or redemption of the principal of a |
28 | loan, bond, mutual fund, certificate of deposit or |
29 | marketable instrument. |
30 | (v) The principal amount received under a repurchase |
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1 | agreement or on account of any transaction properly |
2 | characterized as a loan to the person. |
3 | (vi) Contributions received by a trust, plan or |
4 | other arrangement, any of which is described in section |
5 | 501(a) of the Internal Revenue Code, or to which Title |
6 | 26, Subtitle A, Chapter 1, Subchapter (D) of the Internal |
7 | Revenue Code applies. |
8 | (vii) Compensation, whether current or deferred, and |
9 | whether in cash or in kind, received or to be received by |
10 | an employee, a former employee or the employee's legal |
11 | successor for services rendered to or for an employer, |
12 | including reimbursements received by or for an individual |
13 | for medical or education expenses, health insurance |
14 | premiums or employee expenses or on account of a |
15 | dependent care spending account, legal services plan, any |
16 | cafeteria plan described in section 125 of the Internal |
17 | Revenue Code or any similar employee reimbursement. |
18 | (viii) Proceeds received from the issuance of the |
19 | taxpayer's own stock, options, warrants, puts or calls, |
20 | or from the sale of the taxpayer's treasury stock. |
21 | (ix) Proceeds received on the account of payments |
22 | from insurance policies, except those proceeds received |
23 | for the loss of business revenue. |
24 | (x) Any of the following: |
25 | (A) Gifts or charitable contributions received; |
26 | membership dues received by trade, professional, |
27 | homeowners' or condominium associations. |
28 | (B) Payments received for educational courses, |
29 | meetings, meals or similar payments to a trade, |
30 | professional or other similar association. |
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1 | (C) Fundraising receipts received by any person |
2 | when any excess receipts are donated or used |
3 | exclusively for charitable purposes. |
4 | (xi) Damages received as the result of litigation in |
5 | excess of amounts that, if received without litigation, |
6 | would be gross receipts. |
7 | (xii) Property, money and other amounts received or |
8 | acquired by an agent on behalf of another in excess of |
9 | the agent's commission, fee or other remuneration. |
10 | (xiii) Tax refunds, other tax benefit recoveries and |
11 | reimbursements for the tax imposed under this article |
12 | made by entities that are part of the same combined |
13 | taxpayer or consolidated elected taxpayer group, and |
14 | reimbursements made by entities that are not members of a |
15 | combined taxpayer or consolidated elected taxpayer group |
16 | that are required to be made for economic parity among |
17 | multiple owners of an entity whose tax obligation under |
18 | this article is required to be reported and paid entirely |
19 | by one owner, pursuant to the requirements of sections |
20 | 401.1-A and 401.2-A. |
21 | (xiv) Pension reversions. |
22 | (xv) Contributions to capital. |
23 | (xvi) Sales or use taxes collected as a vendor or an |
24 | out-of-State seller on behalf of the taxing jurisdiction |
25 | from a consumer or other taxes the taxpayer is required |
26 | by law to collect directly from a purchaser and remit to |
27 | a Federal, State or local tax authority. |
28 | (xvii) In the case of receipts from the sale of |
29 | cigarettes or tobacco products by a wholesale dealer, |
30 | retail dealer, distributor, manufacturer or seller, as |
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1 | defined in section 202-A of the act of April 9, 1929 |
2 | (P.L.343, No.176), known as The Fiscal Code, an amount |
3 | equal to the Federal and State excise taxes paid by any |
4 | person on or for the cigarettes or tobacco products under |
5 | subtitle E of the Internal Revenue Code. |
6 | (xviii) In the case of receipts from the sale of |
7 | motor fuel by a licensed motor fuel dealer, licensed |
8 | retail dealer or licensed permissive motor fuel dealer, |
9 | an amount equal to Federal and State excise taxes paid by |
10 | any person on the motor fuel under section 4081 of the |
11 | Internal Revenue Code. The terms "licensed motor fuel |
12 | dealer," "licensed retail dealer" and "licensed |
13 | permissive motor fuel dealer" shall have the same meaning |
14 | as the term "dealer" in 75 Pa.C.S. § 9002 (relating to |
15 | definitions). |
16 | (xix) In the case of receipts from the sale of beer |
17 | or intoxicating liquor, as defined in section 102 of the |
18 | act of April 12, 1951 (P.L.90, No.21), known as the |
19 | Liquor Code, by a person holding a license issued under |
20 | the Liquor Code, an amount equal to Federal and State |
21 | excise taxes paid by any person on or for such beer or |
22 | intoxicating liquor under subtitle E of the Internal |
23 | Revenue Code or the Liquor Code. The term "beer" shall |
24 | have the same meaning as the term "malt or brewed |
25 | beverage" in section 102 of the Liquor Code. The term |
26 | "intoxicating liquor" shall have the same meaning as the |
27 | term "liquor" in section 102 of the Liquor Code. |
28 | (xx) Receipts realized by a motor vehicle dealer, as |
29 | defined in 75 Pa.C.S. § 102 (relating to definitions), |
30 | from the sale or other transfer of a motor vehicle, as |
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1 | defined in 75 Pa.C.S. § 102, to another motor vehicle |
2 | dealer for the purpose of resale by the transferee motor |
3 | vehicle dealer, but only if the sale or other transfer |
4 | was based upon the transferee's need to meet a specific |
5 | customer's preference for a motor vehicle. |
6 | (xxi) Receipts from a financial institution for |
7 | services provided to the financial institution in |
8 | connection with the issuance, processing, servicing and |
9 | management of loans or credit accounts, if the financial |
10 | institution and the recipient of the receipts have at |
11 | least 50% of their ownership interests owned or |
12 | controlled, directly or constructively through related |
13 | interests, by common owners. |
14 | (xxii) Receipts realized from administering anti- |
15 | neoplastic drugs and other cancer chemotherapy, |
16 | biologicals, therapeutic agents and supportive drugs in a |
17 | physician's office to patients with cancer. |
18 | (xxiii) Funds received or used by a mortgage broker |
19 | that is not a dealer in intangibles, other than fees or |
20 | other consideration, pursuant to a table-funding mortgage |
21 | loan or warehouse-lending mortgage loan. The terms used |
22 | in this subparagraph have the same meanings as in section |
23 | 101 of the act of January 30, 1974 (P.L.13, No.6), |
24 | referred to as the Loan Interest and Protection Law, |
25 | except "mortgage broker" means a person assisting a buyer |
26 | in obtaining a mortgage loan for a fee or other |
27 | consideration paid by the buyer or a lender or a person |
28 | engaged in table-funding or warehouse-lending mortgage |
29 | loans that are first lien mortgage loans. |
30 | (xxiv) Property, money and other amounts received by |
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1 | a professional employer arrangement or employee leasing |
2 | arrangement as described in section 4 of the act of |
3 | December 5, 1936 (2nd Sp.Sess., 1937 P.L.2897, No.1), |
4 | known as the Unemployment Compensation Law, from an |
5 | employer in excess of the administrative fee charged by |
6 | the professional employer arrangement. |
7 | (xxv) In the case of amounts retained as commissions |
8 | under section 222 of the act of December 17, 1981 |
9 | (P.L.435, No.135), known as the Race Horse Industry |
10 | Reform Act, an amount equal to the amounts specified |
11 | under section 222 of the Race Horse Industry Reform Act |
12 | that must be paid to or collected by the department as a |
13 | tax and the amounts specified under section 222 of the |
14 | Race Horse Industry Reform Act to be used as purse money. |
15 | (xxvi) Qualifying distribution center receipts. The |
16 | following shall apply: |
17 | (A) For the purposes of this subparagraph: |
18 | (I) "Qualifying distribution center |
19 | receipts." The receipts of a supplier from |
20 | qualified property that is delivered to a |
21 | qualified distribution center, multiplied by a |
22 | quantity that equals one minus the Pennsylvania |
23 | delivery percentage. |
24 | (II) "Qualified property." The tangible |
25 | personal property delivered to a qualified |
26 | distribution center that is shipped to that |
27 | qualified distribution center solely for further |
28 | shipping by the qualified distribution center to |
29 | another location in this Commonwealth or |
30 | elsewhere. The term "further shipping" includes |
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1 | storing and repackaging the property into smaller |
2 | or larger bundles, so long as the property is not |
3 | subject to further manufacturing or processing. |
4 | (III) "Qualified distribution center." The |
5 | warehouse or other similar facility in this |
6 | Commonwealth that, for the qualifying year, is |
7 | operated by a person that is not part of a |
8 | combined taxpayer group and that has a qualifying |
9 | certificate, except that all warehouses or other |
10 | similar facilities that are operated by persons |
11 | in the same taxpayer group and that are located |
12 | within one mile of each other shall be treated as |
13 | one qualified distribution center. |
14 | (IV) "Qualifying year." The calendar year |
15 | to which the qualifying certificate applies. |
16 | (V) "Qualifying period." The period of the |
17 | first day of July of the second year preceding |
18 | the qualifying year through the 30th day of June |
19 | of the year preceding the qualifying year. |
20 | (VI) "Qualifying certificate." The |
21 | certificate issued by the department after the |
22 | operator of a distribution center files an annual |
23 | application with the department. The application |
24 | and annual fee shall be filed and paid for each |
25 | qualified distribution center on or before the |
26 | first day of September before the qualifying year |
27 | or within 45 days after the distribution center |
28 | opens, whichever is later. The applicant must |
29 | substantiate to the department's satisfaction |
30 | that, for the qualifying period, all persons |
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1 | operating the distribution center have more than |
2 | 50% of the cost of the qualified property shipped |
3 | to a location such that it would be sitused |
4 | outside this Commonwealth under section |
5 | 403.3‑A(5). The applicant must also substantiate |
6 | that the distribution center cumulatively had |
7 | costs from its suppliers equal to or exceeding |
8 | $500,000,000 during the qualifying period. For |
9 | purposes of this subclause, "supplier" excludes |
10 | any person that is part of the consolidated |
11 | elected taxpayer group, if applicable, of the |
12 | operator of the qualified distribution center. |
13 | The department may require the applicant to have |
14 | an independent certified public accountant |
15 | certify that the calculation of the minimum |
16 | thresholds required for a qualified distribution |
17 | center by the operator of a distribution center |
18 | has been made in accordance with generally |
19 | accepted accounting principles. The department |
20 | shall issue or deny the issuance of a certificate |
21 | within 60 days after the receipt of the |
22 | application. A denial is subject to appeal under |
23 | section 2702. If the operator files a timely |
24 | appeal under section 2702, the operator shall be |
25 | granted a qualifying certificate, provided that |
26 | the operator is liable for any tax, interest or |
27 | penalty upon amounts claimed as qualifying |
28 | distribution center receipts, other than those |
29 | receipts exempt under section 401.1-A(c)(1), that |
30 | would have otherwise not been owed by its |
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1 | suppliers if the qualifying certificate was |
2 | valid. |
3 | (VII) "Pennsylvania delivery percentage." |
4 | The proportion of the total property delivered to |
5 | a destination inside this Commonwealth from the |
6 | qualified distribution center during the |
7 | qualifying period compared with total deliveries |
8 | from the distribution center everywhere during |
9 | the qualifying period. |
10 | (B) If the distribution center is new and was |
11 | not open for the entire qualifying period, the |
12 | operator of the distribution center may request that |
13 | the department grant a qualifying certificate. If the |
14 | certificate is granted and it is later determined |
15 | that more than 50% of the qualified property during |
