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PRINTER'S NO. 1062
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
76
Session of
2015
INTRODUCED BY ARGALL, FOLMER, SCHWANK, YUDICHAK, SCAVELLO,
WAGNER, BOSCOLA, DINNIMAN, MENSCH, STEFANO, BREWSTER,
WOZNIAK, FONTANA, BARTOLOTTA, BAKER, WARD, ALLOWAY, RAFFERTY,
AUMENT, SMUCKER, BROWNE, EICHELBERGER AND McGARRIGLE,
JUNE 18, 2015
REFERRED TO FINANCE, JUNE 18, 2015
AN ACT
Providing for tax levies and information related to taxes;
authorizing the imposition of a personal income tax or an
earned income tax by a school district subject to voter
approval; providing for imposition of and exclusions from a
sales and use tax for the stabilization of education funding,
for increase to the personal income tax, for certain
licenses, for hotel occupancy tax, for procedure and
administration of the tax, for expiration of authority to
issue certain debt and for reporting by local government
units of debt outstanding; establishing the Education
Stabilization Fund; providing for disbursements from this
fund; and repealing certain provisions of the Public School
Code of 1949 and sales and use tax provisions of the Tax
Reform Code of 1971.
TABLE OF CONTENTS
Chapter 1. Preliminary Provisions
Section 101. Short title.
Section 102. Definitions.
Chapter 3. Taxation by School Districts
Section 301. Scope.
Section 302. Definitions.
Section 303. Limitation.
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Section 304. Preemption.
Section 305. General tax authorization.
Section 306. Referendum.
Section 307. Continuity of tax.
Section 308. Collections.
Section 309. Credits.
Section 310. Exemption and special provisions.
Section 311. Regulations.
Chapter 4. Education Tax
Section 401. Education tax.
Chapter 7. Sales and Use Tax for the Stabilization of Education
Funding
Subchapter A. Preliminary Provisions
Section 701. Scope.
Section 701.1. Definitions.
Subchapter B. Sales and Use Tax
Section 702. Imposition of tax.
Section 703. Computation of tax.
Subchapter C. Exclusions from Sales and Use Tax
Section 704. Exclusions from tax.
Section 705. Alternate imposition of tax.
Section 706. Credit against tax.
Subchapter D. Licenses
Section 708. Licenses.
Subchapter E. Hotel Occupancy Tax
Section 709. Definitions.
Section 710. Imposition of tax.
Section 711. Seasonal tax returns.
Subchapter F. Procedure and Administration
Section 715. Persons required to make returns.
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Section 716. Form of returns.
Section 717. Time for filing returns.
Section 718. Extension of time for filing returns.
Section 719. Place for filing returns.
Section 720. Timely mailing treated as timely filing and
payment.
Section 721. Payment of tax.
Section 722. Time of payment.
Section 723. Other times for payment.
Section 724. Place for payment.
Section 725. Tax held in trust for Commonwealth.
Section 726. (Reserved).
Section 727. Discount.
Section 728. (Reserved).
Section 729. (Reserved).
Section 730. Assessment.
Section 731. Mode and time of assessment.
Section 732. Reassessment.
Section 733. Assessment to recover erroneous refunds.
Section 734. (Reserved).
Section 735. (Reserved).
Section 736. Burden of proof.
Section 737. Collection of tax.
Section 738. Collection of tax on motor vehicles, trailers and
semitrailers.
Section 739. Precollection of tax.
Section 740. Bulk and auction sales.
Section 741. (Reserved).
Section 742. Lien for taxes.
Section 743. Suit for taxes.
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Section 744. Tax suit comity.
Section 745. Service.
Section 746. Collection and payment of tax on credit sales.
Section 747. Prepayment of tax.
Section 747.1. Refund of sales tax attributed to bad debt.
Section 748. Registration of transient vendors.
Section 748.1. Bond.
Section 748.2. Notification to department.
Section 748.3. Seizure of property.
Section 748.4. Fines.
Section 748.5. Transient vendors subject to chapter.
Section 748.6. Promoters.
Section 749. (Reserved).
Section 750. (Reserved).
Section 751. (Reserved).
Section 752. Refunds.
Section 753. Refund petition.
Section 754. (Reserved).
Section 755. (Reserved).
Section 756. Extended time for filing special petition for
refund.
Section 757. (Reserved).
Section 758. Limitation on assessment and collection.
Section 759. Failure to file return.
Section 760. False or fraudulent return.
Section 761. Extension of limitation period.
Section 762. (Reserved).
Section 763. (Reserved).
Section 764. (Reserved).
Section 765. (Reserved).
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Section 766. Additions to tax.
Section 767. Penalties.
Section 768. Criminal offenses.
Section 769. Abatement of additions or penalties.
Section 770. Rules and regulations.
Section 771. Keeping of records.
Section 771.1. Reports and records of promoters.
Section 772. Examinations.
Section 773. Records and examinations of delivery agents.
Section 774. Unauthorized disclosure.
Section 775. Cooperation with other governments.
Section 776. Interstate compacts.
Section 777. Bonds.
Subchapter G. Funding Provisions
Section 780. (Reserved).
Section 781. Appropriation for refunds.
Section 781.1. Construction.
Section 782. Transfers to Education Stabilization Fund.
Chapter 9. (Reserved)
Chapter 11. Limitations on School District Taxation
Section 1101. Authority to levy taxes and effect of future
Constitutional amendment.
Section 1102. Transitional taxes.
Section 1103. Consideration of State appropriations or
reimbursements.
Section 1104. Taxes for cities and school districts of the
first class.
Chapter 12. Indebtedness
Section 1201. (Reserved).
Section 1202. Notices and reporting by school districts of debt
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outstanding.
Chapter 13. Funding Provisions
Section 1301. Definitions.
Section 1302. Education Stabilization Fund.
Section 1303. Standard disbursements to school districts from
Education Stabilization Fund.
Chapter 15. Miscellaneous Provisions
Section 1501. Transitional provision.
Section 1502. Regulations.
Section 1503. Construction.
Section 1504. Severability.
Section 1505. Repeals.
Section 1506. Applicability.
Section 1507. Effective date.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
CHAPTER 1
PRELIMINARY PROVISIONS
Section 101. Short title.
This act shall be known and may be cited as the Property Tax
Independence Act.
Section 102. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Department." The Department of Revenue of the Commonwealth.
"Education Stabilization Fund." The Education Stabilization
Fund established in section 1302.
"Fiscal year." The fiscal year of the Commonwealth beginning
on July 1 and ending on June 30 of the immediately following
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calendar year.
"Governing body." The board of school directors of a school
district, except that the term shall mean the city council of a
city of the first class for purposes of the levy and collection
of any tax in a school district of the first class.
"Internal Revenue Code of 1986." The Internal Revenue Code
of 1986 (Public Law 99-514, 26 U.S.C. § 166).
"Local Tax Enabling Act." The act of December 31, 1965
(P.L.1257, No.511), known as The Local Tax Enabling Act,
"Public School Code of 1949." The act of March 10, 1949
(P.L.30, No.14), known as the Public School Code of 1949.
"School district." A school district of the first class,
first class A, second class, third class or fourth class,
including any independent school district. For purposes of the
levy, assessment and collection of any tax in a school district
of the first class, the term shall include the City Council.
"School per capita tax." The tax authorized pursuant to
section 679 of the act of March 10, 1949 (P.L.30, No.14), known
as the Public School Code of 1949,
"Secretary." The Secretary of Revenue of the Commonwealth.
"Tax Reform Code of 1971." The act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971.
CHAPTER 3
Taxation by School Districts
Section 301. Scope.
This chapter authorizes school districts to levy, assess and
collect a tax on personal income or a tax on earned income and
net profits as a means of abolishing property taxation by the
school district.
Section 302. Definitions.
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The words and phrases used in this chapter shall have the
same meanings given to them in the Tax Reform Code of 1971 or
The Local Tax Enabling Act unless the context clearly indicates
otherwise.
Section 303. Limitation.
Any tax imposed under this chapter shall be subject to the
limitations set forth in Chapter 11.
Section 304. Preemption.
No act of the General Assembly shall vacate or preempt any
resolution passed or adopted under the authority of this
chapter, or any other act, providing authority for the
imposition of a tax by a school district, unless the act of the
General Assembly expressly vacates or preempts the authority to
pass or adopt resolutions.
Section 305. General tax authorization.
(a) General rule.--A board of school directors may, by
resolution, levy, assess and collect or provide for the levying,
assessment and collection of a tax on personal income or a tax
on earned income and net profits for general revenue purposes.
(b) Personal income tax.--
(1) A board of school directors may levy, assess and
collect a tax on the personal income of resident individuals
at a rate determined by the board of school directors.
(2) A school district which seeks to levy the tax
authorized under paragraph (1) must comply with section 306.
(3) If a board of school directors seeks to impose a
personal income tax under this subsection and the referendum
under section 306 is approved by the electorate, the board of
school directors shall have no authority to impose an earned
income and net profits tax under subsection (c) or any other
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act.
(4) A personal income tax imposed under the authority of
this section shall be levied by the school district on each
of the classes of income specified in section 303 of the Tax
Reform Code of 1971 and regulations under that section,
provisions of which are incorporated by reference into this
chapter.
(i) Notwithstanding the provisions of section 353(f)
of the Tax Reform Code of 1971, the Department of Revenue
may permit the proper officer or an authorized agent of a
school district imposing a personal income tax pursuant
to this chapter to inspect the tax returns of any
taxpayer of the school district or may furnish to the
officer or an authorized agent an abstract of the return
of income of any current or former resident of the school
district or supply information concerning any item of
income contained in any tax return. The officer or
authorized agent of the school district imposing a tax
under this chapter shall be furnished the requested
information upon payment to the Department of Revenue of
the actual cost of providing the requested information.
(ii) (A) Except for official purposes or as
provided by law, it shall be unlawful for any officer
or authorized agent of a school district to do any of
the following:
(I) Disclose to any other individual or
entity the amount or source of income, profits,
losses, expenditures or any particular
information concerning income, profits, losses or
expenditures contained in any return.
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(II) Permit any other individual or entity
to view or examine any return or copy of a return
or any book containing any abstract or
particulars.
(III) Print, publish or publicize in any
manner any return; any particular information
contained in or concerning the return; any amount
or source of income, profits, losses or
expenditures in or concerning the return; or any
particular information concerning income,
profits, losses or expenditures contained in or
relating to any return.
(B) Any officer or authorized agent of a school
district that violates clause (A):
(I) May be fined not more than $1,000 or
imprisoned for not more than one year, or both.
(II) May be removed from office or
discharged from employment.
(c) Earned income and net profits tax.--
(1) A board of school directors may levy, assess and
collect a tax on earned income and net profits of resident
individuals at a rate determined by the board of school
directors.
(2) A school district which seeks to levy the tax
authorized under paragraph (1) must comply with section 306.
(3) If a board of school directors seeks to impose a tax
on earned income and net profits under this subsection and
the referendum under section 306 is approved by the
electorate, the board of school directors shall have no
authority to impose a personal income tax under subsection
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(b) or any other act.
Section 306. Referendum.
(a) General rule.--In order to levy a personal income tax or
an earned income and net profits tax under this chapter, a
governing body shall use the procedures set forth in subsections
(b), (c), (d), (e), (f) and (g).
(b) Approved by electorate.--
(1) Subject to notice and public hearing requirements of
subsection (g), a governing body may levy the personal income
tax or earned income and net profits tax under this chapter
only by obtaining the approval of the electorate of the
affected school district in a public referendum at only the
primary election preceding the fiscal year when the personal
income tax or earned income and net profits tax will be
initially imposed or the rate increased.
(2) The referendum question must state the initial rate
of the proposed personal income tax or earned income and net
profits tax, the purpose of the tax, the duration of the tax
and the amount of revenue to be generated by the
implementation of the tax.
(3) The question shall be in clear language that is
readily understandable by a layperson. For the purpose of
illustration, a referendum question may be framed as follows:
Do you favor paying a personal income tax of X% for
the purpose of X, for X years, which will generate
$X?
Do you favor paying an earned income and net profits
tax of X% for the purpose of X, for X years, which
will generate $X?
(4) A nonlegal interpretative statement must accompany
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the question in accordance with section 201.1 of the act of
June 3, 1937 (P.L.1333, No.320), known as the Pennsylvania
Election Code, that includes the following:
(i) the initial rate of the personal income or
earned income and net profits tax imposed under this
chapter; and
(ii) the estimated revenues to be derived from the
initial rate imposed under this chapter.
(c) School district located in more than one county.--In the
event a school district is located in more than one county,
petitions under this section shall be filed with the election
officials of the county in which the administrative offices of
the school district are located.
(d) Review and certification.--The election officials who
receive a petition shall perform all administrative functions in
reviewing and certifying the validity of the petition and
conduct all necessary communications with the school district.
(e) Notification.--
(1) If the election officials of the county who receive
the petition certify that it is sufficient under this section
and determine that a question should be placed on the ballot,
the decision shall be communicated to election officials in
any other county in which the school district is also
located.
(2) Election officials in the other county or counties
shall cooperate with election officials of the county that
receives the petition to ensure that an identical question is
placed on the ballot at the same election throughout the
entire school district.
(f) Certification of results.--Election officials from each
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county involved shall independently certify the results from
their county to the governing body.
(g) Adoption of resolution.--
(1) In order to levy the tax under this section, the
governing body shall adopt a resolution which shall refer to
this chapter prior to placing a question on the ballot.
(2) Prior to adopting a resolution imposing the tax
authorized by this section, the governing body shall give
public notice of its intent to adopt the resolution in the
manner provided by The Local Tax Enabling Act and shall
conduct at least two public hearings regarding the proposed
adoption of the resolution. One public hearing shall be
conducted during normal business hours and one public hearing
shall be conducted during evening hours or on a weekend.
Section 307. Continuity of tax.
Every tax levied under this chapter shall continue in force
on a fiscal year basis without annual reenactment unless the
rate of the tax is subsequently changed or the duration placed
on the referendum has expired.
Section 308. Collections.
