PRINTER'S NO.  395

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

SENATE BILL

 

No.

405

Session of

2011

  

  

INTRODUCED BY BROWNE, FOLMER, ORIE, ALLOWAY, M. WHITE, FONTANA, LEACH AND YUDICHAK, FEBRUARY 4, 2011

  

  

REFERRED TO FINANCE, FEBRUARY 4, 2011  

  

  

  

AN ACT

  

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Amending the act of December 31, 1965 (P.L.1257, No.511),

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entitled "An act empowering cities of the second class,

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cities of the second class A, cities of the third class,

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boroughs, towns, townships of the first class, townships of

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the second class, school districts of the second class,

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school districts of the third class and school districts of

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the fourth class including independent school districts, to

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levy, assess, collect or to provide for the levying,

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assessment and collection of certain taxes subject to maximum

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limitations for general revenue purposes; authorizing the

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establishment of bureaus and the appointment and compensation

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of officers, agencies and employes to assess and collect such

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taxes; providing for joint collection of certain taxes,

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prescribing certain definitions and other provisions for

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taxes levied and assessed upon earned income, providing for

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annual audits and for collection of delinquent taxes, and

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permitting and requiring penalties to be imposed and

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enforced, including penalties for disclosure of confidential

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information, providing an appeal from the ordinance or

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resolution levying such taxes to the court of quarter

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sessions and to the Supreme Court and Superior Court,"

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further providing for delegation of taxing powers and

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restrictions.

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The General Assembly of the Commonwealth of Pennsylvania

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hereby enacts as follows:

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Section 1.  Section 301.1(f)(12) of the act of December 31,

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1965 (P.L.1257, No.511), known as The Local Tax Enabling Act,

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amended October 15, 2008 (P.L.1615, No.130), is amended to read:

 


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Section 301.1.  Delegation of Taxing Powers and Restrictions

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Thereon.--* * *

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(f)  Such local authorities shall not have authority by

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virtue of this act:

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* * *

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(12)  To levy, assess and collect a mercantile or business

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privilege tax on gross receipts or part thereof which are: (i)

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discounts allowed to purchasers as cash discounts for prompt

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payment of their bills; (ii) charges advanced by a seller for

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freight, delivery or other transportation for the purchaser in

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accordance with the terms of a contract of sale; (iii) received

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upon the sale of an article of personal property which was

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acquired by the seller as a trade-in to the extent that the

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gross receipts in the sale of the article taken in trade does

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not exceed the amount of trade-in allowance made in acquiring

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such article; (iv) refunds, credits or allowances given to a

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purchaser on account of defects in goods sold or merchandise

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returned; (v) Pennsylvania sales tax; (vi) based on the value of

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exchanges or transfers between one seller and another seller who

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transfers property with the understanding that property of an

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identical description will be returned at a subsequent date;

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however, when sellers engaged in similar lines of business

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exchange property and one of them makes payment to the other in

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addition to the property exchanged, the additional payment

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received may be included in the gross receipts of the seller

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receiving such additional cash payments; (vii) of sellers from

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sales to other sellers in the same line where the seller

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transfers the title or possession at the same price for which

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the seller acquired the merchandise; or (viii) transfers between

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one department, branch or division of a corporation or other

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business entity of goods, wares and merchandise to another

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department, branch or division of the same corporation or

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business entity and which are recorded on the books to reflect

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such interdepartmental transactions. A mercantile or business

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privilege tax on gross receipts or on the privilege of doing

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business within or from a location within a local taxing

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jurisdiction may be imposed by a local taxing jurisdiction only

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if the privilege of doing business is exercised through a base

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of operations in the local taxing jurisdiction. In the case of a

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tax on the privilege of doing business within or from a location

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within a local taxing jurisdiction, no tax shall be imposed on

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gross receipts from activities which are also subject to a tax

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imposed by another local taxing jurisdiction on the privilege of

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doing business or on business receipts within that other

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jurisdiction. The taxpayer may exclude the gross receipts that

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are taxed or taxable in the other local jurisdiction. For

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purposes of this section, the term "base of operations" shall

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mean an actual, physical and permanent place of business from

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which a taxpayer manages, directs and controls its business

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activities at that location and shall not include a structure

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which is utilized in a municipality for the purpose of

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overseeing construction for the duration of the construction

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project.

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* * *

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Section 2.  The amendment of section 301.1(f)(12) of the act

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is intended as a clarification of existing law and is not

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intended to establish new rights or enlarge existing rights of

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local taxing jurisdictions or establish new obligations or

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enlarge existing obligations of taxpayers.

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Section 4.  This act shall take effect immediately.

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