61 Pa. Code § 47.16
Affiliated interest-The relationship between two corporations, associations, partnerships, proprietorships or other businesses, in which one corporation, association, partnership, proprietorship, individual or other business owns more than 50% of the stock or assets, including inventory, machinery and equipment of the remaining corporation, association, partnership, proprietorship or other business. Also, the common ownership of more than 50% of the stock or assets of each of two or more business entities results in an affiliated interest between the two commonly owned entities.
Example 1. "A" company owns 60% of the stock of "B" corporation. "A" has an affiliated interest in "B". Example 2. "C," an individual, owns 75% of the stock of "D" corporation and 55% of the stock of "E" corporation. "D" corporation has an affiliated interest in "E" corporation.
Fair rental charge-The amount which would be charged for the rental of the property in the open market for a similar period of time and at a similar place.
Example. "A" company has an affiliated interest in "B" company. "A" company leases a motor vehicle ($10,000 acquisition cost) to "B" company for which an annual charge of $1 is made. The Department determines that the $1 charge is not indicative of the fair rental charge of the vehicle. The Department may use as the monthly tax base 4% of $10,000 or $400 as the constructive purchase price of the monthly rental charge for each month during which the vehicle was rented. The monthly tax due on the transaction is $24. For rental or lease periods for a duration of less than 1 month, appropriate allocation of this rule may be followed.
61 Pa. Code § 47.16