PRINTER'S NO.  3369

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

HOUSE BILL

 

No.

1776

Session of

2012

  

  

INTRODUCED BY COX, CALTAGIRONE, MALONEY, GALLOWAY, SACCONE, GOODMAN, GILLEN, SCAVELLO, AUMENT, BARRAR, BEAR, BLOOM, BOBACK, BOYD, R. BROWN, CHRISTIANA, D. COSTA, CREIGHTON, CUTLER, DALEY, DAVIDSON, DAVIS, DAY, DENLINGER, EVERETT, FABRIZIO, GERGELY, GIBBONS, GILLESPIE, HARRIS, HELM, HENNESSEY, HESS, HICKERNELL, KAUFFMAN, M. K. KELLER, KNOWLES, KORTZ, KULA, LAWRENCE, MAHONEY, MATZIE, McGEEHAN, MILLER, MIRABITO, MOUL, PERRY, QUIGLEY, REESE, ROCK, SANTONI, SAYLOR, SCHRODER, STERN, SWANGER, TALLMAN, TOBASH, TOEPEL, TRUITT AND VEREB, APRIL 10, 2012

  

  

REFERRED TO COMMITTEE ON FINANCE, APRIL 10, 2012  

  

  

  

AN ACT

  

1

Providing for tax levies and information related to taxes;

2

authorizing the imposition of a personal income tax or an

3

earned income tax by a school district subject to voter

4

approval; providing for imposition of and exclusions from a

5

sales and use tax for the stabilization of education funding;

6

establishing the Public Transportation Reserve Fund;

7

providing for increase to the personal income tax, for

8

certain licenses, for hotel occupancy tax, for procedure and

9

administration of the tax, for expiration of authority to

10

issue certain debt and for reporting by local government

11

units of debt outstanding; establishing the Education

12

Stabilization Fund; providing for disbursements from this

13

fund and for certain rebates and assistance to senior

14

citizens; and repealing certain provisions of The Local Tax

15

Enabling Act, sales and use tax provisions of the Tax Reform

16

Code of 1971 and provisions relating to senior citizens

17

property tax and rent rebate assistance in the Taxpayer

18

Relief Act.

19

TABLE OF CONTENTS

20

Chapter 1.  Preliminary Provisions

21

Section 101.  Short title.

22

Section 102.  Definitions.

 


1

Chapter 3.  Personal Income Tax

2

Subchapter A.  School District Income Tax

3

Section 301.  Scope.

4

Section 302.  Definitions.

5

Section 303.  Preemption.

6

Section 304.  Personal income tax authorization.

7

Section 305.  Continuity of tax.

8

Section 306.  Exemption of low-income persons.

9

Section 307.  Collection of personal income tax.

10

Section 308.  Limitation on assessment.

11

Section 309.  Distress and sale of personal property of

12

taxpayer.

13

Section 310.  Collection of delinquent taxes from employers.

14

Section 311.  Collection of delinquent taxes from Commonwealth.

15

Section 312.  Notice to taxpayer.

16

Section 313.  Collection of taxes by suit.

17

Section 314.  Interest and penalties.

18

Section 315.  Fines and penalties for violation of resolutions.

19

Section 316.  Collection at source.

20

Subchapter B.  Education Tax

21

Section 321.  Education tax.

22

Chapter 5.  Earned Income Tax

23

Section 501.  Scope.

24

Section 502.  Definitions.

25

Section 503.  Preemption.

26

Section 504.  Earned income tax authorization.

27

Section 505.  Continuity of tax.

28

Section 506.  Exemption of low-income persons.

29

Section 507.  Collection of earned income tax.

30

Section 508.  Limitation on assessment.

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1

Section 509.  Distress and sale of property of taxpayer.

2

Section 510.  Collection of delinquent taxes from employers.

3

Section 511.  Collection of delinquent taxes from Commonwealth.

4

Section 512.  Notice to taxpayer.

5

Section 513.  Collection of taxes by suit.

6

Section 514.  Interest and penalties.

7

Section 515.  Fines and penalties for violation of resolutions.

8

Section 516.  Collection at source.

9

Chapter 7.  Sales and Use Tax for the Stabilization of Education

10

Funding

11

Subchapter A.  Preliminary Provisions

12

Section 701.  Scope.

13

Section 701.1.  Definitions.

14

Subchapter B.  Sales and Use Tax

15

Section 702.  Imposition of tax.

16

Section 703.  Computation of tax.

17

Subchapter C.  Exclusions from Sales and Use Tax

18

Section 704.  Exclusions from tax.

19

Section 705.  Alternate imposition of tax.

20

Section 706.  Credit against tax.

21

Subchapter D.  Licenses

22

Section 708.  Licenses.

23

Subchapter E.  Hotel Occupancy Tax

24

Section 709.  Definitions.

25

Section 710.  Imposition of tax.

26

Section 711.  Seasonal tax returns.

27

Subchapter F.  Procedure and Administration

28

Section 715.  Persons required to make returns.

29

Section 716.  Form of returns.

30

Section 717.  Time for filing returns.

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1

Section 718.  Extension of time for filing returns.

2

Section 719.  Place for filing returns.

3

Section 720.  Timely mailing treated as timely filing and

4

payment.

5

Section 721.  Payment of tax.

6

Section 722.  Time of payment.

7

Section 723.  Other times for payment.

8

Section 724.  Place for payment.

9

Section 725.  Tax held in trust for Commonwealth.

10

Section 726.  Local receivers of use tax.

11

Section 727.  Discount.

12

Section 728.  (Reserved).

13

Section 729.  (Reserved).

14

Section 730.  Assessment.

15

Section 731.  Mode and time of assessment.

16

Section 732.  Reassessment.

17

Section 733.  (Reserved).

18

Section 734.  Review by Board of Finance and Revenue.

19

Section 735.  (Reserved).

20

Section 736.  Burden of proof.

21

Section 737.  Collection of tax.

22

Section 738.  Collection of tax on motor vehicles, trailers and

23

semitrailers.

24

Section 739.  Precollection of tax.

25

Section 740.  Bulk and auction sales.

26

Section 741.  Collection on failure to request reassessment,

27

review or appeal.

28

Section 742.  Lien for taxes.

29

Section 743.  Suit for taxes.

30

Section 744.  Tax suit comity.

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1

Section 745.  Service.

2

Section 746.  Collection and payment of tax on credit sales.

3

Section 747.  Prepayment of tax.

4

Section 747.1.  Refund of sales tax attributed to bad debt.

5

Section 748.  Registration of transient vendors.

6

Section 748.1.  Bond.

7

Section 748.2.  Notification to department.

8

Section 748.3.  Seizure of property.

9

Section 748.4.  Fines.

10

Section 748.5.  Transient vendors subject to chapter.

11

Section 748.6.  Promoters.

12

Section 749.  (Reserved).

13

Section 750.  (Reserved).

14

Section 751.  (Reserved).

15

Section 752.  Refunds.

16

Section 753.  Refund petition.

17

Section 754.  (Reserved).

18

Section 755.  (Reserved).

19

Section 756.  Extended time for filing special petition for

20

refund.

21

Section 757.  (Reserved).

22

Section 758.  Limitation on assessment and collection.

23

Section 759.  Failure to file return.

24

Section 760.  False or fraudulent return.

25

Section 761.  Extension of limitation period.

26

Section 762.  (Reserved).

27

Section 763.  (Reserved).

28

Section 764.  (Reserved).

29

Section 765.  Interest.

30

Section 766.  Additions to tax.

- 5 -

 


1

Section 767.  Penalties.

2

Section 768.  Criminal offenses.

3

Section 769.  Abatement of additions or penalties.

4

Section 770.  Rules and regulations.

5

Section 771.  Keeping of records.

6

Section 771.1.  Reports and records of promoters.

7

Section 772.  Examinations.

8

Section 773.  Records and examinations of delivery agents.

9

Section 774.  Unauthorized disclosure.

10

Section 775.  Cooperation with other governments.

11

Section 776.  Interstate compacts.

12

Section 777.  Bonds.

13

Subchapter G.  Funding Provisions

14

Section 780.  (Reserved).

15

Section 781.  Appropriation for refunds.

16

Section 781.1.  Construction.

17

Section 781.2.  Transfers to Public Transportation Reserve Fund.

18

Section 782.  Transfers to Education Stabilization Fund.

19

Chapter 9.  Senior Citizens Property Tax and Rent Rebate

20

Assistance

21

Section 901.  Scope of chapter.

22

Section 902.  (Reserved).

23

Section 903.  Definitions.

24

Section 904.  Property tax, rent rebate and inflation cost.

25

Section 905.  Filing of claim.

26

Section 906.  Proof of claim.

27

Section 907.  Incorrect claim.

28

Section 908.  Funds for payment of claims.

29

Section 909.  Claim forms and rules and regulations.

30

Section 910.  Fraudulent claims and conveyances to obtain

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1

benefits.

2

Section 911.  Petition for redetermination.

3

Section 912.  Review by Board of Finance and Revenue.

4

Section 913.  Appeal.

5

Chapter 11.  Limitations on School District Taxation

6

Section 1101.  Authority to levy taxes and effect of future

7

Constitutional amendment.

8

Section 1102.  Transitional taxes.

9

Section 1103.  Consideration of State appropriations or

10

reimbursements.

11

Section 1104.  Taxes for cities and school districts of the

12

first class.

13

Chapter 12.  Indebtedness

14

Section 1201.  Expiration of authority to issue debt.

15

Section 1202.  Notices and reporting by school districts of debt

16

outstanding.

17

Chapter 13.  Funding Provisions

18

Section 1301.  Definitions.

19

Section 1302.  Education Stabilization Fund.

20

Section 1303.  Standard disbursements to school districts from

21

Education Stabilization Fund.

22

Chapter 15.  Miscellaneous Provisions

23

Section 1501.  Transitional provision.

24

Section 1502.  Construction.

25

Section 1503.  Severability.

26

Section 1504.  Repeals.

27

Section 1505.  Applicability.

28

Section 1506.  Effective date.

29

The General Assembly of the Commonwealth of Pennsylvania

30

hereby enacts as follows:

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1

CHAPTER 1

2

PRELIMINARY PROVISIONS

3

Section 101.  Short title.

4

This act shall be known and may be cited as the Property Tax

5

Independence Act.

6

Section 102.  Definitions.

7

The following words and phrases when used in this act shall

8

have the meanings given to them in this section unless the

9

context clearly indicates otherwise:

10

"Department."  The Department of Revenue of the Commonwealth.

11

"Education Stabilization Fund."  The Education Stabilization

12

Fund established in section 1302.

13

"Fiscal year."  The fiscal year of the Commonwealth beginning

14

on July 1 and ending on June 30 of the immediately following

15

calendar year.

16

"Governing body."  The board of school directors of a school

17

district, except that the term shall mean the city council of a

18

city of the first class for purposes of the levy and collection

19

of any tax in a school district of the first class.

20

"Internal Revenue Code of 1986."  The Internal Revenue Code

21

of 1986 (Public Law 99-514, 26 U.S.C. § 166).

22

"Local Tax Enabling Act."  The act of December 31, 1965

23

(P.L.1257, No.511), known as The Local Tax Enabling Act,

24

"Public School Code of 1949."  The act of March 10, 1949

25

(P.L.30, No.14), known as the Public School Code of 1949.

26

"School district."  A school district of the first class,

27

first class A, second class, third class or fourth class,

28

including any independent school district. For purposes of the

29

levy, assessment and collection of any tax in a school district

30

of the first class, the term shall include the City Council.

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1

"School per capita tax."  The tax authorized pursuant to

2

section 679 of the act of March 10, 1949 (P.L.30, No.14), known

3

as the Public School Code of 1949,

4

"Secretary."  The Secretary of Revenue of the Commonwealth.

5

"Tax Reform Code of 1971."  The act of March 4, 1971 (P.L.6,

6

No.2), known as the Tax Reform Code of 1971.

7

CHAPTER 3

8

PERSONAL INCOME TAX

9

SUBCHAPTER A

10

SCHOOL DISTRICT INCOME TAX

11

Section 301.  Scope.

12

This chapter authorizes school districts to levy, assess and

13

collect a personal income tax as a means of abolishing property

14

taxation by the school district.

15

Section 302.  Definitions.

16

The following words and phrases when used in this chapter

17

shall have the meanings given to them in this section unless the

18

context clearly indicates otherwise:

19

"Association."  A partnership, limited partnership or other

20

unincorporated group of two or more persons.

21

"Business."  An enterprise, activity, profession or other

22

undertaking of an unincorporated nature conducted for profit or

23

ordinarily conducted for profit whether by a person, association

24

or other entity.

25

"Compensation."  The classes of income included within the

26

definition of "compensation" set forth in section 301 of the act

27

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

28

1971, and upon which are imposed a personal income tax by the

29

Commonwealth.

30

"Corporation."  A corporation or joint stock association

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1

organized under the laws of the United States or the

2

Commonwealth of Pennsylvania or any other state, territory,

3

foreign country or dependency.

4

"Current year."  The calendar year or fiscal year for which a

5

tax is levied.

6

"Domicile."

7

(1)  The place where a person lives and has the person's

8

permanent home and to which the person has the intention of

9

returning whenever the person is absent. Actual residence is

10

not necessarily domicile because domicile is the fixed place

11

of abode which, in the intention of the taxpayer, is

12

permanent rather than transitory.

13

(2)  Domicile is the voluntarily fixed place of

14

habitation of a person, not for a mere special or limited

15

purpose, but with the present intention of making a permanent

16

home, until some event occurs to induce the person to adopt

17

some other permanent home.

18

(3)  In the case of a business or association, the

19

domicile is any place where the business or association is

20

conducting or engaging in a business for profit within a

21

school district.

22

"Employer."  A person, association, corporation, governmental

23

unit or other entity employing one or more persons, other than

24

domestic servants, for compensation.

25

"Nonresident."  A person, association or other entity

26

domiciled outside a school district.

27

"Person" or "individual."  A natural person.

28

"Personal income."  The classes of income enumerated in

29

section 303 of the act of March 4, 1971 (P.L.6, No.2), known as

30

the Tax Reform Code of 1971, and on which is imposed a personal

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1

income tax by the Commonwealth.

2

"Political subdivision."  A school district.

3

"Preceding year."  The calendar year or fiscal year before a

4

current year.

5

"Resident."  A person, association, corporation or other

6

entity:

7

(1)  living in or maintaining a permanent or fixed place

8

of abode in a school district; or

9

(2)  conducting or engaging in a business for profit

10

within a school district.

11

"Succeeding year."  The calendar year or fiscal year

12

following a current year.

13

"Tax officer."  The person, public employee or private agency

14

designated by a governing body to collect and administer a tax

15

imposed under this chapter, and the treasurer of a school

16

district of the first class A.

17

"Taxpayer."  A person, association or other entity required

18

under this chapter to file a tax return or to pay a tax.

19

Section 303.  Preemption.

20

No act of the General Assembly shall vacate or preempt any

21

resolution passed or adopted under the authority of this

22

chapter, or any other act, providing authority for the

23

imposition of a tax by a school district, unless the act of the

24

General Assembly expressly vacates or preempts the authority to

25

pass or adopt the resolutions.

26

Section 304.  Personal income tax authorization.

27

(a)  School districts.--Except as prohibited under Chapter

28

11, each school district shall have the power and may, by

29

resolution, levy, assess and collect or provide for the levying,

30

assessment and collection of a tax for general revenue purposes

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1

at a rate as it shall determine on personal income of the

2

residents of the school district. A school district may only

3

levy or increase the rate of personal income tax when that

4

school district complies with the provisions of subsection (b).

5

(b)  Adoption of referendum.--

6

(1)  In order to levy a personal income tax under this

7

chapter, a governing body shall use the procedures set forth

8

in paragraphs (2), (3), (4), (5), (6) and (7).

9

(2)  (i)  Subject to the notice and public hearing

10

requirements of paragraph (7), a governing body may levy

11

the personal income tax under this chapter only by

12

obtaining the approval of the electorate of the affected

13

school district in a public referendum at only the

14

municipal election preceding the fiscal year when the

15

personal income tax will be initially imposed or the rate

16

increased.

17

(ii)  The referendum question must state the initial

18

rate of the proposed personal income tax, the reason for

19

the tax and the amount of proposed budgeted revenue

20

growth, if any, in the first fiscal year following

21

adoption of the referendum.

22

(iii)  The question shall be in clear language that

23

is readily understandable by a layperson. For the purpose

24

of illustration, a referendum question may be framed as

25

follows:

26

Do you favor the imposition of a personal income tax

27

of X%?

28

(iv)  A nonlegal interpretative statement must

29

accompany the question in accordance with section 201.1

30

of the act of June 3, 1937 (P.L.1333, No.320), known as

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1

the Pennsylvania Election Code, that includes the

2

following: the initial rate of the personal income tax

3

imposed under this chapter, the estimated revenues to be

4

derived from the initial rate of the personal income tax

5

imposed under this chapter.

6

(3)  In the event a school district is located in more

7

than one county, petitions under this section shall be filed

8

with the election officials of the county in which the

9

administrative offices of the school district are located.

10

(4)  The election officials who receive a petition shall

11

perform all administrative functions in reviewing and

12

certifying the validity of the petition and conduct all

13

necessary communications with the school district.

14

(5)  (i)  If the election officials of the county who

15

receive the petition certify that it is sufficient under

16

this section and determine that a question should be

17

placed on the ballot, the decision shall be communicated

18

to election officials in any other county in which the

19

school district is also located.

20

(ii)  Election officials in the other county or

21

counties shall cooperate with election officials of the

22

county that receives the petition to ensure that an

23

identical question is placed on the ballot at the same

24

election throughout the entire school district.

25

(6)  Election officials from each county involved shall

26

independently certify the results from their county to the

27

governing body.

28

(7)  (i)  In order to levy the tax under this section,

29

the governing body shall adopt a resolution which shall

30

refer to this chapter prior to placing a question on the

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1

ballot.

2

(ii)  Prior to adopting a resolution imposing the tax

3

authorized by this section, the governing body shall give

4

public notice of its intent to adopt the resolution in

5

the manner provided by The Local Tax Enabling Act and

6

shall conduct at least two public hearings regarding the

7

proposed adoption of the resolution. One public hearing

8

shall be conducted during normal business hours and one

9

public hearing shall be conducted during evening hours or

10

on a weekend.

11

Section 305.  Continuity of tax.

12

Every tax levied under this chapter shall continue in force

13

on a calendar or fiscal year basis, as the case may be, without

14

annual reenactment unless the rate of the tax is subsequently

15

changed.

16

Section 306.  Exemption of low-income persons.

17

(a)  Low-income exemption.--Each school district shall exempt

18

any person who qualifies under the provisions of section 304 of

19

the Tax Reform Code of 1971 from payment of any or all of the

20

tax imposed under section 304.

21

(b)  Procedures.--Each school district shall adopt procedures

22

for the processing of claims for these exemptions.

23

Section 307.  Collection of personal income tax.

24

The tax officer shall collect all personal income tax imposed

25

by a school district.

26

Section 308.  Limitation on assessment.

27

No assessment may be made of any personal income tax imposed

28

under this chapter more than five years after the date on which

29

the tax should have been paid except where a fraudulent return

30

or no return has been filed.

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1

Section 309.  Distress and sale of personal property of

2

taxpayer.

3

(a)  General rule.--In case of the neglect or refusal of any

4

person, association or corporation to make payment of the amount

5

of any personal income tax due after two months from the date of

6

the tax notice, the tax officer shall levy the amount of the

7

tax, penalty, interest and costs thereon, not exceeding costs

8

and charges allowed constables for similar services by distress

9

and sale of the goods and chattels of the delinquent taxpayer,

10

wherever located, after giving at least ten days' public notice

11

of the sale by one advertisement in a newspaper of general

12

circulation published in the county.

13

(b)  Effect on return.--No failure to demand or collect any

14

taxes by distress and sale of goods and chattels shall

15

invalidate any return made, lien filed for nonpayment of taxes

16

or any tax sale for the collection of taxes.

17

Section 310.  Collection of delinquent taxes from employers.

18

(a)  General rule.--The tax officer shall demand, receive and

19

collect from all employers employing persons owing delinquent

20

personal income taxes or having in possession unpaid

21

compensation belonging to any person or persons owing delinquent

22

personal income taxes on the presentation of a written notice

23

and demand certifying that the information contained in the

24

notice and demand is true and correct and containing the name of

25

the taxpayer and the amount of tax due.

26

(b)  Response to notice.--On the presentation of the written

27

notice and demand, the employer shall deduct from the

28

compensation of the employees then owing, or thereafter due, a

29

sum sufficient to pay the amount of the delinquent personal

30

income taxes, interest, penalty and costs shown on the written

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1

notice or demand, and shall pay the same to the tax officer by

2

which the delinquent tax was levied within 60 days after the

3

notice was given.

4

(c)  Limitation on deduction.--No more than 10% of the

5

compensation of the delinquent taxpayer may be deducted at any

6

one time for delinquent personal income taxes, penalty, interest

7

and costs.

