H0683B1427A04499 MSP:NLH 11/23/15 #90 A04499
AMENDMENTS TO HOUSE BILL NO. 683
Sponsor: SENATOR ARGALL
Printer's No. 1427
Amend Bill, page 1, lines 1 through 12, by striking out all
of said lines and inserting
Providing for tax levies and information related to taxes;
authorizing the imposition of a personal income tax or an
earned income tax by a school district subject to voter
approval; providing for imposition of and exclusions from a
sales and use tax for the stabilization of education funding,
for increase to the personal income tax, for certain
licenses, for hotel occupancy tax, for procedure and
administration of the tax, for expiration of authority to
issue certain debt and for reporting by local government
units of debt outstanding; establishing the Education
Stabilization Fund; providing for disbursements from this
fund; providing for senior citizen property tax rent rebate
assistance; and making repeals.
TABLE OF CONTENTS
Chapter 1. Preliminary Provisions
Section 101. Short title.
Section 102. Definitions.
Chapter 3. Taxation by School Districts
Section 301. Scope.
Section 302. Definitions.
Section 303. Limitation.
Section 304. Preemption.
Section 305. General tax authorization.
Section 306. Referendum.
Section 307. Continuity of tax.
Section 308. Collections.
Section 309. Credits.
Section 310. Exemption and special provisions.
Section 311. Regulations.
Chapter 4. Education Tax
Section 401. Education tax.
Chapter 7. Sales and Use Tax for the Stabilization of Education
Funding
Subchapter A. Preliminary Provisions
Section 700. Scope.
Section 701. Definitions.
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Subchapter B. Sales and Use Tax
Section 702. Imposition of tax.
Section 703. Computation of tax.
Subchapter C. Exclusions from Sales and Use Tax
Section 704. Exclusions from tax.
Section 705. Alternate imposition of tax.
Section 706. Credit against tax.
Subchapter D. Licenses
Section 708. Licenses.
Subchapter E. Hotel Occupancy Tax
Section 709. Definitions.
Section 710. Imposition of tax.
Section 711. Seasonal tax returns.
Subchapter F. Procedure and Administration
Section 715. Persons required to make returns.
Section 716. Form of returns.
Section 717. Time for filing returns.
Section 718. Extension of time for filing returns.
Section 719. Place for filing returns.
Section 720. Timely mailing treated as timely filing and
payment.
Section 721. Payment of tax.
Section 722. Time of payment.
Section 723. Other times for payment.
Section 724. Place for payment.
Section 725. Tax held in trust for Commonwealth.
Section 726. (Reserved).
Section 727. Discount.
Section 728. (Reserved).
Section 729. (Reserved).
Section 730. Assessment.
Section 731. Mode and time of assessment.
Section 732. Reassessment.
Section 733. Assessment to recover erroneous refunds.
Section 734. (Reserved).
Section 735. (Reserved).
Section 736. Burden of proof.
Section 737. Collection of tax.
Section 738. Collection of tax on motor vehicles, trailers and
semitrailers.
Section 739. Precollection of tax.
Section 740. Bulk and auction sales.
Section 741. (Reserved).
Section 742. Lien for taxes.
Section 743. Suit for taxes.
Section 744. Tax suit comity.
Section 745. Service.
Section 746. Collection and payment of tax on credit sales.
Section 747. Prepayment of tax.
Section 747.1. Refund of sales tax attributed to bad debt.
Section 748. Registration of transient vendors.
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Section 748.1. Bond.
Section 748.2. Notification to department.
Section 748.3. Seizure of property.
Section 748.4. Fines.
Section 748.5. Transient vendors subject to chapter.
Section 748.6. Promoters.
Section 749. (Reserved).
Section 750. (Reserved).
Section 751. (Reserved).
Section 752. Refunds.
Section 753. Refund petition.
Section 754. (Reserved).
Section 755. (Reserved).
Section 756. Extended time for filing special petition for
refund.
Section 757. (Reserved).
Section 758. Limitation on assessment and collection.
Section 759. Failure to file return.
Section 760. False or fraudulent return.
Section 761. Extension of limitation period.
Section 762. (Reserved).
Section 763. (Reserved).
Section 764. (Reserved).
Section 765. (Reserved).
Section 766. Additions to tax.
Section 767. Penalties.
Section 768. Criminal offenses.
Section 769. Abatement of additions or penalties.
Section 770. Rules and regulations.
Section 771. Keeping of records.
Section 771.1. Reports and records of promoters.
Section 772. Examinations.
Section 773. Records and examinations of delivery agents.
Section 774. Unauthorized disclosure.
Section 775. Cooperation with other governments.
Section 776. Interstate compacts.
Section 777. Bonds.
Subchapter G. Funding Provisions
Section 780. (Reserved).
Section 781. Appropriation for refunds.
Section 781.1. Construction.
Section 782. Transfers to Education Stabilization Fund.
Section 783. Transfers to Public Transportation Assistance
Fund.
Chapter 9. (Reserved)
Chapter 11. Limit on School District Taxation and Expiration of
Debt Authority
Section 1101. Authority to levy taxes and effect of future
Constitutional amendment.
Section 1102. Transitional taxes.
Section 1103. Consideration of State appropriations or
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reimbursements.
Section 1104. Taxes for cities and school districts of the
first class.
Chapter 13. Funding Provisions
Section 1301. Definitions.
Section 1302. Education Stabilization Fund.
Section 1302.1. Sources and transfers.
Section 1303. Standard disbursements to school districts from
Education Stabilization Fund.
Chapter 14. Senior Citizens Property Tax and Rent Rebate
Assistance
Section 1401. Scope of chapter.
Section 1402. (Reserved).
Section 1403. Definitions.
Section 1404. Property tax; and rent rebate
Section 1405. Filing of claim.
Section 1406. Proof of claim.
Section 1407. Incorrect claim.
Section 1408. Funds for payment of claims.
Section 1409. Claim forms and rules and regulations.
Section 1410. Fraudulent claims and conveyances to obtain
benefits.
Section 1411. Petition for redetermination.
Section 1412. Review by Board of Finance and Revenue.
Section 1413. Appeal.
Chapter 15. Miscellaneous Provisions
Section 1501. Transitional provision.
Section 1502. Regulations.
Section 1503. Construction.
Section 1504. Severability.
Section 1505. Repeals.
Section 1506. Applicability.
Section 1507. Effective date.
Amend Bill, page 1, lines 15 through 20; page 2, lines 1
through 30; page 3, lines 1 through 22; by striking out all of
said lines on said pages and inserting
CHAPTER 1
PRELIMINARY PROVISIONS
Section 101. Short title.
This act shall be known and may be cited as the Property Tax
Independence Act.
Section 102. 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:
"Department." The Department of Revenue of the Commonwealth.
"Education Stabilization Fund." The Education Stabilization
Fund established in section 1302.
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"Fiscal year." The fiscal year of the Commonwealth beginning
on July 1 and ending on June 30 of the immediately following
calendar year.
"Governing body." The board of school directors of a school
district, except that the term shall mean the city council of a
city of the first class for purposes of the levy and collection
of any tax in a school district of the first class.
"Internal Revenue Code of 1986." The Internal Revenue Code
of 1986 (Public Law 99-514, 26 U.S.C. § 166).
"Local Tax Enabling Act." The act of December 31, 1965
(P.L.1257, No.511), known as The Local Tax Enabling Act,
"Public School Code of 1949." The act of March 10, 1949
(P.L.30, No.14), known as the Public School Code of 1949.
"School district." A school district of the first class,
first class A, second class, third class or fourth class,
including any independent school district. For purposes of the
levy, assessment and collection of any tax in a school district
of the first class, the term shall include the City Council.
"School per capita tax." The tax authorized pursuant to
section 679 of the act of March 10, 1949 (P.L.30, No.14), known
as the Public School Code of 1949,
"Secretary." The Secretary of Revenue of the Commonwealth.
"Tax Reform Code of 1971." The act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971.
CHAPTER 3
Taxation by School Districts
Section 301. Scope.
This chapter authorizes school districts to levy, assess and
collect a tax on personal income or a tax on earned income and
net profits as a means of abolishing property taxation by the
school district.
Section 302. Definitions.
The words and phrases used in this chapter shall have the
same meanings given to them in the Tax Reform Code of 1971 or
The Local Tax Enabling Act unless the context clearly indicates
otherwise.
Section 303. Limitation.
Any tax imposed under this chapter shall be subject to the
limitations set forth in Chapter 11.
Section 304. Preemption.
No act of the General Assembly shall vacate or preempt any
resolution passed or adopted under the authority of this
chapter, or any other act, providing authority for the
imposition of a tax by a school district, unless the act of the
General Assembly expressly vacates or preempts the authority to
pass or adopt resolutions.
Section 305. General tax authorization.
(a) General rule.--A board of school directors may, by
resolution, levy, assess and collect or provide for the levying,
assessment and collection of a tax on personal income or a tax
on earned income and net profits for general revenue purposes.
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(b) Personal income tax.--
(1) A board of school directors may levy, assess and
collect a tax on the personal income of resident individuals
at a rate determined by the board of school directors.
(2) A school district which seeks to levy the tax
authorized under paragraph (1) must comply with section 306.
(3) If a board of school directors seeks to impose a
personal income tax under this subsection and the referendum
under section 306 is approved by the electorate, the board of
school directors shall have no authority to impose an earned
income and net profits tax under subsection (c) or any other
act.
(4) A personal income tax imposed under the authority of
this section shall be levied by the school district on each
of the classes of income specified in section 303 of the Tax
Reform Code of 1971 and regulations under that section,
provisions of which are incorporated by reference into this
chapter.
(i) Notwithstanding the provisions of section 353(f)
of the Tax Reform Code of 1971, the Department of Revenue
may permit the proper officer or an authorized agent of a
school district imposing a personal income tax pursuant
to this chapter to inspect the tax returns of any
taxpayer of the school district or may furnish to the
officer or an authorized agent an abstract of the return
of income of any current or former resident of the school
district or supply information concerning any item of
income contained in any tax return. The officer or
authorized agent of the school district imposing a tax
under this chapter shall be furnished the requested
information upon payment to the Department of Revenue of
the actual cost of providing the requested information.
(ii) (A) Except for official purposes or as
provided by law, it shall be unlawful for any officer
or authorized agent of a school district to do any of
the following:
(I) Disclose to any other individual or
entity the amount or source of income, profits,
losses, expenditures or any particular
information concerning income, profits, losses or
expenditures contained in any return.
(II) Permit any other individual or entity
to view or examine any return or copy of a return
or any book containing any abstract or
particulars.
(III) Print, publish or publicize in any
manner any return; any particular information
contained in or concerning the return; any amount
or source of income, profits, losses or
expenditures in or concerning the return; or any
particular information concerning income,
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profits, losses or expenditures contained in or
relating to any return.
(B) Any officer or authorized agent of a school
district that violates clause (A):
(I) May be fined not more than $1,000 or
imprisoned for not more than one year, or both.
(II) May be removed from office or
discharged from employment.
(c) Earned income and net profits tax.--
(1) A board of school directors may levy, assess and
collect a tax on earned income and net profits of resident
individuals at a rate determined by the board of school
directors.
(2) A school district which seeks to levy the tax
authorized under paragraph (1) must comply with section 306.
(3) If a board of school directors seeks to impose a tax
on earned income and net profits under this subsection and
the referendum under section 306 is approved by the
electorate, the board of school directors shall have no
authority to impose a personal income tax under subsection
(b) or any other act.
Section 306. Referendum.
(a) General rule.--In order to levy a personal income tax or
an earned income and net profits tax under this chapter, a
governing body shall use the procedures set forth in subsections
(b), (c), (d), (e), (f) and (g).
(b) Approved by electorate.--
(1) Subject to notice and public hearing requirements of
subsection (g), a governing body may levy the personal income
tax or earned income and net profits tax under this chapter
only by obtaining the approval of the electorate of the
affected school district in a public referendum at only the
primary election preceding the fiscal year when the personal
income tax or earned income and net profits tax will be
initially imposed or the rate increased.
(2) The referendum question must state the initial rate
of the proposed personal income tax or earned income and net
profits tax, the purpose of the tax, the duration of the tax
and the amount of revenue to be generated by the
implementation of the tax.
(3) The question shall be in clear language that is
readily understandable by a layperson. For the purpose of
illustration, a referendum question may be framed as follows:
Do you favor paying a personal income tax of X% for
the purpose of X, for X years, which will generate
$X?
Do you favor paying an earned income and net profits
tax of X% for the purpose of X, for X years, which
will generate $X?
(4) A nonlegal interpretative statement must accompany
the question in accordance with section 201.1 of the act of
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June 3, 1937 (P.L.1333, No.320), known as the Pennsylvania
Election Code, that includes the following:
(i) the initial rate of the personal income or
earned income and net profits tax imposed under this
chapter; and
(ii) the estimated revenues to be derived from the
initial rate imposed under this chapter.
(c) School district located in more than one county.--In the
event a school district is located in more than one county,
petitions under this section shall be filed with the election
officials of the county in which the administrative offices of
the school district are located.
(d) Review and certification.--The election officials who
receive a petition shall perform all administrative functions in
reviewing and certifying the validity of the petition and
conduct all necessary communications with the school district.
(e) Notification.--
(1) If the election officials of the county who receive
the petition certify that it is sufficient under this section
and determine that a question should be placed on the ballot,
the decision shall be communicated to election officials in
any other county in which the school district is also
located.
(2) Election officials in the other county or counties
shall cooperate with election officials of the county that
receives the petition to ensure that an identical question is
placed on the ballot at the same election throughout the
entire school district.
(f) Certification of results.--Election officials from each
county involved shall independently certify the results from
their county to the governing body.
(g) Adoption of resolution.--
(1) In order to levy the tax under this section, the
governing body shall adopt a resolution which shall refer to
this chapter prior to placing a question on the ballot.
(2) Prior to adopting a resolution imposing the tax
authorized by this section, the governing body shall give
public notice of its intent to adopt the resolution in the
manner provided by The Local Tax Enabling Act and shall
conduct at least two public hearings regarding the proposed
adoption of the resolution. One public hearing shall be
conducted during normal business hours and one public hearing
shall be conducted during evening hours or on a weekend.
Section 307. Continuity of tax.
Every tax levied under this chapter shall continue in force
on a fiscal year basis without annual reenactment unless the
rate of the tax is subsequently changed or the duration placed
on the referendum has expired.
Section 308. Collections.
Any income tax imposed under this chapter shall be subject to
the provisions for collection and delinquency found in The Local
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Tax Enabling Act.
Section 309. Credits.
(a) Credit.--Except as set forth in subsection (b), the
provisions of The Local Tax Enabling Act shall be applied by a
board of school directors to determine any credits applicable to
a tax imposed under this chapter.
(b) Limitation.--Payment of any tax on income to any state
other than Pennsylvania or to any political subdivision located
outside the boundaries of this Commonwealth by a resident of a
school district located in this Commonwealth shall not be
credited to and allowed as a deduction from the liability of
such person for any income tax imposed by the school district of
residence pursuant to this chapter.
Section 310. Exemption and special provisions.
(a) Earned income and net profits tax.--A school district
that imposes an earned income and net profits tax authorized
under section 305(c) may exempt from the payment of that tax any
person whose total income from all sources is less than $12,000.
(b) Applicability to personal income tax.--Section 304 of
the Tax Reform Code of 1971 shall apply to any personal income
tax levied by a school district under section 305(b).
Section 311. Regulations.
A school district that imposes:
(1) an earned income and net profits tax authorized
under section 305(c) shall be subject to the provisions of
The Local Tax Enabling Act and may adopt procedures for the
processing of claims for credits and exemptions under section
309 and 310; or
(2) a personal income tax under section 305(b) shall be
subject to all regulations adopted by the Department of
Revenue in administering the tax due to the Commonwealth
under Article III of the Tax Reform Code of 1971.
CHAPTER 4
EDUCATION TAX
Section 401. Education tax.
(a) General rule.--In addition to the tax collected under
section 302 of the Tax Reform Code of 1971, the Commonwealth
shall impose and administer the tax set forth in subsection (b)
in the same manner as the tax under Article III of the Tax
Reform Code of 1971.
(b) Imposition of tax.--
(1) Every resident individual, estate or trust shall be
subject to, and shall pay for the privilege of receiving each
of the classes of income enumerated in section 303 of the Tax
Reform Code of 1971, a tax upon each dollar of income
received by that resident during that resident's taxable year
at the rate of 1.88%.
(2) Every nonresident individual, estate or trust shall
be subject to, and shall pay for the privilege of receiving
each of the classes of income enumerated in section 303 of
the Tax Reform Code of 1971 from sources within this
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Commonwealth, a tax upon each dollar of income received by
that nonresident during that nonresident's taxable year at
the rate of 1.88%.
(c) Deposit in Education Stabilization Fund.--
(1) All moneys collected under this section shall be
deposited in the Education Stabilization Fund.
(2) So much of the proceeds of the tax imposed by this
chapter as shall be necessary for the payment of refunds,
enforcement or administration under this chapter is hereby
appropriated to the department for such purposes.
(d) Combination of tax forms.--The department shall
incorporate the taxpayer reporting requirement for the
implementation of this section into the forms utilized by the
department under Article III of the Tax Reform Code of 1971.
(e) Definitions.--The words and phrases used in this section
shall have the same meaning given to them in Article III of the
Tax Reform Code of 1971.
CHAPTER 7
SALES AND USE TAX FOR THE
STABILIZATION OF EDUCATION FUNDING
SUBCHAPTER A
PRELIMINARY PROVISIONS
Section 700. Scope.
The tax provided for under this chapter shall be known as the
Sales and Use Tax for the Stabilization of Education Funding,
which shall be a replacement for the sales and use tax
authorized under Article II of the Tax Reform Code of 1971 and
that is repealed by this act.
Section 701. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
(a) "Soft drinks."
(1) All nonalcoholic beverages, whether carbonated or
not, such as soda water, ginger ale, Coca Cola, lime cola,
Pepsi Cola, Dr Pepper, fruit juice when plain or carbonated
water, flavoring or syrup is added, carbonated water,
orangeade, lemonade, root beer or any and all preparations,
commonly referred to as soft drinks, of whatsoever kind, and
are further described as including any and all beverages,
commonly referred to as soft drinks, which are made with or
without the use of any syrup.
(2) The term does not include natural fruit or vegetable
juices or their concentrates, or noncarbonated fruit juice
drinks containing not less than 25% by volume of natural
fruit juices or of fruit juice which has been reconstituted
to its original state, or natural concentrated fruit or
vegetable juices reconstituted to their original state,
whether any of the natural juices are frozen or unfrozen,
sweetened or unsweetened, seasoned with salt or spice or
unseasoned. The term also does not include coffee, coffee
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substitutes, tea, cocoa, natural fluid milk or noncarbonated
drinks made from milk derivatives.
(b) "Maintaining a place of business in this Commonwealth."
(1) Having, maintaining or using within this
Commonwealth, either directly or through a subsidiary,
representative or an agent, an office, distribution house,
sales house, warehouse, service enterprise or other place of
business; or any agent of general or restricted authority, or
representative, irrespective of whether the place of
business, representative or agent is located in this
Commonwealth, permanently or temporarily, or whether the
person or subsidiary maintaining the place of business,
representative or agent is authorized to do business within
this Commonwealth.
(1.1) Providing taxable services.
(2) Engaging in any activity as a business within this
Commonwealth by any person, either directly or through a
subsidiary, representative or an agent, in connection with
the lease, sale or delivery of tangible personal property or
the performance of services thereon for use, storage or
consumption or in connection with the sale or delivery for
use of the services described in subclauses (11) through (18)
of clause (k) of this section, including, but not limited to,
having, maintaining or using any office, distribution house,
sales house, warehouse or other place of business, any stock
of goods or any solicitor, canvasser, salesman,
representative or agent under its authority, at its direction
or with its permission, regardless of whether the person or
subsidiary is authorized to do business in this Commonwealth.
(3) Regularly or substantially soliciting orders within
this Commonwealth in connection with the lease, sale or
delivery of tangible personal property to or the performance
thereon of services or in connection with the sale or
delivery of the services described in subclauses (11) through
(18) of clause (k) of this section for residents of this
Commonwealth by means of catalogs or other advertising,
whether the orders are accepted within or without this
Commonwealth.
(3.1) Entering this Commonwealth by any person to
provide assembly, service or repair of tangible personal
property, either directly or through a subsidiary,
representative or an agent.
(3.2) Delivering tangible personal property to locations
within this Commonwealth if the delivery includes the
unpacking, positioning, placing or assembling of the tangible
personal property.
(3.3) Having any contact within this Commonwealth which
would allow the Commonwealth to require a person to collect
and remit tax under the Constitution of the United States.
(3.4) Providing a customer's mobile telecommunications
service deemed to be provided by the customer's home service
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provider under the Mobile Telecommunications Sourcing Act (4
U.S.C. § 116). For purposes of this clause, words and phrases
used in this clause shall have the meanings given to them in
the Mobile Telecommunications Sourcing Act.
(4) The term does not include:
(i) Owning or leasing of tangible or intangible
property by a person who has contracted with an
unaffiliated commercial printer for printing, provided
that:
(A) the property is for use by the commercial
printer; and
(B) the property is located at the Pennsylvania
premises of the commercial printer.
(ii) Visits by a person's employees or agents to the
premises in this Commonwealth of an unaffiliated
commercial printer with whom the person has contracted
for printing in connection with said contract.
(c) "Manufacture." The performance of manufacturing,
fabricating, compounding, processing or other operations,
engaged in as a business, which place any tangible personal
property in a form, composition or character different from that
in which it is acquired whether for sale or use by the
manufacturer, and shall include, but not be limited to:
(1) Every operation commencing with the first production
stage and ending with the completion of tangible personal
property having the physical qualities, including packaging,
if any, passing to the ultimate consumer, which it has when
transferred by the manufacturer to another. For purposes of
this definition, "operation" includes clean rooms and their
component systems, including: environmental control systems,
antistatic vertical walls and manufacturing platforms and
floors which are independent of the real estate; process
piping systems; specialized lighting systems; deionized water
systems; process vacuum and compressed air systems; process
and specialty gases; and alarm or warning devices
specifically designed to warn of threats to the integrity of
the product or people. For purposes of this definition, a
"clean room" is a location with a self-contained, sealed
environment with a controlled, closed air system independent
from the facility's general environmental control system.
(2) The publishing of books, newspapers, magazines and
other periodicals and printing.
(3) Refining, blasting, exploring, mining and quarrying
for, or otherwise extracting from the earth or from waste or
stock piles or from pits or banks any natural resources,
minerals and mineral aggregates including blast furnace slag.
(4) Building, rebuilding, repairing and making additions
to, or replacements in or upon vessels designed for
commercial use of registered tonnage of 50 tons or more when
produced on special order of the purchaser, or when rebuilt,
repaired or enlarged, or when replacements are made upon
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order of or for the account of the owner.
(5) Research having as its objective the production of a
new or an improved:
(i) product or utility service; or
(ii) method of producing a product or utility
service,
but in either case not including market research or research
having as its objective the improvement of administrative
efficiency.