Any income tax imposed under this chapter shall be subject to
the provisions for collection and delinquency found in The Local
Tax Enabling Act.
Section 309. Credits.
(a) Credit.--Except as set forth in subsection (b), the
provisions of The Local Tax Enabling Act shall be applied by a
board of school directors to determine any credits applicable to
a tax imposed under this chapter.
(b) Limitation.--Payment of any tax on income to any state
other than Pennsylvania or to any political subdivision located
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outside the boundaries of this Commonwealth by a resident of a
school district located in this Commonwealth shall not be
credited to and allowed as a deduction from the liability of
such person for any income tax imposed by the school district of
residence pursuant to this chapter.
Section 310. Exemption and special provisions.
(a) Earned income and net profits tax.--A school district
that imposes an earned income and net profits tax authorized
under section 305(c) may exempt from the payment of that tax any
person whose total income from all sources is less than $12,000.
(b) Applicability to personal income tax.--Section 304 of
the Tax Reform Code of 1971 shall apply to any personal income
tax levied by a school district under section 305(b).
Section 311. Regulations.
A school district that imposes:
(1) an earned income and net profits tax authorized
under section 305(c) shall be subject to the provisions of
The Local Tax Enabling Act and may adopt procedures for the
processing of claims for credits and exemptions under section
309 and 310; or
(2) a personal income tax under section 305(b) shall be
subject to all regulations adopted by the Department of
Revenue in administering the tax due to the Commonwealth
under Article III of the Tax Reform Code of 1971.
CHAPTER 4
EDUCATION TAX
Section 401. Education tax.
(a) General rule.--In addition to the tax collected under
section 302 of the Tax Reform Code of 1971, the Commonwealth
shall impose and administer the tax set forth in subsection (b)
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in the same manner as the tax under Article III of the Tax
Reform Code of 1971.
(b) Imposition of tax.--
(1) Every resident individual, estate or trust shall be
subject to, and shall pay for the privilege of receiving each
of the classes of income enumerated in section 303 of the Tax
Reform Code of 1971, a tax upon each dollar of income
received by that resident during that resident's taxable year
at the rate of 1.27%.
(2) Every nonresident individual, estate or trust shall
be subject to, and shall pay for the privilege of receiving
each of the classes of income enumerated in section 303 of
the Tax Reform Code of 1971 from sources within this
Commonwealth, a tax upon each dollar of income received by
that nonresident during that nonresident's taxable year at
the rate of 1.27%.
(c) Deposit in Education Stabilization Fund.--
(1) All moneys collected under this section shall be
deposited in the Education Stabilization Fund.
(2) So much of the proceeds of the tax imposed by this
chapter as shall be necessary for the payment of refunds,
enforcement or administration under this chapter is hereby
appropriated to the department for such purposes.
(d) Combination of tax forms.--The department shall
incorporate the taxpayer reporting requirement for the
implementation of this section into the forms utilized by the
department under Article III of the Tax Reform Code of 1971.
(e) Definitions.--The words and phrases used in this section
shall have the same meaning given to them in Article III of the
Tax Reform Code of 1971.
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CHAPTER 7
SALES AND USE TAX FOR THE
STABILIZATION OF EDUCATION FUNDING
SUBCHAPTER A
PRELIMINARY PROVISIONS
Section 701. Scope.
The tax provided for under this chapter shall be known as the
Sales and Use Tax for the Stabilization of Education Funding,
which shall be a replacement for the sales and use tax
authorized under Article II of the Tax Reform Code of 1971 and
that is repealed by this act.
Section 701.1. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
(a) "Soft drinks."
(1) All nonalcoholic beverages, whether carbonated or
not, such as soda water, ginger ale, Coca Cola, lime cola,
Pepsi Cola, Dr Pepper, fruit juice when plain or carbonated
water, flavoring or syrup is added, carbonated water,
orangeade, lemonade, root beer or any and all preparations,
commonly referred to as soft drinks, of whatsoever kind, and
are further described as including any and all beverages,
commonly referred to as soft drinks, which are made with or
without the use of any syrup.
(2) The term does not include natural fruit or vegetable
juices or their concentrates, or noncarbonated fruit juice
drinks containing not less than 25% by volume of natural
fruit juices or of fruit juice which has been reconstituted
to its original state, or natural concentrated fruit or
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vegetable juices reconstituted to their original state,
whether any of the natural juices are frozen or unfrozen,
sweetened or unsweetened, seasoned with salt or spice or
unseasoned. The term also does not include coffee, coffee
substitutes, tea, cocoa, natural fluid milk or noncarbonated
drinks made from milk derivatives.
(b) "Maintaining a place of business in this Commonwealth."
(1) Having, maintaining or using within this
Commonwealth, either directly or through a subsidiary,
representative or an agent, an office, distribution house,
sales house, warehouse, service enterprise or other place of
business; or any agent of general or restricted authority, or
representative, irrespective of whether the place of
business, representative or agent is located in this
Commonwealth, permanently or temporarily, or whether the
person or subsidiary maintaining the place of business,
representative or agent is authorized to do business within
this Commonwealth.
(1.1) Providing taxable services.
(2) Engaging in any activity as a business within this
Commonwealth by any person, either directly or through a
subsidiary, representative or an agent, in connection with
the lease, sale or delivery of tangible personal property or
the performance of services thereon for use, storage or
consumption or in connection with the sale or delivery for
use of the services described in subclauses (11) through (18)
of clause (k) of this section, including, but not limited to,
having, maintaining or using any office, distribution house,
sales house, warehouse or other place of business, any stock
of goods or any solicitor, canvasser, salesman,
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representative or agent under its authority, at its direction
or with its permission, regardless of whether the person or
subsidiary is authorized to do business in this Commonwealth.
(3) Regularly or substantially soliciting orders within
this Commonwealth in connection with the lease, sale or
delivery of tangible personal property to or the performance
thereon of services or in connection with the sale or
delivery of the services described in subclauses (11) through
(18) of clause (k) of this section for residents of this
Commonwealth by means of catalogs or other advertising,
whether the orders are accepted within or without this
Commonwealth.
(3.1) Entering this Commonwealth by any person to
provide assembly, service or repair of tangible personal
property, either directly or through a subsidiary,
representative or an agent.
(3.2) Delivering tangible personal property to locations
within this Commonwealth if the delivery includes the
unpacking, positioning, placing or assembling of the tangible
personal property.
(3.3) Having any contact within this Commonwealth which
would allow the Commonwealth to require a person to collect
and remit tax under the Constitution of the United States.
(3.4) Providing a customer's mobile telecommunications
service deemed to be provided by the customer's home service
provider under the Mobile Telecommunications Sourcing Act (4
U.S.C. § 116). For purposes of this clause, words and phrases
used in this clause shall have the meanings given to them in
the Mobile Telecommunications Sourcing Act.
(4) The term does not include:
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(i) Owning or leasing of tangible or intangible
property by a person who has contracted with an
unaffiliated commercial printer for printing, provided
that:
(A) the property is for use by the commercial
printer; and
(B) the property is located at the Pennsylvania
premises of the commercial printer.
(ii) Visits by a person's employees or agents to the
premises in this Commonwealth of an unaffiliated
commercial printer with whom the person has contracted
for printing in connection with said contract.
(c) "Manufacture." The performance of manufacturing,
fabricating, compounding, processing or other operations,
engaged in as a business, which place any tangible personal
property in a form, composition or character different from that
in which it is acquired whether for sale or use by the
manufacturer, and shall include, but not be limited to:
(1) Every operation commencing with the first production
stage and ending with the completion of tangible personal
property having the physical qualities, including packaging,
if any, passing to the ultimate consumer, which it has when
transferred by the manufacturer to another. For purposes of
this definition, "operation" includes clean rooms and their
component systems, including: environmental control systems,
antistatic vertical walls and manufacturing platforms and
floors which are independent of the real estate; process
piping systems; specialized lighting systems; deionized water
systems; process vacuum and compressed air systems; process
and specialty gases; and alarm or warning devices
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specifically designed to warn of threats to the integrity of
the product or people. For purposes of this definition, a
"clean room" is a location with a self-contained, sealed
environment with a controlled, closed air system independent
from the facility's general environmental control system.
(2) The publishing of books, newspapers, magazines and
other periodicals and printing.
(3) Refining, blasting, exploring, mining and quarrying
for, or otherwise extracting from the earth or from waste or
stock piles or from pits or banks any natural resources,
minerals and mineral aggregates including blast furnace slag.
(4) Building, rebuilding, repairing and making additions
to, or replacements in or upon vessels designed for
commercial use of registered tonnage of 50 tons or more when
produced on special order of the purchaser, or when rebuilt,
repaired or enlarged, or when replacements are made upon
order of or for the account of the owner.
(5) Research having as its objective the production of a
new or an improved:
(i) product or utility service; or
(ii) method of producing a product or utility
service,
but in either case not including market research or research
having as its objective the improvement of administrative
efficiency.
(6) Remanufacture for wholesale distribution by a
remanufacturer of motor vehicle parts from used parts
acquired in bulk by the remanufacturer using an assembly line
process which involves the complete disassembly of such parts
and integration of the components of such parts with other
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used or new components of parts, including the salvaging,
recycling or reclaiming of used parts by the remanufacturer.
(7) Remanufacture or retrofit by a manufacturer or
remanufacturer of aircraft, armored vehicles, other defense-
related vehicles having a finished value of at least $50,000.
Remanufacture or retrofit involves the disassembly of such
aircraft, vehicles, parts or components, including electric
or electronic components, the integration of those parts and
components with other used or new parts or components,
including the salvaging, recycling or reclaiming of the used
parts or components and the assembly of the new or used
aircraft, vehicles, parts or components. For purposes of this
clause, the following terms or phrases have the following
meanings:
(i) "aircraft" means fixed-wing aircraft,
helicopters, powered aircraft, tilt-rotor or tilt-wing
aircraft, unmanned aircraft and gliders;
(ii) "armored vehicles" means tanks, armed personnel
carriers and all other armed track or semitrack vehicles;
and
(iii) "other defense-related vehicles" means trucks,
truck-tractors, trailers, jeeps and other utility
vehicles, including any unmanned vehicles.
(8) Remanufacture by a remanufacturer of locomotive
parts from used parts acquired in bulk by the remanufacturer
using an assembly line process which involves the complete
disassembly of such parts and integration of the components
of such parts with other used or new components of parts,
including the salvaging, recycling or reclaiming of used
parts by the remanufacturer.
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The term does not include constructing, altering, servicing,
repairing or improving real estate or repairing, servicing or
installing tangible personal property, nor the producing of a
commercial motion picture, nor the cooking, freezing or baking
of fruits, vegetables, mushrooms, fish, seafood, meats, poultry
or bakery products.
(c.1) "Blasting." The use of any combustible or explosive
composition in the removal of material resources, minerals and
mineral aggregates from the earth including the separation of
the dirt, waste and refuse in which they are found.
(d) "Processing." The performance of the following
activities when engaged in as a business enterprise:
(1) The filtering or heating of honey, the cooking,
baking or freezing of fruits, vegetables, mushrooms, fish,
seafood, meats, poultry or bakery products, when the person
engaged in the business packages the property in sealed
containers for wholesale distribution.
(1.1) The processing of fruits or vegetables by
cleaning, cutting, coring, peeling or chopping and treating
to preserve, sterilize or purify and substantially extend the
useful shelf life of the fruits or vegetables, when the
person engaged in the activity packages the property in
sealed containers for wholesale distribution.
(2) The scouring, carbonizing, cording, combing,
throwing, twisting or winding of natural or synthetic fibers,
or the spinning, bleaching, dyeing, printing or finishing of
yarns or fabrics, when the activities are performed prior to
sale to the ultimate consumer.
(3) The electroplating, galvanizing, enameling,
anodizing, coloring, finishing, impregnating or heat treating
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of metals or plastics for sale or in the process of
manufacturing.
(3.1) The blanking, shearing, leveling, slitting or
burning of metals for sale to or use by a manufacturer or
processor.
(4) The rolling, drawing or extruding of ferrous and
nonferrous metals.
(5) The fabrication for sale of ornamental or structural
metal or of metal stairs, staircases, gratings, fire escapes
or railings, not including fabrication work done at the
construction site.
(6) The preparation of animal feed or poultry feed for
sale.
(7) The production, processing and bottling of
nonalcoholic beverages for wholesale distribution.
(8) The operation of a saw mill or planing mill for the
production of lumber or lumber products for sale. The
operation of a saw mill or planing mill begins with the
unloading by the operator of the saw mill or planing mill of
logs, timber, pulpwood or other forms of wood material to be
used in the saw mill or planing mill.
(9) The milling for sale of flour or meal from grains.
(9.1) The aging, stripping, conditioning, crushing and
blending of tobacco leaves for use as cigar filler or as
components of smokeless tobacco products for sale to
manufacturers of tobacco products.
(10) The slaughtering and dressing of animals for meat
to be sold or to be used in preparing meat products for sale,
and the preparation of meat products including lard, tallow,
grease, cooking and inedible oils for wholesale distribution.
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(11) The processing of used lubricating oils.
(12) The broadcasting of radio and television programs
of licensed commercial or educational stations.
(13) The cooking or baking of bread, pastries, cakes,
cookies, muffins and donuts when the person engaged in the
activity sells the items at retail at locations that do not
constitute an establishment from which ready-to-eat food and
beverages are sold. For purposes of this clause, a bakery, a
pastry shop and a donut shop shall not be considered an
establishment from which ready-to-eat food and beverages are
sold.
(14) The cleaning and roasting and the blending,
grinding or packaging for sale of coffee from green coffee
beans or the production of coffee extract.
(15) The preparation of dry or liquid fertilizer for
sale.
(16) The production, processing and packaging of ice for
wholesale distribution.
(17) The producing of mobile telecommunications
services.
(18) The collection, washing, sorting, inspecting and
packaging of eggs.
