An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in personal income tax, further providing for definitions and for income taxes imposed by other states and providing for provisions for overtime pay; in corporate net income tax, further providing for definitions, for determination of net loss deduction, for imposition of tax, for reports and payment of tax, for timely mailing treated as timely filing and payment and for additional withholding requirements, repealing provisions relating to consolidated reports, further providing for extension of time to file reports, for changes made by Federal Government, for limitations on assessments, for definitions, for manufacturing innovation and reinvestment deduction, for enforcement, rules and regulations, inquisitorial powers of the department, for retention of records and for penalties; in tax credit and tax benefit administration, further providing for definitions and providing for application of tax credits or tax benefits to a unitary business; providing for working Pennsylvanians tax credit; and, in general provisions, further providing for estimated tax, for underpayment of estimated tax and for restatement of tax liability under treaties.

PRIOR PRINTER'S NO. 1914 PRINTER'S NO. 2012
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1610
Session of
2025
INTRODUCED BY FIEDLER, DALEY, SAMUELSON, KRAJEWSKI, SCOTT,
DELLOSO, N. NELSON, SANCHEZ, PROBST, HANBIDGE, PIELLI, GIRAL,
KHAN, NEILSON, CIRESI, HOHENSTEIN, SHUSTERMAN, FREEMAN,
DONAHUE, HILL-EVANS, OTTEN, CERRATO, GREEN, WAXMAN, T. DAVIS
AND WEBSTER, JUNE 12, 2025
AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,
JUNE 24, 2025
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," in corporate net income tax, further providing
for definitions, for determination of net loss deduction, for
imposition of tax, for reports and payment of tax, for timely
mailing treated as timely filing and payment and for
additional withholding requirements, repealing provisions
relating to consolidated reports, further providing for
extension of time to file reports, for changes made by
Federal Government, for limitations on assessments, for
definitions, for manufacturing innovation and reinvestment
deduction, for enforcement, rules and regulations,
inquisitorial powers of the department, for retention of
records and for penalties; in tax credit and tax benefit
administration, providing for application of tax credits or
tax benefits to a unitary business; and, in general
provisions, further providing for estimated tax, for
underpayment of estimated tax and for restatement of tax
liability under treaties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
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Section 1. Section 401(3)1(a) and (b), (3)2(a)(17)(E) and
(5) of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
Reform Code of 1971, are amended, (3)1 is amended by adding a
phrase, (3)1(t) is amended by adding a paragraph, (3)2(a)(1) is
amended by adding a subparagraph, (3)2(a)(9)(A) is amended by
adding a unit, (3)4 is amended by adding phrases and the section
is amended by adding clauses to read:
Section 401. Definitions.--The following words, terms, and
phrases, when used in this article, shall have the meaning
ascribed to them in this section, except where the context
clearly indicates a different meaning:
* * *
(3) "Taxable income." 1. (a) In case the entire business
of the corporation is transacted within this Commonwealth, for
any taxable year which begins on or after January 1, 1971,
taxable income for the calendar year or fiscal year as returned
to and ascertained by the Federal Government before special
deductions provided for in 26 U.S.C. Ch. 1 Subch. B Pt. VIII
(relating to special deductions for corporations), not including
the deductions provided for in 26 U.S.C. § 243 (relating to
dividends received by corporations), or in the case of a
corporation participating in the filing of consolidated returns
to the Federal Government or that is not required to file a
return with the Federal Government, the taxable income which
would have been returned to and ascertained by the Federal
Government before special deductions provided for in 26 U.S.C.
Ch. 1 Subch. B Pt. VIII, not including the deductions provided
for in 26 U.S.C. § 243, if separate returns had been made to the
Federal Government for the current and prior taxable years,
subject, however, to any correction thereof, for fraud, evasion,
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or error as finally ascertained by the Federal Government.
(b) Additional deductions shall be allowed from taxable
income on account of any dividends received from any other
corporation but only to the extent that such dividends are
included in taxable income as returned to and ascertained by the
Federal Government. For tax years beginning on or after January
1, 1991, additional deductions shall only be allowed for amounts
included, under [section 78 of the Internal Revenue Code of 1986
(Public Law 99-514, 26 U.S.C. § 78)] 26 U.S.C. § 78 (relating to
gross up for deemed paid foreign tax credit), in taxable income
returned to and ascertained by the Federal Government and for
the amount of any dividends received from a foreign corporation
included in taxable income to the extent such dividends would be
deductible in arriving at Federal taxable income if received
from a domestic corporation. For taxable years beginning after
December 31, 2025, the additional deduction with respect to
dividends shall not be allowed for dividends between members of
a unitary business.
* * *
(p.1) For taxable years beginning after December 31, 2025,
in the case of a corporation that is a member of a unitary
business, the term "taxable income" shall mean the combined
unitary income of the unitary business, as determined on a
water's-edge basis, plus the corporation's nonbusiness income.
* * *
(t) * * *
(5) The adjustment required under paragraph (1) shall not
apply to a transaction between the taxpayer and an affiliated
entity if the taxpayer and the affiliated entity file as part of
the same combined annual report in this State.
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* * *
2. In case the entire business of any corporation, other
than a corporation engaged in doing business as a regulated
investment company as defined by the Internal Revenue Code of
1986, is not transacted within this Commonwealth, the tax
imposed by this article shall be based upon such portion of the
taxable income of such corporation for the fiscal or calendar
year, as defined in subclause 1 hereof, and may be determined as
follows:
(a) Division of Income.
(1) As used in this definition, unless the context otherwise
requires:
* * *
(E.1) Notwithstanding subparagraph (E), in regard to the
sale, redemption, maturity or exchange of securities, held by
the taxpayer primarily for sale to customers in the ordinary
course of its trade or business, sales shall only include the
net gains, equal to zero or above, received by the taxpayer.
* * *
(9) (A) Except as provided in subparagraph (B):
* * *
(vi) (a) For taxable years beginning after December 31,
2025, the combined unitary income of a unitary business, as
determined on a water's-edge basis, shall be apportioned to this
State by multiplying said income by the member's sales factor,
the numerator of which shall be the member's total sales in this
State during the tax period, and the denominator of which shall
be the combined total sales of all members of the unitary
business everywhere during the tax period. In computing the
sales of each member for purposes of apportionment, the
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following sales are excluded from the numerator and denominator:
(I) sales from transactions between or among members of the
unitary business that are deferred under 26 CFR 1.1502-13
(relating to intercompany transactions) for Federal taxable
income purposes; and
(II) the sales of each member that are excluded from the
unitary business pursuant to the definition of water's-edge
basis.
(b) The Pennsylvania sales of each nontaxable member shall
be determined based upon the apportionment rules applicable to
the member and shall be aggregated. Each taxable member of the
unitary business shall include in its sales factor numerator a
portion of the aggregate Pennsylvania sales of nontaxable
members during the tax period based on a ratio, the numerator of
which is the taxable member's Pennsylvania sales during the tax
period and the denominator of which is the aggregate
Pennsylvania sales of all the taxable members of the unitary
business during the tax period.
(c) Nonbusiness income of each member of a unitary business
shall be allocated as provided in paragraphs (5) through (8) of
phrase (a) of subclause 2 of this definition.
(d) A member of the unitary business shall be subject to tax
on its apportioned share of the combined unitary income of the
unitary business, as determined on a water's-edge basis, plus
its nonbusiness income or loss allocated to this State, minus
the member's net loss deduction, if applicable.
(e) The aggregate of all such final sums of each member of
the unitary business from phrase (d) shall constitute the
portion of the unitary business's income subject to the tax
imposed by this article.
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(f) (1) The Secretary of Revenue may distribute, apportion
or allocate gross income, deductions, credits or allowances
between and among two or more corporations, persons, entities,
members or unitary businesses, whether or not incorporated,
whether or not organized in the United States and whether or not
affiliated, if:
(A) the corporations, persons, entities, members or unitary
businesses are owned or controlled directly or indirectly by the
same interests within the meaning of 26 U.S.C. § 482 (relating
to allocation of income and deductions among taxpayers); and
(B) the Secretary of Revenue determines that the
distribution, apportionment or allocation is necessary in order
to reflect an arm's length standard within the meaning of 26 CFR
1.482-1 (relating to allocation of income and deductions among
taxpayers) and to reflect clearly the income of those
corporations, persons, entities, members or unitary businesses.
(2) The Secretary of Revenue shall apply the administrative
and judicial interpretations of 26 U.S.C. § 482 in administering
this section.
(g) For taxable years beginning after December 31, 2025, any
member of a unitary business that would otherwise apportion its
share of the combined unitary income of the unitary business, as
determined on a water's-edge basis, under phrase (b), (c), (d)
or (e) of subclause 2 of this definition shall instead use a
sales factor as described in this section.
* * *
(17) Sales, other than sales under paragraphs (16) and
(16.1), are in this State as follows:
* * *
(E) [Gross receipts] Net gains, equal to zero or above, from
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the sale, redemption, maturity or exchange of securities, held
by the taxpayer primarily for sale to customers in the ordinary
course of its trade or business, if the customers are in this
State.
* * *
4. * * *
(h) Subject to the limitations of this subclause, any member
of a unitary business that has unused net loss from taxable
years that began prior to January 1, 2026, or that generates net
losses while a member of a unitary business may only take the
net loss deduction for taxable years beginning after December
31, 2025, to the extent of the member's share of taxable income
after allocation and apportionment and the net losses may not be
used by other members of the same unitary business except as
otherwise permitted by phrase (g) of subclause 2 of this
definition.
(i) Any net loss realized for a taxable year unused by a
corporation which subsequently becomes a member of another
unitary business may only be used by that corporation except as
otherwise permitted by phrase (g) of subclause 2 of this
definition.
* * *
(5) "Taxable year." [The taxable year which the
corporation, or any consolidated group with which the
corporation participates in the filing of consolidated returns,
actually uses in reporting taxable income to the Federal
Government. With regard to the tax imposed by Article IV of this
act (relating to the Corporate Net Income Tax), the terms
"annual year," "fiscal year," "annual or fiscal year," "tax
year" and "tax period" shall be the same as the corporation's
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taxable year, as defined in this paragraph.]
1. Except as set forth in subclause 2, the taxable year
which the corporation, or any consolidated group with which the
corporation participates in the filing of consolidated returns,
actually uses in reporting taxable income to the Federal
Government, or which the corporation would have used in
reporting taxable income to the Federal Government had it been
required to report its taxable income to the Federal Government.
With regard to the tax imposed by Article IV, the terms "annual
year," "fiscal year," "annual or fiscal year," "tax year" and
"tax period" shall be the same as the corporation's taxable
year, as defined in this subclause or subclause 2.
2. All members of a unitary business shall have a common
taxable year for purposes of computing tax due under this
article. The taxable year shall be the common taxable year
adopted, in a manner prescribed by the department, by all
members of the unitary business. The common taxable year must be
used by all members of the unitary business in the year of
adoption and all future years unless otherwise permitted by the
department.
* * *
(12) "Tax haven." A jurisdiction that during the tax year
in question:
1. has laws or practices that prevent effective exchange of
information for tax purposes with other governments on taxpayers
benefiting from the tax regime;
2. has a tax regime which lacks transparency;
3. facilitates the establishment of foreign-owned entities
without the need for a local substantive presence or prohibits
these entities from having any commercial impact on the local
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economy;
4. explicitly or implicitly excludes the jurisdiction's
resident taxpayers from taking advantage of the tax regime
benefits or prohibits enterprises that benefit from the regime
from operating in the jurisdiction's domestic market; or
5. has created a tax regime which is favorable for tax
avoidance, based upon an overall assessment of relevant factors,
including whether the jurisdiction has a significant untaxed
offshore financial or services sector relative to its overall
economy.
(13) "Unitary business." A single economic enterprise that
is made up of separate parts of a single corporation, of a
commonly controlled group of corporations, or both, that are
sufficiently interdependent, integrated and interrelated through
their activities so as to provide a synergy and mutual benefit
that produces a sharing or exchange of value among them and a
flow of value to the separate parts. A unitary business includes
all parts and corporations that are included in a unitary
business under the Constitution of the United States.
(14) "Water's-edge basis." A system of reporting that
includes the income and apportionment factors of certain members
of a unitary business, described as follows:
1. Any member incorporated in the United States or formed
under the laws of any state of the United States, the District
of Columbia, any territory or possession of the United States or
the Commonwealth of Puerto Rico.
2. Any member, regardless of the place incorporated or
formed, if at least twenty per cent of the member's sales factor
is within the United States, and the following shall apply:
(a) For purposes of determining whether at least twenty per
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cent of a member's sales factor is within the United States, the
calculation must be performed on a stand-alone basis. Sales
shall be gross figures without eliminations for transactions
with other members of any unitary business.
(b) Whether sales are within the United States is based on
the sales factor sourcing rules contained in clause (3)2.
3. Any member which is one of the following:
(a) A domestic international sales corporation as described
in 26 U.S.C. Ch. 1 Subch. N Pt. IV Subpt. A (relating to
treatment of qualifying corporations).
(b) A foreign sales corporation as described in the former
26 U.S.C. §§ 921, 922, 923, 924, 925, 926 and 927.
(c) An export trade corporation as described in 26 U.S.C.
Ch. 1 Subch. N Pt. III Subpt. G (relating to export trade
corporations).
4. Any member not described in subclause 1, 2 or 3 shall
include the portion of the member's taxable income derived from
or attributable to sources within the United States, as
determined under 26 U.S.C. (relating to Internal Revenue Code)
without regard to Federal treaties, and its apportionment
factors related thereto.
5. Any member that is a "controlled foreign corporation" as
defined in 26 U.S.C. § 957 (relating to controlled foreign
corporations; United States persons), to the extent the income
of that member is income defined in 26 U.S.C. § 952 (relating to
Subpart F income defined) as Subpart F income, not excluding
lower-tier subsidiaries' distributions of such income which were
previously taxed, determined without regard to Federal treaties,
and the apportionment factors related to that income; any item
of income received by a controlled foreign corporation and the
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apportionment factors related to such income shall be excluded
if the corporation establishes to the satisfaction of the
Secretary of Revenue that such income was subject to an
effective rate of income tax imposed by a foreign country
greater than ninety per cent of the maximum rate of tax
specified in 26 U.S.C. § 11 (relating to tax imposed). The
effective rate of income tax determination shall be based upon
the methodology under 26 CFR 1.954-1 (relating to foreign base
company income).
6. Any member that is incorporated in or is doing business
in a tax haven unless it is proven to the satisfaction of the
secretary that such member is incorporated in or doing business
in a tax haven for a legitimate business purpose.
(15) "Commonly controlled group." For a corporation, the
corporation is a member of a group of two or more corporations
and more than fifty per cent of the voting stock or controlling
interest of each member of the group is directly or indirectly
owned by a common owner or by common owners, either corporate or
noncorporate, or by one or more of the member corporations of
the group.
(16) "Combined unitary income." The aggregate separate
company taxable income or loss of all members of a unitary
business subject to apportionment except:
1. Income from an intercompany transaction between members
of a unitary business shall be deferred in a manner similar to
26 CFR 1.1502-13 for Federal taxable income purposes.
2. Dividends paid by one member of a unitary business to
another.