(6) Remanufacture for wholesale distribution by a
remanufacturer of motor vehicle parts from used parts
acquired in bulk by the remanufacturer using an assembly line
process which involves the complete disassembly of such parts
and integration of the components of such parts with other
used or new components of parts, including the salvaging,
recycling or reclaiming of used parts by the remanufacturer.
(7) Remanufacture or retrofit by a manufacturer or
remanufacturer of aircraft, armored vehicles, other defense-
related vehicles having a finished value of at least $50,000.
Remanufacture or retrofit involves the disassembly of such
aircraft, vehicles, parts or components, including electric
or electronic components, the integration of those parts and
components with other used or new parts or components,
including the salvaging, recycling or reclaiming of the used
parts or components and the assembly of the new or used
aircraft, vehicles, parts or components. For purposes of this
clause, the following terms or phrases have the following
meanings:
(i) "aircraft" means fixed-wing aircraft,
helicopters, powered aircraft, tilt-rotor or tilt-wing
aircraft, unmanned aircraft and gliders;
(ii) "armored vehicles" means tanks, armed personnel
carriers and all other armed track or semitrack vehicles;
and
(iii) "other defense-related vehicles" means trucks,
truck-tractors, trailers, jeeps and other utility
vehicles, including any unmanned vehicles.
(8) Remanufacture by a remanufacturer of locomotive
parts from used parts acquired in bulk by the remanufacturer
using an assembly line process which involves the complete
disassembly of such parts and integration of the components
of such parts with other used or new components of parts,
including the salvaging, recycling or reclaiming of used
parts by the remanufacturer.
The term does not include constructing, altering, servicing,
repairing or improving real estate or repairing, servicing or
installing tangible personal property, nor the producing of a
commercial motion picture, nor the cooking, freezing or baking
of fruits, vegetables, mushrooms, fish, seafood, meats, poultry
or bakery products.
(c.1) "Blasting." The use of any combustible or explosive
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composition in the removal of material resources, minerals and
mineral aggregates from the earth including the separation of
the dirt, waste and refuse in which they are found.
(d) "Processing." The performance of the following
activities when engaged in as a business enterprise:
(1) The filtering or heating of honey, the cooking,
baking or freezing of fruits, vegetables, mushrooms, fish,
seafood, meats, poultry or bakery products, when the person
engaged in the business packages the property in sealed
containers for wholesale distribution.
(1.1) The processing of fruits or vegetables by
cleaning, cutting, coring, peeling or chopping and treating
to preserve, sterilize or purify and substantially extend the
useful shelf life of the fruits or vegetables, when the
person engaged in the activity packages the property in
sealed containers for wholesale distribution.
(2) The scouring, carbonizing, cording, combing,
throwing, twisting or winding of natural or synthetic fibers,
or the spinning, bleaching, dyeing, printing or finishing of
yarns or fabrics, when the activities are performed prior to
sale to the ultimate consumer.
(3) The electroplating, galvanizing, enameling,
anodizing, coloring, finishing, impregnating or heat treating
of metals or plastics for sale or in the process of
manufacturing.
(3.1) The blanking, shearing, leveling, slitting or
burning of metals for sale to or use by a manufacturer or
processor.
(4) The rolling, drawing or extruding of ferrous and
nonferrous metals.
(5) The fabrication for sale of ornamental or structural
metal or of metal stairs, staircases, gratings, fire escapes
or railings, not including fabrication work done at the
construction site.
(6) The preparation of animal feed or poultry feed for
sale.
(7) The production, processing and bottling of
nonalcoholic beverages for wholesale distribution.
(8) The operation of a saw mill or planing mill for the
production of lumber or lumber products for sale. The
operation of a saw mill or planing mill begins with the
unloading by the operator of the saw mill or planing mill of
logs, timber, pulpwood or other forms of wood material to be
used in the saw mill or planing mill.
(9) The milling for sale of flour or meal from grains.
(9.1) The aging, stripping, conditioning, crushing and
blending of tobacco leaves for use as cigar filler or as
components of smokeless tobacco products for sale to
manufacturers of tobacco products.
(10) The slaughtering and dressing of animals for meat
to be sold or to be used in preparing meat products for sale,
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and the preparation of meat products including lard, tallow,
grease, cooking and inedible oils for wholesale distribution.
(11) The processing of used lubricating oils.
(12) The broadcasting of radio and television programs
of licensed commercial or educational stations.
(13) The cooking or baking of bread, pastries, cakes,
cookies, muffins and donuts when the person engaged in the
activity sells the items at retail at locations that do not
constitute an establishment from which ready-to-eat food and
beverages are sold. For purposes of this clause, a bakery, a
pastry shop and a donut shop shall not be considered an
establishment from which ready-to-eat food and beverages are
sold.
(14) The cleaning and roasting and the blending,
grinding or packaging for sale of coffee from green coffee
beans or the production of coffee extract.
(15) The preparation of dry or liquid fertilizer for
sale.
(16) The production, processing and packaging of ice for
wholesale distribution.
(17) The producing of mobile telecommunications
services.
(18) The collection, washing, sorting, inspecting and
packaging of eggs.
(e) "Person." Any natural person, association, fiduciary,
partnership, corporation or other entity, including the
Commonwealth of Pennsylvania, its political subdivisions and
instrumentalities and public authorities. Whenever used in
prescribing and imposing a penalty or imposing a fine or
imprisonment, or both, the term as applied to an association,
includes the members of the association and, as applied to a
corporation, the officers of the corporation.
(f) "Purchase at retail."
(1) The acquisition for a consideration of the
ownership, custody or possession of tangible personal
property other than for resale by the person acquiring the
same when the acquisition is made for the purpose of
consumption or use, whether the acquisition is absolute or
conditional, and by any means it is effected.
(2) The acquisition of a license to use or consume, and
the rental or lease of tangible personal property, other than
for resale regardless of the period of time the lessee has
possession or custody of the property.
(3) The obtaining for a consideration of those services
described in subclauses (2), (3) and (4) of clause (k) of
this section other than for resale.
(4) A retention after March 7, 1956, of possession,
custody or a license to use or consume pursuant to a rental
contract or other lease arrangement (other than as security)
other than for resale.
(5) The obtaining for a consideration of those services
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described in subclauses (11) through (18) of clause (k) of
this section.
The term, with respect to liquor and malt or brewed beverages,
includes the purchase of liquor from any Pennsylvania Liquor
Store by any person for any purpose, and the purchase of malt or
brewed beverages from a manufacturer of malt or brewed
beverages, distributor or importing distributor by any person
for any purpose, except purchases from a manufacturer of malt or
brewed beverages by a distributor or importing distributor or
purchases from an importing distributor by a distributor within
the meaning of the Liquor Code. The term does not include any
purchase of malt or brewed beverages from a retail dispenser or
any purchase of liquor or malt or brewed beverages from a person
holding a retail liquor license within the meaning of and
pursuant to the provisions of the Liquor Code, but includes any
purchase or acquisition of liquor or malt or brewed beverages
other than pursuant to the provisions of the Liquor Code.
(g) "Purchase price."
(1) The total value of anything paid or delivered, or
promised to be paid or delivered, whether money or otherwise,
in complete performance of a sale at retail or purchase at
retail, without any deduction on account of the cost or value
of the property sold, cost or value of transportation, cost
or value of labor or service, interest or discount paid or
allowed after the sale is consummated, any other taxes
imposed by the Commonwealth or any other expense except that
there shall be excluded any gratuity or separately stated
deposit charge for returnable containers.
(2) The value of any tangible personal property actually
taken in trade or exchange in lieu of the whole or any part
of the purchase price shall be deducted from the purchase
price. For the purpose of this clause, the amount allowed by
reason of tangible personal property actually taken in trade
or exchange shall be considered the value of such property.
(3) (i) In determining the purchase price on the sale
or use of taxable tangible personal property or a service
where, because of affiliation of interests between the
vendor and purchaser, or irrespective of any such
affiliation, if for any other reason the purchase price
declared by the vendor or taxpayer on the taxable sale or
use of such tangible personal property or service is, in
the opinion of the department, not indicative of the true
value of the article or service or the fair price
thereof, the department shall, pursuant to uniform and
equitable rules, determine the amount of constructive
purchase price on the basis of which the tax shall be
computed and levied. The rules shall provide for a
constructive amount of purchase price for each sale or
use which would naturally and fairly be charged in an
arms-length transaction in which the element of common
interest between the vendor or purchaser is absent or, if
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no common interest exists, any other element causing a
distortion of the price or value is likewise absent.
(ii) For the purpose of this clause where a taxable
sale or purchase at retail transaction occurs between a
parent and a subsidiary, affiliate or controlled
corporation of such parent corporation, there shall be a
rebuttable presumption, that because of the common
interest, the transaction was not at arms-length.
(4) Where there is a transfer or retention of possession
or custody, whether it is termed a rental, lease, service or
otherwise, of tangible personal property including, but not
limited to, linens, aprons, motor vehicles, trailers, tires,
industrial office and construction equipment, and business
machines the full consideration paid or delivered to the
vendor or lessor shall be considered the purchase price, even
though the consideration is separately stated and designated
as payment for processing, laundering, service, maintenance,
insurance, repairs, depreciation or otherwise. Where the
vendor or lessor supplies or provides an employee to operate
the tangible personal property, the value of the labor
supplied may be excluded and shall not be considered as part
of the purchase price if separately stated. There shall also
be included as part of the purchase price the value of
anything paid or delivered, or promised to be paid or
delivered by a lessee, whether money or otherwise, to any
person other than the vendor or lessor by reason of the
maintenance, insurance or repair of the tangible personal
property which a lessee has the possession or custody of
under a rental contract or lease arrangement.
(5) (i) With respect to the tax imposed by section
702(a)(2), on any tangible personal property originally
purchased by the user of the property six months or
longer prior to the first taxable use of the property
within this Commonwealth, the user may elect to pay tax
on a substituted base determined by considering the
purchase price of the property for tax purposes to be
equal to the prevailing market price of similar tangible
personal property at the time and place of the first use
within this Commonwealth.
(ii) The election must be made at the time of filing
a tax return with the department and reporting the tax
liability and paying the proper tax due plus all accrued
penalties and interest, if any, within six months of the
due date of such report and payment, as provided for by
section 717(a) and (c).
(6) The purchase price of employment agency services and
help supply services shall be the service fee paid by the
purchaser to the vendor or supplying entity. The term
"service fee," as used in this subclause, means the total
charge or fee of the vendor or supplying entity minus the
costs of the supplied employee which costs are wages,
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salaries, bonuses and commissions, employment benefits,
expense reimbursements and payroll and withholding taxes, to
the extent that these costs are specifically itemized or that
these costs in aggregate are stated in billings from the
vendor or supplying entity. To the extent that these costs
are not itemized or stated on the billings, then the service
fee shall be the total charge or fee of the vendor or
supplying entity.
(7) Unless the vendor separately states that portion of
the billing which applies to premium cable service as defined
in clause (ll), the total bill for the provision of all cable
services shall be the purchase price.
(8) The purchase price of prebuilt housing shall be 60%
of the manufacturer's selling price, provided that a
manufacturer of prebuilt housing who precollects tax from a
prebuilt housing builder at the time of the sale to the
prebuilt housing builder shall have the option to collect tax
on 60% of the selling price or on 100% of the actual cost of
the supplies and materials used in the manufacture of the
prebuilt housing.
(9) Amounts representing on-the-spot cash discounts,
employee discounts, volume discounts, store discounts such as
"buy one, get one free," wholesaler's or trade discounts,
rebates and store or manufacturer's coupons shall establish a
new purchase price if both the item and the coupon are
described on the invoice or cash register tape. An amount
representing a discount allowed for prompt payment of bills
which is dependent upon an event occurring after the
completion of the sale may not be deducted in computing the
tax. A sale is completed when there is a transfer of
ownership of the property or services to the purchaser.
(h) "Purchaser." Any person who acquires, for a
consideration, the ownership, custody or possession by sale,
lease or otherwise of tangible personal property, or who obtains
services in exchange for a purchase price but not including an
employer who obtains services from his employees in exchange for
wages or salaries when such services are rendered in the
ordinary scope of their employment.
(i) "Resale."
(1) Any transfer of ownership, custody or possession of
tangible personal property for a consideration, including the
grant of a license to use or consume and transactions where
the possession of the property is transferred but where the
transferor retains title only as security for payment of the
selling price whether the transaction is designated as
bailment lease, conditional sale or otherwise.
(2) The physical incorporation of tangible personal
property as an ingredient or constituent into other tangible
personal property, which is to be sold in the regular course
of business or the performance of those services described in
subclauses (2), (3) and (4) of clause (k) upon tangible
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personal property which is to be sold in the regular course
of business or where the person incorporating the property
has undertaken at the time of purchase to cause it to be
transported in interstate commerce to a destination outside
this Commonwealth. The term includes telecommunications
services purchased by a cable operator or video programmer
that are used to transport or deliver cable or video
programming services which are sold in the regular course of
business.
(3) The term also includes tangible personal property
purchased or having a situs within this Commonwealth solely
for the purpose of being processed, fabricated or
manufactured into, attached to or incorporated into tangible
personal property and thereafter transported outside this
Commonwealth for use exclusively outside this Commonwealth.
(4) The term does not include any sale of malt or brewed
beverages by a retail dispenser, or any sale of liquor or
malt or brewed beverages by a person holding a retail liquor
license within the meaning of the act of April 12, 1951
(P.L.90, No.21), known as the Liquor Code.
(5) The physical incorporation of tangible personal
property as an ingredient or constituent in the construction
of foundations for machinery or equipment the sale or use of
which is excluded from tax under the provisions of paragraphs
(A), (B), (C) and (D) of subclause (8) of clause (k) and
subparagraphs (i), (ii), (iii) and (iv) of paragraph (B) of
subclause (4) of clause (o), whether the foundations at the
time of construction or transfer constitute tangible personal
property or real estate.
(6) The sale at retail or use of services performed for
resale in the ordinary course of business of the purchaser or
user of such services.
(7) The sale at retail or use of services that are
otherwise taxable that are an integral, inseparable part of
the services that are to be sold or used that are taxable.
(j) "Resident."
(1) Any natural person:
(i) who is domiciled in this Commonwealth; or
(ii) who maintains a permanent place of abode within
this Commonwealth and spends in the aggregate more than
60 days of the year within this Commonwealth.
(2) Any corporation:
(i) incorporated under the laws of this
Commonwealth;
(ii) authorized to do business or doing business
within this Commonwealth; or
(iii) maintaining a place of business within this
Commonwealth.
(3) Any association, fiduciary, partnership or other
entity:
(i) domiciled in this Commonwealth;
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(ii) authorized to do business or doing business
within this Commonwealth; or
(iii) maintaining a place of business within this
Commonwealth.
(k) "Sale at retail."
(1) Any transfer, for a consideration, of the ownership,
custody or possession of tangible personal property,
including the grant of a license to use or consume whether
the transfer is absolute or conditional and by any means the
transfer is effected.
(2) The rendition of the service of printing or
imprinting of tangible personal property for a consideration
for persons who furnish, either directly or indirectly, the
materials used in the printing or imprinting.
(3) The rendition for a consideration of the service of:
(i) washing, cleaning, waxing, polishing or
lubricating of motor vehicles of another, regardless of
whether any tangible personal property is transferred in
conjunction with the activity; and
(ii) inspecting motor vehicles pursuant to the
mandatory requirements of 75 Pa.C.S. (relating to
vehicles).
(4) The rendition for a consideration of the service of
repairing, altering, mending, pressing, fitting, dyeing,
laundering, drycleaning or cleaning tangible personal
property other than wearing apparel or shoes, or applying or
installing tangible personal property as a repair or
replacement part of other tangible personal property other
than wearing apparel or shoes for a consideration, regardless
of whether the services are performed directly or by any
means other than by coin-operated self-service laundry
equipment for wearing apparel or household goods and whether
or not any tangible personal property is transferred in
conjunction with the activity, except such services as are
rendered in the construction, reconstruction, remodeling,
repair or maintenance of real estate.
(5) (Reserved).
(6) (Reserved).
(7) (Reserved).
(8) Any retention of possession, custody or a license to
use or consume tangible personal property or any further
obtaining of services described in subclauses (2), (3) and
(4) of this clause pursuant to a rental or service contract
or other arrangement (other than as security). The term does
not include:
(i) any transfer of tangible personal property or
rendition of services for the purpose of resale; or
(ii) the rendition of services or the transfer of
tangible personal property, including, but not limited
to, machinery and equipment and their parts and supplies
to be used or consumed by the purchaser directly in the
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operations of:
(A) The manufacture of tangible personal
property.
(B) Farming, dairying, agriculture, horticulture
or floriculture when engaged in as a business
enterprise. The term "farming" includes the
propagation and raising of ranch raised fur-bearing
animals and the propagation of game birds for
commercial purposes by holders of propagation permits
issued under 34 Pa.C.S. (relating to game) and the
propagation and raising of horses to be used
exclusively for commercial racing activities.
(C) The producing, delivering or rendering of a
public utility service, or in constructing,
reconstructing, remodeling, repairing or maintaining
the facilities which are directly used in producing,
delivering or rendering the service.
(D) Processing as defined in clause (d). The
exclusions provided in this paragraph or paragraph
(A), (B) or (C) do not apply to any vehicle required
registered under 75 Pa.C.S. (relating to vehicles),
except those vehicles used directly by a public
utility engaged in business as a common carrier; to
maintenance facilities; or to materials, supplies or
equipment to be used or consumed in the construction,
reconstruction, remodeling, repair or maintenance of
real estate other than directly used machinery,
equipment, parts or foundations that may be affixed
to such real estate. The exclusions provided in this
paragraph or paragraph (A), (B) or (C) do not apply
to tangible personal property or services to be used
or consumed in managerial sales or other
nonoperational activities, nor to the purchase or use
of tangible personal property or services by any
person other than the person directly using the same
in the operations described in this paragraph or
paragraph (A), (B) or (C).
The exclusion provided in paragraph (C) does not apply to:
(i) construction materials, supplies or equipment
used to construct, reconstruct, remodel, repair or
maintain facilities not used directly by the purchaser in
the production, delivering or rendition of public utility
service;
(ii) construction materials, supplies or equipment
used to construct, reconstruct, remodel, repair or
maintain a building, road or similar structure; or
(iii) tools and equipment used but not installed in
the maintenance of facilities used directly in the
production, delivering or rendition of a public utility
service.
The exclusions provided in paragraphs (A), (B), (C) and (D)
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do not apply to the services enumerated in clauses (k)(11)
through (18) and (w) through (kk), except that the exclusion
provided in this subclause for farming, dairying and
agriculture shall apply to the service enumerated in clause
(z).
(9) Where tangible personal property or services are
utilized for purposes constituting a sale at retail and for
purposes excluded from the definition of "sale at retail," it
shall be presumed that the tangible personal property or
services are utilized for purposes constituting a sale at
retail and subject to tax unless the user proves to the
department that the predominant purposes for which such
tangible personal property or services are utilized do not
constitute a sale at retail.
(10) The term, with respect to liquor and malt or brewed
beverages, includes the sale of liquor by any Pennsylvania
liquor store to any person for any purpose, and the sale of
malt or brewed beverages by a manufacturer of malt or brewed
beverages, distributor or importing distributor to any person
for any purpose, except sales by a manufacturer of malt or
brewed beverages to a distributor or importing distributor or
sales by an importing distributor to a distributor within the
meaning of the act of April 12, 1951 (P.L.90, No.21), known
as the Liquor Code. The term does not include any sale of
malt or brewed beverages by a retail dispenser or any sale of
liquor or malt or brewed beverages by a person holding a
retail liquor license within the meaning of and pursuant to
the provisions of the Liquor Code, but shall include any sale
of liquor or malt or brewed beverages other than pursuant to
the provisions of the Liquor Code.
(11) The rendition for a consideration of lobbying
services.
(12) The rendition for a consideration of adjustment
services, collection services or credit reporting services.
(13) The rendition for a consideration of secretarial or
editing services.
(14) The rendition for a consideration of disinfecting
or pest control services, building maintenance or cleaning
services.
(15) The rendition for a consideration of employment
agency services or help supply services.
(16) (Reserved).
(17) The rendition for a consideration of lawn care
service.
(18) The rendition for a consideration of self-storage
service.
(19) The rendition for a consideration of a mobile
telecommunications service.
(20) Except as otherwise provided under section 704, the
rendition for a consideration of any service enumerated in
clause (dd) when the primary objective of the purchaser is
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the receipt of any benefit of the service performed, as
distinguished from the receipt of property.
(l) "Storage." Any keeping or retention of tangible
personal property within this Commonwealth for any purpose
including the interim keeping, retaining or exercising any right
or power over such tangible personal property. This term is in
no way limited to the provision of self-storage service.
(m) "Tangible personal property." Corporeal personal
property including, but not limited to, goods, wares,
merchandise, steam and natural and manufactured and bottled gas
for non-residential use, electricity for non-residential use,
prepaid telecommunications, cable or video programming service,
spirituous or vinous liquor and malt or brewed beverages and
soft drinks, interstate telecommunications service originating
or terminating in this Commonwealth and charged to a service
address in this Commonwealth, intrastate telecommunications
service with the exception of:
(1) Subscriber line charges and basic local telephone
service for residential use.
(2) Charges for telephone calls paid for by inserting
money into a telephone accepting direct deposits of money to
operate, provided further, the service address of any
intrastate telecommunications service is deemed to be within
this Commonwealth or within a political subdivision,
regardless of how or where billed or paid.
In the case of any interstate or intrastate telecommunications
service, any charge paid through a credit or payment mechanism
which does not relate to a service address, such as a bank,
travel, credit or debit card, but not including prepaid
telecommunications, is deemed attributable to the address of
origination of the telecommunications service.
(n) "Taxpayer." Any person required to pay or collect the
tax imposed by this chapter.
(o) "Use."
(1) The exercise of any right or power incidental to the
ownership, custody or possession of tangible personal
property and includes, but is not limited to, transportation,
storage or consumption.
(2) The obtaining by a purchaser of the service of
printing or imprinting of tangible personal property when the
purchaser furnishes, either directly or indirectly, the
articles used in the printing or imprinting.
(3) The obtaining by a purchaser of the services of:
(i) washing, cleaning, waxing, polishing or
lubricating of motor vehicles regardless of whether any
tangible personal property is transferred to the
purchaser in conjunction with the services; and
(ii) inspecting motor vehicles pursuant to the
mandatory requirements of 75 Pa.C.S. (relating to
vehicles).