8

(d)  Deduction for costs.--The employer shall be entitled to

9

deduct from the moneys collected from each employee the costs

10

incurred from the extra bookkeeping necessary to record the

11

transactions, not exceeding 2% of the amount collected and paid

12

over to the tax officer.

13

(e)  Forfeiture.--If the employer fails to deduct the amount

14

of such taxes or to pay the same over to the tax officer, less

15

the amount deducted under subsection (d), within the time

16

required by this section, the employer shall forfeit and pay the

17

amount of the tax for those taxpayers whose taxes are not

18

withheld and paid over, or that are withheld and not paid over

19

together with a penalty of 10%, to be recovered by a civil

20

action to be instituted by the tax officer, as debts of like

21

amount are now by law recoverable, except that the person shall

22

not have the benefit of any exemption law or stay of execution.

23

(f)  Collection rights preserved.--Nothing in this section

24

shall be deemed to affect or impair the right of any school

25

district or the tax officer to pursue and collect delinquent

26

taxes validly imposed prior to the effective date of this

27

section.

28

Section 311.  Collection of delinquent taxes from Commonwealth.

29

(a)  General rule.--On presentation of a written notice and

30

demand under oath to the State Treasurer or any other fiscal

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1

officer of the Commonwealth, or its boards, authorities,

2

agencies or commissions, the treasurer or officer shall deduct

3

from the compensation then owing a sum sufficient to pay the

4

amount of the delinquent personal income taxes, interest,

5

penalty and costs shown on the written notice. The same shall be

6

paid to the tax officer within 60 days after the notice is

7

given.

8

(b)  Limitation on deduction.--No more than 10% of the

9

compensation of the delinquent taxpayer may be deducted at any

10

one time for delinquent personal income taxes, interest, penalty

11

and costs.

12

(c)  Collection rights preserved.--Nothing in this section

13

shall be deemed to affect or impair the right of a school

14

district or the tax officer to pursue and collect delinquent

15

taxes validly imposed prior to the effective date of this

16

section.

17

Section 312.  Notice to taxpayer.

18

The department shall, at least 15 days prior to the

19

presentation of a written notice and demand under section 310 or

20

311, notify the taxpayer owing the delinquent tax by registered

21

mail that a written notice and demand shall be presented to the

22

taxpayer's employer unless the tax is paid. The return receipt

23

card for registered mail shall be marked delivered to addressee

24

only, and the cost of notification by registered mail shall be

25

included in the costs for collecting taxes.

26

Section 313.  Collection of taxes by suit.

27

(a)  Power to collect.--

28

(1)  Each school district and the tax officer shall have

29

power to collect unpaid taxes from taxpayers and employers

30

owing such taxes by a civil action or other appropriate

- 17 -

 


1

remedy.

2

(2)  On judgment, execution may be issued without any

3

stay or benefit of any exemption law.

4

(3)  The power to collect unpaid taxes under the

5

provisions of this section shall not be affected by the fact

6

that such taxes have been entered as liens in the office of

7

the prothonotary or the fact that the property against which

8

they were levied has been returned to the county

9

commissioners for taxes for prior years.

10

(b)  Limitation of actions.--A suit brought to recover the

11

taxes under subsection (a) shall be instituted within three

12

years after the tax is due or within three years after a

13

declaration or return has been filed, whichever date is later,

14

except in the following cases:

15

(1)  If no declaration or return was filed by any person

16

although a declaration or return was required to be filed

17

under provisions of the ordinance, there shall be no

18

limitation.

19

(2)  If an examination of the declaration or return filed

20

by any person, or of other evidence relating to the

21

declaration or return in the possession of the tax officer,

22

reveals a fraudulent evasion of taxes, there shall be no

23

limitation.

24

(3)  If there is a substantial understatement of tax

25

liability of 25% or more and no fraud, suit shall be

26

instituted within six years.

27

(4)  If a person has deducted taxes under the provisions

28

of the resolution and has failed to pay the amounts so

29

deducted to the tax officer, or if a person has willfully

30

failed or omitted to make the deductions required by this

- 18 -

 


1

section, there shall be no limitation.

2

(c)  Regulations.--The tax officer, by regulation, shall

3

establish the procedures for collecting the personal income tax

4

and paying the full amount collected over to the school district

5

on a quarterly basis.

6

Section 314.  Interest and penalties.

7

(a)  General rule.--If for any reason the tax is not paid

8

when due, interest at the annual rate of 6% on the amount of the

9

tax, and an additional penalty of .5% of the amount of the

10

unpaid tax for each month or fraction thereof during which the

11

tax remains unpaid, shall be added and collected. Where suit is

12

brought for the recovery of such tax, the person liable therefor

13

shall, in addition, be liable for the costs of collection and

14

the interest and penalties herein imposed.

15

(b)  One-time waiver of interest authorized.--

16

(1)  Notwithstanding the provisions of subsection (a),

17

the school district may, by resolution, establish a one-time

18

period during which interest or interest and penalties that

19

would otherwise be imposed for the nonreporting or

20

underreporting of personal income tax liabilities or for the

21

nonpayment of personal income taxes previously imposed and

22

due shall be waived in total or in part if the taxpayer

23

voluntarily files delinquent returns and pays the taxes in

24

full during the period so established.

25

(2)  Each school district may adopt regulations to

26

implement the provisions of this subsection.

27

(c)  Proceedings.--The provisions of subsection (b) shall not

28

affect or terminate any petitions, investigations, prosecutions

29

or other proceedings pending on the effective date of this

30

section, or prevent the commencement or further prosecution of

- 19 -

 


1

any proceedings by the proper authorities for violations of this

2

act. No proceedings shall, however, be commenced on the basis of

3

delinquent returns filed pursuant to subsection (b) if the

4

returns are determined to be substantially true and correct and

5

the taxes are paid in full within the prescribed time.

6

Section 315.  Fines and penalties for violation of resolutions.

7

(a)  Conduct prohibited.--

8

(1)  Any person who fails, neglects or refuses to make

9

any declaration or return required by the resolution, any

10

employer who fails, neglects or refuses to register or to pay

11

the tax deducted from its employees, or fails, neglects or

12

refuses to deduct or withhold the tax from its employees, any

13

person who refuses to permit the officer or any agent

14

designated by that officer to examine the person's books,

15

records and papers, and any person who knowingly makes any

16

incomplete, false or fraudulent return, or attempts to do

17

anything whatsoever to avoid the full disclosure of the

18

amount of the person's personal income in order to avoid the

19

payment of the whole or any part of the tax imposed by the

20

resolution, shall, upon conviction thereof, in any county in

21

which the school district imposing the tax is located, be

22

sentenced to pay a fine of not more than $500 for each

23

offense and costs and, in default of payment of the fines and

24

costs, to be imprisoned for a period not exceeding 30 days.

25

(2)  Any person who divulges any information which is

26

confidential under the provisions of the resolution shall,

27

upon conviction thereof, be sentenced to pay a fine of not

28

more than $500 for each offense and costs and, in default of

29

payment of said fines and costs, to be imprisoned for a

30

period not exceeding 30 days.

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1

(b)  Cumulative penalties.--The penalties imposed under this

2

section shall be in addition to any other penalty imposed by any

3

other section of the resolution.

4

(c)  Defense unavailable.--The failure of any person to

5

receive or procure forms required for making the declaration or

6

returns by the resolution shall not excuse the person from

7

making the declaration or return.

8

Section 316.  Collection at source.

9

(a)  Duty of employers to register.--Every employer having an

10

office, factory, workshop, branch, warehouse or other place of

11

business within the school district imposing a tax on personal

12

income who employs one or more persons, other than domestic

13

servants, for a salary, wage, commission or other compensation,

14

who has not previously registered shall, within 15 days after

15

becoming an employer, register with the tax officer his name and

16

address and such other information as the tax officer may

17

require.

18

(b)  Duty to deduct tax.--

19

(1)  Every employer having an office, factory, workshop,

20

branch, warehouse or other place of business within the

21

school district imposing a tax on personal income who employs

22

one or more persons, other than domestic servants, for a

23

salary, wage, commission or other compensation, shall deduct

24

at the time of payment thereof, the tax imposed pursuant to

25

this chapter due to his employee or employees, and shall, on

26

or before April 30 of the current year, July 31 of the

27

current year, October 31 of the current year and January 31

28

of the succeeding year, file a return and pay to the tax

29

officer the amount of taxes deducted during the preceding

30

three-month periods ending March 31 of the current year, June

- 21 -

 


1

30 of the current year, September 30 of the current year and

2

December 31 of the current year, respectively.

3

(2)  Unless otherwise agreed upon between the tax officer

4

and employer, the return shall show the name and Social

5

Security number of each employee, the compensation of the

6

employee during the preceding three-month period, the tax

7

deducted from the compensation, the school district imposing

8

the tax upon the employee, the total compensation of all

9

employees during the preceding three-month period and the

10

total tax deducted from the compensation and paid with the

11

return.

12

(3)  Any employer that for two of the preceding four

13

quarterly periods has failed to deduct the proper tax, or any

14

part thereof, or has failed to pay over the proper amount of

15

tax to the school district, may be required by the officer to

16

file the employer's return and pay the tax monthly. In such

17

cases, payments of tax shall be made to the tax officer on or

18

before the last day of the month succeeding the month for

19

which the tax was withheld.

20

(c)  Duty to file annual return.--On or before February 28 of

21

the succeeding year, every employer shall file with the tax

22

officer:

23

(1)  An annual return showing the total amount of

24

compensation paid, the total amount of tax deducted and the

25

total amount of tax paid to the tax officer for the period

26

beginning January 1 of the current year and ending December

27

31 of the current year.

28

(2)  A return withholding statement for each employee

29

employed during all or any part of the period beginning

30

January 1 of the current year and ending December 31 of the

- 22 -

 


1

current year, setting forth the employee's name, address and

2

Social Security number, the amount of earned income paid to

3

the employee during the period, the amount of tax deducted,

4

the school district imposing the tax upon the employees and

5

the amount of tax paid to the tax officer. Every employer

6

shall furnish two copies of the individual return to the

7

employee for whom it is filed.

8

(d)  Discontinued businesses.--Every employer who

9

discontinues business prior to December 31 of the current year

10

shall, within 30 days after the discontinuance of business, file

11

the returns and withholding statements required by this section

12

and pay the tax due.

13

(e)  Liability of employers.--Every employer who willfully or

14

negligently fails or omits to make the deductions required by

15

this section shall be liable for payment of the taxes which he

16

was required to withhold to the extent that such taxes have not

17

been recovered from the employee.

18

(f)  Liability of employees.--The failure or omission of any

19

employer to make the deductions required by this section shall

20

not relieve any employee from the payment of the tax or from

21

complying with the requirements of the ordinance or resolution

22

relating to the filing of declarations and returns.

23

SUBCHAPTER B

24

EDUCATION TAX

25

Section 321.  Education tax.

26

(a)  General rule.--In addition to the tax collected under

27

section 302 of the Tax Reform Code of 1971, the Commonwealth

28

shall impose the tax set forth in subsection (c) in the same

29

manner as the tax under the Tax Reform Code of 1971.

30

(b)  Imposition of tax.--

- 23 -

 


1

(1)  Every resident individual, estate or trust shall be

2

subject to, and shall pay for the privilege of receiving each

3

of the classes of income enumerated in section 303 of the Tax

4

Reform Code of 1971, a tax upon each dollar of income

5

received by that resident during that resident's taxable year

6

at the rate of .94%.

7

(2)  Every nonresident individual, estate or trust shall

8

be subject to, and shall pay for the privilege of receiving

9

each of the classes of income enumerated in section 303 of

10

the Tax Reform Code of 1971 from sources within this

11

Commonwealth, a tax upon each dollar of income received by

12

that nonresident during that nonresident's taxable year at

13

the rate of .94%.

14

(c)  Deposit in Education Stabilization Fund.--All moneys

15

collected under this section shall be deposited in the Education

16

Stabilization Fund.

17

(d)  Combination of tax forms.--The department shall

18

incorporate the taxpayer reporting requirement for the

19

implementation of this section into the forms utilized by the

20

department under Article III of the Tax Reform Code of 1971.

21

(e)  Definitions.--The words and phrases used in this section

22

shall have the same meaning given to them in Article III of the

23

Tax Reform Code of 1971.

24

CHAPTER 5

25

EARNED INCOME TAX

26

Section 501.  Scope.

27

This chapter authorizes school districts to levy, assess and

28

collect an earned income tax.

29

Section 502.  Definitions.

30

The following words and phrases when used in this chapter

- 24 -

 


1

shall have the meanings given to them in this section unless the

2

context clearly indicates otherwise:

3

"Association."  A partnership, limited partnership or other

4

unincorporated group of two or more persons.

5

"Business."  An enterprise, activity, profession or other

6

undertaking of an unincorporated nature conducted for profit or

7

ordinarily conducted for profit whether by a person, association

8

or other entity.

9

"Corporation."  A corporation or joint stock association

10

organized under the laws of the United States, this Commonwealth

11

or any other state, territory, foreign country or dependency.

12

"Current year."  The calendar year or fiscal year for which a

13

tax is levied.

14

"Department."  The Department of Community and Economic

15

Development of the Commonwealth.

16

"Domicile."

17

(1)  The place where a person lives and has the person's

18

permanent home and to which the person has the intention of

19

returning whenever the person is absent. Actual residence is

20

not necessarily domicile because domicile is the fixed place

21

of abode which, in the intention of the taxpayer, is

22

permanent rather than transitory.

23

(2)  Domicile is the voluntarily fixed place of

24

habitation of a person, not for a mere special or limited

25

purpose, but with the present intention of making a permanent

26

home, until some event occurs to induce the person to adopt

27

some other permanent home.

28

(3)  In the case of a business or association, the

29

domicile is any place where the business or association is

30

conducting or engaging in a business for profit within a

- 25 -

 


1

school district.

2

"Earned income."

3

(1)  Compensation as determined under section 303 of the

4

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

5

Code of 1971, and regulations in 61 Pa. Code Pt. I Subpt. B

6

Art. V (relating to personal income tax).

7

(2)  Employee business expenses are allowable deductions

8

as determined under Article III of the Tax Reform Code of

9

1971.

10

(3)  The amount of any housing allowance provided to a

11

member of the clergy shall not be taxable as earned income.

12

"Employer."  A person, association, corporation, governmental

13

unit or other entity employing one or more persons, other than

14

domestic servants for compensation.

15

"Nonresident."  A person, association or other entity

16

domiciled outside a school district.

17

"Person" or "individual."  A natural person.

18

"Political subdivision."  A school district.

19

"Preceding year."  The calendar year or fiscal year before a

20

current year.

21

"Resident."  A person, association, corporation or other

22

entity:

23

(1)  living in or maintaining a permanent or fixed place

24

of abode in a school district; or

25

(2)  conducting or engaging in a business for profit

26

within a school district.

27

"Succeeding year."  The calendar year or fiscal year

28

following a current year.

29

"Tax officer."  The person, public employee or private agency

30

designated by a governing body to collect and administer a tax

- 26 -

 


1

imposed under this chapter, and the treasurer of a school

2

district of the first class A.

3

"Taxpayer."  A person, association or other entity required

4

under this chapter to file a tax return or to pay a tax.

5

Section 503.  Preemption.

6

No act of the General Assembly shall vacate or preempt any

7

resolution passed or adopted under the authority of this chapter

8

or any other act providing authority for the imposition of a tax

9

by a school district, unless the act of the General Assembly

10

expressly vacates or preempts the authority to pass or adopt

11

such resolutions.

12

Section 504.  Earned income tax authorization.

13

(a)  School districts.--Except as prohibited under Chapter

14

11, each school district shall have the power and may, by

15

resolution, levy, assess and collect or provide for the levying,

16

assessment and collection of a tax for general revenue purposes

17

at a rate as it shall determine on earned income of the

18

residents of the school district. A school district may only

19

impose and increase the rate of earned income tax when that

20

school district complies with the provisions of subsection (b).

21

(b)  Adoption of referendum.--

22

(1)  In order to levy an earned income tax under this

23

chapter, a governing body shall use the procedures set forth

24

in paragraphs (2), (3), (4), (5), (6) and (7).

25

(2)  (i)  Subject to the notice and public hearing

26

requirements of paragraph (7), a governing body may levy

27

the earned income tax under this chapter only by

28

obtaining the approval of the electorate of the affected

29

school district in a public referendum at only the

30

municipal election preceding the fiscal year when the

- 27 -

 


1

earned income tax will be initially imposed or the rate

2

increased.

3

(ii)  The referendum question must state the initial

4

rate of the proposed earned income tax, the reason for

5

the tax and the amount of proposed budgeted revenue

6

growth, if any, in the first fiscal year following

7

adoption of the referendum.

8

(iii)  The question shall be in clear language that

9

is readily understandable by a layperson. For the purpose

10

of illustration, a referendum question may be framed as

11

follows:

12

Do you favor the imposition of an earned income and

13

net profits tax of X%?

14

(iv)  A nonlegal interpretative statement must

15

accompany the question in accordance with section 201.1

16

of the act of June 3, 1937 (P.L.1333, No.320), known as

17

the Pennsylvania Election Code, that includes the

18

following: the initial rate of the earned income tax

19

imposed under this chapter and the estimated revenues to

20

be derived from the initial rate of the earned income tax

21

imposed under this chapter.

22

(3)  In the event a school district is located in more

23

than one county, petitions under this section shall be filed

24

with the election officials of the county in which the

25

administrative offices of the school district are located.

26

(4)  The election officials who receive a petition shall

27

perform all administrative functions in reviewing and

28

certifying the validity of the petition and conduct all

29

necessary communications with the school district.

30

(5)  (i)  If the election officials of the county who

- 28 -

 


1

receive the petition certify that it is sufficient under

2

this section and determine that a question should be

3

placed on the ballot, the decision shall be communicated

4

to election officials in any other county in which the

5

school district is also located.

6

(ii)  Election officials in the other county or

7

counties shall cooperate with election officials of the

8

county receiving the petition to ensure that an identical

9

question is placed on the ballot at the same election

10

throughout the entire school district.

11

(6)  Election officials from each county involved shall

12

independently certify the results from their county to the

13

governing body.

14

(7)  (i)  In order to levy the tax under this section,

15

the governing body shall adopt a resolution which refers

16

to this chapter prior to placing a question on the

17

ballot.

18

(ii)  Prior to adopting a resolution imposing the tax

19

authorized by this section, the governing body shall give

20

public notice of its intent to adopt the resolution in

21

the manner provided by The Local Tax Enabling Act and

22

shall conduct at least two public hearings regarding the

23

proposed adoption of the resolution. One public hearing

24

shall be conducted during normal business hours and one

25

public hearing shall be conducted during evening hours or

26

on a weekend.

27

Section 505.  Continuity of tax.

28

Every tax levied under this chapter shall continue in force

29

on a calendar or fiscal year basis, as the case may be, without

30

annual reenactment unless the rate of the tax is subsequently

- 29 -

 


1

changed.

2

Section 506.  Exemption of low-income persons.

3

(a)  General rule.--Each school district shall exempt any

4

person whose total income from all sources is less than $10,000

5

per year from the earned income tax, or any portion thereof.

6

(b)  Procedures.--Each school district shall adopt procedures

7

for the processing of claims for these exemptions.

8

Section 507.  Collection of earned income tax.

9

The tax officer shall collect all earned income tax imposed

10

by a school district.

11

Section 508.  Limitation on assessment.

12

No assessment may be made of any earned income tax imposed

13

under this chapter more than five years after the date on which

14

the tax should have been paid except where a fraudulent return

15

or no return has been filed.

16

Section 509.  Distress and sale of property of taxpayer.

17

(a)  General rule.--In case of the neglect or refusal of any

18

person, association or corporation to make payment of the amount

19

of any earned income tax due after two months from the date of

20

the tax notice, the tax officer shall levy the amount of the

21

tax, penalty, interest and costs thereon, not exceeding costs

22

and charges allowed constables for similar services by distress

23

and sale of the goods and chattels of the delinquent taxpayer,

24

wherever located, after giving at least ten days' public notice

25

of such sale by one advertisement in a newspaper of general

26

circulation published in the county.

27

(b)  Effect on return.--No failure to demand or collect any

28

taxes by distress and sale of goods and chattels shall

29

invalidate any return made, lien filed for nonpayment of taxes

30

or any tax sale for the collection of taxes.

- 30 -

 


1

Section 510.  Collection of delinquent taxes from employers.

2

(a)  General rule.--The tax officer shall demand, receive and

3

collect from all employers employing persons owing delinquent

4

earned income taxes or having in possession unpaid earned income

5

belonging to any person or persons owing delinquent earned

6

income taxes on the presentation of a written notice and demand

7

certifying that the information contained in the notice and

8

demand is true and correct and containing the name of the

9

taxpayer and the amount of tax due.

10

(b)  Response to notice.--On the presentation of the written

11

notice and demand, the employer shall deduct from the earned

12

income of the employees then owing, or thereafter due, a sum

13

sufficient to pay the amount of the delinquent earned income

14

taxes, interest, penalty and costs shown on the written notice

15

or demand, and shall pay the same to the tax officer by which

16

the delinquent tax was levied within 60 days after the notice

17

was given.

