PROPOSED RULEMAKING
DEPARTMENT
OF REVENUE
[ 61 PA. CODE CHS. 73 AND 74 ]
Malt Beverage Tax
[38 Pa.B. 4624]
[Saturday, August 23, 2008]The Department of Revenue (Department), under Article XX of the Tax Reform Code of 1971 (TRC) (72 P. S. §§ 9001--9016), proposes to amend 61 Pa. Code Chapters 73 and 74 (relating to emergency and limited malt beverage tax credit and malt beverage tax; and malt beverage tax) to read as set forth in Annex A.
Purpose of Proposed Rulemaking
The proposed rulemaking codifies legislative changes relating to the Malt Beverage Tax that were set forth in the act of December 23, 2003 (P. L. 250, No. 46) (72 P. S. § 9010) (regarding to limited tax credits). The title of Chapter 73 is being amended to remove the words ''Emergency and.'' In addition, the Department has added clarifying language and removed obsolete language throughout Chapters 73 and 74.
Explanation of Regulatory Requirements
Several definitions in § 73.52 (relating to definitions) are amended to reflect legislative changes in Act 46-2003. The definition for ''Bureau'' is obsolete and has been removed from the regulation. The definition for ''report'' is renamed to ''application,'' and this change is reflected in revisions throughout the rulemaking. The detailed instructions that previously appeared in the definition of ''report'' have been moved to § 73.54 (relating to report applying for tax credit).The term ''emergency period'' is replaced with ''effective period'' to mirror the language in the act. Additionally, increased dollar amounts and revised dates are changed in the definitions of ''amounts paid,'' ''emergency period (renamed ''effective period'')'' and ''qualifying capital expenditures.''
Sections 73.51 and 74.1 (relating to purpose) have been revised to update citations.
Section 73.53 (relating to tax credit to be allowed and limitations) is amended to reflect an increase from $100,000 to $200,000 for tax credits allowed, not to exceed in total amount the amount of qualifying capital expenditures. In paragraphs (1) and (2), the terms ''actually'' and ''actual'' have been deleted from the phrases ''amounts actually paid'' and ''actual amounts paid'' respectively to mirror the term used in the definition ''amount paid'' in § 73.52. Additionally, clarifying language is added in paragraph (4).
Section 73.54 has been renamed to ''Application for tax credit.'' The text immediately appearing under the section name has been updated for clarity, and the last sentence has been moved to paragraph (3). In paragraphs (1) and (3) obsolete language has been replaced. Paragraph (4) updates the period for maintaining auditable record schedules and supporting data regarding tax credit claims to ''January 31, 2011'' and deletes ''January 31, 1980.'' Paragraph (5) updates the period for keeping and retaining account records to not less than 3 years after ''December 31, 2008'' and deletes ''December 31, 1977.''
Section 73.55 (relating to grant of credit, conditions and limitations) deletes ''December 31, 1977'' and revises to ''December 31, 2008'' as the ending date when no credit will be allowed against any tax due to any taxable period. Paragraph (2) is amended with clarification language of 3 years, but not beyond December 31, 2008, for tax credits not utilized by the taxpayer.
Sections 74.31--74.41 (relating to malt beverage tax refunds) has been renamed ''Malt Beverage Tax Credits.'' The term ''refunds'' has been changed to ''credits'' in the section headings and text throughout this entire subchapter to mirror the use of the term ''credit'' as authorized in the statute at section 2009 of the act (72 P. S. § 9009(f)) regarding refund of tax.
Section 74.35 (relating to refunds on malt beverage rendered unsalable by reason of damage or destruction) is amended to include a new reason of ''recalled due to defect.''
Section 74.37 (relating to credits) deletes obsolete language, ''attention Bureau of Examination.''
Section 74.41 (relating to time limit on credits) is amended to increase from 2 to 3 years the time limit on credits from the date of sale.
Affected Parties
Manufacturers, retailers and purchasers of malt or brewed beverages may be affected by the regulation.
Fiscal Impact
The Department has determined that the proposed amendment will have minimal fiscal impact on the Commonwealth.
Paperwork
The proposed amendment will not create additional paperwork for the public or the Commonwealth.
Effectiveness/Sunset Date
The regulation will become effective upon final publication in the Pennsylvania Bulletin. The regulation is scheduled for review within 5 years of final publication. No sunset date has been assigned.
Contact Person
Interested persons are invited to submit in writing any comments, suggestions or objections regarding the proposed amendments to Mary R. Sprunk, Office of Chief Counsel, Department of Revenue, P. O. Box 281061, Harrisburg, Pennsylvania 17128-1061, within 30 days after the date of the publication of this notice in the Pennsylvania Bulletin.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on August 13, 2008, the Department submitted a copy of this proposed amendment to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House Committee on Finance and the Senate Committee on Finance (Committees). In addition to submitting the amendment, the Department has provided IRRC and the Committees with a copy of a detailed Regulatory Analysis Form prepared by the Department in compliance with Executive Order 1996-1, ''Regulatory Review and Promulgation.'' A copy of this material is available to the public upon request.
