THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY WILLIAMS AND D. EVANS, JULY 2, 2009

REFERRED TO COMMITTEE ON APPROPRIATIONS, JULY 2, 2009  

AN ACT

Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An

act relating to tax reform and State taxation by codifying

and enumerating certain subjects of taxation and imposing

taxes thereon; providing procedures for the payment,

collection, administration and enforcement thereof; providing

for tax credits in certain cases; conferring powers and

imposing duties upon the Department of Revenue, certain

employers, fiduciaries, individuals, persons, corporations

and other entities; prescribing crimes, offenses and

penalties," in special situs for local sales tax, further

providing for construction materials; and providing for an

optional sales and use tax for first class cities.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 201 introductory paragraph of the act of

March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of

1971, is amended to read:

Section 201.  Definitions.--The following words, terms and

phrases when used in this Article II or in Article II-B shall

have the meaning ascribed to them in this section, except where

the context clearly indicates a different meaning:

* * *

Section 2.  Section 202-A of the act, added June 22, 2001

(P.L.353, No.23), is amended to read:

Section 202-A.  Situs for Certain Construction Materials.--

(a)  Notwithstanding the provisions of section 504 of the act of

June 5, 1991 (P.L.9, No.6), known as the "Pennsylvania

Intergovernmental Cooperation Authority Act for Cities of the

First Class," the sale or use of road construction material,

including recycled asphalt, recycled concrete, asphalt, concrete

and road aggregates, shall be deemed to have been consummated at

the location of its final destination. Final destination will be

determined by reference to delivery or shipping documents

relating to such sales.

(b)  This section shall apply to taxes levied under Article

II-B and under Chapter 5 of the "Pennsylvania Intergovernmental

Cooperation Authority Act for Cities of the First Class." This

section shall not apply to taxes levied under Article XXXI-B of

the act of July 28, 1953 (P.L.723, No.230), known as the "Second

Class County Code."

Section 3.  The act is amended by adding an article to read:

ARTICLE II-B

OPTIONAL SALES AND USE TAX FOR CITIES OF THE FIRST CLASS

Section 201-B.  Definitions.

(a)  Article II.--The definitions in section 201 apply to

this article.

(b)  Specific.--The following words and phrases when used in

this article shall have the meanings given to them in this

subsection unless the context clearly indicates otherwise:

"City."  A city of the first class.

"Fund."  The Local Sales and Use Tax Fund.

Section 202-B.  Construction.

(a)  Additional tax.--The tax imposed by a city under this

article shall be in addition to any tax imposed:

(1)  by the Commonwealth under Article II; or

(2)  by a city under the act of June 5, 1991 (P.L.9,

No.6), known as the Pennsylvania Intergovernmental

Cooperation Authority Act for Cities of the First Class.

(b)  Article II.--Except for the differing situs provisions

under section 204-B, Article II applies to this article.

Section 203-B.  Imposition.

(a)  Sales.--

(1)  The governing body of a city may levy, assess and

collect, upon each separate sale at retail of tangible

personal property or services within the city, a tax on the

purchase price.

(2)  The tax shall be collected by the vendor from the

purchaser and shall be paid over to the Commonwealth as

provided in this article.

(b)  Use.--

(1)  If a city imposes the tax under subsection (a), the

governing body of the city shall levy, assess and collect,

upon the use within the city of tangible personal property

purchased at retail and of services purchased at retail, a

tax on the purchase price.

(2)  Except as set forth in paragraph (3), the tax shall

be paid over to the Commonwealth by the person that makes the

use.

(3)  The tax shall not be paid over to the Commonwealth

by a person that, with respect to the same taxable subject:

(i)  has paid the tax under subsection (a); or

(ii)  has paid the tax imposed by this subsection to

the vendor.

(c)  Rate and uniformity.--The rate of the tax authorized by

this section shall be 1%.

(d)  Computation.--The tax under this section shall be

computed as follows:

(1)  If the purchase price is 50¢ or less, no tax shall

be collected.

(2)  If the purchase price is 51¢ or more but less than

$1.51, 1¢ shall be collected.

(3)  If the purchase price is $1.51 or more but less than

$2.51, 2¢ shall be collected.

(4)  If the purchase price is $2.51 or more but less than

$3.51, 3¢ shall be collected.

(5)  If the purchase price is $3.51 or more but less than

$4.51, 4¢ shall be collected.

(6)  If the purchase price is $4.51 or more but less than

$5.51, 5¢ shall be collected.

(7)  If the purchase price is $5.51 or more but less than

$6.51, 6¢ shall be collected.

(8)  If the purchase price is $6.51 or more but less than

$7.51, 7¢ shall be collected.

(9)  If the purchase price is $7.51 or more but less than

$8.51, 8¢ shall be collected.

(10)  If the purchase price is $8.51 or more but less

than $9.51, 9¢ shall be collected.

(11)  If the purchase price is $9.51 or more but less

than $10.01, 10¢ shall be collected.

(12)  If the purchase price is more than $10, 1% of each

$10 purchase price plus the above bracket charges upon any

fractional part of a $10 increment shall be collected.

Section 204-B.  Situs for imposition of tax.