16 | that year was not shipped to a location such that it |
17 | would be sitused outside of this Commonwealth under |
18 | section 403.3-A(5) or if it is later determined that |
19 | the person that operates the distribution center had |
20 | average monthly costs from its suppliers of less than |
21 | $40,000,000 during that year, then the operator of |
22 | the distribution center shall be liable for any tax, |
23 | interest or penalty upon amounts claimed as |
24 | qualifying distribution center receipts, other than |
25 | those receipts exempt under section 401.1-A(c)(1), |
26 | that would have not otherwise been owed by its |
27 | suppliers during the qualifying year if the |
28 | qualifying certificate was valid. For purposes of |
29 | this clause, "supplier" excludes any person that is |
30 | part of the consolidated elected taxpayer group, if |
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1 | applicable, of the operator of the qualified |
2 | distribution center. |
3 | (C) The following shall apply: |
4 | (I) When filing an application for a |
5 | qualifying certificate under clause (A)(VI), the |
6 | operator of a qualified distribution center also |
7 | shall provide documentation, as the department |
8 | requires, for the department to ascertain the |
9 | Pennsylvania delivery percentage. The department, |
10 | upon issuing the qualifying certificate, also |
11 | shall certify the Pennsylvania delivery |
12 | percentage. The operator of the qualified |
13 | distribution center may appeal the department's |
14 | certification of the Pennsylvania delivery |
15 | percentage in the same manner as an appeal is |
16 | taken from the denial of a qualifying certificate |
17 | under clause (A). |
18 | (II) Within 30 days after all appeals have |
19 | been exhausted, the operator of the qualified |
20 | distribution center shall notify the affected |
21 | suppliers of qualified property that the |
22 | suppliers are required to file, within 60 days |
23 | after receiving notice from the operator of the |
24 | qualified distribution center, amended reports |
25 | for the impacted calendar quarter, quarters or |
26 | year, whichever the case may be. Any additional |
27 | tax liability or tax overpayment shall be subject |
28 | to interest but shall not be subject to the |
29 | imposition of any penalty so long as the amended |
30 | returns are timely filed. The supplier of |
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1 | tangible personal property delivered to the |
2 | qualified distribution center shall include in |
3 | its report of taxable gross receipts the receipts |
4 | from the total sales of property delivered to the |
5 | qualified distribution center for the calendar |
6 | quarter, quarters or year, whichever the case may |
7 | be, multiplied by the Pennsylvania delivery |
8 | percentage for the qualifying year. Nothing in |
9 | this clause shall be construed as imposing |
10 | liability on the operator of a qualified |
11 | distribution center for the tax imposed by this |
12 | article arising from any change to the |
13 | Pennsylvania delivery percentage. |
14 | (D) In the case where the distribution center is |
15 | new and not open for the entire qualifying period, |
16 | the operator shall make a good faith estimate of a |
17 | Pennsylvania delivery percentage for use by suppliers |
18 | in their reports of taxable gross receipts for the |
19 | remainder of the qualifying period. The operator of |
20 | the facility shall disclose to the suppliers that the |
21 | Pennsylvania delivery percentage is an estimate and |
22 | is subject to recalculation. By the due date of the |
23 | next application for a qualifying certificate, the |
24 | operator shall determine the actual Pennsylvania |
25 | delivery percentage for the estimated qualifying |
26 | period and proceed as provided under clause (C) with |
27 | respect to the calculation and recalculation of the |
28 | Pennsylvania delivery percentage. The supplier is |
29 | required to file, within 60 days after receiving |
30 | notice from the operator of the qualified |
|
1 | distribution center, amended reports for the impacted |
2 | calendar quarter, quarters or year, whichever the |
3 | case may be. Any additional tax liability or tax |
4 | overpayment shall be subject to interest but shall |
5 | not be subject to the imposition of any penalty so |
6 | long as the amended returns are timely filed. |
7 | (E) Qualifying certificates and Pennsylvania |
8 | delivery percentages issued by the department shall |
9 | be open to public inspection and shall be timely |
10 | published by the department. A supplier relying in |
11 | good faith on a certificate issued under this |
12 | subsection shall not be subject to tax on the |
13 | qualifying distribution center receipts under this |
14 | subparagraph. A person receiving a qualifying |
15 | certificate is responsible for paying the tax, |
16 | interest and penalty upon amounts claimed as |
17 | qualifying distribution center receipts that would |
18 | not otherwise have been owed by the supplier if the |
19 | qualifying certificate were available when it is |
20 | later determined that the qualifying certificate |
21 | should not have been issued because the statutory |
22 | requirements were in fact not met. |
23 | (F) The annual fee for a qualifying certificate |
24 | shall be $100,000 for each qualified distribution |
25 | center. If a qualifying certificate is not issued, |
26 | the annual fee is subject to refund after the |
27 | exhaustion of all appeals provided for under clause |
28 | (A)(VI). The fee imposed under this clause may be |
29 | assessed in the same manner as the tax imposed under |
30 | this article. The first $100,000 of the annual |
|
1 | application fees collected each calendar year shall |
2 | be credited to the Commercial Activity Tax |
3 | Administrative Fund. |
4 | (G) The department may require that adequate |
5 | security be posted by the operator of the |
6 | distribution center on appeal when the department |
7 | disagrees that the applicant has met the minimum |
8 | thresholds for a qualified distribution center as set |
9 | forth under clauses (A) and (B). |
10 | (xxvii) Receipts of an employer from payroll |
11 | deductions relating to the reimbursement of the employer |
12 | for advancing money to an unrelated third party on an |
13 | employee's behalf. |
14 | (xxviii) Cash discounts allowed and taken. |
15 | (xxix) Returns and allowances. |
16 | (xxx) Bad debts from receipts on the basis of which |
17 | the tax imposed by this article was paid in a prior |
18 | quarterly tax payment period. For the purpose of this |
19 | subparagraph, "bad debts" means any debts that have |
20 | become worthless or uncollectible between the preceding |
21 | and current quarterly tax payment periods, have been |
22 | uncollected for at least six months, and that may be |
23 | claimed as a deduction under section 166 of the Internal |
24 | Revenue Code and the regulations adopted under that |
25 | section or that could be claimed as if the taxpayer kept |
26 | its accounts on the accrual basis. The term "bad debts" |
27 | does not include repossessed property, uncollectible |
28 | amounts on property that remains in the possession of the |
29 | taxpayer until the full purchase price is paid, or |
30 | expenses in attempting to collect any account receivable |
|
1 | or for any portion of the debt recovered. |
2 | (xxxi) Any amount realized from the sale of an |
3 | account receivable to the extent the receipts from the |
4 | underlying transaction giving rise to the account |
5 | receivable were included in the gross receipts of the |
6 | taxpayer. |
7 | (xxxii) Any receipts for which the tax imposed by |
8 | this article is prohibited by the Constitution of the |
9 | United States, Federal law or the Constitution of |
10 | Pennsylvania. |
11 | (3) In the case of a taxpayer when acting as a real |
12 | estate broker, the term includes only the portion of any fee |
13 | for the service of a real estate broker, or service of a real |
14 | estate salesperson associated with that broker, that is |
15 | retained by the broker and not paid to an associated real |
16 | estate salesperson or another real estate broker. For the |
17 | purposes of this paragraph, the term "real estate broker" |
18 | shall mean someone licensed under the terms of the |
19 | Commonwealth to act as a real estate broker. |
20 | (4) A taxpayer's method of accounting for gross receipts |
21 | for a tax period shall be the same as the taxpayer's method |
22 | of accounting for Federal income tax purposes for the |
23 | taxpayer's Federal taxable year that includes the tax period. |
24 | If a taxpayer's method of accounting for Federal income tax |
25 | purposes changes, its method of accounting for gross receipts |
26 | under this article shall be changed accordingly. |
27 | "Home Owners' Loan Act." The Home Owners' Loan Act (48 Stat. |
28 | 128, 12 U.S.C. § 1467a). |
29 | "Internal Revenue Code." The Internal Revenue Code of 1986 |
30 | (100 Stat. 2085, 26 U.S.C. § 1 et seq.), as amended. Any term |
|
1 | used in this article that is not otherwise defined has the same |
2 | meaning as when used in a comparable context in the laws of the |
3 | United States relating to Federal income taxes unless a |
4 | different meaning is clearly required. Any reference in this |
5 | article to the Internal Revenue Code includes other laws of the |
6 | United States relating to Federal income taxes. |
7 | "Payroll." Any of the following: |
8 | (1) Any amount subject to withholding by the person |
9 | under section 316. |
10 | (2) Any other amount the person pays as compensation to |
11 | an individual under the supervision or control of the person |
12 | for work done in this Commonwealth. |
13 | (3) Any amount the person pays for services performed in |
14 | this Commonwealth on its behalf by another. |
15 | "Person." Individuals, combinations of individuals of any |
16 | form, receivers, assignees, trustees in bankruptcy, firms, |
17 | companies, joint-stock companies, business trusts, estates, |
18 | partnerships, limited liability partnerships, limited liability |
19 | companies, associations, joint ventures, clubs, societies, for- |
20 | profit corporations, Pennsylvania S corporations, qualified |
21 | subchapter S subsidiaries, qualified subchapter S trusts, |
22 | trusts, entities that are disregarded for Federal income tax |
23 | purposes and any other entities. |
24 | "Qualifying controlled group." Two or more corporations in |
25 | which any taxpayer of one corporation owns or controls either |
26 | directly or indirectly more than 50% of the capital stock with |
27 | voting rights of one or more of the other corporations. |
28 | "Qualifying dealer." A dealer in intangibles that is a |
29 | qualifying dealer in intangibles or a member of a qualifying |
30 | controlled group of which an insurance company also is a member |
|
1 | on the first day of January of the year in and for which the tax |
2 | is required to be paid by the dealer. |
3 | "Qualifying dealer in intangibles." A dealer in intangibles |
4 | that is a member of a qualifying controlled group of which a |
5 | financial institution is also a member on the first day of the |
6 | financial institution's tax year. |
7 | "Received." The term includes amounts accrued under the |
8 | accrual method of accounting. |
9 | "Reporting person." A person in a consolidated elected |
10 | taxpayer or combined taxpayer group that is designated by that |
11 | group to legally bind the group for all filings and tax |
12 | liabilities and to receive all legal notices with respect to |
13 | matters under this article or, for the purposes of section |
14 | 404‑A, a separate taxpayer that is not a member of the group. |
15 | "Substantial nexus with this Commonwealth." Attributed to a |
16 | person who: |
17 | (1) Owns or uses a part or all of its capital in this |
18 | Commonwealth. |
19 | (2) Holds a certificate of compliance with the laws of |
20 | this Commonwealth authorizing the person to do business in |
21 | this Commonwealth. |
22 | (3) Has bright-line presence in this Commonwealth. |
23 | (4) Otherwise has nexus with this Commonwealth to an |
24 | extent that the person can be required to remit the tax |
25 | imposed under this article under the Constitution of the |
26 | United States. |
27 | "Table-funding mortgage loan." A residential mortgage loan |
28 | transaction in which the residential mortgage loan is initially |
29 | payable to the mortgage broker, the mortgage broker does not use |
30 | the mortgage broker's own funds to fund the transaction and, by |
|
1 | the terms of the mortgage or other agreement, the mortgage is |
2 | simultaneously assigned to another person. |
3 | "Tangible personal property." The term shall have the same |
4 | meaning as in section 201(m). |
5 | "Tax period." The calendar quarter or calendar year on the |