3. Income of the following corporations is not included in
the determination of combined unitary income:
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(a) any corporation subject to taxation under Article VII,
VIII, IX or XV;
(b) any corporation specified in the definition of
"institution" in section 701.5 that would be subject to taxation
under Article VII, were it doing business in this Commonwealth,
as defined in section 701.5;
(c) any corporation commonly known as a title insurance
company that would be subject to taxation under Article VIII,
were it incorporated in this State;
(d) any corporation specified as an insurance company,
association or exchange in Article IX that would be subject to
taxation under Article IX, were it transacting insurance
business in this State;
(e) any corporation specified in the definition of
"institution" in section 1501 that would be subject to taxation
under Article XV, were it located, as defined in section 1501,
in this State; or
(f) any corporation that has filed a timely election and has
qualified to be taxed as a regulated investment company under
the provisions of the Internal Revenue Code of 1954, as amended.
(17) "Member." A corporation that is a member of a unitary
business. The term does not include a corporation listed in
clause (16)3.
(18) "Taxable member." A member which would be subject to
the tax imposed by this article under section 402 on a separate
entity basis for exercising, whether in its own name or through
any person, association, business trust, corporation, joint
venture, limited liability company, limited partnership,
partnership, member or other entity, any of the privileges
included in section 402(a)(1), (2), (3), (4) and (5).
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(19) "Nontaxable member." A member which is not a taxable
member.
Section 2. Section 401.1 of the act is amended by adding a
subsection to read:
Section 401.1. Determination of Net Loss Deduction.--* * *
(f) For taxable years beginning after December 31, 2025,
taxpayers filing combined annual reports must calculate the
available net loss deduction on a taxable member by taxable
member basis in accordance with the provisions of subclause 4 of
section 401(3).
Section 3. Sections 402(a) introductory paragraph and (5)
(iii) and 403(c), (d) and (f) of the act are amended and the
sections are amended by adding subsections to read:
Section 402. Imposition of Tax.--(a) A corporation shall be
subject to and shall pay an excise tax for exercising, whether
in its own name or through any person, association, business
trust, corporation, joint venture, limited liability company,
limited partnership, partnership, member or other entity, any of
the following privileges:
* * *
(5) * * *
(iii) There shall be a rebuttable presumption that a
corporation, or in the context of a unitary business, a member
of a unitary business with $500,000 or more of sales sourced in
the current tax year to this Commonwealth under section 401 has
substantial nexus in this Commonwealth without regard to
physical presence in this Commonwealth.
* * *
(d) For purposes of this section the term "corporation"
shall include a unitary business, except where the context
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clearly indicates a different meaning.
Section 403. Reports and Payment of Tax.--* * *
(a.1) (1) Each corporation that is a member of a unitary
business that consists of two or more corporations, unless
excluded by the provisions of this article, shall file as part
of a combined annual report. The members of the unitary business
shall designate one member that is subject to tax under this
article to file the combined annual report and to act as agent
on behalf of all other members of the unitary business. Each
corporation that is a member of a unitary business shall be
liable for its tax liability under this article. The agent also
shall be liable for the aggregate amount of the unitary
business' tax liability pursuant to this article.
(2) The oath or affirmation of the designated member's
president, vice president, treasurer, assistant treasurer or
other authorized officer shall constitute the oath or
affirmation of each corporation that is a member of that unitary
business.
(3) The designated member shall transmit to the department
upon a form prescribed by the department a combined annual
report under oath or affirmation of the member's president, vice
president, treasurer, assistant treasurer or other authorized
officer.
(4) In addition to the information required in subsection
(a), the combined annual report shall set forth:
(i) All members included in the unitary business.
(ii) All necessary data, both in the aggregate and for each
member of the unitary business, that sets forth the
determination of tax liability for each member of the unitary
business.
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(iii) Any other information that the department may require.
(a.2) A member of a unitary business of two or more
corporations must determine the member's income and
apportionment factors on a water's-edge basis.
* * *
(b.1) It shall be the duty of each unitary business liable
to pay tax under this article to pay estimated tax under section
3003.2 and to make final payment of tax due for the taxable year
with the combined annual report required by this section.
(c) The amount of all taxes, imposed under the provisions of
this article, not paid on or before the times as above provided,
shall bear interest as provided in section 806 of the act of
April 9, 1929 (P.L.343, No.176), known as "The Fiscal Code,"
from the date they are due and payable until paid, except that
if the taxable income has been, or is increased by the
Commissioner of Internal Revenue, or by any other agency or
court of the United States, interest shall be computed on the
additional tax due from thirty days after the corporation
receives notice of the change of income until paid: Provided,
however, That any corporation or designated member responsible
for filing a combined annual report may pay the full amount of
such tax, or any part thereof, together with interest due to the
date of payment, without prejudice to its right to present and
prosecute, an administrative petition or an appeal to court. If
it be thereafter determined that such taxes were overpaid, the
department shall enter a credit to the account of such
corporation or designated member, which may be used by it in the
manner prescribed by law.
(d) If the officers of any corporation or designated member
shall neglect, or refuse to make any report as herein required,
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or shall knowingly make any false report, a penalty of five
hundred dollars ($500) plus an additional one per cent for every
dollar of tax determined to be due in excess of twenty-five
thousand dollars ($25,000) shall be added to the tax determined
to be due. No amounts added to the tax shall bear any interest
whatsoever.
* * *
(e.1) If the members of a unitary business have a common
taxable year that closes not upon December 31, but upon some
other date, such unitary business shall make the combined annual
report, herein required, on or before the fifteenth day of the
month following what is or would be the due date of the return
to the Federal Government, subject in all other respects to the
provisions of this article.
(f) If the corporation or any members of the unitary
business shall claim in its report or in its combined annual
report that the return made to the Federal Government was
inaccurate, the amount claimed [by it] to be the taxable income,
taxable under this article, and the basis of such claim of
inaccuracy, shall be fully specified.
Section 4. Sections 403.1 and 403.2(b) and (e) of the act
are amended to read:
Section 403.1. Timely Mailing Treated as Timely Filing and
Payment.--Notwithstanding the provisions of any State tax law to
the contrary, whenever a report or payment of all or any portion
of a State tax is required by law to be received by the
Pennsylvania Department of Revenue or other agency of the
Commonwealth on or before a day certain, the corporation shall
be deemed to have complied with such law if the letter
transmitting the report or payment of such tax which has been
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received by the department is postmarked by the United States
Postal Service on or prior to the final day on which the payment
is to be received.
For the purposes of this article, presentation of a receipt
indicating that the report or payment was mailed by registered
or certified mail on or before the due date shall be evidence of
timely filing and payment.
For purposes of this section, the term "corporation" shall
include a unitary business.
Section 403.2. Additional Withholding Requirements.--* * *
(b) A partnership required to file a report under subsection
(a) shall withhold and pay to the department a tax on behalf of
its nonfiling corporate partners in an amount equal to its net
nonfiling corporate partners' shares of income and deductions as
reported to the Federal Government multiplied by the tax rate
applicable to the taxable year being reported. Any amount
withheld and paid to the department on behalf of a nonfiling
corporate partner shall be considered a tax payment by that
partner and credited to its account [as if it was directly paid
by the partner] or the account of the designated member of the
unitary business.
* * *
(e) The following words, terms and phrases when used in this
section shall have the meaning ascribed to them in this section,
except where the context clearly indicates a different meaning:
"Net nonfiling corporate partners' shares of income and
deductions as reported to the Federal Government." That portion
of the income, less the deductions:
(1) reported on Schedule K of the Federal Form 1065, Return
of Partnership Income, filed with the Federal Government for the
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taxable year; and
(2) allocated on Federal Schedule K-1 to nonfiling corporate
partners.
If the entire business of the partnership is not transacted in
this Commonwealth, the amount computed under this definition
shall be apportioned to this Commonwealth as provided in section
401(3)2 as if the partnership were a corporation subject to tax
under this article.
"Nonfiling corporate partner." A partner which:
(1) is a corporation as defined in section 401; and
(2) has [not] neither filed a tax report nor been included
in a combined annual report and has not paid the tax required by
sections 402 and 403 for the previous taxable year.
"Partner." An owner of an interest in the partnership, in
whatever manner that owner and ownership interest are
designated.
"Partnership." An entity classified as a partnership for
Federal income tax purposes.
(1) The term includes:
(i) a partnership, limited partnership, limited liability
partnership or limited liability company; and
(ii) any syndicate, group, pool, joint venture, business
trust, association or other unincorporated organization through
or by which a business, financial operation or venture is
carried on.
(2) The term does not include an entity that is:
(i) listed on a United States national stock exchange; or
(ii) described in section 401(1)1 or 2.
Section 5. Section 404 of the act is repealed:
[Section 404. Consolidated Reports.--The department shall
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not permit any corporation owning or controlling, directly or
indirectly, any of the voting capital stock of another
corporation or of other corporations, subject to the provisions
of this article, to make a consolidated report, showing the
combined net income.]
Section 6. Section 405 of the act is amended to read:
Section 405. Extension of Time to File Reports.--The
department may, upon application made to it, in such form as it
shall prescribe, on or prior to the last day for filing any
annual report, and upon proper cause shown, grant to the
corporation, required to file such report, an extension of not
more than sixty days within which such report may be filed. If
the Federal income tax authorities grant an extension of time
for filing the reports with the Federal Government, the
department shall automatically grant an extension of time for
filing the annual report under this article until the fifteenth
day of the month following the termination of the Federal
extension, but the amount of tax due shall, in such cases,
nevertheless, be subject to interest from the due dates and at
the rates fixed by this article. For purposes of this section
the term "report," when used in the context of filings with the
department, shall include combined annual reports and the term
"corporation" shall include a unitary business.
Section 7. Section 406(e) of the act is amended and the
section is amended by adding a subsection to read:
Section 406. Changes Made by Federal Government.--* * *
(e) The provisions of this section shall apply to every
corporation which was doing business in Pennsylvania in the year
for which the Federal income has been changed, irrespective of
whether or not such corporation or any member of a unitary
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business has thereafter merged, consolidated, withdrawn or
dissolved. Any clearance certificate issued by the department
shall be conditioned upon the requirement that in the event of a
change in Federal income for any year for which taxes have been
paid to the Commonwealth, the corporation or its successor or
its officers or its directors shall file with the department a
report of change and pay any additional State tax resulting
therefrom.
(f) For purposes of this section, the term "corporation"
shall include a unitary business.
Section 8. Sections 407.3(f), 407.6(a)(5), (6) and (8) and
407.7(d)(3) of the act are amended to read:
Section 407.3. Limitations on Assessments.--* * *
(f) For purposes of this section[,]:
(1) a report filed before the last day prescribed for filing
shall be deemed to have been filed on the last day[.]; and
(2) the term "report" shall include combined annual reports.
Section 407.6. Definitions.--(a) For the purposes of this
part only, the following words, terms and phrases shall have the
meaning ascribed to them in this subsection, except where the
context clearly indicates a different meaning:
* * *
(5) "Qualified manufacturing innovation and reinvestment
deduction." An allowable deduction as determined, calculated
and executed in a commitment letter between the department and
the taxpayer. The deduction shall be applied to the taxable
income of the taxpayer to reduce a qualified tax liability of
the taxpayer following the allocation and apportionment of the
income of the taxpayer. If the taxpayer is a unitary business
filing a combined annual return, the deduction shall be applied
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to the specific member of the unitary business which qualifies
under this part. Such member shall reduce taxable income
following allocation and the apportionment of the combined
unitary income of the unitary business, as determined on a
water's-edge basis, and the application of any net loss of the
member.
(6) "Qualified tax liability." A taxpayer's tax liability
under this article. In the case of a unitary business, the term
only includes the portion of the unitary business's overall tax
liability under this article associated with the taxable member
qualified to receive the deduction under this part.
* * *
(8) "Taxpayer." An employer subject to the tax under this
article. For purposes of this definition, an employer shall
include a member of a unitary business.
* * *
Section 407.7. Manufacturing Innovation and Reinvestment
Deduction.--* * *
(d) * * *
(3) (i) A taxpayer cannot use the deduction to reduce the
taxpayer's tax liability by more than fifty per cent of the tax
liability under this article for the taxable year. For a unitary
business, the limitation shall apply to the portion of the tax
liability of the unitary business under this article associated
with the taxable member which qualifies for the deduction under
this section.
(ii) The deduction is nontransferable and any unused portion
in a tax year shall expire at the end of the corresponding tax
year.
Section 9. Section 408 of the act is amended by adding a
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subsection to read:
Section 408. Enforcement; Rules and Regulations;
Inquisitorial Powers of the Department.--* * *
(e) As used in this section, the term "corporation" shall
include a unitary business.
Section 10. Sections 409 and 410(c) of the act are amended
to read:
Section 409. Retention of Records.--Each corporation shall
maintain and keep for a period of three years after any report
is filed under this article, such record or records of its
business within this Commonwealth for the period covered by such
report and other pertinent papers, as may be required by the
department. For purposes of this section, the term "corporation"
shall include a unitary business.
Section 410. Penalties.--* * *
(c) Any person, who wilfully fails, neglects, or refuses to
make a report or to pay the tax as herein prescribed, or who
shall refuse to permit the department to examine the books,
papers, and records of any corporation liable to pay tax under
this article, shall be guilty of a misdemeanor, and, upon
conviction thereof, shall be sentenced to pay a fine not
exceeding one thousand dollars ($1,000) and costs of
prosecution, or to undergo imprisonment not exceeding six
months, or both. Such penalty shall be in addition to any other
penalties imposed by this article. For purposes of this
subsection, the term "corporation" shall include a unitary
business.
Section 11. The act is amended by adding a section to read:
Section 1710-A.1. Application of tax credits or tax benefits to
a unitary business.
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For purposes of determining the amount of tax credit or tax
benefit which is applicable to the tax due by a unitary business
under Article IV, any tax credit or tax benefit awarded to or
conferred upon a corporation which is a member of a unitary
business shall be calculated as if that member is a separate
company and can only be applied against that portion of the
unitary business's annual tax liability associated with that
member which receives the tax credit or tax benefit. For
purposes of this article, the term "unitary business" shall have
the same meaning as in section 401(13) and the term "member"
shall have the same meaning as in section 401(17).
Section 12. Section 3003.2(b)(2) and (4.3) and (c)(1) of the
act are amended and subsection (a) is amended by adding a
paragraph to read:
Section 3003.2. Estimated Tax.--(a) The following taxpayers
are required to pay estimated tax:
* * *
(1.1) Every unitary business subject to the corporate net
income tax imposed by Article IV, commencing with the calendar
year 2026 and fiscal years beginning during the calendar year
2026 and each taxable year thereafter, shall make payments of
estimated corporate net income tax.
* * *
(b) The following words, terms and phrases when used in this
section and section 3003.3 shall have the following meanings
ascribed to them:
* * *
(2) "Estimated corporate net income tax." The amount which
the corporation or the unitary business estimates as the amount
of tax imposed by section 402 of Article IV for the taxable
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year.
* * *
(4.3) "Person." Any natural person, association, fiduciary,
partnership, corporation, unitary business or other entity,
including the Commonwealth, its political subdivisions and
instrumentalities and public authorities. Whenever used in any
clause prescribing and imposing a penalty or imposing a fine or
imprisonment, or both, the term "person," as applied to an
association, shall include the members thereof [and], as applied
to a corporation, the officers thereof and as applied to a
unitary business, the officers of the designated member.
* * *
(c) Estimated tax shall be paid as follows:
(1) Payments of estimated corporate net income tax shall be
made in equal installments on or before the fifteenth day of the
third, sixth, ninth and twelfth months of the taxable year. The
remaining portion of the corporate net income tax due, if any,
shall be paid upon the date the corporation's annual report or
the unitary business's combined annual report is required to be
filed without reference to any extension of time for filing such
report.