18

(c)  Limitation on deduction.--No more than 10% of the

19

compensation of the delinquent taxpayer may be deducted at any

20

one time for delinquent earned income taxes, penalty, interest

21

and costs.

22

(d)  Deduction for costs.--The employer shall be entitled to

23

deduct from the moneys collected from each employee the costs

24

incurred from the extra bookkeeping necessary to record the

25

transactions, not exceeding 2% of the amount collected and paid

26

over to the tax officer.

27

(e)  Forfeiture.--If the employer fails to deduct the amount

28

of such taxes or to pay the same over to the tax officer, less

29

the amount deducted under subsection (d), within the time

30

required by this section, the employer shall forfeit and pay the

- 31 -

 


1

amount of the tax for those taxpayers whose taxes are not

2

withheld and paid over, or that are withheld and not paid over

3

together with a penalty of 10%, to be recovered by a civil

4

action instituted by the tax officer, as debts of like amount

5

are now by law recoverable, except that the person shall not

6

have the benefit of any exemption law or stay of execution.

7

(f)  Collection rights preserved.--Nothing in this section

8

shall be deemed to affect or impair the right of any school

9

district or the tax officer to pursue and collect delinquent

10

taxes validly imposed prior to the effective date of this

11

section.

12

Section 511.  Collection of delinquent taxes from Commonwealth.

13

(a)  General rule.--On presentation of a written notice and

14

demand under oath to the State Treasurer or any other fiscal

15

officer of the Commonwealth, or its boards, authorities,

16

agencies or commissions, the treasurer or officer shall deduct

17

from the compensation then owing a sum sufficient to pay the

18

amount of the delinquent earned income taxes, interest, penalty

19

and costs shown on the written notice. The same shall be paid to

20

the tax officer within 60 days after the notice is given.

21

(b)  Limitation on deduction.--No more than 10% of the

22

compensation of the delinquent taxpayer may be deducted at any

23

one time for delinquent earned income taxes, interest, penalty

24

and costs.

25

(c)  Collection rights preserved.--Nothing in this section

26

shall be deemed to affect or impair the right of a school

27

district or the tax officer to pursue and collect delinquent

28

taxes validly imposed prior to the effective date of this

29

section.

30

Section 512.  Notice to taxpayer.

- 32 -

 


1

The tax officer shall, at least 15 days prior to the

2

presentation of a written notice and demand under section 510 or

3

511, notify the taxpayer owing the delinquent tax by registered

4

mail that a written notice and demand shall be presented to the

5

taxpayer's employer unless such tax is paid. The return receipt

6

card for registered mail shall be marked delivered to addressee

7

only, and the cost of notification by registered mail shall be

8

included in the costs for collecting taxes.

9

Section 513.  Collection of taxes by suit.

10

(a)  Power to collect.--

11

(1)  Each school district and the tax officer shall have

12

power to collect unpaid taxes from taxpayers and employers

13

owing such taxes by a civil action or other appropriate

14

remedy.

15

(2)  On judgment, execution may be issued without any

16

stay or benefit of any exemption law.

17

(3)  The power to collect unpaid taxes under the

18

provisions of this section shall not be affected by the fact

19

that such taxes have been entered as liens in the office of

20

the prothonotary or the fact that the property against which

21

they were levied has been returned to the county

22

commissioners for taxes for prior years.

23

(b)  Limitation of actions.--A suit brought to recover the

24

taxes under subsection (a) shall be instituted within three

25

years after the tax is due or within three years after a

26

declaration or return has been filed, whichever date is later,

27

except in the following cases:

28

(1)  If no declaration or return was filed by any person,

29

although a declaration or return was required to be filed

30

under provisions of the ordinance, there shall be no

- 33 -

 


1

limitation.

2

(2)  If an examination of the declaration or return filed

3

by any person, or of other evidence relating to the

4

declaration or return in the possession of the tax officer,

5

reveals a fraudulent evasion of taxes, there shall be no

6

limitation.

7

(3)  If there is a substantial understatement of tax

8

liability of 25% or more and no fraud, suit shall be

9

instituted within six years.

10

(4)  If a person has deducted taxes under the provisions

11

of the resolution and has failed to pay the amounts so

12

deducted to the tax officer, or if any person has willfully

13

failed or omitted to make the deductions required by this

14

section, there shall be no limitation.

15

(c)  Procedures.--The tax officer shall establish the

16

procedures for collecting the earned income tax and paying the

17

full amount collected over to the school district on a quarterly

18

basis.

19

Section 514.  Interest and penalties.

20

(a)  General rule.--If for any reason the tax is not paid

21

when due, interest at the annual rate of 6% on the amount of the

22

tax, and an additional penalty of .5% of the amount of the

23

unpaid tax for each month or fraction thereof during which the

24

tax remains unpaid, shall be added and collected. Where suit is

25

brought for the recovery of such tax, the person liable therefor

26

shall, in addition, be liable for the costs of collection and

27

the interest and penalties herein imposed.

28

(b)  One-time waiver of interest authorized.--

29

(1)  Notwithstanding the provisions of subsection (a),

30

the school district may, by resolution, establish a one-time

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1

period during which interest or interest and penalties that

2

would otherwise be imposed for the nonreporting or

3

underreporting of earned income tax liabilities or for the

4

nonpayment of earned income taxes previously imposed and due

5

shall be waived in total or in part if the taxpayer

6

voluntarily files delinquent returns and pays the taxes in

7

full during the period so established.

8

(2)  Each school district may adopt regulations to

9

implement the provisions of this subsection.

10

(c)  Proceedings.--The provisions of subsection (b) shall not

11

affect or terminate any petitions, investigations, prosecutions

12

or other proceedings pending on the effective date of this

13

section, or prevent the commencement or further prosecution of

14

any proceedings by the proper authorities for violations of this

15

act. No proceedings shall, however, be commenced on the basis of

16

delinquent returns filed pursuant to subsection (b) if the

17

returns are determined to be substantially true and correct and

18

the taxes are paid in full within the prescribed time.

19

Section 515.  Fines and penalties for violation of resolutions.

20

(a)  Conduct prohibited.--

21

(1)  Any person who fails, neglects or refuses to make

22

any declaration or return required by the resolution, any

23

employer who fails, neglects or refuses to register or to pay

24

the tax deducted from its employees, or fails, neglects or

25

refuses to deduct or withhold the tax from its employees, any

26

person who refuses to permit the officer or any agent

27

designated by that officer to examine the person's books,

28

records and papers, and any person who knowingly makes any

29

incomplete, false or fraudulent return, or attempts to do

30

anything whatsoever to avoid the full disclosure of the

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1

amount of the person's earned income in order to avoid the

2

payment of the whole or any part of the tax imposed by the

3

resolution, shall, upon conviction thereof, in any county in

4

which the school district imposing the tax is located be

5

sentenced to pay a fine of not more than $500 for each

6

offense and costs and, in default of payment of the fines and

7

costs, to be imprisoned for a period not exceeding 30 days.

8

(2)  Any person who divulges any information which is

9

confidential under the provisions of the resolution shall,

10

upon conviction thereof, be sentenced to pay a fine of not

11

more than $500 for each offense and costs and, in default of

12

payment of said fines and costs, to be imprisoned for a

13

period not exceeding 30 days.

14

(b)  Cumulative penalties.--The penalties imposed under this

15

section shall be in addition to any other penalty imposed by any

16

other section of the resolution.

17

(c)  Defense unavailable.--The failure of any person to

18

receive or procure forms required for making the declaration or

19

returns required by the resolution shall not excuse the person

20

from making the declaration or return.

21

Section 516.  Collection at source.

22

(a)  Duty of employers to register.--Every employer having an

23

office, factory, workshop, branch, warehouse or other place of

24

business within the school district imposing a tax on earned

25

income within the taxing district who employs one or more

26

persons, other than domestic servants, for a salary, wage,

27

commission or other compensation, who has not previously

28

registered shall, within 15 days after becoming an employer,

29

register with the tax officer his name and address and such

30

other information as the tax officer may require.

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1

(b)  Duty to deduct tax.--

2

(1)  Every employer having an office, factory, workshop,

3

branch, warehouse or other place of business within the

4

school district imposing a tax on earned income who employs

5

one or more persons, other than domestic servants, for a

6

salary, wage, commission or other compensation, shall deduct

7

at the time of payment thereof, the tax imposed pursuant to

8

this chapter on the earned income due to his employee or

9

employees, and shall, on or before April 30 of the current

10

year, July 31 of the current year, October 31 of the current

11

year and January 31 of the succeeding year, file a return and

12

pay to the tax officer the amount of taxes deducted during

13

the preceding three-month periods ending March 31 of the

14

current year, June 30 of the current year, September 30 of

15

the current year and December 31 of the current year,

16

respectively.

17

(2)  Unless otherwise agreed upon between the tax officer

18

and employer, the return shall show the name and Social

19

Security number of each employee, the earned income of the

20

employee during the preceding three-month period, the tax

21

deducted from the compensation, the school district imposing

22

the tax upon the employee, the total earned income of all

23

employees during the preceding three-month period and the

24

total tax deducted from the compensation and paid with the

25

return.

26

(3)  Any employer that for two of the preceding four

27

quarterly periods has failed to deduct the proper tax, or any

28

part thereof, or has failed to pay over the proper amount of

29

tax to the school district, may be required by the tax

30

officer to file his return and pay the tax monthly. In such

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1

cases, payments of tax shall be made to the tax officer on or

2

before the last day of the month succeeding the month for

3

which the tax was withheld.

4

(c)  Duty to file annual return.--On or before February 28 of

5

the succeeding year, every employer shall file with the tax

6

officer:

7

(1)  An annual return showing the total amount of earned

8

income paid, the total amount of tax deducted and the total

9

amount of tax paid to the tax officer for the period

10

beginning January 1 of the current year and ending December

11

31 of the current year.

12

(2)  A return withholding statement for each employee

13

employed during all or any part of the period beginning

14

January 1 of the current year and ending December 31 of the

15

current year, setting forth the employee's name, address and

16

Social Security number, the amount of earned income paid to

17

the employee during the period, the amount of tax deducted,

18

the school district imposing the tax upon the employees and

19

the amount of tax paid to the tax officer. Every employer

20

shall furnish two copies of the individual return to the

21

employee for whom it is filed.

22

(d)  Discontinued businesses.--Every employer who

23

discontinues business prior to December 31 of the current year

24

shall, within 30 days after the discontinuance of business, file

25

the returns and withholding statements required by this section

26

and pay the tax due.

27

(e)  Liability of employers.--Every employer who willfully or

28

negligently fails or omits to make the deductions required by

29

this section shall be liable for payment of the taxes which he

30

was required to withhold to the extent that such taxes have not

- 38 -

 


1

been recovered from the employee.

2

(f)  Liability of employees.--The failure or omission of any

3

employer to make the deductions required by this section shall

4

not relieve any employee from the payment of the tax or from

5

complying with the requirements of the ordinance or resolution

6

relating to the filing of declarations and returns.

7

CHAPTER 7

8

SALES AND USE TAX FOR THE

9

STABILIZATION OF EDUCATION FUNDING

10

SUBCHAPTER A

11

PRELIMINARY PROVISIONS

12

Section 701.  Scope.

13

The tax provided for under this chapter shall be known as the

14

Sales and Use Tax for the Stabilization of Education Funding,

15

which shall be a replacement for the sales and use tax

16

authorized under Article II of the Tax Reform Code of 1971 and

17

that is repealed by this act.

18

Section 701.1.  Definitions.

19

The following words and phrases when used in this chapter

20

shall have the meanings given to them in this section unless the

21

context clearly indicates otherwise:

22

(a)  "Soft drinks."

23

(1)  All nonalcoholic beverages, whether carbonated or

24

not, such as soda water, ginger ale, Coca Cola, lime cola,

25

Pepsi Cola, Dr Pepper, fruit juice when plain or carbonated

26

water, flavoring or syrup is added, carbonated water,

27

orangeade, lemonade, root beer or any and all preparations,

28

commonly referred to as soft drinks, of whatsoever kind, and

29

are further described as including any and all beverages,

30

commonly referred to as soft drinks, which are made with or

- 39 -

 


1

without the use of any syrup.

2

(2)  The term does not include natural fruit or vegetable

3

juices or their concentrates, or noncarbonated fruit juice

4

drinks containing not less than 25% by volume of natural

5

fruit juices or of fruit juice which has been reconstituted

6

to its original state, or natural concentrated fruit or

7

vegetable juices reconstituted to their original state,

8

whether any of the natural juices are frozen or unfrozen,

9

sweetened or unsweetened, seasoned with salt or spice or

10

unseasoned. The term also does not include coffee, coffee

11

substitutes, tea, cocoa, natural fluid milk or noncarbonated

12

drinks made from milk derivatives.

13

(b)  "Maintaining a place of business in this Commonwealth."

14

(1)  Having, maintaining or using within this

15

Commonwealth, either directly or through a subsidiary,

16

representative or an agent, an office, distribution house,

17

sales house, warehouse, service enterprise or other place of

18

business; or any agent of general or restricted authority, or

19

representative, irrespective of whether the place of

20

business, representative or agent is located in this

21

Commonwealth, permanently or temporarily, or whether the

22

person or subsidiary maintaining the place of business,

23

representative or agent is authorized to do business within

24

this Commonwealth.

25

(2)  Engaging in any activity as a business within this

26

Commonwealth by any person, either directly or through a

27

subsidiary, representative or an agent, in connection with

28

the lease, sale or delivery of tangible personal property or

29

the performance of services thereon for use, storage or

30

consumption or in connection with the sale or delivery for

- 40 -

 


1

use of the services described in subclauses (11) through (18)

2

of clause (k) of this section, including, but not limited to,

3

having, maintaining or using any office, distribution house,

4

sales house, warehouse or other place of business, any stock

5

of goods or any solicitor, canvasser, salesman,

6

representative or agent under its authority, at its direction

7

or with its permission, regardless of whether the person or

8

subsidiary is authorized to do business in this Commonwealth.

9

(3)  Regularly or substantially soliciting orders within

10

this Commonwealth in connection with the lease, sale or

11

delivery of tangible personal property to or the performance

12

thereon of services or in connection with the sale or

13

delivery of the services described in subclauses (11) through

14

(18) of clause (k) of this section for residents of this

15

Commonwealth by means of catalogs or other advertising,

16

whether the orders are accepted within or without this

17

Commonwealth.

18

(3.1)  Entering this Commonwealth by any person to

19

provide assembly, service or repair of tangible personal

20

property, either directly or through a subsidiary,

21

representative or an agent.

22

(3.2)  Delivering tangible personal property to locations

23

within this Commonwealth if the delivery includes the

24

unpacking, positioning, placing or assembling of the tangible

25

personal property.

26

(3.3)  Having any contact within this Commonwealth which

27

would allow the Commonwealth to require a person to collect

28

and remit tax under the Constitution of the United States.

29

(3.4)  Providing a customer's mobile telecommunications

30

service deemed to be provided by the customer's home service

- 41 -

 


1

provider under the Mobile Telecommunications Sourcing Act (4

2

U.S.C. § 116). For purposes of this clause, words and phrases

3

used in this clause shall have the meanings given to them in

4

the Mobile Telecommunications Sourcing Act.

5

(4)  The term does not include:

6

(i)  Owning or leasing of tangible or intangible

7

property by a person who has contracted with an

8

unaffiliated commercial printer for printing, provided

9

that:

10

(A)  the property is for use by the commercial

11

printer; and

12

(B)  the property is located at the Pennsylvania

13

premises of the commercial printer.

14

(ii)  Visits by a person's employees or agents to the

15

premises in this Commonwealth of an unaffiliated

16

commercial printer with whom the person has contracted

17

for printing in connection with said contract.

18

(b.1)  "Service performed in this Commonwealth."

19

A service performed:

20

(1)  completely in this Commonwealth;

21

(2)  partially in this Commonwealth and partially outside

22

this Commonwealth, when the recipient or user of the service

23

is located in this Commonwealth; or

24

(3)  partially in this Commonwealth and partially outside

25

this Commonwealth, when the recipient or user of the service

26

is not located in this Commonwealth, but only to the extent

27

of those services actually performed in this Commonwealth.

28

The place of performance need not be determined if the recipient

29

or user of the service is located in this Commonwealth.

30

A service performed partially in this Commonwealth and partially

- 42 -

 


1

outside this Commonwealth shall be presumed to have been

2

performed completely in this Commonwealth unless the taxpayer

3

can show the place of performance by clear and convincing

4

evidence. With respect to interstate telecommunications

5

services, only services for interstate telecommunications which

6

originate or are terminated in this Commonwealth and which are

7

billed and charged to a service address in this Commonwealth

8

shall be presumed to have been performed completely in this

9

Commonwealth and shall be subject to tax.

10

(c)  "Manufacture."  The performance of manufacturing,

11

fabricating, compounding, processing or other operations,

12

engaged in as a business, which place any tangible personal

13

property in a form, composition or character different from that

14

in which it is acquired whether for sale or use by the

15

manufacturer, and shall include, but not be limited to:

16

(1)  Every operation commencing with the first production

17

stage and ending with the completion of tangible personal

18

property having the physical qualities, including packaging,

19

if any, passing to the ultimate consumer, which it has when

20

transferred by the manufacturer to another. For purposes of

21

this definition, "operation" includes clean rooms and their

22

component systems, including: environmental control systems,

23

antistatic vertical walls and manufacturing platforms and

24

floors which are independent of the real estate; process

25

piping systems; specialized lighting systems; deionized water

26

systems; process vacuum and compressed air systems; process

27

and specialty gases; and alarm or warning devices

28

specifically designed to warn of threats to the integrity of

29

the product or people. For purposes of this definition, a

30

"clean room" is a location with a self-contained, sealed

- 43 -

 


1

environment with a controlled, closed air system independent

2

from the facility's general environmental control system.

3

(2)  The publishing of books, newspapers, magazines and

4

other periodicals and printing.

5

(3)  Refining, blasting, exploring, mining and quarrying

6

for, or otherwise extracting from the earth or from waste or

7

stock piles or from pits or banks any natural resources,

8

minerals and mineral aggregates including blast furnace slag.

9

(4)  Building, rebuilding, repairing and making additions

10

to, or replacements in or upon vessels designed for

11

commercial use of registered tonnage of 50 tons or more when

12

produced on special order of the purchaser, or when rebuilt,

13

repaired or enlarged, or when replacements are made upon

14

order of or for the account of the owner.

15

(5)  Research having as its objective the production of a

16

new or an improved:

17

(i)  product or utility service; or

18

(ii)  method of producing a product or utility

19

service,

20

but in either case not including market research or research

21

having as its objective the improvement of administrative

22

efficiency.

23

(6)  Remanufacture for wholesale distribution by a

24

remanufacturer of motor vehicle parts from used parts

25

acquired in bulk by the remanufacturer using an assembly line

26

process which involves the complete disassembly of such parts

27

and integration of the components of such parts with other

28

used or new components of parts, including the salvaging,

29

recycling or reclaiming of used parts by the remanufacturer.

30

(7)  Remanufacture or retrofit by a manufacturer or

- 44 -

 


1

remanufacturer of aircraft, armored vehicles, other defense-

2

related vehicles having a finished value of at least $50,000.

3

Remanufacture or retrofit involves the disassembly of such

4

aircraft, vehicles, parts or components, including electric

5

or electronic components, the integration of those parts and

6

components with other used or new parts or components,

7

including the salvaging, recycling or reclaiming of the used

8

parts or components and the assembly of the new or used

9

aircraft, vehicles, parts or components. The term does not

10

include constructing, altering, servicing, repairing or

11

improving real estate or repairing, servicing or installing

12

tangible personal property, nor the cooking, freezing or

13

baking of fruits, vegetables, mushrooms, fish, seafood,

14

meats, poultry or bakery products. For purposes of this

15

clause, the following terms or phrases have the following

16

meanings:

17

(i)  "aircraft" means fixed-wing aircraft,

18

helicopters, powered aircraft, tilt-rotor or tilt-wing

19

aircraft, unmanned aircraft and gliders;

20

(ii)  "armored vehicles" means tanks, armed personnel

21

carriers and all other armed track or semitrack vehicles;

22

and

23

(iii)  "other defense-related vehicles" means trucks,

24

truck-tractors, trailers, jeeps and other utility

25

vehicles, including any unmanned vehicles.

26

(c.1)  "Blasting."  The use of any combustible or explosive

27

composition in the removal of material resources, minerals and

28

mineral aggregates from the earth including the separation of

29

the dirt, waste and refuse in which they are found.

30

(d)  "Processing."  The performance of the following

- 45 -

 


1

activities when engaged in as a business enterprise:

2

(1)  The filtering or heating of honey, the cooking,

3

baking or freezing of fruits, vegetables, mushrooms, fish,

4

seafood, meats, poultry or bakery products, when the person

5

engaged in the business packages the property in sealed

6

containers for wholesale distribution.