6 | basis of which a taxpayer is required to pay the tax imposed |
7 | under this article. |
8 | "Taxable gross receipts." Gross receipts sitused to this |
9 | Commonwealth under section 403.3. |
10 | "Taxpayer." Any person, or any group of persons in the case |
11 | of a consolidated elected taxpayer or combined taxpayer treated |
12 | as one taxpayer, required to register or pay tax under this |
13 | article. The term does not include excluded persons. |
14 | "Warehouse-mortgage loan." A residential mortgage loan |
15 | transaction in which the residential mortgage loan is initially |
16 | payable to the mortgage broker, the mortgage broker uses the |
17 | mortgage broker's own funds to fund the transaction and the |
18 | mortgage is sold or assigned before the mortgage broker receives |
19 | a scheduled payment on the residential mortgage loan. |
20 | Section 401.1-A. Consolidation of related taxpayers, election |
21 | and requirements. |
22 | (a) Election.--A group of two or more persons may elect to |
23 | be a consolidated elected taxpayer for the purposes of this |
24 | article if the group satisfies all of the following |
25 | requirements: |
26 | (1) The group elects to include all persons, including |
27 | persons enumerated under paragraphs (2), (3), (4), (5), (6), |
28 | (7), (8), (9) and (10) of the definition of "excluded |
29 | person," having at least 80%, or having at least 50%, of the |
30 | value of their ownership interests owned or controlled, |
|
1 | directly or constructively through related interests, by |
2 | common owners during all or any portion of the tax period, |
3 | together with the common owners. A group making its initial |
4 | election on the basis of the 80% ownership test may change |
5 | its election so that its consolidated elected taxpayer group |
6 | is formed on the basis of the 50% ownership test if all of |
7 | the following are satisfied: |
8 | (i) When the initial election was made, the group |
9 | did not have any persons satisfying the 50% ownership |
10 | test. |
11 | (ii) One or more of the persons in the initial group |
12 | subsequently acquires ownership interests in a person |
13 | such that the 50% ownership test is satisfied, the 80% |
14 | ownership test is not satisfied and the acquired person |
15 | would be required to be included in a combined taxpayer |
16 | group under section 401.2-A. |
17 | (iii) The group requests the change in a written |
18 | request to the department on or before the due date for |
19 | filing the first return due under section 405.1-A after |
20 | the date of the acquisition. |
21 | (iv) The group has not previously changed its |
22 | election. At the election of the group, all entities that |
23 | are not incorporated or formed under Federal or State |
24 | laws and that meet the consolidated elected ownership |
25 | test shall either be included in the group or all shall |
26 | be excluded from the group. If, at the time of |
27 | registration, the group does not include the entities |
28 | that meet the consolidated elected ownership test, the |
29 | group shall elect to either include or exclude the newly |
30 | acquired entities before the due date of the first return |
|
1 | due after the date of the acquisition. Each group shall |
2 | notify the department of the elections before the due |
3 | date of the return for the period in which the election |
4 | becomes binding. If 50% of the value of a person's |
5 | ownership interests is owned or controlled by each of two |
6 | consolidated elected taxpayer groups formed under the |
7 | 50% ownership or control test, that person is a member of |
8 | each group for the purposes, and each group shall include |
9 | in the group's taxable gross receipts 50% of that |
10 | person's taxable gross receipts. Otherwise, all of that |
11 | person's taxable gross receipts shall be included in the |
12 | taxable gross receipts of the consolidated elected |
13 | taxpayer group of which the person is a member. In no |
14 | event shall the ownership or control of 50% of the value |
15 | of a person's ownership interests by two otherwise |
16 | unrelated groups form the basis for consolidating the |
17 | groups into a single consolidated elected taxpayer group |
18 | or permit any exclusion under subsection (c) of taxable |
19 | gross receipts between members of the two groups. |
20 | Paragraph (3) applies with respect to the elections |
21 | described in this subsection. |
22 | (2) The group makes the election to be treated as a |
23 | consolidated elected taxpayer in the manner prescribed under |
24 | paragraph (1). |
25 | (3) Subject to review and audit by the department, the |
26 | group agrees that all of the following apply: |
27 | (i) The group shall file reports as a single |
28 | taxpayer for at least the next eight calendar quarters |
29 | following the election so long as at least two or more of |
30 | the members of the group meet the requirements of |
|
1 | paragraph (1). |
2 | (ii) Before the expiration of the eighth calendar |
3 | quarter, the group shall notify the department if it |
4 | elects to cancel its designation as a consolidated |
5 | elected taxpayer. If the group does not so notify the |
6 | department, the election remains in effect for another |
7 | eight calendar quarters. |
8 | (iii) If, at any time during any of those eight |
9 | calendar quarters following the election, a former member |
10 | of the group no longer meets the requirements under |
11 | paragraph (1), that member shall report and pay the tax |
12 | imposed under this article separately, as a member of a |
13 | combined taxpayer or, if the former member satisfies the |
14 | requirements with respect to another consolidated elected |
15 | group, as a member of that consolidated elected group. |
16 | (iv) The group agrees to the application of |
17 | subsection (b). |
18 | (b) Report.--A group of persons making the election under |
19 | this section shall report and pay tax on all of the group's |
20 | taxable gross receipts even if substantial nexus with this |
21 | Commonwealth does not exist for one or more persons in the |
22 | group. |
23 | (c) Exclusion.-- |
24 | (1) (i) Members of a consolidated elected taxpayer |
25 | group shall exclude gross receipts among persons included |
26 | in the consolidated elected taxpayer group. |
27 | (ii) Subject to paragraph (2), nothing in this |
28 | section shall have the effect of requiring a consolidated |
29 | elected taxpayer group to include gross receipts received |
30 | by a person enumerated under paragraphs (2), (3), (4), |
|
1 | (5), (6), (7), (8), (9) and (10) of the definition of |
2 | "excluded person" if that person is a member of the group |
3 | pursuant to the elections made by the group under |
4 | subsection (a)(1). |
5 | (1.1) In the event of a dealer transfer, a consolidated |
6 | elected taxpayer group shall not exclude, under this |
7 | subsection, gross receipts from the transfer. For the |
8 | purposes of this paragraph, a "dealer transfer" shall mean a |
9 | transfer of property that satisfies both of the following: |
10 | (i) The property is directly transferred by any |
11 | means from one member of the group to another member of |
12 | the group that is a dealer in intangibles but is not a |
13 | qualifying dealer. |
14 | (ii) The property is subsequently delivered by the |
15 | dealer in intangibles to a person that is not a member of |
16 | the group. |
17 | (2) Gross receipts related to the sale or transmission |
18 | of electricity through the use of an intermediary regional |
19 | transmission organization approved by the Federal Energy |
20 | Regulatory Commission shall be excluded from taxable gross |
21 | receipts under paragraph (1) if all other requirements of |
22 | paragraph (1) are met, even if the receipts are from and to |
23 | the same member of the group. |
24 | (d) Notification.--To make the election to be a consolidated |
25 | elected taxpayer, a group of persons shall notify the department |
26 | of the election in the manner prescribed by the department and |
27 | pay the department a registration fee equal to the lesser of |
28 | $200 or $20 for each person in the group. No additional fee |
29 | shall be imposed for the addition of new members to the group |
30 | once the group has remitted a fee in the amount of $200. The |
|
1 | election shall be made and the fee paid before the beginning of |
2 | the first calendar quarter to which the election applies. The |
3 | fee shall be collected and used in the same manner as provided |
4 | under section 404-A. The election shall be made on a form |
5 | prescribed by the department for that purpose and shall be |
6 | signed by one or more individuals with authority, separately or |
7 | together, to make a binding election on behalf of all persons in |
8 | the group. Any person acquired or formed after the filing of the |
9 | registration shall be included in the group if the person meets |
10 | the requirements of subsection (a)(1). The group shall notify |
11 | the department of any additions to the group with the next tax |
12 | return it files with the department. |
13 | Section 401.2-A. Combined taxpayers, registration fee and |
14 | liability. |
15 | (a) Members.--All persons, other than persons enumerated |
16 | under paragraphs (2), (3), (4), (5), (6), (7), (8), (9) and (10) |
17 | of the definition of "excluded person," having more than 50% of |
18 | the value of their ownership interest owned or controlled, |
19 | directly or constructively through related interests, by common |
20 | owners during all or any portion of the tax period, together |
21 | with the common owners, shall be members of a combined taxpayer |
22 | group if those persons are not members of a consolidated elected |
23 | taxpayer pursuant to an election under section 401.1-A. |
24 | (b) Register.--A combined taxpayer shall register, file |
25 | returns and pay taxes under this article as a single taxpayer. |
26 | (c) Exclusion.--A combined taxpayer shall exclude neither |
27 | taxable gross receipts between its members nor from others that |
28 | are not members. |
29 | (d) Payment.--A combined taxpayer shall pay to the |
30 | department a registration fee equal to the lesser of $200 or $20 |
|
1 | for each person in the group. No additional fee shall be imposed |
2 | for the addition of new members to the group once the group has |
3 | remitted a fee in the amount of $200. The fee shall be timely |
4 | paid before the beginning of the first calendar quarter or |
5 | November 15, 2012, whichever is later. The fee shall be |
6 | collected and used in the same manner as provided under section |
7 | 404-A. Any person acquired or formed after the filing of the |
8 | registration shall be included in the group if the person meets |
9 | the requirements of subsection (a). The group must notify the |
10 | department of any additions to the group with the next quarterly |
11 | tax return it files with the department. |
12 | Section 401.3-A. Taxation of property transferred into |
13 | Commonwealth. |
14 | (a) Inclusion.--Except as provided under subsection (b): |
15 | (1) A person shall include as taxable gross receipts the |
16 | value of property the person transfers into this Commonwealth |
17 | for the person's own use within one year after the person |
18 | receives the property outside this Commonwealth. |
19 | (2) In the case of a consolidated elected taxpayer group |
20 | or a combined taxpayer group, the taxpayer shall include as |
21 | taxable gross receipts the value of property that any of the |
22 | taxpayer's members transferred into this Commonwealth for the |
23 | use of any of the taxpayer's members within one year after |
24 | the taxpayer receives the property outside this Commonwealth. |
25 | (b) Outside property.--Property brought into this |
26 | Commonwealth within one year after it is received outside this |
27 | Commonwealth by a person or group described under subsection (a) |
28 | (1) or (2) shall not be included as taxable gross receipts as |
29 | required under subsection (a)(1) or (2) if the department |
30 | ascertains that the property's receipt outside this Commonwealth |
|
1 | by the person or group followed by its transfer into this |
2 | Commonwealth within one year was not intended in whole or in |
3 | part to avoid in whole or in part the tax imposed under this |
4 | article. |
5 | (c) Regulations.--The department may promulgate regulations |
6 | necessary to administer this section. |
7 | Section 401.4-A. Joint and several liability. |
8 | All members of a consolidated elected taxpayer or combined |
9 | taxpayer group during the tax period for which additional tax, |
10 | penalty or interest is owed are jointly and severally liable for |
11 | the amounts. The reporting person will be assessed for the |
12 | liability and the amounts due may be pursued against any member |
13 | of the group. |
14 | Section 402-A. Commercial activity tax levied on taxable gross |
