H1600B2811A05384 DMS:JSL 01/15/08 #90 A05384
AMENDMENTS TO HOUSE BILL NO. 1600
Sponsor: REPRESENTATIVE ROHRER
Printer's No. 2811
1 Amend Bill, page 1, lines 1 and 2, by striking out all of
2 said lines and inserting
3 Providing for tax levies and information related to taxes;
4 authorizing the imposition of a personal income tax or an
5 earned income tax by a school district subject to voter
6 approval; providing for imposition of and exclusions from a
7 sales and use tax for education; establishing the Public
8 Transportation Reserve Fund; providing for increase to the
9 personal income tax and realty transfer tax, for certain
10 licenses, for hotel occupancy tax, for procedure and
11 administration of the tax, for basic education funding for
12 2006-2007 fiscal year, for expiration of authority to issue
13 certain debt, for reporting by local government units of debt
14 outstanding and for assumption of certain debt by the
15 Commonwealth; establishing the Education Operating Fund and
16 the School District Grant and Incentive Programs Fund;
17 providing for disbursements from these funds and for
18 transfers from the Property Tax Relief Fund to the Education
19 Operating Fund; establishing the School Financing Authority
20 and providing for its powers and duties; providing for
21 certain rebates and assistance to senior citizens; adding
22 provisions relating to school district fiscal efficiency;
23 establishing the School Equity Capital Construction Fund and
24 the School Equity Distribution Task Force; and repealing
25 certain provisions of The Local Tax Enabling Act, sales and
26 use tax provisions of the Tax Reform Code of 1971 and
27 provisions relating to senior citizens property tax and rent
28 rebate assistance in the Taxpayer Relief Act.
29 TABLE OF CONTENTS
30 Chapter 1. Preliminary Provisions
31 Section 101. Short title.
32 Section 102. Definitions.
33 Chapter 3. Personal Income Tax
34 Subchapter A. School District Income Tax
35 Section 301. Scope.
36 Section 302. Definitions.
37 Section 303. Preemption.
38 Section 304. Personal income tax authorization.
39 Section 305. Continuity of tax.
40 Section 306. Exemption of low-income persons.
41 Section 307. Collection of personal income tax.
42 Section 308. Limitation on assessment.
1 Section 309. Distress and sale of property of taxpayer.
2 Section 310. Collection of delinquent taxes from employers.
3 Section 311. Collection of delinquent taxes from Commonwealth.
4 Section 312. Notice to taxpayer.
5 Section 313. Collection of taxes by suit.
6 Section 314. Interest and penalties.
7 Section 315. Fines and penalties for violation of resolutions.
8 Section 316. Collection at source.
9 Subchapter B. Education Tax
10 Section 321. Education tax.
11 Chapter 4. State Realty Transfer Tax
12 Section 401. Authorization of State realty transfer tax for
13 public education.
14 Section 402. Deposit of existing Commonwealth realty transfer
15 tax.
16 Chapter 5. Earned Income Tax
17 Section 501. Scope.
18 Section 502. Definitions.
19 Section 503. Preemption.
20 Section 504. Earned income tax authorization.
21 Section 505. Continuity of tax.
22 Section 506. Exemption of low-income persons.
23 Section 507. Collection of earned income tax.
24 Section 508. Limitation on assessment.
25 Section 509. Distress and sale of property of taxpayer.
26 Section 510. Collection of delinquent taxes from employers.
27 Section 511. Collection of delinquent taxes from Commonwealth.
28 Section 512. Notice to taxpayer.
29 Section 513. Collection of taxes by suit.
30 Section 514. Interest and penalties.
31 Section 515. Fines and penalties for violation of resolutions.
32 Section 516. Collection at source.
33 Chapter 7. Sales and Use Tax for Education
34 Subchapter A. Preliminary Provisions
35 Section 701. Scope.
36 Section 701.1. Definitions.
37 Subchapter B. Sales and Use Tax
38 Section 702. Imposition of tax.
39 Section 703. Computation of tax.
40 Subchapter C. Exclusions from Sales and Use Tax
41 Section 704. Exclusions from tax.
42 Section 705. Alternate imposition of tax.
43 Section 706. Credit against tax.
44 Subchapter D. Licenses
45 Section 708. Licenses.
46 Subchapter E. Hotel Occupancy Tax
47 Section 709. Definitions.
48 Section 710. Imposition of tax.
49 Section 711. Seasonal tax returns.
50 Subchapter F. Procedure and Administration
51 Section 715. Persons required to make returns.
52 Section 716. Form of returns.
53 Section 717. Time for filing returns.
54 Section 718. Extension of time for filing returns.
55 Section 719. Place for filing returns.
56 Section 720. Timely mailing treated as timely filing and
57 payment.
58 Section 721. Payment of tax.
59 Section 722. Time of payment.
HB1600A05384 - 2 -
1 Section 723. Other times for payment.
2 Section 724. Place for payment.
3 Section 725. Tax held in trust for Commonwealth.
4 Section 726. Local receivers of use tax.
5 Section 727. Discount.
6 Section 728. (Reserved).
7 Section 729. (Reserved).
8 Section 730. Assessment.
9 Section 731. Mode and time of assessment.
10 Section 732. Reassessment.
11 Section 733. (Reserved).
12 Section 734. Review by Board of Finance and Revenue.
13 Section 735. (Reserved).
14 Section 736. Burden of proof.
15 Section 737. Collection of tax.
16 Section 738. Collection of tax on motor vehicles, trailers
17 and semitrailers.
18 Section 739. Precollection of tax.
19 Section 740. Bulk and auction sales.
20 Section 741. Collection on failure to request reassessment,
21 review or appeal.
22 Section 742. Lien for taxes.
23 Section 743. Suit for taxes.
24 Section 744. Tax suit comity.
25 Section 745. Service.
26 Section 746. Collection and payment of tax on credit sales.
27 Section 747. Prepayment of tax.
28 Section 747.1. Refund of sales tax attributed to bad debt.
29 Section 748. Registration of transient vendors.
30 Section 748.1. Bond.
31 Section 748.2. Notification to department.
32 Section 748.3. Seizure of property.
33 Section 748.4. Fines.
34 Section 748.5. Transient vendors subject to chapter.
35 Section 748.6. Promoters.
36 Section 749. (Reserved).
37 Section 750. (Reserved).
38 Section 751. (Reserved).
39 Section 752. Refunds.
40 Section 753. Refund petition.
41 Section 754. (Reserved).
42 Section 755. (Reserved).
43 Section 756. Extended time for filing special petition for
44 refund.
45 Section 757. (Reserved).
46 Section 758. Limitation on assessment and collection.
47 Section 759. Failure to file return.
48 Section 760. False or fraudulent return.
49 Section 761. Extension of limitation period.
50 Section 762. (Reserved).
51 Section 763. (Reserved).
52 Section 764. (Reserved).
53 Section 765. Interest.
54 Section 766. Additions to tax.
55 Section 767. Penalties.
56 Section 768. Criminal offenses.
57 Section 769. Abatement of additions or penalties.
58 Section 770. Rules and regulations.
59 Section 771. Keeping of records.
HB1600A05384 - 3 -
1 Section 771.1. Reports and records of promoters.
2 Section 772. Examinations.
3 Section 773. Records and examinations of delivery agents.
4 Section 774. Unauthorized disclosure.
5 Section 775. Cooperation with other governments.
6 Section 776. Interstate compacts.
7 Section 777. Bonds.
8 Subchapter G. Funding Provisions
9 Section 780. (Reserved).
10 Section 781. Appropriation for refunds.
11 Section 781.1. Construction.
12 Section 781.2. Transfers to Public Transportation Reserve
13 Fund.
14 Section 782. Transfers to Education Operating Fund.
15 Chapter 9. Senior Citizens Property Tax and Rent Rebate
16 Assistance
17 Section 901. Scope of chapter.
18 Section 902. (Reserved).
19 Section 903. Definitions.
20 Section 904. Property tax, rent rebate and inflation cost.
21 Section 905. Filing of claim.
22 Section 906. Proof of claim.
23 Section 907. Incorrect claim.
24 Section 908. Funds for payment of claims.
25 Section 909. Claim forms and rules and regulations.
26 Section 910. Fraudulent claims and conveyances to obtain
27 benefits.
28 Section 911. Petition for redetermination.
29 Section 912. Review by Board of Finance and Revenue.
30 Section 913. Appeal.
31 Chapter 11. Limitations on School District Taxation
32 Section 1101. Authority to levy taxes and effect of future
33 Constitutional amendment.
34 Section 1102. Transitional taxes.
35 Section 1103. Consideration of State appropriations or
36 reimbursements.
37 Section 1104. Taxes for cities and school districts of the
38 first class.
39 Chapter 12. Indebtedness
40 Section 1201. Expiration of authority to issue debt.
41 Section 1202. Notices and reporting by school districts
42 of debt outstanding.
43 Section 1203. Assumption of school district debt by
44 Commonwealth.
45 Section 1204. Power to apply for debt and limitations.
46 Section 1205. Referendum requirement.
47 Section 1206. Temporary debt.
48 Section 1207. Limit on temporary debt for current expenses and
49 debt service.
50 Section 1208. Emergency loans for current expenses and debt
51 service.
52 Section 1209. Limit on temporary debt for permanent
53 improvements and tax levy.