7

(1.1)  The processing of fruits or vegetables by

8

cleaning, cutting, coring, peeling or chopping and treating

9

to preserve, sterilize or purify and substantially extend the

10

useful shelf life of the fruits or vegetables, when the

11

person engaged in the activity packages the property in

12

sealed containers for wholesale distribution.

13

(2)  The scouring, carbonizing, cording, combing,

14

throwing, twisting or winding of natural or synthetic fibers,

15

or the spinning, bleaching, dyeing, printing or finishing of

16

yarns or fabrics, when the activities are performed prior to

17

sale to the ultimate consumer.

18

(3)  The electroplating, galvanizing, enameling,

19

anodizing, coloring, finishing, impregnating or heat treating

20

of metals or plastics for sale or in the process of

21

manufacturing.

22

(3.1)  The blanking, shearing, leveling, slitting or

23

burning of metals for sale to or use by a manufacturer or

24

processor.

25

(4)  The rolling, drawing or extruding of ferrous and

26

nonferrous metals.

27

(5)  The fabrication for sale of ornamental or structural

28

metal or of metal stairs, staircases, gratings, fire escapes

29

or railings, not including fabrication work done at the

30

construction site.

- 46 -

 


1

(6)  The preparation of animal feed or poultry feed for

2

sale.

3

(7)  The production, processing and bottling of

4

nonalcoholic beverages for wholesale distribution.

5

(8)  The operation of a saw mill or planing mill for the

6

production of lumber or lumber products for sale. The

7

operation of a saw mill or planing mill begins with the

8

unloading by the operator of the saw mill or planing mill of

9

logs, timber, pulpwood or other forms of wood material to be

10

used in the saw mill or planing mill.

11

(9)  The milling for sale of flour or meal from grains.

12

(9.1)  The aging, stripping, conditioning, crushing and

13

blending of tobacco leaves for use as cigar filler or as

14

components of smokeless tobacco products for sale to

15

manufacturers of tobacco products.

16

(10)  The slaughtering and dressing of animals for meat

17

to be sold or to be used in preparing meat products for sale,

18

and the preparation of meat products including lard, tallow,

19

grease, cooking and inedible oils for wholesale distribution.

20

(11)  The processing of used lubricating oils.

21

(12)  The broadcasting of radio and television programs

22

of licensed commercial or educational stations.

23

(13)  The cooking or baking of bread, pastries, cakes,

24

cookies, muffins and donuts when the person engaged in the

25

activity sells the items at retail at locations that do not

26

constitute an establishment from which ready-to-eat food and

27

beverages are sold. For purposes of this clause, a bakery, a

28

pastry shop and a donut shop shall not be considered an

29

establishment from which ready-to-eat food and beverages are

30

sold.

- 47 -

 


1

(14)  The cleaning and roasting and the blending,

2

grinding or packaging for sale of coffee from green coffee

3

beans or the production of coffee extract.

4

(15)  The preparation of dry or liquid fertilizer for

5

sale.

6

(16)  The production, processing and packaging of ice for

7

wholesale distribution.

8

(17)  The producing of mobile telecommunications

9

services.

10

(e)  "Person."  Any natural person, association, fiduciary,

11

partnership, corporation or other entity, including the

12

Commonwealth of Pennsylvania, its political subdivisions and

13

instrumentalities and public authorities. Whenever used in

14

prescribing and imposing a penalty or imposing a fine or

15

imprisonment, or both, the term as applied to an association,

16

includes the members of the association and, as applied to a

17

corporation, the officers of the corporation.

18

(f)  "Purchase at retail."

19

(1)  The acquisition for a consideration of the

20

ownership, custody or possession of tangible personal

21

property other than for resale by the person acquiring the

22

same when the acquisition is made for the purpose of

23

consumption or use, whether the acquisition is absolute or

24

conditional, and by any means it is effected.

25

(2)  The acquisition of a license to use or consume, and

26

the rental or lease of tangible personal property, other than

27

for resale regardless of the period of time the lessee has

28

possession or custody of the property.

29

(3)  The obtaining for a consideration of those services

30

described in subclauses (2), (3) and (4) of clause (k) of

- 48 -

 


1

this section other than for resale.

2

(4)  A retention after March 7, 1956, of possession,

3

custody or a license to use or consume pursuant to a rental

4

contract or other lease arrangement (other than as security)

5

other than for resale.

6

(5)  The obtaining for a consideration of those services

7

described in subclauses (11) through (18) of clause (k) of

8

this section.

9

The term, with respect to liquor and malt or brewed beverages,

10

includes the purchase of liquor from any Pennsylvania Liquor

11

Store by any person for any purpose, and the purchase of malt or

12

brewed beverages from a manufacturer of malt or brewed

13

beverages, distributor or importing distributor by any person

14

for any purpose, except purchases from a manufacturer of malt or

15

brewed beverages by a distributor or importing distributor or

16

purchases from an importing distributor by a distributor within

17

the meaning of the Liquor Code. The term does not include any

18

purchase of malt or brewed beverages from a retail dispenser or

19

any purchase of liquor or malt or brewed beverages from a person

20

holding a retail liquor license within the meaning of and

21

pursuant to the provisions of the Liquor Code, but includes any

22

purchase or acquisition of liquor or malt or brewed beverages

23

other than pursuant to the provisions of the Liquor Code.

24

(g)  "Purchase price."

25

(1)  The total value of anything paid or delivered, or

26

promised to be paid or delivered, whether money or otherwise,

27

in complete performance of a sale at retail or purchase at

28

retail, without any deduction on account of the cost or value

29

of the property sold, cost or value of transportation, cost

30

or value of labor or service, interest or discount paid or

- 49 -

 


1

allowed after the sale is consummated, any other taxes

2

imposed by the Commonwealth or any other expense except that

3

there shall be excluded any gratuity or separately stated

4

deposit charge for returnable containers.

5

(2)  The value of any tangible personal property actually

6

taken in trade or exchange in lieu of the whole or any part

7

of the purchase price shall be deducted from the purchase

8

price. For the purpose of this clause, the amount allowed by

9

reason of tangible personal property actually taken in trade

10

or exchange shall be considered the value of such property.

11

(3)  (i)  In determining the purchase price on the sale

12

or use of taxable tangible personal property or a service

13

where, because of affiliation of interests between the

14

vendor and purchaser, or irrespective of any such

15

affiliation, if for any other reason the purchase price

16

declared by the vendor or taxpayer on the taxable sale or

17

use of such tangible personal property or service is, in

18

the opinion of the department, not indicative of the true

19

value of the article or service or the fair price

20

thereof, the department shall, pursuant to uniform and

21

equitable rules, determine the amount of constructive

22

purchase price on the basis of which the tax shall be

23

computed and levied. The rules shall provide for a

24

constructive amount of purchase price for each sale or

25

use which would naturally and fairly be charged in an

26

arms-length transaction in which the element of common

27

interest between the vendor or purchaser is absent or, if

28

no common interest exists, any other element causing a

29

distortion of the price or value is likewise absent.

30

(ii)  For the purpose of this clause where a taxable

- 50 -

 


1

sale or purchase at retail transaction occurs between a

2

parent and a subsidiary, affiliate or controlled

3

corporation of such parent corporation, there shall be a

4

rebuttable presumption, that because of the common

5

interest, the transaction was not at arms-length.

6

(4)  Where there is a transfer or retention of possession

7

or custody, whether it is termed a rental, lease, service or

8

otherwise, of tangible personal property including, but not

9

limited to, linens, aprons, motor vehicles, trailers, tires,

10

industrial office and construction equipment, and business

11

machines the full consideration paid or delivered to the

12

vendor or lessor shall be considered the purchase price, even

13

though the consideration is separately stated and designated

14

as payment for processing, laundering, service, maintenance,

15

insurance, repairs, depreciation or otherwise. Where the

16

vendor or lessor supplies or provides an employee to operate

17

the tangible personal property, the value of the labor

18

supplied may be excluded and shall not be considered as part

19

of the purchase price if separately stated. There shall also

20

be included as part of the purchase price the value of

21

anything paid or delivered, or promised to be paid or

22

delivered by a lessee, whether money or otherwise, to any

23

person other than the vendor or lessor by reason of the

24

maintenance, insurance or repair of the tangible personal

25

property which a lessee has the possession or custody of

26

under a rental contract or lease arrangement.

27

(5)  (i)  With respect to the tax imposed by section

28

702(a)(2), on any tangible personal property originally

29

purchased by the user of the property six months or

30

longer prior to the first taxable use of the property

- 51 -

 


1

within this Commonwealth, the user may elect to pay tax

2

on a substituted base determined by considering the

3

purchase price of the property for tax purposes to be

4

equal to the prevailing market price of similar tangible

5

personal property at the time and place of the first use

6

within this Commonwealth.

7

(ii)  The election must be made at the time of filing

8

a tax return with the department and reporting the tax

9

liability and paying the proper tax due plus all accrued

10

penalties and interest, if any, within six months of the

11

due date of such report and payment, as provided for by

12

section 717(a) and (c).

13

(6)  The purchase price of employment agency services and

14

help supply services shall be the service fee paid by the

15

purchaser to the vendor or supplying entity. The term

16

"service fee," as used in this subclause, means the total

17

charge or fee of the vendor or supplying entity minus the

18

costs of the supplied employee which costs are wages,

19

salaries, bonuses and commissions, employment benefits,

20

expense reimbursements and payroll and withholding taxes, to

21

the extent that these costs are specifically itemized or that

22

these costs in aggregate are stated in billings from the

23

vendor or supplying entity. To the extent that these costs

24

are not itemized or stated on the billings, then the service

25

fee shall be the total charge or fee of the vendor or

26

supplying entity.

27

(7)  Unless the vendor separately states that portion of

28

the billing which applies to premium cable service as defined

29

in clause (ll), the total bill for the provision of all cable

30

services shall be the purchase price.

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1

(8)  The purchase price of prebuilt housing shall be 60%

2

of the manufacturer's selling price, provided that a

3

manufacturer of prebuilt housing who precollects tax from a

4

prebuilt housing builder at the time of the sale to the

5

prebuilt housing builder shall have the option to collect tax

6

on 60% of the selling price or on 100% of the actual cost of

7

the supplies and materials used in the manufacture of the

8

prebuilt housing.

9

(h)  "Purchaser."  Any person who acquires, for a

10

consideration, the ownership, custody or possession by sale,

11

lease or otherwise of tangible personal property, or who obtains

12

services in exchange for a purchase price but not including an

13

employer who obtains services from his employees in exchange for

14

wages or salaries when such services are rendered in the

15

ordinary scope of their employment.

16

(i)  "Resale."

17

(1)  Any transfer of ownership, custody or possession of

18

tangible personal property for a consideration, including the

19

grant of a license to use or consume and transactions where

20

the possession of the property is transferred but where the

21

transferor retains title only as security for payment of the

22

selling price whether the transaction is designated as

23

bailment lease, conditional sale or otherwise.

24

(2)  The physical incorporation of tangible personal

25

property as an ingredient or constituent into other tangible

26

personal property, which is to be sold in the regular course

27

of business or the performance of those services described in

28

subclauses (2), (3) and (4) of clause (k) upon tangible

29

personal property which is to be sold in the regular course

30

of business or where the person incorporating the property

- 53 -

 


1

has undertaken at the time of purchase to cause it to be

2

transported in interstate commerce to a destination outside

3

this Commonwealth. The term includes telecommunications

4

services purchased by a cable operator or video programmer

5

that are used to transport or deliver cable or video

6

programming services which are sold in the regular course of

7

business.

8

(3)  The term also includes tangible personal property

9

purchased or having a situs within this Commonwealth solely

10

for the purpose of being processed, fabricated or

11

manufactured into, attached to or incorporated into tangible

12

personal property and thereafter transported outside this

13

Commonwealth for use exclusively outside this Commonwealth.

14

(4)  The term does not include any sale of malt or brewed

15

beverages by a retail dispenser, or any sale of liquor or

16

malt or brewed beverages by a person holding a retail liquor

17

license within the meaning of the act of April 12, 1951

18

(P.L.90, No.21), known as the Liquor Code.

19

(5)  The physical incorporation of tangible personal

20

property as an ingredient or constituent in the construction

21

of foundations for machinery or equipment the sale or use of

22

which is excluded from tax under the provisions of paragraphs

23

(A), (B), (C) and (D) of subclause (8) of clause (k) and

24

subparagraphs (i), (ii), (iii) and (iv) of paragraph (B) of

25

subclause (4) of clause (o), whether the foundations at the

26

time of construction or transfer constitute tangible personal

27

property or real estate.

28

(j)  "Resident."

29

(1)  Any natural person:

30

(i)  who is domiciled in this Commonwealth; or

- 54 -

 


1

(ii)  who maintains a permanent place of abode within

2

this Commonwealth and spends in the aggregate more than

3

60 days of the year within this Commonwealth.

4

(2)  Any corporation:

5

(i)  incorporated under the laws of this

6

Commonwealth;

7

(ii)  authorized to do business or doing business

8

within this Commonwealth; or

9

(iii)  maintaining a place of business within this

10

Commonwealth.

11

(3)  Any association, fiduciary, partnership or other

12

entity:

13

(i)  domiciled in this Commonwealth;

14

(ii)  authorized to do business or doing business

15

within this Commonwealth; or

16

(iii)  maintaining a place of business within this

17

Commonwealth.

18

(k)  "Sale at retail."

19

(1)  Any transfer, for a consideration, of the ownership,

20

custody or possession of tangible personal property,

21

including the grant of a license to use or consume whether

22

the transfer is absolute or conditional and by any means the

23

transfer is effected.

24

(2)  The rendition of the service of printing or

25

imprinting of tangible personal property for a consideration

26

for persons who furnish, either directly or indirectly, the

27

materials used in the printing or imprinting.

28

(3)  The rendition for a consideration of the service of:

29

(i)  washing, cleaning, waxing, polishing or

30

lubricating of motor vehicles of another, regardless of

- 55 -

 


1

whether any tangible personal property is transferred in

2

conjunction with the activity; and

3

(ii)  inspecting motor vehicles pursuant to the

4

mandatory requirements of 75 Pa.C.S. (relating to

5

vehicles).

6

(4)  The rendition for a consideration of the service of

7

repairing, altering, mending, pressing, fitting, dyeing,

8

laundering, drycleaning or cleaning tangible personal

9

property other than wearing apparel or shoes, or applying or

10

installing tangible personal property as a repair or

11

replacement part of other tangible personal property other

12

than wearing apparel or shoes for a consideration, regardless

13

of whether the services are performed directly or by any

14

means other than by coin-operated self-service laundry

15

equipment for wearing apparel or household goods and whether

16

or not any tangible personal property is transferred in

17

conjunction with the activity, including such services as are

18

rendered in the construction, reconstruction, remodeling,

19

repair or maintenance of real estate.

20

(5)  (Reserved).

21

(6)  (Reserved).

22

(7)  (Reserved).

23

(8)  Any retention of possession, custody or a license to

24

use or consume tangible personal property or any further

25

obtaining of services described in subclauses (2), (3) and

26

(4) of this clause pursuant to a rental or service contract

27

or other arrangement (other than as security). The term does

28

not include:

29

(i)  any transfer of tangible personal property or

30

rendition of services for the purpose of resale; or

- 56 -

 


1

(ii)  the rendition of services or the transfer of

2

tangible personal property, including, but not limited

3

to, machinery and equipment and their parts and supplies

4

to be used or consumed by the purchaser directly in the

5

operations of:

6

(A)  The manufacture of tangible personal

7

property.

8

(B)  Farming, dairying, agriculture, horticulture

9

or floriculture when engaged in as a business

10

enterprise. The term "farming" includes the

11

propagation and raising of ranch raised fur-bearing

12

animals and the propagation of game birds for

13

commercial purposes by holders of propagation permits

14

issued under 34 Pa.C.S. (relating to game) and the

15

propagation and raising of horses to be used

16

exclusively for commercial racing activities.

17

(C)  The producing, delivering or rendering of a

18

public utility service, or in constructing,

19

reconstructing, remodeling, repairing or maintaining

20

the facilities which are directly used in producing,

21

delivering or rendering the service.

22

(D)  Processing as defined in clause (d). The

23

exclusions provided in this paragraph or paragraph

24

(A), (B) or (C) do not apply to any vehicle required

25

registered under 75 Pa.C.S. (relating to vehicles),

26

except those vehicles used directly by a public

27

utility engaged in business as a common carrier; to

28

maintenance facilities; or to materials, supplies or

29

equipment to be used or consumed in the construction,

30

reconstruction, remodeling, repair or maintenance of

- 57 -

 


1

real estate other than directly used machinery,

2

equipment, parts or foundations that may be affixed

3

to such real estate. The exclusions provided in this

4

paragraph or paragraph (A), (B) or (C) do not apply

5

to tangible personal property or services to be used

6

or consumed in managerial sales or other

7

nonoperational activities, nor to the purchase or use

8

of tangible personal property or services by any

9

person other than the person directly using the same

10

in the operations described in this paragraph or

11

paragraph (A), (B) or (C).

12

The exclusion provided in paragraph (C) does not apply to:

13

(i)  construction materials, supplies or equipment

14

used to construct, reconstruct, remodel, repair or

15

maintain facilities not used directly by the purchaser in

16

the production, delivering or rendition of public utility

17

service;

18

(ii)  construction materials, supplies or equipment

19

used to construct, reconstruct, remodel, repair or

20

maintain a building, road or similar structure; or

21

(iii)  tools and equipment used but not installed in

22

the maintenance of facilities used directly in the

23

production, delivering or rendition of a public utility

24

service. The exclusions provided in paragraphs (A), (B),

25

(C) and (D) do not apply to the services enumerated in

26

clauses (k)(11) through (18) and (w) through (kk), except

27

that the exclusion provided in this subclause for

28

farming, dairying and agriculture shall apply to the

29

service enumerated in clause (z).

30

(9)  Where tangible personal property or services are

- 58 -

 


1

utilized for purposes constituting a sale at retail and for

2

purposes excluded from the definition of "sale at retail," it

3

shall be presumed that the tangible personal property or

4

services are utilized for purposes constituting a sale at

5

retail and subject to tax unless the user proves to the

6

department that the predominant purposes for which such

7

tangible personal property or services are utilized do not

8

constitute a sale at retail.

9

(10)  The term, with respect to liquor and malt or brewed

10

beverages, includes the sale of liquor by any Pennsylvania

11

liquor store to any person for any purpose, and the sale of

12

malt or brewed beverages by a manufacturer of malt or brewed

13

beverages, distributor or importing distributor to any person

14

for any purpose, except sales by a manufacturer of malt or

15

brewed beverages to a distributor or importing distributor or

16

sales by an importing distributor to a distributor within the

17

meaning of the act of April 12, 1951 (P.L.90, No.21), known

18

as the Liquor Code. The term does not include any sale of

19

malt or brewed beverages by a retail dispenser or any sale of

20

liquor or malt or brewed beverages by a person holding a

21

retail liquor license within the meaning of and pursuant to

22

the provisions of the Liquor Code, but shall include any sale

23

of liquor or malt or brewed beverages other than pursuant to

24

the provisions of the Liquor Code.

25

(11)  The rendition for a consideration of lobbying

26

services.

27

(12)  The rendition for a consideration of adjustment

28

services, collection services or credit reporting services.

29

(13)  The rendition for a consideration of secretarial or

30

editing services.

- 59 -

 


1

(14)  The rendition for a consideration of disinfecting

2

or pest control services, building maintenance or cleaning

3

services.

4

(15)  The rendition for a consideration of employment

5

agency services or help supply services.

6

(16)  (Reserved).

7

(17)  The rendition for a consideration of lawn care

8

service.

9

(18)  The rendition for a consideration of self-storage

10

service.

11

(19)  The rendition for a consideration of a mobile

12

telecommunications service.

13

(20)  Except as otherwise provided under section 704, the

14

rendition for a consideration of any service when the primary

15

objective of the purchaser is the receipt of any benefit of

16

the service performed, as distinguished from the receipt of

17

property. The following provisions shall apply:

18

(i)  In determining what is a service, the intended

19

use or stated objective of the contracting parties shall

20

not necessarily be controlling.

21

(ii)  Any service performed in this Commonwealth

22

shall be subject to the tax imposed under this chapter

23

unless specifically exempted in this chapter.

24

(iii)  With respect to services performed in this

25

Commonwealth for a recipient or user of the services

26

located in another state in which the services, had they

27

been performed in that state, would not be subject to a

28

sales or use tax under the laws of that state, then no

29

tax may be imposed under this chapter.

30

(iv)  The tax on the sale or use of services shall

- 60 -

 


1

become due at the time payment or other consideration is

2

made for the portion of services actually paid.

3

(l)  "Storage."  Any keeping or retention of tangible

4

personal property within this Commonwealth for any purpose

5

including the interim keeping, retaining or exercising any right

6

or power over such tangible personal property. This term is in

7

no way limited to the provision of self-storage service.