15 | receipts. |
16 | (a) Imposition.--For the purpose of funding the needs of |
17 | this Commonwealth and its local governments beginning with the |
18 | tax period that commences July 1, 2012, and continuing for every |
19 | tax period thereafter, there is levied a commercial activity tax |
20 | on each person with taxable gross receipts for the privilege of |
21 | doing business in this Commonwealth. Persons on which the |
22 | commercial activity tax is levied include, but are not limited |
23 | to, persons with substantial nexus with this Commonwealth. The |
24 | tax imposed under this section is not a transactional tax and is |
25 | not subject to the act of September 14, 1949 (Public Law No. |
26 | 86-272, 73 Stat. 555). The tax imposed under this section is in |
27 | addition to any other taxes or fees imposed by statute. The tax |
28 | levied under this section is imposed on the person receiving the |
29 | gross receipts and is not a tax imposed directly on a purchaser. |
30 | The tax imposed by this section is an annual privilege tax for |
|
1 | the calendar year that, in the case of calendar year taxpayers, |
2 | is the annual tax period and, in the case of calendar quarter |
3 | taxpayers, contains all quarterly tax periods in the calendar |
4 | year. A taxpayer is subject to the annual privilege tax for |
5 | doing business during any portion of the calendar year. |
6 | (b) Tax on taxpayer.--The tax imposed by this section is a |
7 | tax on the taxpayer and shall not be billed or invoiced to |
8 | another person. If the tax or any portion thereof is billed or |
9 | invoiced and separately stated, the amounts shall remain part of |
10 | the price for purposes of the sales and use taxes levied under |
11 | Article II. Nothing in this subsection shall prohibit: |
12 | (1) a person from including in the price charged for a |
13 | good or service an amount sufficient to recover the tax |
14 | imposed by this section; or |
15 | (2) a lessor from including an amount sufficient to |
16 | recover the tax imposed by this section in a lease payment |
17 | charged or from including the amount on a billing or invoice |
18 | pursuant to the terms of a written lease agreement providing |
19 | for the recovery of the lessor's tax costs. The recovery of |
20 | the costs shall be based on an estimate of the total tax cost |
21 | of the lessor during the tax period, as the tax liability of |
22 | the lessor cannot be calculated until the end of that period. |
23 | Section 403-A. Commercial activity tax rate and computation. |
24 | (a) Computation.--Except as provided under subsections (b) |
25 | and (d) and in sections 403.1-A and 403.2-A, the tax levied |
26 | under this section for each tax period shall be the product of |
27 | two and six-tenths mills per dollar times the remainder of the |
28 | taxpayer's taxable gross receipts for the tax period after |
29 | subtracting the exclusion amount provided for under subsection |
30 | (c). |
|
1 | (b) Amounts.--Notwithstanding subsection (c), the tax on the |
2 | first $1,000,000 in taxable gross receipts each calendar year |
3 | shall be $150. For calendar year 2013, the tax imposed under |
4 | this subsection shall be paid not later than May 10, 2013, by |
5 | both calendar year taxpayers and calendar quarter taxpayers. For |
6 | calendar years 2014, 2015 and 2016, the tax imposed under this |
7 | subsection shall be paid with the fourth-quarter tax return or |
8 | annual tax return for the prior calendar year by both calendar |
9 | year taxpayers and calendar quarter taxpayers. For calendar |
10 | years 2017 and thereafter, the tax imposed under this subsection |
11 | shall be paid not later than the tenth day of May of each year |
12 | along with the first quarter or annual tax return, as |
13 | applicable. |
14 | (c) Exclusion.-- |
15 | (1) Each calendar quarter taxpayer may exclude the first |
16 | $250,000 of taxable gross receipts for a calendar quarter and |
17 | may carry forward and apply any unused exclusion amount to |
18 | the three subsequent calendar quarters. Each calendar year |
19 | taxpayer may exclude the first $1,000,000 of taxable gross |
20 | receipts for a calendar year. |
21 | (2) A taxpayer switching from a calendar year tax period |
22 | to a calendar quarter tax period may, for the first quarter |
23 | of the change, apply the prior calendar quarter exclusion |
24 | amounts to the first calendar quarter return the taxpayer |
25 | files that calendar year. The tax rate shall be based on the |
26 | rate imposed that calendar quarter when the taxpayer switches |
27 | from a calendar year to a calendar quarter tax period. |
28 | (3) A general contractor or a subcontractor shall |
29 | exclude any income other than income that is actually |
30 | realized by the general contractor or a subcontractor. For |
|
1 | the purposes of this paragraph, the term contractor shall |
2 | have the meaning given to it in 61 Pa. Code § 31.11 (relating |
3 | to definitions). |
4 | (4) A taxpayer that has a small profit margin but |
5 | conducts a high volume of business shall exclude the cost of |
6 | labor and goods by itemizing those costs in the manner |
7 | provided by the department. |
8 | (d) Credit.--There is allowed a credit against the tax |
9 | imposed under this article for each of the following calendar |
10 | years if a transfer was made in the preceding calendar year from |
11 | the General Fund to the Commercial Activity Tax Refund Fund |
12 | under section 403.2-A(d): calendar years 2008, 2010 and 2012. |
13 | The credit is allowed for taxpayers that paid in full the tax |
14 | imposed under this article for the calendar year in which the |
15 | transfer was made. The amount of a taxpayer's credit equals the |
16 | amount computed under section 403.2-A(d). |
17 | Section 403.1-A. Calculation of tax imposed per calendar |
18 | quarter. |
19 | This section applies only to calendar quarter taxpayers. The |
20 | tax imposed per calendar quarter under section 403-A(a) shall be |
21 | computed as follows: |
22 | (1) From January 1, 2012, to March 31, 2012, by |
23 | multiplying the tax otherwise due under that subsection by |
24 | 23%. |
25 | (2) From April 1, 2012, to March 31, 2013, by |
26 | multiplying the tax otherwise due under that subsection by |
27 | 40%. |
28 | (3) From April 1, 2013, to March 31, 2014, by |
29 | multiplying the tax otherwise due under that subsection by |
30 | 60%. |
|
1 | (4) From April 1, 2014, to March 31, 2015, by |
2 | multiplying the tax otherwise due under that subsection by |
3 | 80%. |
4 | (5) After March 31, 2015, 100% of the tax due under that |
5 | subsection. |
6 | Section 403.2-A. Periodic review of tax collected, revenue |
7 | limits and application of excess. |
8 | (a) Computation.--Not later than the last day of September |
9 | immediately following the end of each CAT test period, the |
10 | department shall compute the amount of CAT collected during that |
11 | test period. If the amount is greater than 110% of the |
12 | prescribed CAT collections for that period, the department shall |
13 | proceed as provided under subsections (b) and (c). For the |
14 | purposes of this subsection, the prescribed CAT collections for |
15 | the CAT test periods are as follows: |
16 | (1) For the first CAT test period, $8,015,000. |
17 | (2) For the second CAT test period, $1,190,000,000 less |
18 | any amount credited to the Commercial Activity Tax Refund |
19 | Fund with regard to the first CAT test period. |
20 | (3) For the third CAT test period, $1,610,000,000 less |
21 | any amount credited to the commercial activity tax refund |
22 | fund with regard to the second CAT test period. |
23 | (b) Collections exceeded.--If the amount of CAT collected |
24 | during a CAT test period exceeds 110% of the prescribed CAT |
25 | collections for that test period, the department shall determine |
26 | a new tax rate equal to the tax rate that would have yielded the |
27 | prescribed CAT collections during that test period less one-half |
28 | of the amount of the excess that was certified to the department |
29 | for the test period under subsection (c). |
30 | (c) Tax rate.-- |
|
1 | (1) The tax rate shall be the rate that would have to be |
2 | imposed under section 403-A(a) before any applicable phase-in |
3 | percentages under section 403.1-A or otherwise provided by |
4 | law to yield the prescribed CAT collection after applying any |
5 | applicable phase-in percentages. |
6 | (2) A new tax rate computed under subsection (b) shall |
7 | be expressed as a number of mills per dollar, rounded to the |
8 | nearest one-hundredth of one mill. The rate shall be rounded |
9 | upward by one-hundredth of one mill only if the next decimal |
10 | digit is five or more. |
11 | (3) Not later than the last day of September following |
12 | the end of the CAT test period on the basis of which a new |
13 | tax rate is computed, the department shall certify the new |
14 | tax rate to the Governor, the President pro tempore of the |
15 | Senate, the Speaker of the House of Representatives and all |
16 | other members of the General Assembly. The department shall |
17 | publish the new tax rate by journal entry and provide notice |
18 | of the new tax rate to taxpayers. The new tax rate shall be |
19 | the rate imposed under section 403-A(a) beginning with the |
20 | ensuing calendar year and is subject to any applicable phase- |
21 | in percentages provided for under section 403.1-A. |
22 | (c) Certification.--If the amount of CAT collected during a |
23 | CAT test period exceeds 110% of the prescribed CAT collections |
24 | for that test period, the department shall certify the excess |
25 | amount to the department not later than the last day of |
26 | September immediately following the end of that test period. The |
27 | department shall transfer from the General Fund one-half of the |
28 | amount of the excess so certified to the Commercial Activity Tax |
29 | Refund Fund, which is created in the State Treasury, and the |
30 | remaining one-half of the amount of the excess to the budget |
|
1 | stabilization fund. All money credited to the Commercial |
2 | Activity Tax Refund Fund shall be applied to reimburse the |
3 | General Fund for the diminution in revenue caused by the credit |
4 | provided under section 403-A(d). In the calendar year that |
5 | begins immediately after the year in which a transfer is made to |
6 | the Commercial Activity Tax Refund Fund, the department shall |
7 | compute the amount to be credited, under section 403-A(d), to |
8 | each taxpayer that paid in full the tax imposed under this |
9 | article for the calendar year in which the transfer was made. |
10 | The credit allowed to the taxpayer shall equal the amount |
11 | transferred to the Commercial Activity Tax Refund Fund |
12 | multiplied by a fraction, the numerator of which is the amount |
13 | of tax paid by that taxpayer for that calendar year and the |
14 | denominator of which is the total of the taxes paid by all the |
15 | taxpayers for which the credit is allowed. The credit applies |
16 | only to the calendar year that begins immediately after the year |
17 | in which a transfer is made to the commercial activity tax |
18 | refund fund under this subsection. |
19 | (d) Intent.--It is the intent of the General Assembly to |
20 | conduct a review of the prescribed CAT collections and rate |
21 | adjustments provided for under this section every two years and |
22 | to establish lower prescribed CAT collections or reduce the rate |
23 | of tax levied under this article on the basis of the following |
24 | three factors: |
25 | (1) The revenue yield of the tax. |
26 | (2) The condition of this Commonwealth's economy. |
27 | (3) Savings realized by ongoing reform to Medicaid and |
28 | other policy initiatives. |
29 | (e) Definitions.--As used in this section, the following |
30 | words and phrases shall have the meanings given to them in this |
|
1 | subsection unless the context clearly indicates otherwise: |
2 | "CAT." The commercial activity tax levied under this |
3 | article. |
4 | "CAT collected." With regard to a CAT test period, the net |
5 | amount of CAT, exclusive of registration fees, received in the |
6 | period after subtracting any CAT refunded in the period. |
7 | "First CAT test period." The twenty-four month period |
8 | beginning July 1, 2012, and ending June 30, 2014. |
9 | "Second CAT test period." The twelve-month period beginning |
10 | July 1, 2015, and ending June 30, 2016. |
11 | "Third CAT test period." The twelve-month period beginning |
12 | July 1, 2016, and ending June 30, 2017. |
13 | Section 403.3-A. Situsing of gross receipts to this |
14 | Commonwealth. |
15 | For the purposes of this article, gross receipts shall be |
16 | sitused to this Commonwealth as follows: |
17 | (1) Gross rents and royalties from real property located |
18 | in this Commonwealth shall be sitused to this Commonwealth. |