(e) "Person." Any natural person, association, fiduciary,
partnership, corporation or other entity, including the
Commonwealth of Pennsylvania, its political subdivisions and
instrumentalities and public authorities. Whenever used in
prescribing and imposing a penalty or imposing a fine or
imprisonment, or both, the term as applied to an association,
includes the members of the association and, as applied to a
corporation, the officers of the corporation.
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(f) "Purchase at retail."
(1) The acquisition for a consideration of the
ownership, custody or possession of tangible personal
property other than for resale by the person acquiring the
same when the acquisition is made for the purpose of
consumption or use, whether the acquisition is absolute or
conditional, and by any means it is effected.
(2) The acquisition of a license to use or consume, and
the rental or lease of tangible personal property, other than
for resale regardless of the period of time the lessee has
possession or custody of the property.
(3) The obtaining for a consideration of those services
described in subclauses (2), (3) and (4) of clause (k) of
this section other than for resale.
(4) A retention after March 7, 1956, of possession,
custody or a license to use or consume pursuant to a rental
contract or other lease arrangement (other than as security)
other than for resale.
(5) The obtaining for a consideration of those services
described in subclauses (11) through (18) of clause (k) of
this section.
The term, with respect to liquor and malt or brewed beverages,
includes the purchase of liquor from any Pennsylvania Liquor
Store by any person for any purpose, and the purchase of malt or
brewed beverages from a manufacturer of malt or brewed
beverages, distributor or importing distributor by any person
for any purpose, except purchases from a manufacturer of malt or
brewed beverages by a distributor or importing distributor or
purchases from an importing distributor by a distributor within
the meaning of the Liquor Code. The term does not include any
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purchase of malt or brewed beverages from a retail dispenser or
any purchase of liquor or malt or brewed beverages from a person
holding a retail liquor license within the meaning of and
pursuant to the provisions of the Liquor Code, but includes any
purchase or acquisition of liquor or malt or brewed beverages
other than pursuant to the provisions of the Liquor Code.
(g) "Purchase price."
(1) The total value of anything paid or delivered, or
promised to be paid or delivered, whether money or otherwise,
in complete performance of a sale at retail or purchase at
retail, without any deduction on account of the cost or value
of the property sold, cost or value of transportation, cost
or value of labor or service, interest or discount paid or
allowed after the sale is consummated, any other taxes
imposed by the Commonwealth or any other expense except that
there shall be excluded any gratuity or separately stated
deposit charge for returnable containers.
(2) The value of any tangible personal property actually
taken in trade or exchange in lieu of the whole or any part
of the purchase price shall be deducted from the purchase
price. For the purpose of this clause, the amount allowed by
reason of tangible personal property actually taken in trade
or exchange shall be considered the value of such property.
(3) (i) In determining the purchase price on the sale
or use of taxable tangible personal property or a service
where, because of affiliation of interests between the
vendor and purchaser, or irrespective of any such
affiliation, if for any other reason the purchase price
declared by the vendor or taxpayer on the taxable sale or
use of such tangible personal property or service is, in
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the opinion of the department, not indicative of the true
value of the article or service or the fair price
thereof, the department shall, pursuant to uniform and
equitable rules, determine the amount of constructive
purchase price on the basis of which the tax shall be
computed and levied. The rules shall provide for a
constructive amount of purchase price for each sale or
use which would naturally and fairly be charged in an
arms-length transaction in which the element of common
interest between the vendor or purchaser is absent or, if
no common interest exists, any other element causing a
distortion of the price or value is likewise absent.
(ii) For the purpose of this clause where a taxable
sale or purchase at retail transaction occurs between a
parent and a subsidiary, affiliate or controlled
corporation of such parent corporation, there shall be a
rebuttable presumption, that because of the common
interest, the transaction was not at arms-length.
(4) Where there is a transfer or retention of possession
or custody, whether it is termed a rental, lease, service or
otherwise, of tangible personal property including, but not
limited to, linens, aprons, motor vehicles, trailers, tires,
industrial office and construction equipment, and business
machines the full consideration paid or delivered to the
vendor or lessor shall be considered the purchase price, even
though the consideration is separately stated and designated
as payment for processing, laundering, service, maintenance,
insurance, repairs, depreciation or otherwise. Where the
vendor or lessor supplies or provides an employee to operate
the tangible personal property, the value of the labor
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supplied may be excluded and shall not be considered as part
of the purchase price if separately stated. There shall also
be included as part of the purchase price the value of
anything paid or delivered, or promised to be paid or
delivered by a lessee, whether money or otherwise, to any
person other than the vendor or lessor by reason of the
maintenance, insurance or repair of the tangible personal
property which a lessee has the possession or custody of
under a rental contract or lease arrangement.
(5) (i) With respect to the tax imposed by section
702(a)(2), on any tangible personal property originally
purchased by the user of the property six months or
longer prior to the first taxable use of the property
within this Commonwealth, the user may elect to pay tax
on a substituted base determined by considering the
purchase price of the property for tax purposes to be
equal to the prevailing market price of similar tangible
personal property at the time and place of the first use
within this Commonwealth.
(ii) The election must be made at the time of filing
a tax return with the department and reporting the tax
liability and paying the proper tax due plus all accrued
penalties and interest, if any, within six months of the
due date of such report and payment, as provided for by
section 717(a) and (c).
(6) The purchase price of employment agency services and
help supply services shall be the service fee paid by the
purchaser to the vendor or supplying entity. The term
"service fee," as used in this subclause, means the total
charge or fee of the vendor or supplying entity minus the
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costs of the supplied employee which costs are wages,
salaries, bonuses and commissions, employment benefits,
expense reimbursements and payroll and withholding taxes, to
the extent that these costs are specifically itemized or that
these costs in aggregate are stated in billings from the
vendor or supplying entity. To the extent that these costs
are not itemized or stated on the billings, then the service
fee shall be the total charge or fee of the vendor or
supplying entity.
(7) Unless the vendor separately states that portion of
the billing which applies to premium cable service as defined
in clause (ll), the total bill for the provision of all cable
services shall be the purchase price.
(8) The purchase price of prebuilt housing shall be 60%
of the manufacturer's selling price, provided that a
manufacturer of prebuilt housing who precollects tax from a
prebuilt housing builder at the time of the sale to the
prebuilt housing builder shall have the option to collect tax
on 60% of the selling price or on 100% of the actual cost of
the supplies and materials used in the manufacture of the
prebuilt housing.
(9) Amounts representing on-the-spot cash discounts,
employee discounts, volume discounts, store discounts such as
"buy one, get one free," wholesaler's or trade discounts,
rebates and store or manufacturer's coupons shall establish a
new purchase price if both the item and the coupon are
described on the invoice or cash register tape. An amount
representing a discount allowed for prompt payment of bills
which is dependent upon an event occurring after the
completion of the sale may not be deducted in computing the
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tax. A sale is completed when there is a transfer of
ownership of the property or services to the purchaser.
(h) "Purchaser." Any person who acquires, for a
consideration, the ownership, custody or possession by sale,
lease or otherwise of tangible personal property, or who obtains
services in exchange for a purchase price but not including an
employer who obtains services from his employees in exchange for
wages or salaries when such services are rendered in the
ordinary scope of their employment.
(i) "Resale."
(1) Any transfer of ownership, custody or possession of
tangible personal property for a consideration, including the
grant of a license to use or consume and transactions where
the possession of the property is transferred but where the
transferor retains title only as security for payment of the
selling price whether the transaction is designated as
bailment lease, conditional sale or otherwise.
(2) The physical incorporation of tangible personal
property as an ingredient or constituent into other tangible
personal property, which is to be sold in the regular course
of business or the performance of those services described in
subclauses (2), (3) and (4) of clause (k) upon tangible
personal property which is to be sold in the regular course
of business or where the person incorporating the property
has undertaken at the time of purchase to cause it to be
transported in interstate commerce to a destination outside
this Commonwealth. The term includes telecommunications
services purchased by a cable operator or video programmer
that are used to transport or deliver cable or video
programming services which are sold in the regular course of
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business.
(3) The term also includes tangible personal property
purchased or having a situs within this Commonwealth solely
for the purpose of being processed, fabricated or
manufactured into, attached to or incorporated into tangible
personal property and thereafter transported outside this
Commonwealth for use exclusively outside this Commonwealth.
(4) The term does not include any sale of malt or brewed
beverages by a retail dispenser, or any sale of liquor or
malt or brewed beverages by a person holding a retail liquor
license within the meaning of the act of April 12, 1951
(P.L.90, No.21), known as the Liquor Code.
(5) The physical incorporation of tangible personal
property as an ingredient or constituent in the construction
of foundations for machinery or equipment the sale or use of
which is excluded from tax under the provisions of paragraphs
(A), (B), (C) and (D) of subclause (8) of clause (k) and
subparagraphs (i), (ii), (iii) and (iv) of paragraph (B) of
subclause (4) of clause (o), whether the foundations at the
time of construction or transfer constitute tangible personal
property or real estate.
(6) The sale at retail or use of services performed for
resale in the ordinary course of business of the purchaser or
user of such services.
(7) The sale at retail or use of services that are
otherwise taxable that are an integral, inseparable part of
the services that are to be sold or used that are taxable.
(j) "Resident."
(1) Any natural person:
(i) who is domiciled in this Commonwealth; or
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(ii) who maintains a permanent place of abode within
this Commonwealth and spends in the aggregate more than
60 days of the year within this Commonwealth.
(2) Any corporation:
(i) incorporated under the laws of this
Commonwealth;
(ii) authorized to do business or doing business
within this Commonwealth; or
(iii) maintaining a place of business within this
Commonwealth.
(3) Any association, fiduciary, partnership or other
entity:
(i) domiciled in this Commonwealth;
(ii) authorized to do business or doing business
within this Commonwealth; or
(iii) maintaining a place of business within this
Commonwealth.
(k) "Sale at retail."
(1) Any transfer, for a consideration, of the ownership,
custody or possession of tangible personal property,
including the grant of a license to use or consume whether
the transfer is absolute or conditional and by any means the
transfer is effected.
(2) The rendition of the service of printing or
imprinting of tangible personal property for a consideration
for persons who furnish, either directly or indirectly, the
materials used in the printing or imprinting.
(3) The rendition for a consideration of the service of:
(i) washing, cleaning, waxing, polishing or
lubricating of motor vehicles of another, regardless of
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whether any tangible personal property is transferred in
conjunction with the activity; and
(ii) inspecting motor vehicles pursuant to the
mandatory requirements of 75 Pa.C.S. (relating to
vehicles).
(4) The rendition for a consideration of the service of
repairing, altering, mending, pressing, fitting, dyeing,
laundering, drycleaning or cleaning tangible personal
property other than wearing apparel or shoes, or applying or
installing tangible personal property as a repair or
replacement part of other tangible personal property other
than wearing apparel or shoes for a consideration, regardless
of whether the services are performed directly or by any
means other than by coin-operated self-service laundry
equipment for wearing apparel or household goods and whether
or not any tangible personal property is transferred in
conjunction with the activity, except such services as are
rendered in the construction, reconstruction, remodeling,
repair or maintenance of real estate.
(5) (Reserved).
(6) (Reserved).
(7) (Reserved).
(8) Any retention of possession, custody or a license to
use or consume tangible personal property or any further
obtaining of services described in subclauses (2), (3) and
(4) of this clause pursuant to a rental or service contract
or other arrangement (other than as security). The term does
not include:
(i) any transfer of tangible personal property or
rendition of services for the purpose of resale; or
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(ii) the rendition of services or the transfer of
tangible personal property, including, but not limited
to, machinery and equipment and their parts and supplies
to be used or consumed by the purchaser directly in the
operations of:
(A) The manufacture of tangible personal
property.
(B) Farming, dairying, agriculture, horticulture
or floriculture when engaged in as a business
enterprise. The term "farming" includes the
propagation and raising of ranch raised fur-bearing
animals and the propagation of game birds for
commercial purposes by holders of propagation permits
issued under 34 Pa.C.S. (relating to game) and the
propagation and raising of horses to be used
exclusively for commercial racing activities.
(C) The producing, delivering or rendering of a
public utility service, or in constructing,
reconstructing, remodeling, repairing or maintaining
the facilities which are directly used in producing,
delivering or rendering the service.
(D) Processing as defined in clause (d). The
exclusions provided in this paragraph or paragraph
(A), (B) or (C) do not apply to any vehicle required
registered under 75 Pa.C.S. (relating to vehicles),
except those vehicles used directly by a public
utility engaged in business as a common carrier; to
maintenance facilities; or to materials, supplies or
equipment to be used or consumed in the construction,
reconstruction, remodeling, repair or maintenance of
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real estate other than directly used machinery,
equipment, parts or foundations that may be affixed
to such real estate. The exclusions provided in this
paragraph or paragraph (A), (B) or (C) do not apply
to tangible personal property or services to be used
or consumed in managerial sales or other
nonoperational activities, nor to the purchase or use
of tangible personal property or services by any
person other than the person directly using the same
in the operations described in this paragraph or
paragraph (A), (B) or (C).
The exclusion provided in paragraph (C) does not apply to:
(i) construction materials, supplies or equipment
used to construct, reconstruct, remodel, repair or
maintain facilities not used directly by the purchaser in
the production, delivering or rendition of public utility
service;
(ii) construction materials, supplies or equipment
used to construct, reconstruct, remodel, repair or
maintain a building, road or similar structure; or
(iii) tools and equipment used but not installed in
the maintenance of facilities used directly in the
production, delivering or rendition of a public utility
service.
The exclusions provided in paragraphs (A), (B), (C) and (D)
do not apply to the services enumerated in clauses (k)(11)
through (18) and (w) through (kk), except that the exclusion
provided in this subclause for farming, dairying and
agriculture shall apply to the service enumerated in clause
(z).
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(9) Where tangible personal property or services are
utilized for purposes constituting a sale at retail and for
purposes excluded from the definition of "sale at retail," it
shall be presumed that the tangible personal property or
services are utilized for purposes constituting a sale at
retail and subject to tax unless the user proves to the
department that the predominant purposes for which such
tangible personal property or services are utilized do not
constitute a sale at retail.