* * *
Section 13. Section 3003.3(d) of the act is amended and the
section is amended by adding a subsection to read:
Section 3003.3. Underpayment of Estimated Tax.--* * *
(d) Notwithstanding the provisions of [the preceding
subsections,] this section, other than as set forth in
subsection (d.1), interest with respect to any underpayment of
any installment of estimated tax shall not be imposed if the
total amount of all payments of estimated tax made on or before
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the last date prescribed for the payment of such installment
equals or exceeds the amount which would have been required to
be paid on or before such date if the estimated tax were an
amount equal to the tax computed at the rates applicable to the
taxable year, including any minimum tax imposed, but otherwise
on the basis of the facts shown on the report of the taxpayer
for, and the law applicable to, the safe harbor base year,
adjusted for any changes to sections 401, 601, 602 and 1101
enacted for the taxable year, if a report showing a liability
for tax was filed by the taxpayer for the safe harbor base year.
If the total amount of all payments of estimated tax made on or
before the last date prescribed for the payment of such
installment does not equal or exceed the amount required to be
paid per the preceding sentence, but such amount is paid after
the date the installment was required to be paid, then the
period of underpayment shall run from the date the installment
was required to be paid to the date the amount required to be
paid per the preceding sentence is paid. Provided, that if the
total tax for the safe harbor base year exceeds the tax shown on
such report by ten per cent or more, the total tax adjusted to
reflect the current tax rate shall be used for purposes of this
subsection. In the event that the total tax for the safe harbor
base year exceeds the tax shown on the report by ten per cent or
more, interest resulting from the utilization of such total tax
in the application of the provisions of this subsection shall
not be imposed if, within forty-five days of the mailing date of
each assessment, payments are made such that the total amount of
all payments of estimated tax equals or exceeds the amount which
would have been required to be paid on or before such date if
the estimated tax were an amount equal to the total tax adjusted
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to reflect the current tax rate. In any case in which the
taxable year for which an underpayment of estimated tax may
exist is a short taxable year, in determining the tax shown on
the report or the total tax for the safe harbor base year, the
tax will be reduced by multiplying it by the ratio of the number
of installment payments made in the short taxable year to the
number of installment payments required to be made for the full
taxable year.
(d.1) With respect to any underpayment of an installment of
estimated corporate net income tax for any tax year that begins
in taxable year 2026 or 2027 by a corporation required to file a
combined annual report pursuant to section 403(a.1)(1), interest
shall not be imposed if the total amount of all payments of
estimated corporate net income tax made on or before the last
date prescribed for the payment of such installment equals or
exceeds the amount which would have been required to be paid on
or before such date if the estimated tax were an amount equal to
the combined tax shown on the reports of all the members of the
unitary business for the safe harbor base year computed at the
rate applicable to the taxable year.
Section 14. Section 3003.11 of the act is amended to read:
Section 3003.11. Restatement of Tax Liability Under
Treaties.--In the absence of an express exemption from State
income taxes, no treaty of the Federal Government shall be
construed to exempt a corporation or a member of a unitary
business from the taxes imposed under Articles IV and VI. For
purposes of determining "taxable income" under Article IV, any
corporation or member of a unitary business not subject to
Federal income taxation or Federal reporting requirements
pursuant to such a treaty shall be required to file a report or
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file as part of a combined annual report with the department
showing the taxable income which would have been reported to and
ascertained by the Federal Government had it not been exempted
by the treaty.
Section 15. The following provisions of the act shall apply
to tax years beginning on and after January 1, 2026:
The amendment or addition of section 401(3)1(a) and (b),
(p.1) and (t)(5), 2(a)(1)(E.1), 2(a)(9)(A)(vi) and 2(a)(17)
(E) and 4(h) and (i), (5), (12), (13), (14), (15), (16),
(17), (18) and (19).
The addition of section 401.1(f).
The amendment or addition of sections 402(a) introductory
paragraph and (5)(iii), (b) and (d) and 403(a.1), (a.2),
(b.1), (c), (d), (e.1) and (f).
The amendment of sections 403.1 and 403.2(b) and (e).
The repeal of section 404.
The amendment of section 405.
The amendment or addition of section 406(e) and (f).
The amendment of sections 407.3(f), 407.6(a)(5), (6) and
(8) and 407.7(d)(3).
The addition of section 408(e).
The amendment of sections 409 and 410(c).
The addition of section 1710-A.1.
The amendment or addition of section 3003.2(a)(1.1), (b)
(2) and (4.3) and (c)(1).
The amendment or addition of section 3003.3(d) and (d.1).
The amendment of section 3003.11.
Section 16. This act shall take effect January 1, 2026, or
immediately, whichever is later.
AMENDING THE ACT OF MARCH 4, 1971 (P.L.6, NO.2), ENTITLED "AN
ACT RELATING TO TAX REFORM AND STATE TAXATION BY CODIFYING
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AND ENUMERATING CERTAIN SUBJECTS OF TAXATION AND IMPOSING
TAXES THEREON; PROVIDING PROCEDURES FOR THE PAYMENT,
COLLECTION, ADMINISTRATION AND ENFORCEMENT THEREOF; PROVIDING
FOR TAX CREDITS IN CERTAIN CASES; CONFERRING POWERS AND
IMPOSING DUTIES UPON THE DEPARTMENT OF REVENUE, CERTAIN
EMPLOYERS, FIDUCIARIES, INDIVIDUALS, PERSONS, CORPORATIONS
AND OTHER ENTITIES; PRESCRIBING CRIMES, OFFENSES AND
PENALTIES," IN PERSONAL INCOME TAX, FURTHER PROVIDING FOR
DEFINITIONS AND FOR INCOME TAXES IMPOSED BY OTHER STATES AND
PROVIDING FOR PROVISIONS FOR OVERTIME PAY; IN CORPORATE NET
INCOME TAX, FURTHER PROVIDING FOR DEFINITIONS, FOR
DETERMINATION OF NET LOSS DEDUCTION, FOR IMPOSITION OF TAX,
FOR REPORTS AND PAYMENT OF TAX, FOR TIMELY MAILING TREATED AS
TIMELY FILING AND PAYMENT AND FOR ADDITIONAL WITHHOLDING
REQUIREMENTS, REPEALING PROVISIONS RELATING TO CONSOLIDATED
REPORTS, FURTHER PROVIDING FOR EXTENSION OF TIME TO FILE
REPORTS, FOR CHANGES MADE BY FEDERAL GOVERNMENT, FOR
LIMITATIONS ON ASSESSMENTS, FOR DEFINITIONS, FOR
MANUFACTURING INNOVATION AND REINVESTMENT DEDUCTION, FOR
ENFORCEMENT, RULES AND REGULATIONS, INQUISITORIAL POWERS OF
THE DEPARTMENT, FOR RETENTION OF RECORDS AND FOR PENALTIES;
IN TAX CREDIT AND TAX BENEFIT ADMINISTRATION, FURTHER
PROVIDING FOR DEFINITIONS AND PROVIDING FOR APPLICATION OF
TAX CREDITS OR TAX BENEFITS TO A UNITARY BUSINESS; PROVIDING
FOR WORKING PENNSYLVANIANS TAX CREDIT; AND, IN GENERAL
PROVISIONS, FURTHER PROVIDING FOR ESTIMATED TAX, FOR
UNDERPAYMENT OF ESTIMATED TAX AND FOR RESTATEMENT OF TAX
LIABILITY UNDER TREATIES.
THE GENERAL ASSEMBLY OF THE COMMONWEALTH OF PENNSYLVANIA
HEREBY ENACTS AS FOLLOWS:
SECTION 1. SECTION 301(D) OF THE ACT OF MARCH 4, 1971
(P.L.6, NO.2), KNOWN AS THE TAX REFORM CODE OF 1971, IS AMENDED
AND THE SECTION IS AMENDED BY ADDING A SUBSECTION TO READ:
SECTION 301. DEFINITIONS.--ANY REFERENCE IN THIS ARTICLE TO
THE INTERNAL REVENUE CODE OF 1986 SHALL MEAN THE INTERNAL
REVENUE CODE OF 1986 (PUBLIC LAW 99-514, 26 U.S.C. § 1 ET SEQ.),
AS AMENDED TO JANUARY 1, 1997, UNLESS THE REFERENCE CONTAINS THE
PHRASE "AS AMENDED" AND REFERS TO NO OTHER DATE, IN WHICH CASE
THE REFERENCE SHALL BE TO THE INTERNAL REVENUE CODE OF 1986 AS
IT EXISTS AS OF THE TIME OF APPLICATION OF THIS ARTICLE. THE
FOLLOWING WORDS, TERMS AND PHRASES WHEN USED IN THIS ARTICLE
SHALL HAVE THE MEANING ASCRIBED TO THEM IN THIS SECTION EXCEPT
WHERE THE CONTEXT CLEARLY INDICATES A DIFFERENT MEANING:
* * *
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(D) "COMPENSATION" MEANS AND SHALL INCLUDE SALARIES, WAGES,
COMMISSIONS, BONUSES, OVERTIME PAY AND INCENTIVE PAYMENTS
WHETHER BASED ON PROFITS OR OTHERWISE, FEES[, TIPS] AND SIMILAR
REMUNERATION RECEIVED FOR SERVICES RENDERED, WHETHER DIRECTLY OR
THROUGH AN AGENT, AND WHETHER IN CASH OR IN PROPERTY. THE TERM
"COMPENSATION" SHALL INCLUDE ANY PART OF A DISTRIBUTION UNDER A
PLAN DESCRIBED IN SECTION 409A(D)(1) OF THE INTERNAL REVENUE
CODE OF 1986 (PUBLIC LAW 99-514, 26 U.S.C. § 409A(D)(1)), AS
AMENDED, ATTRIBUTABLE TO AN ELECTIVE DEFERRAL OF INCOME OR THE
INCOME ON ANY ELECTIVE DEFERRAL OF INCOME, WHETHER PAID OR
PAYABLE DURING EMPLOYMENT OR TO A RETIRED PERSON UPON OR AFTER
RETIREMENT FROM SERVICE. TIPS AND GRATUITIES SHALL NOT BE
CONSIDERED COMPENSATION UNDER THIS ARTICLE.
THE TERM "COMPENSATION" SHALL NOT MEAN OR INCLUDE: (I)
PERIODIC PAYMENTS FOR SICKNESS AND DISABILITY OTHER THAN REGULAR
WAGES RECEIVED DURING A PERIOD OF SICKNESS OR DISABILITY; OR
(II) DISABILITY, RETIREMENT OR OTHER PAYMENTS ARISING UNDER
WORKMEN'S COMPENSATION ACTS, OCCUPATIONAL DISEASE ACTS AND
SIMILAR LEGISLATION BY ANY GOVERNMENT; OR (III) PAYMENTS
COMMONLY RECOGNIZED AS OLD AGE OR RETIREMENT BENEFITS PAID TO
PERSONS RETIRED FROM SERVICE AFTER REACHING A SPECIFIC AGE OR
AFTER A STATED PERIOD OF EMPLOYMENT; OR (IV) PAYMENTS COMMONLY
KNOWN AS PUBLIC ASSISTANCE, OR UNEMPLOYMENT COMPENSATION
PAYMENTS BY ANY GOVERNMENTAL AGENCY; OR (V) PAYMENTS TO
REIMBURSE ACTUAL EXPENSES; OR (VI) PAYMENTS MADE BY EMPLOYERS OR
LABOR UNIONS, INCLUDING PAYMENTS MADE PURSUANT TO A CAFETERIA
PLAN QUALIFYING UNDER SECTION 125 OF THE INTERNAL REVENUE CODE
OF 1986 (PUBLIC LAW 99-514, 26 U.S.C. § 125), FOR EMPLOYE
BENEFIT PROGRAMS COVERING HOSPITALIZATION, SICKNESS, DISABILITY
OR DEATH, SUPPLEMENTAL UNEMPLOYMENT BENEFITS OR STRIKE BENEFITS:
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PROVIDED, THAT THE PROGRAM DOES NOT DISCRIMINATE IN FAVOR OF
HIGHLY COMPENSATED INDIVIDUALS AS TO ELIGIBILITY TO PARTICIPATE,
PAYMENTS OR PROGRAM BENEFITS; OR (VII) ANY COMPENSATION RECEIVED
BY UNITED STATES SERVICEMEN SERVING IN A COMBAT ZONE; OR (VIII)
PAYMENTS RECEIVED BY A FOSTER PARENT FOR IN-HOME CARE OF FOSTER
CHILDREN FROM AN AGENCY OF THE COMMONWEALTH OR A POLITICAL
SUBDIVISION THEREOF OR AN ORGANIZATION EXEMPT FROM FEDERAL TAX
UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE OF 1954
WHICH IS LICENSED BY THE COMMONWEALTH OR A POLITICAL SUBDIVISION
THEREOF AS A PLACEMENT AGENCY; OR (IX) PAYMENTS MADE BY
EMPLOYERS OR LABOR UNIONS FOR EMPLOYE BENEFIT PROGRAMS COVERING
SOCIAL SECURITY OR RETIREMENT; OR (X) PERSONAL USE OF AN
EMPLOYER'S OWNED OR LEASED PROPERTY OR OF EMPLOYER-PROVIDED
SERVICES.
* * *
(N.3) "OVERTIME PAY" MEANS SALARIES OR WAGES PAID TO
EMPLOYES FOR HOURS OF WORK OFFICIALLY ORDERED OR APPROVED IN
EXCESS OF FORTY HOURS PER WEEK OR EIGHT HOURS PER DAY, AS
APPLICABLE, ACCORDING TO 29 U.S.C. § 207 (RELATING TO MAXIMUM
HOURS).
* * *
SECTION 1.1. SECTION 314 OF THE ACT IS AMENDED TO READ:
SECTION 314. INCOME TAXES IMPOSED BY OTHER STATES.--(A) A
RESIDENT TAXPAYER BEFORE ALLOWANCE OF ANY CREDIT UNDER SECTION
312 SHALL BE ALLOWED A CREDIT AGAINST THE TAX OTHERWISE DUE
UNDER THIS ARTICLE FOR THE AMOUNT OF ANY INCOME TAX, WAGE TAX OR
TAX ON OR MEASURED BY GROSS OR NET EARNED OR UNEARNED INCOME
IMPOSED ON HIM OR ON A PENNSYLVANIA S CORPORATION, LIMITED
LIABILITY COMPANY OR PARTNERSHIP IN WHICH HE IS A DIRECT OR
INDIRECT SHAREHOLDER OR PARTNER, TO THE EXTENT [OF HIS PRO RATA
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SHARE THEREOF DETERMINED IN ACCORDANCE WITH SECTION 307.9,] THAT
THE TAX WAS IMPOSED ON THE TAXPAYER'S DISTRIBUTIVE SHARE OR
OTHER SHARE THEREOF BY ANOTHER STATE WITH RESPECT TO INCOME
WHICH IS ALSO SUBJECT TO TAX UNDER THIS ARTICLE. FOR PURPOSES OF
THIS SUBSECTION, THE TERM "STATE" SHALL ONLY INCLUDE A STATE OF
THE UNITED STATES, THE DISTRICT OF COLUMBIA, THE COMMONWEALTH OF
PUERTO RICO AND ANY TERRITORY OR POSSESSION OF THE UNITED
STATES.
(B) THE CREDIT PROVIDED UNDER THIS SECTION SHALL NOT EXCEED
THE PROPORTION OF THE TAX OTHERWISE DUE UNDER THIS ARTICLE THAT
THE AMOUNT OF THE TAXPAYER'S INCOME SUBJECT TO TAX BY THE OTHER
JURISDICTION BEARS TO HIS ENTIRE TAXABLE INCOME.