(a)  Situs for retail sales.--Except as otherwise set forth

in this section, a sale at retail shall be deemed to be

consummated at the place of business of the retailer. If a

retailer has more than one place of business in this

Commonwealth which participates in the sale, the sale shall be

deemed to be consummated at the place of business of the

retailer where the initial order for the tangible personal

property is taken, even though the order must be forwarded

elsewhere for acceptance, approval of credit, shipment or

billing. A sale by a retailer's employee shall be deemed to be

consummated at the place of business from which that employee

works.

(b)  Out-of-State delivery.--Subsection (a) does not apply if

the tangible personal property sold is delivered by the retailer

to:

(1)  an out-of-State destination;

(2)  a common carrier for delivery to an out-of-State

destination; or

(3)  the United States Post Office for delivery to an

out-of-State destination.

(c)  Situs for vehicle, aircraft and motorcraft sales.--

(1)  This subsection applies to all of the following:

(i)  A mobile home, motor vehicle, semitrailer or

trailer, as defined in 75 Pa.C.S. § 102 (relating to

definitions).

(ii)  Any aircraft, motorboat or similar item of

tangible personal property required under either Federal

or state law to be registered or licensed.

(2)  The sale at retail or use of an item listed in

paragraph (1) shall be deemed to have been completed or used

at the address of the purchaser or user.

(3)  The tax due on an item listed in paragraph (1) shall

be paid by the purchaser or user:

(i)  to the Department of Transportation at the time

of making application for the issuance of a certificate

of title; or

(ii)  if licensing by the Department of

Transportation is not required or obtained, to the

department.

(d)  Situs for utility services.--

(1)  The sale or use of steam, natural and manufactured

gas and electricity shall be deemed to occur at the service

address in the city where the meter which registers the

service is located, without regard to where the services are

rendered.

(2)  The sale or use of telephone service shall be deemed

to occur at the address where the telephone equipment is

located and to which the telephone number is assigned.

(3)  The sale or use of telegraph services shall be

deemed to occur where the telegraph originated.

Section 205-B.  Licenses.

(a)  Issuance and renewal.--

(1)  The license issued under Article II or a separate

license may be issued by the department for the collection

and reporting of the taxes imposed by section 203-B.

(2)  The license is subject to renewal periodically as

required by the department in regulations but in no event

more frequently than once within a five-year period.

(3)  No fee shall be charged for either a license or any

renewal.

(b)  Assignment.--The license shall be nonassignable.

(c)  Liability.--Failure of a person to obtain a license

shall not relieve the person of liability to pay the taxes

imposed by this article.

Section 206-B.  Department.

(a)  Administration.--The department has the following powers

and duties to administer this article:

(1)  Promulgate regulations.

(2)  Enforce this article and regulations under this

article and subsection (b).

(b)  Existing regulations.--The regulations promulgated under

section 270 shall be applicable to the taxes imposed by section

203-B insofar as the regulations are consistent with section

203-B.

(c)  Administrative costs.--The department shall use the

money to cover cost of administration of the tax under Chapter 5

of the act of June 5, 1991 (P.L.9, No.6), known as the

Pennsylvania Intergovernmental Cooperation Authority Act for

Cities of the First Class, to cover the cost of administration

of the tax authorized by this article; and the department shall

not retain any additional amounts for the costs of collection of

the tax authorized by this article.

Section 207-B.  Dedication and disbursement.

(a)  Fund.--

(1)  At least every two weeks, the department shall pay

to the State Treasurer the money from the tax, interest and

penalties, minus refunds and credits, under this article.

(2)  The State Treasurer shall credit the money under

paragraph (1) to the fund. During any period prior to the

credit of money, interest earned on money shall be deposited

into the fund.

(3)  Money in the fund under paragraph (2) shall be the

property of the city and shall be distributed as provided in

this section.

(4)  Pending disbursement to the city, money in the fund

under paragraph (2) shall be invested as is other money in

the custody of the State Treasurer in the manner provided by

law. All earnings received from the investment or deposit of

the money shall be credited to the fund.

(5)  Money in the fund under paragraph (2):

(i)  shall not lapse at the end of any fiscal year;

(ii)  shall not be transferred to any other fund; and

(iii)  shall be used exclusively as provided in this

section.

(b)  Disbursement.--By the 10th day of the month, the State

Treasurer shall disburse to the city the total amount of money

which is, as of the last day of the previous month, contained in

the fund under subsection (a)(2).

Section 208-B.  Municipal action.

(a)  Adoption of ordinance.--If a city desires to impose the

tax under section 203-B, the governing body of the city must

adopt an ordinance stating the tax rate. The effective date of

the ordinance must be:

(1)  at least 30 days after adoption; and

(2)  on the first day of a month.

(b)  Notification to department.--A certified copy of a city

ordinance imposing the tax authorized by section 203-B shall be

delivered to the department within 10 days after the adoption of

the ordinance.

(c)  Copy of repeal ordinance.--A certified copy of a repeal

ordinance shall be delivered to the department at least 30 days

prior to the effective date of the repeal.

Section 209-B.  Expiration.

This article shall expire July 1, 2014. Notwithstanding the

expiration of this article, tax imposed under section 203-B on

sales or uses occurring before July 1, 2014, shall be subject to

section 207-B.

Section 4.  This act shall take effect immediately.