(10) The term, with respect to liquor and malt or brewed
beverages, includes the sale of liquor by any Pennsylvania
liquor store to any person for any purpose, and the sale of
malt or brewed beverages by a manufacturer of malt or brewed
beverages, distributor or importing distributor to any person
for any purpose, except sales by a manufacturer of malt or
brewed beverages to a distributor or importing distributor or
sales by an importing distributor to a distributor within the
meaning of the act of April 12, 1951 (P.L.90, No.21), known
as the Liquor Code. The term does not include any sale of
malt or brewed beverages by a retail dispenser or any sale of
liquor or malt or brewed beverages by a person holding a
retail liquor license within the meaning of and pursuant to
the provisions of the Liquor Code, but shall include any sale
of liquor or malt or brewed beverages other than pursuant to
the provisions of the Liquor Code.
(11) The rendition for a consideration of lobbying
services.
(12) The rendition for a consideration of adjustment
services, collection services or credit reporting services.
(13) The rendition for a consideration of secretarial or
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editing services.
(14) The rendition for a consideration of disinfecting
or pest control services, building maintenance or cleaning
services.
(15) The rendition for a consideration of employment
agency services or help supply services.
(16) (Reserved).
(17) The rendition for a consideration of lawn care
service.
(18) The rendition for a consideration of self-storage
service.
(19) The rendition for a consideration of a mobile
telecommunications service.
(20) Except as otherwise provided under section 704, the
rendition for a consideration of any service enumerated in
clause (dd) when the primary objective of the purchaser is
the receipt of any benefit of the service performed, as
distinguished from the receipt of property.
(l) "Storage." Any keeping or retention of tangible
personal property within this Commonwealth for any purpose
including the interim keeping, retaining or exercising any right
or power over such tangible personal property. This term is in
no way limited to the provision of self-storage service.
(m) "Tangible personal property." Corporeal personal
property including, but not limited to, goods, wares,
merchandise, steam and natural and manufactured and bottled gas
for non-residential use, electricity for non-residential use,
prepaid telecommunications, cable or video programming service,
spirituous or vinous liquor and malt or brewed beverages and
soft drinks, interstate telecommunications service originating
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or terminating in this Commonwealth and charged to a service
address in this Commonwealth, intrastate telecommunications
service with the exception of:
(1) Subscriber line charges and basic local telephone
service for residential use.
(2) Charges for telephone calls paid for by inserting
money into a telephone accepting direct deposits of money to
operate, provided further, the service address of any
intrastate telecommunications service is deemed to be within
this Commonwealth or within a political subdivision,
regardless of how or where billed or paid.
In the case of any interstate or intrastate telecommunications
service, any charge paid through a credit or payment mechanism
which does not relate to a service address, such as a bank,
travel, credit or debit card, but not including prepaid
telecommunications, is deemed attributable to the address of
origination of the telecommunications service.
(n) "Taxpayer." Any person required to pay or collect the
tax imposed by this chapter.
(o) "Use."
(1) The exercise of any right or power incidental to the
ownership, custody or possession of tangible personal
property and includes, but is not limited to, transportation,
storage or consumption.
(2) The obtaining by a purchaser of the service of
printing or imprinting of tangible personal property when the
purchaser furnishes, either directly or indirectly, the
articles used in the printing or imprinting.
(3) The obtaining by a purchaser of the services of:
(i) washing, cleaning, waxing, polishing or
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lubricating of motor vehicles regardless of whether any
tangible personal property is transferred to the
purchaser in conjunction with the services; and
(ii) inspecting motor vehicles pursuant to the
mandatory requirements of 75 Pa.C.S. (relating to
vehicles).
(4) The obtaining by a purchaser of the service of
repairing, altering, mending, pressing, fitting, dyeing,
laundering, drycleaning or cleaning tangible personal
property other than wearing apparel or shoes or applying or
installing tangible personal property as a repair or
replacement part of other tangible personal property,
including, but not limited to, wearing apparel or shoes,
regardless of whether the services are performed directly or
by any means other than by means of coin-operated self-
service laundry equipment for wearing apparel or household
goods, and regardless of whether any tangible personal
property is transferred to the purchaser in conjunction with
the activity, therewith, except such services are obtained in
the construction, reconstruction, remodeling, repair or
maintenance of real estate. The term "use" does not include:
(A) Any tangible personal property acquired and
kept, retained or over which power is exercised
within this Commonwealth on which the taxing of the
storage, use or other consumption thereof is
expressly prohibited by the Constitution of the
United States or which is excluded from tax under
other provisions of this chapter.
(B) The use or consumption of tangible personal
property, including, but not limited to, machinery
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and equipment and parts therefor, and supplies or the
obtaining of the services described in subclauses
(2), (3) and (4) of this clause directly in the
operations of:
(i) The manufacture of tangible personal property.
(ii) Farming, dairying, agriculture, horticulture or
floriculture when engaged in as a business enterprise.
The term includes the propagation and raising of ranch-
raised furbearing animals and the propagation of game
birds for commercial purposes by holders of propagation
permits issued under 34 Pa.C.S. (relating to game) and
the propagation and raising of horses to be used
exclusively for commercial racing activities.
(iii) The producing, delivering or rendering of a
public utility service, or in constructing,
reconstructing, remodeling, repairing or maintaining the
facilities which are directly used in producing,
delivering or rendering such service.
(iv) Processing as defined in subclause (d).
The exclusions provided in subparagraphs (i), (ii), (iii)
and (iv) do not apply to any vehicle required to be
registered under 75 Pa.C.S. (relating to vehicles) except
those vehicles directly used by a public utility engaged
in the business as a common carrier; to maintenance
facilities; or to materials, supplies or equipment to be
used or consumed in the construction, reconstruction,
remodeling, repair or maintenance of real estate other
than directly used machinery, equipment, parts or
foundations therefor that may be affixed to such real
estate. The exclusions provided in subparagraphs (i),
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(ii), (iii) and this subparagraph do not apply to
tangible personal property or services to be used or
consumed in managerial sales or other nonoperational
activities, nor to the purchase or use of tangible
personal property or services by any person other than
the person directly using the same in the operations
described in subparagraphs (i), (ii), (iii) and this
subparagraph. The exclusion provided in subparagraph
(iii) does not apply to:
(A) construction materials, supplies or
equipment used to construct, reconstruct, remodel,
repair or maintain facilities not used directly by
the purchaser in the production, delivering or
rendition of public utility service; or
(B) tools and equipment used but not installed
in the maintenance of facilities used directly in the
production, delivering or rendition of a public
utility service.
The exclusion provided in subparagraphs (i), (ii), (iii)
and this subparagraph does not apply to the services
enumerated in clauses (9) through (16) and (w) through
(kk), except that the exclusion provided in subparagraph
(ii) for farming, dairying and agriculture shall apply to
the service enumerated in clause (z).
(5) Where tangible personal property or services are
utilized for purposes constituting a use, and for purposes
excluded from the definition of "use," it shall be presumed
that the property or services are utilized for purposes
constituting a sale at retail and subject to tax unless the
user proves to the department that the predominant purposes
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for which the property or services are utilized do not
constitute a sale at retail.
(6) The term, with respect to liquor and malt or brewed
beverages, includes the purchase of liquor from any
Pennsylvania Liquor Store by any person for any purpose and
the purchase of malt or brewed beverages from a manufacturer
of malt or brewed beverages, distributor or importing
distributor by any person for any purpose, except purchases
from a manufacturer of malt or brewed beverages by a
distributor or importing distributor, or purchases from an
importing distributor by a distributor within the meaning of
the act of April 12, 1951 (P.L.90, No.21), known as the
Liquor Code. The term does not include any purchase of malt
or brewed beverages from a retail dispenser or any purchase
of liquor or malt or brewed beverages from a person holding a
retail liquor license within the meaning of and pursuant to
the provisions of the Liquor Code, but includes the exercise
of any right or power incidental to the ownership, custody or
possession of liquor or malt or brewed beverages obtained by
the person exercising the right or power in any manner other
than pursuant to the provisions of the Liquor Code.
(7) The use of tangible personal property purchased at
retail on which the services described in subclauses (2), (3)
and (4) of this clause have been performed shall be deemed to
be a use of said services by the person using the property.
(8) (Reserved).
(9) The obtaining by the purchaser of lobbying services.
(10) The obtaining by the purchaser of adjustment
services, collection services or credit reporting services.
(11) The obtaining by the purchaser of secretarial or
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editing services.
(12) The obtaining by the purchaser of disinfecting or
pest control services, building maintenance or cleaning
services.
(13) The obtaining by the purchaser of employment agency
services or help supply services.
(14) (Reserved).
(15) The obtaining by the purchaser of lawn care
service.
(16) The obtaining by the purchaser of self-storage
service.
(17) The obtaining by a construction contractor of
tangible personal property or services provided to tangible
personal property which will be used pursuant to a
construction contract regardless of whether the tangible
personal property or services are transferred.
(18) The obtaining of mobile telecommunications service
by a customer.
(19) Except as otherwise provided under section 704, the
obtaining by the purchaser of any service enumerated in
clause (dd) when the primary objective of the purchaser is
the receipt of any benefit of the service performed, as
distinguished from the receipt of property.
(p) "Vendor." Any person maintaining a place of business in
this Commonwealth, selling or leasing tangible personal
property, or rendering services, the sale or use of which is
subject to the tax imposed by this chapter but not including any
employee who in the ordinary scope of employment renders
services to his employer in exchange for wages and salaries.
(q) "NAICS." The 2012 North American Industry
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Classification System developed by the Federal Office of
Management and Budget and published at 76 Fed. Reg. 159 (Aug.
17, 2011) or its successor revision.
(r) "Gratuity." Any amount paid or remitted for services
performed in conjunction with any sale of food or beverages, or
hotel or motel accommodations which amount is in excess of the
charges and the tax for such food, beverages or accommodations
regardless of the method of billing or payment.
(s) "Commercial aircraft operator." A person, excluding a
scheduled airline who engages in any or all of the following:
charter of aircraft, leasing of aircraft, aircraft sales,
aircraft rental, flight instruction, air freight or any other
flight activities for compensation.
(t) "Transient vendor."
(1) Any person who:
(i) brings into this Commonwealth, by automobile,
truck or other means of transportation, or purchases in
this Commonwealth tangible personal property the sale or
use of which is subject to the tax imposed by this
chapter or comes into this Commonwealth to perform
services the sale or use of which is subject to the tax
imposed by this chapter;
(ii) offers or intends to offer the tangible
personal property or services for sale at retail within
this Commonwealth; and
(iii) does not maintain an established office,
distribution house, saleshouse, warehouse, service
enterprise, residence from which business is conducted or
other place of business within this Commonwealth.
(2) The term does not include a person who delivers
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tangible personal property within this Commonwealth pursuant
to orders for the property which were solicited or placed by
mail or other means.
(3) The term does not include a person who handcrafts
items for sale at special events, including, but not limited
to, fairs, carnivals, art and craft shows and other festivals
and celebrations within this Commonwealth.
(u) "Promoter." A person who either, directly or
indirectly, rents, leases or otherwise operates or grants
permission to any person to use space at a show for the display
for sale or for the sale of tangible personal property or
services subject to tax under section 702.
(v) "Show." An event, the primary purpose of which involves
the display or exhibition of any tangible personal property or
services for sale, including, but not limited to, a flea market,
antique show, coin show, stamp show, comic book show, hobby
show, automobile show, fair or any similar show, whether held
regularly or of a temporary nature, at which more than one
vendor displays for sale or sells tangible personal property or
services subject to tax under section 702.
(w) "Lobbying services." Providing the services of a
lobbyist, as defined in the definition of "lobbyist" in 65
Pa.C.S. Ch. 13A (relating to lobbying disclosure).
(x) "Adjustment services, collection services or credit
reporting services." Providing collection or adjustments of
accounts receivable or mercantile or consumer credit reporting,
including, but not limited to, services of the type provided by
adjustment bureaus or collection agencies, consumer or
mercantile credit reporting bureaus, credit bureaus or agencies,
credit clearinghouses or credit investigation services. The term
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does not include providing credit card service with collection
by a central agency, providing debt counseling or adjustment
services to individuals or billing or collection services
provided by local exchange telephone companies.
(y) "Secretarial or editing services." Providing services
which include, but are not limited to, editing, letter writing,
proofreading, resume writing, typing or word processing. The
term does not include court reporting and stenographic services.
(z) "Disinfecting or pest control services." Providing
disinfecting, termite control, insect control, rodent control or
other pest control services. The term includes, but is not
limited to, deodorant servicing of rest rooms, washroom
sanitation service, rest room cleaning service, extermination
service or fumigating service. As used in this clause, the term
"fumigating service" does not include the fumigation of
agricultural commodities or containers used for agricultural
commodities. As used in this clause, the term "insect control"
does not include the gypsy moth control spraying of trees which
are harvested for commercial purposes.
(aa) "Building maintenance or cleaning services." Providing
services which include, but are not limited to, janitorial, maid
or housekeeping service, office or interior building cleaning or
maintenance service, window cleaning service, floor waxing
service, lighting maintenance service such as bulb replacement,
cleaning, chimney cleaning service, acoustical tile cleaning
service, venetian blind cleaning, cleaning and maintenance of
telephone booths or cleaning and degreasing of service stations.
The term does not include: repairs on buildings and other
structures; the maintenance or repair of boilers, furnaces and
residential air conditioning equipment or their parts; the
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painting, wallpapering or applying other like coverings to
interior walls, ceilings or floors; or the exterior painting of
buildings.
(bb) "Employment agency services." Providing employment
services to a prospective employer or employee other than
employment services provided by theatrical employment agencies
and motion picture casting bureaus. The term includes, but is
not limited to, services of the type provided by employment
agencies, executive placing services and labor contractor
employment agencies other than farm labor.