(C) IN LIEU OF SUBMITTING A COPY OF EACH STATE RETURN IN
WHICH A TAX LIABILITY IS REPORTED AND TAX IS PAID, A MEMBER,
PARTNER, SHAREHOLDER, PARTNERSHIP OR PENNSYLVANIA S CORPORATION
MAY PROVIDE A CERTIFIED STATEMENT THAT REFLECTS EACH MEMBER'S,
PARTNER'S OR SHAREHOLDER'S SHARE OF TAXABLE INCOME, AMOUNT OF
STATE INCOME TAX PAID AND OTHER INFORMATION THAT THE DEPARTMENT
REQUIRES.
SECTION 2. THE ACT IS AMENDED BY ADDING A SECTION TO READ:
SECTION 357.1. PROVISIONS FOR OVERTIME PAY.--(A) AN
EMPLOYER REQUIRED TO WITHHOLD TAX UNDER SECTION 316.1 SHALL
WITHHOLD TAX FROM AN EMPLOYE'S COMPENSATION UNDER THE
REQUIREMENT OF THIS ARTICLE FOR ALL HOURS WORKED BY THE EMPLOYE,
INCLUDING OVERTIME HOURS AS PROVIDED FOR UNDER 29 U.S.C. § 207
(RELATING TO MAXIMUM HOURS).
(B) AN EMPLOYER MAY NOT REDUCE OR DENY THE AVAILABILITY OF
OVERTIME HOURS TO EMPLOYES UNDER 29 U.S.C. § 207 AS A SOLE
RESULT OF THE DEDUCTION UNDER SUBSECTION (C), PROVIDED THAT
OVERTIME HOURS WOULD HAVE OTHERWISE BEEN AVAILABLE TO THE SAME
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EMPLOYES UNDER SIMILAR CIRCUMSTANCES. AN EMPLOYER FOUND TO BE IN
VIOLATION OF THIS SUBSECTION IS SUBJECT TO A FINE OF TWO
THOUSAND DOLLARS ($2,000).
(C) WHEN CALCULATING TAXABLE INCOME ON THE ANNUAL PERSONAL
INCOME TAX RETURN, A TAXPAYER WHO RECEIVED OVERTIME PAY DURING
THE TAXABLE YEAR SHALL BE ELIGIBLE TO DEDUCT AN AMOUNT EQUAL TO
THE AMOUNT OF OVERTIME PAY RECEIVED. IF THE AMOUNT OF DEDUCTION
THAT THE TAXPAYER IS ELIGIBLE TO RECEIVE UNDER THIS SECTION
CAUSES THE TAXPAYER'S TAX LIABILITY UNDER THIS ARTICLE TO BE
LESS THAN ZERO, THE DEPARTMENT SHALL REFUND THE EXCESS AMOUNT TO
THE TAXPAYER.
(D) THIS SECTION SHALL APPLY TO TAXABLE YEARS BEGINNING
AFTER DECEMBER 31, 2025.
SECTION 3. SECTION 401(3)1(A) AND (B), (3)2(A)(17)(E) AND
(5) OF THE ACT ARE AMENDED, (3)1 IS AMENDED BY ADDING A PHRASE,
(3)1(T) IS AMENDED BY ADDING A PARAGRAPH, (3)2(A)(1) IS AMENDED
BY ADDING A SUBPARAGRAPH, (3)2(A)(9)(A) IS AMENDED BY ADDING A
UNIT, (3)4 IS AMENDED BY ADDING PHRASES AND THE SECTION IS
AMENDED BY ADDING CLAUSES TO READ:
SECTION 401. DEFINITIONS.--THE FOLLOWING WORDS, TERMS, AND
PHRASES, WHEN USED IN THIS ARTICLE, SHALL HAVE THE MEANING
ASCRIBED TO THEM IN THIS SECTION, EXCEPT WHERE THE CONTEXT
CLEARLY INDICATES A DIFFERENT MEANING:
* * *
(3) "TAXABLE INCOME." 1. (A) IN CASE THE ENTIRE BUSINESS
OF THE CORPORATION IS TRANSACTED WITHIN THIS COMMONWEALTH, FOR
ANY TAXABLE YEAR WHICH BEGINS ON OR AFTER JANUARY 1, 1971,
TAXABLE INCOME FOR THE CALENDAR YEAR OR FISCAL YEAR AS RETURNED
TO AND ASCERTAINED BY THE FEDERAL GOVERNMENT BEFORE SPECIAL
DEDUCTIONS PROVIDED FOR IN 26 U.S.C. CH. 1 SUBCH. B PT. VIII
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(RELATING TO SPECIAL DEDUCTIONS FOR CORPORATIONS), NOT INCLUDING
THE DEDUCTIONS PROVIDED FOR IN 26 U.S.C. § 243 (RELATING TO
DIVIDENDS RECEIVED BY CORPORATIONS), OR IN THE CASE OF A
CORPORATION PARTICIPATING IN THE FILING OF CONSOLIDATED RETURNS
TO THE FEDERAL GOVERNMENT OR THAT IS NOT REQUIRED TO FILE A
RETURN WITH THE FEDERAL GOVERNMENT, THE TAXABLE INCOME WHICH
WOULD HAVE BEEN RETURNED TO AND ASCERTAINED BY THE FEDERAL
GOVERNMENT BEFORE SPECIAL DEDUCTIONS PROVIDED FOR IN 26 U.S.C.
CH. 1 SUBCH. B PT. VIII, NOT INCLUDING THE DEDUCTIONS PROVIDED
FOR IN 26 U.S.C. § 243, IF SEPARATE RETURNS HAD BEEN MADE TO THE
FEDERAL GOVERNMENT FOR THE CURRENT AND PRIOR TAXABLE YEARS,
SUBJECT, HOWEVER, TO ANY CORRECTION THEREOF, FOR FRAUD, EVASION,
OR ERROR AS FINALLY ASCERTAINED BY THE FEDERAL GOVERNMENT.
(B) ADDITIONAL DEDUCTIONS SHALL BE ALLOWED FROM TAXABLE
INCOME ON ACCOUNT OF ANY DIVIDENDS RECEIVED FROM ANY OTHER
CORPORATION BUT ONLY TO THE EXTENT THAT SUCH DIVIDENDS ARE
INCLUDED IN TAXABLE INCOME AS RETURNED TO AND ASCERTAINED BY THE
FEDERAL GOVERNMENT. FOR TAX YEARS BEGINNING ON OR AFTER JANUARY
1, 1991, ADDITIONAL DEDUCTIONS SHALL ONLY BE ALLOWED FOR AMOUNTS
INCLUDED, UNDER [SECTION 78 OF THE INTERNAL REVENUE CODE OF 1986
(PUBLIC LAW 99-514, 26 U.S.C. § 78)] 26 U.S.C. § 78 (RELATING TO
GROSS UP FOR DEEMED PAID FOREIGN TAX CREDIT), IN TAXABLE INCOME
RETURNED TO AND ASCERTAINED BY THE FEDERAL GOVERNMENT AND FOR
THE AMOUNT OF ANY DIVIDENDS RECEIVED FROM A FOREIGN CORPORATION
INCLUDED IN TAXABLE INCOME TO THE EXTENT SUCH DIVIDENDS WOULD BE
DEDUCTIBLE IN ARRIVING AT FEDERAL TAXABLE INCOME IF RECEIVED
FROM A DOMESTIC CORPORATION. FOR TAXABLE YEARS BEGINNING AFTER
DECEMBER 31, 2025, THE ADDITIONAL DEDUCTION WITH RESPECT TO
DIVIDENDS SHALL NOT BE ALLOWED FOR DIVIDENDS BETWEEN MEMBERS OF
A UNITARY BUSINESS.
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* * *
(P.1) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2025,
IN THE CASE OF A CORPORATION THAT IS A MEMBER OF A UNITARY
BUSINESS, THE TERM "TAXABLE INCOME" SHALL MEAN THE COMBINED
UNITARY INCOME OF THE UNITARY BUSINESS, AS DETERMINED ON A
WATER'S-EDGE BASIS, PLUS THE CORPORATION'S NONBUSINESS INCOME.
* * *
(T) * * *
(5) THE ADJUSTMENT REQUIRED UNDER PARAGRAPH (1) SHALL NOT
APPLY TO A TRANSACTION BETWEEN THE TAXPAYER AND AN AFFILIATED
ENTITY IF THE TAXPAYER AND THE AFFILIATED ENTITY FILE AS PART OF
THE SAME COMBINED ANNUAL REPORT IN THIS STATE.
* * *
2. IN CASE THE ENTIRE BUSINESS OF ANY CORPORATION, OTHER
THAN A CORPORATION ENGAGED IN DOING BUSINESS AS A REGULATED
INVESTMENT COMPANY AS DEFINED BY THE INTERNAL REVENUE CODE OF
1986, IS NOT TRANSACTED WITHIN THIS COMMONWEALTH, THE TAX
IMPOSED BY THIS ARTICLE SHALL BE BASED UPON SUCH PORTION OF THE
TAXABLE INCOME OF SUCH CORPORATION FOR THE FISCAL OR CALENDAR
YEAR, AS DEFINED IN SUBCLAUSE 1 HEREOF, AND MAY BE DETERMINED AS
FOLLOWS:
(A) DIVISION OF INCOME.
(1) AS USED IN THIS DEFINITION, UNLESS THE CONTEXT OTHERWISE
REQUIRES:
* * *
(E.1) NOTWITHSTANDING SUBPARAGRAPH (E), IN REGARD TO THE
SALE, REDEMPTION, MATURITY OR EXCHANGE OF SECURITIES, HELD BY
THE TAXPAYER PRIMARILY FOR SALE TO CUSTOMERS IN THE ORDINARY
COURSE OF ITS TRADE OR BUSINESS, SALES SHALL ONLY INCLUDE THE
NET GAINS, EQUAL TO ZERO OR ABOVE, RECEIVED BY THE TAXPAYER.
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* * *
(9) (A) EXCEPT AS PROVIDED IN SUBPARAGRAPH (B):
* * *
(VI) (A) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31,
2025, THE COMBINED UNITARY INCOME OF A UNITARY BUSINESS, AS
DETERMINED ON A WATER'S-EDGE BASIS, SHALL BE APPORTIONED TO THIS
STATE BY MULTIPLYING SAID INCOME BY THE MEMBER'S SALES FACTOR,
THE NUMERATOR OF WHICH SHALL BE THE MEMBER'S TOTAL SALES IN THIS
STATE DURING THE TAX PERIOD, AND THE DENOMINATOR OF WHICH SHALL
BE THE COMBINED TOTAL SALES OF ALL MEMBERS OF THE UNITARY
BUSINESS EVERYWHERE DURING THE TAX PERIOD. IN COMPUTING THE
SALES OF EACH MEMBER FOR PURPOSES OF APPORTIONMENT, THE
FOLLOWING SALES ARE EXCLUDED FROM THE NUMERATOR AND DENOMINATOR:
(I) SALES FROM TRANSACTIONS BETWEEN OR AMONG MEMBERS OF THE
UNITARY BUSINESS THAT ARE DEFERRED UNDER 26 CFR 1.1502-13
(RELATING TO INTERCOMPANY TRANSACTIONS) FOR FEDERAL TAXABLE
INCOME PURPOSES; AND
(II) THE SALES OF EACH MEMBER THAT ARE EXCLUDED FROM THE
UNITARY BUSINESS PURSUANT TO THE DEFINITION OF WATER'S-EDGE
BASIS.
(B) THE PENNSYLVANIA SALES OF EACH NONTAXABLE MEMBER SHALL
BE DETERMINED BASED UPON THE APPORTIONMENT RULES APPLICABLE TO
THE MEMBER AND SHALL BE AGGREGATED. EACH TAXABLE MEMBER OF THE
UNITARY BUSINESS SHALL INCLUDE IN ITS SALES FACTOR NUMERATOR A
PORTION OF THE AGGREGATE PENNSYLVANIA SALES OF NONTAXABLE
MEMBERS DURING THE TAX PERIOD BASED ON A RATIO, THE NUMERATOR OF
WHICH IS THE TAXABLE MEMBER'S PENNSYLVANIA SALES DURING THE TAX
PERIOD AND THE DENOMINATOR OF WHICH IS THE AGGREGATE
PENNSYLVANIA SALES OF ALL THE TAXABLE MEMBERS OF THE UNITARY
BUSINESS DURING THE TAX PERIOD.
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(C) NONBUSINESS INCOME OF EACH MEMBER OF A UNITARY BUSINESS
SHALL BE ALLOCATED AS PROVIDED IN PARAGRAPHS (5) THROUGH (8) OF
PHRASE (A) OF SUBCLAUSE 2 OF THIS DEFINITION.
(D) A MEMBER OF THE UNITARY BUSINESS SHALL BE SUBJECT TO TAX
ON ITS APPORTIONED SHARE OF THE COMBINED UNITARY INCOME OF THE
UNITARY BUSINESS, AS DETERMINED ON A WATER'S-EDGE BASIS, PLUS
ITS NONBUSINESS INCOME OR LOSS ALLOCATED TO THIS STATE, MINUS
THE MEMBER'S NET LOSS DEDUCTION, IF APPLICABLE.
(E) THE AGGREGATE OF ALL SUCH FINAL SUMS OF EACH MEMBER OF
THE UNITARY BUSINESS FROM PHRASE (D) SHALL CONSTITUTE THE
PORTION OF THE UNITARY BUSINESS'S INCOME SUBJECT TO THE TAX
IMPOSED BY THIS ARTICLE.
(F) (1) THE SECRETARY OF REVENUE MAY DISTRIBUTE, APPORTION
OR ALLOCATE GROSS INCOME, DEDUCTIONS, CREDITS OR ALLOWANCES
BETWEEN AND AMONG TWO OR MORE CORPORATIONS, PERSONS, ENTITIES,
MEMBERS OR UNITARY BUSINESSES, WHETHER OR NOT INCORPORATED,
WHETHER OR NOT ORGANIZED IN THE UNITED STATES AND WHETHER OR NOT
AFFILIATED, IF:
(A) THE CORPORATIONS, PERSONS, ENTITIES, MEMBERS OR UNITARY
BUSINESSES ARE OWNED OR CONTROLLED DIRECTLY OR INDIRECTLY BY THE
SAME INTERESTS WITHIN THE MEANING OF 26 U.S.C. § 482 (RELATING
TO ALLOCATION OF INCOME AND DEDUCTIONS AMONG TAXPAYERS); AND
(B) THE SECRETARY OF REVENUE DETERMINES THAT THE
DISTRIBUTION, APPORTIONMENT OR ALLOCATION IS NECESSARY IN ORDER
TO REFLECT AN ARM'S LENGTH STANDARD WITHIN THE MEANING OF 26 CFR
1.482-1 (RELATING TO ALLOCATION OF INCOME AND DEDUCTIONS AMONG
TAXPAYERS) AND TO REFLECT CLEARLY THE INCOME OF THOSE
CORPORATIONS, PERSONS, ENTITIES, MEMBERS OR UNITARY BUSINESSES.
(2) THE SECRETARY OF REVENUE SHALL APPLY THE ADMINISTRATIVE
AND JUDICIAL INTERPRETATIONS OF 26 U.S.C. § 482 IN ADMINISTERING
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THIS SECTION.
(G) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2025, ANY
MEMBER OF A UNITARY BUSINESS THAT WOULD OTHERWISE APPORTION ITS
SHARE OF THE COMBINED UNITARY INCOME OF THE UNITARY BUSINESS, AS
DETERMINED ON A WATER'S-EDGE BASIS, UNDER PHRASE (B), (C), (D)
OR (E) OF SUBCLAUSE 2 OF THIS DEFINITION SHALL INSTEAD USE A
SALES FACTOR AS DESCRIBED IN THIS SECTION.