54 Section 1210. Limit on temporary debt in anticipation of
55 proceeds of bond issue.
56 Section 1211. Borrowing in anticipation of current revenue.
57 Section 1212. Mandatory reduction in local personal income tax
58 and earned income tax.
59 Chapter 13. Funding Provisions
HB1600A05384 - 4 -
1 Section 1301. Definitions.
2 Section 1302. Education Operating Fund.
3 Section 1303. Cash flow funding forecasts.
4 Section 1304. Standard disbursements to school districts from
5 Education Operating Fund.
6 Section 1305. Education Trust Reserve Account and distressed
7 district prevention and emergency disbursements.
8 Section 1306. Equity disbursements to school districts from
9 School District Equity Account.
10 Section 1307. Other Disbursements from Education Operating
11 Fund.
12 Section 1307.1. School District Grant and Incentive Programs
13 Fund.
14 Section 1307.2. Other appropriations.
15 Section 1308. Education Operating Fund Board.
16 Section 1309. School Financing Authority.
17 Section 1310. Reduction of sales and use tax for education.
18 Section 1311. School Equity Capital Construction Fund.
19 Section 1312. School Equity Distribution Task Force.
20 Chapter 15. School District Fiscal Efficiency Tools
21 Section 1501. Purpose of chapter.
22 Section 1502. Data-driven decision-making technology
23 requirements.
24 Section 1503. Certified operations reports.
25 Section 1504. Superintendent report.
26 Section 1505. Annual performance report.
27 Chapter 17. Miscellaneous Provisions
28 Section 1701. Transitional provision.
29 Section 1702. Construction.
30 Section 1703. Severability.
31 Section 1704. Repeals.
32 Section 1705. Applicability.
33 Section 1706. Effective date.
34 Amend Bill, page 1, lines 8 through 14; pages 2 through 9,
35 lines 1 through 30; page 10, lines 1 through 14, by striking out
36 all of said lines on said pages and inserting
37 This act shall be known and may be cited as the School
38 Property Tax Elimination Act.
39 Section 102. Definitions.
40 The following words and phrases when used in this act shall
41 have the meanings given to them in this section unless the
42 context clearly indicates otherwise:
43 "Department." The Department of Revenue of the Commonwealth.
44 "Education Operating Fund." The Education Operating Fund
45 established in section 1302.
46 "Fiscal year." The fiscal year of the Commonwealth beginning
47 on July 1 and ending on June 30 of the immediately following
48 calendar year.
49 "Governing body." The board of school directors of a school
50 district, except that the term shall mean the city council of a
51 city of the first class for purposes of the levy and collection
52 of any tax in a school district of the first class.
53 "Internal Revenue Code of 1986." The Internal Revenue Code
54 of 1986 (Public Law 99-514, 26 U.S.C. § 166).
55 "Local Tax Enabling Act." The act of December 31, 1965
HB1600A05384 - 5 -
1 (P.L.1257, No.511), known as The Local Tax Enabling Act,
2 "Public School Code of 1949." The act of March 10, 1949
3 (P.L.30, No.14), known as the Public School Code of 1949.
4 "School district." A school district of the first class,
5 first class A, second class, third class or fourth class,
6 including any independent school district. For purposes of the
7 levy, assessment and collection of any tax in a school district
8 of the first class, the term shall include the City Council.
9 "School per capita tax." The tax authorized pursuant to
10 section 679 of the act of March 10, 1949 (P.L.30, No.14), known
11 as the Public School Code of 1949,
12 "Secretary." The Secretary of Revenue of the Commonwealth.
13 "Tax Reform Code of 1971." The act of March 4, 1971 (P.L.6,
14 No.2), known as the Tax Reform Code of 1971.
15 CHAPTER 3
16 PERSONAL INCOME TAX
17 SUBCHAPTER A
18 SCHOOL DISTRICT INCOME TAX
19 Section 301. Scope.
20 This chapter authorizes school districts to levy, assess and
21 collect a personal income tax as a means of abolishing property
22 taxation by the school district.
23 Section 302. Definitions.
24 The following words and phrases when used in this chapter
25 shall have the meanings given to them in this section unless the
26 context clearly indicates otherwise:
27 "Association." A partnership, limited partnership or other
28 unincorporated group of two or more persons.
29 "Business." An enterprise, activity, profession or other
30 undertaking of an unincorporated nature conducted for profit or
31 ordinarily conducted for profit whether by a person, association
32 or other entity.
33 "Compensation." The classes of income included within the
34 definition of "compensation" set forth in section 301 of the act
35 of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
36 1971, and upon which are imposed a personal income tax by the
37 Commonwealth.
38 "Corporation." A corporation or joint stock association
39 organized under the laws of the United States or the
40 Commonwealth of Pennsylvania or any other state, territory,
41 foreign country or dependency.
42 "Current year." The calendar year or fiscal year for which a
43 tax is levied.
44 "Domicile."
45 (1) The place where a person lives and has the person's
46 permanent home and to which the person has the intention of
47 returning whenever the person is absent. Actual residence is
48 not necessarily domicile because domicile is the fixed place
49 of abode which, in the intention of the taxpayer, is
50 permanent rather than transitory.
51 (2) Domicile is the voluntarily fixed place of
52 habitation of a person, not for a mere special or limited
53 purpose, but with the present intention of making a permanent
54 home, until some event occurs to induce the person to adopt
55 some other permanent home.
56 (3) In the case of a business or association, the
57 domicile is any place where the business or association is
58 conducting or engaging in a business for profit within a
59 school district.
HB1600A05384 - 6 -
1 "Employer." A person, association, corporation, governmental
2 unit or other entity employing one or more persons, other than
3 domestic servants, for compensation.
4 "Nonresident." A person, association or other entity
5 domiciled outside a school district.
6 "Person" or "individual." A natural person.
7 "Personal income." The classes of income enumerated in
8 section 303 of the act of March 4, 1971 (P.L.6, No.2), known as
9 the Tax Reform Code of 1971, and on which is imposed a personal
10 income tax by the Commonwealth.
11 "Political subdivision." A school district.
12 "Preceding year." The calendar year or fiscal year before a
13 current year.
14 "Resident." A person, association, corporation or other
15 entity:
16 (1) living in or maintaining a permanent or fixed place
17 of abode in a school district; or
18 (2) conducting or engaging in a business for profit
19 within a school district.
20 "Succeeding year." The calendar year or fiscal year
21 following a current year.
22 "Tax officer." The person, public employee or private agency
23 designated by a governing body to collect and administer a tax
24 imposed under this chapter, and the treasurer of a school
25 district of the first class A.
26 "Taxpayer." A person, association or other entity required
27 under this chapter to file a tax return or to pay a tax.
28 Section 303. Preemption.
29 No act of the General Assembly shall vacate or preempt any
30 resolution passed or adopted under the authority of this
31 chapter, or any other act, providing authority for the
32 imposition of a tax by a school district, unless the act of the
33 General Assembly expressly vacates or preempts the authority to
34 pass or adopt the resolutions.
35 Section 304. Personal income tax authorization.
36 (a) School districts.--Except as prohibited under Chapter
37 11, each school district shall have the power and may, by
38 resolution, levy, assess and collect or provide for the levying,
39 assessment and collection of a tax for general revenue purposes
40 at a rate as it shall determine on personal income of the
41 residents of the school district. A school district may only
42 levy or increase the rate of personal income tax when that
43 school district complies with the provisions of subsection (b).
44 (b) Adoption of referendum.--
45 (1) In order to levy a personal income tax under this
46 chapter, a governing body shall use the procedures set forth
47 in paragraphs (2), (3), (4), (5), (6) and (7).
48 (2) (i) Subject to the notice and public hearing
49 requirements of paragraph (7), a governing body may levy
50 the personal income tax under this chapter only by
51 obtaining the approval of the electorate of the affected
52 school district in a public referendum at only the
53 municipal election preceding the fiscal year when the
54 personal income tax will be initially imposed or the rate
55 increased.
56 (ii) The referendum question must state the initial
57 rate of the proposed personal income tax, the reason for
58 the tax and the amount of proposed budgeted revenue
59 growth, if any, in the first fiscal year following
HB1600A05384 - 7 -
1 adoption of the referendum.
2 (iii) The question shall be in clear language that
3 is readily understandable by a layperson. For the purpose
4 of illustration, a referendum question may be framed as
5 follows:
6 Do you favor the imposition of a personal income tax
7 of X%?
8 (iv) A nonlegal interpretative statement must
9 accompany the question in accordance with section 201.1
10 of the act of June 3, 1937 (P.L.1333, No.320), known as
11 the Pennsylvania Election Code, that includes the
12 following: the initial rate of the personal income tax
13 imposed under this chapter, the estimated revenues to be
14 derived from the initial rate of the personal income tax
15 imposed under this chapter.
16 (3) In the event a school district is located in more
17 than one county, petitions under this section shall be filed
18 with the election officials of the county in which the
19 administrative offices of the school district are located.
20 (4) The election officials who receive a petition shall
21 perform all administrative functions in reviewing and
22 certifying the validity of the petition and conduct all
23 necessary communications with the school district.
24 (5) (i) If the election officials of the county who
25 receive the petition certify that it is sufficient under
26 this section and determine that a question should be
27 placed on the ballot, the decision shall be communicated
28 to election officials in any other county in which the
29 school district is also located.