(4) The obtaining by a purchaser of the service of
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repairing, altering, mending, pressing, fitting, dyeing,
laundering, drycleaning or cleaning tangible personal
property other than wearing apparel or shoes or applying or
installing tangible personal property as a repair or
replacement part of other tangible personal property,
including, but not limited to, wearing apparel or shoes,
regardless of whether the services are performed directly or
by any means other than by means of coin-operated self-
service laundry equipment for wearing apparel or household
goods, and regardless of whether any tangible personal
property is transferred to the purchaser in conjunction with
the activity, therewith, except such services are obtained in
the construction, reconstruction, remodeling, repair or
maintenance of real estate. The term "use" does not include:
(A) Any tangible personal property acquired and
kept, retained or over which power is exercised
within this Commonwealth on which the taxing of the
storage, use or other consumption thereof is
expressly prohibited by the Constitution of the
United States or which is excluded from tax under
other provisions of this chapter.
(B) The use or consumption of tangible personal
property, including, but not limited to, machinery
and equipment and parts therefor, and supplies or the
obtaining of the services described in subclauses
(2), (3) and (4) of this clause directly in the
operations of:
(i) The manufacture of tangible personal property.
(ii) Farming, dairying, agriculture, horticulture or
floriculture when engaged in as a business enterprise.
The term includes the propagation and raising of ranch-
raised furbearing animals and the propagation of game
birds for commercial purposes by holders of propagation
permits issued under 34 Pa.C.S. (relating to game) and
the propagation and raising of horses to be used
exclusively for commercial racing activities.
(iii) The producing, delivering or rendering of a
public utility service, or in constructing,
reconstructing, remodeling, repairing or maintaining the
facilities which are directly used in producing,
delivering or rendering such service.
(iv) Processing as defined in subclause (d).
The exclusions provided in subparagraphs (i), (ii), (iii)
and (iv) do not apply to any vehicle required to be
registered under 75 Pa.C.S. (relating to vehicles) except
those vehicles directly used by a public utility engaged
in the business as a common carrier; to maintenance
facilities; or to materials, supplies or equipment to be
used or consumed in the construction, reconstruction,
remodeling, repair or maintenance of real estate other
than directly used machinery, equipment, parts or
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foundations therefor that may be affixed to such real
estate. The exclusions provided in subparagraphs (i),
(ii), (iii) and this subparagraph do not apply to
tangible personal property or services to be used or
consumed in managerial sales or other nonoperational
activities, nor to the purchase or use of tangible
personal property or services by any person other than
the person directly using the same in the operations
described in subparagraphs (i), (ii), (iii) and this
subparagraph. The exclusion provided in subparagraph
(iii) does not apply to:
(A) construction materials, supplies or
equipment used to construct, reconstruct, remodel,
repair or maintain facilities not used directly by
the purchaser in the production, delivering or
rendition of public utility service; or
(B) tools and equipment used but not installed
in the maintenance of facilities used directly in the
production, delivering or rendition of a public
utility service.
The exclusion provided in subparagraphs (i), (ii), (iii)
and this subparagraph does not apply to the services
enumerated in clauses (9) through (16) and (w) through
(kk), except that the exclusion provided in subparagraph
(ii) for farming, dairying and agriculture shall apply to
the service enumerated in clause (z).
(5) Where tangible personal property or services are
utilized for purposes constituting a use, and for purposes
excluded from the definition of "use," it shall be presumed
that the property or services are utilized for purposes
constituting a sale at retail and subject to tax unless the
user proves to the department that the predominant purposes
for which the property or services are utilized do not
constitute a sale at retail.
(6) The term, with respect to liquor and malt or brewed
beverages, includes the purchase of liquor from any
Pennsylvania Liquor Store by any person for any purpose and
the purchase of malt or brewed beverages from a manufacturer
of malt or brewed beverages, distributor or importing
distributor by any person for any purpose, except purchases
from a manufacturer of malt or brewed beverages by a
distributor or importing distributor, or purchases from an
importing distributor by a distributor within the meaning of
the act of April 12, 1951 (P.L.90, No.21), known as the
Liquor Code. The term does not include any purchase of malt
or brewed beverages from a retail dispenser or any purchase
of liquor or malt or brewed beverages from a person holding a
retail liquor license within the meaning of and pursuant to
the provisions of the Liquor Code, but includes the exercise
of any right or power incidental to the ownership, custody or
possession of liquor or malt or brewed beverages obtained by
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the person exercising the right or power in any manner other
than pursuant to the provisions of the Liquor Code.
(7) The use of tangible personal property purchased at
retail on which the services described in subclauses (2), (3)
and (4) of this clause have been performed shall be deemed to
be a use of said services by the person using the property.
(8) (Reserved).
(9) The obtaining by the purchaser of lobbying services.
(10) The obtaining by the purchaser of adjustment
services, collection services or credit reporting services.
(11) The obtaining by the purchaser of secretarial or
editing services.
(12) The obtaining by the purchaser of disinfecting or
pest control services, building maintenance or cleaning
services.
(13) The obtaining by the purchaser of employment agency
services or help supply services.
(14) (Reserved).
(15) The obtaining by the purchaser of lawn care
service.
(16) The obtaining by the purchaser of self-storage
service.
(17) The obtaining by a construction contractor of
tangible personal property or services provided to tangible
personal property which will be used pursuant to a
construction contract regardless of whether the tangible
personal property or services are transferred.
(18) The obtaining of mobile telecommunications service
by a customer.
(19) Except as otherwise provided under section 704, the
obtaining by the purchaser of any service enumerated in
clause (dd) when the primary objective of the purchaser is
the receipt of any benefit of the service performed, as
distinguished from the receipt of property.
(p) "Vendor." Any person maintaining a place of business in
this Commonwealth, selling or leasing tangible personal
property, or rendering services, the sale or use of which is
subject to the tax imposed by this chapter but not including any
employee who in the ordinary scope of employment renders
services to his employer in exchange for wages and salaries.
(q) "NAICS." The 2012 North American Industry
Classification System developed by the Federal Office of
Management and Budget and published at 76 Fed. Reg. 159 (Aug.
17, 2011) or its successor revision.
(r) "Gratuity." Any amount paid or remitted for services
performed in conjunction with any sale of food or beverages, or
hotel or motel accommodations which amount is in excess of the
charges and the tax for such food, beverages or accommodations
regardless of the method of billing or payment.
(s) "Commercial aircraft operator." A person, excluding a
scheduled airline who engages in any or all of the following:
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charter of aircraft, leasing of aircraft, aircraft sales,
aircraft rental, flight instruction, air freight or any other
flight activities for compensation.
(t) "Transient vendor."
(1) Any person who:
(i) brings into this Commonwealth, by automobile,
truck or other means of transportation, or purchases in
this Commonwealth tangible personal property the sale or
use of which is subject to the tax imposed by this
chapter or comes into this Commonwealth to perform
services the sale or use of which is subject to the tax
imposed by this chapter;
(ii) offers or intends to offer the tangible
personal property or services for sale at retail within
this Commonwealth; and
(iii) does not maintain an established office,
distribution house, saleshouse, warehouse, service
enterprise, residence from which business is conducted or
other place of business within this Commonwealth.
(2) The term does not include a person who delivers
tangible personal property within this Commonwealth pursuant
to orders for the property which were solicited or placed by
mail or other means.
(3) The term does not include a person who handcrafts
items for sale at special events, including, but not limited
to, fairs, carnivals, art and craft shows and other festivals
and celebrations within this Commonwealth.
(u) "Promoter." A person who either, directly or
indirectly, rents, leases or otherwise operates or grants
permission to any person to use space at a show for the display
for sale or for the sale of tangible personal property or
services subject to tax under section 702.
(v) "Show." An event, the primary purpose of which involves
the display or exhibition of any tangible personal property or
services for sale, including, but not limited to, a flea market,
antique show, coin show, stamp show, comic book show, hobby
show, automobile show, fair or any similar show, whether held
regularly or of a temporary nature, at which more than one
vendor displays for sale or sells tangible personal property or
services subject to tax under section 702.
(w) "Lobbying services." Providing the services of a
lobbyist, as defined in the definition of "lobbyist" in 65
Pa.C.S. Ch. 13A (relating to lobbying disclosure).
(x) "Adjustment services, collection services or credit
reporting services." Providing collection or adjustments of
accounts receivable or mercantile or consumer credit reporting,
including, but not limited to, services of the type provided by
adjustment bureaus or collection agencies, consumer or
mercantile credit reporting bureaus, credit bureaus or agencies,
credit clearinghouses or credit investigation services. The term
does not include providing credit card service with collection
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by a central agency, providing debt counseling or adjustment
services to individuals or billing or collection services
provided by local exchange telephone companies.
(y) "Secretarial or editing services." Providing services
which include, but are not limited to, editing, letter writing,
proofreading, resume writing, typing or word processing. The
term does not include court reporting and stenographic services.
(z) "Disinfecting or pest control services." Providing
disinfecting, termite control, insect control, rodent control or
other pest control services. The term includes, but is not
limited to, deodorant servicing of rest rooms, washroom
sanitation service, rest room cleaning service, extermination
service or fumigating service. As used in this clause, the term
"fumigating service" does not include the fumigation of
agricultural commodities or containers used for agricultural
commodities. As used in this clause, the term "insect control"
does not include the gypsy moth control spraying of trees which
are harvested for commercial purposes.
(aa) "Building maintenance or cleaning services." Providing
services which include, but are not limited to, janitorial, maid
or housekeeping service, office or interior building cleaning or
maintenance service, window cleaning service, floor waxing
service, lighting maintenance service such as bulb replacement,
cleaning, chimney cleaning service, acoustical tile cleaning
service, venetian blind cleaning, cleaning and maintenance of
telephone booths or cleaning and degreasing of service stations.
The term does not include: repairs on buildings and other
structures; the maintenance or repair of boilers, furnaces and
residential air conditioning equipment or their parts; the
painting, wallpapering or applying other like coverings to
interior walls, ceilings or floors; or the exterior painting of
buildings.
(bb) "Employment agency services." Providing employment
services to a prospective employer or employee other than
employment services provided by theatrical employment agencies
and motion picture casting bureaus. The term includes, but is
not limited to, services of the type provided by employment
agencies, executive placing services and labor contractor
employment agencies other than farm labor.
(cc) "Help supply services." Providing temporary or
continuing help where the help supplied is on the payroll of the
supplying person or entity, but is under the supervision of the
individual or business to which help is furnished. The term
includes, but is not limited to, service of a type provided by
labor and manpower pools, employee leasing services, office help
supply services, temporary help services, usher services,
modeling services or fashion show model supply services. The
term does not include: providing farm labor services or human
health-related services, including nursing, home health care and
personal care. As used in this clause, "personal care" shall
include providing at least one of the following types of
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assistance to persons with limited ability for self-care:
(1) dressing, bathing or feeding;
(2) supervising self-administered medication;
(3) transferring a person to or from a bed or
wheelchair; or
(4) routine housekeeping chores when provided in
conjunction with and supplied by the same provider of the
assistance listed in subclause (1), (2) or (3).
(dd) "NAICS taxable services." Any service performed in
this Commonwealth as defined in the following subsectors and
industries of the revised 2012 NAICS developed by the Federal
Office of Management and Budget and published at 76 Fed. Reg.
159 (Aug. 17, 2011) or its successor revision:
481, for intrastate transport of persons
482, for intrastate transport of persons
483, for intrastate transport of persons
4851, for intrastate transport of persons
4852, for intrastate transport of persons
4853, for intrastate transport of persons
4855, for intrastate transport of persons
4859, for intrastate transport of persons
487
48841
5111
5112
5121
512131
512132
523930
541
5611
5612
5613
5614
5615
5619
5621
Nontuition and non-housing-related charges imposed by the
following industries: 6112, 6113, 6114, 6115 and 6116
6216, 6219, 6231, 6232, 6233, 6239, 6241, 6242, 6243,
unless provided by a nonprofit organization
6244
7111, unless imposed by industry 611110 or a nonprofit
corporation or nonprofit unincorporated association under the
laws of this Commonwealth or the United States or any entity
that is authorized to do business in this Commonwealth as a
nonprofit corporation or unincorporated association under the
laws of this Commonwealth, including a youth or athletic,
volunteer fire, ambulance, religious, charitable, fraternal,
veterans or civic association or any separately chartered
auxiliary of the foregoing and operated on a nonprofit basis
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7112, unless imposed by industry 611110 or a nonprofit
corporation or nonprofit unincorporated association under the
laws of this Commonwealth or the United States or any entity
that is authorized to do business in this Commonwealth as a
nonprofit corporation or unincorporated association under the
laws of this Commonwealth, including a youth or athletic,
volunteer fire, ambulance, religious, charitable, fraternal,
veterans or civic association or any separately chartered
auxiliary of the foregoing and operated on a nonprofit basis
7113
7114
712
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7139
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7224
8121
8122
8123
8129
(ee) (Reserved).
(ff) (Reserved).
(gg) (Reserved).
(hh) (Reserved).
(ii) (Reserved).
(jj) "Lawn care service." Providing services for lawn
upkeep, including, but not limited to, fertilizing, lawn mowing,
shrubbery trimming or other lawn treatment services.
(kk) "Self-storage service." Providing a building, a room
in a building or a secured area within a building with separate
access provided for each purchaser of self-storage service,
primarily for the purpose of storing personal property. The term
does not include service involving:
(1) safe deposit boxes by financial institutions;
(2) storage in refrigerator or freezer units;
(3) storage in commercial warehouses;
(4) facilities for goods distribution; and
(5) lockers in airports, bus stations, museums and other
public places.
(ll) "Cable or video programming service." Cable television
services, video programming services, community antenna
television services or any other distribution of television,
video, audio or radio services which is transmitted with or
without the use of wires to purchasers.
If a purchaser receives or agrees to receive cable or video
programming service, then the following charges are included in
the purchase price: charges for installation or repair of any
cable or video programming service, upgrade to include
additional premium cable or premium video programming service,
downgrade to exclude all or some premium cable or premium video
programming service, additional cable outlets in excess of ten
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or any other charge or fee related to cable or video programming
services. The term does not apply to: transmissions by public
television, public radio services or official Federal, State or
local government cable services; local origination programming
which provides a variety of public service programs unique to
the community, programming which provides coverage of public
affairs issues which are presented without commentary or
analysis, including United States Congressional proceedings, or
programming which is substantially related to religious
subjects; or subscriber charges for access to a video dial tone
system or charges by a common carrier to a video programmer for
the transport of video programming.
(mm) (Reserved).
(nn) "Construction contract." A written or oral contract or
agreement for the construction, reconstruction, remodeling,
renovation or repair of real estate or a real estate structure.
The term shall not apply to services which are taxable under
clauses (k)(14) and (17) and (o)(12) and (15).
(oo) "Construction contractor." A person who performs an
activity pursuant to a construction contract, including a
subcontractor.
(pp) "Building machinery and equipment." Generation
equipment, storage equipment, conditioning equipment,
distribution equipment and termination equipment, limited to the
following:
(1) air conditioning limited to heating, cooling,
purification, humidification, dehumidification and
ventilation;
(2) electrical;
(3) plumbing;
(4) communications limited to voice, video, data, sound,
master clock and noise abatement;
(5) alarms limited to fire, security and detection;
(6) control system limited to energy management, traffic
and parking lot and building access;
(7) medical system limited to diagnosis and treatment
equipment, medical gas, nurse call and doctor paging;
(8) laboratory system;
(9) cathodic protection system; or
(10) furniture, cabinetry and kitchen equipment.
The term includes boilers, chillers, air cleaners, humidifiers,
fans, switchgear, pumps, telephones, speakers, horns, motion
detectors, dampers, actuators, grills, registers, traffic
signals, sensors, card access devices, guardrails, medial
devices, floor troughs and grates and laundry equipment,
together with integral coverings and enclosures, regardless of
whether: the item constitutes a fixture or is otherwise affixed
to the real estate; damage would be done to the item or its
surroundings on removal; or the item is physically located
within a real estate structure. The term does not include
guardrail posts, pipes, fittings, pipe supports and hangers,
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valves, underground tanks, wire, conduit, receptacle and
junction boxes, insulation, ductwork and coverings.
(qq) "Real estate structure." A structure or item purchased
by a construction contractor pursuant to a construction contract
with:
(1) a charitable organization, a volunteer firemen's
organization, a nonprofit educational institution or a
religious organization for religious purposes and which
qualifies as an institution of purely public charity under
the act of November 26, 1997 (P.L.508, No.55), known as the
Institutions of Purely Public Charity Act;
(2) the United States; or
(3) the Commonwealth, its instrumentalities or political
subdivisions.
The term includes building machinery and equipment; developed or
undeveloped land; streets; roads; highways; parking lots;
stadiums and stadium seating; recreational courts; sidewalks;
foundations; structural supports; walls; floors; ceilings;
roofs; doors; canopies; millwork; elevators; windows and
external window coverings; outdoor advertising boards or signs;
airport runways; bridges; dams; dikes; traffic control devices,
including traffic signs; satellite dishes; antennas; guardrail
posts; pipes; fittings; pipe supports and hangers; valves;
underground tanks; wire; conduit; receptacle and junction boxes;
insulation; ductwork and coverings; and any structure or item
similar to any of the foregoing, regardless of whether the
structure or item constitutes a fixture or is affixed to the
real estate; or damage would be done to the structure or item or
its surroundings on removal.
(rr) "Telecommunications service." Any one-way transmission
or any two-way, interactive transmission of sounds, signals or
other intelligence converted to like form which effects or is
intended to effect meaningful communications by electronic or
electromagnetic means via wire, cable, satellite, light waves,
microwaves, radio waves or other transmission media. The term
includes all types of telecommunication transmissions, local,
toll, wide-area or any other type of telephone service; private
line service; telegraph service; radio repeater service;
wireless communication service; personal communications system
service; cellular telecommunication service; specialized mobile
radio service; stationary two-way radio service; and paging
service. The term does not include any of the following:
(1) Subscriber charges for access to a video dial tone
system.
(2) Charges to video programmers for the transport of
video programming.
(3) Charges for access to the Internet. Access to the
Internet does not include any of the following:
(i) The transport over the Internet or any
proprietary network using the Internet protocol of
telephone calls, facsimile transmissions or other
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telecommunications traffic to or from end users on the
public switched telephone network if the signal sent from
or received by an end user is not in an Internet
protocol.
(ii) Telecommunication services purchased by an
Internet service provider to deliver access to the
Internet to its customers.
(4) Mobile telecommunications services.
(ss) "Internet." The international nonproprietary computer
network of both Federal and non-Federal interoperable packet
switched data networks.
(tt) "Commercial racing activities." Any of the following:
(1) Thoroughbred and harness racing at which pari-mutuel
wagering is conducted under the act of December 17, 1981
(P.L.435, No.135), known as the Race Horse Industry Reform
Act.
(2) Fair racing sanctioned by the State Harness Racing
Commission.
(uu) "Prepaid telecommunications." A tangible item
containing a prepaid authorization number that can be used
solely to obtain telecommunications service, including any
renewal or increases in the prepaid amount.
(vv) "Prebuilt housing." Either of the following:
(1) Manufactured housing, including mobile homes, which
bears a label as required by and referred to in the act of
November 17, 1982 (P.L.676, No.192), known as the
Manufactured Housing Construction and Safety Standards
Authorization Act.
(2) Industrialized housing as defined in the act of May
11, 1972 (P.L.286, No.70), known as the Industrialized
Housing Act.
(ww) "Used prebuilt housing." Prebuilt housing that was
previously subject to a sale to a prebuilt housing purchaser.
(xx) "Prebuilt housing builder." A person who makes a
prebuilt housing sale to a prebuilt housing purchaser.
(yy) "Prebuilt housing sale." A sale of prebuilt housing to
a prebuilt housing purchaser, including a sale to a landlord,
without regard to whether the person making the sale is
responsible for installing the prebuilt housing or whether the
prebuilt housing becomes a real estate structure upon
installation. Temporary installation by a prebuilt housing
builder for display purposes of a unit held for resale shall not
be considered occupancy for residential purposes.
(zz) "Prebuilt housing purchaser." A person who purchases
prebuilt housing in a transaction and who intends to occupy the
unit for residential purposes in this Commonwealth.
(aaa) "Mobile telecommunications service." Mobile
telecommunications service as that term is defined in the Mobile
Telecommunications Sourcing Act (Public Law 106-252, 4 U.S.C. §
116 et seq.).
(bbb) "Fiscal Code." The act of April 9, 1929 (P.L.343,
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No.176), known as The Fiscal Code.
(ccc) "Prepaid mobile telecommunications service." Mobile
telecommunications service which is paid for in advance and
which enables the origination of calls using an access number,
authorization code or both, regardless of whether manually or
electronically dialed, if the remaining amount of units of the
prepaid mobile telecommunications service is known by the
service provider of the prepaid mobile telecommunications
service on a continuous basis. The term does not include the
advance purchase of mobile telecommunications service if the
purchase is pursuant to a service contract between the service
provider and customer and if the service contract requires the
customer to make periodic payments to maintain the mobile
telecommunications service.
(ddd) (Reserved).
(eee) "Dental services." The general and usual services
rendered and care administered by doctors of dental medicine or
doctors of dental surgery, as defined in the act of May 1, 1933
(P.L.216, No.76), known as The Dental Law.
(fff) "Physician services." The general and usual services
rendered and care administered by medical doctors, as defined in
the act of December 20, 1985 (P.L.457, No.112), known as the
Medical Practice Act of 1985, or doctors of osteopathy, as
defined in the act of October 5, 1978 (P.L.1109, No.261), known
as the Osteopathic Medical Practice Act.
(ggg) "Clothing." All vesture, wearing apparel, raiments,
garments, footwear and other articles of clothing, including
clothing patterns and items that are to be a component part of
clothing, worn or carried on or about the human body including,
but not limited to, all accessories, ornamental wear, formal day
or evening apparel and articles made of fur on the hide or pelt
or any material imitative of fur and articles of which such fur,
real, imitation or synthetic, is the component material of chief
value, but only if such value is more than three times the value
of the next most valuable component material, and sporting goods
and clothing not normally used or worn when not engaged in
sports.
(hhh) "Food and beverages." All food and beverages for
human consumption.
SUBCHAPTER B
SALES AND USE TAX
Section 702. Imposition of tax.
(a) Tax on certain sales at retail and uses of tangible
personal property and services.--
(1) There is hereby imposed on each separate sale at
retail of tangible personal property or services in this
Commonwealth a tax of 7% of the purchase price, which tax
shall be collected by the vendor from the purchaser, and
shall be paid over to the Commonwealth as provided in this
chapter.
(2) There is hereby imposed on the use in this
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Commonwealth of tangible personal property purchased at
retail and on those services purchased at retail a tax of 7%
of the purchase price, which tax shall be paid to the
Commonwealth by the person who makes such use as provided
under this chapter, except that the tax shall not be paid to
the Commonwealth by the person where the person has paid the
tax imposed by paragraph (1) or has paid the tax imposed by
this subsection to the vendor with respect to the use.
(b) General sourcing rules.--
(1) All sales of products shall be sourced according to
this subsection by sellers obligated to collect sales and use
tax under this chapter. The sourcing rules described in this
subsection apply to sales of tangible personal property,
digital goods and all services other than telecommunications
services. This subsection only applies to determine a
seller's obligation to pay or collect and remit a sales or
use tax with respect to the seller's sale of a product. This
subsection does not affect the obligation of a purchaser or
lessee to remit tax on the use of the product to the taxing
jurisdictions in which the use occurs. A seller's obligation
to collect sales tax or use tax under this chapter only
occurs if the sale is sourced to this State. Whether sales
tax to a sale source to the Commonwealth shall be determined
based on the location at which the sale is consummated by
delivery or, in the case of a service, where the first use of
the service occurs.