* * *
(17) SALES, OTHER THAN SALES UNDER PARAGRAPHS (16) AND
(16.1), ARE IN THIS STATE AS FOLLOWS:
* * *
(E) [GROSS RECEIPTS] NET GAINS, EQUAL TO ZERO OR ABOVE, FROM
THE SALE, REDEMPTION, MATURITY OR EXCHANGE OF SECURITIES, HELD
BY THE TAXPAYER PRIMARILY FOR SALE TO CUSTOMERS IN THE ORDINARY
COURSE OF ITS TRADE OR BUSINESS, IF THE CUSTOMERS ARE IN THIS
STATE.
* * *
4. * * *
(H) SUBJECT TO THE LIMITATIONS OF THIS SUBCLAUSE, ANY MEMBER
OF A UNITARY BUSINESS THAT HAS UNUSED NET LOSS FROM TAXABLE
YEARS THAT BEGAN PRIOR TO JANUARY 1, 2026, OR THAT GENERATES NET
LOSSES WHILE A MEMBER OF A UNITARY BUSINESS MAY ONLY TAKE THE
NET LOSS DEDUCTION FOR TAXABLE YEARS BEGINNING AFTER DECEMBER
31, 2025, TO THE EXTENT OF THE MEMBER'S SHARE OF TAXABLE INCOME
AFTER ALLOCATION AND APPORTIONMENT AND THE NET LOSSES MAY NOT BE
USED BY OTHER MEMBERS OF THE SAME UNITARY BUSINESS EXCEPT AS
OTHERWISE PERMITTED BY PHRASE (G) OF SUBCLAUSE 2 OF THIS
DEFINITION.
(I) ANY NET LOSS REALIZED FOR A TAXABLE YEAR UNUSED BY A
CORPORATION WHICH SUBSEQUENTLY BECOMES A MEMBER OF ANOTHER
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UNITARY BUSINESS MAY ONLY BE USED BY THAT CORPORATION EXCEPT AS
OTHERWISE PERMITTED BY PHRASE (G) OF SUBCLAUSE 2 OF THIS
DEFINITION.
* * *
(5) "TAXABLE YEAR." [THE TAXABLE YEAR WHICH THE
CORPORATION, OR ANY CONSOLIDATED GROUP WITH WHICH THE
CORPORATION PARTICIPATES IN THE FILING OF CONSOLIDATED RETURNS,
ACTUALLY USES IN REPORTING TAXABLE INCOME TO THE FEDERAL
GOVERNMENT. WITH REGARD TO THE TAX IMPOSED BY ARTICLE IV OF THIS
ACT (RELATING TO THE CORPORATE NET INCOME TAX), THE TERMS
"ANNUAL YEAR," "FISCAL YEAR," "ANNUAL OR FISCAL YEAR," "TAX
YEAR" AND "TAX PERIOD" SHALL BE THE SAME AS THE CORPORATION'S
TAXABLE YEAR, AS DEFINED IN THIS PARAGRAPH.]
1. EXCEPT AS SET FORTH IN SUBCLAUSE 2, THE TAXABLE YEAR
WHICH THE CORPORATION, OR ANY CONSOLIDATED GROUP WITH WHICH THE
CORPORATION PARTICIPATES IN THE FILING OF CONSOLIDATED RETURNS,
ACTUALLY USES IN REPORTING TAXABLE INCOME TO THE FEDERAL
GOVERNMENT, OR WHICH THE CORPORATION WOULD HAVE USED IN
REPORTING TAXABLE INCOME TO THE FEDERAL GOVERNMENT HAD IT BEEN
REQUIRED TO REPORT ITS TAXABLE INCOME TO THE FEDERAL GOVERNMENT.
WITH REGARD TO THE TAX IMPOSED BY ARTICLE IV, THE TERMS "ANNUAL
YEAR," "FISCAL YEAR," "ANNUAL OR FISCAL YEAR," "TAX YEAR" AND
"TAX PERIOD" SHALL BE THE SAME AS THE CORPORATION'S TAXABLE
YEAR, AS DEFINED IN THIS SUBCLAUSE OR SUBCLAUSE 2.
2. ALL MEMBERS OF A UNITARY BUSINESS SHALL HAVE A COMMON
TAXABLE YEAR FOR PURPOSES OF COMPUTING TAX DUE UNDER THIS
ARTICLE. THE TAXABLE YEAR SHALL BE THE COMMON TAXABLE YEAR
ADOPTED, IN A MANNER PRESCRIBED BY THE DEPARTMENT, BY ALL
MEMBERS OF THE UNITARY BUSINESS. THE COMMON TAXABLE YEAR MUST BE
USED BY ALL MEMBERS OF THE UNITARY BUSINESS IN THE YEAR OF
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ADOPTION AND ALL FUTURE YEARS UNLESS OTHERWISE PERMITTED BY THE
DEPARTMENT.
* * *
(12) "TAX HAVEN." A JURISDICTION THAT DURING THE TAX YEAR
IN QUESTION:
1. HAS LAWS OR PRACTICES THAT PREVENT EFFECTIVE EXCHANGE OF
INFORMATION FOR TAX PURPOSES WITH OTHER GOVERNMENTS ON TAXPAYERS
BENEFITING FROM THE TAX REGIME;
2. HAS A TAX REGIME WHICH LACKS TRANSPARENCY;
3. FACILITATES THE ESTABLISHMENT OF FOREIGN-OWNED ENTITIES
WITHOUT THE NEED FOR A LOCAL SUBSTANTIVE PRESENCE OR PROHIBITS
THESE ENTITIES FROM HAVING ANY COMMERCIAL IMPACT ON THE LOCAL
ECONOMY;
4. EXPLICITLY OR IMPLICITLY EXCLUDES THE JURISDICTION'S
RESIDENT TAXPAYERS FROM TAKING ADVANTAGE OF THE TAX REGIME
BENEFITS OR PROHIBITS ENTERPRISES THAT BENEFIT FROM THE REGIME
FROM OPERATING IN THE JURISDICTION'S DOMESTIC MARKET; OR
5. HAS CREATED A TAX REGIME WHICH IS FAVORABLE FOR TAX
AVOIDANCE, BASED UPON AN OVERALL ASSESSMENT OF RELEVANT FACTORS,
INCLUDING WHETHER THE JURISDICTION HAS A SIGNIFICANT UNTAXED
OFFSHORE FINANCIAL OR SERVICES SECTOR RELATIVE TO ITS OVERALL
ECONOMY.
(13) "UNITARY BUSINESS." A SINGLE ECONOMIC ENTERPRISE THAT
IS MADE UP OF SEPARATE PARTS OF A SINGLE CORPORATION, OF A
COMMONLY CONTROLLED GROUP OF CORPORATIONS, OR BOTH, THAT ARE
SUFFICIENTLY INTERDEPENDENT, INTEGRATED AND INTERRELATED THROUGH
THEIR ACTIVITIES SO AS TO PROVIDE A SYNERGY AND MUTUAL BENEFIT
THAT PRODUCES A SHARING OR EXCHANGE OF VALUE AMONG THEM AND A
FLOW OF VALUE TO THE SEPARATE PARTS. A UNITARY BUSINESS INCLUDES
ALL PARTS AND CORPORATIONS THAT ARE INCLUDED IN A UNITARY
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BUSINESS UNDER THE CONSTITUTION OF THE UNITED STATES.
(14) "WATER'S-EDGE BASIS." A SYSTEM OF REPORTING THAT
INCLUDES THE INCOME AND APPORTIONMENT FACTORS OF CERTAIN MEMBERS
OF A UNITARY BUSINESS, DESCRIBED AS FOLLOWS:
1. ANY MEMBER INCORPORATED IN THE UNITED STATES OR FORMED
UNDER THE LAWS OF ANY STATE OF THE UNITED STATES, THE DISTRICT
OF COLUMBIA, ANY TERRITORY OR POSSESSION OF THE UNITED STATES OR
THE COMMONWEALTH OF PUERTO RICO.
2. ANY MEMBER, REGARDLESS OF THE PLACE INCORPORATED OR
FORMED, IF AT LEAST TWENTY PER CENT OF THE MEMBER'S SALES FACTOR
IS WITHIN THE UNITED STATES, AND THE FOLLOWING SHALL APPLY:
(A) FOR PURPOSES OF DETERMINING WHETHER AT LEAST TWENTY PER
CENT OF A MEMBER'S SALES FACTOR IS WITHIN THE UNITED STATES, THE
CALCULATION MUST BE PERFORMED ON A STAND-ALONE BASIS. SALES
SHALL BE GROSS FIGURES WITHOUT ELIMINATIONS FOR TRANSACTIONS
WITH OTHER MEMBERS OF ANY UNITARY BUSINESS.
(B) WHETHER SALES ARE WITHIN THE UNITED STATES IS BASED ON
THE SALES FACTOR SOURCING RULES CONTAINED IN CLAUSE (3)2.
3. ANY MEMBER WHICH IS ONE OF THE FOLLOWING:
(A) A DOMESTIC INTERNATIONAL SALES CORPORATION AS DESCRIBED
IN 26 U.S.C. CH. 1 SUBCH. N PT. IV SUBPT. A (RELATING TO
TREATMENT OF QUALIFYING CORPORATIONS).
(B) A FOREIGN SALES CORPORATION AS DESCRIBED IN THE FORMER
26 U.S.C. §§ 921, 922, 923, 924, 925, 926 AND 927.
(C) AN EXPORT TRADE CORPORATION AS DESCRIBED IN 26 U.S.C.
CH. 1 SUBCH. N PT. III SUBPT. G (RELATING TO EXPORT TRADE
CORPORATIONS).
4. ANY MEMBER NOT DESCRIBED IN SUBCLAUSE 1, 2 OR 3 SHALL
INCLUDE THE PORTION OF THE MEMBER'S TAXABLE INCOME DERIVED FROM
OR ATTRIBUTABLE TO SOURCES WITHIN THE UNITED STATES, AS
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DETERMINED UNDER 26 U.S.C. (RELATING TO INTERNAL REVENUE CODE)
WITHOUT REGARD TO FEDERAL TREATIES, AND ITS APPORTIONMENT
FACTORS RELATED THERETO.
5. ANY MEMBER THAT IS A "CONTROLLED FOREIGN CORPORATION" AS
DEFINED IN 26 U.S.C. § 957 (RELATING TO CONTROLLED FOREIGN
CORPORATIONS; UNITED STATES PERSONS), TO THE EXTENT THE INCOME
OF THAT MEMBER IS INCOME DEFINED IN 26 U.S.C. § 952 (RELATING TO
SUBPART F INCOME DEFINED) AS SUBPART F INCOME, NOT EXCLUDING
LOWER-TIER SUBSIDIARIES' DISTRIBUTIONS OF SUCH INCOME WHICH WERE
PREVIOUSLY TAXED, DETERMINED WITHOUT REGARD TO FEDERAL TREATIES,
AND THE APPORTIONMENT FACTORS RELATED TO THAT INCOME; ANY ITEM
OF INCOME RECEIVED BY A CONTROLLED FOREIGN CORPORATION AND THE
APPORTIONMENT FACTORS RELATED TO SUCH INCOME SHALL BE EXCLUDED
IF THE CORPORATION ESTABLISHES TO THE SATISFACTION OF THE
SECRETARY OF REVENUE THAT SUCH INCOME WAS SUBJECT TO AN
EFFECTIVE RATE OF INCOME TAX IMPOSED BY A FOREIGN COUNTRY
GREATER THAN NINETY PER CENT OF THE MAXIMUM RATE OF TAX
SPECIFIED IN 26 U.S.C. § 11 (RELATING TO TAX IMPOSED). THE
EFFECTIVE RATE OF INCOME TAX DETERMINATION SHALL BE BASED UPON
THE METHODOLOGY UNDER 26 CFR 1.954-1 (RELATING TO FOREIGN BASE
COMPANY INCOME).
6. ANY MEMBER THAT IS INCORPORATED IN OR IS DOING BUSINESS
IN A TAX HAVEN UNLESS IT IS PROVEN TO THE SATISFACTION OF THE
SECRETARY THAT SUCH MEMBER IS INCORPORATED IN OR DOING BUSINESS
IN A TAX HAVEN FOR A LEGITIMATE BUSINESS PURPOSE.
(15) "COMMONLY CONTROLLED GROUP." FOR A CORPORATION, THE
CORPORATION IS A MEMBER OF A GROUP OF TWO OR MORE CORPORATIONS
AND MORE THAN FIFTY PER CENT OF THE VOTING STOCK OR CONTROLLING
INTEREST OF EACH MEMBER OF THE GROUP IS DIRECTLY OR INDIRECTLY
OWNED BY A COMMON OWNER OR BY COMMON OWNERS, EITHER CORPORATE OR
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NONCORPORATE, OR BY ONE OR MORE OF THE MEMBER CORPORATIONS OF
THE GROUP.
(16) "COMBINED UNITARY INCOME." THE AGGREGATE SEPARATE
COMPANY TAXABLE INCOME OR LOSS OF ALL MEMBERS OF A UNITARY
BUSINESS SUBJECT TO APPORTIONMENT EXCEPT:
1. INCOME FROM AN INTERCOMPANY TRANSACTION BETWEEN MEMBERS
OF A UNITARY BUSINESS SHALL BE DEFERRED IN A MANNER SIMILAR TO
26 CFR 1.1502-13 FOR FEDERAL TAXABLE INCOME PURPOSES.
2. DIVIDENDS PAID BY ONE MEMBER OF A UNITARY BUSINESS TO
ANOTHER.
3. INCOME OF THE FOLLOWING CORPORATIONS IS NOT INCLUDED IN
THE DETERMINATION OF COMBINED UNITARY INCOME:
(A) ANY CORPORATION SUBJECT TO TAXATION UNDER ARTICLE VII,
VIII, IX OR XV;
(B) ANY CORPORATION SPECIFIED IN THE DEFINITION OF
"INSTITUTION" IN SECTION 701.5 THAT WOULD BE SUBJECT TO TAXATION
UNDER ARTICLE VII, WERE IT DOING BUSINESS IN THIS COMMONWEALTH,
AS DEFINED IN SECTION 701.5;
(C) ANY CORPORATION COMMONLY KNOWN AS A TITLE INSURANCE
COMPANY THAT WOULD BE SUBJECT TO TAXATION UNDER ARTICLE VIII,
WERE IT INCORPORATED IN THIS STATE;
(D) ANY CORPORATION SPECIFIED AS AN INSURANCE COMPANY,
ASSOCIATION OR EXCHANGE IN ARTICLE IX THAT WOULD BE SUBJECT TO
TAXATION UNDER ARTICLE IX, WERE IT TRANSACTING INSURANCE
BUSINESS IN THIS STATE;
(E) ANY CORPORATION SPECIFIED IN THE DEFINITION OF
"INSTITUTION" IN SECTION 1501 THAT WOULD BE SUBJECT TO TAXATION
UNDER ARTICLE XV, WERE IT LOCATED, AS DEFINED IN SECTION 1501,
IN THIS STATE; OR
(F) ANY CORPORATION THAT HAS FILED A TIMELY ELECTION AND HAS
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QUALIFIED TO BE TAXED AS A REGULATED INVESTMENT COMPANY UNDER
THE PROVISIONS OF THE INTERNAL REVENUE CODE OF 1954, AS AMENDED.
(17) "MEMBER." A CORPORATION THAT IS A MEMBER OF A UNITARY
BUSINESS. THE TERM DOES NOT INCLUDE A CORPORATION LISTED IN
CLAUSE (16)3.