30 (ii) Election officials in the other county or
31 counties shall cooperate with election officials of the
32 county that receives the petition to ensure that an
33 identical question is placed on the ballot at the same
34 election throughout the entire school district.
35 (6) Election officials from each county involved shall
36 independently certify the results from their county to the
37 governing body.
38 (7) (i) In order to levy the tax under this section,
39 the governing body shall adopt a resolution which shall
40 refer to this chapter prior to placing a question on the
41 ballot.
42 (ii) Prior to adopting a resolution imposing the tax
43 authorized by this section, the governing body shall give
44 public notice of its intent to adopt the resolution in
45 the manner provided by section 4 of The Local Tax
46 Enabling Act and shall conduct at least one public
47 hearing regarding the proposed adoption of the
48 resolution.
49 Section 305. Continuity of tax.
50 Every tax levied under this chapter shall continue in force
51 on a calendar or fiscal year basis, as the case may be, without
52 annual reenactment unless the rate of the tax is subsequently
53 changed.
54 Section 306. Exemption of low-income persons.
55 (a) Low-income exemption.--Each school district shall exempt
56 any person who qualifies under the provisions of section 304 of
57 the Tax Reform Code of 1971 from payment of any or all of the
58 tax imposed under section 304.
59 (b) Procedures.--Each school district shall adopt procedures
HB1600A05384 - 8 -
1 for the processing of claims for these exemptions.
2 Section 307. Collection of personal income tax.
3 The tax officer shall collect all personal income tax imposed
4 by a school district.
5 Section 308. Limitation on assessment.
6 No assessment may be made of any personal income tax imposed
7 under this chapter more than five years after the date on which
8 the tax should have been paid except where a fraudulent return
9 or no return has been filed.
10 Section 309. Distress and sale of property of taxpayer.
11 (a) General rule.--In case of the neglect or refusal of any
12 person, association or corporation to make payment of the amount
13 of any personal income tax due after two months from the date of
14 the tax notice, the tax officer shall levy the amount of the
15 tax, penalty, interest and costs thereon, not exceeding costs
16 and charges allowed constables for similar services by distress
17 and sale of the goods and chattels of the delinquent taxpayer,
18 wherever located, after giving at least ten days' public notice
19 of the sale by one advertisement in a newspaper of general
20 circulation published in the county.
21 (b) Effect on return.--No failure to demand or collect any
22 taxes by distress and sale of goods and chattels shall
23 invalidate any return made, lien filed for nonpayment of taxes
24 or any tax sale for the collection of taxes.
25 Section 310. Collection of delinquent taxes from employers.
26 (a) General rule.--The tax officer shall demand, receive and
27 collect from all employers employing persons owing delinquent
28 personal income taxes or having in possession unpaid
29 compensation belonging to any person or persons owing delinquent
30 personal income taxes on the presentation of a written notice
31 and demand certifying that the information contained in the
32 notice and demand is true and correct and containing the name of
33 the taxpayer and the amount of tax due.
34 (b) Response to notice.--On the presentation of the written
35 notice and demand, the employer shall deduct from the
36 compensation of the employees then owing, or thereafter due, a
37 sum sufficient to pay the amount of the delinquent personal
38 income taxes, interest, penalty and costs shown on the written
39 notice or demand, and shall pay the same to the tax officer by
40 which the delinquent tax was levied within 60 days after the
41 notice was given.
42 (c) Limitation on deduction.--No more than 10% of the
43 compensation of the delinquent taxpayer may be deducted at any
44 one time for delinquent personal income taxes, penalty, interest
45 and costs.
46 (d) Deduction for costs.--The employer shall be entitled to
47 deduct from the moneys collected from each employee the costs
48 incurred from the extra bookkeeping necessary to record the
49 transactions, not exceeding 2% of the amount collected and paid
50 over to the tax officer.
51 (e) Forfeiture.--If the employer fails to deduct the amount
52 of such taxes or to pay the same over to the tax officer, less
53 the amount deducted under subsection (d), within the time
54 required by this section, the employer shall forfeit and pay the
55 amount of the tax for those taxpayers whose taxes are not
56 withheld and paid over, or that are withheld and not paid over
57 together with a penalty of 10%, to be recovered by a civil
58 action to be instituted by the tax officer, as debts of like
59 amount are now by law recoverable, except that the person shall
HB1600A05384 - 9 -
1 not have the benefit of any exemption law or stay of execution.
2 (f) Collection rights preserved.--Nothing in this section
3 shall be deemed to affect or impair the right of any school
4 district or the tax officer to pursue and collect delinquent
5 taxes validly imposed prior to the effective date of this
6 section.
7 Section 311. Collection of delinquent taxes from Commonwealth.
8 (a) General rule.--On presentation of a written notice and
9 demand under oath to the State Treasurer or any other fiscal
10 officer of the Commonwealth, or its boards, authorities,
11 agencies or commissions, the treasurer or officer shall deduct
12 from the compensation then owing a sum sufficient to pay the
13 amount of the delinquent personal income taxes, interest,
14 penalty and costs shown on the written notice. The same shall be
15 paid to the tax officer within 60 days after the notice is
16 given.
17 (b) Limitation on deduction.--No more than 10% of the
18 compensation of the delinquent taxpayer may be deducted at any
19 one time for delinquent personal income taxes, interest, penalty
20 and costs.
21 (c) Collection rights preserved.--Nothing in this section
22 shall be deemed to affect or impair the right of a school
23 district or the tax officer to pursue and collect delinquent
24 taxes validly imposed prior to the effective date of this
25 section.
26 Section 312. Notice to taxpayer.
27 The department shall, at least 15 days prior to the
28 presentation of a written notice and demand under section 310 or
29 311, notify the taxpayer owing the delinquent tax by registered
30 mail that a written notice and demand shall be presented to the
31 taxpayer's employer unless the tax is paid. The return receipt
32 card for registered mail shall be marked delivered to addressee
33 only, and the cost of notification by registered mail shall be
34 included in the costs for collecting taxes.
35 Section 313. Collection of taxes by suit.
36 (a) Power to collect.--
37 (1) Each school district and the tax officer shall have
38 power to collect unpaid taxes from taxpayers and employers
39 owing such taxes by a civil action or other appropriate
40 remedy.
41 (2) On judgment, execution may be issued without any
42 stay or benefit of any exemption law.
43 (3) The power to collect unpaid taxes under the
44 provisions of this section shall not be affected by the fact
45 that such taxes have been entered as liens in the office of
46 the prothonotary or the fact that the property against which
47 they were levied has been returned to the county
48 commissioners for taxes for prior years.
49 (b) Limitation of actions.--A suit brought to recover the
50 taxes under subsection (a) shall be instituted within three
51 years after the tax is due or within three years after a
52 declaration or return has been filed, whichever date is later,
53 except in the following cases:
54 (1) If no declaration or return was filed by any person
55 although a declaration or return was required to be filed
56 under provisions of the ordinance, there shall be no
57 limitation.
58 (2) If an examination of the declaration or return filed
59 by any person, or of other evidence relating to the
HB1600A05384 - 10 -
1 declaration or return in the possession of the tax officer,
2 reveals a fraudulent evasion of taxes, there shall be no
3 limitation.
4 (3) If there is a substantial understatement of tax
5 liability of 25% or more and no fraud, suit shall be
6 instituted within six years.
7 (4) If a person has deducted taxes under the provisions
8 of the resolution and has failed to pay the amounts so
9 deducted to the tax officer, or if a person has willfully
10 failed or omitted to make the deductions required by this
11 section, there shall be no limitation.
12 (c) Regulations.--The tax officer, by regulation, shall
13 establish the procedures for collecting the personal income tax
14 and paying the full amount collected over to the school district
15 on a quarterly basis.
16 Section 314. Interest and penalties.
17 (a) General rule.--If for any reason the tax is not paid
18 when due, interest at the annual rate of 6% on the amount of the
19 tax, and an additional penalty of .5% of the amount of the
20 unpaid tax for each month or fraction thereof during which the
21 tax remains unpaid, shall be added and collected. Where suit is
22 brought for the recovery of such tax, the person liable therefor
23 shall, in addition, be liable for the costs of collection and
24 the interest and penalties herein imposed.
25 (b) One-time waiver of interest authorized.--
26 (1) Notwithstanding the provisions of subsection (a),
27 the school district may, by resolution, establish a one-time
28 period during which interest or interest and penalties that
29 would otherwise be imposed for the nonreporting or
30 underreporting of personal income tax liabilities or for the
31 nonpayment of personal income taxes previously imposed and
32 due shall be waived in total or in part if the taxpayer
33 voluntarily files delinquent returns and pays the taxes in
34 full during the period so established.
35 (2) Each school district may adopt regulations to
36 implement the provisions of this subsection.
37 (c) Proceedings.--The provisions of subsection (b) shall not
38 affect or terminate any petitions, investigations, prosecutions
39 or other proceedings pending on the effective date of this
40 section, or prevent the commencement or further prosecution of
41 any proceedings by the proper authorities for violations of this
42 act. No proceedings shall, however, be commenced on the basis of
43 delinquent returns filed pursuant to subsection (b) if the
44 returns are determined to be substantially true and correct and
45 the taxes are paid in full within the prescribed time.