(2) Sales, excluding leases or rental, of products shall
be sourced as follows:
(i) When the product is received by the purchaser at
a business location of the seller, the sale is sourced to
that business location.
(ii) When the product is not received by the
purchaser at a business location of the seller, the sale
is sourced to the location where receipt by the purchaser
or the purchaser's donee, designated such by the
purchaser, occurs, including the location indicated by
instructions for delivery to the purchaser or donee,
known to the seller.
(iii) When subparagraphs (i) and (ii) do not apply,
the sale is sourced to the location indicated by an
address for the purchaser that is available from the
business records of the seller that are maintained in the
ordinary course of the seller's business when use of this
address does not constitute bad faith.
(iv) When subparagraphs (i), (ii) and (iii) do not
apply, the sale is sourced to the location indicated by
an address for the purchaser obtained during the
consummation of the sale, including the address of a
purchaser's payment instrument, if no other address is
available, when use of this address does not constitute
bad faith.
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(v) When subparagraphs (i), (ii), (iii) and (iv) do
not apply, including the circumstance where the seller is
without sufficient information to apply the previous
rules, when the location will be determined by the
address from which tangible personal property was
shipped, from which the digital good or the computer
software delivered electronically was first available for
transmission by the seller or from which the service was
provided disregarding for these purposes any location
that merely provided the digital transfer of the product
sold.
(c) Telecommunications service.--
(1) Notwithstanding any other provisions of this
chapter, the tax with respect to telecommunications service
within the meaning of "tangible personal property" in section
701 shall be computed at the rate of 7% on the total amount
charged to customers for the services, irrespective of
whether such charge is based on a flat rate or on a message
unit charge.
(2) A telecommunications service provider shall have no
responsibility or liability to the Commonwealth for billing,
collecting or remitting taxes that apply to services,
products or other commerce sold over telecommunications lines
by third-party vendors.
(3) To prevent actual multistate taxation of interstate
telecommunications service, any taxpayer, on proof that the
taxpayer has paid a similar tax to another state on the same
interstate telecommunications service, shall be allowed a
credit against the tax imposed by this section on the same
interstate telecommunications service to the extent of the
amount of the tax properly due and paid to the other state.
(4) With respect to interstate telecommunications
services, only services for interstate telecommunications
which originate or are terminated in this Commonwealth and
which are billed and charged to a service address in this
Commonwealth shall be presumed to have been performed
completely in this Commonwealth and shall be subject to tax
under this chapter.
(d) Coin-operated vending machines.--Notwithstanding any
other provisions of this chapter, the sale or use of food and
beverages dispensed by means of coin-operated vending machines
shall be taxed at the rate of 7% of the receipts collected from
any coin-operated vending machine which dispenses food and
beverages.
(e) Prepaid telecommunications.--
(1) Notwithstanding any provisions of this chapter, the
sale or use of prepaid telecommunications evidenced by the
transfer of tangible personal property shall be subject to
the tax imposed by subsection (a).
(2) The sale or use of prepaid telecommunications not
evidenced by the transfer of tangible personal property shall
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be subject to the tax imposed by subsection (a) and shall be
deemed to occur at the purchaser's billing address.
(3) (i) Notwithstanding paragraph (2), the sale or use
of prepaid telecommunications service not evidenced by
the transfer of tangible personal property shall be taxed
at the rate of 7% of the receipts collected on each sale
if the service provider elects to collect the tax imposed
by this chapter on receipts of each sale.
(ii) The service provider shall notify the
department of its election and shall collect the tax on
receipts of each sale until the service provider notifies
the department otherwise.
(e.1) Prepaid mobile telecommunications service.--
(1) Notwithstanding any other provision of this chapter,
the sale or use of prepaid mobile telecommunications service
evidenced by the transfer of tangible personal property shall
be subject to the tax imposed by subsection (a).
(2) The sale or use of prepaid mobile telecommunications
service not evidenced by the transfer of tangible personal
property shall be subject to the tax imposed by subsection
(a) and shall be deemed to occur at the purchaser's billing
address or the location associated with the mobile telephone
number or the point of sale, whichever is applicable.
(3) (i) Notwithstanding paragraph (2), the sale or use
of prepaid mobile telecommunications service not
evidenced by the transfer of tangible personal property
shall be taxed at the rate of 7% of the receipts
collected on each sale if the service provider elects to
collect the tax imposed by this chapter on receipts of
each sale.
(ii) The service provider shall notify the
department of its election and shall collect the tax on
receipts of each sale until the service provider notifies
the department otherwise.
(f) Prebuilt housing.--
(1) Notwithstanding any other provision of this chapter,
tax with respect to sales of prebuilt housing shall be
imposed on the prebuilt housing builder at the time of the
prebuilt housing sale within this Commonwealth and shall be
paid and reported by the prebuilt housing builder to the
department in the time and manner provided in this chapter.
(2) A manufacturer of prebuilt housing may, at its
option, precollect the tax from the prebuilt housing builder
at the time of sale to the prebuilt housing builder.
(3) In any case where prebuilt housing is purchased and
the tax is not paid by the prebuilt housing builder or
precollected by the manufacturer, the prebuilt housing
purchaser shall remit tax directly to the department if the
prebuilt housing is used in this Commonwealth without regard
to whether the prebuilt housing becomes a real estate
structure.
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(g) Home service providers.--
(1) Notwithstanding any other provisions of this chapter
and in accordance with the Mobile Telecommunications Sourcing
Act (Public Law 106-252, 4 U.S.C. § 116 et seq.), the sale or
use of mobile telecommunications services which are deemed to
be provided to a customer by a home service provider under 4
U.S.C. § 117 (relating to sourcing rules) shall be subject to
the tax of 7% of the purchase price, which tax shall be
collected by the home service provider from the customer, and
shall be paid over to the Commonwealth as provided in this
chapter if the customer's place of primary use is located
within this Commonwealth, regardless of where the mobile
telecommunications services originate, terminate or pass
through.
(2) For purposes of this subsection, words and phrases
used in this subsection shall have the same meanings given to
them in the Mobile Telecommunications Sourcing Act.
Section 703. Computation of tax.
(a) General rule.--The amount of tax imposed by section 702
shall be computed as follows:
(1) If the purchase price is 7¢ or less, no tax shall be
collected.
(2) If the purchase price is 8¢ or more but less than
22¢, 1¢ shall be collected.
(3) If the purchase price is 22¢ or more but less than
36¢, 2¢ shall be collected.
(4) If the purchase price is 36¢ or more but less than
50¢, 3¢ shall be collected.
(5) If the purchase price is 50¢ or more but less than
65¢, 4¢ shall be collected.
(6) If the purchase price is 65¢ or more but less than
79¢, 5¢ shall be collected.
(7) If the purchase price is 79¢ or more but less than
93¢, 6¢ shall be collected.
(8) If the purchase price is 93¢ or more but less than
$1.07, seven percent of each dollar of purchase price plus
the above tax bracket charges upon any fractional part of a
dollar in excess of even dollars shall be collected.
(b) Deposit into Education Stabilization Fund.--The tax
collected under section 702 shall be deposited into the
Education Stabilization Fund.
SUBCHAPTER C
EXCLUSIONS FROM SALES AND USE TAX
Section 704. Exclusions from tax.
The tax imposed by section 702 shall not be imposed upon any
of the following:
(1) The sale at retail or use of tangible personal
property (other than motor vehicles, trailers, semi-trailers,
motor boats, aircraft or other similar tangible personal
property required under either Federal law or laws of this
Commonwealth to be registered or licensed) or services sold
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by or purchased from a person not a vendor in an isolated
transaction or sold by or purchased from a person who is a
vendor but is not a vendor with respect to the tangible
personal property or services sold or purchased in such
transaction, provided that inventory and stock in trade so
sold or purchased shall not be excluded from the tax by the
provisions of this subsection.
(2) The use of tangible personal property purchased by a
nonresident person outside of, and brought into this
Commonwealth for use therein for a period not to exceed seven
days, or for any period of time when such nonresident is a
tourist or vacationer and, in either case not consumed within
the Commonwealth.
(3) (i) The use of tangible personal property purchased
outside this Commonwealth for use outside this
Commonwealth by a then nonresident natural person or a
business entity not actually doing business within this
Commonwealth, who later brings the tangible personal
property into this Commonwealth in connection with the
person's or entity's establishment of a permanent
business or residence in this Commonwealth, provided that
the property was purchased more than six months prior to
the date it was first brought into this Commonwealth or
prior to the establishment of the business or residence,
whichever first occurs.
(ii) This paragraph shall not apply to tangible
personal property temporarily brought into this
Commonwealth for the performance of contracts for the
construction, reconstruction, remodeling, repairing and
maintenance of real estate.
(4) (Reserved).
(5) The sale at retail or use of steam, natural and
manufactured and bottled gas, fuel oil or electricity when
purchased directly by the user solely for the user's own
residential use.
(6) (Reserved).
(7) (Reserved).
(8) (Reserved).
(9) (Reserved).
(10) (i) The sale at retail to or use by any charitable
organization, volunteer firefighters' organization or
nonprofit educational institution or a religious
organization for religious purposes of tangible personal
property or services other than pursuant to a
construction contract.
(ii) This paragraph shall not apply with respect to
any tangible personal property or services used in any
unrelated trade or business carried on by the
organization or institution or with respect to any
materials, supplies and equipment used and transferred to
the organization or institution in the construction,
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reconstruction, remodeling, renovation, repairs and
maintenance of any real estate structure, other than
building machinery and equipment, except materials and
supplies when purchased by the organization or
institution for routine maintenance and repairs.
(11) The sale at retail, or use of gasoline and other
motor fuels, the sales of which are otherwise subject to
excise taxes under 75 Pa.C.S. Ch. 90 (relating to liquid
fuels and fuels tax).
(12) (i) The sale at retail to, or use by the United
States, this Commonwealth or its instrumentalities or
political subdivisions, nonpublic schools, charter
schools, cyber charter schools or vocational schools of
tangible personal property or services.
(ii) This paragraph includes the sale at retail to a
supervisor of a home education program of tangible
personal property or services used exclusively for the
home education program.
(iii) As used in this paragraph, the terms
"nonpublic school," "charter school," "cyber charter
school," "vocational school," "supervisor" and "home
education program" shall have the meanings given to them
in the Public School Code of 1949.
(13) The sale at retail, or use of wrapping paper,
wrapping twine, bags, cartons, tape, rope, labels,
nonreturnable containers and all other wrapping supplies,
when such use is incidental to the delivery of any personal
property, except that any charge for wrapping or packaging
shall be subject to tax at the rate imposed by section 702.
(14) Sale at retail or use of vessels designed for
commercial use of registered tonnage of 50 tons or more when
produced by the builders thereof upon special order of the
purchaser.
(15) Sale at retail of tangible personal property or
services used or consumed in building, rebuilding, repairing
and making additions to or replacements in and upon vessels
designed for commercial use of registered tonnage of 50 tons
or more upon special order of the purchaser, or when rebuilt,
repaired or enlarged, or when replacements are made upon
order of or for the account of the owner.
(16) The sale at retail or use of tangible personal
property or services to be used or consumed for ship cleaning
or maintenance or as fuel, supplies, ships' equipment, ships'
stores or sea stores on vessels designed for commercial use
of registered tonnage of 50 tons or more to be operated
principally outside the limits of this Commonwealth.
(17) The sale at retail or use of prescription
medicines, drugs or medical supplies, crutches and
wheelchairs for the use of persons with disabilities and
invalids, artificial limbs, artificial eyes and artificial
hearing devices when designed to be worn on the person of the
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purchaser or user, false teeth and materials used by a
dentist in dental treatment, eyeglasses when especially
designed or prescribed by an ophthalmologist, oculist or
optometrist for the personal use of the owner or purchaser
and artificial braces and supports designed solely for the
use of persons with disabilities or any other therapeutic,
prosthetic or artificial device designed for the use of a
particular individual to correct or alleviate a physical
incapacity, including, but not limited to, hospital beds,
iron lungs and kidney machines.
(18) The sale at retail or use of coal.
(19) (Reserved).
(20) (Reserved).
(21) (Reserved).
(22) (Reserved).
(23) (Reserved).
(24) The sale at retail or use of motor vehicles,
trailers and semitrailers, or bodies attached to the chassis
thereof, sold to a nonresident of this Commonwealth to be
used outside this Commonwealth and which are registered in a
state other than this Commonwealth within 20 days after
delivery to the vendee.
(25) The sale at retail or use of water.
(26) The sale at retail or use of clothing as defined in
section 701(ggg) with a purchase price of less than $50.
(27) (Reserved).
(28) (Reserved).
(29) The sale at retail or use of food and beverages
authorized for the Women, Infants and Children Program under
section 17 of the Child Nutrition Act of 1966 (Public Law 89-
642, 42 U.S.C. § 1786) as administered by the Department of
Health.
(30) Meals and student fees imposed by educational
institutions as described in NAICS industry 611110.
(31) (Reserved).
(32) (Reserved).
(33) (Reserved).
(34) (Reserved).
(35) (Reserved).
(36) The sale at retail or use of rail transportation
equipment used in the movement of personalty.
(37) (Reserved).
(38) (Reserved).
(39) The sale at retail or use of fish feed purchased by
or on behalf of sportsmen's clubs, fish cooperatives or
nurseries approved by the Pennsylvania Fish Commission.
(40) The sale at retail of supplies and materials to
tourist promotion agencies, which receive grants from the
Commonwealth, for distribution to the public as promotional
material or the use of such supplies and materials by said
agencies for said purposes.
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(41) (Reserved).
(42) The sale or use of brook trout (salvelinus
fontinalis), brown trout (Salmo trutta) or rainbow trout
(Salmo gairdneri).
(43) The sale at retail or use of buses to be used
exclusively for the transportation of children for school
purposes.
(44) The sale at retail or use of firewood. For the
purpose of this paragraph, firewood shall mean the product of
trees when severed from the land and cut into proper lengths
for burning and pellets made from pure wood sawdust if used
for fuel for cooking, hot water production or to heat
residential dwellings.
(45) (Reserved).
(46) The sale at retail or use of tangible personal
property purchased in accordance with the Food Stamp Act of
1977, as amended (Public Law 95-113, 7 U.S.C. §§ 2011-2029).
(47) (Reserved).
(48) (Reserved).
(49) (i) The sale at retail or use of food and
beverages by nonprofit associations which support sports
programs.
(ii) The following words and phrases when used in
this paragraph shall have the meanings given to them in
this subparagraph unless the context clearly indicates
otherwise:
"Nonprofit association." An entity which is
organized as a nonprofit corporation or nonprofit
unincorporated association under the laws of this
Commonwealth or the United States or any entity which is
authorized to do business in this Commonwealth as a
nonprofit corporation or unincorporated association under
the laws of this Commonwealth, including, but not limited
to, youth or athletic associations, volunteer fire,
ambulance, religious, charitable, fraternal, veterans,
civic, or any separately chartered auxiliary of the
foregoing, if organized and operated on a nonprofit
basis.
"Sports program." Baseball, softball, football,
basketball, soccer and any other competitive sport
formally recognized as a sport by the United States
Olympic Committee as specified by and under the
jurisdiction of the Amateur Sports Act of 1978 (Public
Law 95-606, 36 U.S.C. Ch. 2205), the Amateur Athletic
Union or the National Collegiate Athletic Association.
The term shall be limited to a program or that portion of
a program that is organized for recreational purposes and
whose activities are substantially for such purposes and
which is primarily for participants who are 18 years of
age or younger or whose 19th birthday occurs during the
year of participation or the competitive season,
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whichever is longer. There shall, however, be no age
limitation for programs operated for persons with
physical handicaps or persons with mental retardation.
"Support." The funds raised from sales are used to
pay the expenses of a sports program or the nonprofit
association sells the food and beverages at a location
where a sports program is being conducted under this
chapter or the Tax Reform Code of 1971.
(50) (Reserved).
(51) The sale at retail or use of interior office
building cleaning services but only as relates to the costs
of the supplied employee, which costs are wages, salaries,
bonuses and commissions, employment benefits, expense
reimbursements and payroll and withholding taxes, to the
extent that these costs are specifically itemized or that
these costs in aggregate are stated in billings from the
vendor or supplying entity.
(52) (Reserved).
(53) (Reserved).
(54) (Reserved).
(55) (Reserved).
(56) The sale at retail or use of tangible personal
property or services used, transferred or consumed in
installing or repairing equipment or devices designed to
assist persons in ascending or descending a stairway when:
(i) The equipment or devices are used by a person
who, by virtue of a physical disability, is unable to
ascend or descend stairs without the aid of such
equipment or device.
(ii) The equipment or device is installed or used in
the person's place of residence.
(iii) A physician has certified the physical
disability of the person in whose residence the equipment
or device is installed or used.
(57) The sale at retail to or use by a construction
contractor of building machinery and equipment and services
thereto that are:
(i) transferred pursuant to a construction contract
for any charitable organization, volunteer firemen's
organization, nonprofit educational institution or
religious organization for religious purposes, provided
that the building machinery and equipment and services
thereto are not used in any unrelated trade or business;
or
(ii) transferred to the United States or the
Commonwealth or its instrumentalities or political
subdivisions.
(58) (Reserved).
(59) The sale at retail or use of molds and related mold
equipment used directly and predominantly in the manufacture
of products, regardless of whether the person that holds
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title to the equipment manufactures a product.
(60) (Reserved).
(61) (Reserved).
(62) The sale at retail or use of tangible personal
property or services which are directly used in farming,
dairying or agriculture when engaged in as a business
enterprise, regardless of whether the sale is made to the
person directly engaged in the business enterprise or to a
person contracting with the person directly engaged in the
business enterprise for the production of food.
(63) (Reserved).
(64) The sale at retail to or use by a construction
contractor, employed by a public school district pursuant to
a construction contract, of any materials and building
supplies which, during construction or reconstruction, are
made part of any public school building utilized for
instructional classroom education within this Commonwealth,
if the construction or reconstruction:
(i) is necessitated by a disaster emergency, as
defined in 35 Pa.C.S. § 7102 (relating to definitions);
and
(ii) takes place during the period when there is a
declaration of disaster emergency under 35 Pa.C.S. §
7301(c) (relating to general authority of Governor).
(65) (Reserved).
(66) The sale at retail or use of copies of an official
document sold by a government agency or a court. For the
purposes of this paragraph, the following terms or phrases
shall have the following meanings:
(i) "court" includes:
(A) an appellate court as defined in 42 Pa.C.S.
§ 102 (relating to definitions);
(B) A court of common pleas as defined in 42
Pa.C.S. § 102; or
(C) the minor judiciary as defined in 42 Pa.C.S.
§ 102;
(ii) "government agency" means an agency as defined
in section 102 of the act of February 14, 2008 (P.L.6,
No.3), known as the Right-to-Know Law; and
(iii) "official document" means a record as defined
in section 102 of the Right-to-Know Law. The term shall
include notes of court testimony, deposition transcripts,
driving records, accident reports, birth and death
certificates, deeds, divorce decrees and other similar
documents.
(67) The sale at retail or use of repair or replacement
parts, including the installation of those parts, exclusively
for use in helicopters and similar rotorcraft or in
overhauling or rebuilding of helicopters and similar
rotorcraft or helicopters and similar rotorcraft components.
(68) The sale at retail or use of helicopters and
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similar rotorcraft.
(69) The sale at retail or use of aircraft parts,
services to aircraft and aircraft components. For purposes of
this paragraph, the term "aircraft" shall include a fixed-
wing aircraft, powered aircraft, tilt-rotor or tilt-wing
aircraft, glider or unmanned aircraft.
(70) (Reserved).
(71) The sale at retail or use of tuition.
(72) But for the services as defined in section 701(w),
(x), (y), (z), (aa), (bb), (cc), (jj) and (kk), the sale at
retail or use of any of the following business, professional
or technical services performed by a business and rendered to
another business:
(i) Legal services as defined by NAICS industry
5411.
(ii) Architectural, engineering and related services
as defined by NAICS industry 5413.
(iii) Accounting, auditing and bookkeeping services
as defined by NAICS industry 5412.
(iv) Specialized design services as defined by NAICS
industry 5414.
(v) Advertising, public relations and related
services as defined by NAICS industry 5418.
(vi) Services to buildings and dwellings as defined
by NAICS industry 5617.
(vii) Scientific, environmental and technical
consulting services as defined by NAICS industry 5416.
(viii) Scientific research and development services
as defined by NAICS industries 5417 and 5419.
(ix) Information services as defined by NAICS
subsector 519.
(x) Administrative services as defined by NAICS
industries 5611, 5612, 5613, 5614, 5615 and 5619.
(xi) Custom programming, design and data processing
services as defined by NAICS industry 5415.
(xii) Parking lot and garage services as defined by
NAICS industry 8129.
(73) The sale at retail or use of legal services
relating to family law or criminal law.
(74) The sale at retail, or the use of motion picture
film rented or licensed from a distributor for the purpose of
commercial exhibition.
(75) The sale at retail or use of services performed by
minors under 18 years of age and not on behalf of another
person.
(76) The sale at retail or use of services provided by
employees to their employers in exchange for wages and
salaries when such services are rendered in the ordinary
course of employment.
(77) The sale at retail or use of goods or services that
are part of a Medicare Part B transaction.
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Section 705. Alternate imposition of tax.
(a) General rule.--If any person actively and principally
engaged in the business of selling new or used motor vehicles,
trailers or semitrailers, and registered with the department in
the "dealer's class," acquires a motor vehicle, trailer or
semitrailer for the purpose of resale, and prior to such resale,
uses the motor vehicle, trailer or semitrailer for a taxable use
under this chapter or the Tax Reform Code of 1971, the person
may pay a tax equal to 7% of the fair rental value of the motor
vehicle, trailer or semitrailer during use.
(b) Aircraft.--A commercial aircraft operator who acquires
an aircraft for the purpose of resale, or lease, or is entitled
to claim another valid exemption at the time of purchase, and
subsequent to the purchase, periodically uses the same aircraft
for a taxable use under this chapter or the Tax Reform Code of
1971, may elect to pay a tax equal to 7% of the fair rental
value of the aircraft during such use.
(c) Applicability.--This section shall not apply to the use
of a vehicle as a wrecker, parts truck, delivery truck or
courtesy car.
Section 706. Credit against tax.
(a) Tax paid to another state.--
(1) A credit against the tax imposed by section 702
shall be granted with respect to tangible personal property
or services purchased for use outside the Commonwealth equal
to the tax paid to another state by reason of the imposition
by such other state of a tax similar to the tax imposed by
this chapter.
(2) No credit under paragraph (1) shall be granted
unless the other state grants substantially similar tax
relief by reason of the payment of tax under this chapter or
under the Tax Reform Code of 1971.
