Section 7701.1 - Ascertainment of taxable amount; exclusion of United States obligations(a)(1) The taxable amount of shares shall be ascertained and fixed by the book value of total bank equity capital as determined by the Reports of Condition at the end of the preceding calendar year in accordance with the requirements of the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation or other applicable regulatory authority.(2) If an institution does not file the Reports of Condition, book values shall be determined by generally accepted accounting principles as of the end of the preceding calendar year.(3) For institutions which file Reports of Condition on a consolidated basis with subsidiaries formed pursuant to 12 U.S. Code § 611 (relating to formation authorized; fiscal agents; depositaries in insular possessions), total bank equity capital shall exclude the book value of total equity capital of the subsidiaries in accordance with the following schedule:(i) For the calendar year beginning January 1, 2018, the exclusion for the book value of total equity capital of the subsidiaries shall be limited to twenty per cent of the book value of total equity capital of the subsidiaries.(ii) For the calendar year beginning January 1, 2019, the exclusion for the book value of total equity capital of the subsidiaries shall be limited to forty per cent of the book value of total equity capital of the subsidiaries.(iii) For the calendar year beginning January 1, 2020, the exclusion for the book value of total equity capital of the subsidiaries shall be limited to sixty per cent of the book value of total equity capital of the subsidiaries.(iv) For the calendar year beginning January 1, 2021, the exclusion for the book value of total equity capital of the subsidiaries shall be limited to eighty per cent of the book value of total equity capital of the subsidiaries.(v) For the calendar year beginning January 1, 2022, and each calendar year thereafter, the exclusion for the book value of total equity capital of the subsidiaries shall be one hundred per cent of the book value of total equity capital of the subsidiaries.(b) A deduction for the value of United States obligations shall be provided from the taxable amount of shares in an amount equal to the same percentage of total bank equity capital as the book value of obligations of the United States bears to the book value of the total assets. In computing the deduction for United States obligations, any goodwill recorded as a result of the use of purchase accounting for an acquisition or combination as described in this section and occurring after June 30, 2001, shall be subtracted from the book value of total bank equity capital and disregarded in determining the deduction provided for obligations of the United States. For purposes of this article, United States obligations shall be obligations coming within the scope of 31 U.S.C. § 3124 (relating to exemption from taxation). (b.1) A deduction for goodwill shall be provided from the taxable amount of shares in an amount equal to the value of any goodwill recorded as a result of the use of purchase accounting for an acquisition or combination as described in this section and occurring after June 30, 2001.(c) For purposes of this section:(1) a mere change in identity, form or place of organization of one institution, however effected, shall be treated as if a single institution had been in existence prior to as well as after such change; and(2) if there is a combination of two or more institutions into one, the book values and deductions for United States obligations from the Reports of Condition of the constituent institutions shall be combined. For purposes of this section, a combination shall include any acquisition required to be accounted for by using the purchase method in accordance with generally accepted accounting principles or a statutory merger or consolidation.Amended by P.L. TBD 2016 No. 84, § 15.5, eff. 7/13/2016.Amended by P.L. 270 2013 No. 52, § 22, eff. 7/9/2013.1971, March 4, P.L. 6, No. 2, art. VII, § 701.1, added 1982, Dec. 17, P.L. 1385, No. 317, § 2, imd. effective. Amended 1983, Dec. 1, P.L. 228, No. 66, § 2, effective Jan. 1, 1984; 1989, July 1, P.L. 95, No. 21, § 1, imd. effective; 1994, June 16, P.L. 279, No. 48, § 16, effective July 1, 1994; 2007, July 25, P.L. 373, No. 55, § 5, imd. effective.