46 Section 315. Fines and penalties for violation of resolutions.
47 (a) Conduct prohibited.--
48 (1) Any person who fails, neglects or refuses to make
49 any declaration or return required by the resolution, any
50 employer who fails, neglects or refuses to register or to pay
51 the tax deducted from its employees, or fails, neglects or
52 refuses to deduct or withhold the tax from its employees, any
53 person who refuses to permit the officer or any agent
54 designated by that officer to examine the person's books,
55 records and papers, and any person who knowingly makes any
56 incomplete, false or fraudulent return, or attempts to do
57 anything whatsoever to avoid the full disclosure of the
58 amount of the person's personal income in order to avoid the
59 payment of the whole or any part of the tax imposed by the
HB1600A05384 - 11 -
1 resolution, shall, upon conviction thereof, in any county in
2 which the school district imposing the tax is located, be
3 sentenced to pay a fine of not more than $500 for each
4 offense and costs and, in default of payment of the fines and
5 costs, to be imprisoned for a period not exceeding 30 days.
6 (2) Any person who divulges any information which is
7 confidential under the provisions of the resolution shall,
8 upon conviction thereof, be sentenced to pay a fine of not
9 more than $500 for each offense and costs and, in default of
10 payment of said fines and costs, to be imprisoned for a
11 period not exceeding 30 days.
12 (b) Cumulative penalties.--The penalties imposed under this
13 section shall be in addition to any other penalty imposed by any
14 other section of the resolution.
15 (c) Defense unavailable.--The failure of any person to
16 receive or procure forms required for making the declaration or
17 returns by the resolution shall not excuse the person from
18 making the declaration or return.
19 Section 316. Collection at source.
20 (a) Duty of employers to register.--Every employer having an
21 office, factory, workshop, branch, warehouse or other place of
22 business within the school district imposing a tax on personal
23 income who employs one or more persons, other than domestic
24 servants, for a salary, wage, commission or other compensation,
25 who has not previously registered shall, within 15 days after
26 becoming an employer, register with the tax officer his name and
27 address and such other information as the tax officer may
28 require.
29 (b) Duty to deduct tax.--
30 (1) Every employer having an office, factory, workshop,
31 branch, warehouse or other place of business within the
32 school district imposing a tax on personal income who employs
33 one or more persons, other than domestic servants, for a
34 salary, wage, commission or other compensation, shall deduct
35 at the time of payment thereof, the tax imposed pursuant to
36 this chapter due to his employee or employees, and shall, on
37 or before April 30 of the current year, July 31 of the
38 current year, October 31 of the current year and January 31
39 of the succeeding year, file a return and pay to the tax
40 officer the amount of taxes deducted during the preceding
41 three-month periods ending March 31 of the current year, June
42 30 of the current year, September 30 of the current year and
43 December 31 of the current year, respectively.
44 (2) Unless otherwise agreed upon between the tax officer
45 and employer, the return shall show the name and Social
46 Security number of each employee, the compensation of the
47 employee during the preceding three-month period, the tax
48 deducted from the compensation, the school district imposing
49 the tax upon the employee, the total compensation of all
50 employees during the preceding three-month period and the
51 total tax deducted from the compensation and paid with the
52 return.
53 (3) Any employer that for two of the preceding four
54 quarterly periods has failed to deduct the proper tax, or any
55 part thereof, or has failed to pay over the proper amount of
56 tax to the school district, may be required by the officer to
57 file the employer's return and pay the tax monthly. In such
58 cases, payments of tax shall be made to the tax officer on or
59 before the last day of the month succeeding the month for
HB1600A05384 - 12 -
1 which the tax was withheld.
2 (c) Duty to file annual return.--On or before February 28 of
3 the succeeding year, every employer shall file with the tax
4 officer:
5 (1) An annual return showing the total amount of
6 compensation paid, the total amount of tax deducted and the
7 total amount of tax paid to the tax officer for the period
8 beginning January 1 of the current year and ending December
9 31 of the current year.
10 (2) A return withholding statement for each employee
11 employed during all or any part of the period beginning
12 January 1 of the current year and ending December 31 of the
13 current year, setting forth the employee's name, address and
14 Social Security number, the amount of earned income paid to
15 the employee during the period, the amount of tax deducted,
16 the school district imposing the tax upon the employees and
17 the amount of tax paid to the tax officer. Every employer
18 shall furnish two copies of the individual return to the
19 employee for whom it is filed.
20 (d) Discontinued businesses.--Every employer who
21 discontinues business prior to December 31 of the current year
22 shall, within 30 days after the discontinuance of business, file
23 the returns and withholding statements required by this section
24 and pay the tax due.
25 (e) Liability of employers.--Every employer who willfully or
26 negligently fails or omits to make the deductions required by
27 this section shall be liable for payment of the taxes which he
28 was required to withhold to the extent that such taxes have not
29 been recovered from the employee.
30 (f) Liability of employees.--The failure or omission of any
31 employer to make the deductions required by this section shall
32 not relieve any employee from the payment of the tax or from
33 complying with the requirements of the ordinance or resolution
34 relating to the filing of declarations and returns.
35 SUBCHAPTER B
36 EDUCATION TAX
37 Section 321. Education tax.
38 (a) Legislative finding.--The General Assembly finds that
39 there is a need for an education tax to offset the loss of
40 revenue caused by the abolition of the school earned income tax
41 and the abolition of other school nuisance taxes and by the need
42 to preserve the tax exemption for food and clothing under the
43 Tax Reform Code of 1971.
44 (b) General rule.--In addition to the tax collected under
45 section 302 of the Tax Reform Code of 1971, the Commonwealth
46 shall impose the tax set forth in subsection (c) in the same
47 manner as the tax under the Tax Reform Code of 1971.
48 (c) Imposition of tax.--
49 (1) Every resident individual, estate or trust shall be
50 subject to, and shall pay for the privilege of receiving each
51 of the classes of income enumerated in section 303 of the Tax
52 Reform Code of 1971, a tax upon each dollar of income
53 received by that resident during that resident's taxable year
54 at the rate of .85%.
55 (2) Every nonresident individual, estate or trust shall
56 be subject to, and shall pay for the privilege of receiving
57 each of the classes of income enumerated in section 303 of
58 the Tax Reform Code of 1971 from sources within this
59 Commonwealth, a tax upon each dollar of income received by
HB1600A05384 - 13 -
1 that nonresident during that nonresident's taxable year at
2 the rate of .85%.
3 (d) Deposit in Education Operating Fund.--All moneys
4 collected under this section shall be deposited in the Education
5 Operating Fund.
6 (e) Combination of tax forms.--The department shall
7 incorporate the taxpayer reporting requirement for the
8 implementation of this section into the forms utilized by the
9 department under Article III of the Tax Reform Code of 1971.
10 (f) Definitions.--The words and phrases used in this section
11 shall have the same meaning given to them in Article III of the
12 Tax Reform Code of 1971.
13 CHAPTER 4
14 STATE REALTY TRANSFER TAX
15 Section 401. Authorization of State realty transfer tax for
16 public education.
17 (a) General rule.--The Commonwealth shall impose the tax set
18 forth in subsection (b) in the same manner as the tax collected
19 under section 1102-C of the Tax Reform Code of 1971.
20 (b) Imposition of tax.--
21 (1) Every person who makes, executes, delivers, accepts
22 or presents for recording any document or in whose behalf any
23 document is made, executed, delivered, accepted or presented
24 for recording, shall be subject to pay for and in respect to
25 the transaction or any part thereof, or for or in respect of
26 the vellum parchment or paper upon which such document is
27 written or printed, a State tax at the rate of .5% of the
28 value of the real estate represented by such document, which
29 State tax shall be payable at the earlier of the time the
30 document is presented for recording or within 30 days of
31 acceptance of such document or within 30 days of becoming an
32 acquired company.
33 (2) The tax imposed under this section shall apply to
34 transactions that occur on or after January 1, 2009.
35 (c) Deposit into Education Operating Fund.--All moneys
36 collected under this section shall be deposited in the Education
37 Operating Fund and shall be utilized in accordance with the
38 provisions of this act.
39 Section 402. Deposit of existing Commonwealth realty transfer
40 tax.
41 All moneys required to be paid to the Commonwealth in
42 accordance with Article XI-C of the Tax Reform Code of 1971
43 shall be credited to the General Fund.
44 CHAPTER 5
45 EARNED INCOME TAX
46 Section 501. Scope.
47 This chapter authorizes school districts to levy, assess and
48 collect an earned income tax.
49 Section 502. Definitions.
50 The following words and phrases when used in this chapter
51 shall have the meanings given to them in this section unless the
52 context clearly indicates otherwise:
53 "Association." A partnership, limited partnership or other
54 unincorporated group of two or more persons.
55 "Business." An enterprise, activity, profession or other
56 undertaking of an unincorporated nature conducted for profit or
57 ordinarily conducted for profit whether by a person, association
58 or other entity.
59 "Corporation." A corporation or joint stock association
HB1600A05384 - 14 -
1 organized under the laws of the United States, this Commonwealth
2 or any other state, territory, foreign country or dependency.
3 "Current year." The calendar year or fiscal year for which a
4 tax is levied.
5 "Department." The Department of Community and Economic
6 Development of the Commonwealth.
7 "Domicile."
