Pennsylvania Statutes Title 10 P.S. Charities and Welfare § 373. Definitions

The following words and phrases when used in this act shall have the meanings given to them in this section unless the context clearly indicates otherwise:

“Affiliate.” A domestic or foreign corporation, association, trust or other organization which owns a 10% or greater interest in an institution of purely public charity. A domestic or foreign corporation, association, trust or other organization in which an institution of purely public charity owns a 10% or greater interest.

“Annual return.” The annual information return required to be filed with the Internal Revenue Service by institutions exempt from tax under section 501(a) of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §501(a)). The annual information return consists of Internal Revenue Service Form 990 or Form 990EZ and Schedule A or any succeeding form used for the same or similar purpose. For an institution which is not required to file such returns, the institution's annual financial statement with reported income shall constitute its annual return.

“Bureau.” The Bureau of Charitable Organizations of the Department of State of the Commonwealth.

“Commercial business.” The sale of products or services that are principally the same as those offered by an existing small business in the same community.

“Contribution.” The promise, grant, pledge or gift of money, property, goods, services, financial assistance or other similar remittance.

“Goods or services.” Goods or services which promote any of the enumerated purposes under section 5(b)  1 and which are valued in accordance with generally accepted accounting principles applicable to the institution.

“Government agency.” Any Commonwealth agency or any political subdivision or municipal or other local authority or any officer or agency of any political subdivision or local authority.

“Institution.” A domestic or foreign nonprofit corporation, association or trust or other similar entity.

“Institution of purely public charity.” An institution which meets the criteria under section 5.

“Net operating income.” The amount of funds remaining after all operating expenses related to the provision of goods or services associated with the institution's charitable purpose are deducted from payments received for providing these goods or services, as determined in accordance with generally accepted accounting principles applicable to the institution.

“Political subdivision.” Any county, city, borough, town, township, school district, vocational school district and county institution district.

“Program service revenue.” Income earned from the provision of goods or services, including government fees and contracts associated with the institution's charitable purpose, which is reported on the annual return.

“Small business.” Any self-employed individual, sole proprietorship, firm, corporation, partnership, association or other entity that:

(1) has fewer than 101 full-time employees; and

(2) is subject to income taxation under the act of March 4, 1971 (P.L. 6, No. 2),  2 known as the Tax Reform Code of 1971.

“Total operating expenses.” The costs related to the provision of goods or services associated with the institution's charitable purpose, as determined in accordance with generally accepted accounting principles applicable to the institution.

“Voluntary agreement.” An agreement, contract or other arrangement for the purpose of receiving contributions pursuant to section 7  3 between a political subdivision and an institution seeking or possessing an exemption as an institution of purely public charity. These contributions are for the purpose of defraying some of the cost of various local government services. The term includes the establishment of public service foundations by institutions of purely public charity.