(18) "TAXABLE MEMBER." A MEMBER WHICH WOULD BE SUBJECT TO
THE TAX IMPOSED BY THIS ARTICLE UNDER SECTION 402 ON A SEPARATE
ENTITY BASIS FOR EXERCISING, WHETHER IN ITS OWN NAME OR THROUGH
ANY PERSON, ASSOCIATION, BUSINESS TRUST, CORPORATION, JOINT
VENTURE, LIMITED LIABILITY COMPANY, LIMITED PARTNERSHIP,
PARTNERSHIP, MEMBER OR OTHER ENTITY, ANY OF THE PRIVILEGES
INCLUDED IN SECTION 402(A)(1), (2), (3), (4) AND (5).
(19) "NONTAXABLE MEMBER." A MEMBER WHICH IS NOT A TAXABLE
MEMBER.
SECTION 4. SECTION 401.1 OF THE ACT IS AMENDED BY ADDING A
SUBSECTION TO READ:
SECTION 401.1. DETERMINATION OF NET LOSS DEDUCTION.--* * *
(F) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 2025,
TAXPAYERS FILING COMBINED ANNUAL REPORTS MUST CALCULATE THE
AVAILABLE NET LOSS DEDUCTION ON A TAXABLE MEMBER BY TAXABLE
MEMBER BASIS IN ACCORDANCE WITH THE PROVISIONS OF SUBCLAUSE 4 OF
SECTION 401(3).
SECTION 5. SECTIONS 402(A) INTRODUCTORY PARAGRAPH AND (5)
(III) AND (B) AND 403(C), (D) AND (F) OF THE ACT ARE AMENDED AND
THE SECTIONS ARE AMENDED BY ADDING SUBSECTIONS TO READ:
SECTION 402. IMPOSITION OF TAX.--(A) A CORPORATION SHALL BE
SUBJECT TO AND SHALL PAY AN EXCISE TAX FOR EXERCISING, WHETHER
IN ITS OWN NAME OR THROUGH ANY PERSON, ASSOCIATION, BUSINESS
TRUST, CORPORATION, JOINT VENTURE, LIMITED LIABILITY COMPANY,
LIMITED PARTNERSHIP, PARTNERSHIP, MEMBER OR OTHER ENTITY, ANY OF
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THE FOLLOWING PRIVILEGES:
* * *
(5) * * *
(III) THERE SHALL BE A REBUTTABLE PRESUMPTION THAT A
CORPORATION, OR IN THE CONTEXT OF A UNITARY BUSINESS, A MEMBER
OF A UNITARY BUSINESS WITH $500,000 OR MORE OF SALES SOURCED IN
THE CURRENT TAX YEAR TO THIS COMMONWEALTH UNDER SECTION 401 HAS
SUBSTANTIAL NEXUS IN THIS COMMONWEALTH WITHOUT REGARD TO
PHYSICAL PRESENCE IN THIS COMMONWEALTH.
* * *
(B) THE ANNUAL RATE OF TAX ON CORPORATE NET INCOME IMPOSED
BY SUBSECTION (A) FOR TAXABLE YEARS BEGINNING FOR THE CALENDAR
YEAR OR FISCAL YEAR ON OR AFTER THE DATES SET FORTH SHALL BE AS
FOLLOWS:
TAXABLE YEAR TAX RATE
JANUARY 1, 1995,
THROUGH DECEMBER
31, 2022 9.99%
JANUARY 1, 2023,
THROUGH DECEMBER
31, 2023 8.99%
JANUARY 1, 2024,
THROUGH DECEMBER
31, 2024 8.49%
JANUARY 1, 2025,
THROUGH DECEMBER
31, 2025 7.99%
JANUARY 1, 2026,
THROUGH DECEMBER
31, 2026 [7.49%] 7.24%
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JANUARY 1, 2027,
THROUGH DECEMBER
31, 2027 [6.99%] 6.49%
JANUARY 1, 2028,
THROUGH DECEMBER
31, 2028 [6.49%] 5.74%
JANUARY 1, 2029,
[THROUGH DECEMBER
31, 2029] AND EACH
TAXABLE YEAR
THEREAFTER [5.99%] 4.99%
[JANUARY 1, 2030,
THROUGH DECEMBER
31, 2030 5.49%
JANUARY 1, 2031, AND
EACH TAXABLE YEAR
THEREAFTER 4.99%]
* * *
(D) FOR PURPOSES OF THIS SECTION THE TERM "CORPORATION"
SHALL INCLUDE A UNITARY BUSINESS, EXCEPT WHERE THE CONTEXT
CLEARLY INDICATES A DIFFERENT MEANING.
SECTION 403. REPORTS AND PAYMENT OF TAX.--* * *
(A.1) (1) EACH CORPORATION THAT IS A MEMBER OF A UNITARY
BUSINESS THAT CONSISTS OF TWO OR MORE CORPORATIONS, UNLESS
EXCLUDED BY THE PROVISIONS OF THIS ARTICLE, SHALL FILE AS PART
OF A COMBINED ANNUAL REPORT. THE MEMBERS OF THE UNITARY BUSINESS
SHALL DESIGNATE ONE MEMBER THAT IS SUBJECT TO TAX UNDER THIS
ARTICLE TO FILE THE COMBINED ANNUAL REPORT AND TO ACT AS AGENT
ON BEHALF OF ALL OTHER MEMBERS OF THE UNITARY BUSINESS. EACH
CORPORATION THAT IS A MEMBER OF A UNITARY BUSINESS SHALL BE
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LIABLE FOR ITS TAX LIABILITY UNDER THIS ARTICLE. THE AGENT ALSO
SHALL BE LIABLE FOR THE AGGREGATE AMOUNT OF THE UNITARY
BUSINESS' TAX LIABILITY PURSUANT TO THIS ARTICLE.
(2) THE OATH OR AFFIRMATION OF THE DESIGNATED MEMBER'S
PRESIDENT, VICE PRESIDENT, TREASURER, ASSISTANT TREASURER OR
OTHER AUTHORIZED OFFICER SHALL CONSTITUTE THE OATH OR
AFFIRMATION OF EACH CORPORATION THAT IS A MEMBER OF THAT UNITARY
BUSINESS.
(3) THE DESIGNATED MEMBER SHALL TRANSMIT TO THE DEPARTMENT
UPON A FORM PRESCRIBED BY THE DEPARTMENT A COMBINED ANNUAL
REPORT UNDER OATH OR AFFIRMATION OF THE MEMBER'S PRESIDENT, VICE
PRESIDENT, TREASURER, ASSISTANT TREASURER OR OTHER AUTHORIZED
OFFICER.
(4) IN ADDITION TO THE INFORMATION REQUIRED IN SUBSECTION
(A), THE COMBINED ANNUAL REPORT SHALL SET FORTH:
(I) ALL MEMBERS INCLUDED IN THE UNITARY BUSINESS.
(II) ALL NECESSARY DATA, BOTH IN THE AGGREGATE AND FOR EACH
MEMBER OF THE UNITARY BUSINESS, THAT SETS FORTH THE
DETERMINATION OF TAX LIABILITY FOR EACH MEMBER OF THE UNITARY
BUSINESS.
(III) ANY OTHER INFORMATION THAT THE DEPARTMENT MAY REQUIRE.
(A.2) A MEMBER OF A UNITARY BUSINESS OF TWO OR MORE
CORPORATIONS MUST DETERMINE THE MEMBER'S INCOME AND
APPORTIONMENT FACTORS ON A WATER'S-EDGE BASIS.
* * *
(B.1) IT SHALL BE THE DUTY OF EACH UNITARY BUSINESS LIABLE
TO PAY TAX UNDER THIS ARTICLE TO PAY ESTIMATED TAX UNDER SECTION
3003.2 AND TO MAKE FINAL PAYMENT OF TAX DUE FOR THE TAXABLE YEAR
WITH THE COMBINED ANNUAL REPORT REQUIRED BY THIS SECTION.
(C) THE AMOUNT OF ALL TAXES, IMPOSED UNDER THE PROVISIONS OF
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THIS ARTICLE, NOT PAID ON OR BEFORE THE TIMES AS ABOVE PROVIDED,
SHALL BEAR INTEREST AS PROVIDED IN SECTION 806 OF THE ACT OF
APRIL 9, 1929 (P.L.343, NO.176), KNOWN AS "THE FISCAL CODE,"
FROM THE DATE THEY ARE DUE AND PAYABLE UNTIL PAID, EXCEPT THAT
IF THE TAXABLE INCOME HAS BEEN, OR IS INCREASED BY THE
COMMISSIONER OF INTERNAL REVENUE, OR BY ANY OTHER AGENCY OR
COURT OF THE UNITED STATES, INTEREST SHALL BE COMPUTED ON THE
ADDITIONAL TAX DUE FROM THIRTY DAYS AFTER THE CORPORATION
RECEIVES NOTICE OF THE CHANGE OF INCOME UNTIL PAID: PROVIDED,
HOWEVER, THAT ANY CORPORATION OR DESIGNATED MEMBER RESPONSIBLE
FOR FILING A COMBINED ANNUAL REPORT MAY PAY THE FULL AMOUNT OF
SUCH TAX, OR ANY PART THEREOF, TOGETHER WITH INTEREST DUE TO THE
DATE OF PAYMENT, WITHOUT PREJUDICE TO ITS RIGHT TO PRESENT AND
PROSECUTE, AN ADMINISTRATIVE PETITION OR AN APPEAL TO COURT. IF
IT BE THEREAFTER DETERMINED THAT SUCH TAXES WERE OVERPAID, THE
DEPARTMENT SHALL ENTER A CREDIT TO THE ACCOUNT OF SUCH
CORPORATION OR DESIGNATED MEMBER, WHICH MAY BE USED BY IT IN THE
MANNER PRESCRIBED BY LAW.
(D) IF THE OFFICERS OF ANY CORPORATION OR DESIGNATED MEMBER
SHALL NEGLECT, OR REFUSE TO MAKE ANY REPORT AS HEREIN REQUIRED,
OR SHALL KNOWINGLY MAKE ANY FALSE REPORT, A PENALTY OF FIVE
HUNDRED DOLLARS ($500) PLUS AN ADDITIONAL ONE PER CENT FOR EVERY
DOLLAR OF TAX DETERMINED TO BE DUE IN EXCESS OF TWENTY-FIVE
THOUSAND DOLLARS ($25,000) SHALL BE ADDED TO THE TAX DETERMINED
TO BE DUE. NO AMOUNTS ADDED TO THE TAX SHALL BEAR ANY INTEREST
WHATSOEVER.
* * *
(E.1) IF THE MEMBERS OF A UNITARY BUSINESS HAVE A COMMON
TAXABLE YEAR THAT CLOSES NOT UPON DECEMBER 31, BUT UPON SOME
OTHER DATE, SUCH UNITARY BUSINESS SHALL MAKE THE COMBINED ANNUAL
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REPORT, HEREIN REQUIRED, ON OR BEFORE THE FIFTEENTH DAY OF THE
MONTH FOLLOWING WHAT IS OR WOULD BE THE DUE DATE OF THE RETURN
TO THE FEDERAL GOVERNMENT, SUBJECT IN ALL OTHER RESPECTS TO THE
PROVISIONS OF THIS ARTICLE.
(F) IF THE CORPORATION OR ANY MEMBERS OF THE UNITARY
BUSINESS SHALL CLAIM IN ITS REPORT OR IN ITS COMBINED ANNUAL
REPORT THAT THE RETURN MADE TO THE FEDERAL GOVERNMENT WAS
INACCURATE, THE AMOUNT CLAIMED [BY IT] TO BE THE TAXABLE INCOME,
TAXABLE UNDER THIS ARTICLE, AND THE BASIS OF SUCH CLAIM OF
INACCURACY, SHALL BE FULLY SPECIFIED.
SECTION 6. SECTIONS 403.1 AND 403.2(B) AND (E) OF THE ACT
ARE AMENDED TO READ:
SECTION 403.1. TIMELY MAILING TREATED AS TIMELY FILING AND
PAYMENT.--NOTWITHSTANDING THE PROVISIONS OF ANY STATE TAX LAW TO
THE CONTRARY, WHENEVER A REPORT OR PAYMENT OF ALL OR ANY PORTION
OF A STATE TAX IS REQUIRED BY LAW TO BE RECEIVED BY THE
PENNSYLVANIA DEPARTMENT OF REVENUE OR OTHER AGENCY OF THE
COMMONWEALTH ON OR BEFORE A DAY CERTAIN, THE CORPORATION SHALL
BE DEEMED TO HAVE COMPLIED WITH SUCH LAW IF THE LETTER
TRANSMITTING THE REPORT OR PAYMENT OF SUCH TAX WHICH HAS BEEN
RECEIVED BY THE DEPARTMENT IS POSTMARKED BY THE UNITED STATES
POSTAL SERVICE ON OR PRIOR TO THE FINAL DAY ON WHICH THE PAYMENT
IS TO BE RECEIVED.
FOR THE PURPOSES OF THIS ARTICLE, PRESENTATION OF A RECEIPT
INDICATING THAT THE REPORT OR PAYMENT WAS MAILED BY REGISTERED
OR CERTIFIED MAIL ON OR BEFORE THE DUE DATE SHALL BE EVIDENCE OF
TIMELY FILING AND PAYMENT.
FOR PURPOSES OF THIS SECTION, THE TERM "CORPORATION" SHALL
INCLUDE A UNITARY BUSINESS.
SECTION 403.2. ADDITIONAL WITHHOLDING REQUIREMENTS.--* * *
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(B) A PARTNERSHIP REQUIRED TO FILE A REPORT UNDER SUBSECTION
(A) SHALL WITHHOLD AND PAY TO THE DEPARTMENT A TAX ON BEHALF OF
ITS NONFILING CORPORATE PARTNERS IN AN AMOUNT EQUAL TO ITS NET
NONFILING CORPORATE PARTNERS' SHARES OF INCOME AND DEDUCTIONS AS
REPORTED TO THE FEDERAL GOVERNMENT MULTIPLIED BY THE TAX RATE
APPLICABLE TO THE TAXABLE YEAR BEING REPORTED. ANY AMOUNT
WITHHELD AND PAID TO THE DEPARTMENT ON BEHALF OF A NONFILING
CORPORATE PARTNER SHALL BE CONSIDERED A TAX PAYMENT BY THAT
PARTNER AND CREDITED TO ITS ACCOUNT [AS IF IT WAS DIRECTLY PAID
BY THE PARTNER] OR THE ACCOUNT OF THE DESIGNATED MEMBER OF THE
UNITARY BUSINESS.
* * *
(E) THE FOLLOWING WORDS, TERMS AND PHRASES WHEN USED IN THIS
SECTION SHALL HAVE THE MEANING ASCRIBED TO THEM IN THIS SECTION,
EXCEPT WHERE THE CONTEXT CLEARLY INDICATES A DIFFERENT MEANING:
"NET NONFILING CORPORATE PARTNERS' SHARES OF INCOME AND
DEDUCTIONS AS REPORTED TO THE FEDERAL GOVERNMENT." THAT PORTION
OF THE INCOME, LESS THE DEDUCTIONS:
(1) REPORTED ON SCHEDULE K OF THE FEDERAL FORM 1065, RETURN
OF PARTNERSHIP INCOME, FILED WITH THE FEDERAL GOVERNMENT FOR THE
TAXABLE YEAR; AND
(2) ALLOCATED ON FEDERAL SCHEDULE K-1 TO NONFILING CORPORATE
PARTNERS.