19 | (2) Gross rents and royalties from tangible personal |
20 | property shall be sitused to this Commonwealth to the extent |
21 | the tangible personal property is located or used in this |
22 | Commonwealth. |
23 | (3) Gross receipts from the sale of electricity and |
24 | electric transmission and distribution services shall be |
25 | sitused to this Commonwealth in the manner provided under |
26 | section 1101. |
27 | (4) Gross receipts from the sale of real property |
28 | located in this Commonwealth shall be sitused to this |
29 | Commonwealth. |
30 | (5) Gross receipts from the sale of tangible personal |
|
1 | property shall be sitused to this Commonwealth if the |
2 | property is received in this Commonwealth by the purchaser. |
3 | In the case of delivery of tangible personal property by |
4 | common carrier or by other means of transportation, the place |
5 | at which the property is ultimately received after all |
6 | transportation has been completed shall be considered the |
7 | place where the purchaser receives the property. For purposes |
8 | of this paragraph, the phrase "delivery of tangible personal |
9 | property by common carrier or by other means of |
10 | transportation" includes the situation in which a purchaser |
11 | accepts the property in this Commonwealth and then transports |
12 | the property directly or by other means to a location outside |
13 | this Commonwealth. Direct delivery in this Commonwealth, |
14 | other than for purposes of transportation, to a person or |
15 | firm designated by a purchaser constitutes delivery to the |
16 | purchaser in this Commonwealth, and direct delivery outside |
17 | this Commonwealth to a person or firm designated by a |
18 | purchaser does not constitute delivery to the purchaser in |
19 | this Commonwealth, regardless of where title passes or other |
20 | conditions of sale. |
21 | (6) Gross receipts from the sale, exchange, disposition |
22 | or other grant of the right to use trademarks, trade names, |
23 | patents, copyrights and similar intellectual property shall |
24 | be sitused to this Commonwealth to the extent that the |
25 | receipts are based on the amount of use of the property in |
26 | this Commonwealth. If the receipts are not based on the |
27 | amount of use of the property, but rather on the right to use |
28 | the property, and the payor has the right to use the property |
29 | in this Commonwealth, then the receipts from the sale, |
30 | exchange, disposition or other grant of the right to use the |
|
1 | property shall be sitused to this Commonwealth to the extent |
2 | the receipts are based on the right to use the property in |
3 | this Commonwealth. |
4 | (7) Gross receipts from the sale of transportation |
5 | services by a common or contract carrier shall be sitused to |
6 | this Commonwealth in proportion to the mileage traveled by |
7 | the carrier during the tax period on roadways, waterways, |
8 | airways and railways in this Commonwealth to the mileage |
9 | traveled by the carrier during the tax period on roadways, |
10 | waterways, airways and railways everywhere. With prior |
11 | written approval of the department, a common or contract |
12 | carrier may use an alternative situsing procedure for |
13 | transportation services. |
14 | (8) Gross receipts from dividends, interest and other |
15 | sources of income from financial instruments described under |
16 | section 1101 shall be sitused to this Commonwealth. Nothing |
17 | in this paragraph shall limit or modify the exclusions |
18 | enumerated under the definition of "excluded person" and |
19 | paragraph (2) of the definition of "gross receipts." The |
20 | department may promulgate regulations to further specify the |
21 | manner in which to situs gross receipts subject to this |
22 | paragraph. |
23 | (9) Gross receipts from the sale of all other services, |
24 | and all other gross receipts not otherwise sitused under this |
25 | section, shall be sitused to this Commonwealth in the |
26 | proportion that the purchaser's benefit in this Commonwealth |
27 | with respect to what was purchased bears to the purchaser's |
28 | benefit everywhere with respect to what was purchased. The |
29 | physical location where the purchaser ultimately uses or |
30 | receives the benefit of what was purchased shall be paramount |
|
1 | in determining the proportion of the benefit in this |
2 | Commonwealth to the benefit everywhere. If a taxpayer's |
3 | records do not allow the taxpayer to determine that location, |
4 | the taxpayer may use an alternative method to situs gross |
5 | receipts under this subsection if the alternative method is |
6 | reasonable, is consistently and uniformly applied, and is |
7 | supported by the taxpayer's records as the records exist when |
8 | the service is provided or within a reasonable period of time |
9 | thereafter. |
10 | (10) If the situsing provisions of paragraphs (1), (2), |
11 | (3), (4), (5), (6), (7) and (8) do not fairly represent the |
12 | extent of a person's activity in this Commonwealth, the |
13 | person may request, or the department may require or permit, |
14 | an alternative method. The request by a person must be made |
15 | within the applicable statute of limitations set forth in |
16 | this article. |
17 | (11) The department may promulgate regulations to |
18 | provide additional guidance to the application, and provide |
19 | alternative methods of situsing gross receipts that apply to |
20 | all persons, or subset of persons, that are engaged in |
21 | similar business or trade activities. |
22 | Section 404-A. Registration of taxpayer and fee. |
23 | (a) Registration required.--Not later than 30 days after a |
24 | person first has more than $150,000 in taxable gross receipts in |
25 | a calendar year, each person subject to this article shall |
26 | register with the department on the form prescribed by the |
27 | department. The form shall include the following: |
28 | (1) The person's name. |
29 | (2) If applicable, the name of the state or country |
30 | under the laws of which the person is incorporated. |
|
1 | (3) If applicable, the location of a person's principal |
2 | office and the name and address of the officer or agent of |
3 | the corporation in charge of the business. |
4 | (4) If applicable, the names of the person's president, |
5 | secretary, treasurer and authorized agent designated under |
6 | section 1101, with the post office address of each. |
7 | (5) The kind of business in which the person is engaged. |
8 | (6) If required by the department, the date of the |
9 | beginning of the person's annual accounting period that |
10 | includes the first day of January of the taxable calendar |
11 | year. |
12 | (7) If the person is not a corporation or a sole |
13 | proprietor, the names of the person's owners and officers, if |
14 | required by the department. |
15 | (8) The person's Federal Employer Identification Number |
16 | or, if those are not applicable, the person's Social Security |
17 | number or equivalent. |
18 | (9) All other information that the department requires |
19 | to administer and enforce this article. |
20 | (b) Fee.--Except as otherwise provided in this subsection, |
21 | each person registering with the department as required by |
22 | subsection (a) shall pay a registration fee. The fee shall be in |
23 | the amount of $15 if a person registers electronically and $20 |
24 | if a person does not register electronically. The registration |
25 | fee shall be paid in the manner prescribed by the department at |
26 | the same time the registration is due if a person is subject to |
27 | the tax imposed under this article before January 1, 2012. If a |
28 | person first becomes subject to the tax after that date, the |
29 | registration fee is payable with the first tax period return the |
30 | person is required to file as prescribed by section 405.1-A. If |
|
1 | a person does not register within the time prescribed by this |
2 | section, an additional fee is imposed in the amount of $100 per |
3 | month or part thereof that the fee is outstanding, not to exceed |
4 | $1,000. The department may abate the additional fee. The fee |
5 | imposed under this subsection may be assessed in the same manner |
6 | as the tax imposed under this article. Proceeds from the fee |
7 | shall be credited to the Commercial Activity Tax Administrative |
8 | Fund, which is created in the State Treasury for the department |
9 | to use in implementing and administering the tax imposed under |
10 | this article. Registration fees paid under this section, |
11 | excluding any additional fee imposed for a person's failure to |
12 | timely register, shall be credited against the first payment of |
13 | tax payable under section 403-A. |
14 | (c) Notification.--If a person that has registered under |
15 | this section is no longer a taxpayer subject to this article, |
16 | including no longer being a taxpayer because of the application |
17 | of paragraph (1) of the definition of "excluded person," the |
18 | person shall notify the department that the person's |
19 | registration should be canceled. |
20 | (d) (Reserved). |
21 | (e) Definitions.--As used in this section, the following |
22 | words and phrases shall have the meanings given to them in this |
23 | subsection unless the context clearly indicates otherwise: |
24 | "Person." The term includes a reporting person. |
25 | Section 405-A. Election as calendar year taxpayer. |
26 | (a) Notification.--If a person subject to this article |
27 | anticipates that the person's taxable gross receipts will be |
28 | more than $1,000,000 in a calendar year, the person shall notify |
29 | the department on the person's initial registration form and |
30 | file on a quarterly basis as a calendar quarter taxpayer. Any |
|
1 | taxpayer with taxable gross receipts of no more than $1,000,000 |
2 | shall register as a calendar year taxpayer and shall file |
3 | annually. |
4 | (b) Calendar quarter taxpayer.--Any person that is a |
5 | calendar year taxpayer under subsection (a) shall become a |
6 | calendar quarter taxpayer in the subsequent calendar year if the |
7 | person's taxable gross receipts for the prior calendar year are |
8 | more than $1,000,000 and shall remain a calendar quarter |
9 | taxpayer until the person notifies the department, and receives |
10 | approval in writing from the department, to switch back to being |
11 | a calendar year taxpayer. Nothing in this subsection shall |
12 | prohibit a person that has elected to be a calendar year |
13 | taxpayer from notifying the department, using the procedures |
14 | prescribed by the department, that it is switching back to being |
15 | a calendar quarter taxpayer. |
16 | (c) Calendar year taxpayer.--Any taxpayer that is not a |
17 | calendar quarter taxpayer under this section is a calendar year |
18 | taxpayer. The department may grant written approval for a |
19 | calendar quarter taxpayer to use an alternative reporting |
20 | schedule or estimate the amount of tax due for a calendar |
21 | quarter if the taxpayer demonstrates to the department the need |
22 | for the deviation. The department may promulgate a regulation to |
23 | apply this subsection to a group of taxpayers without the |
24 | taxpayers having to receive written approval from the |
25 | department. |
26 | Section 405.1-A. Filing of tax return required and minimum |
27 | interim payment. |
28 | (a) Form.-- |
29 | (1) Not later than the tenth day of the second month |
30 | after the end of each calendar quarter, every taxpayer other |
|
1 | than a calendar year taxpayer shall file with the department |
2 | a tax return in the form as the department prescribes. The |
3 | return shall include the amount of the taxpayer's taxable |
4 | gross receipts for the calendar quarter and shall indicate |
5 | the amount of tax due under section 403-A for the calendar |
6 | quarter. |
7 | (2) (i) Subject to section 405-A(c), a calendar quarter |
8 | taxpayer shall report the taxable gross receipts for that |
9 | calendar quarter. |
10 | (ii) With respect to taxable gross receipts |
11 | incorrectly reported in a calendar quarter that has a |
12 | lower tax rate, the tax shall be computed at the tax rate |
13 | in effect for the quarterly return in which the receipts |
14 | should have been reported. Nothing in this subparagraph |
15 | shall prohibit a taxpayer from filing an application for |
16 | refund under section 408-A with regard to the incorrect |
17 | reporting of taxable gross receipts discovered after |
18 | filing the annual return described in paragraph(3). A tax |
19 | return shall not be deemed to be an incorrect reporting |
20 | of taxable gross receipts for the purposes of this |
21 | subparagraph if the return reflects between 95% and 105% |
22 | of the actual taxable gross receipts for the calendar |
23 | quarter. |