8 (1) The place where a person lives and has the person's
9 permanent home and to which the person has the intention of
10 returning whenever the person is absent. Actual residence is
11 not necessarily domicile because domicile is the fixed place
12 of abode which, in the intention of the taxpayer, is
13 permanent rather than transitory.
14 (2) Domicile is the voluntarily fixed place of
15 habitation of a person, not for a mere special or limited
16 purpose, but with the present intention of making a permanent
17 home, until some event occurs to induce the person to adopt
18 some other permanent home.
19 (3) In the case of a business or association, the
20 domicile is any place where the business or association is
21 conducting or engaging in a business for profit within a
22 school district.
23 "Earned income."
24 (1) Compensation as determined under section 303 of the
25 act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform
26 Code of 1971, and regulations in 61 Pa. Code Pt. I Subpt. B
27 Art. V (relating to personal income tax).
28 (2) Employee business expenses are allowable deductions
29 as determined under Article III of the Tax Reform Code of
30 1971.
31 (3) The amount of any housing allowance provided to a
32 member of the clergy shall not be taxable as earned income.
33 "Employer." A person, association, corporation, governmental
34 unit or other entity employing one or more persons, other than
35 domestic servants for compensation.
36 "Nonresident." A person, association or other entity
37 domiciled outside a school district.
38 "Person" or "individual." A natural person.
39 "Political subdivision." A school district.
40 "Preceding year." The calendar year or fiscal year before a
41 current year.
42 "Resident." A person, association, corporation or other
43 entity:
44 (1) living in or maintaining a permanent or fixed place
45 of abode in a school district; or
46 (2) conducting or engaging in a business for profit
47 within a school district.
48 "Succeeding year." The calendar year or fiscal year
49 following a current year.
50 "Tax officer." The person, public employee or private agency
51 designated by a governing body to collect and administer a tax
52 imposed under this chapter, and the treasurer of a school
53 district of the first class A.
54 "Taxpayer." A person, association or other entity required
55 under this chapter to file a tax return or to pay a tax.
56 Section 503. Preemption.
57 No act of the General Assembly shall vacate or preempt any
58 resolution passed or adopted under the authority of this chapter
59 or any other act providing authority for the imposition of a tax
HB1600A05384 - 15 -
1 by a school district, unless the act of the General Assembly
2 expressly vacates or preempts the authority to pass or adopt
3 such resolutions.
4 Section 504. Earned income tax authorization.
5 (a) School districts.--Except as prohibited under Chapter
6 11, each school district shall have the power and may, by
7 resolution, levy, assess and collect or provide for the levying,
8 assessment and collection of a tax for general revenue purposes
9 at a rate as it shall determine on earned income of the
10 residents of the school district. A school district may only
11 impose and increase the rate of earned income tax when that
12 school district complies with the provisions of subsection (b).
13 (b) Adoption of referendum.--
14 (1) In order to levy an earned income tax under this
15 chapter, a governing body shall use the procedures set forth
16 in paragraphs (2), (3), (4), (5), (6) and (7).
17 (2) (i) Subject to the notice and public hearing
18 requirements of paragraph (7), a governing body may levy
19 the earned income tax under this chapter only by
20 obtaining the approval of the electorate of the affected
21 school district in a public referendum at only the
22 municipal election preceding the fiscal year when the
23 earned income tax will be initially imposed or the rate
24 increased.
25 (ii) The referendum question must state the initial
26 rate of the proposed earned income tax, the reason for
27 the tax and the amount of proposed budgeted revenue
28 growth, if any, in the first fiscal year following
29 adoption of the referendum.
30 (iii) The question shall be in clear language that
31 is readily understandable by a layperson. For the purpose
32 of illustration, a referendum question may be framed as
33 follows:
34 Do you favor the imposition of an earned income and
35 net profits tax of X%?
36 (iv) A nonlegal interpretative statement must
37 accompany the question in accordance with section 201.1
38 of the act of June 3, 1937 (P.L.1333, No.320), known as
39 the Pennsylvania Election Code, that includes the
40 following: the initial rate of the earned income tax
41 imposed under this chapter and the estimated revenues to
42 be derived from the initial rate of the earned income tax
43 imposed under this chapter.
44 (3) In the event a school district is located in more
45 than one county, petitions under this section shall be filed
46 with the election officials of the county in which the
47 administrative offices of the school district are located.
48 (4) The election officials who receive a petition shall
49 perform all administrative functions in reviewing and
50 certifying the validity of the petition and conduct all
51 necessary communications with the school district.
52 (5) (i) If the election officials of the county who
53 receive the petition certify that it is sufficient under
54 this section and determine that a question should be
55 placed on the ballot, the decision shall be communicated
56 to election officials in any other county in which the
57 school district is also located.
58 (ii) Election officials in the other county or
59 counties shall cooperate with election officials of the
HB1600A05384 - 16 -
1 county receiving the petition to ensure that an identical
2 question is placed on the ballot at the same election
3 throughout the entire school district.
4 (6) Election officials from each county involved shall
5 independently certify the results from their county to the
6 governing body.
7 (7) (i) In order to levy the tax under this section,
8 the governing body shall adopt a resolution which refers
9 to this chapter prior to placing a question on the
10 ballot.
11 (ii) Prior to adopting a resolution imposing the tax
12 authorized by this section, the governing body shall give
13 public notice of its intent to adopt the resolution in
14 the manner provided by section 4 of The Local Tax
15 Enabling Act and shall conduct at least one public
16 hearing regarding the proposed adoption of the
17 resolution.
18 Section 505. Continuity of tax.
19 Every tax levied under this chapter shall continue in force
20 on a calendar or fiscal year basis, as the case may be, without
21 annual reenactment unless the rate of the tax is subsequently
22 changed.
23 Section 506. Exemption of low-income persons.
24 (a) General rule.--Each school district shall exempt any
25 person whose total income from all sources is less than $10,000
26 per year from the earned income tax, or any portion thereof.
27 (b) Procedures.--Each school district shall adopt procedures
28 for the processing of claims for these exemptions.
29 Section 507. Collection of earned income tax.
30 The tax officer shall collect all earned income tax imposed
31 by a school district.
32 Section 508. Limitation on assessment.
33 No assessment may be made of any earned income tax imposed
34 under this chapter more than five years after the date on which
35 the tax should have been paid except where a fraudulent return
36 or no return has been filed.
37 Section 509. Distress and sale of property of taxpayer.
38 (a) General rule.--In case of the neglect or refusal of any
39 person, association or corporation to make payment of the amount
40 of any earned income tax due after two months from the date of
41 the tax notice, the tax officer shall levy the amount of the
42 tax, penalty, interest and costs thereon, not exceeding costs
43 and charges allowed constables for similar services by distress
44 and sale of the goods and chattels of the delinquent taxpayer,
45 wherever located, after giving at least ten days' public notice
46 of such sale by one advertisement in a newspaper of general
47 circulation published in the county.
48 (b) Effect on return.--No failure to demand or collect any
49 taxes by distress and sale of goods and chattels shall
50 invalidate any return made, lien filed for nonpayment of taxes
51 or any tax sale for the collection of taxes.
52 Section 510. Collection of delinquent taxes from employers.
53 (a) General rule.--The tax officer shall demand, receive and
54 collect from all employers employing persons owing delinquent
55 earned income taxes or having in possession unpaid earned income
56 belonging to any person or persons owing delinquent earned
57 income taxes on the presentation of a written notice and demand
58 certifying that the information contained in the notice and
59 demand is true and correct and containing the name of the
HB1600A05384 - 17 -
1 taxpayer and the amount of tax due.
2 (b) Response to notice.--On the presentation of the written
3 notice and demand, the employer shall deduct from the earned
4 income of the employees then owing, or thereafter due, a sum
5 sufficient to pay the amount of the delinquent earned income
6 taxes, interest, penalty and costs shown on the written notice
7 or demand, and shall pay the same to the tax officer by which
8 the delinquent tax was levied within 60 days after the notice
9 was given.
10 (c) Limitation on deduction.--No more than 10% of the
11 compensation of the delinquent taxpayer may be deducted at any
12 one time for delinquent earned income taxes, penalty, interest
13 and costs.
14 (d) Deduction for costs.--The employer shall be entitled to
15 deduct from the moneys collected from each employee the costs
16 incurred from the extra bookkeeping necessary to record the
17 transactions, not exceeding 2% of the amount collected and paid
18 over to the tax officer.
19 (e) Forfeiture.--If the employer fails to deduct the amount
20 of such taxes or to pay the same over to the tax officer, less
21 the amount deducted under subsection (d), within the time
22 required by this section, the employer shall forfeit and pay the
23 amount of the tax for those taxpayers whose taxes are not
24 withheld and paid over, or that are withheld and not paid over
25 together with a penalty of 10%, to be recovered by a civil
26 action instituted by the tax officer, as debts of like amount
27 are now by law recoverable, except that the person shall not
28 have the benefit of any exemption law or stay of execution.
29 (f) Collection rights preserved.--Nothing in this section
30 shall be deemed to affect or impair the right of any school
31 district or the tax officer to pursue and collect delinquent
32 taxes validly imposed prior to the effective date of this
33 section.
34 Section 511. Collection of delinquent taxes from Commonwealth.
35 (a) General rule.--On presentation of a written notice and
36 demand under oath to the State Treasurer or any other fiscal
37 officer of the Commonwealth, or its boards, authorities,
38 agencies or commissions, the treasurer or officer shall deduct
39 from the compensation then owing a sum sufficient to pay the
40 amount of the delinquent earned income taxes, interest, penalty
41 and costs shown on the written notice. The same shall be paid to
42 the tax officer within 60 days after the notice is given.
