PRINTER'S NO.
3544
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2383
Session of 2012
INTRODUCED BY PAYTON, THOMAS AND YOUNGBLOOD, MAY 16, 2012REFERRED TO COMMITTEE ON FINANCE, MAY 16, 2012AN ACTAmending the act of March 4, 1971 (P.L.6, No.2), entitled "Anact relating to tax reform and State taxation by codifyingand enumerating certain subjects of taxation and imposingtaxes thereon; providing procedures for the payment,collection, administration and enforcement thereof; providingfor tax credits in certain cases; conferring powers andimposing duties upon the Department of Revenue, certainemployers, fiduciaries, individuals, persons, corporationsand other entities; prescribing crimes, offenses andpenalties," in corporate net income tax, further providingfor definitions and for imposition of tax; in procedure andadministration, further providing for definitions, forpetition for reassessment and for petition procedure; furtherproviding for provisions relating to review by board;providing for review by Tax Review Tribunal; and establishingthe Tax Review Tribunal and providing for its powers andduties.The General Assembly of the Commonwealth of Pennsylvaniahereby enacts as follows:Section 1. Section 401(3)2(a) and 4(c) of the act of March4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971,amended or added December 23, 1983 (P.L.370, No.90), August 4,1991 (P.L.97, No.22), June 22, 2001 (P.L.353, No.23), June 29,2002 (P.L.559, No.89) and October 9, 2009 (P.L.451, No.48), areamended, clause (3)2 is amended by adding a phrase and thesection is amended by adding clauses to read:
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Section 401. Definitions.--The following words, terms, andphrases, when used in this article, shall have the meaningascribed to them in this section, except where the contextclearly indicates a different meaning:* * *(3) "Taxable income." * * *2. In case the entire business of any corporation, otherthan a corporation engaged in doing business as a regulatedinvestment company as defined by the Internal Revenue Code of1986, is not transacted within this Commonwealth, the taximposed by this article shall be based upon such portion of thetaxable income of such corporation for the fiscal or calendaryear, as defined in subclause 1 hereof, and may be determined asfollows:(a) Division of Income.(1) As used in this definition, unless the context otherwiserequires:(A) "Business income" means income arising from transactionsand activity in the regular course of the taxpayer's trade orbusiness and includes income from tangible and intangibleproperty if either the acquisition, the management or thedisposition of the property constitutes an integral part of thetaxpayer's regular trade or business operations. The termincludes all income which is apportionable under theConstitution of the United States.(B) "Commercial domicile" means the principal place fromwhich the trade or business of the taxpayer is directed ormanaged.(C) "Compensation" means wages, salaries, commissions andany other form of remuneration paid to employes for personal20120HB2383PN3544
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services.(D) "Nonbusiness income" means all income other thanbusiness income. The term does not include income which isapportionable under the Constitution of the United States.(E) "Sales" means all gross receipts of the taxpayer notallocated under this definition other than dividends received,interest on United States, state or political subdivisionobligations and gross receipts heretofore or hereafter receivedfrom the sale, redemption, maturity or exchange of securities,except those held by the taxpayer primarily for sale tocustomers in the ordinary course of its trade or business.(F) "State" means any state of the United States, theDistrict of Columbia, the Commonwealth of Puerto Rico, anyterritory or possession of the United States, and any foreigncountry or political subdivision thereof.(G) "This state" means the Commonwealth of Pennsylvania or,in the case of application of this definition to theapportionment and allocation of income for local tax purposes,the subdivision or local taxing district in which the relevanttax return is filed.(2) Any taxpayer having income from business activity whichis taxable both within and without this State other thanactivity as a corporation whose allocation and apportionment ofincome is specifically provided for in section 401(3)2(b)(c) and(d) shall allocate and apportion taxable income as provided inthis definition.(3) For purposes of allocation and apportionment of incomeunder this definition, a taxpayer is taxable in another state ifin that state the taxpayer is subject to a net income tax, afranchise tax measured by net income, a franchise tax for the20120HB2383PN3544
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