24 | (3) For the purposes of paragraph(2)(i), the tax return |
25 | filed for the fourth calendar quarter of a calendar year is |
26 | the annual return for the privilege tax imposed by this |
27 | article. The return shall report any additional taxable gross |
28 | receipts not previously reported in the calendar year and |
29 | shall adjust for any over-reported taxable gross receipts in |
30 | the calendar year. If the taxpayer ceases to be a taxpayer |
|
1 | before the end of the calendar year, the last return the |
2 | taxpayer is required to file shall be the annual return, and |
3 | the taxpayer shall report any additional taxable gross |
4 | receipts not previously reported in the calendar year and |
5 | shall adjust for any over-reported taxable gross receipts in |
6 | the calendar year. |
7 | (4) As the tax imposed by this article is a privilege |
8 | tax, the tax rate with respect to taxable gross receipts for |
9 | a calendar quarter is not fixed until the end of the |
10 | measurement period for each calendar quarter. Subject to |
11 | paragraph (2)(ii), the total amount of taxable gross receipts |
12 | reported for a given calendar quarter shall be subject to the |
13 | tax rate in effect in that quarter. |
14 | (5) Not later than the tenth day of May following the |
15 | end of each calendar year, every calendar year taxpayer shall |
16 | file with the department a tax return in the form as the |
17 | department prescribes. The return shall include the amount of |
18 | the taxpayer's taxable gross receipts for the calendar year |
19 | and shall indicate the amount of tax due under section 403-A |
20 | for the calendar year. |
21 | (b) Minimum tax.-- |
22 | (1) A person that first becomes subject to the tax |
23 | imposed under this article shall pay the minimum tax imposed |
24 | under section 403-A(b) along with the registration fee |
25 | imposed under section 404-A, if applicable, on or before the |
26 | day the return is required to be filed for that quarter under |
27 | subsection (a)(1), regardless of whether the person elects to |
28 | be a calendar year taxpayer under section 405-A. |
29 | (2) The amount of the minimum tax for a person subject |
30 | to paragraph (1) shall be reduced to $75 if the registration |
|
1 | is timely filed after the first day of May and before the |
2 | first day of January of the following calendar year. |
3 | Section 406-A. Penalty for late filing or delinquent payment. |
4 | (a) Imposition.--Any taxpayer that fails to file a return or |
5 | pay the full amount of the tax due within the period prescribed |
6 | under this article shall pay a penalty in an amount not |
7 | exceeding the greater of $50 or 10% of the tax required to be |
8 | paid for the tax period. |
9 | (b) Additional imposition.-- |
10 | (1) If any additional tax is found to be due, the |
11 | department may impose an additional penalty of up to 15% on |
12 | the additional tax found to be due. |
13 | (2) Any delinquent payments of the tax made after a |
14 | taxpayer is notified of an audit or a tax discrepancy by the |
15 | department is subject to the penalty imposed under this |
16 | subsection. If an assessment is issued under section 409-A in |
17 | connection with the delinquent payments, the payments shall |
18 | be credited to the assessment. |
19 | (c) Failure to switch.--After calendar year 2015, the |
20 | department may impose an additional penalty against a taxpayer |
21 | that fails to switch to being a calendar quarter taxpayer at the |
22 | time it had over $2,000,000 in taxable gross receipts in the |
23 | calendar year, as required under section 405-A(b). The penalty |
24 | may be imposed in an amount not to exceed 10% of the tax due |
25 | above $2,000,000 in taxable gross receipts for the calendar |
26 | year. Any penalty imposed under this subsection shall be in |
27 | addition to any other penalties imposed under this section. |
28 | (d) Failure to register.--If the department notifies a |
29 | person required to register under section 404-A of that |
30 | requirement and of the requirement to remit the tax due under |
|
1 | this article, and the person fails to register and remit the tax |
2 | within 60 days after the notice, the department may impose an |
3 | additional penalty of up to 35% of the tax due. The penalty |
4 | imposed under this subsection shall be in addition to any other |
5 | penalties imposed under this section. |
6 | (e) Collection.--The department may collect any penalty or |
7 | interest imposed by this section in the same manner as the tax |
8 | imposed under this article. Penalties and interest collected |
9 | shall be considered as revenue arising from the tax imposed |
10 | under this article. |
11 | (f) Abatement.--The department may abate all or a portion of |
12 | any penalties imposed under this section and may promulgate |
13 | regulations governing the abatements. |
14 | (g) Interest.--If any tax due is not timely paid in |
15 | accordance with this article, the taxpayer shall pay interest, |
16 | calculated at the annual rate prescribed under 61 Pa. Code |
17 | § 151.22 (relating to transfer and assessment and refund of |
18 | credits) or section 2 of the act of April 9, 1867 (P.L.58, |
19 | No.36), entitled "An act regulating interest on public |
20 | accounts," from the date the tax payment was due to the date of |
21 | payment or to the date an assessment was issued, whichever |
22 | occurs first. |
23 | (h) Incorrect reporting.--The department may impose a |
24 | penalty of up to 10% for any additional tax that is due under |
25 | section 405.1-A(a)(2)(ii) from a taxpayer incorrectly reporting |
26 | its taxable gross receipts. |
27 | (i) Incorrect billing.--If the department discovers that a |
28 | taxpayer has billed or invoiced another person for the tax |
29 | imposed under this article in violation of 402-A(b), the |
30 | department shall notify the taxpayer of the violation by |
|
1 | certified mail and may impose a penalty of up to $500. If the |
2 | taxpayer subsequently bills or invoices a person for the tax |
3 | imposed under this article, the department shall impose a |
4 | penalty of $500. |
5 | Section 407-A. Quarterly payments, electronic filing of returns |
6 | and penalty. |
7 | (a) Electronic filing.--Any person required to file returns |
8 | for a calendar quarter shall remit each tax payment, and, if |
9 | required by the department, file the tax return or the annual |
10 | report, electronically. The department may require taxpayers to |
11 | use the electronic filing system under section 3003.8 to file |
12 | returns and remit the tax or may provide another means for |
13 | taxpayers to file and remit the tax electronically. |
14 | (b) Excuse from requirement.--A person required by this |
15 | section to remit taxes or file returns electronically may apply |
16 | to the department, on the form prescribed by the department, to |
17 | be excused from that requirement. The department may excuse a |
18 | person from the requirements of this subsection for good cause. |
19 | (c) Failure.-- |
20 | (1) If a person required to remit taxes or file a return |
21 | electronically under this section fails to do so, the |
22 | department may impose a penalty not to exceed the following: |
23 | (i) For either of the first two calendar quarters |
24 | the person so fails, 5% of the amount of the payment that |
25 | was required to be remitted. |
26 | (ii) For the third and any subsequent calendar |
27 | quarters the person so fails, 10% of the amount of the |
28 | payment that was required to be remitted. |
29 | (2) The penalty imposed under paragraph (1) shall be in |
30 | addition to any other penalty imposed under this article and |
|
1 | shall be considered as revenue arising from the tax imposed |
2 | under this article. A penalty may be collected by assessment |
3 | in the manner prescribed by section 409-A. The department may |
4 | abate all or a portion of the penalty. |
5 | Section 408-A. Application for refund to taxpayer. |
6 | (a) Time.--An application for refund to the taxpayer of the |
7 | amount of taxes imposed under this article that are overpaid, |
8 | paid illegally or erroneously, or paid on any illegal or |
9 | erroneous assessment, shall be filed by the reporting person |
10 | with the department, on the form prescribed by the department, |
11 | within four years after the date of the illegal or erroneous |
12 | payment of the tax, or within any additional period allowed |
13 | under section 409-A(f). The applicant shall provide the amount |
14 | of the requested refund along with the claimed reasons for, and |
15 | documentation to support, the issuance of a refund. |
16 | (b) Amount.--On the filing of the refund application, the |
17 | department shall determine the amount of refund to which the |
18 | applicant is entitled. If the amount is not less than that |
19 | claimed, the department shall certify the amount to the State |
20 | Treasurer for payment. If the amount is less than that claimed, |
21 | the department shall proceed in accordance with 53 Pa.C.S. |
22 | § 8425 (relating to refunds of overpayments). |
23 | (c) Interest.--Interest on a refund applied for under this |
24 | section, computed at the rate provided for under section 1274(d) |
25 | of the Internal Revenue Code, shall be allowed from the later of |
26 | the date the tax was paid or when the tax payment was due. |
27 | (d) Full exclusion.--A calendar quarter taxpayer with more |
28 | than $1,000,000 in taxable gross receipts in a calendar year |
29 | other than calendar year 2012 and that is not able to exclude |
30 | $1,000,000 in taxable gross receipts because of the operation of |
|
1 | the taxpayer's business in that calendar year may file for a |
2 | refund under this section to obtain the full exclusion of |
3 | $1,000,000 in taxable gross receipts for that calendar year. |
4 | (e) Credit.--Except as provided under section 408.1-A, the |
5 | department may, with the consent of the taxpayer, provide for |
6 | the crediting against tax due for a tax year the amount of any |
7 | refund due the taxpayer under this article for a preceding tax |
8 | year. |
9 | Section 408.1-A. Application of refund to debt to Commonwealth. |
10 | (a) Satisfaction.--If a taxpayer entitled to a refund under |
11 | section 408-A owes any debt to the Commonwealth, the amount |
12 | refundable may be applied in satisfaction of the debt. If the |
13 | amount refundable is less than the amount of the debt, it may be |
14 | applied in partial satisfaction of the debt. If the amount |
15 | refundable is greater than the amount of the debt, the amount |
16 | remaining after satisfaction of the debt shall be refunded. This |
17 | section shall apply to debts that have become final. For the |
18 | purposes of this section, a debt becomes final when, under the |
19 | applicable law, any time provided for petition for reassessment, |
20 | request for reconsideration or other appeal of the legality or |
21 | validity of the amount giving rise to the debt expires without |
22 | an appeal having been filed in the manner provided by law. |
23 | (b) Definitions.--As used in this section, the following |
24 | words and phrases shall have the meanings given to them in this |
25 | subsection unless the context clearly indicates otherwise: |
26 | "Debt to the Commonwealth." Any of the following: |
27 | (1) Unpaid taxes due the Commonwealth. |
28 | (2) Unpaid workers' compensation premiums due the |
29 | Commonwealth. |
30 | (3) Unpaid unemployment compensation contributions due |
|
1 | under the Commonwealth. |
2 | (4) Unpaid unemployment compensation payment in lieu of |
3 | contribution. |
4 | (5) Unpaid fees payable to the Commonwealth or to the |
5 | clerk of courts. |
6 | (6) Incorrect medical assistance payments. |
7 | (7) Any unpaid charge, penalty or interest arising from |
8 | paragraphs (1), (2), (3), (4), (5) and (6). |
9 | Section 409-A. Assessment against person not filing return or |
10 | paying tax. |
11 | (a) Assessment.--The department may make an assessment, |
12 | based on any information in the department's possession, against |
13 | any person that fails to file a return or pay any tax as |
14 | required by this article. The department shall give the person |
15 | assessed written notice of the assessment as provided under 61 |
16 | Pa. Code § 119.1 (relating to payment on notice and demand). |
17 | With the notice, the department shall provide instructions on |
18 | the manner in which to petition for reassessment and request a |
19 | hearing with respect to the petition. The department shall send |
20 | any assessments against consolidated elected taxpayer and |
21 | combined taxpayer groups under section 401.1-A or 401.2-A to the |
22 | taxpayer's reporting person. The reporting person shall notify |
23 | all members of the group of the assessment and all outstanding |
24 | taxes, interest and penalties for which the assessment is |
25 | issued. |