(b) (Reserved).
SUBCHAPTER D
LICENSES
Section 708. Licenses.
(a) Duty to obtain license.--Every person maintaining a
place of business in this Commonwealth, selling or leasing
services or tangible personal property, the sale or use of which
is subject to tax and who has not obtained a license from the
department, shall, prior to the beginning of business, make
application to the department, on a form prescribed by the
department, for a license. If such person maintains more than
one place of business in this Commonwealth, the license shall be
issued for the principal place of business in this Commonwealth.
(b) Criteria for issuance of license.--
(1) The department shall, after the receipt of an
application, issue the license applied for under subsection
(a) if the applicant filed all required State tax reports and
paid any State taxes not subject to a timely perfected
administrative or judicial appeal or subject to a duly
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authorized deferred payment plan. The license shall be
nonassignable.
(2) All licenses in effect on the effective date of this
section under former Article III of the Tax Reform Code of
1971 and all licenses issued or renewed on or after the
effective date of this section shall be valid for a period of
five years.
(b.1) Refusal of license.--
(1) If an applicant for a license or any person holding
a license has not filed all required State tax reports and
paid any State taxes not subject to a timely perfected
administrative or judicial appeal or subject to a duly
authorized deferred payment plan, the department may refuse
to issue, may suspend or may revoke said license.
(2) The department shall notify the applicant or
licensee of any refusal, suspension or revocation. The notice
shall contain a statement that the refusal, suspension or
revocation may be made public. The notice shall be made by
first class mail.
(3) An applicant or licensee aggrieved by the
determination of the department may file an appeal pursuant
to the provisions for administrative appeals in this chapter,
except that the appeal must be filed within 30 days of the
date of the notice. In the case of a suspension or revocation
which is appealed, the license shall remain valid pending a
final outcome of the appeals process.
(4) Notwithstanding section 774 or sections 353(f),
408(b), 603, 702, 802, 904 and 1102 of the Tax Reform Code of
1971, or any other provision of law to the contrary, if no
appeal is taken or if an appeal is taken and denied at the
conclusion of the appeal process, the department may
disclose, by publication or otherwise, the identity of a
person and the fact that the person's license has been
refused, suspended or revoked under this subsection.
Disclosure may include the basis for refusal, suspension or
revocation.
(c) Penalties.--
(1) A person that maintains a place of business in this
Commonwealth for the purpose of selling or leasing services
or tangible personal property, the sale or use of which is
subject to tax, without having a valid license at the time of
the sale or lease shall be guilty of a summary offense and,
upon conviction thereof, be sentenced to pay a fine of not
less than $300 nor more than $1,500 and, in default thereof,
a term of imprisonment of not less than five days nor more
than 30 days.
(2) The penalties imposed by this subsection shall be in
addition to any other penalties imposed by this chapter.
(3) For purposes of this subsection, the offering for
sale or lease of any service or tangible personal property,
the sale or use of which is subject to tax, during any
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calendar day shall constitute a separate violation.
(4) The secretary may designate employees of the
department to enforce the provisions of this subsection. The
employees shall exhibit proof of and be within the scope of
the designation when instituting proceedings as provided by
the Pennsylvania Rules of Criminal Procedure.
(d) Effect of failure to obtain license.--Failure of any
person to obtain a license shall not relieve that person of
liability to pay the tax imposed by this chapter.
SUBCHAPTER E
HOTEL OCCUPANCY TAX
Section 709. Definitions.
(a) General rule.--The following words and phrases when used
in this subchapter shall have the meanings given to them in this
section unless the context clearly indicates otherwise:
"Hotel." A building or buildings in which the public may,
for a consideration, obtain sleeping accommodations. The term
does not include any charitable, educational or religious
institution summer camp for children, hospital or nursing home.
"Occupancy." The use or possession or the right to the use or
possession by any person, other than a permanent resident, of
any room or rooms in a hotel for any purpose or the right to the
use or possession of the furnishings or to the services and
accommodations accompanying the use and possession of the room
or rooms.
"Occupant." A person, other than a permanent resident, who,
for a consideration, uses, possesses or has a right to use or
possess any room or rooms in a hotel under any lease,
concession, permit, right of access, license or agreement.
"Operator." Any person who operates a hotel.
"Permanent resident." Any occupant who has occupied or has
the right to occupancy of any room or rooms in a hotel for at
least 30 consecutive days.
"Rent." The consideration received for occupancy valued in
money, whether received in money or otherwise, including all
receipts, cash, credits and property or services of any kind or
nature, and also any amount for which the occupant is liable for
the occupancy without any deduction. The term "rent" shall not
include a gratuity.
(b) Other definitions.--The following words and phrases,
when used in Subchapters D and F, shall, in addition to the
meaning ascribed to them by section 701, have the meaning
ascribed to them in this subsection, except where the context
clearly indicates a different meaning:
"Maintaining a place of business in this Commonwealth."
Being the operator of a hotel in this Commonwealth.
"Purchase at retail." Occupancy.
"Purchase price." Rent.
"Purchaser." Occupant.
"Sale at retail." The providing of occupancy to an occupant
by an operator.
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"Services." Occupancy.
"Tangible personal property." Occupancy.
"Use." Occupancy.
"Vendor." Operator.
Section 710. Imposition of tax.
There is hereby imposed an excise tax of 7% of the rent on
every occupancy of a room or rooms in a hotel in this
Commonwealth, which tax shall be collected by the operator from
the occupant and paid over to the Commonwealth as provided in
this act.
Section 711. Seasonal tax returns.
Notwithstanding any other provisions in this chapter or the
Tax Reform Code of 1971, the department may, by regulation,
waive the requirement for the filing of quarterly returns in the
case of any operator whose hotel is operated only during certain
seasons of the year, and may provide for the filing of returns
by such persons at times other than those provided by section
721.
SUBCHAPTER F
PROCEDURE AND ADMINISTRATION
Section 715. Persons required to make returns.
Every person required to pay tax to the department or collect
and remit tax to the department shall file returns with respect
to the tax.
Section 716. Form of returns.
The returns required by section 715 shall be on forms
prescribed by the department and shall show such information
with respect to the taxes imposed by this chapter as the
department may reasonably require.
Section 717. Time for filing returns.
(a) Quarterly and monthly returns.--
(1) For the year in which this chapter becomes
effective, and in each year thereafter, a return shall be
filed quarterly by every licensee on or before the 20th day
of April, July, October and January for the three months
ending the last day of March, June, September and December.
(2) For the year in which this chapter becomes
effective, and in each year thereafter, a return shall be
filed monthly with respect to each month by every licensee
whose actual tax liability for the third calendar quarter of
the preceding year equals or exceeds $600 and is less than
$25,000. Such returns shall be filed on or before the 20th
day of the next succeeding month with respect to which the
return is made. Any licensee required to file monthly returns
under this act shall be relieved from filing quarterly
returns.
(3) With respect to every licensee whose actual tax
liability for the third calendar quarter of the preceding
year equals or exceeds $25,000 and is less than $100,000, the
licensee shall, on or before the 20th day of each month, file
a single return consisting of all of the following:
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(i) Either of the following:
(A) An amount equal to 50% of the licensee's
actual tax liability for the same month in the
preceding calendar year if the licensee was a monthly
filer or, if the licensee was a quarterly or
semiannual filer, 50% of the licensee's average
actual tax liability for that tax period in the
preceding calendar year. The average actual tax
liability shall be the actual tax liability for the
tax period divided by the number of months in that
tax period. For licensees that were not in business
during the same month in the preceding calendar year
or were in business for only a portion of that month,
the amount shall be 50% of the average actual tax
liability for each tax period the licensee has been
in business. If the licensee is filing a tax
liability for the first time with no preceding tax
periods, the amount shall be zero.
(B) An amount equal to or greater than 50% of
the licensee's actual tax liability for the same
month.
(ii) An amount equal to the taxes due for the
preceding month, less any amounts paid in the preceding
month as required by subparagraph (i).
(4) With respect to each month by every licensee whose
actual tax liability for the third calendar quarter of the
preceding year equals or exceeds $100,000, the licensee
shall, on or before the 20th day of each month, file a single
return consisting of the amounts under paragraph (3)(i)(A)
and (ii).
(5) The amount due under paragraph (3)(i) or (4) shall
be due the same day as the remainder of the preceding month's
tax.
(6) The department shall determine whether the amounts
reported under paragraph (3) or (4) shall be remitted as one
combined payment or as two separate payments.
(7) The department may require the filing of the returns
and the payments for these types of filers by electronic
means approved by the department.
(8) Any licensee filing returns under paragraph (3) or
(4) shall be relieved of filing quarterly returns.
(9) If a licensee required to remit payments under
paragraph (3) or (4) fails to make a timely payment or makes
a payment which is less than the required amount, the
department may, in addition to any applicable penalties,
impose an additional penalty equal to 5% of the amount due
under paragraph (3) or (4) which was not timely paid. The
penalty under this paragraph shall be determined when the tax
return is filed for the tax period.
(b) Annual returns.--No annual return shall be filed, except
as may be required by rules and regulations of the department
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promulgated and published at least 60 days prior to the end of
the year with respect to which the returns are made. Where such
annual returns are required, licensees shall not be required to
file such returns prior to the 20th day of the year succeeding
the year with respect to which the returns are made.
(c) Other returns.--Any person, other than a licensee,
liable to pay to the department any tax under this chapter,
shall file a return on or before the 20th day of the month
succeeding the month in which the person becomes liable for the
tax.
(d) Small taxpayers.--The department, by regulation, may
waive the requirement for the filing of quarterly return in the
case of any licensee whose individual tax collections do not
exceed $75 per calendar quarter and may provide for reporting on
a less frequent basis in such cases.
Section 718. Extension of time for filing returns.
The department may, on written application and for good cause
shown, grant a reasonable extension of time for filing any
return required under this subchapter. However, the time for
making a return shall not be extended for more than three
months.
Section 719. Place for filing returns.
Returns shall be filed with the department at its main office
or at any branch office which it may designate for filing
returns.
Section 720. Timely mailing treated as timely filing and
payment.
(a) General rule.--Notwithstanding the provisions of any
State tax law to the contrary, whenever a report or payment of
all or any portion of a State tax is required by law to be
received by the department or other agency of the Commonwealth
on or before a day certain, the taxpayer shall be deemed to have
complied with the law if the letter transmitting the report or
payment of the tax which has been received by the department is
postmarked by the United States Postal Service on or prior to
the final day on which the payment is to be received.
(b) Presentation of receipt.--For the purposes of this
chapter, presentation of a receipt indicating that the report or
payment was mailed by registered or certified mail on or before
the due date shall be evidence of timely filing and payment.
Section 721. Payment of tax.
When a return of tax is required under this subchapter, the
person required to make the return shall pay the tax to the
department.
Section 722. Time of payment.
(a) General rule.--The tax imposed by this chapter and
incurred or collected by a licensee shall be due and payable by
the licensee on the day the return is required to be filed under
the provisions of section 717 and the payment must accompany the
return for the preceding period.
(b) Annual payments.--If the amount of tax due for the
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preceding year as shown by the annual return of a taxpayer is
greater than the amount already paid by the taxpayer in
connection with the taxpayer's monthly or quarterly returns, the
taxpayer shall send with the annual return a remittance for the
unpaid amount of tax for the year.
(c) Other payments.--Any person other than a licensee liable
to pay any tax under this chapter shall remit the tax at the
time of filing the return required by this chapter.
Section 723. Other times for payment.
In the event that the department authorizes a taxpayer to
file a return at other times than those specified in section
717, the tax due shall be paid at the time the return is filed.
Section 724. Place for payment.
The tax imposed by this chapter shall be paid to the
department at the place fixed for filing the return.
Section 725. Tax held in trust for Commonwealth.
(a) General rule.--All taxes collected by any person from
purchasers in accordance with this chapter and all taxes
collected by any person from purchasers under color of this
chapter which have not been properly refunded by the person to
the purchaser shall constitute a trust fund for the
Commonwealth, and such trust shall be enforceable against such
person, the person's representatives and any person, other than
a purchaser to whom a refund has been made properly, receiving
any part of the fund without consideration, or knowing that the
taxpayer is committing a breach of trust.
(b) Presumption.--Any person receiving payment of a lawful
obligation of the taxpayer from the fund identified under
subsection (a) shall be presumed to have received the same in
good faith and without any knowledge of the breach of trust.
(c) Right to petition and appeal.--Any person, other than a
taxpayer, against whom the department makes any claim under this
section shall have the same right to petition and appeal as is
given taxpayers by any provisions of this subchapter.
Section 726. (Reserved).
Section 727. Discount.
(a) General rule.--Subject to the provisions of subsection
(b), if a return is filed by a licensee and the tax shown to be
due thereon less any discount is paid all within the time
prescribed, the licensee shall be entitled to credit and apply
against the tax payable by the licensee a discount of 1% of the
amount of the tax collected by the licensee, as compensation for
the expense of collecting and remitting the tax due by the
licensee and as consideration of the prompt payment.
(b) Types of periodic filers.--For returns filed on or after
the effective date of this section, the discount under
subsection (a) shall be limited to the following:
(1) For a monthly filer, $25 per return.
(2) For a quarterly filer, $75 per return.
(3) For a semiannual filer, $150 per return.
Section 728. (Reserved).
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Section 729. (Reserved).
Section 730. Assessment.
The department shall make the inquiries, determinations and
assessments of the tax, including interest, additions and
penalties, imposed by this chapter. A notice of assessment and
demand for payment shall be mailed to the taxpayer. The notice
shall set forth the basis of the assessment.
Section 731. Mode and time of assessment.
(a) Duty to examine.--
(1) Within a reasonable time after any return is filed,
the department shall examine it and, if the return shows a
greater tax due or collected than the amount of tax remitted
with the return, the department shall issue an assessment for
the difference, together with an addition of 3% of the
difference, which shall be paid to the department within ten
days after a notice of the assessment has been mailed to the
taxpayer.
(2) If such assessment is not paid within ten days,
there shall be added and paid to the department an additional
3% of the difference for each month during which the
assessment remains unpaid. The total of all additions shall
not exceed 18% of the difference shown on the assessment.
(b) Understated tax on returns.--
(1) If the department determines that any return or
returns of any taxpayer understates the amount of tax due, it
shall determine the proper amount and shall ascertain the
difference between the amount of tax shown in the return and
the amount determined. The difference may be referred to as
the deficiency.
(2) The department shall send a notice of assessment for
the deficiency and the reasons to the taxpayer.
(3) The taxpayer shall pay the deficiency to the
department within 30 days after a notice of the assessment
has been mailed to the taxpayer.
(c) Estimated assessments.--
(1) In the event that any taxpayer fails to file a
return required by this chapter, the department may make an
estimated assessment, based on information available, of the
proper amount of tax owed by the taxpayer and shall send a
notice of assessment in the estimated amount to the taxpayer.
(2) The taxpayer shall pay the tax within 30 days after
a notice of the estimated assessment has been mailed to the
taxpayer.
(d) Studies.--
(1) The department may conduct the studies necessary to
compute effective rates by business classification, based
upon the ratio between the tax required to be collected and
taxable sales and to use such rates in arriving at the
apparent tax liability of a taxpayer.
(2) Any assessment based on such rates shall be prima
facie correct, except that the rate shall not be considered
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where a taxpayer establishes the rate is based on a sample
inapplicable to the taxpayer.
Section 732. Reassessment.
Any taxpayer against whom an assessment is made may petition
the department for a reassessment under Article XXVII of the Tax
Reform Code of 1971.
Section 733. Assessment to recover erroneous refunds.
The department may, within two years of the granting of any
refund or credit, or within the period in which an assessment
could have been filed by the department with respect to the
transaction pertaining to which the refund was granted,
whichever period shall last occur, file an assessment to recover
any refund or part thereof or credit or part thereof which was
erroneously made or allowed.
Section 734. (Reserved).
Section 735. (Reserved).
Section 736. Burden of proof.
In all cases of petitions for reassessment, review or appeal,
the burden of proof shall be on the petitioner or appellant, as
applicable.
Section 737. Collection of tax.
(a) General rule.--The department shall collect the tax in
the manner provided by law for the collection of taxes imposed
by the laws of this Commonwealth.
(b) Collection by persons maintaining a place of business in
the Commonwealth.--
(1) Every person maintaining a place of business in this
Commonwealth and selling or leasing tangible personal
property or services, the sale or use of which is subject to
tax shall collect the tax from the purchaser or lessee at the
time of making the sale or lease, and shall remit the tax to
the department, unless the collection and remittance is
otherwise provided for in this chapter.
(2) (i) Every person not otherwise required to collect
tax that delivers tangible personal property to a
location within this Commonwealth and that unpacks,
positions, places or assembles the tangible personal
property shall collect the tax from the purchaser at the
time of delivery and shall remit the tax to the
department if the person delivering the tangible personal
property is responsible for collecting any portion of the
purchase price of the tangible personal property
delivered and the purchaser has not provided the person
with proof that the tax imposed by this chapter has been
or will be collected by the seller or that the purchaser
provided the seller with a valid exemption certificate.
(ii) Every person required to collect tax under this
paragraph shall be deemed to be selling or leasing
tangible personal property or services, the sale or use
of which is subject to the tax imposed under section 702.
(3) Any person required under this chapter to collect
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tax from another person, who shall fail to collect the proper
amount of the tax, shall be liable for the full amount of the
tax which the person should have collected.
(c) Certificate for tax-exempt sales or leases.--
(1) If the tax does not apply to the sale or lease of
tangible personal property or services, the purchaser or
lessee shall furnish to the vendor a certificate indicating
that the sale is not legally subject to the tax. The
certificate shall be in substantially such form as the
department may, by regulation, prescribe.
(2) Where the tangible personal property or service is
of a type which is never subject to the tax imposed or where
the sale or lease of tangible personal property is in
interstate commerce, the certificate need not be furnished.
(3) Where a series of transactions are not subject to
tax, a purchaser or user may furnish the vendor with a single
exemption certificate in substantially such form and valid
for such period of time as the department may, by regulation,
prescribe.
(4) The department shall provide all school districts
and intermediate units with a permanent tax exemption number.
(5) An exemption certificate, which is complete and
regular and on its face discloses a valid basis of exemption
if taken in good faith, shall relieve the vendor from the
liability imposed by this section.
(6) An exemption certificate:
(i) accepted by a vendor from a natural person
domiciled within this Commonwealth or any association,
fiduciary, partnership, corporation or other entity,
either authorized to do business within this Commonwealth
or having an established place of business within this
Commonwealth, in the ordinary course of the vendor's
business;
(ii) which on its face discloses a valid basis of
exemption consistent with the activity of the purchaser
and character of the property or service being purchased
or which is provided to the vendor by a charitable,
religious, educational or volunteer firefighters'
organization;
(iii) contains the organization's charitable
exemption number; and
(iv) which, in the case of any purchase costing $200
or more, is accompanied by a sworn declaration on a form
to be provided by the department of an intended usage of
the property or service which would render it nontaxable,
shall be presumed to be taken in good faith and the burden of
proving otherwise shall be on the department.
(d) Direct payment permits.--
(1) The department may authorize a purchaser or lessee
who acquires tangible personal property or services under
circumstances which make it impossible at the time of
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acquisition to determine the manner in which the tangible
personal property or service will be used, to pay the tax
directly to the department, and waive the collection of the
tax by the vendor.
(2) No such authority shall be granted or exercised,
except on application to the department, and the issuance by
the department, in its discretion, of a direct payment
permit.
(3) If a direct payment permit is granted, its use shall
be subject to conditions specified by the department, and the
payment of tax on all acquisitions pursuant to the permit
shall be made directly to the department by the permit
holder.
Section 738. Collection of tax on motor vehicles, trailers and
semitrailers.
(a) General rule.--Notwithstanding the provisions of section
737(b)(1), tax due on the sale at retail or use of a motor
vehicle, trailer or semitrailer, except mobile homes as defined
in 75 Pa.C.S. (relating to vehicles), required by law to be
registered with the department under the provisions of 75
Pa.C.S. shall be paid by the purchaser or user directly to the
department on application to the department for an issuance of a
certificate of title on the motor vehicle, trailer or
semitrailer.
(b) No issuance of certificate of title without payment of
tax.--
(1) The department shall not issue a certificate of
title until the tax has been paid, or evidence satisfactory
to the department has been given to establish that tax is not
due.
(2) The department may cancel or suspend any record of
certificate of title or registration of a motor vehicle,
trailer or semitrailer when the check received in payment of
the tax on the vehicle is not paid on demand.
(c) First encumbrance.--The tax shall be considered as a
first encumbrance against the vehicle and the vehicle may not be
transferred without first payment in full of the tax and any
interest additions or penalties which shall accrue in accordance
with this chapter.
Section 739. Precollection of tax.
(a) Authorization.--
(1) Except as otherwise provided under paragraph (2),
the department may, by regulation, authorize or require
particular categories of vendors selling tangible personal
property for resale to precollect from the purchaser the tax
which the purchaser will collect on making a sale at retail
of the tangible personal property.
(2) The department, pursuant to this section, may not
require a vendor to precollect tax from a purchaser who
purchases for resale more than $1,000 worth of tangible
personal property from the vendor per year.
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(b) No license required.--In any case in which a vendor has
been authorized to prepay the tax to the person from whom the
vendor purchased the tangible personal property for resale, the
vendor authorized to prepay the tax may, under the regulations
of the department, be relieved from the duty to secure a license
if the duty arises only by reason of the vendor's sale of the
tangible personal property with respect to which the vendor is,
under authorization of the department, to prepay the tax.
(c) Reimbursement.--
(1) The vendor, on making a sale at retail of tangible
personal property with respect to which the vendor has
prepaid the tax, must separately state at the time of resale
the proper amount of tax on the transaction, and reimburse
itself on account of the taxes which the vendor has
previously prepaid.
(2) If the vendor collects a greater amount of tax in
any reporting period than the vendor previously prepaid on
purchase of the goods with respect to which the vendor
prepaid the tax, the vendor must file a return and remit the
balance to the Commonwealth at the time at which a return
would otherwise be due with respect to the sales.
Section 740. Bulk and auction sales.
A person who sells or causes to be sold at auction, or who
sells or transfers in bulk, 51% or more of any stock, of goods,
wares or merchandise of any kind, fixtures, machinery,
equipment, buildings or real estate, involved in a business for
which the person is licensed or required to be licensed under
this chapter, or is liable for filing use tax returns in
accordance with this chapter, shall be subject to the provisions
of section 1403 of The Fiscal Code.
Section 741. (Reserved).
Section 742. Lien for taxes.
(a) Nature and effect of lien.--
(1) If any person liable to pay any tax neglects or
refuses to pay the same after demand, the amount, including
any interest, addition or penalty, together with any costs
that may accrue in addition, shall be a lien in favor of the
Commonwealth on the property, both real and personal, of the
person but only after same has been entered and docketed of
record by the prothonotary of the county where the property
is situated.
(2) The department may, at any time, transmit to the
prothonotaries of the respective counties certified copies of
all liens for taxes imposed by this chapter or the Tax Reform
Code of 1971 and penalties and interest.