8

(m)  "Tangible personal property."  Corporeal personal

9

property including, but not limited to, goods, wares,

10

merchandise, steam and natural and manufactured and bottled gas

11

for non-residential use, electricity for non-residential use,

12

prepaid telecommunications, premium cable or premium video

13

programming service, spirituous or vinous liquor and malt or

14

brewed beverages and soft drinks, interstate telecommunications

15

service originating or terminating in this Commonwealth and

16

charged to a service address in this Commonwealth, intrastate

17

telecommunications service with the exception of:

18

(1)  Subscriber line charges and basic local telephone

19

service for residential use.

20

(2)  Charges for telephone calls paid for by inserting

21

money into a telephone accepting direct deposits of money to

22

operate, provided further, the service address of any

23

intrastate telecommunications service is deemed to be within

24

this Commonwealth or within a political subdivision,

25

regardless of how or where billed or paid.

26

In the case of any interstate or intrastate telecommunications

27

service, any charge paid through a credit or payment mechanism

28

which does not relate to a service address, such as a bank,

29

travel, credit or debit card, but not including prepaid

30

telecommunications, is deemed attributable to the address of

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1

origination of the telecommunications service.

2

(n)  "Taxpayer."  Any person required to pay or collect the

3

tax imposed by this chapter.

4

(o)  "Use."

5

(1)  The exercise of any right or power incidental to the

6

ownership, custody or possession of tangible personal

7

property and includes, but is not limited to, transportation,

8

storage or consumption.

9

(2)  The obtaining by a purchaser of the service of

10

printing or imprinting of tangible personal property when the

11

purchaser furnishes, either directly or indirectly, the

12

articles used in the printing or imprinting.

13

(3)  The obtaining by a purchaser of the services of:

14

(i)  washing, cleaning, waxing, polishing or

15

lubricating of motor vehicles regardless of whether any

16

tangible personal property is transferred to the

17

purchaser in conjunction with the services; and

18

(ii)  inspecting motor vehicles pursuant to the

19

mandatory requirements of 75 Pa.C.S. (relating to

20

vehicles).

21

(4)  The obtaining by a purchaser of the service of

22

repairing, altering, mending, pressing, fitting, dyeing,

23

laundering, drycleaning or cleaning tangible personal

24

property other than wearing apparel or shoes or applying or

25

installing tangible personal property as a repair or

26

replacement part of other tangible personal property,

27

including, but not limited to, wearing apparel or shoes,

28

regardless of whether the services are performed directly or

29

by any means other than by means of coin-operated self-

30

service laundry equipment for wearing apparel or household

- 62 -

 


1

goods, and regardless of whether any tangible personal

2

property is transferred to the purchaser in conjunction with

3

the activity. The term use does not include:

4

(A)  Any tangible personal property acquired and

5

kept, retained or over which power is exercised

6

within this Commonwealth on which the taxing of the

7

storage, use or other consumption thereof is

8

expressly prohibited by the Constitution of the

9

United States or which is excluded from tax under

10

other provisions of this chapter.

11

(B)  The use or consumption of tangible personal

12

property, including, but not limited to, machinery

13

and equipment and parts therefor, and supplies or the

14

obtaining of the services described in subclauses

15

(2), (3) and (4) of this clause directly in the

16

operations of:

17

(i)  The manufacture of tangible personal property.

18

(ii)  Farming, dairying, agriculture, horticulture or

19

floriculture when engaged in as a business enterprise.

20

The term includes the propagation and raising of ranch-

21

raised furbearing animals and the propagation of game

22

birds for commercial purposes by holders of propagation

23

permits issued under 34 Pa.C.S. (relating to game) and

24

the propagation and raising of horses to be used

25

exclusively for commercial racing activities.

26

(iii)  The producing, delivering or rendering of a

27

public utility service, or in constructing,

28

reconstructing, remodeling, repairing or maintaining the

29

facilities which are directly used in producing,

30

delivering or rendering such service.

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1

(iv)  Processing as defined in subclause (d).

2

The exclusions provided in subparagraphs (i), (ii), (iii)

3

and (iv) do not apply to any vehicle required to be

4

registered under 75 Pa.C.S. (relating to vehicles) except

5

those vehicles directly used by a public utility engaged

6

in the business as a common carrier; to maintenance

7

facilities; or to materials, supplies or equipment to be

8

used or consumed in the construction, reconstruction,

9

remodeling, repair or maintenance of real estate other

10

than directly used machinery, equipment, parts or

11

foundations therefor that may be affixed to such real

12

estate. The exclusions provided in subparagraphs (i),

13

(ii), (iii) and this subparagraph do not apply to

14

tangible personal property or services to be used or

15

consumed in managerial sales or other nonoperational

16

activities, nor to the purchase or use of tangible

17

personal property or services by any person other than

18

the person directly using the same in the operations

19

described in subparagraphs (i), (ii), (iii) and this

20

subparagraph. The exclusion provided in subparagraph

21

(iii) does not apply to:

22

(A)  construction materials, supplies or

23

equipment used to construct, reconstruct, remodel,

24

repair or maintain facilities not used directly by

25

the purchaser in the production, delivering or

26

rendition of public utility service; or

27

(B)  tools and equipment used but not installed

28

in the maintenance of facilities used directly in the

29

production, delivering or rendition of a public

30

utility service.

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1

The exclusion provided in subparagraphs (i), (ii), (iii)

2

and this subparagraph does not apply to the services

3

enumerated in clauses (9) through (16) and (w) through

4

(kk), except that the exclusion provided in subparagraph

5

(ii) for farming, dairying and agriculture shall apply to

6

the service enumerated in clause (z).

7

(5)  Where tangible personal property or services are

8

utilized for purposes constituting a use, and for purposes

9

excluded from the definition of "use," it shall be presumed

10

that the property or services are utilized for purposes

11

constituting a sale at retail and subject to tax unless the

12

user proves to the department that the predominant purposes

13

for which the property or services are utilized do not

14

constitute a sale at retail.

15

(6)  The term, with respect to liquor and malt or brewed

16

beverages, includes the purchase of liquor from any

17

Pennsylvania Liquor Store by any person for any purpose and

18

the purchase of malt or brewed beverages from a manufacturer

19

of malt or brewed beverages, distributor or importing

20

distributor by any person for any purpose, except purchases

21

from a manufacturer of malt or brewed beverages by a

22

distributor or importing distributor, or purchases from an

23

importing distributor by a distributor within the meaning of

24

the act of April 12, 1951 (P.L.90, No.21), known as the

25

Liquor Code. The term does not include any purchase of malt

26

or brewed beverages from a retail dispenser or any purchase

27

of liquor or malt or brewed beverages from a person holding a

28

retail liquor license within the meaning of and pursuant to

29

the provisions of the Liquor Code, but includes the exercise

30

of any right or power incidental to the ownership, custody or

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1

possession of liquor or malt or brewed beverages obtained by

2

the person exercising the right or power in any manner other

3

than pursuant to the provisions of the Liquor Code.

4

(7)  The use of tangible personal property purchased at

5

retail on which the services described in subclauses (2), (3)

6

and (4) of this clause have been performed shall be deemed to

7

be a use of said services by the person using the property.

8

(8)  (Reserved).

9

(9)  The obtaining by the purchaser of lobbying services.

10

(10)  The obtaining by the purchaser of adjustment

11

services, collection services or credit reporting services.

12

(11)  The obtaining by the purchaser of secretarial or

13

editing services.

14

(12)  The obtaining by the purchaser of disinfecting or

15

pest control services, building maintenance or cleaning

16

services.

17

(13)  The obtaining by the purchaser of employment agency

18

services or help supply services.

19

(14)  (Reserved).

20

(15)  The obtaining by the purchaser of lawn care

21

service.

22

(16)  The obtaining by the purchaser of self-storage

23

service.

24

(17)  The obtaining by a construction contractor of

25

tangible personal property or services provided to tangible

26

personal property which will be used pursuant to a

27

construction contract regardless of whether the tangible

28

personal property or services are transferred.

29

(18)  The obtaining of mobile telecommunications service

30

by a customer.

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1

(19)  Except as otherwise provided under section 704, the

2

obtaining by the purchaser of any service, not otherwise set

3

forth in this definition, when the primary objective of the

4

purchaser is the receipt of any benefit of the service

5

performed, as distinguished from the receipt of property. The

6

following provisions shall apply:

7

(i)  In determining what is a service, the intended

8

use or stated objective of the contracting parties shall

9

not necessarily be controlling.

10

(ii)  Any service performed in this Commonwealth

11

shall be subject to the tax imposed under this chapter

12

unless specifically exempted in this chapter.

13

(iii)  With respect to services performed in this

14

Commonwealth for a recipient or user of the services

15

located in another state in which the services, had they

16

been performed in that state, would not be subject to a

17

sales or use tax under the laws of that state, then no

18

tax may be imposed under this chapter.

19

(iv)  The tax on the sale or use of services shall

20

become due at the time payment or other consideration is

21

made for the portion of services actually paid.

22

(p)  "Vendor."  Any person maintaining a place of business in

23

this Commonwealth, selling or leasing tangible personal

24

property, or rendering services, the sale or use of which is

25

subject to the tax imposed by this chapter but not including any

26

employee who in the ordinary scope of employment renders

27

services to his employer in exchange for wages and salaries.

28

(q)  (Reserved).

29

(r)  "Gratuity."  Any amount paid or remitted for services

30

performed in conjunction with any sale of food or beverages, or

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1

hotel or motel accommodations which amount is in excess of the

2

charges and the tax for such food, beverages or accommodations

3

regardless of the method of billing or payment.

4

(s)  "Commercial aircraft operator."  A person, excluding a

5

scheduled airline who engages in any or all of the following:

6

charter of aircraft, leasing of aircraft, aircraft sales,

7

aircraft rental, flight instruction, air freight or any other

8

flight activities for compensation.

9

(t)  "Transient vendor."

10

(1)  Any person who:

11

(i)  brings into this Commonwealth, by automobile,

12

truck or other means of transportation, or purchases in

13

this Commonwealth tangible personal property the sale or

14

use of which is subject to the tax imposed by this

15

chapter or comes into this Commonwealth to perform

16

services the sale or use of which is subject to the tax

17

imposed by this chapter;

18

(ii)  offers or intends to offer the tangible

19

personal property or services for sale at retail within

20

this Commonwealth; and

21

(iii)  does not maintain an established office,

22

distribution house, saleshouse, warehouse, service

23

enterprise, residence from which business is conducted or

24

other place of business within this Commonwealth.

25

(2)  The term does not include a person who delivers

26

tangible personal property within this Commonwealth pursuant

27

to orders for the property which were solicited or placed by

28

mail or other means.

29

(3)  The term does not include a person who handcrafts

30

items for sale at special events, including, but not limited

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1

to, fairs, carnivals, art and craft shows and other festivals

2

and celebrations within this Commonwealth.

3

(u)  "Promoter."  A person who either, directly or

4

indirectly, rents, leases or otherwise operates or grants

5

permission to any person to use space at a show for the display

6

for sale or for the sale of tangible personal property or

7

services subject to tax under section 702.

8

(v)  "Show."  An event, the primary purpose of which involves

9

the display or exhibition of any tangible personal property or

10

services for sale, including, but not limited to, a flea market,

11

antique show, coin show, stamp show, comic book show, hobby

12

show, automobile show, fair or any similar show, whether held

13

regularly or of a temporary nature, at which more than one

14

vendor displays for sale or sells tangible personal property or

15

services subject to tax under section 702.

16

(w)  "Lobbying services."  Providing the services of a

17

lobbyist, as defined in the definition of "lobbyist" in 65

18

Pa.C.S. Ch. 13 (relating to lobby regulation and disclosures).

19

(x)  "Adjustment services, collection services or credit

20

reporting services."  Providing collection or adjustments of

21

accounts receivable or mercantile or consumer credit reporting,

22

including, but not limited to, services of the type provided by

23

adjustment bureaus or collection agencies, consumer or

24

mercantile credit reporting bureaus, credit bureaus or agencies,

25

credit clearinghouses or credit investigation services. The term

26

does not include providing credit card service with collection

27

by a central agency, providing debt counseling or adjustment

28

services to individuals or billing or collection services

29

provided by local exchange telephone companies.

30

(y)  "Secretarial or editing services."  Providing services

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1

which include, but are not limited to, editing, letter writing,

2

proofreading, resume writing, typing or word processing. The

3

term does not include court reporting and stenographic services.

4

(z)  "Disinfecting or pest control services."  Providing

5

disinfecting, termite control, insect control, rodent control or

6

other pest control services. The term includes, but is not

7

limited to, deodorant servicing of rest rooms, washroom

8

sanitation service, rest room cleaning service, extermination

9

service or fumigating service. As used in this clause, the term

10

"fumigating service" does not include the fumigation of

11

agricultural commodities or containers used for agricultural

12

commodities. As used in this clause, the term "insect control"

13

does not include the gypsy moth control spraying of trees which

14

are harvested for commercial purposes.

15

(aa)  "Building maintenance or cleaning services."  Providing

16

services which include, but are not limited to, janitorial, maid

17

or housekeeping service, office or interior building cleaning or

18

maintenance service, window cleaning service, floor waxing

19

service, lighting maintenance service such as bulb replacement,

20

cleaning, chimney cleaning service, acoustical tile cleaning

21

service, venetian blind cleaning, cleaning and maintenance of

22

telephone booths or cleaning and degreasing of service stations.

23

The term does not include: repairs on buildings and other

24

structures; the maintenance or repair of boilers, furnaces and

25

residential air conditioning equipment or their parts; the

26

painting, wallpapering or applying other like coverings to

27

interior walls, ceilings or floors; or the exterior painting of

28

buildings.

29

(bb)  "Employment agency services."  Providing employment

30

services to a prospective employer or employee other than

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1

employment services provided by theatrical employment agencies

2

and motion picture casting bureaus. The term includes, but is

3

not limited to, services of the type provided by employment

4

agencies, executive placing services and labor contractor

5

employment agencies other than farm labor.

6

(cc)  "Help supply services."  Providing temporary or

7

continuing help where the help supplied is on the payroll of the

8

supplying person or entity, but is under the supervision of the

9

individual or business to which help is furnished. The term

10

includes, but is not limited to, service of a type provided by

11

labor and manpower pools, employee leasing services, office help

12

supply services, temporary help services, usher services,

13

modeling services or fashion show model supply services. The

14

term does not include: providing farm labor services or human

15

health-related services, including nursing, home health care and

16

personal care. As used in this clause, "personal care" shall

17

include providing at least one of the following types of

18

assistance to persons with limited ability for self-care:

19

(1)  dressing, bathing or feeding;

20

(2)  supervising self-administered medication;

21

(3)  transferring a person to or from a bed or

22

wheelchair; or

23

(4)  routine housekeeping chores when provided in

24

conjunction with and supplied by the same provider of the

25

assistance listed in subclause (1), (2) or (3).

26

(dd)  (Reserved).

27

(ee)  (Reserved).

28

(ff)  (Reserved).

29

(gg)  (Reserved).

30

(hh)  (Reserved).

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1

(ii)  (Reserved).

2

(jj)  "Lawn care service."  Providing services for lawn

3

upkeep, including, but not limited to, fertilizing, lawn mowing,

4

shrubbery trimming or other lawn treatment services.

5

(kk)  "Self-storage service."  Providing a building, a room

6

in a building or a secured area within a building with separate

7

access provided for each purchaser of self-storage service,

8

primarily for the purpose of storing personal property. The term

9

does not include service involving:

10

(1)  safe deposit boxes by financial institutions;

11

(2)  storage in refrigerator or freezer units;

12

(3)  storage in commercial warehouses;

13

(4)  facilities for goods distribution; and

14

(5)  lockers in airports, bus stations, museums and other

15

public places.

16

(ll)  "Cable or video programming service."  Cable television

17

services, video programming services, community antenna

18

television services or any other distribution of television,

19

video, audio or radio services which is transmitted with or

20

without the use of wires to purchasers.

21

If a purchaser receives or agrees to receive cable or video

22

programming service, then the following charges are included in

23

the purchase price: charges for installation or repair of any

24

cable or video programming service, upgrade to include

25

additional premium cable or premium video programming service,

26

downgrade to exclude all or some premium cable or premium video

27

programming service, additional cable outlets in excess of ten

28

or any other charge or fee related to cable or video programming

29

services. The term does not apply to: transmissions by public

30

television, public radio services or official Federal, State or

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1

local government cable services; local origination programming

2

which provides a variety of public service programs unique to

3

the community, programming which provides coverage of public

4

affairs issues which are presented without commentary or

5

analysis, including United States Congressional proceedings, or

6

programming which is substantially related to religious

7

subjects; or subscriber charges for access to a video dial tone

8

system or charges by a common carrier to a video programmer for

9

the transport of video programming.

10

(mm)  (Reserved).

11

(nn)  "Construction contract."  A written or oral contract or

12

agreement for the construction, reconstruction, remodeling,

13

renovation or repair of real estate or a real estate structure.

14

The term shall not apply to services which are taxable under

15

clauses (k)(14) and (17) and (o)(12) and (15).

16

(oo)  "Construction contractor."  A person who performs an

17

activity pursuant to a construction contract, including a

18

subcontractor.

19

(pp)  "Building machinery and equipment."  Generation

20

equipment, storage equipment, conditioning equipment,

21

distribution equipment and termination equipment, limited to the

22

following:

23

(1)  air conditioning limited to heating, cooling,

24

purification, humidification, dehumidification and

25

ventilation;

26

(2)  electrical;

27

(3)  plumbing;

28

(4)  communications limited to voice, video, data, sound,

29

master clock and noise abatement;

30

(5)  alarms limited to fire, security and detection;

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1

(6)  control system limited to energy management, traffic

2

and parking lot and building access;

3

(7)  medical system limited to diagnosis and treatment

4

equipment, medical gas, nurse call and doctor paging;

5

(8)  laboratory system;

6

(9)  cathodic protection system; or

7

(10)  furniture, cabinetry and kitchen equipment.

8

The term includes boilers, chillers, air cleaners, humidifiers,

9

fans, switchgear, pumps, telephones, speakers, horns, motion

10

detectors, dampers, actuators, grills, registers, traffic

11

signals, sensors, card access devices, guardrails, medial

12

devices, floor troughs and grates and laundry equipment,

13

together with integral coverings and enclosures, regardless of

14

whether: the item constitutes a fixture or is otherwise affixed

15

to the real estate; damage would be done to the item or its

16

surroundings on removal; or the item is physically located

17

within a real estate structure. The term does not include

18

guardrail posts, pipes, fittings, pipe supports and hangers,

19

valves, underground tanks, wire, conduit, receptacle and

20

junction boxes, insulation, ductwork and coverings.

21

(qq)  "Real estate structure." A structure or item purchased

22

by a construction contractor pursuant to a construction contract

23

with:

24

(1)  a charitable organization, a volunteer firemen's

25

organization, a nonprofit educational institution or a

26

religious organization for religious purposes and which

27

qualifies as an institution of purely public charity under

28

the act of November 26, 1997 (P.L.508, No.55), known as the

29

Institutions of Purely Public Charity Act;

30

(2)  the United States; or

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1

(3)  the Commonwealth, its instrumentalities or political

2

subdivisions.

3

The term includes building machinery and equipment; developed or

4

undeveloped land; streets; roads; highways; parking lots;

5

stadiums and stadium seating; recreational courts; sidewalks;

6

foundations; structural supports; walls; floors; ceilings;

7

roofs; doors; canopies; millwork; elevators; windows and

8

external window coverings; outdoor advertising boards or signs;

9

airport runways; bridges; dams; dikes; traffic control devices,

10

including traffic signs; satellite dishes; antennas; guardrail

11

posts; pipes; fittings; pipe supports and hangers; valves;

12

underground tanks; wire; conduit; receptacle and junction boxes;

13

insulation; ductwork and coverings; and any structure or item

14

similar to any of the foregoing, regardless of whether the

15

structure or item constitutes a fixture or is affixed to the

16

real estate; or damage would be done to the structure or item or

17

its surroundings on removal.

18

(rr)  "Telecommunications service."  Any one-way transmission

19

or any two-way, interactive transmission of sounds, signals or

20

other intelligence converted to like form which effects or is

21

intended to effect meaningful communications by electronic or

22

electromagnetic means via wire, cable, satellite, light waves,

23

microwaves, radio waves or other transmission media. The term

24

includes all types of telecommunication transmissions, local,

25

toll, wide-area or any other type of telephone service; private

26

line service; telegraph service; radio repeater service;

27

wireless communication service; personal communications system

28

service; cellular telecommunication service; specialized mobile

29

radio service; stationary two-way radio service; and paging

30

service. The term does not include any of the following:

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1

(1)  Subscriber charges for access to a video dial tone

2

system.

3

(2)  Charges to video programmers for the transport of

4

video programming.

5

(3)  Charges for access to the Internet. Access to the

6

Internet does not include any of the following:

7

(i)  The transport over the Internet or any

8

proprietary network using the Internet protocol of

9

telephone calls, facsimile transmissions or other

10

telecommunications traffic to or from end users on the

11

public switched telephone network if the signal sent from

12

or received by an end user is not in an Internet

13

protocol.

14

(ii)  Telecommunication services purchased by an

15

Internet service provider to deliver access to the

16

Internet to its customers.

17

(4)  Mobile telecommunications services.