IF THE ENTIRE BUSINESS OF THE PARTNERSHIP IS NOT TRANSACTED IN
THIS COMMONWEALTH, THE AMOUNT COMPUTED UNDER THIS DEFINITION
SHALL BE APPORTIONED TO THIS COMMONWEALTH AS PROVIDED IN SECTION
401(3)2 AS IF THE PARTNERSHIP WERE A CORPORATION SUBJECT TO TAX
UNDER THIS ARTICLE.
"NONFILING CORPORATE PARTNER." A PARTNER WHICH:
(1) IS A CORPORATION AS DEFINED IN SECTION 401; AND
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(2) HAS [NOT] NEITHER FILED A TAX REPORT NOR BEEN INCLUDED
IN A COMBINED ANNUAL REPORT AND HAS NOT PAID THE TAX REQUIRED BY
SECTIONS 402 AND 403 FOR THE PREVIOUS TAXABLE YEAR.
"PARTNER." AN OWNER OF AN INTEREST IN THE PARTNERSHIP, IN
WHATEVER MANNER THAT OWNER AND OWNERSHIP INTEREST ARE
DESIGNATED.
"PARTNERSHIP." AN ENTITY CLASSIFIED AS A PARTNERSHIP FOR
FEDERAL INCOME TAX PURPOSES.
(1) THE TERM INCLUDES:
(I) A PARTNERSHIP, LIMITED PARTNERSHIP, LIMITED LIABILITY
PARTNERSHIP OR LIMITED LIABILITY COMPANY; AND
(II) ANY SYNDICATE, GROUP, POOL, JOINT VENTURE, BUSINESS
TRUST, ASSOCIATION OR OTHER UNINCORPORATED ORGANIZATION THROUGH
OR BY WHICH A BUSINESS, FINANCIAL OPERATION OR VENTURE IS
CARRIED ON.
(2) THE TERM DOES NOT INCLUDE AN ENTITY THAT IS:
(I) LISTED ON A UNITED STATES NATIONAL STOCK EXCHANGE; OR
(II) DESCRIBED IN SECTION 401(1)1 OR 2.
SECTION 7. SECTION 404 OF THE ACT IS REPEALED:
[SECTION 404. CONSOLIDATED REPORTS.--THE DEPARTMENT SHALL
NOT PERMIT ANY CORPORATION OWNING OR CONTROLLING, DIRECTLY OR
INDIRECTLY, ANY OF THE VOTING CAPITAL STOCK OF ANOTHER
CORPORATION OR OF OTHER CORPORATIONS, SUBJECT TO THE PROVISIONS
OF THIS ARTICLE, TO MAKE A CONSOLIDATED REPORT, SHOWING THE
COMBINED NET INCOME.]
SECTION 8. SECTION 405 OF THE ACT IS AMENDED TO READ:
SECTION 405. EXTENSION OF TIME TO FILE REPORTS.--THE
DEPARTMENT MAY, UPON APPLICATION MADE TO IT, IN SUCH FORM AS IT
SHALL PRESCRIBE, ON OR PRIOR TO THE LAST DAY FOR FILING ANY
ANNUAL REPORT, AND UPON PROPER CAUSE SHOWN, GRANT TO THE
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CORPORATION, REQUIRED TO FILE SUCH REPORT, AN EXTENSION OF NOT
MORE THAN SIXTY DAYS WITHIN WHICH SUCH REPORT MAY BE FILED. IF
THE FEDERAL INCOME TAX AUTHORITIES GRANT AN EXTENSION OF TIME
FOR FILING THE REPORTS WITH THE FEDERAL GOVERNMENT, THE
DEPARTMENT SHALL AUTOMATICALLY GRANT AN EXTENSION OF TIME FOR
FILING THE ANNUAL REPORT UNDER THIS ARTICLE UNTIL THE FIFTEENTH
DAY OF THE MONTH FOLLOWING THE TERMINATION OF THE FEDERAL
EXTENSION, BUT THE AMOUNT OF TAX DUE SHALL, IN SUCH CASES,
NEVERTHELESS, BE SUBJECT TO INTEREST FROM THE DUE DATES AND AT
THE RATES FIXED BY THIS ARTICLE. FOR PURPOSES OF THIS SECTION
THE TERM "REPORT," WHEN USED IN THE CONTEXT OF FILINGS WITH THE
DEPARTMENT, SHALL INCLUDE COMBINED ANNUAL REPORTS AND THE TERM
"CORPORATION" SHALL INCLUDE A UNITARY BUSINESS.
SECTION 9. SECTION 406(E) OF THE ACT IS AMENDED AND THE
SECTION IS AMENDED BY ADDING A SUBSECTION TO READ:
SECTION 406. CHANGES MADE BY FEDERAL GOVERNMENT.--* * *
(E) THE PROVISIONS OF THIS SECTION SHALL APPLY TO EVERY
CORPORATION WHICH WAS DOING BUSINESS IN PENNSYLVANIA IN THE YEAR
FOR WHICH THE FEDERAL INCOME HAS BEEN CHANGED, IRRESPECTIVE OF
WHETHER OR NOT SUCH CORPORATION OR ANY MEMBER OF A UNITARY
BUSINESS HAS THEREAFTER MERGED, CONSOLIDATED, WITHDRAWN OR
DISSOLVED. ANY CLEARANCE CERTIFICATE ISSUED BY THE DEPARTMENT
SHALL BE CONDITIONED UPON THE REQUIREMENT THAT IN THE EVENT OF A
CHANGE IN FEDERAL INCOME FOR ANY YEAR FOR WHICH TAXES HAVE BEEN
PAID TO THE COMMONWEALTH, THE CORPORATION OR ITS SUCCESSOR OR
ITS OFFICERS OR ITS DIRECTORS SHALL FILE WITH THE DEPARTMENT A
REPORT OF CHANGE AND PAY ANY ADDITIONAL STATE TAX RESULTING
THEREFROM.
(F) FOR PURPOSES OF THIS SECTION, THE TERM "CORPORATION"
SHALL INCLUDE A UNITARY BUSINESS.
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SECTION 10. SECTIONS 407.3(F), 407.6(A)(5), (6) AND (8) AND
407.7(D)(3) OF THE ACT ARE AMENDED TO READ:
SECTION 407.3. LIMITATIONS ON ASSESSMENTS.--* * *
(F) FOR PURPOSES OF THIS SECTION[,]:
(1) A REPORT FILED BEFORE THE LAST DAY PRESCRIBED FOR FILING
SHALL BE DEEMED TO HAVE BEEN FILED ON THE LAST DAY[.]; AND
(2) THE TERM "REPORT" SHALL INCLUDE COMBINED ANNUAL REPORTS.
SECTION 407.6. DEFINITIONS.--(A) FOR THE PURPOSES OF THIS
PART ONLY, THE FOLLOWING WORDS, TERMS AND PHRASES SHALL HAVE THE
MEANING ASCRIBED TO THEM IN THIS SUBSECTION, EXCEPT WHERE THE
CONTEXT CLEARLY INDICATES A DIFFERENT MEANING:
* * *
(5) "QUALIFIED MANUFACTURING INNOVATION AND REINVESTMENT
DEDUCTION." AN ALLOWABLE DEDUCTION AS DETERMINED, CALCULATED
AND EXECUTED IN A COMMITMENT LETTER BETWEEN THE DEPARTMENT AND
THE TAXPAYER. THE DEDUCTION SHALL BE APPLIED TO THE TAXABLE
INCOME OF THE TAXPAYER TO REDUCE A QUALIFIED TAX LIABILITY OF
THE TAXPAYER FOLLOWING THE ALLOCATION AND APPORTIONMENT OF THE
INCOME OF THE TAXPAYER. IF THE TAXPAYER IS A UNITARY BUSINESS
FILING A COMBINED ANNUAL RETURN, THE DEDUCTION SHALL BE APPLIED
TO THE SPECIFIC MEMBER OF THE UNITARY BUSINESS WHICH QUALIFIES
UNDER THIS PART. SUCH MEMBER SHALL REDUCE TAXABLE INCOME
FOLLOWING ALLOCATION AND THE APPORTIONMENT OF THE COMBINED
UNITARY INCOME OF THE UNITARY BUSINESS, AS DETERMINED ON A
WATER'S-EDGE BASIS, AND THE APPLICATION OF ANY NET LOSS OF THE
MEMBER.
(6) "QUALIFIED TAX LIABILITY." A TAXPAYER'S TAX LIABILITY
UNDER THIS ARTICLE. IN THE CASE OF A UNITARY BUSINESS, THE TERM
ONLY INCLUDES THE PORTION OF THE UNITARY BUSINESS'S OVERALL TAX
LIABILITY UNDER THIS ARTICLE ASSOCIATED WITH THE TAXABLE MEMBER
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QUALIFIED TO RECEIVE THE DEDUCTION UNDER THIS PART.
* * *
(8) "TAXPAYER." AN EMPLOYER SUBJECT TO THE TAX UNDER THIS
ARTICLE. FOR PURPOSES OF THIS DEFINITION, AN EMPLOYER SHALL
INCLUDE A MEMBER OF A UNITARY BUSINESS.
* * *
SECTION 407.7. MANUFACTURING INNOVATION AND REINVESTMENT
DEDUCTION.--* * *
(D) * * *
(3) (I) A TAXPAYER CANNOT USE THE DEDUCTION TO REDUCE THE
TAXPAYER'S TAX LIABILITY BY MORE THAN FIFTY PER CENT OF THE TAX
LIABILITY UNDER THIS ARTICLE FOR THE TAXABLE YEAR. FOR A UNITARY
BUSINESS, THE LIMITATION SHALL APPLY TO THE PORTION OF THE TAX
LIABILITY OF THE UNITARY BUSINESS UNDER THIS ARTICLE ASSOCIATED
WITH THE TAXABLE MEMBER WHICH QUALIFIES FOR THE DEDUCTION UNDER
THIS SECTION.
(II) THE DEDUCTION IS NONTRANSFERABLE AND ANY UNUSED PORTION
IN A TAX YEAR SHALL EXPIRE AT THE END OF THE CORRESPONDING TAX
YEAR.
SECTION 11. SECTION 408 OF THE ACT IS AMENDED BY ADDING A
SUBSECTION TO READ:
SECTION 408. ENFORCEMENT; RULES AND REGULATIONS;
INQUISITORIAL POWERS OF THE DEPARTMENT.--* * *
(E) AS USED IN THIS SECTION, THE TERM "CORPORATION" SHALL
INCLUDE A UNITARY BUSINESS.
SECTION 12. SECTIONS 409 AND 410(C) OF THE ACT ARE AMENDED
TO READ:
SECTION 409. RETENTION OF RECORDS.--EACH CORPORATION SHALL
MAINTAIN AND KEEP FOR A PERIOD OF THREE YEARS AFTER ANY REPORT
IS FILED UNDER THIS ARTICLE, SUCH RECORD OR RECORDS OF ITS
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BUSINESS WITHIN THIS COMMONWEALTH FOR THE PERIOD COVERED BY SUCH
REPORT AND OTHER PERTINENT PAPERS, AS MAY BE REQUIRED BY THE
DEPARTMENT. FOR PURPOSES OF THIS SECTION, THE TERM "CORPORATION"
SHALL INCLUDE A UNITARY BUSINESS.
SECTION 410. PENALTIES.--* * *
(C) ANY PERSON, WHO WILFULLY FAILS, NEGLECTS, OR REFUSES TO
MAKE A REPORT OR TO PAY THE TAX AS HEREIN PRESCRIBED, OR WHO
SHALL REFUSE TO PERMIT THE DEPARTMENT TO EXAMINE THE BOOKS,
PAPERS, AND RECORDS OF ANY CORPORATION LIABLE TO PAY TAX UNDER
THIS ARTICLE, SHALL BE GUILTY OF A MISDEMEANOR, AND, UPON
CONVICTION THEREOF, SHALL BE SENTENCED TO PAY A FINE NOT
EXCEEDING ONE THOUSAND DOLLARS ($1,000) AND COSTS OF
PROSECUTION, OR TO UNDERGO IMPRISONMENT NOT EXCEEDING SIX
MONTHS, OR BOTH. SUCH PENALTY SHALL BE IN ADDITION TO ANY OTHER
PENALTIES IMPOSED BY THIS ARTICLE. FOR PURPOSES OF THIS
SUBSECTION, THE TERM "CORPORATION" SHALL INCLUDE A UNITARY
BUSINESS.
SECTION 12.1. THE DEFINITION OF "TAX CREDIT" IN SECTION
1701-A.1 OF THE ACT IS AMENDED BY ADDING A PARAGRAPH TO READ:
SECTION 1701-A.1. DEFINITIONS.
THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS ARTICLE
SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
CONTEXT CLEARLY INDICATES OTHERWISE:
* * *
"TAX CREDIT." A TAX CREDIT AUTHORIZED UNDER ANY OF THE
FOLLOWING:
* * *
(14.2) ARTICLE XVIII-I.
* * *
SECTION 13. THE ACT IS AMENDED BY ADDING A SECTION TO READ:
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SECTION 1710-A.1. APPLICATION OF TAX CREDITS OR TAX BENEFITS TO
A UNITARY BUSINESS.
FOR PURPOSES OF DETERMINING THE AMOUNT OF TAX CREDIT OR TAX
BENEFIT WHICH IS APPLICABLE TO THE TAX DUE BY A UNITARY BUSINESS
UNDER ARTICLE IV, ANY TAX CREDIT OR TAX BENEFIT AWARDED TO OR
CONFERRED UPON A CORPORATION WHICH IS A MEMBER OF A UNITARY
BUSINESS SHALL BE CALCULATED AS IF THAT MEMBER IS A SEPARATE
COMPANY AND CAN ONLY BE APPLIED AGAINST THAT PORTION OF THE
UNITARY BUSINESS'S ANNUAL TAX LIABILITY ASSOCIATED WITH THAT
MEMBER WHICH RECEIVES THE TAX CREDIT OR TAX BENEFIT. FOR
PURPOSES OF THIS ARTICLE, THE TERM "UNITARY BUSINESS" SHALL HAVE
THE SAME MEANING AS IN SECTION 401(13) AND THE TERM "MEMBER"
SHALL HAVE THE SAME MEANING AS IN SECTION 401(17).
SECTION 13.1. THE ACT IS AMENDED BY ADDING AN ARTICLE TO
READ:
ARTICLE XVIII-I
WORKING PENNSYLVANIANS TAX CREDIT
SECTION 1801-I. SCOPE OF ARTICLE.
THIS ARTICLE RELATES TO THE WORKING PENNSYLVANIANS TAX
CREDIT.
SECTION 1802-I. DEFINITIONS.
THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS ARTICLE
SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
CONTEXT CLEARLY INDICATES OTHERWISE:
"DEPARTMENT." THE DEPARTMENT OF REVENUE OF THE COMMONWEALTH.
"FEDERAL EARNED INCOME TAX CREDIT." THE EARNED INCOME TAX
CREDIT PROVIDED UNDER 26 U.S.C. § 32 (RELATING TO EARNED
INCOME).
"QUALIFIED TAXPAYER." A TAXPAYER ELIGIBLE TO RECEIVE A TAX
CREDIT UNDER SECTION 1804-I.
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"TAX CREDIT." THE WORKING PENNSYLVANIANS TAX CREDIT PROVIDED
UNDER THIS ARTICLE.
"TAX LIABILITY." TAX LIABILITY UNDER ARTICLE III.
"TAXPAYER." AN INDIVIDUAL SUBJECT TO THE TAX UNDER ARTICLE
III.
SECTION 1803-I. WORKING PENNSYLVANIANS TAX CREDIT.
(A) APPLICATION OF TAX CREDIT.--A QUALIFIED TAXPAYER MAY
APPLY THE TAX CREDIT AGAINST THE QUALIFIED TAXPAYER'S TAX
LIABILITY.