43 (b) Limitation on deduction.--No more than 10% of the
44 compensation of the delinquent taxpayer may be deducted at any
45 one time for delinquent earned income taxes, interest, penalty
46 and costs.
47 (c) Collection rights preserved.--Nothing in this section
48 shall be deemed to affect or impair the right of a school
49 district or the tax officer to pursue and collect delinquent
50 taxes validly imposed prior to the effective date of this
51 section.
52 Section 512. Notice to taxpayer.
53 The tax officer shall, at least 15 days prior to the
54 presentation of a written notice and demand under section 510 or
55 511, notify the taxpayer owing the delinquent tax by registered
56 mail that a written notice and demand shall be presented to the
57 taxpayer's employer unless such tax is paid. The return receipt
58 card for registered mail shall be marked delivered to addressee
59 only, and the cost of notification by registered mail shall be
HB1600A05384 - 18 -
1 included in the costs for collecting taxes.
2 Section 513. Collection of taxes by suit.
3 (a) Power to collect.--
4 (1) Each school district and the tax officer shall have
5 power to collect unpaid taxes from taxpayers and employers
6 owing such taxes by a civil action or other appropriate
7 remedy.
8 (2) On judgment, execution may be issued without any
9 stay or benefit of any exemption law.
10 (3) The power to collect unpaid taxes under the
11 provisions of this section shall not be affected by the fact
12 that such taxes have been entered as liens in the office of
13 the prothonotary or the fact that the property against which
14 they were levied has been returned to the county
15 commissioners for taxes for prior years.
16 (b) Limitation of actions.--A suit brought to recover the
17 taxes under subsection (a) shall be instituted within three
18 years after the tax is due or within three years after a
19 declaration or return has been filed, whichever date is later,
20 except in the following cases:
21 (1) If no declaration or return was filed by any person,
22 although a declaration or return was required to be filed
23 under provisions of the ordinance, there shall be no
24 limitation.
25 (2) If an examination of the declaration or return filed
26 by any person, or of other evidence relating to the
27 declaration or return in the possession of the tax officer,
28 reveals a fraudulent evasion of taxes, there shall be no
29 limitation.
30 (3) If there is a substantial understatement of tax
31 liability of 25% or more and no fraud, suit shall be
32 instituted within six years.
33 (4) If a person has deducted taxes under the provisions
34 of the resolution and has failed to pay the amounts so
35 deducted to the tax officer, or if any person has willfully
36 failed or omitted to make the deductions required by this
37 section, there shall be no limitation.
38 (c) Procedures.--The tax officer shall establish the
39 procedures for collecting the earned income tax and paying the
40 full amount collected over to the school district on a quarterly
41 basis.
42 Section 514. Interest and penalties.
43 (a) General rule.--If for any reason the tax is not paid
44 when due, interest at the annual rate of 6% on the amount of the
45 tax, and an additional penalty of .5% of the amount of the
46 unpaid tax for each month or fraction thereof during which the
47 tax remains unpaid, shall be added and collected. Where suit is
48 brought for the recovery of such tax, the person liable therefor
49 shall, in addition, be liable for the costs of collection and
50 the interest and penalties herein imposed.
51 (b) One-time waiver of interest authorized.--
52 (1) Notwithstanding the provisions of subsection (a),
53 the school district may, by resolution, establish a one-time
54 period during which interest or interest and penalties that
55 would otherwise be imposed for the nonreporting or
56 underreporting of earned income tax liabilities or for the
57 nonpayment of earned income taxes previously imposed and due
58 shall be waived in total or in part if the taxpayer
59 voluntarily files delinquent returns and pays the taxes in
HB1600A05384 - 19 -
1 full during the period so established.
2 (2) Each school district may adopt regulations to
3 implement the provisions of this subsection.
4 (c) Proceedings.--The provisions of subsection (b) shall not
5 affect or terminate any petitions, investigations, prosecutions
6 or other proceedings pending on the effective date of this
7 section, or prevent the commencement or further prosecution of
8 any proceedings by the proper authorities for violations of this
9 act. No proceedings shall, however, be commenced on the basis of
10 delinquent returns filed pursuant to subsection (b) if the
11 returns are determined to be substantially true and correct and
12 the taxes are paid in full within the prescribed time.
13 Section 515. Fines and penalties for violation of resolutions.
14 (a) Conduct prohibited.--
15 (1) Any person who fails, neglects or refuses to make
16 any declaration or return required by the resolution, any
17 employer who fails, neglects or refuses to register or to pay
18 the tax deducted from its employees, or fails, neglects or
19 refuses to deduct or withhold the tax from its employees, any
20 person who refuses to permit the officer or any agent
21 designated by that officer to examine the person's books,
22 records and papers, and any person who knowingly makes any
23 incomplete, false or fraudulent return, or attempts to do
24 anything whatsoever to avoid the full disclosure of the
25 amount of the person's earned income in order to avoid the
26 payment of the whole or any part of the tax imposed by the
27 resolution, shall, upon conviction thereof, in any county in
28 which the school district imposing the tax is located be
29 sentenced to pay a fine of not more than $500 for each
30 offense and costs and, in default of payment of the fines and
31 costs, to be imprisoned for a period not exceeding 30 days.
32 (2) Any person who divulges any information which is
33 confidential under the provisions of the resolution shall,
34 upon conviction thereof, be sentenced to pay a fine of not
35 more than $500 for each offense and costs and, in default of
36 payment of said fines and costs, to be imprisoned for a
37 period not exceeding 30 days.
38 (b) Cumulative penalties.--The penalties imposed under this
39 section shall be in addition to any other penalty imposed by any
40 other section of the resolution.
41 (c) Defense unavailable.--The failure of any person to
42 receive or procure forms required for making the declaration or
43 returns required by the resolution shall not excuse the person
44 from making the declaration or return.
45 Section 516. Collection at source.
46 (a) Duty of employers to register.--Every employer having an
47 office, factory, workshop, branch, warehouse or other place of
48 business within the school district imposing a tax on earned
49 income within the taxing district who employs one or more
50 persons, other than domestic servants, for a salary, wage,
51 commission or other compensation, who has not previously
52 registered shall, within 15 days after becoming an employer,
53 register with the tax officer his name and address and such
54 other information as the tax officer may require.
55 (b) Duty to deduct tax.--
56 (1) Every employer having an office, factory, workshop,
57 branch, warehouse or other place of business within the
58 school district imposing a tax on earned income who employs
59 one or more persons, other than domestic servants, for a
HB1600A05384 - 20 -
1 salary, wage, commission or other compensation, shall deduct
2 at the time of payment thereof, the tax imposed pursuant to
3 this chapter on the earned income due to his employee or
4 employees, and shall, on or before April 30 of the current
5 year, July 31 of the current year, October 31 of the current
6 year and January 31 of the succeeding year, file a return and
7 pay to the tax officer the amount of taxes deducted during
8 the preceding three-month periods ending March 31 of the
9 current year, June 30 of the current year, September 30 of
10 the current year and December 31 of the current year,
11 respectively.
12 (2) Unless otherwise agreed upon between the tax officer
13 and employer, the return shall show the name and Social
14 Security number of each employee, the earned income of the
15 employee during the preceding three-month period, the tax
16 deducted from the compensation, the school district imposing
17 the tax upon the employee, the total earned income of all
18 employees during the preceding three-month period and the
19 total tax deducted from the compensation and paid with the
20 return.
21 (3) Any employer that for two of the preceding four
22 quarterly periods has failed to deduct the proper tax, or any
23 part thereof, or has failed to pay over the proper amount of
24 tax to the school district, may be required by the tax
25 officer to file his return and pay the tax monthly. In such
26 cases, payments of tax shall be made to the tax officer on or
27 before the last day of the month succeeding the month for
28 which the tax was withheld.
29 (c) Duty to file annual return.--On or before February 28 of
30 the succeeding year, every employer shall file with the tax
31 officer:
32 (1) An annual return showing the total amount of earned
33 income paid, the total amount of tax deducted and the total
34 amount of tax paid to the tax officer for the period
35 beginning January 1 of the current year and ending December
36 31 of the current year.
37 (2) A return withholding statement for each employee
38 employed during all or any part of the period beginning
39 January 1 of the current year and ending December 31 of the
40 current year, setting forth the employee's name, address and
41 Social Security number, the amount of earned income paid to
42 the employee during the period, the amount of tax deducted,
43 the school district imposing the tax upon the employees and
44 the amount of tax paid to the tax officer. Every employer
45 shall furnish two copies of the individual return to the
46 employee for whom it is filed.
47 (d) Discontinued businesses.--Every employer who
48 discontinues business prior to December 31 of the current year
49 shall, within 30 days after the discontinuance of business, file
50 the returns and withholding statements required by this section
51 and pay the tax due.
52 (e) Liability of employers.--Every employer who willfully or
53 negligently fails or omits to make the deductions required by
54 this section shall be liable for payment of the taxes which he
55 was required to withhold to the extent that such taxes have not
56 been recovered from the employee.