18

(ss)  "Internet."  The international nonproprietary computer

19

network of both Federal and non-Federal interoperable packet

20

switched data networks.

21

(tt)  "Commercial racing activities."  Any of the following:

22

(1)  Thoroughbred and harness racing at which pari-mutuel

23

wagering is conducted under the act of December 17, 1981

24

(P.L.435, No.135), known as the Race Horse Industry Reform

25

Act.

26

(2)  Fair racing sanctioned by the State Harness Racing

27

Commission.

28

(uu)  "Prepaid telecommunications."  A tangible item

29

containing a prepaid authorization number that can be used

30

solely to obtain telecommunications service, including any

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1

renewal or increases in the prepaid amount.

2

(vv)  "Prebuilt housing."  Either of the following:

3

(1)  Manufactured housing, including mobile homes, which

4

bears a label as required by and referred to in the act of

5

November 17, 1982 (P.L.676, No.192), known as the

6

Manufactured Housing Construction and Safety Standards

7

Authorization Act.

8

(2)  Industrialized housing as defined in the act of May

9

11, 1972 (P.L.286, No.70), known as the Industrialized

10

Housing Act.

11

(ww)  "Used prebuilt housing."  Prebuilt housing that was

12

previously subject to a sale to a prebuilt housing purchaser.

13

(xx)  "Prebuilt housing builder."  A person who makes a

14

prebuilt housing sale to a prebuilt housing purchaser.

15

(yy)  "Prebuilt housing sale."  A sale of prebuilt housing to

16

a prebuilt housing purchaser, including a sale to a landlord,

17

without regard to whether the person making the sale is

18

responsible for installing the prebuilt housing or whether the

19

prebuilt housing becomes a real estate structure upon

20

installation. Temporary installation by a prebuilt housing

21

builder for display purposes of a unit held for resale shall not

22

be considered occupancy for residential purposes.

23

(zz)  "Prebuilt housing purchaser."  A person who purchases

24

prebuilt housing in a transaction and who intends to occupy the

25

unit for residential purposes in this Commonwealth.

26

(aaa)  "Mobile telecommunications service."  Mobile

27

telecommunications service as that term is defined in the Mobile

28

Telecommunications Sourcing Act (Public Law 106-252, 4 U.S.C. §

29

116 et seq.).

30

(bbb)  "Fiscal Code."  The act of April 9, 1929 (P.L.343,

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1

No.176), known as The Fiscal Code.

2

(ccc)  "Prepaid mobile telecommunications service."  Mobile

3

telecommunications service which is paid for in advance and

4

which enables the origination of calls using an access number,

5

authorization code or both, regardless of whether manually or

6

electronically dialed, if the remaining amount of units of the

7

prepaid mobile telecommunications service is known by the

8

service provider of the prepaid mobile telecommunications

9

service on a continuous basis. The term does not include the

10

advance purchase of mobile telecommunications service if the

11

purchase is pursuant to a service contract between the service

12

provider and customer and if the service contract requires the

13

customer to make periodic payments to maintain the mobile

14

telecommunications service.

15

(ddd)  "Call center."  The physical location in this

16

Commonwealth:

17

(1)  where at least 150 employees are employed to

18

initiate or answer telephone calls;

19

(2)  where there are at least 200 telephone lines; and

20

(3)  which utilizes an automated call distribution system

21

for customer telephone calls in one or more of the following

22

activities:

23

(i)  customer service and support;

24

(ii)  technical assistance;

25

(iii)  help desk service;

26

(iv)  providing information;

27

(v)  conducting surveys;

28

(vi)  revenue collections; or

29

(vii)  receiving orders or reservations.

30

For purposes of this clause, a physical location may include

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1

multiple buildings utilized by a taxpayer located within this

2

Commonwealth. Transactions for which purchase agreements are

3

executed after June 30, ????.

4

(eee)  "Dental services."  The general and usual services

5

rendered and care administered by doctors of dental medicine or

6

doctors of dental surgery, as defined in the act of May 1, 1933

7

(P.L.216, No.76), known as The Dental Law.

8

(fff)  "Physician services."  The general and usual services

9

rendered and care administered by medical doctors, as defined in

10

the act of December 20, 1985 (P.L.457, No.112), known as the

11

Medical Practice Act of 1985, or doctors of osteopathy, as

12

defined in the act of October 5, 1978 (P.L.1109, No.261), known

13

as the Osteopathic Medical Practice Act.

14

(ggg)  "Clothing."  All vesture, wearing apparel, raiments,

15

garments, footwear and other articles of clothing, including

16

clothing patterns and items that are to be a component part of

17

clothing, worn or carried on or about the human body including,

18

but not limited to, all accessories, ornamental wear, formal day

19

or evening apparel and articles made of fur on the hide or pelt

20

or any material imitative of fur and articles of which such fur,

21

real, imitation or synthetic, is the component material of chief

22

value and sporting goods and clothing not normally used or worn

23

when not engaged in sports.

24

(hhh)  "Food and beverages."  All food and beverages for

25

human consumption, including, but not limited to:

26

(1)  Soft drinks.

27

(2)  Malt and brewed beverages and spiritous and vinous

28

liquors.

29

(3)  Food or beverages, whether sold for consumption on

30

or off the premises of on a take-out or to go basis or

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1

delivered to the purchaser or consumer, when purchased:

2

(i)  from persons engaged in the business of

3

catering; or

4

(ii)  from persons engaged in the business of

5

operating establishments from which ready-to-eat food and

6

beverages are sold, including, but not limited to,

7

restaurants, cafes, lunch counters, private and social

8

clubs, taverns, dining cars, hotels, night clubs, fast

9

food operations, pizzerias, fairs, carnivals, lunch

10

carts, ice cream stands, snack bars, cafeterias, employee

11

cafeterias, theaters, stadiums, arenas, amusement parks,

12

carryout shops, coffee shops and other establishments

13

whether mobile or immobile.

14

For purposes of this clause, a bakery, a pastry shop, a donut

15

shop, a delicatessen, a grocery store, a supermarket, a farmer's

16

market, a convenience store or a vending machine shall not be

17

considered an establishment from which food or beverages ready

18

to eat are sold except for the sale of meals, sandwiches, food

19

from salad bars, hand-dipped or hand-served ice-based products

20

including ice cream and yogurt, hot soup, hot pizza and other

21

hot food items, brewed coffee and hot beverages. For purposes of

22

this subclause, beverages shall not include malt and brewed

23

beverages and spiritous and vinous liquors but shall include

24

soft drinks.

25

SUBCHAPTER B

26

SALES AND USE TAX

27

Section 702.  Imposition of tax.

28

(a)  Tax on certain sales at retail and uses of tangible

29

personal property and services.--

30

(1)  There is hereby imposed on each separate sale at

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1

retail of tangible personal property or services in this

2

Commonwealth a tax of 7% of the purchase price, which tax

3

shall be collected by the vendor from the purchaser, and

4

shall be paid over to the Commonwealth as provided in this

5

chapter.

6

(2)  There is hereby imposed on the use in this

7

Commonwealth of tangible personal property purchased at

8

retail and on those services purchased at retail a tax of 7%

9

of the purchase price, which tax shall be paid to the

10

Commonwealth by the person who makes such use as provided

11

under this chapter, except that the tax shall not be paid to

12

the Commonwealth by the person where the person has paid the

13

tax imposed by paragraph (1) or has paid the tax imposed by

14

this subsection to the vendor with respect to the use.

15

(b)  (Reserved).

16

(c)  Telecommunications service.--

17

(1)  Notwithstanding any other provisions of this

18

chapter, the tax with respect to telecommunications service

19

within the meaning of "tangible personal property" in section

20

701 shall be computed at the rate of 7% on the total amount

21

charged to customers for the services, irrespective of

22

whether such charge is based on a flat rate or on a message

23

unit charge.

24

(2)  A telecommunications service provider shall have no

25

responsibility or liability to the Commonwealth for billing,

26

collecting or remitting taxes that apply to services,

27

products or other commerce sold over telecommunications lines

28

by third-party vendors.

29

(3)  To prevent actual multistate taxation of interstate

30

telecommunications service, any taxpayer, on proof that the

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1

taxpayer has paid a similar tax to another state on the same

2

interstate telecommunications service, shall be allowed a

3

credit against the tax imposed by this section on the same

4

interstate telecommunications service to the extent of the

5

amount of the tax properly due and paid to the other state.

6

(d)  Coin-operated vending machines.--Notwithstanding any

7

other provisions of this chapter, the sale or use of food and

8

beverages dispensed by means of coin-operated vending machines

9

shall be taxed at the rate of 7% of the receipts collected from

10

any coin-operated vending machine which dispenses food and

11

beverages that were previously taxable.

12

(e)  Prepaid telecommunications.--

13

(1)  Notwithstanding any provisions of this chapter, the

14

sale or use of prepaid telecommunications evidenced by the

15

transfer of tangible personal property shall be subject to

16

the tax imposed by subsection (a).

17

(2)  The sale or use of prepaid telecommunications not

18

evidenced by the transfer of tangible personal property shall

19

be subject to the tax imposed by subsection (a) and shall be

20

deemed to occur at the purchaser's billing address.

21

(3)  (i)  Notwithstanding paragraph (2), the sale or use

22

of prepaid telecommunications service not evidenced by

23

the transfer of tangible personal property shall be taxed

24

at the rate of 7% of the receipts collected on each sale

25

if the service provider elects to collect the tax imposed

26

by this chapter on receipts of each sale.

27

(ii)  The service provider shall notify the

28

department of its election and shall collect the tax on

29

receipts of each sale until the service provider notifies

30

the department otherwise.

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1

(e.1)  Prepaid mobile telecommunications service.--

2

(1)  Notwithstanding any other provision of this chapter,

3

the sale or use of prepaid mobile telecommunications service

4

evidenced by the transfer of tangible personal property shall

5

be subject to the tax imposed by subsection (a).

6

(2)  The sale or use of prepaid mobile telecommunications

7

service not evidenced by the transfer of tangible personal

8

property shall be subject to the tax imposed by subsection

9

(a) and shall be deemed to occur at the purchaser's billing

10

address or the location associated with the mobile telephone

11

number or the point of sale, whichever is applicable.

12

(3)  (i)  Notwithstanding paragraph (2), the sale or use

13

of prepaid mobile telecommunications service not

14

evidenced by the transfer of tangible personal property

15

shall be taxed at the rate of 7% of the receipts

16

collected on each sale if the service provider elects to

17

collect the tax imposed by this chapter on receipts of

18

each sale.

19

(ii)  The service provider shall notify the

20

department of its election and shall collect the tax on

21

receipts of each sale until the service provider notifies

22

the department otherwise.

23

(f)  Prebuilt housing.--

24

(1)  Notwithstanding any other provision of this chapter,

25

tax with respect to sales of prebuilt housing shall be

26

imposed on the prebuilt housing builder at the time of the

27

prebuilt housing sale within this Commonwealth and shall be

28

paid and reported by the prebuilt housing builder to the

29

department in the time and manner provided in this chapter.

30

(2)  A manufacturer of prebuilt housing may, at its

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1

option, precollect the tax from the prebuilt housing builder

2

at the time of sale to the prebuilt housing builder.

3

(3)  In any case where prebuilt housing is purchased and

4

the tax is not paid by the prebuilt housing builder or

5

precollected by the manufacturer, the prebuilt housing

6

purchaser shall remit tax directly to the department if the

7

prebuilt housing is used in this Commonwealth without regard

8

to whether the prebuilt housing becomes a real estate

9

structure.

10

(g)  Home service providers.--

11

(1)  Notwithstanding any other provisions of this chapter

12

and in accordance with the Mobile Telecommunications Sourcing

13

Act (Public Law 106-252, 4 U.S.C. § 116 et seq.), the sale or

14

use of mobile telecommunications services which are deemed to

15

be provided to a customer by a home service provider under 4

16

U.S.C. § 117 (relating to sourcing rules) shall be subject to

17

the tax of 7% of the purchase price, which tax shall be

18

collected by the home service provider from the customer, and

19

shall be paid over to the Commonwealth as provided in this

20

chapter if the customer's place of primary use is located

21

within this Commonwealth, regardless of where the mobile

22

telecommunications services originate, terminate or pass

23

through.

24

(2)  For purposes of this subsection, words and phrases

25

used in this subsection shall have the same meanings given to

26

them in the Mobile Telecommunications Sourcing Act.

27

Section 703.  Computation of tax.

28

(a)  Table to be published.--Within 60 days of the effective

29

date of this section, the department shall prepare and publish

30

as a notice in the Pennsylvania Bulletin a table setting forth

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1

the amount of tax imposed under section 702 for purchase prices

2

that are less than $1.

3

(b)  Deposit into Education Stabilization Fund.--The tax

4

collected under section 702 shall be deposited into the

5

Education Stabilization Fund.

6

SUBCHAPTER C

7

EXCLUSIONS FROM SALES AND USE TAX

8

Section 704.  Exclusions from tax.

9

The tax imposed by section 702 shall not be imposed upon any

10

of the following:

11

(1)  The sale at retail or use of tangible personal

12

property (other than motor vehicles, trailers, semi-trailers,

13

motor boats, aircraft or other similar tangible personal

14

property required under either Federal law or laws of this

15

Commonwealth to be registered or licensed) or services sold

16

by or purchased from a person not a vendor in an isolated

17

transaction or sold by or purchased from a person who is a

18

vendor but is not a vendor with respect to the tangible

19

personal property or services sold or purchased in such

20

transaction, provided that inventory and stock in trade so

21

sold or purchased shall not be excluded from the tax by the

22

provisions of this subsection.

23

(2)  The use of tangible personal property purchased by a

24

nonresident person outside of, and brought into this

25

Commonwealth for use therein for a period not to exceed seven

26

days, or for any period of time when such nonresident is a

27

tourist or vacationer and, in either case not consumed within

28

the Commonwealth.

29

(3)  (i)  The use of tangible personal property purchased

30

outside this Commonwealth for use outside this

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1

Commonwealth by a then nonresident natural person or a

2

business entity not actually doing business within this

3

Commonwealth, who later brings the tangible personal

4

property into this Commonwealth in connection with the

5

person's or entity's establishment of a permanent

6

business or residence in this Commonwealth, provided that

7

the property was purchased more than six months prior to

8

the date it was first brought into this Commonwealth or

9

prior to the establishment of the business or residence,

10

whichever first occurs.

11

(ii)  This paragraph shall not apply to tangible

12

personal property temporarily brought into this

13

Commonwealth for the performance of contracts for the

14

construction, reconstruction, remodeling, repairing and

15

maintenance of real estate.

16

(4)  (Reserved).

17

(5)  The sale at retail or use of steam, natural and

18

manufactured and bottled gas, fuel oil, electricity or

19

intrastate subscriber line charges, basic local telephone

20

service or telegraph service when purchased directly by the

21

user solely for the user's own residential use and charges

22

for telephone calls paid for by inserting money into a

23

telephone accepting direct deposits of money to operate.

24

(6)  (Reserved).

25

(7)  (Reserved).

26

(8)  (Reserved).

27

(9)  (Reserved).

28

(10)  (i)  The sale at retail to or use by any charitable

29

organization, volunteer firefighters' organization or

30

nonprofit educational institution or a religious

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1

organization for religious purposes of tangible personal

2

property or services other than pursuant to a

3

construction contract.

4

(ii)  This paragraph shall not apply with respect to

5

any tangible personal property or services used in any

6

unrelated trade or business carried on by the

7

organization or institution or with respect to any

8

materials, supplies and equipment used and transferred to

9

the organization or institution in the construction,

10

reconstruction, remodeling, renovation, repairs and

11

maintenance of any real estate structure, other than

12

building machinery and equipment, except materials and

13

supplies when purchased by the organization or

14

institution for routine maintenance and repairs.

15

(11)  The sale at retail, or use of gasoline and other

16

motor fuels, the sales of which are otherwise subject to

17

excise taxes under 75 Pa.C.S. Ch. 90 (relating to liquid

18

fuels and fuels tax).

19

(12)  (i)  The sale at retail to, or use by the United

20

States, this Commonwealth or its instrumentalities or

21

political subdivisions, nonpublic schools, charter

22

schools, cyber charter schools or vocational schools of

23

tangible personal property or services.

24

(ii)  This paragraph includes the sale at retail to a

25

supervisor of a home education program of tangible

26

personal property or services used exclusively for the

27

home education program.

28

(iii)  As used in this paragraph, the terms

29

"nonpublic school," "charter school," "cyber charter

30

school," "vocational school," "supervisor" and "home

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1

education program" shall have the meanings given to them

2

in the Public School Code of 1949.

3

(13)  The sale at retail, or use of wrapping paper,

4

wrapping twine, bags, cartons, tape, rope, labels,

5

nonreturnable containers and all other wrapping supplies,

6

when such use is incidental to the delivery of any personal

7

property, except that any charge for wrapping or packaging

8

shall be subject to tax at the rate imposed by section 702.

9

(14)  Sale at retail or use of vessels designed for

10

commercial use of registered tonnage of 50 tons or more when

11

produced by the builders thereof upon special order of the

12

purchaser.

13

(15)  Sale at retail of tangible personal property or

14

services used or consumed in building, rebuilding, repairing

15

and making additions to or replacements in and upon vessels

16

designed for commercial use of registered tonnage of 50 tons

17

or more upon special order of the purchaser, or when rebuilt,

18

repaired or enlarged, or when replacements are made upon

19

order of or for the account of the owner.

20

(16)  The sale at retail or use of tangible personal

21

property or services to be used or consumed for ship cleaning

22

or maintenance or as fuel, supplies, ships' equipment, ships'

23

stores or sea stores on vessels designed for commercial use

24

of registered tonnage of 50 tons or more to be operated

25

principally outside the limits of this Commonwealth.

26

(17)  The sale at retail or use of prescription

27

medicines, drugs or medical supplies, crutches and

28

wheelchairs for the use of persons with disabilities and

29

invalids, artificial limbs, artificial eyes and artificial

30

hearing devices when designed to be worn on the person of the

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1

purchaser or user, false teeth and materials used by a

2

dentist in dental treatment, eyeglasses when especially

3

designed or prescribed by an ophthalmologist, oculist or

4

optometrist for the personal use of the owner or purchaser

5

and artificial braces and supports designed solely for the

6

use of persons with disabilities or any other therapeutic,

7

prosthetic or artificial device designed for the use of a

8

particular individual to correct or alleviate a physical

9

incapacity, including, but not limited to, hospital beds,

10

iron lungs and kidney machines.

11

(18)  The sale at retail or use of coal.

12

(19)  (Reserved).

13

(20)  (Reserved).

14

(21)  (Reserved).

15

(22)  (Reserved).

16

(23)  (Reserved).

17

(24)  The sale at retail or use of motor vehicles,

18

trailers and semitrailers, or bodies attached to the chassis

19

thereof, sold to a nonresident of this Commonwealth to be

20

used outside this Commonwealth and which are registered in a

21

state other than this Commonwealth within 20 days after

22

delivery to the vendee.

23

(25)  The sale at retail or use of water.

24

(26)  The sale at retail or use of all vesture, wearing

25

apparel, raiments, garments, footwear and other articles of

26

clothing with a purchase price of less than $50, including

27

clothing patterns and items that are to be a component part

28

of clothing, worn or carried on or about the human body but

29

all accessories, ornamental wear, formal day or evening

30

apparel and articles made of fur on the hide or pelt or any

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1

material imitative of fur and articles of which such fur,

2

real, imitation or synthetic, is the component material of

3

chief value, but only if such value is more than three times

4

the value of the next most valuable component material, and

5

sporting goods and clothing not normally used or worn when

6

not engaged in sports shall not be excluded from the tax.

7

(27)  (Reserved).

8

(28)  (Reserved).

9

(29)  The sale at retail or use of food and beverages

10

that are federally approved items for the Women, Infants and

11

Children Program under section 17 of the Child Nutrition Act

12

of 1966 (Public Law 89-642, 42 U.S.C. § 1786).

13

(30)  (i)  The sale at retail or use of any printed or

14

other form of advertising materials regardless of where

15

or by whom the advertising material was produced.

16

(ii)  This paragraph shall not include the sale at

17

retail or use of mail order catalogs and direct mail

18

advertising literature or materials, including electoral

19

literature or materials, such as envelopes, address

20

labels and a one-time license to use a list of names and

21

mailing addresses for each delivery of direct mail

22

advertising literature or materials, including electoral

23

literature or materials, through the United States Postal

24

Service.

25

(31)  (Reserved).

26

(32)  (Reserved).

27

(33)  (Reserved).

28

(34)  (Reserved).

29

(35)  (Reserved).

30

(36)  The sale at retail or use of rail transportation

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1

equipment used in the movement of personalty.

2

(37)  (Reserved).

3

(38)  (Reserved).

4

(39)  The sale at retail or use of fish feed purchased by

5

or on behalf of sportsmen's clubs, fish cooperatives or

6

nurseries approved by the Pennsylvania Fish Commission.

7

(40)  The sale at retail of supplies and materials to

8

tourist promotion agencies, which receive grants from the

9

Commonwealth, for distribution to the public as promotional

10

material or the use of such supplies and materials by said

11

agencies for said purposes.