The Committees may, at any time prior to the submittal of the final-form regulation, convey to the agency and the Commission, their comments, recommendations and objections to the proposed regulation. IRRC may, within 30 days of the close of the public comment period, submit to the agency and Committees any comments, recommendations and objections to the proposed regulation. The notification shall specify the regulatory review criteria which have not been met by that portion. The Regulatory Review Act specifies detailed procedures for review of objections raised, prior to final publication of the amendments, by the Department, the General Assembly and the Governor.
THOMAS W. WOLF
SecretaryFiscal Note: 15-444. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 61. REVENUE
PART I. DEPARTMENT OF REVENUE
Subpart B. GENERAL FUND REVENUES
ARTICLE III. CIGARETTE AND BEVERAGE TAXES
CHAPTER 73. [EMERGENCY AND] LIMITED MALT BEVERAGE TAX CREDIT § 73.51. Purpose.
The Secretary of Revenue, under the authority [contained in section 10.1(d) and other provisions of the act (47 P. S. § 112.1(d))] of the act and by reason of the act provides, among other things, that the General Assembly of the Commonwealth, conscious of the financial emergency facing the brewing industry of this Commonwealth and the attendant risk of business failure and loss of employment opportunity, declares it public policy that the renewal and improvement of the capital facilities of the brewing industry be encouraged and assisted by a limited tax subsidy to be granted during the period of the emergency and further making provisions for a limited subsidy by tax credits to be allowed under certain terms, conditions and limitations, adopts this [section and §§ 73.52--73.57] chapter to assist in these and other purposes and to aid and guide in the administration, operation and enforcement of the act.
§ 73.52. Definitions.
The following words and terms, when used in this [subchapter] chapter, have the following meanings, unless the context clearly indicates otherwise:
Act--[The act of May 9, 1974 (P. L. 279, No. 82) (47 P. S. § 112.1), an amendment to the Malt Beverage Tax Law (47 P. S. §§ 103--120.3)] The Malt Beverage Tax Law (72 P. S. §§ 9001--9016).
Amounts paid--Amounts actually paid, or at the taxpayer's election, amounts promised to be paid under firm purchase contracts actually executed within any calendar year falling within the [emergency] effective period provided, [however, that] there shall be no duplication of amounts paid under this definition. [Provided, further, that] In addition, [no amount or] amounts shall constitute amounts paid until full proof thereof, as provided in the act and as provided in this chapter, shall have been submitted and filed under oath or other verification[, as hereinafter required,] and the Secretary has approved and certified the amounts [and then only] to the extent of the amounts [so] approved and certified by the Secretary do not [to] exceed [$100,000] $200,000 within a single calendar year.
Application--The report for claiming a tax credit.
[Bureau--The Pennsylvania Bureau of Cigarette and Beverage Taxes.
Commonwealth--The Commonwealth of Pennsylvania.
Department--The Department of Revenue of the Commonwealth of Pennsylvania.
Emergency] Effective period--The period from January 1, 1974, to [December 31, 1976] December 31, 2008, inclusive.
Qualifying capital expenditures--Amounts paid by a taxpayer during the [emergency] effective period for the purchase of items of plant, machinery or equipment intended for use by the taxpayer within this Commonwealth in the manufacture and sale of malt or brewed beverages. [However, the] The total amount of qualifying capital expenditures made by the taxpayer within a single calendar year included within the [emergency] effective period may not exceed [$100,000] $200,000. [Provided further that the] The plant, machinery and equipment shall be directly related to the utilization of the manufacture and sale of malt or brewed beverages [. Provided, further, that] and the total amount of qualifying capital expenditures made within a single calendar year within the [emergency] effective period [shall] must include all amounts paid as defined in this chapter and the act, and [shall] may not exceed [$100,000] $200,000 in any single calendar year.
* * * * * [Report--The application for claiming a tax credit as provided for in section 10.1(d) of the act (47 P. S. § 112.1(d)) and all attachments thereto. The report shall be in writing, shall contain in addition to other information the Secretary shall require, a statement of the nature, amounts and dates of the qualifying capital expenditures made, including a full description of the same, with specifications, together with copies of all contracts, bills, receipts and related papers pertaining to the qualifying capital expenditures for which a tax credit is, or may be sought. The report shall be made under oath or verified so as to subject the maker of the same to the penalties of perjury for any false statement, including attachments, in the report.
Secretary--The Secretary of Revenue of the Commonwealth of Pennsylvania when not otherwise qualified.]
* * * * * § 73.53. Tax credit to be allowed and limitations.