26 | (b) Final.--Unless the person assessed, within 60 days after |
27 | service of the notice of assessment, files with the department, |
28 | either personally or by certified mail, a written petition |
29 | signed by the person or the person's authorized agent having |
30 | knowledge of the facts, the assessment becomes final, and the |
|
1 | amount of the assessment is due and payable from the person |
2 | assessed to the State Treasurer. The petition shall indicate the |
3 | objections of the person assessed, but additional objections may |
4 | be raised in writing if received by the department prior to the |
5 | date shown on the final determination. |
6 | (c) Filing.-- |
7 | (1) After an assessment becomes final, if any portion of |
8 | the assessment, including accrued interest, remains unpaid, a |
9 | certified copy of the department's entry making the |
10 | assessment final may be filed in the office of the clerk of |
11 | the court of common pleas in the county in which the person |
12 | resides or has its principal place of business in this |
13 | Commonwealth. |
14 | (2) Immediately upon the filing of the entry, the clerk |
15 | shall enter judgment for the Commonwealth against the person |
16 | assessed in the amount shown on the entry. Execution shall |
17 | issue upon the judgment at the request of the department, and |
18 | all laws applicable to sales on execution shall apply to |
19 | sales made under the judgment. |
20 | (3) The portion of the assessment not paid within 60 |
21 | days after the day the assessment was issued shall bear |
22 | interest at the annual rate prescribed under section 1274(d) |
23 | of the Internal Revenue Code from the day the department |
24 | issues the assessment until it is paid. Interest shall be |
25 | paid in the same manner as the tax and may be collected by |
26 | the issuance of an assessment under this section. |
27 | (d) Jeopardy assessment.--If the department believes that |
28 | collection of the tax will be jeopardized unless proceedings to |
29 | collect or secure collection of the tax are instituted without |
30 | delay, the department may issue a jeopardy assessment against |
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1 | the person liable for the tax. Immediately upon the issuance of |
2 | the jeopardy assessment, the department shall file an entry with |
3 | the clerk of the court of common pleas in the manner prescribed |
4 | under subsection (c). Notice of the jeopardy assessment shall be |
5 | served on the person assessed or the person's authorized agent |
6 | in the manner provided under 61 Pa. Code § 119.1 within five |
7 | days of the filing of the entry with the clerk. The total amount |
8 | assessed shall be immediately due and payable, unless the person |
9 | assessed files a petition for reassessment in accordance with |
10 | subsection (b) and provides security in a form satisfactory to |
11 | the department and in an amount sufficient to satisfy the unpaid |
12 | balance of the assessment. Full or partial payment of the |
13 | assessment shall not prejudice the department's consideration of |
14 | the petition for reassessment. |
15 | (e) Forwarding.--The department shall immediately forward to |
16 | the State Treasurer all amounts the department receives under |
17 | this section, which shall be considered as revenue arising from |
18 | the tax imposed under this article. |
19 | (f) Time for assessment.--Except as provided under this |
20 | subsection, no assessment shall be made or issued against a |
21 | taxpayer for the tax imposed under this article more than four |
22 | years after the due date for the filing of the return for the |
23 | tax period for which the tax was reported, or more than four |
24 | years after the return for the tax period was filed, whichever |
25 | is later. The time limit may be extended if both the taxpayer |
26 | and the department consent in writing to the extension or enter |
27 | into an agreement waiving or extending the time limit. Any |
28 | extension shall extend the four-year time limit under section |
29 | 408-A(b) for the same period of time. Nothing in this subsection |
30 | shall bar an assessment against a taxpayer that fails to file a |
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1 | return required under this article or that files a fraudulent |
2 | return. |
3 | (g) Audit.--If the department possesses information that |
4 | indicates that the amount of tax a taxpayer is required to pay |
5 | under this article exceeds the amount the taxpayer paid, the |
6 | department may audit a sample of the taxpayer's gross receipts |
7 | over a representative period of time to ascertain the amount of |
8 | tax due and may issue an assessment based on the audit. The |
9 | department shall make a good faith effort to reach agreement |
10 | with the taxpayer in selecting a representative sample. The |
11 | department may apply a sampling method only if the department |
12 | has prescribed the method by regulation. |
13 | (h) Location of person.--If the whereabouts of a person |
14 | subject to this article is not known to the department, the |
15 | department shall follow the procedures under 61 Pa. Code |
16 | § 119.1. |
17 | Section 410-A. Disposal of business or assets and tax due |
18 | immediately. |
19 | If any person liable for the tax imposed under this article |
20 | sells the trade or business, disposes in any manner other than |
21 | in the regular course of business at least 75% of assets of the |
22 | trade or business or quits the trade or business, any tax owed |
23 | by the person shall become due and payable immediately, and the |
24 | person shall pay the tax under this section, including any |
25 | applicable penalties and interest, within 45 days after the date |
26 | of selling or quitting the trade or business. The person's |
27 | successor shall withhold a sufficient amount of the purchase |
28 | money to cover the amount due and unpaid until the former owner |
29 | produces a receipt from the department showing that the amounts |
30 | are paid or a certificate indicating that no taxes are due. If a |
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1 | purchaser fails to withhold purchase money, that person shall be |
2 | personally liable up to the purchase money amount, for the |
3 | amounts that are unpaid during the operation of the business by |
4 | the former owner. The department may promulgate regulations |
5 | regarding the issuance of certificates under this section, |
6 | including the waiver of the need for a certificate if certain |
7 | criteria are met. |
8 | Section 411-A. Failure to report or pay and annulment of |
9 | privilege or franchise. |
10 | If any person subject to this article fails to report or pay |
11 | the tax as required under this article or fails to pay any |
12 | penalty imposed under this article within 90 days after the time |
13 | prescribed for payment of the penalty, the Attorney General, on |
14 | the request of the department, shall commence an action in quo |
15 | warranto in the court of appeals of the county in which the |
16 | person has its principal place of business to forfeit and annul |
17 | its privileges or franchise within this Commonwealth. If the |
18 | court finds that the person is in default for the amount |
19 | claimed, it shall render judgment revoking the person's |
20 | privileges or franchise within this Commonwealth. |
21 | Section 412-A. Records, Federal returns and Federal-State |
22 | reconciliation computations. |
23 | The department may prescribe requirements for the keeping of |
24 | records and other pertinent documents, the filing of copies of |
25 | Federal income tax returns and determinations and computations |
26 | reconciling Federal income tax returns with the returns and |
27 | reports required under section 405-A. The department may require |
28 | any person, by notice served on that person, to keep those |
29 | records that the department considers necessary to show whether, |
30 | and the extent to which, a person is subject to this article. |
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1 | Those records and other documents shall be open during business |
2 | hours to inspection by the department and shall be preserved for |
3 | a period of four years unless the department, in writing, |
4 | consents to their destruction within that period, or by order |
5 | requires that they be kept longer. If the records are normally |
6 | kept by the person electronically, the person shall provide the |
7 | records to the department electronically at the department's |
8 | request. Any information required by the department under this |
9 | article is confidential as provided for under section 408, |
10 | except that the department shall make public an electronic list |
11 | of all actively registered persons required to remit the tax |
12 | under this article, including legal names, trade names, |
13 | addresses and account numbers. The list shall include all |
14 | persons that canceled their registration at any time during the |
15 | preceding four calendar years, including the date the |
16 | registration was canceled. |
17 | Section 453-A. Credit against tax for amortizable net operating |
18 | losses. |
19 | (a) Nonrefundable credit.--For each calendar period |
20 | beginning prior to January 1, 2037, there is allowed a |
21 | nonrefundable tax credit against the tax levied each year by |
22 | this article on each qualifying taxpayer, on each consolidated |
23 | elected taxpayer having one or more qualifying taxpayers as a |
24 | member and on each combined taxpayer having one or more |
25 | qualifying taxpayers as a member. The credit shall be claimed in |
26 | the order specified in section 498-A and is allowed only to |
27 | reduce the first one-half of any tax remaining after allowance |
28 | of the credits that precede it in section 498-A. No credit under |
29 | subsection (b) shall be allowed against the second one-half of |
30 | the remaining tax. Except as otherwise limited by subsections |
|
1 | (b) and (c), the maximum amount of the nonrefundable credit that |
2 | may be used against the first one-half of the remaining tax for |
3 | each calendar year is as follows: |
4 | (1) For calendar year 2017, 10% of the amortizable |
5 | amount. |
6 | (2) For calendar year 2018, 20% of the amortizable |
7 | amount, less all amounts previously used. |
8 | (3) For calendar year 2019, 30% of the amortizable |
9 | amount, less all amounts previously used. |
10 | (4) For calendar year 2020, 40% of the amortizable |
11 | amount, less all amounts previously used. |
12 | (5) For calendar year 2021, 50% of the amortizable |
13 | amount, less all amounts previously used. |
14 | (6) For calendar year 2022, 60% of the amortizable |
15 | amount, less all amounts previously used. |
16 | (7) For calendar year 2023, 70% of the amortizable |
17 | amount, less all amounts previously used. |
18 | (8) For calendar year 2024, 80% of the amortizable |
19 | amount, less all amounts previously used. |
20 | (9) For calendar year 2025, 90% of the amortizable |
21 | amount, less all amounts previously used. |
22 | (10) For each of calendar years 2026, 2027, 2028, 2029, |
23 | 2030, 2031, 2032, 2033, 2034, 2035 and 2036, 100% of the |
24 | amortizable amount, less all amounts used in all previous |
25 | years. |
26 | In no event shall the cumulative credit used for calendar years |
27 | 2017, 2018, 2019, 2020, 2021, 2022, 2023, 2024, 2025, 2026, |
28 | 2027, 2028, 2029, 2030, 2031, 2032, 2033, 2034, 2035 and 2036 |
29 | exceed 100% of the amortizable amount. |
30 | (b) Refundable credit.-- |
|
1 | (1) Except as set forth under paragraph (2), a |
2 | refundable credit is allowed in calendar year 2037 for any |
3 | portion of the qualifying taxpayer's amortizable amount that |
4 | is not used in accordance with subsection (a) against the tax |
5 | levied by this article on all taxpayers. |
6 | (2) Paragraph (1) shall not apply and no refundable |
7 | credit shall be available to any person if during any portion |
8 | of the calendar year 2030 the person is not subject to the |
9 | tax imposed by this article. |
10 | (c) Filing.--Not later than June 30, 2013, each qualifying |
11 | taxpayer, consolidated elected taxpayer or combined taxpayer |
12 | that claims for any year the credit allowed under subsections |
13 | (a) and (b) shall file with the department a report setting |
14 | forth the amortizable amount available to the taxpayer and all |
15 | other related information that the department, by regulation, |
16 | requires. If the taxpayer does not timely file the report or |
17 | fails to provide timely all information required by this |
18 | subsection, the taxpayer is precluded from claiming any credit |
19 | amounts described under subsections (a) and (b). Unless extended |
20 | by mutual consent, the department may, until June 30, 2017, |