(cc) "Help supply services." Providing temporary or
continuing help where the help supplied is on the payroll of the
supplying person or entity, but is under the supervision of the
individual or business to which help is furnished. The term
includes, but is not limited to, service of a type provided by
labor and manpower pools, employee leasing services, office help
supply services, temporary help services, usher services,
modeling services or fashion show model supply services. The
term does not include: providing farm labor services or human
health-related services, including nursing, home health care and
personal care. As used in this clause, "personal care" shall
include providing at least one of the following types of
assistance to persons with limited ability for self-care:
(1) dressing, bathing or feeding;
(2) supervising self-administered medication;
(3) transferring a person to or from a bed or
wheelchair; or
(4) routine housekeeping chores when provided in
conjunction with and supplied by the same provider of the
assistance listed in subclause (1), (2) or (3).
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(dd) "NAICS taxable services." Any service performed in
this Commonwealth as defined in the following subsectors and
industries of the revised 2012 NAICS developed by the Federal
Office of Management and Budget and published at 76 Fed. Reg.
159 (Aug. 17, 2011) or its successor revision:
481, for intrastate transport of persons
482, for intrastate transport of persons
483, for intrastate transport of persons
4851, for intrastate transport of persons
4852, for intrastate transport of persons
4853, for intrastate transport of persons
4855, for intrastate transport of persons
4859, for intrastate transport of persons
487
48841
5111
5112
5121
512131
512132
523930
541
5611
5612
5613
5614
5615
5619
5621
Nontuition and non-housing-related charges imposed by the
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following industries: 6112, 6113, 6114, 6115 and 6116
6216, 6219, 6231, 6232, 6233, 6239, 6241, 6242, 6243,
unless provided by a nonprofit organization
6244
7111, unless imposed by industry 611110 or a nonprofit
corporation or nonprofit unincorporated association under the
laws of this Commonwealth or the United States or any entity
that is authorized to do business in this Commonwealth as a
nonprofit corporation or unincorporated association under the
laws of this Commonwealth, including a youth or athletic,
volunteer fire, ambulance, religious, charitable, fraternal,
veterans or civic association or any separately chartered
auxiliary of the foregoing and operated on a nonprofit basis
7112, unless imposed by industry 611110 or a nonprofit
corporation or nonprofit unincorporated association under the
laws of this Commonwealth or the United States or any entity
that is authorized to do business in this Commonwealth as a
nonprofit corporation or unincorporated association under the
laws of this Commonwealth, including a youth or athletic,
volunteer fire, ambulance, religious, charitable, fraternal,
veterans or civic association or any separately chartered
auxiliary of the foregoing and operated on a nonprofit basis
7113
7114
712
7131
7139
7212
7224
8121
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8122
8123
8129
(ee) (Reserved).
(ff) (Reserved).
(gg) (Reserved).
(hh) (Reserved).
(ii) (Reserved).
(jj) "Lawn care service." Providing services for lawn
upkeep, including, but not limited to, fertilizing, lawn mowing,
shrubbery trimming or other lawn treatment services.
(kk) "Self-storage service." Providing a building, a room
in a building or a secured area within a building with separate
access provided for each purchaser of self-storage service,
primarily for the purpose of storing personal property. The term
does not include service involving:
(1) safe deposit boxes by financial institutions;
(2) storage in refrigerator or freezer units;
(3) storage in commercial warehouses;
(4) facilities for goods distribution; and
(5) lockers in airports, bus stations, museums and other
public places.
(ll) "Cable or video programming service." Cable television
services, video programming services, community antenna
television services or any other distribution of television,
video, audio or radio services which is transmitted with or
without the use of wires to purchasers.
If a purchaser receives or agrees to receive cable or video
programming service, then the following charges are included in
the purchase price: charges for installation or repair of any
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cable or video programming service, upgrade to include
additional premium cable or premium video programming service,
downgrade to exclude all or some premium cable or premium video
programming service, additional cable outlets in excess of ten
or any other charge or fee related to cable or video programming
services. The term does not apply to: transmissions by public
television, public radio services or official Federal, State or
local government cable services; local origination programming
which provides a variety of public service programs unique to
the community, programming which provides coverage of public
affairs issues which are presented without commentary or
analysis, including United States Congressional proceedings, or
programming which is substantially related to religious
subjects; or subscriber charges for access to a video dial tone
system or charges by a common carrier to a video programmer for
the transport of video programming.
(mm) (Reserved).
(nn) "Construction contract." A written or oral contract or
agreement for the construction, reconstruction, remodeling,
renovation or repair of real estate or a real estate structure.
The term shall not apply to services which are taxable under
clauses (k)(14) and (17) and (o)(12) and (15).
(oo) "Construction contractor." A person who performs an
activity pursuant to a construction contract, including a
subcontractor.
(pp) "Building machinery and equipment." Generation
equipment, storage equipment, conditioning equipment,
distribution equipment and termination equipment, limited to the
following:
(1) air conditioning limited to heating, cooling,
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purification, humidification, dehumidification and
ventilation;
(2) electrical;
(3) plumbing;
(4) communications limited to voice, video, data, sound,
master clock and noise abatement;
(5) alarms limited to fire, security and detection;
(6) control system limited to energy management, traffic
and parking lot and building access;
(7) medical system limited to diagnosis and treatment
equipment, medical gas, nurse call and doctor paging;
(8) laboratory system;
(9) cathodic protection system; or
(10) furniture, cabinetry and kitchen equipment.
The term includes boilers, chillers, air cleaners, humidifiers,
fans, switchgear, pumps, telephones, speakers, horns, motion
detectors, dampers, actuators, grills, registers, traffic
signals, sensors, card access devices, guardrails, medial
devices, floor troughs and grates and laundry equipment,
together with integral coverings and enclosures, regardless of
whether: the item constitutes a fixture or is otherwise affixed
to the real estate; damage would be done to the item or its
surroundings on removal; or the item is physically located
within a real estate structure. The term does not include
guardrail posts, pipes, fittings, pipe supports and hangers,
valves, underground tanks, wire, conduit, receptacle and
junction boxes, insulation, ductwork and coverings.
(qq) "Real estate structure." A structure or item purchased
by a construction contractor pursuant to a construction contract
with:
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(1) a charitable organization, a volunteer firemen's
organization, a nonprofit educational institution or a
religious organization for religious purposes and which
qualifies as an institution of purely public charity under
the act of November 26, 1997 (P.L.508, No.55), known as the
Institutions of Purely Public Charity Act;
(2) the United States; or
(3) the Commonwealth, its instrumentalities or political
subdivisions.
The term includes building machinery and equipment; developed or
undeveloped land; streets; roads; highways; parking lots;
stadiums and stadium seating; recreational courts; sidewalks;
foundations; structural supports; walls; floors; ceilings;
roofs; doors; canopies; millwork; elevators; windows and
external window coverings; outdoor advertising boards or signs;
airport runways; bridges; dams; dikes; traffic control devices,
including traffic signs; satellite dishes; antennas; guardrail
posts; pipes; fittings; pipe supports and hangers; valves;
underground tanks; wire; conduit; receptacle and junction boxes;
insulation; ductwork and coverings; and any structure or item
similar to any of the foregoing, regardless of whether the
structure or item constitutes a fixture or is affixed to the
real estate; or damage would be done to the structure or item or
its surroundings on removal.
(rr) "Telecommunications service." Any one-way transmission
or any two-way, interactive transmission of sounds, signals or
other intelligence converted to like form which effects or is
intended to effect meaningful communications by electronic or
electromagnetic means via wire, cable, satellite, light waves,
microwaves, radio waves or other transmission media. The term
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includes all types of telecommunication transmissions, local,
toll, wide-area or any other type of telephone service; private
line service; telegraph service; radio repeater service;
wireless communication service; personal communications system
service; cellular telecommunication service; specialized mobile
radio service; stationary two-way radio service; and paging
service. The term does not include any of the following:
(1) Subscriber charges for access to a video dial tone
system.
(2) Charges to video programmers for the transport of
video programming.
(3) Charges for access to the Internet. Access to the
Internet does not include any of the following:
(i) The transport over the Internet or any
proprietary network using the Internet protocol of
telephone calls, facsimile transmissions or other
telecommunications traffic to or from end users on the
public switched telephone network if the signal sent from
or received by an end user is not in an Internet
protocol.
(ii) Telecommunication services purchased by an
Internet service provider to deliver access to the
Internet to its customers.
(4) Mobile telecommunications services.
(ss) "Internet." The international nonproprietary computer
network of both Federal and non-Federal interoperable packet
switched data networks.
(tt) "Commercial racing activities." Any of the following:
(1) Thoroughbred and harness racing at which pari-mutuel
wagering is conducted under the act of December 17, 1981
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(P.L.435, No.135), known as the Race Horse Industry Reform
Act.
(2) Fair racing sanctioned by the State Harness Racing
Commission.
(uu) "Prepaid telecommunications." A tangible item
containing a prepaid authorization number that can be used
solely to obtain telecommunications service, including any
renewal or increases in the prepaid amount.
(vv) "Prebuilt housing." Either of the following:
(1) Manufactured housing, including mobile homes, which
bears a label as required by and referred to in the act of
November 17, 1982 (P.L.676, No.192), known as the
Manufactured Housing Construction and Safety Standards
Authorization Act.
(2) Industrialized housing as defined in the act of May
11, 1972 (P.L.286, No.70), known as the Industrialized
Housing Act.
(ww) "Used prebuilt housing." Prebuilt housing that was
previously subject to a sale to a prebuilt housing purchaser.
(xx) "Prebuilt housing builder." A person who makes a
prebuilt housing sale to a prebuilt housing purchaser.
(yy) "Prebuilt housing sale." A sale of prebuilt housing to
a prebuilt housing purchaser, including a sale to a landlord,
without regard to whether the person making the sale is
responsible for installing the prebuilt housing or whether the
prebuilt housing becomes a real estate structure upon
installation. Temporary installation by a prebuilt housing
builder for display purposes of a unit held for resale shall not
be considered occupancy for residential purposes.
(zz) "Prebuilt housing purchaser." A person who purchases
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prebuilt housing in a transaction and who intends to occupy the
unit for residential purposes in this Commonwealth.
(aaa) "Mobile telecommunications service." Mobile
telecommunications service as that term is defined in the Mobile
Telecommunications Sourcing Act (Public Law 106-252, 4 U.S.C. §
116 et seq.).
(bbb) "Fiscal Code." The act of April 9, 1929 (P.L.343,
No.176), known as The Fiscal Code.
(ccc) "Prepaid mobile telecommunications service." Mobile
telecommunications service which is paid for in advance and
which enables the origination of calls using an access number,
authorization code or both, regardless of whether manually or
electronically dialed, if the remaining amount of units of the
prepaid mobile telecommunications service is known by the
service provider of the prepaid mobile telecommunications
service on a continuous basis. The term does not include the
advance purchase of mobile telecommunications service if the
purchase is pursuant to a service contract between the service
provider and customer and if the service contract requires the
customer to make periodic payments to maintain the mobile
telecommunications service.
(ddd) (Reserved).
(eee) "Dental services." The general and usual services
rendered and care administered by doctors of dental medicine or
doctors of dental surgery, as defined in the act of May 1, 1933
(P.L.216, No.76), known as The Dental Law.
(fff) "Physician services." The general and usual services
rendered and care administered by medical doctors, as defined in
the act of December 20, 1985 (P.L.457, No.112), known as the
Medical Practice Act of 1985, or doctors of osteopathy, as
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defined in the act of October 5, 1978 (P.L.1109, No.261), known
as the Osteopathic Medical Practice Act.
(ggg) "Clothing." All vesture, wearing apparel, raiments,
garments, footwear and other articles of clothing, including
clothing patterns and items that are to be a component part of
clothing, worn or carried on or about the human body including,
but not limited to, all accessories, ornamental wear, formal day
or evening apparel and articles made of fur on the hide or pelt
or any material imitative of fur and articles of which such fur,
real, imitation or synthetic, is the component material of chief
value, but only if such value is more than three times the value
of the next most valuable component material, and sporting goods
and clothing not normally used or worn when not engaged in
sports.
(hhh) "Food and beverages." All food and beverages for
human consumption.
SUBCHAPTER B
SALES AND USE TAX
Section 702. Imposition of tax.
(a) Tax on certain sales at retail and uses of tangible
personal property and services.--
(1) There is hereby imposed on each separate sale at
retail of tangible personal property or services in this
Commonwealth a tax of 7% of the purchase price, which tax
shall be collected by the vendor from the purchaser, and
shall be paid over to the Commonwealth as provided in this
chapter.
(2) There is hereby imposed on the use in this
Commonwealth of tangible personal property purchased at
retail and on those services purchased at retail a tax of 7%
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of the purchase price, which tax shall be paid to the
Commonwealth by the person who makes such use as provided
under this chapter, except that the tax shall not be paid to
the Commonwealth by the person where the person has paid the
tax imposed by paragraph (1) or has paid the tax imposed by
this subsection to the vendor with respect to the use.
(b) General sourcing rules.--
(1) All sales of products shall be sourced according to
this subsection by sellers obligated to collect sales and use
tax under this chapter. The sourcing rules described in this
subsection apply to sales of tangible personal property,
digital goods and all services other than telecommunications
services. This subsection only applies to determine a
seller's obligation to pay or collect and remit a sales or
use tax with respect to the seller's sale of a product. This
subsection does not affect the obligation of a purchaser or
lessee to remit tax on the use of the product to the taxing
jurisdictions in which the use occurs. A seller's obligation
to collect sales tax or use tax under this chapter only
occurs if the sale is sourced to this State. Whether sales
tax to a sale source to the Commonwealth shall be determined
based on the location at which the sale is consummated by
delivery or, in the case of a service, where the first use of
the service occurs.
(2) Sales, excluding leases or rental, of products shall
be sourced as follows:
(i) When the product is received by the purchaser at
a business location of the seller, the sale is sourced to
that business location.
(ii) When the product is not received by the
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purchaser at a business location of the seller, the sale
is sourced to the location where receipt by the purchaser
or the purchaser's donee, designated such by the
purchaser, occurs, including the location indicated by
instructions for delivery to the purchaser or donee,
known to the seller.