A tax credit [or credits shall] will be allowed to a taxpayer, as provided in this section, not to exceed [in] the total amount [the amount] of qualifying capital expenditures made by the taxpayer and certified by the Secretary.
(1) The amount of qualifying capital expenditures made by the taxpayer in [any] a single calendar year shall be the total of the amounts [actually] paid, and at the taxpayer's election, amounts promised to be paid under firm purchase contracts executed during the calendar year, and certified by the Secretary, but not exceeding a total of [$100,000] $200,000.
(2) [No] A taxpayer, notwithstanding the number of plants, sales quarters or other facilities of the taxpayer within this Commonwealth for the manufacture and sale of malt or brewed beverages, and [further] notwithstanding the [actual] amounts paid as defined in § 73.52 (relating to definitions) [shall] will be certified by the Secretary to receive or [shall] will receive a tax credit [or credits] in [any] a single calendar year in excess of [$100,000] $200,000.
* * * * * (4) Tax credit used in any calendar year may not exceed tax [paid] owed to the Department in that calendar year.
§ 73.54. [Report applying] Application for tax credit.
A taxpayer [desiring to claim] seeking a tax credit [or credits] under [this] the act shall [from time to time, in accordance with regulations promulgated by the Secretary, report to the Secretary the nature, amounts and dates of qualifying capital expenditure made by him and other information the Secretary shall require] file an application with the Secretary. [If satisfied as to the correctness of the report, the Secretary shall issue to the taxpayer a certificate establishing the amount of qualifying capital expenditures made by the taxpayer and included within the report.]
(1) [Effective September 30, 1974, a taxpayer may no less than 4 weeks prior to making a commitment of expenditures regarding a qualifying capital expenditure notify the Secretary in writing by personal delivery or certified mail, of the renewal or improvement intended to be made and fully describe the same. The Secretary may, at his discretion, cause an examination to be made of the taxpayer's capital facilities to ascertain what renewal and improvement, or either, of the capital facilities is intended. No report provided for in this subchapter or the act may be made or submitted by a taxpayer, nor may a tax credit for any renewal and improvement of the capital facilities be allowed, nor may a certificate establishing an amount of qualifying capital expenditures be made or tax credit allowed, whichever shall in the Secretary's discretion be applicable, unless the foregoing written notification has been submitted by the taxpayer.] The application must be in writing on a form provided by the Department and include a statement of the nature, amounts and dates of the qualifying capital expenditures made, including a full description of the same, with specifications, together with copies of all contracts, bills, receipts and related papers pertaining to the qualifying capital expenditures for which a tax credit is, or may be sought, and other information required by the Secretary. The application must be made under oath or verified so as to subject the applicant to the penalties of perjury for false statement, including attachments, in the application.
* * * * * (3) [Every report provided for in this section or in the act shall include and have attached thereto a full description of the items of plant, machinery or equipment, which is the subject matter of the report and which is concerned in any claim for a tax credit, including in detail the nature, amounts and dates of the qualifying capital expenditures made by the taxpayer, together with a written and signed statement, by the taxpayer or an officer thereof, under oath or verified so as to subject the maker of the same to the penalties of perjury for any false statement, including attachments, in the report, that the statements, items and amounts in the report and the attachments thereto are fully true, exact, correct and authentic, and submit exact copies of all documents, and the like, in support thereof including, but not restricted to, contracts, bills, receipts and other related papers pertaining to the qualifying capital expenditures.] If satisfied as to the correctness of the application, the Secretary will issue to the taxpayer a certificate establishing the amount of qualifying capital expenditures made by the taxpayer and included within the application.
(4) It [shall be the duty of the taxpayer] is the taxpayer's duty to maintain auditable records schedules and relevant supporting data regarding tax credit claims until [January 31, 1980] January 31, 2011. [In addition, a] A schedule of payments and commitments shall be accurately maintained and be explicitly identifiable as to the amounts paid as well as the qualifying capital expenditure.
(5) Every taxpayer shall keep and retain full and complete books of account records and appropriate subsidiary accounts and data as to every qualifying capital expenditure, [reports] applications with attachments and every tax credit allowed and every certificate issued under the act as to qualifying capital expenditures by the Secretary for a period of not less than 3 years after [December 31, 1977] December 31, 2008, or later date as the Secretary may in writing notify the taxpayer on or prior to [December 31, 1977] December 31, 2008. All records shall be subject to examination by the Department. Every taxpayer shall give to the Department, or its [duly] authorized representative, reasonable means, facilities and opportunity for these examinations and audits.
* * * * * § 73.55. Grant of credit, conditions and limitations.
Upon receipt from a taxpayer of a certificate from the Secretary [issued under section 10.1(c) of the act (47 P. S. § 112.1(c)], the Secretary [shall] will grant a tax credit in the amount certified against any tax then due or thereafter becoming due from the taxpayer under the act. [No credit] Credit will not be allowed against any tax due for any taxable period ending after [December 31, 1977] December 31, 2008.
