SB 742 — An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in bank and trust company shares tax, further providing for ascertainment of taxable amount and exclusion of United States obligations; and providing for ascertainment of taxable amount and construction.

PRIOR PRINTER'S NO.

795 THEPRINTER'S GENERALNO. ASSEMBLY OF PENNSYLVANIA SENATE BILL Session of No.

7421671 2023THE INTRODUCEDGENERAL BYASSEMBLY HUTCHINSON,OF AUMENT,PENNSYLVANIA STEFANO,SENATE BAKER,BILL COLEMAN,Session ROBINSON, COSTA AND BARTOLOTTA, JUNE 1, 2023 REFERRED TO FINANCE, JUNE 1, 2023 AN ACT Amending the act of MarchNo. 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;

providing742 procedures2023 forINTRODUCED BY HUTCHINSON, AUMENT, STEFANO, BAKER, COLEMAN, ROBINSON, COSTA, BARTOLOTTA AND DUSH, JUNE 1, 2023 SENATOR MARTIN, APPROPRIATIONS, RE-REPORTED AS AMENDED, JUNE 3, 2024 AN ACT Amending the payment,act forof March 4, 1971 (P.L.6, No.2), entitled "An act relating to tax creditsreform inand State taxation by codifying and enumerating certain cases;subjects of taxation and imposing collection, administration and enforcement thereof;

conferringproviding powersfor andvidingtax imposingcredits dutiesin upon the Department of Revenue, certain employers,cases; fiduciaries, individuals, persons, corporations and other entities;

prescribingconferring crimes,powers offenses and penalties,"imposing induties bankupon andthe trustDepartment companyof sharesRevenue, tax,certain furtheremployers, providingfiduciaries, forindividuals, ascertainmentpersons, ofcorporations taxable amount and exclusionother ofentities; United States obligations.

prescribing crimes, offenses and penalties," in bank and trust company shares tax, further providing for ascertainment of taxable amount and exclusion of United States obligations;

AND PROVIDING FOR ASCERTAINMENT <-- OF TAXABLE AMOUNT AND CONSTRUCTION.

For purposes of this section, a combination shall include any acquisition required to be 20230SB0742PN1671 - 2 - accounted for by using the purchase method in accordance with 20230SB0742PN0795 - 2 - generally accepted accounting principles or a statutory merger or consolidation.] Section 2.

The General Assembly finds and declares that the <-- amendment of section 701.1(b), (b.1) and (c) of the act is intended to clarify the treatment of goodwill by section 701.1 as amended by section 5 of the act of July 25, 2007 (P.L.373, No.55), section 22 of the act of July 9, 2013 (P.L.270, No.52), and section 15.5 of the act of July 13, 2016 (P.L.526, No.84).

SectionSECTION 3.2.

THE AMENDMENT OF SECTION 701.1(B), (B.1) AND (C) <-- OF THE ACT SHALL APPLY TO THE ASCERTAINMENT OF THE TAXABLE AMOUNT OF SHARES AFTER DECEMBER 31, 2024, AND TO THE REPORT AND THE PAYMENT OF THE BANK AND TRUST COMPANY SHARES TAX DUE AFTER MARCH 14, 2025.

SECTION 3.

THE GENERAL ASSEMBLY FINDS AND DECLARES AS FOLLOWS:

(1) THE AMENDMENT OF SECTION 701.1(B), (B.1) AND (C) OF THE ACT SHALL NOT BE RELIED UPON TO:

(I) ASCERTAIN THE TAXABLE AMOUNT OF SHARES FOR A PERIOD PRIOR TO JANUARY 1, 2025;

(II) ASCERTAIN THE AMOUNT OF TAX DUE PRIOR TO MARCH 15, 2025;

OR (III) AUTHORIZE A REFUND OF A TAX PAID FOR A PERIOD FOR WHICH A REPORT WAS DUE PRIOR TO MARCH 15, 2025, BEYOND THE EXTENT TO WHICH THE REFUND WOULD HAVE OTHERWISE BEEN DUE NOTWITHSTANDING THE AMENDMENT OF SECTION 701.1(B), (B.1) AND (C) OF THE ACT.

(2) IN ASCERTAINING THE TAXABLE AMOUNT OF SHARES FOR A PERIOD PRIOR TO JANUARY 1, 2025, THE AMOUNT OF GOODWILL SUBTRACTED AND DISREGARDED IN CALCULATING THE DEDUCTION FOR 20230SB0742PN1671 - 3 - UNITED STATES OBLIGATIONS UNDER SECTION 701.1(B) OF THE ACT, AND THE AMOUNT OF GOODWILL DEDUCTED FROM THE TAXABLE AMOUNT OF SHARES UNDER SECTION 701.1(B.1) OF THE ACT, SHALL BE DETERMINED BASED ON THE LAW AS IN EFFECT PRIOR TO THE EFFECTIVE DATE OF THIS SECTION, WITHOUT ANY INFERENCE THAT THE AMENDMENT OF SECTION 701.1(B), (B.1) AND (C) OF THE ACT EXPANDED, OR CONFIRMED ANY ADMINISTRATIVE DETERMINATION THAT LIMITED OR RESTRICTED, THE EXTENT TO WHICH GOODWILL COULD BE SUBTRACTED AND DISREGARDED UNDER SECTION 701.1(B) OF THE ACT OR DEDUCTED UNDER SECTION 701.1(B.1) OF THE ACT.

Section 3 4.

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