(3) Each prothonotary receiving the lien shall enter and
docket the lien of record in the prothonotary's office, which
lien shall be indexed as judgments are now indexed.
(4) No prothonotary shall require, as a condition
precedent to the entry of the liens, the payment of the costs
incident thereto.
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(b) Priority status.--
(1) The lien imposed under this section shall have
priority from the date of its recording, and shall be fully
paid and satisfied out of the proceeds of any judicial sale
of property before any other obligation, judgment, claim,
lien or estate to which the property may subsequently become
subject, except costs of the sale and of the writ on which
the sale was made, and real estate taxes and municipal claims
against such property, but shall be subordinate to mortgages
and other liens existing and duly recorded or entered of
record prior to the recording of the tax lien.
(2) In the case of a judicial sale of property, subject
to a lien imposed under this section, on a lien or claim over
which the lien imposed under this section has priority, the
sale shall discharge the lien imposed under this section to
the extent only that the proceeds are applied to its payment,
and the lien shall continue in full force and effect as to
the balance remaining unpaid.
(3) There shall be no inquisition or condemnation upon
any judicial sale of real estate made by the Commonwealth
pursuant to the provisions of this section.
(4) (i) The lien of the taxes, interest and penalties,
shall continue for five years from the date of entry, and
may be revived and continued in the manner now or
hereafter provided for renewal of judgments, or as may be
provided in The Fiscal Code, and a writ of execution may
directly issue upon the lien without the issuance and
prosecution to judgment of a writ of scire facias.
(ii) Not less than ten days before issuance of any
execution on the lien, notice of the filing and the
effect of the lien shall be sent by registered mail to
the taxpayer at the taxpayer's last known post office
address.
(iii) The lien shall have no effect on any stock of
goods, wares or merchandise regularly sold or leased in
the ordinary course of business by the person against
whom the lien has been entered, unless and until a writ
of execution has been issued and a levy made on the stock
of goods, wares and merchandise.
(c) Penalty.--Any willful failure of any prothonotary to
carry out any duty imposed on the prothonotary under this
section shall be a misdemeanor, and, upon conviction, the
prothonotary shall be sentenced to pay a fine not more than
$1,000 and costs of prosecution or to a term of imprisonment not
exceeding one year, or both.
(d) Priority payment from distribution.--
(1) Except as otherwise provided under the law, in the
distribution, voluntary or compulsory, in receivership,
bankruptcy or otherwise, of the property or estate of any
person, all taxes imposed by this chapter which are due and
unpaid and are not collectible under section 725 shall be
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paid from the first money available for distribution in
priority to all other claims and liens, except insofar as the
laws of the United States may give a prior claim to the
Federal Government.
(2) Any person charged with the administration or
distribution of the property or estate, who violates the
provisions of this section, shall be personally liable for
any taxes imposed by this chapter, which are accrued and
unpaid and are chargeable against the person whose property
or estate is being administered or distributed.
(e) Construction.--Subject to the limitations contained in
this chapter as to the assessment of taxes, nothing contained in
this section shall be construed to restrict, prohibit or limit
the use by the department in collecting taxes finally due and
payable of any other remedy or procedure available at law or
equity for the collection of debts.
Section 743. Suit for taxes.
(a) General rule.--At any time within three years after any
tax or any amount of tax shall be finally due and payable, the
department may commence an action in the courts of this
Commonwealth, of any state or of the United States, in the name
of the Commonwealth, to collect the amount of tax due together
with additions, interest, penalties and costs in the manner
provided at law or in equity for the collection of ordinary
debts.
(b) Prosecution by Attorney General.--The Attorney General
shall prosecute the action and, except as provided in this
chapter, the provisions of the Rules of Civil Procedure and the
provisions of the laws of this Commonwealth relating to civil
procedures and remedies shall, to the extent that they are
applicable, be available in such proceedings.
(c) Construction.--The provisions of this section are in
addition to any process, remedy or procedure for the collection
of taxes provided by this chapter or by the laws of this
Commonwealth, and this section is neither limited by nor
intended to limit any such process, remedy or procedure.
Section 744. Tax suit comity.
The courts of this Commonwealth shall recognize and enforce
liabilities for sales and use taxes, lawfully imposed by any
other state if the other state extends a like comity to this
Commonwealth.
Section 745. Service.
(a) General rule.--Any person who maintains a place of
business in this Commonwealth is deemed to have appointed the
Secretary of the Commonwealth as the person's agent for the
acceptance of service of process or notice in any proceedings
for the enforcement of the civil provisions of this chapter, and
any service made upon the Secretary of the Commonwealth as agent
shall be of the same legal force and validity as if the service
had been personally made on the person.
(b) Substitute service.--Where service cannot be made on the
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person in the manner provided by other laws of this Commonwealth
relating to service of process, service may be made on the
Secretary of the Commonwealth and, in such case, a copy of the
process or notice shall also be personally served on any agent
or representative of the person who may be found within this
Commonwealth, or where no such agent or representative may be
found a copy of the process or notice shall be sent by
registered mail to the person at the last known address of the
person's principal place of business, home office or residence.
Section 746. Collection and payment of tax on credit sales.
If any sale subject to tax under this chapter is wholly or
partly on credit, the vendor shall require the purchaser to pay
in cash at the time the sale is made, or within 30 days
thereafter, the total amount of tax due upon the entire purchase
price. The vendor shall remit the tax to the department,
regardless of whether payment was made by the purchaser to the
vendor, with the next return required to be filed under section
717.
Section 747. Prepayment of tax.
(a) General rule.--Whenever a vendor is prohibited by law or
governmental regulation to charge and collect the purchase price
in advance of or at the time of delivery, the vendor shall
prepay the tax as required by section 722, but in that case, if
the purchaser fails to pay to the vendor the total amount of the
purchase price and the tax and the amount is written off as
uncollectible by the vendor, the vendor shall not be liable for
the tax and shall be entitled to a credit or refund of the tax
paid.
(b) Subsequent collection of tax.--If the purchase price is
thereafter collected, in whole or in part, the amount collected
shall be first applied to the payment of the entire tax portion
of the bill, and shall be remitted to the department by the
vendor with the first return filed after such collection.
(c) Time period for refund.--Tax prepaid shall be subject to
refund on petition to the department under the provisions of
section 752, filed within 105 days of the close of the fiscal
year in which the accounts are written off.
Section 747.1. Refund of sales tax attributed to bad debt.
(a) General rule.--A vendor may file a petition for refund
of sales tax paid to the department that is attributed to a bad
debt if all of the following apply:
(1) The purchaser fails to pay the total purchase price.
(2) The purchase price is written off, either in whole
or in part, as a debt on the books and records of the vendor
or an affiliate of the vendor.
(3) The bad debt has been deducted for Federal income
tax purposes under section 166 of the Internal Revenue Code
of 1986.
(a.1) Time for filing petition.--A petition for refund,
which is authorized by this section, must be filed with the
department within the time limitations under section 3003.1(a).
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(a.2) Private-label credit cards.--In the case of private-
label credit card accounts not qualifying under subsection (a),
a vendor or lender that makes an election pursuant to subsection
(a.3) shall be entitled to file a petition for refund of sales
tax that the vendor has previously reported and paid to the
department, if all of the following conditions are met:
(1) No refund was previously allowed with respect to the
portion of the account written off as a bad debt.
(2) The account has been found worthless and written
off, either in whole or in part, as bad debt on the books and
records of the lender or an affiliate of the lender.
(3) The account has been deducted for Federal income tax
purposes under section 166 of the Internal Revenue Code of
1986 (Public Law 99-514, 26 U.S.C. § 166) by the lender or an
affiliate of the lender.
(a.3) Joint election.--In order to be eligible for a refund
under subsection (a.2), the lender and the vendor must execute
and file with the department a joint election, signed by both
parties, designating which party is entitled to claim the
refund. This election may not be revoked unless a written notice
is signed by the party that signed the election being revoked
and is filed with the department.
(b) Limitation.--
(1) The refund authorized by this section shall be
limited to the sales tax paid to the department that is
attributed to the bad debt, less any discount under section
727.
(2) Partial payments by the purchaser shall be prorated
between the original purchase price and the sales tax due on
the sale.
(3) Payments made on any transaction which includes both
taxable and nontaxable components shall be allocated
proportionally between the taxable and nontaxable components.
(c) Assignment.--A vendor or lender may assign its right to
petition and receive a refund of sales tax attributed to a bad
debt to an affiliate.
(d) Items not refundable.--No refund shall be granted under
this section for interest, finance charges or expenses incurred
in attempting to collect any amount receivable.
(e) Documentation.--Documentation requirements are as
follows:
(1) Any person claiming a refund under this section
shall, on request, make available adequate books, records or
other documentation supporting the claimed refund, including:
(i) Date of original sale, name and Pennsylvania
sales tax license number of the retailer.
(ii) Name and address of purchaser.
(iii) Amount that the purchaser paid or agreed to
pay.
(iv) Taxable and nontaxable charges.
(v) Amount on which the retailer reported and paid
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sales tax.
(vi) All payments or other credits applied to the
account of the purchaser.
(vii) Evidence that the uncollected amount has been
designated as a bad debt in the books and records of the
vendor or lender, as appropriate, and that the amount has
been claimed as a bad debt deduction for Federal income
tax purposes.
(viii) The county in which any local sales tax was
incurred.
(ix) The unpaid portion of the sales price.
(x) A certification, under penalty of perjury, that
no person has collected money on the bad debt for which
the refund is claimed.
(xi) Any other information required by the
department.
(2) A person claiming a refund under this section may
provide alternative forms of documentation acceptable to the
department if appropriate in light of the volume and
character of uncollectible accounts. This includes the
following:
(i) If a vendor remits sales or use tax to the
Commonwealth and to another state, the entity claiming a
refund under this section may use an apportionment method
to substantiate the amount of Pennsylvania tax included
in the bad debts to which the refund applies.
(ii) The apportionment method must use the vendor's
Pennsylvania and non-Pennsylvania sales, the vendor's
taxable and nontaxable sales and the amount of tax the
vendor remitted to Pennsylvania.
(f) Subsequent collection.--
(1) If the purchase price that is attributed to a prior
bad debt refund is collected in whole or in part by the
vendor or lender, or an affiliate of the vendor or lender,
the entity claiming the refund shall remit the proportional
tax to the department with the first return filed after the
collection. If the entity is not required to file periodic
returns, the entity shall remit the proportional tax to the
department with another return pursuant to section 717(c).
(2) Any consideration received for the assignment, sale
or other transfer of a bad debt with respect to which a
refund has been granted shall be deemed to be a collection of
a prior bad debt. This paragraph shall not apply to a
transfer to an entity that is part of the same affiliated
group, as defined by section 1504 of the Internal Revenue
Code of 1986 (Public Law 99-514, 26 U.S.C. § 1504).
(3) A person that collects, in whole or in part, the
purchase price attributed to a prior bad debt refund is
required to maintain adequate books, records or other
documentation to allow the department to determine whether
the purchase price attributed to a prior bad debt refund has
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been collected. Information under this paragraph includes the
pertinent facts required by subsection (e).
(4) If it is determined by the department that a prior
bad debt has been collected, in whole or in part, and the
proportional tax has not been properly reported and paid to
the department, the person that claimed the refund on the
transaction shall report and pay the proportional tax to the
department plus applicable interest and penalty under this
chapter.
(g) Interest prohibited.--Notwithstanding the provisions of
section 806.1 of The Fiscal Code, no interest shall be paid by
the Commonwealth on refunds of sales tax attributed to bad debt
under this section.
(h) Administration.--
(1) No refund or credit of sales tax shall be made for
any uncollected purchase price or bad debt except as
authorized by this section.
(2) No deduction or credit for bad debt may be taken on
any return filed with the department.
(3) This section shall provide the exclusive procedure
for claiming a refund or credit of sales tax attributed to
uncollected purchase price or bad debt.
(i) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in this
subsection unless the context clearly indicates otherwise:
"Affiliate." A person that is:
(1) An affiliated entity under section 1504(a)(1) of the
Internal Revenue Code of 1986.
(2) A person described in paragraph (1) or (2) of the
definition of "lender" that would be an affiliated entity,
under section 1504 of the Internal Revenue Code of 1986, of a
vendor but for the fact the person is not a corporation, an
assignee or another transferee of a person described in
paragraph (1) or (2) of the definition of "lender".
"Lender." Any of the following:
(1) A person that owns or has owned a private-label
credit card account purchased directly from a vendor that
reported the tax under this chapter.
(2) A person that owns or has owned a private-label
credit card account pursuant to a contract directly with the
vendor that reported the tax under this chapter.
(3) A person that is:
(i) an affiliate of a person described in paragraph
(1) or (2); or
(ii) an assignee or other transferee of a person
described in paragraph (1) or (2).
"Private-label credit card." Any charge card, credit card or
other instrument serving similar purpose which carries, refers
to or is branded with the name or logo of a vendor and which can
be used for purchases from the vendor. The term does not include
a card or instrument which may also be used to make purchases
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from persons other than the vendor whose name or logo appears on
the card or instrument or that vendor's affiliates. Nothing in
this definition shall be construed to authorize a refund with
respect to bad debts attributable to sales by unrelated persons
referred to in this definition.
Section 748. Registration of transient vendors.
(a) General rule.--Prior to conducting business or otherwise
commencing operations in this Commonwealth, a transient vendor
shall register with the department. The application for
registration shall be in such form and contain such information
as the department, by regulation, shall prescribe and shall set
forth truthfully and accurately the information desired by the
department. This registration shall be renewed and updated
annually.
(b) Certificate to be issued.--After registration and the
posting of the bond required by section 748.1, the department
shall issue to the transient vendor a certificate valid for one
year. On renewal of registration, the department shall issue a
new certificate valid for one year, if the department is
satisfied that the transient vendor has complied with the
provisions of this chapter.
(c) Possession and exhibition of certificate.--The transient
vendor shall possess the certificate at all times when
conducting business within this Commonwealth and shall exhibit
the certificate upon demand by authorized employees of the
department or any law enforcement officer.
(d) Contents of certificate.--The certificate issued by the
department shall state that the transient vendor named in the
certificate has registered with the department and shall provide
notice to the transient vendor that:
(1) The transient vendor must notify the department in
writing before it enters this Commonwealth to conduct
business, of the location or locations where it intends to
conduct business and the date or dates on which it intends to
conduct business.
(2) Failure to notify or giving false information to the
department may result in suspension or revocation of the
transient vendor's certificate.
(3) Conducting business in this Commonwealth after a
certificate has been suspended or revoked may result in
criminal conviction and the imposition of fines or other
penalties.
Section 748.1. Bond.
(a) General rule.--Upon registration with the department, a
transient vendor shall also post a bond with the department in
the amount of $500 as surety for compliance with the provisions
of this chapter. After a period of demonstrated compliance with
these provisions or, if the transient vendor provides the
license number of a promoter who has notified the department of
a show, in accordance with the provisions of section 748.6(a),
the department may reduce the amount of bond required of a
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transient vendor or may eliminate the bond entirely.
(b) Voluntary suspension of certificate.--A transient vendor
may file a request for voluntary suspension of certificate with
the department. If the department is satisfied that the
provisions of this chapter have been complied with and has
possession of the transient vendor's certificate, it shall
return the bond posted to the transient vendor.
Section 748.2. Notification to department.
(a) General rule.--Prior to entering this Commonwealth to
conduct business, a transient vendor shall notify the department
in writing of the location or locations where it intends to
conduct business and the date or dates on which it intends to
conduct business.
(b) Inspection of records.--While conducting business in
this Commonwealth, the transient vendor shall permit authorized
employees of the department to inspect its sales records,
including, but not limited to, sales receipts and inventory or
price lists and to permit inspection of the tangible personal
property offered for sale at retail.
(c) Conditions for suspension or revocation of
certificate.--The department may suspend or revoke a certificate
issued to a transient vendor if the transient vendor:
(1) fails to notify the department as required by
subsection (a);
(2) provides the department with false information
regarding the conduct of business in this Commonwealth;
(3) fails to collect sales tax on all tangible personal
property or services sold subject to the sales tax; or
(4) fails to file with the department a tax return as
required by section 717.
(d) Regulations.--The department shall promulgate the rules
and regulations necessary to implement this section.
Section 748.3. Seizure of property.
(a) General rule.--If a transient vendor conducting business
in this Commonwealth fails to exhibit a valid certificate on
demand by authorized employees of the department, those
authorized employees shall seize, without warrant, the tangible
personal property and the automobile, truck or other means of
transportation used to transport or carry that property. All
property seized shall be deemed contraband and shall be subject
to immediate forfeiture proceedings instituted by the department
pursuant to procedures adopted by regulation, except as
otherwise provided by this section.
(b) Release of seized property.--Property seized pursuant to
subsection (a) shall be released on:
(1) presentation of a valid certificate to authorized
employees of the department; or
(2) registration by the transient vendor with the
department and the posting of a bond in the amount of $500,
either immediately or within 15 days after the property is
seized.
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Section 748.4. Fines.
Any transient vendor conducting business in this Commonwealth
while its certificate is suspended or revoked, as provided by
sections 748.1(b) and 748.2(c), commits a misdemeanor of the
third degree and, upon conviction, shall be sentenced to pay a
fine of not more than $2,500 for each offense.
Section 748.5. Transient vendors subject to chapter.
Except as otherwise provided, a transient vendor shall be
subject to the provisions of this chapter in the same manner as
a vendor who maintains a place of business in this Commonwealth.
Section 748.6. Promoters.
(a) General rule.--A promoter of a show or shows in this
Commonwealth may annually file with the department an
application for a promoter's license stating the location and
dates of such show or shows. The application shall be filed at
least 30 days prior to the opening of the first show and shall
be in such form as the department may prescribe.
(b) License.--
(1) Except as otherwise provided in this chapter, the
department shall, within 15 days after receipt of an
application for a license, issue to the promoter without
charge a license to operate such shows.
(2) If application for a license under this section has
been timely filed and if the license has not been received by
the promoter prior to the opening of the show, the
authorization contained in this section with respect to the
obtaining of a promoter's license shall be deemed to have
been complied with, unless or until the promoter receives
notice from the department denying the application for a
promoter's license.
(c) Compliance.--Any promoter who is a vendor under the
provisions of section 701 shall comply with all the provisions
of this chapter applicable to vendors and with the provisions of
this section applicable to promoters.
(d) Prohibited conduct.--No licensed promoter shall permit
any person to display for sale or to sell tangible personal
property or services subject to tax under section 702 at a show
unless the person is licensed under section 708 and provides to
the promoter the information required under law.
(e) Penalties.--
(1) Any licensed promoter who:
(i) permits any person to display for sale or to
sell tangible personal property or service without first
having been licensed under section 708;
(ii) fails to maintain records of a show as required
by law; or
(iii) knowingly maintains false records or fails to
comply with any provision contained in this section or
any regulation promulgated by the department pertaining
to shows,
shall be subject to denial of a license or the revocation of
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any existing license issued pursuant to this section.
(2) The department may deny the promoter a license
certificate to operate a show for a period of not more than
six months from the date of such denial. The penalty shall be
in addition to any other penalty imposed by this chapter.
(3) Within 20 days of notice of denial or revocation of
a license by the department, the promoter may petition the
department for a hearing pursuant to 2 Pa.C.S. (relating to
administrative law and procedure).
Section 749. (Reserved).
Section 750. (Reserved).
Section 751. (Reserved).
Section 752. Refunds.
(a) General rule.--Subject to the provisions of subsection
(b), the department shall, pursuant to the provisions of Article
XXVII of the Tax Reform Code of 1971, refund all taxes, interest
and penalties paid to the Commonwealth under the provisions of
this chapter and to which the Commonwealth is not rightfully
entitled. The refunds shall be made to the person, the person's
heirs, successors, assigns or other personal representatives,
who actually paid the tax.
(b) Exception.--No refund shall be made under this section
with respect to any payment made by reason of an assessment with
respect to which a taxpayer has filed a petition for
reassessment pursuant to section 2702 of the Tax Reform Code of
1971 to the extent that the petition has been determined
adversely to the taxpayer by a decision which is no longer
subject to further review or appeal.
(c) Construction.--Nothing contained in this section shall
be deemed to prohibit a taxpayer who has filed a timely petition
for reassessment from amending it to a petition for refund where
the petitioner has paid the tax assessed.
Section 753. Refund petition.
(a) General rule.--Except as provided for in subsection (b)
and section 756, the refund or credit of tax, interest or
penalty provided for by section 752 shall be made only where the
person who has actually paid the tax files a petition for refund
with the department under Article XXVII of the Tax Reform Code
of 1971, within the limits of section 3003.1 of the Tax Reform
Code of 1971.
(b) Assessments.--A refund or credit of tax, interest or
penalty paid as a result of an assessment made by the department
under section 731 shall be made only where the person who has
actually paid the tax files with the department a petition for a
refund with the department under Article XXVII of the Tax Reform
Code of 1971 within the time limits of section 3003.1 of the Tax
Reform Code of 1971. The filing of a petition for refund under
the provisions of this subsection shall not affect the abatement
of interest, additions or penalties to which the person may be
entitled by reason of the person's payment of the assessment.
Section 754. (Reserved).
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Section 755. (Reserved).
Section 756. Extended time for filing special petition for
refund.
(a) General rule.--Any party to a transaction who has paid
tax by reason of a transaction with respect to which the
department is assessing tax against another person may, within
six months after the filing by the department of the assessment
against the other person, file a special petition for refund,
notwithstanding the person's failure to timely file a petition
pursuant to section 3003.1 of the Tax Reform Code of 1971. The
provisions of Article XXVII of the Tax Reform Code of 1971 shall
be applicable to the special petition for refund, except that
the department need not act on the petition until there is a
final determination as to the propriety of the assessment filed
against the other party to the transaction. Where a petition is
filed under this provision in order to take advantage of the
extended period of limitations, overpayments by the petitioner
shall be refunded but only to the extent of the actual tax,
without consideration of interest and penalties, paid by the
other party to the transaction.
(b) Purpose.--The purpose of this section is to avoid
duplicate payment of tax where a determination is made by the
department that one party to a transaction is subject to tax,
and another party to the transaction has previously paid tax
with respect to the transaction and, as such, this section shall
be construed as extending right beyond that provided for by
section 753, and not to limit the other section.
Section 757. (Reserved).
Section 758. Limitation on assessment and collection.
The amount of the tax imposed by this chapter shall be
assessed within three years after the date when the return
provided for by section 717(a) or (c) is filed or the end of the
year in which the tax liability arises, whichever occurs later.
Any assessment may be made at any time during the period
notwithstanding that the department may have made one or more
previous assessments against the taxpayer for the year in
question, or for any part of the year. In any case, no credit
shall be given for any penalty previously assessed or paid.
Section 759. Failure to file return.
Where no return is filed, the amount of the tax due may be
assessed and collected at any time as to taxable transactions
not reported.
Section 760. False or fraudulent return.
Where the taxpayer willfully files a false or fraudulent
return with intent to evade the tax imposed by this chapter, the
amount of tax due may be assessed and collected at any time.