12

(41)  (Reserved).

13

(42)  The sale or use of brook trout (salvelinus

14

fontinalis), brown trout (Salmo trutta) or rainbow trout

15

(Salmo gairdneri).

16

(43)  The sale at retail or use of buses to be used

17

exclusively for the transportation of children for school

18

purposes.

19

(44)  The sale at retail or use of firewood.

20

(45)  (Reserved).

21

(46)  The sale at retail or use of tangible personal

22

property purchased in accordance with the Food Stamp Act of

23

1977, as amended (Public Law 95-113, 7 U.S.C. §§ 2011-2029).

24

(47)  (Reserved).

25

(48)  (Reserved).

26

(49)  (i)  The sale at retail or use of food and

27

beverages by nonprofit associations which support sports

28

programs.

29

(ii)  The following words and phrases when used in

30

this paragraph shall have the meanings given to them in

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1

this subparagraph unless the context clearly indicates

2

otherwise:

3

"Nonprofit association."  An entity which is

4

organized as a nonprofit corporation or nonprofit

5

unincorporated association under the laws of this

6

Commonwealth or the United States or any entity which is

7

authorized to do business in this Commonwealth as a

8

nonprofit corporation or unincorporated association under

9

the laws of this Commonwealth, including, but not limited

10

to, youth or athletic associations, volunteer fire,

11

ambulance, religious, charitable, fraternal, veterans,

12

civic, or any separately chartered auxiliary of the

13

foregoing, if organized and operated on a nonprofit

14

basis.

15

"Sports program."  Baseball, softball, football,

16

basketball, soccer and any other competitive sport

17

formally recognized as a sport by the United States

18

Olympic Committee as specified by and under the

19

jurisdiction of the Amateur Sports Act of 1978 (Public

20

Law 95-606, 36 U.S.C. Ch. 2205), the Amateur Athletic

21

Union or the National Collegiate Athletic Association.

22

The term shall be limited to a program or that portion of

23

a program that is organized for recreational purposes and

24

whose activities are substantially for such purposes and

25

which is primarily for participants who are 18 years of

26

age or younger or whose 19th birthday occurs during the

27

year of participation or the competitive season,

28

whichever is longer. There shall, however, be no age

29

limitation for programs operated for persons with

30

physical handicaps or persons with mental retardation.

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1

"Support."  The funds raised from sales are used to

2

pay the expenses of a sports program or the nonprofit

3

association sells the food and beverages at a location

4

where a sports program is being conducted under this

5

chapter or the Tax Reform Code of 1971.

6

(50)  (Reserved).

7

(51)  The sale at retail or use of interior office

8

building cleaning services but only as relates to the costs

9

of the supplied employee, which costs are wages, salaries,

10

bonuses and commissions, employment benefits, expense

11

reimbursements and payroll and withholding taxes, to the

12

extent that these costs are specifically itemized or that

13

these costs in aggregate are stated in billings from the

14

vendor or supplying entity.

15

(52)  (Reserved).

16

(53)  (Reserved).

17

(54)  (Reserved).

18

(55)  (Reserved).

19

(56)  The sale at retail or use of tangible personal

20

property or services used, transferred or consumed in

21

installing or repairing equipment or devices designed to

22

assist persons in ascending or descending a stairway when:

23

(i)  The equipment or devices are used by a person

24

who, by virtue of a physical disability, is unable to

25

ascend or descend stairs without the aid of such

26

equipment or device.

27

(ii)  The equipment or device is installed or used in

28

the person's place of residence.

29

(iii)  A physician has certified the physical

30

disability of the person in whose residence the equipment

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1

or device is installed or used.

2

(57)  The sale at retail to or use by a construction

3

contractor of building machinery and equipment and services

4

thereto that are:

5

(i)  transferred pursuant to a construction contract

6

for any charitable organization, volunteer firemen's

7

organization, nonprofit educational institution or

8

religious organization for religious purposes, provided

9

that the building machinery and equipment and services

10

thereto are not used in any unrelated trade or business;

11

or

12

(ii)  transferred to the United States or the

13

Commonwealth or its instrumentalities or political

14

subdivisions.

15

(58)  (Reserved).

16

(59)  The sale at retail or use of molds and related mold

17

equipment used directly and predominantly in the manufacture

18

of products, regardless of whether the person that holds

19

title to the equipment manufactures a product.

20

(60)  (Reserved).

21

(61)  (Reserved).

22

(62)  The sale at retail or use of tangible personal

23

property or services which are directly used in farming,

24

dairying or agriculture when engaged in as a business

25

enterprise, regardless of whether the sale is made to the

26

person directly engaged in the business enterprise or to a

27

person contracting with the person directly engaged in the

28

business enterprise for the production of food.

29

(63)  (Reserved).

30

(64)  The sale at retail to or use by a construction

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1

contractor, employed by a public school district pursuant to

2

a construction contract, of any materials and building

3

supplies which, during construction or reconstruction, are

4

made part of any public school building utilized for

5

instructional classroom education within this Commonwealth,

6

if the construction or reconstruction:

7

(i)  is necessitated by a disaster emergency, as

8

defined in 35 Pa.C.S. § 7102 (relating to definitions);

9

and

10

(ii)  takes place during the period when there is a

11

declaration of disaster emergency under 35 Pa.C.S. §

12

7301(c) (relating to general authority of Governor).

13

(65)  (Reserved).

14

(66)  The sale at retail or use of copies of an official

15

document sold by a government agency or a court. For the

16

purposes of this paragraph, the following terms or phrases

17

shall have the following meanings:

18

(i)  "court" includes:

19

(A)  an appellate court as defined in 42 Pa.C.S.

20

§ 102 (relating to definitions);

21

(B)  A court of common pleas as defined in 42

22

Pa.C.S. § 102; or

23

(C)  the minor judiciary as defined in 42 Pa.C.S.

24

§ 102;

25

(ii)  "government agency" means an agency as defined

26

in section 102 of the act of February 14, 2008 (P.L.6,

27

No.3), known as the Right-to-Know Law; and

28

(iii)  "official document" means a record as defined

29

in section 102 of the Right-to-Know Law. The term shall

30

include notes of court testimony, deposition transcripts,

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1

driving records, accident reports, birth and death

2

certificates, deeds, divorce decrees and other similar

3

documents.

4

(67)  The sale at retail or use of repair or replacement

5

parts, including the installation of those parts, exclusively

6

for use in helicopters and similar rotorcraft or in

7

overhauling or rebuilding of helicopters and similar

8

rotorcraft or helicopters and similar rotorcraft components.

9

(68)  The sale at retail or use of helicopters and

10

similar rotorcraft.

11

(69)  The sale at retail or use of goods or services that

12

are part of a Medicare Part B transaction.

13

(70)  The sale at retail or use of transportation of

14

persons provided or funded by the Federal, State or local

15

government.

16

(71)  The sale at retail of insurance premiums.

17

(72)  The sale at retail, between an owner of real

18

property and a financial institution, of a mortgage.

19

(73)  An investment or gain on an investment, including,

20

but not limited to, bank deposits, stocks and bonds,

21

including any commissions, maintenance costs and other

22

charges, which commissions, maintenance costs and other

23

charges related to the making of such investment or a gain

24

thereon.

25

(74)  The rental of real property.

26

(75)  The sale at retail of tuition.

27

(76)  The sale at retail of any of the following

28

business, professional or technical services performed by a

29

business and rendered to another business:

30

(i)  Legal services.

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1

(ii)  Architectural, engineering and related

2

services.

3

(iii)  Accounting, auditing and bookkeeping services.

4

(iv)  Specialized design services.

5

(v)  Advertising, public relations and related

6

services.

7

(vi)  Services to building and dwellings.

8

(vii)  Scientific, environmental and technical

9

consulting services.

10

(viii)  Scientific research and development services.

11

(ix)  Information services.

12

(x)  Administrative services.

13

(xi)  Custom programming, design and data processing

14

services.

15

(xii)  Parking lot and garage services.

16

(77)  The sale at retail of legal services relating to

17

domestic relations matters or criminal matters.

18

(78)  The sale at retail of services rendered as part of

19

a transfer of an interest in real property.

20

(79)  The sale at retail to or use by a person of legal

21

services rendered by an attorney where the payment is made

22

pursuant to a contingency fee based upon a percentage of the

23

amount recovered with respect to a legal claim or dispute.

24

(80)  The sale at retail to or use by a person of the

25

services rendered by or under the supervision of a licensed

26

real estate broker, associate broker or salesperson in

27

connection with any aspect of the sale, lease or acquisition

28

of any interest in real property.

29

(81)  The sale at retail, or the use of motion picture

30

film rented or licensed from a distributor for the purpose of

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1

commercial exhibition.

2

(82)  The sale at retail or use of services performed by

3

minors under 18 years of age and not on behalf of another

4

person.

5

(83)  The sale at retail or use of services performed by

6

any person to the extent that the recipient or user of such

7

services receives those services free of charge.

8

(84)  The sale at retail or use of services provided by

9

employees to their employers in exchange for wages and

10

salaries when such services are rendered in the ordinary

11

course of employment.

12

(85)  The sale at retail or use of services performed for

13

resale in the ordinary course of business of the purchaser or

14

user of such services.

15

(86)  The sale at retail or use of services that are

16

otherwise taxable that are an integral, inseparable part of

17

the services that are to be sold or used and that are

18

taxable.

19

(87)  Telecommunication services performed in this

20

Commonwealth.

21

(88)  The sale at retail of medical goods or services by

22

a hospital, as defined in the act of December 20, 1985

23

(P.L.457, No.112), known as the Medical Practice Act of 1985.

24

(89)  The sale at retail of medical or dental services,

25

including charges for office visits.

26

Section 705.  Alternate imposition of tax.

27

(a)  General rule.--If any person actively and principally

28

engaged in the business of selling new or used motor vehicles,

29

trailers or semitrailers, and registered with the department in

30

the "dealer's class," acquires a motor vehicle, trailer or

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1

semitrailer for the purpose of resale, and prior to such resale,

2

uses the motor vehicle, trailer or semitrailer for a taxable use

3

under this chapter or the Tax Reform Code of 1971, the person

4

may pay a tax equal to 7% of the fair rental value of the motor

5

vehicle, trailer or semitrailer during use.

6

(b)  Aircraft.--A commercial aircraft operator who acquires

7

an aircraft for the purpose of resale, or lease, or is entitled

8

to claim another valid exemption at the time of purchase, and

9

subsequent to the purchase, periodically uses the same aircraft

10

for a taxable use under this chapter or the Tax Reform Code of

11

1971, may elect to pay a tax equal to 7% of the fair rental

12

value of the aircraft during such use.

13

(c)  Applicability.--This section shall not apply to the use

14

of a vehicle as a wrecker, parts truck, delivery truck or

15

courtesy car.

16

Section 706.  Credit against tax.

17

(a)  Tax paid to another state.--

18

(1)  A credit against the tax imposed by section 702

19

shall be granted with respect to tangible personal property

20

or services purchased for use outside the Commonwealth equal

21

to the tax paid to another state by reason of the imposition

22

by the other state of a tax similar to the tax imposed by

23

this chapter.

24

(2)  No credit under paragraph (1) shall be granted

25

unless the other state grants substantially similar tax

26

relief by reason of the payment of tax under this chapter or

27

under the Tax Reform Code of 1971.

28

(b)  Telecommunications services.--A credit against the tax

29

imposed by section 702 on telecommunications services shall be

30

granted to a call center for gross receipts tax paid by a

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1

telephone company on the receipts derived from the sale of

2

incoming and outgoing interstate telecommunications services to

3

the call center under section 1101(a)(2) of the Tax Reform Code

4

of 1971. The following apply:

5

(1)  A telephone company, on request, shall notify a call

6

center of the amount of gross receipts tax paid by the

7

telephone company on the receipts derived from the sale of

8

incoming and outgoing interstate telecommunications services

9

to the call center.

10

(2)  A call center that is eligible for the credit in

11

this subsection may apply for a tax credit as set forth in

12

this subsection.

13

(3)  By February 15, a taxpayer must submit an

14

application to the department for gross receipts tax paid on

15

the receipts derived from the sale of incoming and outgoing

16

interstate telecommunications services incurred in the prior

17

calendar year.

18

(4)  By April 15 of the calendar year following the close

19

of the calendar year during which the gross receipts tax was

20

incurred, the department shall notify the applicant of the

21

amount of the applicant's tax credit approved by the

22

department.

23

(5)  The total amount of tax credits provided for in this

24

subsection and approved by the department shall not exceed

25

$30,000,000 in any fiscal year. If the total amount of tax

26

credits applied for by all applicants exceeds the amount

27

allocated for those credits, then the credit to be received

28

by each applicant shall be determined as follows:

29

(i)  Divide:

30

(A)  the tax credit applied for by the applicant;

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1

by

2

(B)  the total of all tax credits applied for by

3

all applicants.

4

(ii)  Multiply:

5

(A)  the quotient under subparagraph (i); by

6

(B)  the amount allocated for all tax credits.

7

SUBCHAPTER D

8

LICENSES

9

Section 708.  Licenses.

10

(a)  Duty to obtain license.--Every person maintaining a

11

place of business in this Commonwealth, selling or leasing

12

services or tangible personal property, the sale or use of which

13

is subject to tax and who has not obtained a license from the

14

department, shall, prior to the beginning of business, make

15

application to the department, on a form prescribed by the

16

department, for a license. If such person maintains more than

17

one place of business in this Commonwealth, the license shall be

18

issued for the principal place of business in this Commonwealth.

19

(b)  Criteria for issuance of license.--

20

(1)  The department shall, after the receipt of an

21

application, issue the license applied for under subsection

22

(a) if the applicant filed all required State tax reports and

23

paid any State taxes not subject to a timely perfected

24

administrative or judicial appeal or subject to a duly

25

authorized deferred payment plan. The license shall be

26

nonassignable.

27

(2)  All licenses in effect on the effective date of this

28

section under former Article III of the Tax Reform Code of

29

1971 and all licenses issued or renewed on or after the

30

effective date of this section shall be valid for a period of

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1

five years.

2

(b.1)  Refusal of license.--

3

(1)  If an applicant for a license or any person holding

4

a license has not filed all required State tax reports and

5

paid any State taxes not subject to a timely perfected

6

administrative or judicial appeal or subject to a duly

7

authorized deferred payment plan, the department may refuse

8

to issue, may suspend or may revoke said license.

9

(2)  The department shall notify the applicant or

10

licensee of any refusal, suspension or revocation. The notice

11

shall contain a statement that the refusal, suspension or

12

revocation may be made public. The notice shall be made by

13

first class mail.

14

(3)  An applicant or licensee aggrieved by the

15

determination of the department may file an appeal pursuant

16

to the provisions for administrative appeals in this chapter.

17

In the case of a suspension or revocation which is appealed,

18

the license shall remain valid pending a final outcome of the

19

appeals process.

20

(4)  Notwithstanding section 774 or sections 353(f),

21

408(b), 603, 702, 802, 904 and 1102 of the Tax Reform Code of

22

1971, or any other provision of law to the contrary, if no

23

appeal is taken or if an appeal is taken and denied at the

24

conclusion of the appeal process, the department may

25

disclose, by publication or otherwise, the identity of a

26

person and the fact that the person's license has been

27

refused, suspended or revoked under this subsection.

28

Disclosure may include the basis for refusal, suspension or

29

revocation.

30

(c)  Penalties.--

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1

(1)  A person that maintains a place of business in this

2

Commonwealth for the purpose of selling or leasing services

3

or tangible personal property, the sale or use of which is

4

subject to tax, without having first been licensed by the

5

department shall be guilty of a summary offense and, upon

6

conviction thereof, be sentenced to pay a fine of not less

7

than $300 nor more than $1,500 and, in default thereof, a

8

term of imprisonment of not less than five days nor more than

9

30 days.

10

(2)  The penalties imposed by this subsection shall be in

11

addition to any other penalties imposed by this chapter.

12

(3)  For purposes of this subsection, the offering for

13

sale or lease of any service or tangible personal property,

14

the sale or use of which is subject to tax, during any

15

calendar day shall constitute a separate violation.

16

(4)  The secretary may designate employees of the

17

department to enforce the provisions of this subsection. The

18

employees shall exhibit proof of and be within the scope of

19

the designation when instituting proceedings as provided by

20

the Pennsylvania Rules of Criminal Procedure.

21

(d)  Effect of failure to obtain license.--Failure of any

22

person to obtain a license shall not relieve that person of

23

liability to pay the tax imposed by this chapter.

24

SUBCHAPTER E

25

HOTEL OCCUPANCY TAX

26

Section 709.  Definitions.

27

(a)  General rule.--The following words and phrases when used

28

in this subchapter shall have the meanings given to them in this

29

section unless the context clearly indicates otherwise:

30

"Hotel."  A building or buildings in which the public may,

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1

for a consideration, obtain sleeping accommodations. The term

2

does not include any charitable, educational or religious

3

institution summer camp for children, hospital or nursing home.

4

"Occupancy." The use or possession or the right to the use or

5

possession by any person, other than a permanent resident, of

6

any room or rooms in a hotel for any purpose or the right to the

7

use or possession of the furnishings or to the services and

8

accommodations accompanying the use and possession of the room

9

or rooms.

10

"Occupant."  A person, other than a permanent resident, who,

11

for a consideration, uses, possesses or has a right to use or

12

possess any room or rooms in a hotel under any lease,

13

concession, permit, right of access, license or agreement.

14

"Operator."  Any person who operates a hotel.

15

"Permanent resident."  Any occupant who has occupied or has

16

the right to occupancy of any room or rooms in a hotel for at

17

least 30 consecutive days.

18

"Rent." The consideration received for occupancy valued in

19

money, whether received in money or otherwise, including all

20

receipts, cash, credits and property or services of any kind or

21

nature, and also any amount for which the occupant is liable for

22

the occupancy without any deduction. The term "rent" shall not

23

include a gratuity.

24

(b)  Other definitions.--The following words and phrases,

25

when used in Subchapters D and F, shall, in addition to the

26

meaning ascribed to them by section 701, have the meaning

27

ascribed to them in this subsection, except where the context

28

clearly indicates a different meaning:

29

"Maintaining a place of business in this Commonwealth."

30

Being the operator of a hotel in this Commonwealth.

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1

"Purchase at retail."  Occupancy.

2

"Purchase price."  Rent.

3

"Purchaser."  Occupant.

4

"Sale at retail."  The providing of occupancy to an occupant

5

by an operator.

6

"Services."  Occupancy.

7

"Tangible personal property."  Occupancy.

8

"Use."  Occupancy.

9

"Vendor."  Operator.

10

Section 710.  Imposition of tax.

11

There is hereby imposed an excise tax of 7% of the rent on

12

every occupancy of a room or rooms in a hotel in this

13

Commonwealth, which tax shall be collected by the operator from

14

the occupant and paid over to the Commonwealth as provided in

15

this chapter and deposited into the Education Stabilization

16

Fund.

17

Section 711.  Seasonal tax returns.

18

Notwithstanding any other provisions in this chapter or the

19

Tax Reform Code of 1971, the department may, by regulation,

20

waive the requirement for the filing of quarterly returns in the

21

case of any operator whose hotel is operated only during certain

22

seasons of the year, and may provide for the filing of returns

23

by such persons at times other than those provided by section

24

721.

25

SUBCHAPTER F

26

PROCEDURE AND ADMINISTRATION

27

Section 715.  Persons required to make returns.

28

Every person required to pay tax to the department or collect

29

and remit tax to the department shall file returns with respect

30

to the tax.

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1

Section 716.  Form of returns.

2

The returns required by section 715 shall be on forms

3

prescribed by the department and shall show such information

4

with respect to the taxes imposed by this chapter as the

5

department may reasonably require.

6

Section 717.  Time for filing returns.

7

(a)  Monthly reporting.--A return shall be filed monthly with

8

respect to each month by every licensee whose total tax reported

9

or, in the event no report is filed, the total tax which should

10

have been reported, for the third calendar quarter of the

11

preceding year equals or exceeds $600. The returns shall be

12

filed on or before the 20th day of the next succeeding month

13

with respect to which the return is made. Any licensee required

14

to file monthly returns under this chapter shall be relieved

15

from filing quarterly returns.

16

(b)  Annual reporting.--No annual return shall be filed,

17

except as may be required by rules and regulations of the

18

department promulgated and published at least 60 days prior to

19

the end of the year with respect to which the returns are made.

20

Where such annual returns are required, licensees shall not be

21

required to file such returns prior to the 20th day of the year

22

succeeding the year with respect to which the returns are made.

23

(c)  Persons other than licensees.--Any person, other than a

24

licensee, liable to pay to the department any tax under this

25

chapter, shall file a return on or before the 20th day of the

26

month succeeding the month in which the person becomes liable

27

for the tax.

28

(d)  Waivers.--The department, by regulation, may waive the

29

requirement for the filing of quarterly return in the case of

30

any licensee whose individual tax collections do not exceed $75

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1

per calendar quarter and may provide for reporting on a less

2

frequent basis in such cases.

