An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in corporate net income tax, further providing for definitions, for imposition of tax, for reports and payment of tax and for consolidated reports; and, in general provisions, further providing for underpayment of estimated tax.
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Senate
- Passed House
- To Governor
- Became Law
Overview
This bill amends the Pennsylvania Corporate Net Income Tax Act, primarily by requiring ‘combined reporting’ for multi-state corporations. This means these companies must file a single report detailing their combined income, rather than separate reports for each state. The bill also adjusts corporate tax rates, introduces changes to how ‘taxable income’ is calculated, particularly regarding deductions and apportionment of income, and modifies rules regarding underpayment of estimated taxes, offering a safe harbor for certain underpayments related to combined reporting requirements. It also updates definitions and clarifies reporting requirements for unitary businesses.
Key provisions
- Requires multi-state corporations to file combined annual reports, consolidating their income and tax liabilities.
- Adjusts corporate tax rates, with a gradual reduction over time.
- Modifies the calculation of ‘taxable income’ for corporations operating primarily in Pennsylvania, incorporating federal deductions and a ‘water’s-edge’ basis for unitary businesses.
- Introduces a credit for corporations that have paid taxes in both Pennsylvania and another jurisdiction on a transaction with an affiliated entity.
- Updates the rules for underpayment of estimated tax, providing a safe harbor for certain underpayments related to combined reporting.
- Clarifies the definition of a ‘unitary business’ and its reporting requirements.
- Defines ‘tax haven’ jurisdictions for tax purposes.
- Addresses the apportionment of income for unitary businesses.
Bill text
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Document of record
- Version
- Pn 1492 Html
- Published
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Sponsors
Official sponsors from legislative records.
9 on record
Primary sponsor
Cosponsors
Christine Tartaglione
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