57 (f) Liability of employees.--The failure or omission of any
58 employer to make the deductions required by this section shall
59 not relieve any employee from the payment of the tax or from
HB1600A05384 - 21 -
1 complying with the requirements of the ordinance or resolution
2 relating to the filing of declarations and returns.
3 CHAPTER 7
4 SALES AND USE TAX FOR EDUCATION
5 SUBCHAPTER A
6 PRELIMINARY PROVISIONS
7 Section 701. Scope.
8 The tax provided for under this chapter shall be known as the
9 Sales and Use Tax for Education, which shall be a replacement
10 for the sales and use tax authorized under Article II of the Tax
11 Reform Code of 1971 and that is repealed by this act.
12 Section 701.1. Definitions.
13 The following words and phrases when used in this chapter
14 shall have the meanings given to them in this section unless the
15 context clearly indicates otherwise:
16 (a) "Soft drinks."
17 (1) All nonalcoholic beverages, whether carbonated or
18 not, such as soda water, ginger ale, Coca Cola, lime cola,
19 Pepsi Cola, Dr Pepper, fruit juice when plain or carbonated
20 water, flavoring or syrup is added, carbonated water,
21 orangeade, lemonade, root beer or any and all preparations,
22 commonly referred to as soft drinks, of whatsoever kind, and
23 are further described as including any and all beverages,
24 commonly referred to as soft drinks, which are made with or
25 without the use of any syrup.
26 (2) The term does not include natural fruit or vegetable
27 juices or their concentrates, or noncarbonated fruit juice
28 drinks containing not less than 25% by volume of natural
29 fruit juices or of fruit juice which has been reconstituted
30 to its original state, or natural concentrated fruit or
31 vegetable juices reconstituted to their original state,
32 whether any of the natural juices are frozen or unfrozen,
33 sweetened or unsweetened, seasoned with salt or spice or
34 unseasoned. The term also does not include coffee, coffee
35 substitutes, tea, cocoa, natural fluid milk or noncarbonated
36 drinks made from milk derivatives.
37 (b) "Maintaining a place of business in this Commonwealth."
38 (1) Having, maintaining or using within this
39 Commonwealth, either directly or through a subsidiary,
40 representative or an agent, an office, distribution house,
41 sales house, warehouse, service enterprise or other place of
42 business; or any agent of general or restricted authority, or
43 representative, irrespective of whether the place of
44 business, representative or agent is located in this
45 Commonwealth, permanently or temporarily, or whether the
46 person or subsidiary maintaining the place of business,
47 representative or agent is authorized to do business within
48 this Commonwealth.
49 (2) Engaging in any activity as a business within this
50 Commonwealth by any person, either directly or through a
51 subsidiary, representative or an agent, in connection with
52 the lease, sale or delivery of tangible personal property or
53 the performance of services thereon for use, storage or
54 consumption or in connection with the sale or delivery for
55 use of the services described in subclauses (11) through (18)
56 of clause (k) of this section, including, but not limited to,
57 having, maintaining or using any office, distribution house,
58 sales house, warehouse or other place of business, any stock
59 of goods or any solicitor, canvasser, salesman,
HB1600A05384 - 22 -
1 representative or agent under its authority, at its direction
2 or with its permission, regardless of whether the person or
3 subsidiary is authorized to do business in this Commonwealth.
4 (3) Regularly or substantially soliciting orders within
5 this Commonwealth in connection with the lease, sale or
6 delivery of tangible personal property to or the performance
7 thereon of services or in connection with the sale or
8 delivery of the services described in subclauses (11) through
9 (18) of clause (k) of this section for residents of this
10 Commonwealth by means of catalogs or other advertising,
11 whether the orders are accepted within or without this
12 Commonwealth.
13 (3.1) Entering this Commonwealth by any person to
14 provide assembly, service or repair of tangible personal
15 property, either directly or through a subsidiary,
16 representative or an agent.
17 (3.2) Delivering tangible personal property to locations
18 within this Commonwealth if the delivery includes the
19 unpacking, positioning, placing or assembling of the tangible
20 personal property.
21 (3.3) Having any contact within this Commonwealth which
22 would allow the Commonwealth to require a person to collect
23 and remit tax under the Constitution of the United States.
24 (3.4) Providing a customer's mobile telecommunications
25 service deemed to be provided by the customer's home service
26 provider under the Mobile Telecommunications Sourcing Act (4
27 U.S.C. § 116). For purposes of this clause, words and phrases
28 used in this clause shall have the meanings given to them in
29 the Mobile Telecommunications Sourcing Act.
30 (4) The term does not include:
31 (i) Owning or leasing of tangible or intangible
32 property by a person who has contracted with an
33 unaffiliated commercial printer for printing, provided
34 that:
35 (A) the property is for use by the commercial
36 printer; and
37 (B) the property is located at the Pennsylvania
38 premises of the commercial printer.
39 (ii) Visits by a person's employees or agents to the
40 premises in this Commonwealth of an unaffiliated
41 commercial printer with whom the person has contracted
42 for printing in connection with said contract.
43 (c) "Manufacture." The performance of manufacturing,
44 fabricating, compounding, processing or other operations,
45 engaged in as a business, which place any tangible personal
46 property in a form, composition or character different from that
47 in which it is acquired whether for sale or use by the
48 manufacturer, and shall include, but not be limited to:
49 (1) Every operation commencing with the first production
50 stage and ending with the completion of tangible personal
51 property having the physical qualities, including packaging,
52 if any, passing to the ultimate consumer, which it has when
53 transferred by the manufacturer to another. For purposes of
54 this definition, "operation" includes clean rooms and their
55 component systems, including: environmental control systems,
56 antistatic vertical walls and manufacturing platforms and
57 floors which are independent of the real estate; process
58 piping systems; specialized lighting systems; deionized water
59 systems; process vacuum and compressed air systems; process
HB1600A05384 - 23 -
1 and specialty gases; and alarm or warning devices
2 specifically designed to warn of threats to the integrity of
3 the product or people. For purposes of this definition, a
4 "clean room" is a location with a self-contained, sealed
5 environment with a controlled, closed air system independent
6 from the facility's general environmental control system.
7 (2) The publishing of books, newspapers, magazines and
8 other periodicals and printing.
9 (3) Refining, blasting, exploring, mining and quarrying
10 for, or otherwise extracting from the earth or from waste or
11 stock piles or from pits or banks any natural resources,
12 minerals and mineral aggregates including blast furnace slag.
13 (4) Building, rebuilding, repairing and making additions
14 to, or replacements in or upon vessels designed for
15 commercial use of registered tonnage of 50 tons or more when
16 produced on special order of the purchaser, or when rebuilt,
17 repaired or enlarged, or when replacements are made upon
18 order of or for the account of the owner.
19 (5) Research having as its objective the production of a
20 new or an improved:
21 (i) product or utility service; or
22 (ii) method of producing a product or utility
23 service,
24 but in either case not including market research or research
25 having as its objective the improvement of administrative
26 efficiency.
27 (6) Remanufacture for wholesale distribution by a
28 remanufacturer of motor vehicle parts from used parts
29 acquired in bulk by the remanufacturer using an assembly line
30 process which involves the complete disassembly of such parts
31 and integration of the components of such parts with other
32 used or new components of parts, including the salvaging,
33 recycling or reclaiming of used parts by the remanufacturer.
34 (7) Remanufacture or retrofit by a manufacturer or
35 remanufacturer of aircraft, armored vehicles, other defense-
36 related vehicles having a finished value of at least $50,000.
37 Remanufacture or retrofit involves the disassembly of such
38 aircraft, vehicles, parts or components, including electric
39 or electronic components, the integration of those parts and
40 components with other used or new parts or components,
41 including the salvaging, recycling or reclaiming of the used
42 parts or components and the assembly of the new or used
43 aircraft, vehicles, parts or components. The term does not
44 include constructing, altering, servicing, repairing or
45 improving real estate or repairing, servicing or installing
46 tangible personal property, nor the cooking, freezing or
47 baking of fruits, vegetables, mushrooms, fish, seafood,
48 meats, poultry or bakery products. For purposes of this
49 clause, the following terms or phrases have the following
50 meanings:
51 (i) "aircraft" means fixed-wing aircraft,
52 helicopters, powered aircraft, tilt-rotor or tilt-wing
53 aircraft, unmanned aircraft and gliders;
54 (ii) "armored vehicles" means tanks, armed personnel
55 carriers and all other armed track or semitrack vehicles;
56 and
57 (iii) "other defense-related vehicles" means trucks,
58 truck-tractors, trailers, jeeps and other utility
59 vehicles, including any unmanned vehicles.
HB1600A05384 - 24 -
1 (c.1) "Blasting." The use of any combustible or explosive
2 composition in the removal of material resources, minerals and
3 mineral aggregates from the earth including the separation of
4 the dirt, waste and refuse in which they are found.
5 (d) "Processing." The performance of the following
6 activities when engaged in as a business enterprise:
7 (1) The filtering or heating of honey, the cooking,
8 baking or freezing of fruits, vegetables, mushrooms, fish,
9 seafood, meats, poultry or bakery products, when the person
10 engaged in the business packages the property in sealed
11 containers for wholesale distribution.
12 (1.1) The processing of fruits or vegetables by
13 cleaning, cutting, coring, peeling or chopping and treating
14 to preserve, sterilize or purify and substantially extend the
15 useful shelf life of the fruits or vegetables, when the
16 person engaged in the activity packages the property in
17 sealed containers for wholesale distribution.