* * * * * (2) Tax credits not utilized by a taxpayer because the taxpayer's tax payments were exceeded by the tax credit allowable in [any] a calendar year are available for utilization by the taxpayer [in subsequent calendar years] for 3 years[, but not beyond December 31, 1977] December 31, 2008.
CHAPTER 74. MALT BEVERAGE TAX § 74.1. Purpose.
It is the purpose of the [Malt Beverage Tax Law (47 P. S. §§ 103--120.3)] act to provide revenue by imposing a State tax upon the sale of malt beverages by the manufacturer and importing agents for foreign manufacturers, the obligation to collect [said] the taxes for the Commonwealth and transmit [same] the taxes monthly to the Commonwealth.
§ 74.2. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
Act--The Malt Beverage Tax Law [(47 P. S. §§ 103--120.3)] (72 P. S. §§ 9001--9016).
* * * * *
MALT BEVERAGE TAX [REFUNDS] CREDITS § 74.31 [Refunds] Credits for manufacturers on out-of-State sales.
[In the event any] If malt or brewed beverages upon which the tax has been paid by a manufacturer have been sold or shipped by [him] the manufacturer to a licensed or regular dealer in [such] malt or brewed beverages in another state, [such] the manufacturer shall be entitled to a [refund] credit of the actual amount of tax paid by [him] the manufacturer, [upon condition that] the seller [shall make] makes an affidavit that the malt or brewed beverages were so sold and shipped, and that [he] the manufacturer shall furnish from the purchaser an affidavit, or in cases [where] when the total purchase price is $5 or less, a written certificate in lieu of an affidavit from the purchaser, or, upon satisfactory proof that [such] the affidavit or certificate cannot be obtained, other evidence satisfactory to the Department that [he] the manufacturer has received [such] the malt or brewed beverages for sale or consumption outside this Commonwealth, together with the name and address of the purchaser.
§ 74.32. [Refunds] Credits for Pennsylvania manufacturers on sales to exempt parties.
[In the event any] If malt or brewed beverages upon which the tax has been paid by a manufacturer have been sold to commissaries, ship's stores or voluntary unincorporated organizations of the armed forces personnel operating under regulations promulgated by the Secretary of Defense, the manufacturer shall be entitled to a [refund] credit of the actual amount of tax paid by him, upon condition that he shall make affidavit and furnish proof that the malt or brewed beverages were so sold.
§ 74.33. [Refunds] Credits for out-of-State manufacturers on sales to tax exempt parties.
[In the event any] If malt or brewed beverages upon which the tax has been paid by an out-of-State manufacturer and subsequently sold by an importing distributor to commissaries, ship's stores or voluntary unincorporated organizations of the armed forces personnel operating under regulations promulgated by the Secretary of Defense, the manufacturer shall be entitled to a [refund] credit of the actual amount of tax paid by [him upon condition that he shall make] the manufacturer if he makes an affidavit and [furnish] furnishes proof that the malt or brewed beverages were so sold.
§ 74.34. [Refunds] Credits for manufacturers on sales to public service licensee.
[In the event any] If malt or brewed beverages upon which the tax has been paid by a manufacturer have been sold and delivered to a public service licensee who is obligated to pay the tax thereon, the manufacturer shall be entitled to a [refund] credit of the actual amount of tax paid by him, upon condition that he [shall make] makes an affidavit and furnish proof satisfactory to the Department of the facts.
§ 74.35. [Refunds] Credits on malt beverage rendered unsalable by reason of damage or destruction.
[In the event any] If malt or brewed beverages, upon which the tax has been paid by a manufacturer [shall be] the manufacturer rendered unsalable by reason of damage or destruction or recalled due to defect, [such] the manufacturer shall be entitled to a [refund] credit of the actual amount of tax paid [by him, upon condition that he shall make] he makes an affidavit and [furnish proof satisfactory] furnishes to the Department that the malt beverages were so damaged or destroyed.
§ 74.36. [Refunds] Credits on leakers, stale beer and beer which has become unsalable or over-aged.
The Department will not permit [refunds] credits on leakers, stale beer and beer which has become unsalable or over-aged.
§ 74.37. Credits.
[No credits] Credits will not be granted without the approval of the Department [of Revenue, attention Bureau of Examination].
§ 74.40. Off-premises storage.
Malt beverages returned to an off-premises location [shall] will not be entitled to a tax [refund] credit.
§ 74.41. Time limit on [refunds] credits.
[No] An application for [refund shall] credit will not be recognized or processed unless filed within [two] 3 years from date of sale.
[Pa.B. Doc. No. 08-1524. Filed for public inspection August 22, 2008, 9:00 a.m.]
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