(iii) When subparagraphs (i) and (ii) do not apply,
the sale is sourced to the location indicated by an
address for the purchaser that is available from the
business records of the seller that are maintained in the
ordinary course of the seller's business when use of this
address does not constitute bad faith.
(iv) When subparagraphs (i), (ii) and (iii) do not
apply, the sale is sourced to the location indicated by
an address for the purchaser obtained during the
consummation of the sale, including the address of a
purchaser's payment instrument, if no other address is
available, when use of this address does not constitute
bad faith.
(v) When subparagraphs (i), (ii), (iii) and (iv) do
not apply, including the circumstance where the seller is
without sufficient information to apply the previous
rules, when the location will be determined by the
address from which tangible personal property was
shipped, from which the digital good or the computer
software delivered electronically was first available for
transmission by the seller or from which the service was
provided disregarding for these purposes any location
that merely provided the digital transfer of the product
sold.
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(c) Telecommunications service.--
(1) Notwithstanding any other provisions of this
chapter, the tax with respect to telecommunications service
within the meaning of "tangible personal property" in section
701 shall be computed at the rate of 7% on the total amount
charged to customers for the services, irrespective of
whether such charge is based on a flat rate or on a message
unit charge.
(2) A telecommunications service provider shall have no
responsibility or liability to the Commonwealth for billing,
collecting or remitting taxes that apply to services,
products or other commerce sold over telecommunications lines
by third-party vendors.
(3) To prevent actual multistate taxation of interstate
telecommunications service, any taxpayer, on proof that the
taxpayer has paid a similar tax to another state on the same
interstate telecommunications service, shall be allowed a
credit against the tax imposed by this section on the same
interstate telecommunications service to the extent of the
amount of the tax properly due and paid to the other state.
(4) With respect to interstate telecommunications
services, only services for interstate telecommunications
which originate or are terminated in this Commonwealth and
which are billed and charged to a service address in this
Commonwealth shall be presumed to have been performed
completely in this Commonwealth and shall be subject to tax
under this chapter.
(d) Coin-operated vending machines.--Notwithstanding any
other provisions of this chapter, the sale or use of food and
beverages dispensed by means of coin-operated vending machines
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shall be taxed at the rate of 7% of the receipts collected from
any coin-operated vending machine which dispenses food and
beverages.
(e) Prepaid telecommunications.--
(1) Notwithstanding any provisions of this chapter, the
sale or use of prepaid telecommunications evidenced by the
transfer of tangible personal property shall be subject to
the tax imposed by subsection (a).
(2) The sale or use of prepaid telecommunications not
evidenced by the transfer of tangible personal property shall
be subject to the tax imposed by subsection (a) and shall be
deemed to occur at the purchaser's billing address.
(3) (i) Notwithstanding paragraph (2), the sale or use
of prepaid telecommunications service not evidenced by
the transfer of tangible personal property shall be taxed
at the rate of 7% of the receipts collected on each sale
if the service provider elects to collect the tax imposed
by this chapter on receipts of each sale.
(ii) The service provider shall notify the
department of its election and shall collect the tax on
receipts of each sale until the service provider notifies
the department otherwise.
(e.1) Prepaid mobile telecommunications service.--
(1) Notwithstanding any other provision of this chapter,
the sale or use of prepaid mobile telecommunications service
evidenced by the transfer of tangible personal property shall
be subject to the tax imposed by subsection (a).
(2) The sale or use of prepaid mobile telecommunications
service not evidenced by the transfer of tangible personal
property shall be subject to the tax imposed by subsection
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(a) and shall be deemed to occur at the purchaser's billing
address or the location associated with the mobile telephone
number or the point of sale, whichever is applicable.
(3) (i) Notwithstanding paragraph (2), the sale or use
of prepaid mobile telecommunications service not
evidenced by the transfer of tangible personal property
shall be taxed at the rate of 7% of the receipts
collected on each sale if the service provider elects to
collect the tax imposed by this chapter on receipts of
each sale.
(ii) The service provider shall notify the
department of its election and shall collect the tax on
receipts of each sale until the service provider notifies
the department otherwise.
(f) Prebuilt housing.--
(1) Notwithstanding any other provision of this chapter,
tax with respect to sales of prebuilt housing shall be
imposed on the prebuilt housing builder at the time of the
prebuilt housing sale within this Commonwealth and shall be
paid and reported by the prebuilt housing builder to the
department in the time and manner provided in this chapter.
(2) A manufacturer of prebuilt housing may, at its
option, precollect the tax from the prebuilt housing builder
at the time of sale to the prebuilt housing builder.
(3) In any case where prebuilt housing is purchased and
the tax is not paid by the prebuilt housing builder or
precollected by the manufacturer, the prebuilt housing
purchaser shall remit tax directly to the department if the
prebuilt housing is used in this Commonwealth without regard
to whether the prebuilt housing becomes a real estate
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structure.
(g) Home service providers.--
(1) Notwithstanding any other provisions of this chapter
and in accordance with the Mobile Telecommunications Sourcing
Act (Public Law 106-252, 4 U.S.C. § 116 et seq.), the sale or
use of mobile telecommunications services which are deemed to
be provided to a customer by a home service provider under 4
U.S.C. § 117 (relating to sourcing rules) shall be subject to
the tax of 7% of the purchase price, which tax shall be
collected by the home service provider from the customer, and
shall be paid over to the Commonwealth as provided in this
chapter if the customer's place of primary use is located
within this Commonwealth, regardless of where the mobile
telecommunications services originate, terminate or pass
through.
(2) For purposes of this subsection, words and phrases
used in this subsection shall have the same meanings given to
them in the Mobile Telecommunications Sourcing Act.
Section 703. Computation of tax.
(a) General rule.--The amount of tax imposed by section 702
shall be computed as follows:
(1) If the purchase price is 7¢ or less, no tax shall be
collected.
(2) If the purchase price is 8¢ or more but less than
22¢, 1¢ shall be collected.
(3) If the purchase price is 22¢ or more but less than
36¢, 2¢ shall be collected.
(4) If the purchase price is 36¢ or more but less than
50¢, 3¢ shall be collected.
(5) If the purchase price is 50¢ or more but less than
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65¢, 4¢ shall be collected.
(6) If the purchase price is 65¢ or more but less than
79¢, 5¢ shall be collected.
(7) If the purchase price is 79¢ or more but less than
93¢, 6¢ shall be collected.
(8) If the purchase price is 93¢ or more but less than
$1.07, seven percent of each dollar of purchase price plus
the above tax bracket charges upon any fractional part of a
dollar in excess of even dollars shall be collected.
(b) Deposit into Education Stabilization Fund.--The tax
collected under section 702 shall be deposited into the
Education Stabilization Fund.
SUBCHAPTER C
EXCLUSIONS FROM SALES AND USE TAX
Section 704. Exclusions from tax.
The tax imposed by section 702 shall not be imposed upon any
of the following:
(1) The sale at retail or use of tangible personal
property (other than motor vehicles, trailers, semi-trailers,
motor boats, aircraft or other similar tangible personal
property required under either Federal law or laws of this
Commonwealth to be registered or licensed) or services sold
by or purchased from a person not a vendor in an isolated
transaction or sold by or purchased from a person who is a
vendor but is not a vendor with respect to the tangible
personal property or services sold or purchased in such
transaction, provided that inventory and stock in trade so
sold or purchased shall not be excluded from the tax by the
provisions of this subsection.
(2) The use of tangible personal property purchased by a
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nonresident person outside of, and brought into this
Commonwealth for use therein for a period not to exceed seven
days, or for any period of time when such nonresident is a
tourist or vacationer and, in either case not consumed within
the Commonwealth.
(3) (i) The use of tangible personal property purchased
outside this Commonwealth for use outside this
Commonwealth by a then nonresident natural person or a
business entity not actually doing business within this
Commonwealth, who later brings the tangible personal
property into this Commonwealth in connection with the
person's or entity's establishment of a permanent
business or residence in this Commonwealth, provided that
the property was purchased more than six months prior to
the date it was first brought into this Commonwealth or
prior to the establishment of the business or residence,
whichever first occurs.
(ii) This paragraph shall not apply to tangible
personal property temporarily brought into this
Commonwealth for the performance of contracts for the
construction, reconstruction, remodeling, repairing and
maintenance of real estate.
(4) (Reserved).
(5) The sale at retail or use of steam, natural and
manufactured and bottled gas, fuel oil or electricity when
purchased directly by the user solely for the user's own
residential use.
(6) (Reserved).
(7) (Reserved).
(8) (Reserved).
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(9) (Reserved).
(10) (i) The sale at retail to or use by any charitable
organization, volunteer firefighters' organization or
nonprofit educational institution or a religious
organization for religious purposes of tangible personal
property or services other than pursuant to a
construction contract.
(ii) This paragraph shall not apply with respect to
any tangible personal property or services used in any
unrelated trade or business carried on by the
organization or institution or with respect to any
materials, supplies and equipment used and transferred to
the organization or institution in the construction,
reconstruction, remodeling, renovation, repairs and
maintenance of any real estate structure, other than
building machinery and equipment, except materials and
supplies when purchased by the organization or
institution for routine maintenance and repairs.
(11) The sale at retail, or use of gasoline and other
motor fuels, the sales of which are otherwise subject to
excise taxes under 75 Pa.C.S. Ch. 90 (relating to liquid
fuels and fuels tax).
(12) (i) The sale at retail to, or use by the United
States, this Commonwealth or its instrumentalities or
political subdivisions, nonpublic schools, charter
schools, cyber charter schools or vocational schools of
tangible personal property or services.
(ii) This paragraph includes the sale at retail to a
supervisor of a home education program of tangible
personal property or services used exclusively for the
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home education program.
(iii) As used in this paragraph, the terms
"nonpublic school," "charter school," "cyber charter
school," "vocational school," "supervisor" and "home
education program" shall have the meanings given to them
in the Public School Code of 1949.
(13) The sale at retail, or use of wrapping paper,
wrapping twine, bags, cartons, tape, rope, labels,
nonreturnable containers and all other wrapping supplies,
when such use is incidental to the delivery of any personal
property, except that any charge for wrapping or packaging
shall be subject to tax at the rate imposed by section 702.
(14) Sale at retail or use of vessels designed for
commercial use of registered tonnage of 50 tons or more when
produced by the builders thereof upon special order of the
purchaser.
(15) Sale at retail of tangible personal property or
services used or consumed in building, rebuilding, repairing
and making additions to or replacements in and upon vessels
designed for commercial use of registered tonnage of 50 tons
or more upon special order of the purchaser, or when rebuilt,
repaired or enlarged, or when replacements are made upon
order of or for the account of the owner.
(16) The sale at retail or use of tangible personal
property or services to be used or consumed for ship cleaning
or maintenance or as fuel, supplies, ships' equipment, ships'
stores or sea stores on vessels designed for commercial use
of registered tonnage of 50 tons or more to be operated
principally outside the limits of this Commonwealth.
(17) The sale at retail or use of prescription
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medicines, drugs or medical supplies, crutches and
wheelchairs for the use of persons with disabilities and
invalids, artificial limbs, artificial eyes and artificial
hearing devices when designed to be worn on the person of the
purchaser or user, false teeth and materials used by a
dentist in dental treatment, eyeglasses when especially
designed or prescribed by an ophthalmologist, oculist or
optometrist for the personal use of the owner or purchaser
and artificial braces and supports designed solely for the
use of persons with disabilities or any other therapeutic,
prosthetic or artificial device designed for the use of a
particular individual to correct or alleviate a physical
incapacity, including, but not limited to, hospital beds,
iron lungs and kidney machines.
(18) The sale at retail or use of coal.
(19) (Reserved).
(20) (Reserved).
(21) (Reserved).
(22) (Reserved).
(23) (Reserved).
(24) The sale at retail or use of motor vehicles,
trailers and semitrailers, or bodies attached to the chassis
thereof, sold to a nonresident of this Commonwealth to be
used outside this Commonwealth and which are registered in a
state other than this Commonwealth within 20 days after
delivery to the vendee.
(25) The sale at retail or use of water.
(26) The sale at retail or use of clothing as defined in
section 701.1(ggg) with a purchase price of less than $50.
(27) (Reserved).
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(28) (Reserved).
(29) The sale at retail or use of food and beverages
authorized for the Women, Infants and Children Program under
section 17 of the Child Nutrition Act of 1966 (Public Law 89-
642, 42 U.S.C. § 1786) as administered by the Department of
Health.
(30) Meals and student fees imposed by educational
institutions as described in NAICS industry 611110.
(31) (Reserved).
(32) (Reserved).
(33) (Reserved).
(34) (Reserved).
(35) (Reserved).
(36) The sale at retail or use of rail transportation
equipment used in the movement of personalty.
(37) (Reserved).
(38) (Reserved).
(39) The sale at retail or use of fish feed purchased by
or on behalf of sportsmen's clubs, fish cooperatives or
nurseries approved by the Pennsylvania Fish Commission.
(40) The sale at retail of supplies and materials to
tourist promotion agencies, which receive grants from the
Commonwealth, for distribution to the public as promotional
material or the use of such supplies and materials by said
agencies for said purposes.
(41) (Reserved).
(42) The sale or use of brook trout (salvelinus
fontinalis), brown trout (Salmo trutta) or rainbow trout
(Salmo gairdneri).
(43) The sale at retail or use of buses to be used
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exclusively for the transportation of children for school
purposes.
(44) The sale at retail or use of firewood. For the
purpose of this paragraph, firewood shall mean the product of
trees when severed from the land and cut into proper lengths
for burning and pellets made from pure wood sawdust if used
for fuel for cooking, hot water production or to heat
residential dwellings.
(45) (Reserved).
(46) The sale at retail or use of tangible personal
property purchased in accordance with the Food Stamp Act of
1977, as amended (Public Law 95-113, 7 U.S.C. §§ 2011-2029).
(47) (Reserved).
(48) (Reserved).
(49) (i) The sale at retail or use of food and
beverages by nonprofit associations which support sports
programs.