21 | audit the accuracy of the amortizable amount available to each |
22 | taxpayer that will claim the credit, and adjust the amortizable |
23 | amount or, if appropriate, issue any assessment or final |
24 | determination, as applicable, necessary to correct any errors |
25 | found upon audit. |
26 | (d) Sham transaction.--For the purpose of calculating the |
27 | amortizable amount, if the department ascertains that any |
28 | portion of that amount is the result of a sham transaction, the |
29 | department shall reduce the amortizable amount by two times the |
30 | adjustment. |
|
1 | (e) Transfer.--If one entity transfers all or a portion of |
2 | its assets and equity to another entity as part of an entity |
3 | organization or reorganization or subsequent entity organization |
4 | or reorganization for which no gain or loss is recognized in |
5 | whole or in part for Federal income tax purposes under the |
6 | Internal Revenue Code, the credits allowed by this section shall |
7 | be computed in a manner consistent with that used to compute the |
8 | portion, if any, of Federal net operating losses allowed to the |
9 | respective entities under the Internal Revenue Code. The |
10 | department may prescribe forms or regulations for making the |
11 | computations required by this subsection. |
12 | (f) Disposition.-- |
13 | (1) Except as provided under subsection (g), no person |
14 | shall pledge, collateralize, hypothecate, assign, convey, |
15 | sell, exchange or otherwise dispose of any or all tax credits |
16 | or any portion of any or all tax credits allowed under this |
17 | section. |
18 | (2) No credit allowed under this section is subject to |
19 | execution, attachment, lien, levy or other judicial |
20 | proceeding. |
21 | (g) Compliance.-- |
22 | (1) (i) Except as set forth under subparagraph (ii) and |
23 | notwithstanding section 401(3)1, each person timely and |
24 | fully complying with the reporting requirements set forth |
25 | under subsection (c) shall not claim, and shall not be |
26 | entitled to claim, any deduction or adjustment for any |
27 | Pennsylvania net operating loss carried forward to any |
28 | one or more franchise tax years after franchise tax year |
29 | 2005. |
30 | (ii) Subparagraph (i) shall apply only to the |
|
1 | portion of the Pennsylvania net operating loss |
2 | represented by the disallowed Pennsylvania net operating |
3 | loss carryforward. |
4 | (2) Notwithstanding section 401(3)1, with respect to all |
5 | franchise tax years after franchise tax year 2012, each |
6 | person timely and fully complying with the reporting |
7 | requirements set forth under subsection (c) shall not claim, |
8 | and shall not be entitled to claim, any deduction, exclusion |
9 | or adjustment with respect to deductible temporary |
10 | differences reflected on the person's books and records on |
11 | the last day of its taxable year ending in 2010. |
12 | (3) (i) Except as set forth under subparagraph (ii) and |
13 | notwithstanding section 401(3)1, with respect to all |
14 | franchise tax years after franchise tax year 2012, each |
15 | person timely and fully complying with the reporting |
16 | requirements set forth under subsection (c) shall exclude |
17 | from Pennsylvania net income all taxable temporary |
18 | differences reflected on the person's books and records |
19 | on the last day of its taxable year ending in 2010. |
20 | (ii) The exclusion provided under subparagraph (i) |
21 | for any franchise tax year may not exceed the amount of |
22 | the taxable temporary differences otherwise included in |
23 | Pennsylvania net income for that year. |
24 | (4) Paragraphs (2) and (3) shall apply only to the |
25 | extent the items were used in the calculations of the credit |
26 | provided under this section. |
27 | (h) Definitions.--As used in this section, the following |
28 | words and phrases shall have the meanings given to them in this |
29 | subsection unless the context clearly indicates otherwise: |
30 | "Amortizable amount." The term shall mean: |
|
1 | (1) If the qualifying taxpayer's other net deferred tax |
2 | items apportioned to this Commonwealth is equal to or greater |
3 | than zero, 8% of the sum of the qualifying taxpayer's |
4 | disallowed Pennsylvania net operating loss carryforward and |
5 | the qualifying taxpayer's other net deferred tax items |
6 | apportioned to this Commonwealth. |
7 | (2) If the amount of the qualifying taxpayer's other net |
8 | deferred tax items apportioned to this Commonwealth is less |
9 | than zero and if the absolute value of the amount of |
10 | qualifying taxpayer's other net deferred tax items |
11 | apportioned to this Commonwealth is less than the qualifying |
12 | taxpayer's disallowed net operating loss, 8% of the |
13 | difference between the qualifying taxpayer's disallowed net |
14 | operating loss carryforward and the absolute value of the |
15 | qualifying taxpayer's other net deferred tax items |
16 | apportioned to this Commonwealth. |
17 | (3) If the amount of the qualifying taxpayer's other net |
18 | deferred tax items apportioned to this Commonwealth is less |
19 | than zero and if the absolute value of the amount of |
20 | qualifying taxpayer's other net deferred tax items |
21 | apportioned to this Commonwealth is equal to or greater than |
22 | the qualifying taxpayer's disallowed net operating loss, |
23 | zero. |
24 | "Amount of other net deferred tax items." The term shall |
25 | mean: |
26 | (1) Subject to paragraphs (2), (3) and (4), the |
27 | difference between the qualifying taxpayer's deductible |
28 | temporary differences, net of related valuation allowance |
29 | amounts, shown on the qualifying taxpayer's books and records |
30 | on the last day of its taxable year ending in 2010, and the |
|
1 | qualifying taxpayer's taxable temporary differences as shown |
2 | on those books and records on that date. The amount of other |
3 | net deferred tax items may be less than zero. |
4 | (2) For the purposes of computing the amount of the |
5 | qualifying taxpayer's other net deferred tax items described |
6 | under paragraph (1), any credit carryforward shall be |
7 | excluded from the amount of deductible temporary differences |
8 | to the extent the credit carryforward amount, net of any |
9 | related valuation allowance amount, is otherwise included in |
10 | the qualifying taxpayer's deductible temporary differences, |
11 | net of related valuation allowance amounts, shown on the |
12 | qualifying taxpayer's books and records on the last day of |
13 | the qualifying taxpayer's taxable year ending in 2010. |
14 | (3) No portion of the disallowed Pennsylvania net |
15 | operating loss carryforward shall be included in the |
16 | computation of the amount of the qualifying taxpayer's other |
17 | net deferred tax items described under paragraph (1). |
18 | (4) The amount of other net deferred tax items |
19 | apportioned to this Commonwealth may not exceed 25% of the |
20 | qualifying Pennsylvania net operating loss carryforward. |
21 | "Books and records." The qualifying taxpayer's books, |
22 | records and all other information, all of which the qualifying |
23 | taxpayer maintains and uses to prepare and issue its financial |
24 | statements in accordance with generally accepted accounting |
25 | principles. |
26 | "Deductible temporary differences" and "taxable temporary |
27 | differences." The terms shall have the same meanings as those |
28 | terms have for purposes of paragraph 13 of the Statement of |
29 | Financial Accounting Standards, number 109. |
30 | "Disallowed Pennsylvania net operating loss carryforward." |
|
1 | The lesser of the amounts described under paragraph (1) or (2), |
2 | except that the amounts described under paragraph (1) or (2) |
3 | shall each be reduced by the qualifying amount. |
4 | (1) The qualifying taxpayer's qualifying Pennsylvania |
5 | net operating loss carryforward. |
6 | (2) The Pennsylvania net operating loss carryforward |
7 | amount that the qualifying taxpayer used to compute the |
8 | related deferred tax asset reflected on its books and records |
9 | on the last day of its taxable year ending in 2010, adjusted |
10 | for return to accrual, but this amount shall be reduced by |
11 | the qualifying related valuation allowance amount. For the |
12 | purposes of this paragraph, the "qualifying related valuation |
13 | allowance amount" is the amount of Pennsylvania net operating |
14 | loss reflected in the qualifying taxpayer's computation of |
15 | the valuation allowance account, as shown on its books and |
16 | records on the last day of its taxable year ending in 2010, |
17 | with respect to the deferred tax asset relating to its |
18 | Pennsylvania net operating loss carryforward amount. |
19 | "Franchise tax year." The term shall mean the tax year for |
20 | the qualifying taxpayer. |
21 | "Net income." The term shall have the same meaning as the |
22 | term "net profits" under section 303. |
23 | "Other net deferred tax items apportioned to the |
24 | Commonwealth." The term shall be the product of: |
25 | (1) the amount of other net deferred tax items; and |
26 | (2) the formula described under 61 Pa. Code § 155.28 |
27 | (relating to capital stock value methods-fix formula) for the |
28 | qualifying taxpayer's franchise tax year 2012. |
29 | "Qualifying amount." $50,000,000 per person, except that if |
30 | for franchise tax year 2012 the person was a member of a |
|
1 | combined franchise tax report, as provided under section 403, |
2 | the "qualifying amount" is, in the aggregate, $50,000,000 for |
3 | all members of that combined franchise tax report, and for |
4 | purposes of paragraphs (1) and (2) of the definition of |
5 | "disallowed Pennsylvania net operating loss carryforward," those |
6 | members shall allocate to each member any portion of the |
7 | $50,000,000 amount. The total amount allocated to the members |
8 | who are qualifying taxpayers shall equal $50,000,000. |
9 | "Qualifying Pennsylvania net operating loss carryforward." A |
10 | Pennsylvania net operating loss carryforward that the taxpayer |
11 | could deduct in whole or in part for franchise tax year 2012, |
12 | except for the application of subsection (g). A qualifying |
13 | Pennsylvania net operating loss carryforward shall not exceed |
14 | the amount of loss carryforward from franchise tax year 2011 as |
15 | reported by the taxpayer either on a franchise tax report for |
16 | franchise tax year 2011 or on an amended franchise tax report |
17 | prepared in good faith for the year and filed before July 1, |
18 | 2012. |
19 | "Qualifying taxpayer." A taxpayer under this article that |
20 | has a qualifying Pennsylvania net operating loss carryforward |
21 | equal to or greater than the qualifying amount. |
22 | "Sham transaction." A transaction or series of transactions |
23 | without economic substance because there is no business purpose |
24 | or expectation of profit other than obtaining tax benefits. |
25 | "Taxable year." The term shall have the same meaning as |
26 | under section 301(v). |
27 | Section 498-A. Order of credits, limitations and excess carried |
28 | forward. |
29 | (a) Procedure.--To provide a uniform procedure for |
30 | calculating the amount of tax due under this article, a taxpayer |
|
1 | shall claim any credits to which it is entitled in the following |
2 | order: |
3 | (1) The nonrefundable credit for calendar years 2017, |
4 | 2018, 2019, 2020, 2021, 2022, 2023, 2024, 2025, 2026, 2027, |
5 | 2028, 2029, 2030, 2031, 2032, 2033, 2034, 2035 and 2036 for |
6 | unused net operating losses under section 453-A(a). |
7 | (2) The refundable credit for calendar year 2037 for |
8 | unused net operating losses under 453-A(b). |
9 | (b) Limit.--For any credit except the credit enumerated |
10 | under subsection (a)(1), the amount of the credit for a tax |
11 | period shall not exceed the tax due after allowing for any other |
12 | credit that precedes it in the order required under this |
13 | section. Any excess amount of a particular credit may be carried |
14 | forward if authorized under the section creating the credit. |
15 | Section 499-A. Penalties. |
16 | (a) Fraudulent filing.--Whoever files a fraudulent refund |
17 | claim under section 408-A shall be fined the greater of not more |
18 | than $1,000 or the amount of the fraudulent refund requested or |
19 | imprisoned not more than 60 days, or both. |
20 | (b) Violation of article.--Except as provided under this |
21 | section, whoever violates this article, or any regulation |
22 | promulgated by the department under this article, shall be fined |
23 | not more than $500 or imprisoned not more than 30 days, or both. |
24 | (c) Cumulative penalties.--The penalties provided under this |
25 | section shall be in addition to any penalties imposed by the |
26 | department under section 406-A. |
27 | Section 3. This act shall take effect January 1, 2012, or |
28 | immediately, whichever is later. |
|