3

Section 718.  Extension of time for filing returns.

4

The department may, on written application and for good cause

5

shown, grant a reasonable extension of time for filing any

6

return required under this subchapter. However, the time for

7

making a return shall not be extended for more than three

8

months.

9

Section 719.  Place for filing returns.

10

Returns shall be filed with the department at its main office

11

or at any branch office which it may designate for filing

12

returns.

13

Section 720.  Timely mailing treated as timely filing and

14

payment.

15

(a)  General rule.--Notwithstanding the provisions of any

16

State tax law to the contrary, whenever a report or payment of

17

all or any portion of a State tax is required by law to be

18

received by the department or other agency of the Commonwealth

19

on or before a day certain, the taxpayer shall be deemed to have

20

complied with the law if the letter transmitting the report or

21

payment of the tax which has been received by the department is

22

postmarked by the United States Postal Service on or prior to

23

the final day on which the payment is to be received.

24

(b)  Presentation of receipt.--For the purposes of this

25

chapter, presentation of a receipt indicating that the report or

26

payment was mailed by registered or certified mail on or before

27

the due date shall be evidence of timely filing and payment.

28

Section 721.  Payment of tax.

29

When a return of tax is required under this subchapter, the

30

person required to make the return shall pay the tax to the

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1

department.

2

Section 722.  Time of payment.

3

(a)  General rule.--The tax imposed by this chapter and

4

incurred or collected by a licensee shall be due and payable by

5

the licensee on the day the return is required to be filed under

6

the provisions of section 717 and the payment must accompany the

7

return for the preceding period.

8

(b)  Other payments.--If the amount of tax due for the

9

preceding year as shown by the annual return of a taxpayer is

10

greater than the amount already paid by the taxpayer in

11

connection with the taxpayer's monthly or quarterly returns, the

12

taxpayer shall send with the annual return a remittance for the

13

unpaid amount of tax for the year.

14

(c)  Persons other than licensees.--Any person other than a

15

licensee liable to pay any tax under this chapter shall remit

16

the tax at the time of filing the return required by this

17

chapter.

18

Section 723.  Other times for payment.

19

In the event that the department authorizes a taxpayer to

20

file a return at other times than those specified in section

21

717, the tax due shall be paid at the time the return is filed.

22

Section 724.  Place for payment.

23

The tax imposed by this chapter shall be paid to the

24

department at the place fixed for filing the return.

25

Section 725.  Tax held in trust for Commonwealth.

26

(a)  General rule.--All taxes collected by any person from

27

purchasers in accordance with this chapter and all taxes

28

collected by any person from purchasers under color of this

29

chapter which have not been properly refunded by the person to

30

the purchaser shall constitute a trust fund for the

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1

Commonwealth, and such trust shall be enforceable against such

2

person, the person's representatives and any person, other than

3

a purchaser to whom a refund has been made properly, receiving

4

any part of the fund without consideration, or knowing that the

5

taxpayer is committing a breach of trust.

6

(b)  Presumption.--Any person receiving payment of a lawful

7

obligation of the taxpayer from the fund identified under

8

subsection (a) shall be presumed to have received the same in

9

good faith and without any knowledge of the breach of trust.

10

(c)  Right to petition and appeal.--Any person, other than a

11

taxpayer, against whom the department makes any claim under this

12

section shall have the same right to petition and appeal as is

13

given taxpayers by any provisions of this subchapter.

14

Section 726.  Local receivers of use tax.

15

(a)  General rule.--In every county, except counties of the

16

first class, the county treasurer shall receive use tax due and

17

payable under this chapter from any person other than a

18

licensee. The receiving of the taxes shall be pursuant to rules

19

and regulations promulgated by the department and on forms

20

furnished by the department.

21

(b)  Deduction for administrative costs.--Each county

22

treasurer shall remit to the department all use taxes received

23

under the authority of this section minus the costs of

24

administering this section not to exceed 1% of the amount of use

25

taxes received, which amount shall be retained in lieu of any

26

commission otherwise allowable by law for the collection of the

27

tax.

28

Section 727.  Discount.

29

(a)  General rule.--Subject to the provisions of subsection

30

(b), if a return is filed by a licensee and the tax shown to be

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1

due thereon less any discount is paid all within the time

2

prescribed, the licensee shall be entitled to credit and apply

3

against the tax payable by the licensee a discount of 1% of the

4

amount of the tax collected by the licensee, as compensation for

5

the expense of collecting and remitting the tax due by the

6

licensee and as consideration of the prompt payment.

7

(b)  Types of periodic filers.--For returns filed on or after

8

the effective date of this section, the discount under

9

subsection (a) shall be limited to the following:

10

(1)  For a monthly filer, $25 per return.

11

(2)  For a quarterly filer, $75 per return.

12

(3)  For a semiannual filer, $150 per return.

13

Section 728.  (Reserved).

14

Section 729.  (Reserved).

15

Section 730.  Assessment.

16

The department shall make the inquiries, determinations and

17

assessments of the tax, including interest, additions and

18

penalties, imposed by this chapter. A notice of assessment and

19

demand for payment shall be mailed by certified mail to the

20

taxpayer. The notice shall set forth the basis of the

21

assessment.

22

Section 731.  Mode and time of assessment.

23

(a)  Duty to examine.--

24

(1)  Within a reasonable time after any return is filed,

25

the department shall examine it and, if the return shows a

26

greater tax due or collected than the amount of tax remitted

27

with the return, the department shall issue an assessment for

28

the difference, together with an addition of 3% of the

29

difference, which shall be paid to the department within ten

30

days after a notice of the assessment has been mailed to the

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1

taxpayer.

2

(2)  If such assessment is not paid within ten days,

3

there shall be added and paid to the department an additional

4

3% of the difference for each month during which the

5

assessment remains unpaid. The total of all additions shall

6

not exceed 18% of the difference shown on the assessment.

7

(b)  Underestimated tax on returns.--

8

(1)  If the department determines that any return or

9

returns of any taxpayer understates the amount of tax due, it

10

shall determine the proper amount and shall ascertain the

11

difference between the amount of tax shown in the return and

12

the amount determined. The difference may be referred to as

13

the deficiency.

14

(2)  The department shall send a notice of assessment for

15

the deficiency and the reasons to the taxpayer.

16

(3)  The taxpayer shall pay the deficiency to the

17

department within 30 days after a notice of the assessment

18

has been mailed to the taxpayer.

19

(c)  Estimated assessments.--

20

(1)  In the event that any taxpayer fails to file a

21

return required by this chapter, the department may make an

22

estimated assessment, based on information available, of the

23

proper amount of tax owed by the taxpayer and shall send a

24

notice of assessment in the estimated amount to the taxpayer.

25

(2)  The taxpayer shall pay the tax within 30 days after

26

a notice of the estimated assessment has been mailed to the

27

taxpayer.

28

(d)  Studies.--

29

(1)  The department may conduct the studies necessary to

30

compute effective rates by business classification, based

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1

upon the ratio between the tax required to be collected and

2

taxable sales and to use such rates in arriving at the

3

apparent tax liability of a taxpayer.

4

(2)  Any assessment based on such rates shall be prima

5

facie correct, except that the rate shall not be considered

6

where a taxpayer establishes the rate is based on a sample

7

inapplicable to the taxpayer.

8

Section 732.  Reassessment.

9

Any taxpayer against whom an assessment is made may petition

10

the department for a reassessment under Article XXVII of the Tax

11

Reform Code of 1971.

12

Section 733.  (Reserved).

13

Section 734.  Review by Board of Finance and Revenue.

14

(a)  Procedure.--

15

(1)  Within 60 days after the date of mailing of notice

16

by the department of the decision on any petition for

17

reassessment filed with it, the person against whom the

18

assessment was made may, by petition, request the Board of

19

Finance and Revenue to review the decision.

20

(2)  The failure of the department to notify the

21

petitioner of a decision within the time provided by section

22

732 shall act as a denial of such petition, and a petition

23

for review may be filed with the Board of Finance and Revenue

24

within 120 days of the date prior to which the department

25

should have mailed to the petitioner its notice of decision.

26

(b)  Contents of petition for review.--Each petition for

27

review filed under this section shall state specifically the

28

reasons on which the petitioner relies, or shall incorporate by

29

reference the petition for reassessment in which the reasons are

30

stated. The petition shall be supported by affidavit that it is

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1

not made for the purpose of delay and that the facts set forth

2

in the petition are true.

3

(c)  Action by board.--

4

(1)  The Board of Finance and Revenue shall act finally

5

in disposing of petitions filed with it within six months

6

after they have been received.

7

(2)  In the event of the failure of the board to dispose

8

of any petition within six months, the action taken by the

9

department, upon the petition for reassessment, shall be

10

sustained.

11

(3)  The Board of Finance and Revenue may sustain the

12

action taken by the department on the petition for

13

reassessment, or it may reassess the tax due on such basis as

14

it deems according to law.

15

(4)  The board shall give notice of its action to the

16

department and to the petitioner.

17

Section 735.  (Reserved).

18

Section 736.  Burden of proof.

19

In all cases of petitions for reassessment, review or appeal,

20

the burden of proof shall be on the petitioner or appellant, as

21

applicable.

22

Section 737.  Collection of tax.

23

(a)  General rule.--The department shall collect the tax in

24

the manner provided by law for the collection of taxes imposed

25

by the laws of this Commonwealth.

26

(b)  Collection by persons maintaining a place of business in

27

the Commonwealth.--

28

(1)  Every person maintaining a place of business in this

29

Commonwealth and selling or leasing tangible personal

30

property or services, the sale or use of which is subject to

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1

tax shall collect the tax from the purchaser or lessee at the

2

time of making the sale or lease, and shall remit the tax to

3

the department, unless the collection and remittance is

4

otherwise provided for in this chapter.

5

(2)  (i)  Every person not otherwise required to collect

6

tax that delivers tangible personal property to a

7

location within this Commonwealth and that unpacks,

8

positions, places or assembles the tangible personal

9

property shall collect the tax from the purchaser at the

10

time of delivery and shall remit the tax to the

11

department if the person delivering the tangible personal

12

property is responsible for collecting any portion of the

13

purchase price of the tangible personal property

14

delivered and the purchaser has not provided the person

15

with proof that the tax imposed by this chapter has been

16

or will be collected by the seller or that the purchaser

17

provided the seller with a valid exemption certificate.

18

(ii)  Every person required to collect tax under this

19

paragraph shall be deemed to be selling or leasing

20

tangible personal property or services, the sale or use

21

of which is subject to the tax imposed under section 702.

22

(3)  Any person required under this chapter to collect

23

tax from another person, who shall fail to collect the proper

24

amount of the tax, shall be liable for the full amount of the

25

tax which the person should have collected.

26

(c)  Certificate for tax-exempt sales or leases.--

27

(1)  If the tax does not apply to the sale or lease of

28

tangible personal property or services, the purchaser or

29

lessee shall furnish to the vendor a certificate indicating

30

that the sale is not legally subject to the tax. The

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1

certificate shall be in substantially such form as the

2

department may, by regulation, prescribe.

3

(2)  Where the tangible personal property or service is

4

of a type which is never subject to the tax imposed or where

5

the sale or lease is in interstate commerce, the certificate

6

need not be furnished.

7

(3)  Where a series of transactions are not subject to

8

tax, a purchaser or user may furnish the vendor with a single

9

exemption certificate in substantially such form and valid

10

for such period of time as the department may, by regulation,

11

prescribe.

12

(4)  The department shall provide all school districts

13

and intermediate units with a permanent tax exemption number.

14

(5)  An exemption certificate, which is complete and

15

regular and on its face discloses a valid basis of exemption

16

if taken in good faith, shall relieve the vendor from the

17

liability imposed by this section.

18

(6)  An exemption certificate:

19

(i)  accepted by a vendor from a natural person

20

domiciled within this Commonwealth or any association,

21

fiduciary, partnership, corporation or other entity,

22

either authorized to do business within this Commonwealth

23

or having an established place of business within this

24

Commonwealth, in the ordinary course of the vendor's

25

business;

26

(ii)  which on its face discloses a valid basis of

27

exemption consistent with the activity of the purchaser

28

and character of the property or service being purchased

29

or which is provided to the vendor by a charitable,

30

religious, educational or volunteer firefighters'

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1

organization;

2

(iii)  contains the organization's charitable

3

exemption number; and

4

(iv)  which, in the case of any purchase costing $200

5

or more, is accompanied by a sworn declaration on a form

6

to be provided by the department of an intended usage of

7

the property or service which would render it nontaxable,

8

shall be presumed to be taken in good faith and the burden of

9

proving otherwise shall be on the department.

10

(d)  Waivers.--

11

(1)  The department may authorize a purchaser or lessee

12

who acquires tangible personal property or services under

13

circumstances which make it impossible at the time of

14

acquisition to determine the manner in which the tangible

15

personal property or service will be used, to pay the tax

16

directly to the department, and waive the collection of the

17

tax by the vendor.

18

(2)  No such authority shall be granted or exercised,

19

except on application to the department, and the issuance by

20

the department, in its discretion, of a direct payment

21

permit.

22

(3)  If a direct payment permit is granted, its use shall

23

be subject to conditions specified by the department, and the

24

payment of tax on all acquisitions pursuant to the permit

25

shall be made directly to the department by the permit

26

holder.

27

Section 738.  Collection of tax on motor vehicles, trailers and

28

semitrailers.

29

(a)  General rule.--Notwithstanding the provisions of section

30

737(b)(1), tax due on the sale at retail or use of a motor

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1

vehicle, trailer or semitrailer, except mobile homes as defined

2

in 75 Pa.C.S (relating to vehicles), required by law to be

3

registered with the department under the provisions of 75

4

Pa.C.S. shall be paid by the purchaser or user directly to the

5

department on application to the department for an issuance of a

6

certificate of title on the motor vehicle, trailer or

7

semitrailer.

8

(b)  No issuance of certificate of title without payment of

9

tax.--

10

(1)  The department shall not issue a certificate of

11

title until the tax has been paid, or evidence satisfactory

12

to the department has been given to establish that tax is not

13

due.

14

(2)  The department may cancel or suspend any record of

15

certificate of title or registration of a motor vehicle,

16

trailer or semitrailer when the check received in payment of

17

the tax on the vehicle is not paid on demand.

18

(c)  First encumbrance.--The tax shall be considered as a

19

first encumbrance against the vehicle and the vehicle may not be

20

transferred without first payment in full of the tax and any

21

interest additions or penalties which shall accrue in accordance

22

with this chapter.

23

Section 739.  Precollection of tax.

24

(a)  Authorization.--

25

(1)  Except as otherwise provided under paragraph (2),

26

the department may, by regulation, authorize or require

27

particular categories of vendors selling tangible personal

28

property for resale to precollect from the purchaser the tax

29

which the purchaser will collect on making a sale at retail

30

of the tangible personal property.

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1

(2)  The department, pursuant to this section, may not

2

require a vendor to precollect tax from a purchaser who

3

purchases for resale more than $1,000 worth of tangible

4

personal property from the vendor per year.

5

(b)  No license required.--In any case in which a vendor has

6

been authorized to prepay the tax to the person from whom the

7

vendor purchased the tangible personal property for resale, the

8

vendor authorized to prepay the tax may, under the regulations

9

of the department, be relieved from the duty to secure a license

10

if the duty arises only by reason of the vendor's sale of the

11

tangible personal property with respect to which the vendor is,

12

under authorization of the department, to prepay the tax.

13

(c)  Reimbursement.--

14

(1)  The vendor, on making a sale at retail of tangible

15

personal property with respect to which the vendor has

16

prepaid the tax, must separately state at the time of resale

17

the proper amount of tax on the transaction, and reimburse

18

itself on account of the taxes which the vendor has

19

previously prepaid.

20

(2)  If the vendor collects a greater amount of tax in

21

any reporting period than the vendor previously prepaid on

22

purchase of the goods with respect to which the vendor

23

prepaid the tax, the vendor must file a return and remit the

24

balance to the Commonwealth at the time at which a return

25

would otherwise be due with respect to the sales.

26

Section 740.  Bulk and auction sales.

27

A person who sells or causes to be sold at auction, or who

28

sells or transfers in bulk, 51% or more of any stock, of goods,

29

wares or merchandise of any kind, fixtures, machinery,

30

equipment, buildings or real estate, involved in a business for

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1

which the person is licensed or required to be licensed under

2

this chapter, or is liable for filing use tax returns in

3

accordance with this chapter, shall be subject to the provisions

4

of section 1403 of The Fiscal Code.

5

Section 741.  Collection on failure to request reassessment,

6

review or appeal.

7

(a)  General rule.--The department may collect any tax:

8

(1)  If an assessment of tax is not paid within ten days

9

or 30 days, as the case may be, after notice of the

10

assessment to the taxpayer and no petition for reassessment

11

has been filed.

12

(2)  Within 60 days from the date of reassessment, if no

13

petition for review has been filed.

14

(3)  Within 30 days from the date of the decision of the

15

Board of Finance and Revenue on a petition for review, or of

16

the expiration of the board's time for acting on the

17

petition, if no appeal has been made.

18

(4)  In all cases of judicial sales, receiverships,

19

assignments or bankruptcies.

20

(b)  Limitation on defenses.--

21

(1)  Subject to the provisions of paragraph (2), in any

22

such case in a proceeding for the collection of the taxes,

23

the person against whom the taxes were assessed shall not be

24

permitted to set up any ground of defense that might have

25

been determined by the department, the Board of Finance and

26

Revenue or the courts.

27

(2)  The defense of failure of the department to mail

28

notice of assessment or reassessment to the taxpayer and the

29

defense of payment of assessment or reassessment may be

30

raised in proceedings for collection by a motion to stay the

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1

proceedings.

2

Section 742.  Lien for taxes.

3

(a)  Nature and effect of lien.--

4

(1)  If any person liable to pay any tax neglects or

5

refuses to pay the same after demand, the amount, including

6

any interest, addition or penalty, together with any costs

7

that may accrue in addition, shall be a lien in favor of the

8

Commonwealth on the property, both real and personal, of the

9

person but only after same has been entered and docketed of

10

record by the prothonotary of the county where the property

11

is situated.

12

(2)  The department may, at any time, transmit to the

13

prothonotaries of the respective counties certified copies of

14

all liens for taxes imposed by this chapter or the Tax Reform

15

Code of 1971 and penalties and interest.

16

(3)  Each prothonotary receiving the lien shall enter and

17

docket the lien of record in the prothonotary's office, which

18

lien shall be indexed as judgments are now indexed.

19

(4)  No prothonotary shall require, as a condition

20

precedent to the entry of the liens, the payment of the costs

21

incident thereto.

22

(b)  Priority status.--

23

(1)  The lien imposed under this section shall have

24

priority from the date of its recording, and shall be fully

25

paid and satisfied out of the proceeds of any judicial sale

26

of property before any other obligation, judgment, claim,

27

lien or estate to which the property may subsequently become

28

subject, except costs of the sale and of the writ on which

29

the sale was made, and real estate taxes and municipal claims

30

against such property, but shall be subordinate to mortgages

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1

and other liens existing and duly recorded or entered of

2

record prior to the recording of the tax lien.

3

(2)  In the case of a judicial sale of property, subject

4

to a lien imposed under this section, on a lien or claim over

5

which the lien imposed under this section has priority, the

6

sale shall discharge the lien imposed under this section to

7

the extent only that the proceeds are applied to its payment,

8

and the lien shall continue in full force and effect as to

9

the balance remaining unpaid.

10

(3)  There shall be no inquisition or condemnation upon

11

any judicial sale of real estate made by the Commonwealth

12

pursuant to the provisions of this section.

13

(4)  (i)  The lien of the taxes, interest and penalties,

14

shall continue for five years from the date of entry, and

15

may be revived and continued in the manner now or

16

hereafter provided for renewal of judgments, or as may be

17

provided in The Fiscal Code, and a writ of execution may

18

directly issue upon the lien without the issuance and

19

prosecution to judgment of a writ of scire facias.

20

(ii)  Not less than ten days before issuance of any

21

execution on the lien, notice of the filing and the

22

effect of the lien shall be sent by registered mail to

23

the taxpayer at the taxpayer's last known post office

24

address.

25

(iii)  The lien shall have no effect on any stock of

26

goods, wares or merchandise regularly sold or leased in

27

the ordinary course of business by the person against

28

whom the lien has been entered, unless and until a writ

29

of execution has been issued and a levy made on the stock

30

of goods, wares and merchandise.

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1

(c)  Penalty.--Any willful failure of any prothonotary to

2

carry out any duty imposed on the prothonotary under this

3

section shall be a misdemeanor, and, upon conviction, the

4

prothonotary shall be sentenced to pay a fine not more than

5

$1,000 and costs of prosecution or to a term of imprisonment not

6

exceeding one year, or both.

7

(d)  Priority payment from distribution.--

8

(1)  Except as otherwise provided under the law, in the

9

distribution, voluntary or compulsory, in receivership,

10

bankruptcy or otherwise, of the property or estate of any

11

person, all taxes imposed by this chapter which are due and

12

unpaid and are not collectible under s