(ii) The following words and phrases when used in
this paragraph shall have the meanings given to them in
this subparagraph unless the context clearly indicates
otherwise:
"Nonprofit association." An entity which is
organized as a nonprofit corporation or nonprofit
unincorporated association under the laws of this
Commonwealth or the United States or any entity which is
authorized to do business in this Commonwealth as a
nonprofit corporation or unincorporated association under
the laws of this Commonwealth, including, but not limited
to, youth or athletic associations, volunteer fire,
ambulance, religious, charitable, fraternal, veterans,
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civic, or any separately chartered auxiliary of the
foregoing, if organized and operated on a nonprofit
basis.
"Sports program." Baseball, softball, football,
basketball, soccer and any other competitive sport
formally recognized as a sport by the United States
Olympic Committee as specified by and under the
jurisdiction of the Amateur Sports Act of 1978 (Public
Law 95-606, 36 U.S.C. Ch. 2205), the Amateur Athletic
Union or the National Collegiate Athletic Association.
The term shall be limited to a program or that portion of
a program that is organized for recreational purposes and
whose activities are substantially for such purposes and
which is primarily for participants who are 18 years of
age or younger or whose 19th birthday occurs during the
year of participation or the competitive season,
whichever is longer. There shall, however, be no age
limitation for programs operated for persons with
physical handicaps or persons with mental retardation.
"Support." The funds raised from sales are used to
pay the expenses of a sports program or the nonprofit
association sells the food and beverages at a location
where a sports program is being conducted under this
chapter or the Tax Reform Code of 1971.
(50) (Reserved).
(51) The sale at retail or use of interior office
building cleaning services but only as relates to the costs
of the supplied employee, which costs are wages, salaries,
bonuses and commissions, employment benefits, expense
reimbursements and payroll and withholding taxes, to the
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extent that these costs are specifically itemized or that
these costs in aggregate are stated in billings from the
vendor or supplying entity.
(52) (Reserved).
(53) (Reserved).
(54) (Reserved).
(55) (Reserved).
(56) The sale at retail or use of tangible personal
property or services used, transferred or consumed in
installing or repairing equipment or devices designed to
assist persons in ascending or descending a stairway when:
(i) The equipment or devices are used by a person
who, by virtue of a physical disability, is unable to
ascend or descend stairs without the aid of such
equipment or device.
(ii) The equipment or device is installed or used in
the person's place of residence.
(iii) A physician has certified the physical
disability of the person in whose residence the equipment
or device is installed or used.
(57) The sale at retail to or use by a construction
contractor of building machinery and equipment and services
thereto that are:
(i) transferred pursuant to a construction contract
for any charitable organization, volunteer firemen's
organization, nonprofit educational institution or
religious organization for religious purposes, provided
that the building machinery and equipment and services
thereto are not used in any unrelated trade or business;
or
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(ii) transferred to the United States or the
Commonwealth or its instrumentalities or political
subdivisions.
(58) (Reserved).
(59) The sale at retail or use of molds and related mold
equipment used directly and predominantly in the manufacture
of products, regardless of whether the person that holds
title to the equipment manufactures a product.
(60) (Reserved).
(61) (Reserved).
(62) The sale at retail or use of tangible personal
property or services which are directly used in farming,
dairying or agriculture when engaged in as a business
enterprise, regardless of whether the sale is made to the
person directly engaged in the business enterprise or to a
person contracting with the person directly engaged in the
business enterprise for the production of food.
(63) (Reserved).
(64) The sale at retail to or use by a construction
contractor, employed by a public school district pursuant to
a construction contract, of any materials and building
supplies which, during construction or reconstruction, are
made part of any public school building utilized for
instructional classroom education within this Commonwealth,
if the construction or reconstruction:
(i) is necessitated by a disaster emergency, as
defined in 35 Pa.C.S. § 7102 (relating to definitions);
and
(ii) takes place during the period when there is a
declaration of disaster emergency under 35 Pa.C.S. §
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7301(c) (relating to general authority of Governor).
(65) (Reserved).
(66) The sale at retail or use of copies of an official
document sold by a government agency or a court. For the
purposes of this paragraph, the following terms or phrases
shall have the following meanings:
(i) "court" includes:
(A) an appellate court as defined in 42 Pa.C.S.
§ 102 (relating to definitions);
(B) A court of common pleas as defined in 42
Pa.C.S. § 102; or
(C) the minor judiciary as defined in 42 Pa.C.S.
§ 102;
(ii) "government agency" means an agency as defined
in section 102 of the act of February 14, 2008 (P.L.6,
No.3), known as the Right-to-Know Law; and
(iii) "official document" means a record as defined
in section 102 of the Right-to-Know Law. The term shall
include notes of court testimony, deposition transcripts,
driving records, accident reports, birth and death
certificates, deeds, divorce decrees and other similar
documents.
(67) The sale at retail or use of repair or replacement
parts, including the installation of those parts, exclusively
for use in helicopters and similar rotorcraft or in
overhauling or rebuilding of helicopters and similar
rotorcraft or helicopters and similar rotorcraft components.
(68) The sale at retail or use of helicopters and
similar rotorcraft.
(69) The sale at retail or use of aircraft parts,
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services to aircraft and aircraft components. For purposes of
this paragraph, the term "aircraft" shall include a fixed-
wing aircraft, powered aircraft, tilt-rotor or tilt-wing
aircraft, glider or unmanned aircraft.
(70) (Reserved).
(71) The sale at retail or use of tuition.
(72) But for the services as defined in section
701.1(w), (x), (y), (z), (aa), (bb), (cc), (jj) and (kk), the
sale at retail or use of any of the following business,
professional or technical services performed by a business
and rendered to another business:
(i) Legal services as defined by NAICS industry
5411.
(ii) Architectural, engineering and related services
as defined by NAICS industry 5413.
(iii) Accounting, auditing and bookkeeping services
as defined by NAICS industry 5412.
(iv) Specialized design services as defined by NAICS
industry 5414.
(v) Advertising, public relations and related
services as defined by NAICS industry 5418.
(vi) Services to buildings and dwellings as defined
by NAICS industry 5617.
(vii) Scientific, environmental and technical
consulting services as defined by NAICS industry 5416.
(viii) Scientific research and development services
as defined by NAICS industries 5417 and 5419.
(ix) Information services as defined by NAICS
subsector 519.
(x) Administrative services as defined by NAICS
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industries 5611, 5612, 5613, 5614, 5615 and 5619.
(xi) Custom programming, design and data processing
services as defined by NAICS industry 5415.
(xii) Parking lot and garage services as defined by
NAICS industry 8129.
(73) The sale at retail or use of legal services
relating to family law or criminal law.
(74) The sale at retail, or the use of motion picture
film rented or licensed from a distributor for the purpose of
commercial exhibition.
(75) The sale at retail or use of services performed by
minors under 18 years of age and not on behalf of another
person.
(76) The sale at retail or use of services provided by
employees to their employers in exchange for wages and
salaries when such services are rendered in the ordinary
course of employment.
(77) The sale at retail or use of goods or services that
are part of a Medicare Part B transaction.
Section 705. Alternate imposition of tax.
(a) General rule.--If any person actively and principally
engaged in the business of selling new or used motor vehicles,
trailers or semitrailers, and registered with the department in
the "dealer's class," acquires a motor vehicle, trailer or
semitrailer for the purpose of resale, and prior to such resale,
uses the motor vehicle, trailer or semitrailer for a taxable use
under this chapter or the Tax Reform Code of 1971, the person
may pay a tax equal to 7% of the fair rental value of the motor
vehicle, trailer or semitrailer during use.
(b) Aircraft.--A commercial aircraft operator who acquires
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an aircraft for the purpose of resale, or lease, or is entitled
to claim another valid exemption at the time of purchase, and
subsequent to the purchase, periodically uses the same aircraft
for a taxable use under this chapter or the Tax Reform Code of
1971, may elect to pay a tax equal to 7% of the fair rental
value of the aircraft during such use.
(c) Applicability.--This section shall not apply to the use
of a vehicle as a wrecker, parts truck, delivery truck or
courtesy car.
Section 706. Credit against tax.
(a) Tax paid to another state.--
(1) A credit against the tax imposed by section 702
shall be granted with respect to tangible personal property
or services purchased for use outside the Commonwealth equal
to the tax paid to another state by reason of the imposition
by such other state of a tax similar to the tax imposed by
this chapter.
(2) No credit under paragraph (1) shall be granted
unless the other state grants substantially similar tax
relief by reason of the payment of tax under this chapter or
under the Tax Reform Code of 1971.
(b) (Reserved).
SUBCHAPTER D
LICENSES
Section 708. Licenses.
(a) Duty to obtain license.--Every person maintaining a
place of business in this Commonwealth, selling or leasing
services or tangible personal property, the sale or use of which
is subject to tax and who has not obtained a license from the
department, shall, prior to the beginning of business, make
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application to the department, on a form prescribed by the
department, for a license. If such person maintains more than
one place of business in this Commonwealth, the license shall be
issued for the principal place of business in this Commonwealth.
(b) Criteria for issuance of license.--
(1) The department shall, after the receipt of an
application, issue the license applied for under subsection
(a) if the applicant filed all required State tax reports and
paid any State taxes not subject to a timely perfected
administrative or judicial appeal or subject to a duly
authorized deferred payment plan. The license shall be
nonassignable.
(2) All licenses in effect on the effective date of this
section under former Article III of the Tax Reform Code of
1971 and all licenses issued or renewed on or after the
effective date of this section shall be valid for a period of
five years.
(b.1) Refusal of license.--
(1) If an applicant for a license or any person holding
a license has not filed all required State tax reports and
paid any State taxes not subject to a timely perfected
administrative or judicial appeal or subject to a duly
authorized deferred payment plan, the department may refuse
to issue, may suspend or may revoke said license.
(2) The department shall notify the applicant or
licensee of any refusal, suspension or revocation. The notice
shall contain a statement that the refusal, suspension or
revocation may be made public. The notice shall be made by
first class mail.
(3) An applicant or licensee aggrieved by the
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determination of the department may file an appeal pursuant
to the provisions for administrative appeals in this chapter,
except that the appeal must be filed within 30 days of the
date of the notice. In the case of a suspension or revocation
which is appealed, the license shall remain valid pending a
final outcome of the appeals process.
(4) Notwithstanding section 774 or sections 353(f),
408(b), 603, 702, 802, 904 and 1102 of the Tax Reform Code of
1971, or any other provision of law to the contrary, if no
appeal is taken or if an appeal is taken and denied at the
conclusion of the appeal process, the department may
disclose, by publication or otherwise, the identity of a
person and the fact that the person's license has been
refused, suspended or revoked under this subsection.
Disclosure may include the basis for refusal, suspension or
revocation.
(c) Penalties.--
(1) A person that maintains a place of business in this
Commonwealth for the purpose of selling or leasing services
or tangible personal property, the sale or use of which is
subject to tax, without having a valid license at the time of
the sale or lease shall be guilty of a summary offense and,
upon conviction thereof, be sentenced to pay a fine of not
less than $300 nor more than $1,500 and, in default thereof,
a term of imprisonment of not less than five days nor more
than 30 days.
(2) The penalties imposed by this subsection shall be in
addition to any other penalties imposed by this chapter.
(3) For purposes of this subsection, the offering for
sale or lease of any service or tangible personal property,
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the sale or use of which is subject to tax, during any
calendar day shall constitute a separate violation.
(4) The secretary may designate employees of the
department to enforce the provisions of this subsection. The
employees shall exhibit proof of and be within the scope of
the designation when instituting proceedings as provided by
the Pennsylvania Rules of Criminal Procedure.
(d) Effect of failure to obtain license.--Failure of any
person to obtain a license shall not relieve that person of
liability to pay the tax imposed by this chapter.
SUBCHAPTER E
HOTEL OCCUPANCY TAX
Section 709. Definitions.
(a) General rule.--The following words and phrases when used
in this subchapter shall have the meanings given to them in this
section unless the context clearly indicates otherwise:
"Hotel." A building or buildings in which the public may,
for a consideration, obtain sleeping accommodations. The term
does not include any charitable, educational or religious
institution summer camp for children, hospital or nursing home.
"Occupancy." The use or possession or the right to the use or
possession by any person, other than a permanent resident, of
any room or rooms in a hotel for any purpose or the right to the
use or possession of the furnishings or to the services and
accommodations accompanying the use and possession of the room
or rooms.
"Occupant." A person, other than a permanent resident, who,
for a consideration, uses, possesses or has a right to use or
possess any room or rooms in a hotel under any lease,
concession, permit, right of access, license or agreement.
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"Operator." Any person who operates a hotel.
"Permanent resident." Any occupant who has occupied or has
the right to occupancy of any room or rooms in a hotel for at
least 30 consecutive days.
"Rent." The consideration received for occupancy valued in
money, whether received in money or otherwise, including all
receipts, cash, credits and property or services of any kind or
nature, and also any amount for which the occupant is liable for
the occupancy without any deduction. The term "rent" shall not
include a gratuity.
(b) Other definitions.--The following words and phrases,
when used in Subchapters D and F, shall, in addition to the
meaning ascribed to them by section 701, have the meaning
ascribed to them in this subsection, except where the context
clearly indicates a different meaning:
"Maintaining a place of business in this Commonwealth."
Being the operator of a hotel in this Commonwealth.
"Purchase at retail." Occupancy.
"Purchase price." Rent.
"Purchaser." Occupant.
"Sale at retail." The providing of occupancy to an occupant
by an operator.
"Services." Occupancy.
"Tangible personal property." Occupancy.
"Use." Occupancy.
"Vendor." Operator.
Section 710. Imposition of tax.
There is hereby imposed an excise tax of 7% of the rent on
every occupancy of a room or rooms in a hotel in this
Commonwealth, which tax shall be collected by the operator from
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the occupant and paid over to the Commonwealth as provided in
this act.
Section 711. Seasonal tax returns.
Notwithstanding any other provisions in this chapter or the
Tax Reform Code of 1971, the department may, by regulation,
waive the requirement for the filing of quarterly returns in the
case of any operator whose hotel is operated only during certain
seasons of the year, and may provide for the filing of returns
by such persons at times other than those provided by section
721.