Section 761. Extension of limitation period.
Notwithstanding any other provisions of this subchapter
where, before the expiration of the period prescribed in that
other provision for the assessment of a tax, a taxpayer has
consented in writing that the period be extended, the amount of
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tax due may be assessed at any time within the extended period.
The period so extended may be extended further by subsequent
consents in writing made before the expiration of the extended
period.
Section 762. (Reserved).
Section 763. (Reserved).
Section 764. (Reserved).
Section 765. (Reserved).
Section 766. Additions to tax.
(a) Failure to file return.--In the case of failure to file
any return required by section 715 on the date prescribed for
the return, determined with regard to any extension of time for
filing, and, in the case in which a return filed understates the
true amount due by more than 50%, there shall be added to the
amount of tax actually due 5% of the amount of the tax if the
failure to file a proper return is for not more than one month,
with an additional 5% for each additional month, or fraction
thereof, during which such failure continues, not exceeding 25%
in the aggregate. In every case at least $2 shall be added.
(b) Addition for understatement.--There shall be added to
every assessment under section 731(b) an addition equal to 5% of
the amount of the understatement and no addition to the tax
shall be paid under section 731(a).
Section 767. Penalties.
(a) General rule.--The penalties, additions, interest and
liabilities provided by this chapter shall be paid on notice and
demand by the department, and shall be assessed and collected in
the same manner as taxes. Except as otherwise provided, any
reference in this chapter to tax imposed by this chapter shall
be deemed also to refer to the penalties, additions, interest
and liabilities provided by this chapter.
(b) Monetary penalty.--Any person who willfully attempts, in
any manner, to evade or defeat the tax imposed by this chapter,
or the payment thereof, or to assist any other person to evade
or defeat the tax imposed by this chapter, or the payment
thereof, or to receive a refund improperly shall, in addition to
other penalties provided by law, be liable for a penalty equal
to one-half of the total amount of the tax evaded.
(c) Burden of proof.--In any direct proceeding arising out
of a petition for reassessment or refund as provided in this
chapter, in which an issue of fact is raised with respect to
whether a return is fraudulent or with respect to the propriety
of the imposition by the department of the penalty prescribed in
subsection (b), the burden of proof with respect to the issue
shall be on the department.
Section 768. Criminal offenses.
(a) False returns.--Any person who with intent to defraud
the Commonwealth willfully makes, or causes to be made, any
return required by this chapter which is false commits a
misdemeanor and, upon conviction, shall be sentenced to pay a
fine of not more than $2,000 or to imprisonment not exceeding
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three years, or both.
(b) Other offenses.--Except as otherwise provided by
subsection (a) and subject to the provisions of subsection (c),
any person who:
(1) advertises or holds out or states to the public or
to any purchaser or user, directly or indirectly, that the
tax or any part imposed by this chapter will be absorbed by
the person, or that it will not be added to the purchase
price of the tangible personal property or services described
in section 701(k)(2), (3), (4), (11), (12), (13), (14), (15),
(16), (17), (18) and (20) sold or, if added, that the tax or
any part will be refunded, other than when the person refunds
the purchase price because of the property being returned to
the vendor;
(2) sells or leases tangible personal property or the
services, the sale or use of which by the purchaser is
subject to tax under this chapter, and willfully fails to
collect the tax from the purchaser and timely remit the same
to the department;
(3) willfully fails or neglects to timely file any
return or report required by this chapter or, as a taxpayer,
refuses to timely pay any tax, penalty or interest imposed or
provided for by this chapter, or willfully fails to preserve
the person's books, papers and records as directed by the
department;
(4) refuses to permit the department or any of its
authorized agents to examine the person's books, records or
papers, or who knowingly makes any incomplete, false or
fraudulent return or report;
(5) does or attempts to do anything to prevent the full
disclosure of the amount or character of taxable sales
purchases or use made by himself or any other person;
(6) provides any person with a false statement as to the
payment of tax with respect to particular tangible personal
property or services; or
(7) makes, utters or issues a false or fraudulent
exemption certificate;
commits a misdemeanor and, upon conviction shall be sentenced to
pay a fine of not more than $1,000 and costs of prosecution or
to imprisonment for not more than one year, or both.
(c) Exceptions.--
(1) Any person who maintains a place of business outside
this Commonwealth may absorb the tax with respect to taxable
sales made in the normal course of business to customers
present at that place of business without being subject to
the penalty and fines.
(2) Advertising tax-included prices shall be
permissible, if the prepaid services are sold by the service
provider, for prepaid telecommunications services not
evidenced by the transfer of tangible personal property or
for prepaid mobile telecommunications services.
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(d) Penalties are cumulative.--The penalties imposed by this
section shall be in addition to any other penalties imposed by
any provision of this chapter.
Section 769. Abatement of additions or penalties.
On the filing of a petition for reassessment or a petition
for refund as provided under this chapter by a taxpayer,
additions or penalties imposed on the taxpayer by this chapter
may be waived or abated, in whole or in part, where the
petitioner has established that the petitioner has acted in good
faith, without negligence and with no intent to defraud.
Section 770. Rules and regulations.
(a) General rule.--The department shall enforce the
provisions of this chapter and shall prescribe, adopt,
promulgate and enforce rules and regulations not inconsistent
with the provisions of this chapter, relating to any matter or
thing pertaining to the administration and enforcement of the
provisions of this chapter, and the collection of taxes,
penalties and interest imposed by this chapter. The department
may prescribe the extent, if any, to which any of the rules and
regulations shall be applied without retroactive effect.
(b) Determination of purchase price.--
(1) In determining the purchase price of taxable sales
where, because of affiliation of interests between the vendor
and the purchaser or irrespective of any such affiliation, if
for any other reason, the purchase price of the sale is in
the opinion of the department not indicative of the true
value of the article or the fair price of the article, the
department shall, pursuant to uniform and equitable rules,
determine the amount of constructive purchase price on the
basis of which the tax shall be computed and levied.
(2) The rules shall provide for a constructive amount of
a purchase price for each sale, which price shall equal a
price for the article which would naturally and fairly be
charged in an arm's-length transaction in which the element
of common interests between vendor and purchaser or, if no
common interest exists, any other element causing a
distortion of the price or value is absent.
(3) For the purpose of this chapter where a taxable sale
occurs between a parent corporation and a subsidiary
affiliate or controlled corporation of such parent, there
shall be a rebuttable presumption that because of such common
interest the transaction was not at arm's-length.
Section 771. Keeping of records.
(a) Persons liable for taxes.--Every person liable for any
tax imposed by this chapter, or for the collection of the tax,
shall keep the records, render such statements, make the returns
and comply with the rules and regulations as the department may,
from time to time, prescribe regarding matters pertinent to the
person's business. Whenever in the judgment of the department it
is necessary, it may require any person, by notice served on the
person, or by regulations, to make the returns, render the
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statements or keep the records as the department deems
sufficient to show whether the person is liable to pay or
collect tax under this chapter.
(b) Persons collecting taxes.--Any person liable to collect
tax from another person under the provisions of this chapter
shall file reports, keep records, make payments and be subject
to interest and penalties as provided for under this chapter, in
the same manner as if the person were directly subject to the
tax.
(c) Nonresidents.--
(1) A nonresident who does business in this Commonwealth
as a retail dealer shall keep adequate records of the
business and of the tax due with respect to the business,
which records shall at all times be retained within this
Commonwealth unless retention outside this Commonwealth is
authorized by the department.
(2) No taxes collected from purchasers shall be sent
outside this Commonwealth without the written consent of and
in accordance with conditions prescribed by the department.
(3) The department may require a taxpayer who desires to
retain records or tax collections outside this Commonwealth
to assume reasonable out-of-State audit expenses.
(d) Retail dealers.--
(1) Any person doing business as a retail dealer who at
the same time is engaged in another business which does not
involve the making of sales taxable under this chapter shall
keep separate books and records of the person's businesses so
as to show the sales taxable under this chapter separately
from the sales not taxable under this chapter.
(2) If the person fails to keep such separate books and
records, the person shall be liable for tax at the rate
designated in section 702 on the entire purchase price of
sales from both or all of the person's businesses.
(e) Segregation of taxes required.--
(1) In those instances where a vendor gives no sales
memoranda or uses registers showing only total sales, the
vendor shall adopt some method of segregating tax from sales
receipts and keep records showing the segregation, all in
accordance with proper accounting and business practices.
(2) A vendor may apply to the department for permission
to use a collection and recording procedure which will show
the information as the law requires with reasonable accuracy
and simplicity. The application must contain a detailed
description of the procedure to be adopted.
(3) Permission to use the proposed procedure is not to
be construed as relieving the vendor from remitting the full
amount of tax collected.
(4) The department may revoke the permission on 30 days'
notice to the vendor.
(5) Refusal of the department to grant permission in
advance to use the procedure shall not be construed to
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invalidate a procedure which on examination shows the
information as the law requires.
Section 771.1. Reports and records of promoters.
Every licensed promoter shall keep a record of the date and
place of each show and the name, address, sales, use and hotel
occupancy license number of every person whom the licensed
promoter permits to display for sale or to sell tangible
personal property or services subject to tax under section 702
at the show. The records shall be open for inspection and
examination at any reasonable time by the department or a duly
authorized representative, and the records shall, unless the
department consents in writing to an earlier destruction, be
preserved for three years after the date the report was filed or
the date it was due, whichever occurs later, except that the
department may by regulation require that they be kept for a
longer period of time.
Section 772. Examinations.
(a) Power of department.--The department or any of its
authorized agents may examine the books, papers and records of
any taxpayer in order to verify the accuracy and completeness of
any return made or if no return was made, to ascertain and
assess the tax imposed by this chapter. The department may
require the preservation of all such books, papers and records
for any period deemed proper by it but not to exceed three years
from the end of the calendar year to which the records relate.
(b) Duty of taxpayers.--Every taxpayer shall give to the
department, or its agent, the means, facilities and opportunity
for the examinations and investigation.
(c) Other powers of department.--
(1) The department is further authorized to examine any
person, under oath, concerning taxable sales or use by any
taxpayer or concerning any other matter relating to the
enforcement or administration of this chapter, and to this
end may compel the production of books, papers and records
and the attendance of all persons whether as parties or
witnesses whom it believes to have knowledge of such matters.
(2) The procedure for such hearings or examinations
shall be the same as that provided by The Fiscal Code
relating to inquisitorial powers of fiscal officers.
Section 773. Records and examinations of delivery agents.
Every agent for the purpose of delivery of goods shipped into
this Commonwealth by a nonresident, including, but not limited
to, a common carrier, shall maintain adequate records of such
deliveries pursuant to rules and regulations adopted by the
department and shall make the records available to the
department upon request after due notice.
Section 774. Unauthorized disclosure.
Any information gained by the department as a result of any
return, examination, investigation, hearing or verification
required or authorized by this chapter shall be confidential,
except for official purposes and except in accordance with
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proper judicial order or as otherwise provided by law, and any
person unlawfully divulging such information commits a
misdemeanor and, upon conviction, shall be sentenced to pay a
fine of not more than $1,000 and costs of prosecution or to
imprisonment for not more than one year, or both.
Section 775. Cooperation with other governments.
Notwithstanding the provisions of section 774, the department
may permit the Commissioner of Internal Revenue of the United
States, or the proper officer of any state, or the authorized
representative of either such officer, to inspect the tax
returns of any taxpayer, or may furnish to the officer or to the
officer's authorized representative an abstract of the return of
any taxpayer, or supply the officer or the authorized
representative with information concerning any item contained in
any return or disclosed by the report of any examination or
investigation of the return of any taxpayer. This permission
shall be granted only if the statutes of the United States or of
such other state, as the case may be, grant substantially
similar privileges to the proper officer of the Commonwealth
charged with the administration of this chapter.
Section 776. Interstate compacts.
(a) General rule.--The Governor, or the Governor's
authorized representative, may confer with the Governor and the
authorized representatives of other states with respect to
reciprocal use tax collection between the Commonwealth and such
other states.
(b) Other powers.--The Governor, or the Governor's
authorized representative, may join with the authorities of
other states to conduct joint investigations, to exchange
information, hold joint hearings and enter into compacts or
interstate agreements with such other states to accomplish
uniform reciprocal use tax collections between those states who
are parties to any compact or interstate agreement and the
Commonwealth.
Section 777. Bonds.
(a) Procedure.--
(1) Whenever the department, in its discretion, deems it
necessary to protect the revenues to be obtained under the
provisions of this chapter, it may require any nonresident
natural person or any foreign corporation, association,
fiduciary, partnership or other entity, not authorized to do
in this Commonwealth or not having an established place of
business in this Commonwealth and subject to the tax imposed
by section 702, to file a bond issued by a surety company
authorized to do business in this Commonwealth and approved
by the Insurance Commissioner as to solvency and
responsibility, in such amounts as it may fix, to secure the
payment of any tax or penalties due, or which may become due,
from a natural person or corporation.
(2) In order to protect the revenues to be obtained
under the provisions of this chapter, the department shall
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require any nonresident natural person or any foreign
corporation, association, fiduciary, partnership or entity,
who or which is a building contractor, or who or which is a
supplier delivering building materials for work in this
Commonwealth and is not authorized to do business in this
Commonwealth or does not have an established place of
business in this Commonwealth and is subject to the tax
imposed by section 702, to file a bond issued by a surety
company authorized to do business in this Commonwealth and
approved by the Insurance Commissioner as to solvency and
responsibility, in the amounts as it may fix, to secure the
payments of any tax or penalties due, or which may become
due, from a natural person, corporation or other entity.
(3) The department may also require a bond of any person
petitioning the department for reassessment, in the case of
any assessment over $500 or where it is of the opinion that
the ultimate collection is in jeopardy.
(4) (i) The department may, for a period of three
years, require a bond of any person who has on three or
more occasions within a 12-month period either filed a
return or made payment to the department more than 30
days late.
(ii) If the department determines that a taxpayer is
to file a bond, the department shall give notice to the
taxpayer to that effect, specifying the amount of the
bond required.
(iii) The taxpayer shall file a bond within five
days after the giving of the notice by the department
unless, within the five-day period, the taxpayer requests
in writing a hearing before the secretary or the
secretary's representative at which hearing the
necessity, propriety and amount of the bond shall be
determined by the secretary or a representative. The
determination shall be final and shall be complied within
15 days after notice is mailed to the taxpayer.
(b) Alternative security.--
(1) In lieu of the bond required by this section,
securities approved by the department, or cash in the amount
as it may prescribe, may be deposited.
(2) Such securities or cash shall be kept in the custody
of the department, who may, at any time, without notice to
the depositor, apply them to any tax and/or interest or
penalties due, and for that purpose the securities may be
sold by the department, at public or private sale, on five
days' written notice to the depositor.
(c) Lien may be filed.--
(1) The department may file a lien pursuant to section
742 against any taxpayer who fails to file a bond when
required to do so under this section.
(2) All funds received on execution of the judgment on
the lien shall be refunded to the taxpayer with 3% interest
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should a final determination be made that the taxpayer does
not owe any payment to the department.
Section 778. Remote sales reports.
(a) Duty to submit.--Within 90 days of the publication of
the notice under subsection (b), the Independent Fiscal Office,
in conjunction with the department, shall submit a detailed
report to the chairman and minority chairman of the
Appropriations Committee of the Senate, the chairman and
minority chairman of the Finance Committee of the Senate, the
chairman and minority chairman of the Appropriations Committee
of the House of Representatives and the chairman and minority
chairman of the Finance Committee of the House of
Representatives outlining the plans concerning the
implementation of the legislation referenced in subsection (b)
or other substantially similar Federal legislation, which would
grant the Commonwealth the authority to impose and collect the
tax under this chapter due on sales from remote sellers. The
report shall include all of the following:
(1) The amount of State funds necessary to implement the
legislation referenced in subsection (b) or other
substantially similar legislation. The amount needed shall be
itemized and all costs, including personnel, office expenses
and other related costs, shall be included.
(2) The amount of State tax revenue expected to result
from the implementation of the legislation referenced in
subsection (b) or other substantially similar legislation for
the fiscal year and for five fiscal years thereafter.
(3) The source of funds which will be utilized to pay
for the legislation referenced in subsection (b) or other
substantially similar legislation implementation program.
(4) The legal and practical issues concerning the
propriety of collecting and enforcing the tax imposed under
this chapter from remote sellers.
(5) The number of other states which have a similar law
in effect and the success or deficiencies of the law.
(6) Proposed draft legislation concerning the
implementation of the legislation referenced in subsection
(b) or other substantially similar legislation.
(7) A detailed timetable on when separate tasks must be
completed for full implementation on an estimated start date.
(b) Notice in the Pennsylvania Bulletin.--The secretary
shall publish notice in the Pennsylvania Bulletin that Federal
legislation relating to remote sellers has been enacted.
SUBCHAPTER G
FUNDING PROVISIONS
Section 780. (Reserved).
Section 781. Appropriation for refunds.
So much of the proceeds of the tax imposed by this chapter as
shall be necessary for the payment of refunds, enforcement or
administration under this chapter is hereby appropriated for
those purposes.
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Section 781.1. Construction.
To the extent that the language of this chapter is identical
to that of equivalent provisions in the former act of March 6,
1956 (P.L.1228, No.381), known as the Tax Act of 1963 for
Education, or Article II of the Tax Reform Code of 1971, that
language shall be deemed a reenactment of such identical
provisions.
Section 782. Transfers to Education Stabilization Fund.
(a) Deposit of sales and use tax and hotel occupancy tax
collected.--The secretary shall deposit into the Education
Stabilization Fund revenues received on or after January 1,
2016, regardless of the transaction date, that equal the portion
of the tax imposed by this chapter as follows:
(1) Except as otherwise provided in section 2301 of the
Tax Reform Code of 1971 providing for the establishment of
the Public Transportation Assistance Fund, 39.6% of the tax
collected on the sales at retail and use of tangible personal
property and services as provided in Subchapter B.
(2) One-seventh of the hotel occupancy tax collected
under Subchapter E.
(b) (Reserved).
Section 783. Transfers to Public Transportation Assistance
Fund.
(a) General rule.--All revenues received on or after July 1,
1992, from the imposition of tax on periodicals shall be
transferred to the Public Transportation Assistance Fund
according to the formula set forth in subsection (b).
(b) Transfer.--Within 30 days of the close of any calendar
month, 0.596% of the taxes received in the previous month under
this chapter, less any amounts collected in that previous
calendar month under former 74 Pa.C.S. § 1314(d) (relating to
Public Assistance Transportation Fund), shall be transferred to
the Public Transportation Assistance Fund.
(c) Deposit.--In fiscal year 1991-1992, the Secretary of
Revenue shall ensure that $10,000,000 is deposited into the
Public Assistance Transportation Fund from the combination of
revenues received under former 74 Pa.C.S. § 1314(d) and
transfers of periodical taxes received under this chapter.
(d) Revenue.--Commencing February 20, 2016, and
notwithstanding the provisions of 74 Pa.C.S. § 1506(c)(1)
(relating to fund) to the contrary, the revenues deposited into
the Public Transportation Trust Fund under 74 Pa.C.S. § 1506(c)
(1) shall be 2.769% of the amount collected under this chapter.
The amounts required to be deposited into the Public
Transportation Trust Fund under this subsection are estimated to
be equivalent to the revenue that would be deposited into the
Public Transportation Trust Fund under 74 Pa.C.S. § 1506(c)(1)
if the amendments to section 702 were not enacted.
CHAPTER 9
(RESERVED)
CHAPTER 11
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LIMIT ON SCHOOL DISTRICT TAXATION
AND EXPIRATION OF DEBT AUTHORITY
Section 1101. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"School district debt." All debt which a school district is
obligated to pay.
Section 1102. Coordination of school district fiscal years.
(a) General rule.--By July 1, 2016, a school district which
operates under a fiscal year other than the period beginning
July 1 of each calendar year and ending June 30 of the calendar
year next succeeding shall adopt a fiscal year which is the
period beginning July 1 of each calendar year and ending June 30
of the calendar year next succeeding.
(b) Duties of department.--The Department of Education shall
provide technical assistance and guidance to school districts
subject to assist school districts adopting a different fiscal
year under subsection (a).
Section 1103. Transition period.
Beginning with the effective date of this section and ending
July 1, 2016, a school district which levies a tax on real
property may not increase the rate of tax on real property above
the rate levied as of the effective date of this section.
Section 1104. School district debt and budgeting.
(a) General rule.--Beginning on the effective date of this
section, a school district may not incur any additional school
district debt except debt which is authorized by a referendum
under Chapter 3.
(b) Certification.--By April 1, 2016, and by April 1 of each
year after, a school district shall certify and report to the
Department of Education all of the following:
(1) The amount of all outstanding school district debt.
(2) The repayment status of all outstanding school
district debt.
(3) The repayment terms of all outstanding school
district debt.
(4) The amount of annual debt service which must be paid
by the school district on the outstanding school district
debt.
(5) Any other information requested by the Department of
Education.
(c) Confirmation of information.--The Department of
Education may examine the books and records of a school district
in order to confirm the data submitted under subsection (b).
(d) Department responsibilities.--By July 1, 2016, and by
January 1 each year after, the Department of Education shall do
all of the following:
(1) Certify to the State Treasurer and the Office of the
Budget the amount of annual debt service payments necessary
for each school district to continue to repay its existing
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outstanding school district debt.
(2) Notify each school district of the amount of its
annual debt service payments that the Department of Education
has certified as necessary for the school district to
continue to repay its existing outstanding school district
debt.
(e) School district responsibilities.--A school district
shall do all of the following:
(1) Adopt a preliminary budget proposal under section
311 of the Taxpayer Relief Act which reflects proposed tax
rates on real property that complies with section 1105.
(2) Adopt an annual budget under section 312 of the
Taxpayer Relief Act which reflects proposed tax rates on real
property that complies with section 1105.
Section 1105. Expiration of certain authority to levy, assess
and collect real property taxes.
Except as necessary to service outstanding school district
debt, the authority of a school district to levy, assess and
collect a tax on real property shall expire July 1, 2016.
CHAPTER 13
FUNDING PROVISIONS
Section 1301. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Base revenue." The money a school district receives from
school property taxes and the State property tax reduction
allocation received under section 505 of act of June 27, 2006
(1st Sp.Sess., P.L.1873, No.1), known as the Taxpayer Relief
Act, during fiscal year 2015-2016 less the amount certified by
the department under section 1104(a).
"Cost of living factor." The lesser of:
(1) the percentage increase in the Statewide average
weekly wage, as defined in 53 Pa.C.S. § 8401 (relating to
definitions), from the previous calendar year; or
(2) the average of the percentage increase in sales and
use tax collected under section 702 and the tax upon each
dollar income collected under section 401(b)(1) and the
percentage increase of the hotel occupancy tax collected
under section 710 from the previous calendar year.
"Department." The Department of Education of the
Commonwealth.
"Fund." The Education Stabilization Fund established in
section 1302.
Section 1302. Education Stabilization Fund.
(a) Establishment.--The Education Stabilization Fund is
established as a separate fund in the State Treasury.