(B) SPOUSES WHO FILE SEPARATELY.--IN THE CASE OF SPOUSES WHO
ARE BOTH ELIGIBLE TO RECEIVE THE TAX CREDIT AND WHO FILE A JOINT
FEDERAL TAX RETURN BUT WHO ELECT TO DETERMINE THEIR TAXES
SEPARATELY, THE TAX CREDIT MAY ONLY BE USED BY THE SPOUSE WITH
THE GREATER TAX OTHERWISE DUE, COMPUTED WITHOUT REGARD TO THE
TAX CREDIT.
(C) AMOUNT OF TAX CREDIT.--THE TAX CREDIT SHALL BE EQUAL TO
30% OF THE FEDERAL EARNED INCOME TAX CREDIT RECEIVED BY THE
TAXPAYER FOR THE SAME TAXABLE YEAR.
(D) CREDIT REFUNDABLE.--IF THE AMOUNT OF CREDIT WHICH THE
QUALIFIED TAXPAYER IS ELIGIBLE TO RECEIVE UNDER THIS SECTION
EXCEEDS THE QUALIFIED TAXPAYER'S TAX LIABILITY, THE DEPARTMENT
SHALL REFUND THE EXCESS AMOUNT TO THE QUALIFIED TAXPAYER.
SECTION 1804-I. ELIGIBILITY.
A TAXPAYER IS ELIGIBLE TO RECEIVE A TAX CREDIT IF THE
TAXPAYER CLAIMED THE FEDERAL EARNED INCOME TAX CREDIT DURING THE
SAME TAXABLE YEAR.
SECTION 1805-I. REGULATIONS.
(A) RULES AND REGULATIONS.--THE DEPARTMENT MAY PROMULGATE
RULES AND REGULATIONS TO ADMINISTER AND ENFORCE THIS ARTICLE.
(B) GUIDELINES.--THE DEPARTMENT MAY DEVELOP WRITTEN
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GUIDELINES FOR THE IMPLEMENTATION OF THIS ARTICLE. THE
GUIDELINES SHALL BE IN EFFECT UNTIL THE DEPARTMENT PROMULGATES
RULES AND REGULATIONS FOR THE IMPLEMENTATION OF THE PROVISIONS
OF THIS ARTICLE.
SECTION 1806-I. APPLICABILITY.
THIS ARTICLE SHALL APPLY TO TAXABLE YEARS BEGINNING AFTER
DECEMBER 31, 2024.
SECTION 14. SECTION 3003.2(B)(2) AND (4.3) AND (C)(1) OF THE
ACT ARE AMENDED AND SUBSECTION (A) IS AMENDED BY ADDING A
PARAGRAPH TO READ:
SECTION 3003.2. ESTIMATED TAX.--(A) THE FOLLOWING TAXPAYERS
ARE REQUIRED TO PAY ESTIMATED TAX:
* * *
(1.1) EVERY UNITARY BUSINESS SUBJECT TO THE CORPORATE NET
INCOME TAX IMPOSED BY ARTICLE IV, COMMENCING WITH THE CALENDAR
YEAR 2026 AND FISCAL YEARS BEGINNING DURING THE CALENDAR YEAR
2026 AND EACH TAXABLE YEAR THEREAFTER, SHALL MAKE PAYMENTS OF
ESTIMATED CORPORATE NET INCOME TAX.
* * *
(B) THE FOLLOWING WORDS, TERMS AND PHRASES WHEN USED IN THIS
SECTION AND SECTION 3003.3 SHALL HAVE THE FOLLOWING MEANINGS
ASCRIBED TO THEM:
* * *
(2) "ESTIMATED CORPORATE NET INCOME TAX." THE AMOUNT WHICH
THE CORPORATION OR THE UNITARY BUSINESS ESTIMATES AS THE AMOUNT
OF TAX IMPOSED BY SECTION 402 OF ARTICLE IV FOR THE TAXABLE
YEAR.
* * *
(4.3) "PERSON." ANY NATURAL PERSON, ASSOCIATION, FIDUCIARY,
PARTNERSHIP, CORPORATION, UNITARY BUSINESS OR OTHER ENTITY,
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INCLUDING THE COMMONWEALTH, ITS POLITICAL SUBDIVISIONS AND
INSTRUMENTALITIES AND PUBLIC AUTHORITIES. WHENEVER USED IN ANY
CLAUSE PRESCRIBING AND IMPOSING A PENALTY OR IMPOSING A FINE OR
IMPRISONMENT, OR BOTH, THE TERM "PERSON," AS APPLIED TO AN
ASSOCIATION, SHALL INCLUDE THE MEMBERS THEREOF [AND], AS APPLIED
TO A CORPORATION, THE OFFICERS THEREOF AND AS APPLIED TO A
UNITARY BUSINESS, THE OFFICERS OF THE DESIGNATED MEMBER.
* * *
(C) ESTIMATED TAX SHALL BE PAID AS FOLLOWS:
(1) PAYMENTS OF ESTIMATED CORPORATE NET INCOME TAX SHALL BE
MADE IN EQUAL INSTALLMENTS ON OR BEFORE THE FIFTEENTH DAY OF THE
THIRD, SIXTH, NINTH AND TWELFTH MONTHS OF THE TAXABLE YEAR. THE
REMAINING PORTION OF THE CORPORATE NET INCOME TAX DUE, IF ANY,
SHALL BE PAID UPON THE DATE THE CORPORATION'S ANNUAL REPORT OR
THE UNITARY BUSINESS'S COMBINED ANNUAL REPORT IS REQUIRED TO BE
FILED WITHOUT REFERENCE TO ANY EXTENSION OF TIME FOR FILING SUCH
REPORT.
* * *
SECTION 15. SECTION 3003.3(D) OF THE ACT IS AMENDED AND THE
SECTION IS AMENDED BY ADDING A SUBSECTION TO READ:
SECTION 3003.3. UNDERPAYMENT OF ESTIMATED TAX.--* * *
(D) NOTWITHSTANDING THE PROVISIONS OF [THE PRECEDING
SUBSECTIONS,] THIS SECTION, OTHER THAN AS SET FORTH IN
SUBSECTION (D.1), INTEREST WITH RESPECT TO ANY UNDERPAYMENT OF
ANY INSTALLMENT OF ESTIMATED TAX SHALL NOT BE IMPOSED IF THE
TOTAL AMOUNT OF ALL PAYMENTS OF ESTIMATED TAX MADE ON OR BEFORE
THE LAST DATE PRESCRIBED FOR THE PAYMENT OF SUCH INSTALLMENT
EQUALS OR EXCEEDS THE AMOUNT WHICH WOULD HAVE BEEN REQUIRED TO
BE PAID ON OR BEFORE SUCH DATE IF THE ESTIMATED TAX WERE AN
AMOUNT EQUAL TO THE TAX COMPUTED AT THE RATES APPLICABLE TO THE
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TAXABLE YEAR, INCLUDING ANY MINIMUM TAX IMPOSED, BUT OTHERWISE
ON THE BASIS OF THE FACTS SHOWN ON THE REPORT OF THE TAXPAYER
FOR, AND THE LAW APPLICABLE TO, THE SAFE HARBOR BASE YEAR,
ADJUSTED FOR ANY CHANGES TO SECTIONS 401, 601, 602 AND 1101
ENACTED FOR THE TAXABLE YEAR, IF A REPORT SHOWING A LIABILITY
FOR TAX WAS FILED BY THE TAXPAYER FOR THE SAFE HARBOR BASE YEAR.
IF THE TOTAL AMOUNT OF ALL PAYMENTS OF ESTIMATED TAX MADE ON OR
BEFORE THE LAST DATE PRESCRIBED FOR THE PAYMENT OF SUCH
INSTALLMENT DOES NOT EQUAL OR EXCEED THE AMOUNT REQUIRED TO BE
PAID PER THE PRECEDING SENTENCE, BUT SUCH AMOUNT IS PAID AFTER
THE DATE THE INSTALLMENT WAS REQUIRED TO BE PAID, THEN THE
PERIOD OF UNDERPAYMENT SHALL RUN FROM THE DATE THE INSTALLMENT
WAS REQUIRED TO BE PAID TO THE DATE THE AMOUNT REQUIRED TO BE
PAID PER THE PRECEDING SENTENCE IS PAID. PROVIDED, THAT IF THE
TOTAL TAX FOR THE SAFE HARBOR BASE YEAR EXCEEDS THE TAX SHOWN ON
SUCH REPORT BY TEN PER CENT OR MORE, THE TOTAL TAX ADJUSTED TO
REFLECT THE CURRENT TAX RATE SHALL BE USED FOR PURPOSES OF THIS
SUBSECTION. IN THE EVENT THAT THE TOTAL TAX FOR THE SAFE HARBOR
BASE YEAR EXCEEDS THE TAX SHOWN ON THE REPORT BY TEN PER CENT OR
MORE, INTEREST RESULTING FROM THE UTILIZATION OF SUCH TOTAL TAX
IN THE APPLICATION OF THE PROVISIONS OF THIS SUBSECTION SHALL
NOT BE IMPOSED IF, WITHIN FORTY-FIVE DAYS OF THE MAILING DATE OF
EACH ASSESSMENT, PAYMENTS ARE MADE SUCH THAT THE TOTAL AMOUNT OF
ALL PAYMENTS OF ESTIMATED TAX EQUALS OR EXCEEDS THE AMOUNT WHICH
WOULD HAVE BEEN REQUIRED TO BE PAID ON OR BEFORE SUCH DATE IF
THE ESTIMATED TAX WERE AN AMOUNT EQUAL TO THE TOTAL TAX ADJUSTED
TO REFLECT THE CURRENT TAX RATE. IN ANY CASE IN WHICH THE
TAXABLE YEAR FOR WHICH AN UNDERPAYMENT OF ESTIMATED TAX MAY
EXIST IS A SHORT TAXABLE YEAR, IN DETERMINING THE TAX SHOWN ON
THE REPORT OR THE TOTAL TAX FOR THE SAFE HARBOR BASE YEAR, THE
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TAX WILL BE REDUCED BY MULTIPLYING IT BY THE RATIO OF THE NUMBER
OF INSTALLMENT PAYMENTS MADE IN THE SHORT TAXABLE YEAR TO THE
NUMBER OF INSTALLMENT PAYMENTS REQUIRED TO BE MADE FOR THE FULL
TAXABLE YEAR.
(D.1) WITH RESPECT TO ANY UNDERPAYMENT OF AN INSTALLMENT OF
ESTIMATED CORPORATE NET INCOME TAX FOR ANY TAX YEAR THAT BEGINS
IN TAXABLE YEAR 2026 OR 2027 BY A CORPORATION REQUIRED TO FILE A
COMBINED ANNUAL REPORT PURSUANT TO SECTION 403(A.1)(1), INTEREST
SHALL NOT BE IMPOSED IF THE TOTAL AMOUNT OF ALL PAYMENTS OF
ESTIMATED CORPORATE NET INCOME TAX MADE ON OR BEFORE THE LAST
DATE PRESCRIBED FOR THE PAYMENT OF SUCH INSTALLMENT EQUALS OR
EXCEEDS THE AMOUNT WHICH WOULD HAVE BEEN REQUIRED TO BE PAID ON
OR BEFORE SUCH DATE IF THE ESTIMATED TAX WERE AN AMOUNT EQUAL TO
THE COMBINED TAX SHOWN ON THE REPORTS OF ALL THE MEMBERS OF THE
UNITARY BUSINESS FOR THE SAFE HARBOR BASE YEAR COMPUTED AT THE
RATE APPLICABLE TO THE TAXABLE YEAR.
SECTION 16. SECTION 3003.11 OF THE ACT IS AMENDED TO READ:
SECTION 3003.11. RESTATEMENT OF TAX LIABILITY UNDER
TREATIES.--IN THE ABSENCE OF AN EXPRESS EXEMPTION FROM STATE
INCOME TAXES, NO TREATY OF THE FEDERAL GOVERNMENT SHALL BE
CONSTRUED TO EXEMPT A CORPORATION OR A MEMBER OF A UNITARY
BUSINESS FROM THE TAXES IMPOSED UNDER ARTICLES IV AND VI. FOR
PURPOSES OF DETERMINING "TAXABLE INCOME" UNDER ARTICLE IV, ANY
CORPORATION OR MEMBER OF A UNITARY BUSINESS NOT SUBJECT TO
FEDERAL INCOME TAXATION OR FEDERAL REPORTING REQUIREMENTS
PURSUANT TO SUCH A TREATY SHALL BE REQUIRED TO FILE A REPORT OR
FILE AS PART OF A COMBINED ANNUAL REPORT WITH THE DEPARTMENT
SHOWING THE TAXABLE INCOME WHICH WOULD HAVE BEEN REPORTED TO AND
ASCERTAINED BY THE FEDERAL GOVERNMENT HAD IT NOT BEEN EXEMPTED
BY THE TREATY.
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SECTION 17. THIS ACT SHALL APPLY AS FOLLOWS:
(1) THE AMENDMENT OR ADDITION OF SECTION 314(A) AND (C)
SHALL APPLY TO TAXABLE YEARS BEGINNING AFTER DECEMBER 31,
2021.
(2) THE FOLLOWING PROVISIONS OF THE ACT SHALL APPLY TO
TAX YEARS BEGINNING ON AND AFTER JANUARY 1, 2026:
THE AMENDMENT OF SECTION 301.
THE ADDITION OF SECTION 357.1.
THE AMENDMENT OR ADDITION OF SECTION 401(3)1(A) AND
(B), (P.1) AND (T)(5), 2(A)(1)(E.1), 2(A)(9)(A)(VI) AND
2(A)(17)(E) AND 4(H) AND (I), (5), (12), (13), (14),
(15), (16), (17), (18) AND (19).
THE ADDITION OF SECTION 401.1(F).
THE AMENDMENT OR ADDITION OF SECTIONS 402(A)
INTRODUCTORY PARAGRAPH AND (5)(III), (B) AND (D) AND
403(A.1), (A.2), (B.1), (C), (D), (E.1) AND (F).
THE AMENDMENT OF SECTIONS 403.1 AND 403.2(B) AND (E).
THE REPEAL OF SECTION 404.
THE AMENDMENT OF SECTION 405.
THE AMENDMENT OR ADDITION OF SECTION 406(E) AND (F).
THE AMENDMENT OF SECTIONS 407.3(F), 407.6(A)(5), (6)
AND (8) AND 407.7(D)(3).
THE ADDITION OF SECTION 408(E).
THE AMENDMENT OF SECTIONS 409 AND 410(C).
THE ADDITION OF SECTION 1710-A.1.
THE AMENDMENT OR ADDITION OF SECTION 3003.2(A)(1.1),
(B)(2) AND (4.3) AND (C)(1).
THE AMENDMENT OR ADDITION OF SECTION 3003.3(D) AND
(D.1).
THE AMENDMENT OF SECTION 3003.11.
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SECTION 18. THIS ACT SHALL TAKE EFFECT AS FOLLOWS:
(1) THE FOLLOWING SHALL TAKE EFFECT IMMEDIATELY:
THIS SECTION.
THE AMENDMENT OR ADDITION OF SECTION 314(A) AND (C).
THE AMENDMENT OF THE DEFINITION OF "TAX CREDIT" IN
SECTION 1701-A.1.
THE ADDITION OF ARTICLE XVIII-I.
(2) THE REMAINDER OF THIS ACT SHALL TAKE EFFECT JANUARY
1, 2026, OR IMMEDIATELY, WHICHEVER IS LATER.
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