SUBCHAPTER F
PROCEDURE AND ADMINISTRATION
Section 715. Persons required to make returns.
Every person required to pay tax to the department or collect
and remit tax to the department shall file returns with respect
to the tax.
Section 716. Form of returns.
The returns required by section 715 shall be on forms
prescribed by the department and shall show such information
with respect to the taxes imposed by this chapter as the
department may reasonably require.
Section 717. Time for filing returns.
(a) Quarterly and monthly returns.--
(1) For the year in which this chapter becomes
effective, and in each year thereafter, a return shall be
filed quarterly by every licensee on or before the 20th day
of April, July, October and January for the three months
ending the last day of March, June, September and December.
(2) For the year in which this chapter becomes
effective, and in each year thereafter, a return shall be
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filed monthly with respect to each month by every licensee
whose actual tax liability for the third calendar quarter of
the preceding year equals or exceeds $600 and is less than
$25,000. Such returns shall be filed on or before the 20th
day of the next succeeding month with respect to which the
return is made. Any licensee required to file monthly returns
under this act shall be relieved from filing quarterly
returns.
(3) With respect to every licensee whose actual tax
liability for the third calendar quarter of the preceding
year equals or exceeds $25,000 and is less than $100,000, the
licensee shall, on or before the 20th day of each month, file
a single return consisting of all of the following:
(i) Either of the following:
(A) An amount equal to 50% of the licensee's
actual tax liability for the same month in the
preceding calendar year if the licensee was a monthly
filer or, if the licensee was a quarterly or
semiannual filer, 50% of the licensee's average
actual tax liability for that tax period in the
preceding calendar year. The average actual tax
liability shall be the actual tax liability for the
tax period divided by the number of months in that
tax period. For licensees that were not in business
during the same month in the preceding calendar year
or were in business for only a portion of that month,
the amount shall be 50% of the average actual tax
liability for each tax period the licensee has been
in business. If the licensee is filing a tax
liability for the first time with no preceding tax
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periods, the amount shall be zero.
(B) An amount equal to or greater than 50% of
the licensee's actual tax liability for the same
month.
(ii) An amount equal to the taxes due for the
preceding month, less any amounts paid in the preceding
month as required by subparagraph (i).
(4) With respect to each month by every licensee whose
actual tax liability for the third calendar quarter of the
preceding year equals or exceeds $100,000, the licensee
shall, on or before the 20th day of each month, file a single
return consisting of the amounts under paragraph (3)(i)(A)
and (ii).
(5) The amount due under paragraph (3)(i) or (4) shall
be due the same day as the remainder of the preceding month's
tax.
(6) The department shall determine whether the amounts
reported under paragraph (3) or (4) shall be remitted as one
combined payment or as two separate payments.
(7) The department may require the filing of the returns
and the payments for these types of filers by electronic
means approved by the department.
(8) Any licensee filing returns under paragraph (3) or
(4) shall be relieved of filing quarterly returns.
(9) If a licensee required to remit payments under
paragraph (3) or (4) fails to make a timely payment or makes
a payment which is less than the required amount, the
department may, in addition to any applicable penalties,
impose an additional penalty equal to 5% of the amount due
under paragraph (3) or (4) which was not timely paid. The
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penalty under this paragraph shall be determined when the tax
return is filed for the tax period.
(b) Annual returns.--No annual return shall be filed, except
as may be required by rules and regulations of the department
promulgated and published at least 60 days prior to the end of
the year with respect to which the returns are made. Where such
annual returns are required, licensees shall not be required to
file such returns prior to the 20th day of the year succeeding
the year with respect to which the returns are made.
(c) Other returns.--Any person, other than a licensee,
liable to pay to the department any tax under this chapter,
shall file a return on or before the 20th day of the month
succeeding the month in which the person becomes liable for the
tax.
(d) Small taxpayers.--The department, by regulation, may
waive the requirement for the filing of quarterly return in the
case of any licensee whose individual tax collections do not
exceed $75 per calendar quarter and may provide for reporting on
a less frequent basis in such cases.
Section 718. Extension of time for filing returns.
The department may, on written application and for good cause
shown, grant a reasonable extension of time for filing any
return required under this subchapter. However, the time for
making a return shall not be extended for more than three
months.
Section 719. Place for filing returns.
Returns shall be filed with the department at its main office
or at any branch office which it may designate for filing
returns.
Section 720. Timely mailing treated as timely filing and
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payment.
(a) General rule.--Notwithstanding the provisions of any
State tax law to the contrary, whenever a report or payment of
all or any portion of a State tax is required by law to be
received by the department or other agency of the Commonwealth
on or before a day certain, the taxpayer shall be deemed to have
complied with the law if the letter transmitting the report or
payment of the tax which has been received by the department is
postmarked by the United States Postal Service on or prior to
the final day on which the payment is to be received.
(b) Presentation of receipt.--For the purposes of this
chapter, presentation of a receipt indicating that the report or
payment was mailed by registered or certified mail on or before
the due date shall be evidence of timely filing and payment.
Section 721. Payment of tax.
When a return of tax is required under this subchapter, the
person required to make the return shall pay the tax to the
department.
Section 722. Time of payment.
(a) General rule.--The tax imposed by this chapter and
incurred or collected by a licensee shall be due and payable by
the licensee on the day the return is required to be filed under
the provisions of section 717 and the payment must accompany the
return for the preceding period.
(b) Annual payments.--If the amount of tax due for the
preceding year as shown by the annual return of a taxpayer is
greater than the amount already paid by the taxpayer in
connection with the taxpayer's monthly or quarterly returns, the
taxpayer shall send with the annual return a remittance for the
unpaid amount of tax for the year.
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(c) Other payments.--Any person other than a licensee liable
to pay any tax under this chapter shall remit the tax at the
time of filing the return required by this chapter.
Section 723. Other times for payment.
In the event that the department authorizes a taxpayer to
file a return at other times than those specified in section
717, the tax due shall be paid at the time the return is filed.
Section 724. Place for payment.
The tax imposed by this chapter shall be paid to the
department at the place fixed for filing the return.
Section 725. Tax held in trust for Commonwealth.
(a) General rule.--All taxes collected by any person from
purchasers in accordance with this chapter and all taxes
collected by any person from purchasers under color of this
chapter which have not been properly refunded by the person to
the purchaser shall constitute a trust fund for the
Commonwealth, and such trust shall be enforceable against such
person, the person's representatives and any person, other than
a purchaser to whom a refund has been made properly, receiving
any part of the fund without consideration, or knowing that the
taxpayer is committing a breach of trust.
(b) Presumption.--Any person receiving payment of a lawful
obligation of the taxpayer from the fund identified under
subsection (a) shall be presumed to have received the same in
good faith and without any knowledge of the breach of trust.
(c) Right to petition and appeal.--Any person, other than a
taxpayer, against whom the department makes any claim under this
section shall have the same right to petition and appeal as is
given taxpayers by any provisions of this subchapter.
Section 726. (Reserved).
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Section 727. Discount.
(a) General rule.--Subject to the provisions of subsection
(b), if a return is filed by a licensee and the tax shown to be
due thereon less any discount is paid all within the time
prescribed, the licensee shall be entitled to credit and apply
against the tax payable by the licensee a discount of 1% of the
amount of the tax collected by the licensee, as compensation for
the expense of collecting and remitting the tax due by the
licensee and as consideration of the prompt payment.
(b) Types of periodic filers.--For returns filed on or after
the effective date of this section, the discount under
subsection (a) shall be limited to the following:
(1) For a monthly filer, $25 per return.
(2) For a quarterly filer, $75 per return.
(3) For a semiannual filer, $150 per return.
Section 728. (Reserved).
Section 729. (Reserved).
Section 730. Assessment.
The department shall make the inquiries, determinations and
assessments of the tax, including interest, additions and
penalties, imposed by this chapter. A notice of assessment and
demand for payment shall be mailed to the taxpayer. The notice
shall set forth the basis of the assessment.
Section 731. Mode and time of assessment.
(a) Duty to examine.--
(1) Within a reasonable time after any return is filed,
the department shall examine it and, if the return shows a
greater tax due or collected than the amount of tax remitted
with the return, the department shall issue an assessment for
the difference, together with an addition of 3% of the
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difference, which shall be paid to the department within ten
days after a notice of the assessment has been mailed to the
taxpayer.
(2) If such assessment is not paid within ten days,
there shall be added and paid to the department an additional
3% of the difference for each month during which the
assessment remains unpaid. The total of all additions shall
not exceed 18% of the difference shown on the assessment.
(b) Understated tax on returns.--
(1) If the department determines that any return or
returns of any taxpayer understates the amount of tax due, it
shall determine the proper amount and shall ascertain the
difference between the amount of tax shown in the return and
the amount determined. The difference may be referred to as
the deficiency.
(2) The department shall send a notice of assessment for
the deficiency and the reasons to the taxpayer.
(3) The taxpayer shall pay the deficiency to the
department within 30 days after a notice of the assessment
has been mailed to the taxpayer.
(c) Estimated assessments.--
(1) In the event that any taxpayer fails to file a
return required by this chapter, the department may make an
estimated assessment, based on information available, of the
proper amount of tax owed by the taxpayer and shall send a
notice of assessment in the estimated amount to the taxpayer.
(2) The taxpayer shall pay the tax within 30 days after
a notice of the estimated assessment has been mailed to the
taxpayer.
(d) Studies.--
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(1) The department may conduct the studies necessary to
compute effective rates by business classification, based
upon the ratio between the tax required to be collected and
taxable sales and to use such rates in arriving at the
apparent tax liability of a taxpayer.
(2) Any assessment based on such rates shall be prima
facie correct, except that the rate shall not be considered
where a taxpayer establishes the rate is based on a sample
inapplicable to the taxpayer.
Section 732. Reassessment.
Any taxpayer against whom an assessment is made may petition
the department for a reassessment under Article XXVII of the Tax
Reform Code of 1971.
Section 733. Assessment to recover erroneous refunds.
The department may, within two years of the granting of any
refund or credit, or within the period in which an assessment
could have been filed by the department with respect to the
transaction pertaining to which the refund was granted,
whichever period shall last occur, file an assessment to recover
any refund or part thereof or credit or part thereof which was
erroneously made or allowed.
Section 734. (Reserved).
Section 735. (Reserved).
Section 736. Burden of proof.
In all cases of petitions for reassessment, review or appeal,
the burden of proof shall be on the petitioner or appellant, as
applicable.
Section 737. Collection of tax.
(a) General rule.--The department shall collect the tax in
the manner provided by law for the collection of taxes imposed
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by the laws of this Commonwealth.
(b) Collection by persons maintaining a place of business in
the Commonwealth.--
(1) Every person maintaining a place of business in this
Commonwealth and selling or leasing tangible personal
property or services, the sale or use of which is subject to
tax shall collect the tax from the purchaser or lessee at the
time of making the sale or lease, and shall remit the tax to
the department, unless the collection and remittance is
otherwise provided for in this chapter.
(2) (i) Every person not otherwise required to collect
tax that delivers tangible personal property to a
location within this Commonwealth and that unpacks,
positions, places or assembles the tangible personal
property shall collect the tax from the purchaser at the
time of delivery and shall remit the tax to the
department if the person delivering the tangible personal
property is responsible for collecting any portion of the
purchase price of the tangible personal property
delivered and the purchaser has not provided the person
with proof that the tax imposed by this chapter has been
or will be collected by the seller or that the purchaser
provided the seller with a valid exemption certificate.
(ii) Every person required to collect tax under this
paragraph shall be deemed to be selling or leasing
tangible personal property or services, the sale or use
of which is subject to the tax imposed under section 702.
(3) Any person required under this chapter to collect
tax from another person, who shall fail to collect the proper
amount of the tax, shall be liable for the full amount of the
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tax which the person should have collected.
(c) Certificate for tax-exempt sales or leases.--
(1) If the tax does not apply to the sale or lease of
tangible personal property or services, the purchaser or
lessee shall furnish to the vendor a certificate indicating
that the sale is not legally subject to the tax. The
certificate shall be in substantially such form as the
department may, by regulation, prescribe.
(2) Where the tangible personal property or service is
of a type which is never subject to the tax imposed or where
the sale or lease of tangible personal property is in
interstate commerce, the certificate need not be furnished.
(3) Where a series of transactions are not subject to
tax, a purchaser or user may furnish the vendor with a single
exemption certificate in substantially such form and valid
for such period of time as the department may, by regulation,
prescribe.
(4) The department shall provide all school districts
and intermediate units with a permanent tax exemption number.
(5) An exemption certificate, which is complete and
regular and on its face discloses a valid basis of exemption
if taken in good faith, shall relieve the vendor from the
liability imposed by this section.
(6) An exemption certificate:
(i) accepted by a vendor from a natural person
domiciled within this Commonwealth or any association,
fiduciary, partnership, corporation or other entity,
either authorized to do business within this Commonwealth
or having an established place of business within this
Commonwealth, in the ordinary course of the vendor's
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business;
(ii) which on its face discloses a valid basis of
exemption consistent with the activity of the purchaser
and character of the property or service being purchased
or which is provided to the vendor by a charitable,
religious, educational or volunteer firefighters'
organization;
(iii) contains the organization's charitable
exemption number; and
(iv) which, in the case of any purchase costing $200
or more, is accompanied by a sworn declaration on a form
to be provided by the department of an intended usage of
the property or service which would render it nontaxable,
shall be presumed to be taken in good faith and the burden of
proving otherwise shall be on the department.
(d) Direct payment permits.--
(1) The department may authorize a purchaser or lessee
who acquires tangible personal property or services under
circumstances which make it impossible at the time of
acquisition to determine the manner in which the tangible
personal property or service will be used, to pay the tax
directly to the department, and waive the collection of the
tax by the vendor.
(2) No such authority shall be granted or exercised,
except on application to the department, and the issuance by
the department, in its discretion, of a direct payment
permit.
(3) If a direct payment permit is granted, its use shall
be subject to conditions specified by the department, and the
payment of tax on all acquisitions pursuant to the permit
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