(b) Use.--The department shall use the fund to make
disbursements under section 1303.
(c) Continuing appropriation.--The money of the fund is
hereby continuously appropriated to the department as provided
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in this act. This appropriation shall not lapse at the end of
any fiscal year.
Section 1302.1. Sources and transfers.
(a) Deposit.--The following shall be deposited into the
fund:
(1) Money remaining in the Property Tax Relief Fund
following utilization of funds to provide tax relief in
cities of the first class under Chapters 5 and 7 of the act
of June 27, 2006 (1st Sp.Sess., P.L.1873, No.1), known as the
Taxpayer Relief Act, and for property tax and rent rebates
under Chapter 14.
(2) Money collected by the department under section 401.
(3) Money collected by the department under Chapter 7.
(4) Appropriations.
(5) Return on money in the fund.
(b) Transfer from the fund.--
(1) No later than June 30, 2017, and each June 30
thereafter, an amount equal to the refund reimbursement
factor multiplied by the amount of refunds issued under
Article III of the Tax Reform Code of 1971 for tax years in
which the tax imposed under Chapter 4 is applicable, shall be
transferred from the Education Stabilization Fund to the
General Fund.
(2) For the purpose of this subsection, "refund
reimbursement factor" means a fraction equal to the rate of
tax imposed under Chapter 4 divided by the sum of the rate of
tax imposed under Chapter 4 plus the rate of tax imposed
under Article III of the Tax Reform Code of 1971.
Section 1303. Standard disbursements to school districts from
Education Stabilization Fund.
(a) General rule.--In fiscal year 2016-2017, the department
shall disburse to each school district an amount equal to the
sum of the following:
(1) the school district's base revenues, plus
(2) the school district's base revenue multiplied by the
cost-of-living factor.
(b) Annual adjustment.--In fiscal year 2017-2018 and each
fiscal year thereafter, the department shall disburse to a
school district an amount equal to the sum of the following:
(1) The amount received by the school district in the
prior fiscal year under this section.
(2) The amount received by the school district in the
prior fiscal year under this section multiplied by the cost-
of-living factor.
(c) Distributions.--Disbursements under subsections (a) and
(b) shall be made at a time and in a manner determined by the
Department of Education in consultation with the Department of
Revenue.
CHAPTER 14
SENIOR CITIZENS PROPERTY TAX AND
RENT REBATE ASSISTANCE
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Section 1401. Scope of chapter.
This chapter provides senior citizens with assistance in the
form of property tax and rent rebates.
Section 1402. (Reserved).
Section 1403. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Board." The Board of Finance and Revenue of the
Commonwealth.
"Claimant." A person who files a claim for property tax
rebate or rent rebate in lieu of property taxes and:
(1) was at least 65 years of age or whose spouse, if a
member of the household, was at least 65 years of age during
a calendar year in which real property taxes or rent were due
and payable;
(2) was a widow or widower and was at least 50 years of
age during a calendar year or part thereof in which real
property taxes or rent were due and payable; or
(3) was a permanently disabled person 18 years of age or
older during a calendar year or part thereof in which the
real property taxes or rent were due and payable.
"Department." The Department of Revenue of the Commonwealth.
"Homestead." A dwelling, whether owned or rented, and so
much of the land surrounding it, as is reasonably necessary for
the use of the dwelling as a home, occupied by a claimant. The
term includes, but is not limited to:
(1) Premises occupied by reason of ownership or lease in
a cooperative housing corporation.
(2) Mobile homes which are assessed as realty for local
property tax purposes and the land, if owned or rented by the
claimant, upon which the mobile home is situated, and other
similar living accommodations.
(3) A part of a multidwelling or multipurpose building
and a part of the land upon which it is built.
(4) Premises occupied by reason of the claimant's
ownership or rental of a dwelling located on land owned by a
nonprofit incorporated association, of which the claimant is
a member, if the claimant is required to pay a pro rata share
of the property taxes levied against the association's land.
(5) Premises occupied by a claimant if the claimant is
required by law to pay a property tax by reason of the
claimant's ownership or rental, including a possessory
interest, in the dwelling, the land or both. An owner
includes a person in possession under a contract of sale,
deed of trust, life estate, joint tenancy or tenancy in
common or by reason of statutes of descent and distribution.
"Household income." All income received by a claimant and
the claimant's spouse while residing in the homestead during the
calendar year for which a rebate is claimed.
"Income." All income from whatever source derived,
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including, but not limited to:
(1) Salaries, wages, bonuses, commissions, income from
self-employment, alimony, support money, cash public
assistance and relief.
(2) The gross amount of any pensions or annuities,
including railroad retirement benefits for calendar years
prior to 1999 and 50% of railroad retirement benefits for
calendar years 1999 and thereafter.
(3) (i) All benefits received under the Social Security
Act (49 Stat. 620, 42 U.S.C. § 301 et seq.), except
Medicare benefits, for calendar years prior to 1999, and
50% of all benefits received under the Social Security
Act, except Medicare benefits, for calendar years 1999
and thereafter.
(ii) Notwithstanding any other provision of this act
to the contrary, persons who, as of December 31, 2012,
are eligible for the property tax or rent rebate shall
remain eligible if the household income limit is exceeded
due solely to a Social Security cost-of-living
adjustment.
(iii) Eligibility in the property tax and rent
rebate program pursuant to subparagraph (ii) shall expire
on December 31, 2016.
(4) All benefits received under State unemployment
insurance laws.
(5) All interest received from the Federal or any state
government or any instrumentality or political subdivision
thereof.
(6) Realized capital gains and rentals.
(7) Workers' compensation.
(8) The gross amount of loss of time insurance benefits,
life insurance benefits and proceeds, except the first $5,000
of the total of death benefit payments.
(9) Gifts of cash or property, other than transfers by
gift between members of a household, in excess of a total
value of $300.
The term does not include surplus food or other relief in kind
supplied by a governmental agency, property tax or rent rebate,
inflation dividend dividend, Federal veterans' disability
payments or State veterans' benefit.
"Permanently disabled person." A person who is unable to
engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can
be expected to continue indefinitely, except as provided in
section 1404(b)(3) and (c).
"Real property taxes." All taxes on a homestead, exclusive
of municipal assessments, delinquent charges and interest, due
and payable during a calendar year.
"Rent rebate in lieu of property taxes." Twenty percent of
the gross amount actually paid in cash or its equivalent in any
calendar year to a landlord in connection with the occupancy of
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a homestead by a claimant, irrespective of whether such amount
constitutes payment solely for the right of occupancy or
otherwise.
"Secretary." The Secretary of Revenue of the Commonwealth.
"State veterans' benefits." Service-connected compensation
or benefits of any kind provided to a veteran or an unmarried
surviving spouse of a veteran by a Commonwealth agency or
authorized under the laws of this Commonwealth.
"Taxpayer Relief Act." The act of June 27, 2006 (1st
Sp.Sess., P.L.1873, No.1), known as the Taxpayer Relief Act.
"Widow" or "widower." The surviving wife or the surviving
husband, as the case may be, of a deceased individual and who
has not remarried except as provided in section 1404(b)(3) and
(c).
Section 1404. Property tax; and rent rebate.
(a) Schedule of rebates.--
(1) The amount of any claim for property tax rebate or
rent rebate in lieu of property taxes for real property taxes
or rent due and payable during calendar years 1985 through
2005 shall be determined in accordance with the following
schedule:
Household Income
Percentage of Real Property Taxes or
Rent Rebate in Lieu of
Property Taxes Allowed as Rebate
$ 0 - $ 4,999 100%
5,000 - 5,499 100
5,500 - 5,999 90
6,000 - 6,499 80
6,500 - 6,999 70
7,000 - 7,499 60
7,500 - 7,999 50
8,000 - 8,499 40
8,500 - 8,999 35
9,000 - 9,999 25
10,000 - 11,999 20
12,000 - 12,999 15
13,000 - 15,000 10
(2) The following apply:
(i) The base amount of any claim for property tax
rebate for real property taxes due and payable during
calendar year 2006 and thereafter shall be determined in
accordance with the following schedule:
Household Income
Amount of Real Property Taxes
Allowed as Rebate
$ 0 - $ 8,000 $650
8,001 - 15,000 500
15,001 - 18,000 300
18,001 - 35,000 250
(ii) The supplemental amount for a claimant with a
household income equal to or less than $30,000 and an
eligible claim for property tax rebate for real property
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taxes due and payable during the calendar year preceding
the first year in which a payment under section 505(b) of
the Taxpayer Relief Act is made and each year thereafter
and whose real property taxes exceed 15% of the
claimant's household income shall be equal to 50% of the
base amount determined under subparagraph (i). A claimant
who is a resident of a city of the first class, a city of
the second class A or a school district of the first
class A shall be ineligible for the supplemental amount
under this subparagraph.
(3) The amount of any claim for rent rebate in lieu of
property taxes for rent due and payable during calendar year
2006 and thereafter shall be determined in accordance with
the following:
Household Income
Amount of Rent Rebate in
Lieu of Property Taxes
Allowed as Rebate
$ 0 - $ 8,000 $650
8,001 - 15,000 500
(b) Limitations on claims.--
(1) No claim through calendar year 2005 shall be allowed
if the amount of property tax or rent rebate computed in
accordance with this section is less than $10, and the
maximum amount of property tax or rent rebate payable shall
not exceed $500.
(2) For calendar year 2006 and thereafter, the maximum
amount of property tax or rent rebate in lieu of property
taxes payable shall not exceed the lesser of:
(i) the amount of a claim under subsection (a)(2) or
(3);
(ii) the amount of real property taxes actually
paid; or
(iii) 20% of gross rent actually paid.
(3) No claim shall be allowed if the claimant is a
tenant of an owner of real property exempt from real property
taxes.
(c) Apportionment and public assistance.--
(1) If any of the following exist relating to a claim:
(i) a homestead is owned or rented and occupied for
only a portion of a year or is owned or rented in part by
a person who does not meet the qualifications for a
claimant, exclusive of any interest owned or leased by a
claimant's spouse;
(ii) the claimant is a widow or widower who
remarries; or
(iii) the claimant is a formerly disabled person who
is no longer disabled,
the department shall apportion the real property taxes or
rent in accordance with the period or degree of ownership or
leasehold or eligibility of the claimant in determining the
amount of rebate for which a claimant is eligible.
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(2) A claimant who receives public assistance from the
Department of Public Welfare shall not be eligible for rent
rebate in lieu of property taxes during those months within
which the claimant receives public assistance.
(d) Government subsidies.--Rent shall not include subsidies
provided by or through a governmental agency.
Section 1405. Filing of claim.
(a) General rule.--Except as otherwise provided in
subsection (b), a claim for property tax or rent rebate shall be
filed with the department on or before the 30th day of June of
the year next succeeding the end of the calendar year in which
real property taxes or rent was due and payable.
(b) Exception.--A claim filed after the June 30 deadline
until December 31 of such calendar year shall be accepted by the
secretary as long as funds are available to pay the benefits to
the late filing claimant.
(c) Payments from State Lottery Fund.--No reimbursement on a
claim shall be made from the State Lottery Fund earlier than the
day following the 30th day of June provided in this chapter on
which that claim may be filed with the department.
(d) Eligibility of claimants.--
(1) Only one claimant from a homestead each year shall
be entitled to the property tax or rent rebate.
(2) If two or more persons are able to meet the
qualifications for a claimant, they may determine who the
claimant shall be.
(3) If they are unable to agree, the department shall
determine to whom the rebate is to be paid.
Section 1406. Proof of claim.
(a) Contents.--Each claim shall include:
(1) Reasonable proof of household income.
(2) The size and nature of the property claimed as a
homestead.
(3) The rent, tax receipt or other proof that the real
property taxes on the homestead have been paid or rent in
connection with the occupancy of a homestead has been paid.
(4) If the claimant is a widow or widower, a declaration
of such status in such manner as prescribed by the secretary.
(b) Proof of disability.--
(1) Proof that a claimant is eligible to receive
disability benefits under the Social Security Act (49 Stat.
620, 42 U.S.C. § 301 et seq.) shall constitute proof of
disability under this chapter.
(2) No person who has been found not to be disabled by
the Social Security Administration shall be granted a rebate
under this chapter.
(3) A claimant not covered under the Social Security Act
shall be examined by a physician designated by the department
and such status determined using the same standards used by
the Social Security Administration.
(c) Direct payment of taxes or rent not required.--It shall
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not be necessary that such taxes or rent were paid directly by
the claimant if the rent or taxes have been paid when the claim
is filed.
(d) Proof of age on first claim.--The first claim filed
shall include proof that the claimant or the claimant's spouse
was at least 65 years of age, or at least 50 years of age in the
case of a widow or widower during the calendar year in which
real property taxes or rent were due and payable.
Section 1407. Incorrect claim.
Whenever on audit of a claim the department finds the claim
to have been incorrectly determined, it shall redetermine the
correct amount of the claim and notify the claimant of the
reason for the redetermination and the amount of the corrected
claim.
Section 1408. Funds for payment of claims.
(a) Payment.--Approved claims shall be paid from the State
Lottery Fund established by the act of August 26, 1971 (P.L.351,
No.91), known as the State Lottery Law.
(b) Transfers.--The Secretary of the Budget shall transfer
the following amounts from the Property Tax Relief Fund to the
State Lottery:
(1) Notwithstanding any other provision of law, an
amount equal to $100,000,000 of the total slot machine
license fees paid by successful applicants for a Category 1
slot machine license under 4 Pa.C.S. § 1209 (relating to slot
machine license fee). The transfer under this paragraph shall
occur upon deposit in the Property Tax Relief Fund of moneys
derived from the fee from the fourth successful applicant for
a Category 1 slot machine license.
(2) Notwithstanding any other provision of law, an
amount equal to $100,000,000 of the total slot machine
license fees paid by successful applicants for a Category 2
slot machine license under 4 Pa.C.S. § 1209. The transfer
under this paragraph shall occur upon deposit in the Property
Tax Relief Fund of moneys derived from the fee from the third
successful applicant for a Category 2 slot machine license.
(3) For fiscal years 2007-2008 and 2008-2009, an amount
equal to the sum of approved claims to be paid in each of
those fiscal years under sections 704 of the Taxpayer Relief
Act and 1404(a)(2)(ii), if any.
(4) For fiscal year 2009-2010 and each fiscal year
thereafter, all of the following:
(i) The difference between the sum of the amount of
approved claims to be paid in the next fiscal year under
section 1404(a)(2)(i) and (3) and the amount of approved
claims paid in fiscal year 2006-2007 under section
1404(a)(1).
(ii) The sum of the amount of approved claims to be
paid in the next fiscal year under sections 704 of the
Taxpayer Relief Act and 1404(a)(2)(ii), if any.
(5) Beginning in fiscal year 2009-2010 and until the
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difference between the sum of subparagraphs (i) and (ii) and
$200,000,000 is paid, an amount of not less than $40,000,000
annually or the amount of the difference, whichever is less.
All transfers under this paragraph shall be completed no
later than four years after the transfer required by
paragraph (2).
(i) The difference between the sum of the amount of
approved claims to be paid in fiscal year 2007-2008 under
section 1404(a)(2)(i) and (3) and the amount of approved
claims paid in fiscal year 2006-2007 under section
1404(a)(1).
(ii) The difference between the sum of the amount of
approved claims to be paid in fiscal year 2008-2009 under
section 1404(a)(2)(i) and (3) and the amount of approved
claims paid in fiscal year 2006-2007 under section
1404(a)(1).
Section 1409. Claim forms and rules and regulations.
(a) General rule.--Necessary rules and regulations shall be
prescribed by a committee consisting of the Secretary of Aging,
the Secretary of Revenue and the Secretary of Community and
Economic Development. The Secretary of Aging shall serve as the
chairman of the committee. The department shall receive all
applications, determine the eligibility of claimants, hear
appeals, disburse payments and make available suitable forms for
the filing of claims.
(b) Report to General Assembly.--In addition to any rules
and regulations prescribed under subsection (a), the department
shall collect the following information and issue a report
including such information to the chairman and minority chairman
of the Appropriations Committee of the Senate and the chairman
and minority chairman of the Appropriations Committee of the
House of Representatives by September 30, 2006, and September 30
of each year thereafter.
(1) The total number of claims which will be paid in the
fiscal year in which the report is issued with the
information provided by school district, by county and for
each household income level under section 1404(a)(2)(i).
(2) The total amount of rebates paid in the fiscal year
in which the report is issued with the information provided
by school district, by county and for each household income
level under section 1404(a)(2)(i).
Section 1410. Fraudulent claims and conveyances to obtain
benefits.
(a) Civil penalty.--In any case in which a claim is
excessive and was filed with fraudulent intent, the claim shall
be disallowed in full, and a penalty of 25% of the amount
claimed shall be imposed. The penalty and the amount of the
disallowed claim, if the claim has been paid, shall bear
interest at the rate of 1.5% per month from the date of the
claim until repaid.
(b) Criminal penalty.--The claimant and any person who
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assisted in the preparation or filing of a fraudulent claim
commits a misdemeanor of the third degree and, upon conviction
thereof, shall be sentenced to pay a fine not exceeding $1,000
or to imprisonment not exceeding one year, or both.
(c) Disallowance for receipt of title.--A claim shall be
disallowed if the claimant received title to the homestead
primarily for the purpose of receiving property tax rebate.
Section 1411. Petition for redetermination.
(a) Right to file.--A claimant whose claim is either denied,
corrected or otherwise adversely affected by the department may
file with the department a petition for redetermination on forms
supplied by the department within 90 days after the date of
mailing of written notice by the department of such action.
(b) Contents.--The petition shall set forth the grounds upon
which the claimant alleges that such departmental action is
erroneous or unlawful, in whole or part, and shall contain an
affidavit or affirmation that the facts contained in the
petition are true and correct.
(c) Extension of time for filing.--
(1) An extension of time for filing the petition may be
allowed for cause but may not exceed 120 days.
(2) The department shall hold such hearings as may be
necessary for the purpose of redetermination, and each
claimant who has duly filed such petition for redetermination
shall be notified by the department of the time when and the
place where such hearing in the claimant's case will be held.
(d) Time period for decision.--The department shall, within
six months after receiving a filed petition for redetermination,
dispose of the matters raised by such petition and shall mail
notice of the department's decision to the claimant.
Section 1412. Review by Board of Finance and Revenue.
(a) Right to review.--Within 90 days after the date of
official receipt by the claimant of notice mailed by the
department of its decision on a petition for redetermination
filed with it, the claimant who is adversely affected by the
decision may by petition request the board to review such
action.
(b) Effect of no decision from department.--The failure of
the department to officially notify the claimant of a decision
within the six-month period provided for by section 1411 shall
act as a denial of the petition, and a petition for review may
be filed with the board within 120 days after written notice is
officially received by the claimant that the department has
failed to dispose of the petition within the six-month period.
(c) Contents of petition for redetermination.--A petition
for redetermination filed shall state the reasons upon which the
claimant relies or shall incorporate by reference the petition
for redetermination in which such reasons were stated. The
petition shall be supported by affidavit that the facts set
forth therein are correct and true.
(d) Time period for decision.--The board shall act in
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disposition of petitions filed with it within six months after
they have been received, and, in the event of failure of the
board to dispose of any petition within six months, the action
taken by the department upon the petition for redetermination
shall be deemed sustained.
(e) Relief authorized by board.--The board may sustain the
action taken by the department on the petition for
redetermination or it may take such other action as it shall
deem necessary and consistent with provisions of this chapter.
(f) Form of notice.--Notice of the action of the board shall
be given by mail to the department and to the claimant.
Section 1413. Appeal.
A claimant aggrieved by a decision of the board may appeal
from the decision of the board in the manner provided by law for
appeals from decisions of the board in tax cases.
CHAPTER 15
MISCELLANEOUS PROVISIONS
Section 1501. Transitional provision.
(a) Sales and use tax.--Notwithstanding the repeal specified
under section 1505(b)(6), the department shall have the
authority to enforce the collection of taxes imposed for
transactions that occur prior to the effective date of this
section under former Article II of the Tax Reform Code of 1971.
The taxes collected on or after January 1, 2016, regardless of
the transaction date, shall be deposited as provided in section
782.
(b) Other taxes.--Notwithstanding the repeal specified under
section 1505(b)(2), a governing body shall have the authority to
enforce, after the effective date of the repeal, the collection
of taxes levied and assessed under the former provision prior to
the effective date of section 1505(b)(2).
Section 1502. Regulations.
The department shall have jurisdiction over and shall
promulgate regulations as necessary for the proper
administration of this act.
Section 1503. Construction.
Any and all references in any other act to Article II or any
provision in Article II of the Tax Reform Code of 1971 shall be
deemed a reference to Chapter 7 of this act or the corresponding
provisions in Chapter 7 of this act.
Section 1504. Severability.
The provisions of this act are severable as follows:
(1) If any provision of this act is held invalid, the
invalidity shall not affect other provisions or applications
of this act which can be given effect without the invalid
provision or application.
(2) Under no circumstances shall the invalidity of any
provision or application of this act affect the validity of
any provision in this act that abolishes the power of the
governing body and any school district and city of the first
class or any other political subdivision to levy, assess or
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collect a tax on any interest in real property for school
purposes.
Section 1505. Repeals.
(a) Intent.--The General Assembly declares that the repeals
under subsection (b) are necessary to effectuate this act.
(b) Provisions.--The following acts and parts of acts are
repealed to the extent specified:
(1) Section 631 of the act of March 10, 1949 (P.L.30,
No.14), known as the Public School Code of 1949, is repealed.
(2) Any provision of the Public School Code of 1949 and
of any other law relating to the authority of any school
district to levy, assess and collect any tax on real property
and the power of any city of the first class to levy, assess
and collect any tax real property for school purposes is
repealed upon the expiration of the respective schedule
prescribed in sections 1101 and 1102.
(3) Any provision of the act of the Public School Code
of 1949 and any other law relating to debt is repealed to the
extent that it is inconsistent with this act.
(4) Any provision of the Public School Code of 1949 and
any home rule charter adopted pursuant thereto is repealed
insofar as it is inconsistent with this act.
(5) Any provision of the act of August 9, 1963 (P.L.643,
No.341), known as the First Class City Public Education Home
Rule Act, and any home rule school district charter adopted
pursuant thereto is repealed insofar as it is inconsistent
with this act.
(6) Article II of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971, is repealed.
(7) Subchapters C and D of Chapter 3 and Chapter 13 of
the act of June 27, 2006 (1st Sp.Sess., P.L.1873, No.1),
known as the Taxpayer Relief Act, are repealed.
(8) All acts and parts of acts that are inconsistent
with this act are repealed to the extent of such
inconsistency.
Section 1506. Applicability.
Chapter 7 and section 1505(b)(6) shall apply January 1, 2016.
Section 1507. Effective date.
This act shall take effect as follows:
(1) Chapters 3 and 4 and section 1505(b)(2) shall take
effect June 30, 2016.
(2) The remainder of this act shall take effect
immediately.
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See A04499 in
the context
of HB0683