18 (2) The scouring, carbonizing, cording, combing,
19 throwing, twisting or winding of natural or synthetic fibers,
20 or the spinning, bleaching, dyeing, printing or finishing of
21 yarns or fabrics, when the activities are performed prior to
22 sale to the ultimate consumer.
23 (3) The electroplating, galvanizing, enameling,
24 anodizing, coloring, finishing, impregnating or heat treating
25 of metals or plastics for sale or in the process of
26 manufacturing.
27 (3.1) The blanking, shearing, leveling, slitting or
28 burning of metals for sale to or use by a manufacturer or
29 processor.
30 (4) The rolling, drawing or extruding of ferrous and
31 nonferrous metals.
32 (5) The fabrication for sale of ornamental or structural
33 metal or of metal stairs, staircases, gratings, fire escapes
34 or railings, not including fabrication work done at the
35 construction site.
36 (6) The preparation of animal feed or poultry feed for
37 sale.
38 (7) The production, processing and bottling of
39 nonalcoholic beverages for wholesale distribution.
40 (8) The operation of a saw mill or planing mill for the
41 production of lumber or lumber products for sale. The
42 operation of a saw mill or planing mill begins with the
43 unloading by the operator of the saw mill or planing mill of
44 logs, timber, pulpwood or other forms of wood material to be
45 used in the saw mill or planing mill.
46 (9) The milling for sale of flour or meal from grains.
47 (9.1) The aging, stripping, conditioning, crushing and
48 blending of tobacco leaves for use as cigar filler or as
49 components of smokeless tobacco products for sale to
50 manufacturers of tobacco products.
51 (10) The slaughtering and dressing of animals for meat
52 to be sold or to be used in preparing meat products for sale,
53 and the preparation of meat products including lard, tallow,
54 grease, cooking and inedible oils for wholesale distribution.
55 (11) The processing of used lubricating oils.
56 (12) The broadcasting of radio and television programs
57 of licensed commercial or educational stations.
58 (13) The cooking or baking of bread, pastries, cakes,
59 cookies, muffins and donuts when the person engaged in the
HB1600A05384 - 25 -
1 activity sells the items at retail at locations that do not
2 constitute an establishment from which ready-to-eat food and
3 beverages are sold. For purposes of this clause, a bakery, a
4 pastry shop and a donut shop shall not be considered an
5 establishment from which ready-to-eat food and beverages are
6 sold.
7 (14) The cleaning and roasting and the blending,
8 grinding or packaging for sale of coffee from green coffee
9 beans or the production of coffee extract.
10 (15) The preparation of dry or liquid fertilizer for
11 sale.
12 (16) The production, processing and packaging of ice for
13 wholesale distribution.
14 (17) The producing of mobile telecommunications
15 services.
16 (e) "Person." Any natural person, association, fiduciary,
17 partnership, corporation or other entity, including the
18 Commonwealth of Pennsylvania, its political subdivisions and
19 instrumentalities and public authorities. Whenever used in
20 prescribing and imposing a penalty or imposing a fine or
21 imprisonment, or both, the term as applied to an association,
22 includes the members of the association and, as applied to a
23 corporation, the officers of the corporation.
24 (f) "Purchase at retail."
25 (1) The acquisition for a consideration of the
26 ownership, custody or possession of tangible personal
27 property other than for resale by the person acquiring the
28 same when the acquisition is made for the purpose of
29 consumption or use, whether the acquisition is absolute or
30 conditional, and by any means it is effected.
31 (2) The acquisition of a license to use or consume, and
32 the rental or lease of tangible personal property, other than
33 for resale regardless of the period of time the lessee has
34 possession or custody of the property.
35 (3) The obtaining for a consideration of those services
36 described in subclauses (2), (3) and (4) of clause (k) of
37 this section other than for resale.
38 (4) A retention after March 7, 1956, of possession,
39 custody or a license to use or consume pursuant to a rental
40 contract or other lease arrangement (other than as security)
41 other than for resale.
42 (5) The obtaining for a consideration of those services
43 described in subclauses (11) through (18) of clause (k) of
44 this section.
45 The term, with respect to liquor and malt or brewed beverages,
46 includes the purchase of liquor from any Pennsylvania Liquor
47 Store by any person for any purpose, and the purchase of malt or
48 brewed beverages from a manufacturer of malt or brewed
49 beverages, distributor or importing distributor by any person
50 for any purpose, except purchases from a manufacturer of malt or
51 brewed beverages by a distributor or importing distributor or
52 purchases from an importing distributor by a distributor within
53 the meaning of the Liquor Code. The term does not include any
54 purchase of malt or brewed beverages from a retail dispenser or
55 any purchase of liquor or malt or brewed beverages from a person
56 holding a retail liquor license within the meaning of and
57 pursuant to the provisions of the Liquor Code, but includes any
58 purchase or acquisition of liquor or malt or brewed beverages
59 other than pursuant to the provisions of the Liquor Code.
HB1600A05384 - 26 -
1 (g) "Purchase price."
2 (1) The total value of anything paid or delivered, or
3 promised to be paid or delivered, whether money or otherwise,
4 in complete performance of a sale at retail or purchase at
5 retail, without any deduction on account of the cost or value
6 of the property sold, cost or value of transportation, cost
7 or value of labor or service, interest or discount paid or
8 allowed after the sale is consummated, any other taxes
9 imposed by the Commonwealth or any other expense except that
10 there shall be excluded any gratuity or separately stated
11 deposit charge for returnable containers.
12 (2) The value of any tangible personal property actually
13 taken in trade or exchange in lieu of the whole or any part
14 of the purchase price shall be deducted from the purchase
15 price. For the purpose of this clause, the amount allowed by
16 reason of tangible personal property actually taken in trade
17 or exchange shall be considered the value of such property.
18 (3) (i) In determining the purchase price on the sale
19 or use of taxable tangible personal property or a service
20 where, because of affiliation of interests between the
21 vendor and purchaser, or irrespective of any such
22 affiliation, if for any other reason the purchase price
23 declared by the vendor or taxpayer on the taxable sale or
24 use of such tangible personal property or service is, in
25 the opinion of the department, not indicative of the true
26 value of the article or service or the fair price
27 thereof, the department shall, pursuant to uniform and
28 equitable rules, determine the amount of constructive
29 purchase price on the basis of which the tax shall be
30 computed and levied. The rules shall provide for a
31 constructive amount of purchase price for each sale or
32 use which would naturally and fairly be charged in an
33 arms-length transaction in which the element of common
34 interest between the vendor or purchaser is absent or, if
35 no common interest exists, any other element causing a
36 distortion of the price or value is likewise absent.
37 (ii) For the purpose of this clause where a taxable
38 sale or purchase at retail transaction occurs between a
39 parent and a subsidiary, affiliate or controlled
40 corporation of such parent corporation, there shall be a
41 rebuttable presumption, that because of the common
42 interest, the transaction was not at arms-length.
43 (4) Where there is a transfer or retention of possession
44 or custody, whether it is termed a rental, lease, service or
45 otherwise, of tangible personal property including, but not
46 limited to, linens, aprons, motor vehicles, trailers, tires,
47 industrial office and construction equipment, and business
48 machines the full consideration paid or delivered to the
49 vendor or lessor shall be considered the purchase price, even
50 though the consideration is separately stated and designated
51 as payment for processing, laundering, service, maintenance,
52 insurance, repairs, depreciation or otherwise. Where the
53 vendor or lessor supplies or provides an employee to operate
54 the tangible personal property, the value of the labor
55 supplied may be excluded and shall not be considered as part
56 of the purchase price if separately stated. There shall also
57 be included as part of the purchase price the value of
58 anything paid or delivered, or promised to be paid or
59 delivered by a lessee, whether money or otherwise, to any
HB1600A05384 - 27 -
1 person other than the vendor or lessor by reason of the
2 maintenance, insurance or repair of the tangible personal
3 property which a lessee has the possession or custody of
4 under a rental contract or lease arrangement.
5 (5) (i) With respect to the tax imposed by section
6 702(a)(2), on any tangible personal property originally
7 purchased by the user of the property six months or
8 longer prior to the first taxable use of the property
9 within this Commonwealth, the user may elect to pay tax
10 on a substituted base determined by considering the
11 purchase price of the property for tax purposes to be
12 equal to the prevailing market price of similar tangible
13 personal property at the time and place of the first use
14 within this Commonwealth.
15 (ii) The election must be made at the time of filing
16 a tax return with the department and reporting the tax
17 liability and paying the proper tax due plus all accrued
18 penalties and interest, if any, within six months of the
19 due date of such report and payment, as provided for by
20 section 717(a) and (c).
21 (6) The purchase price of employment agency services and
22 help supply services shall be the service fee paid by the
23 purchaser to the vendor or supplying entity. The term
24 "service fee," as used in this subclause, means the total
25 charge or fee of the vendor or supplying entity minus the
26 costs of the supplied employee which costs are wages,
27 salaries, bonuses and commissions, employment benefits,
28 expense reimbursements and payroll and withholding taxes, to
29 the extent that these costs are specifically itemized or that
30 these costs in aggregate are stated in billings from the
31 vendor or supplying entity. To the extent that these costs
32 are not itemized or stated on the billings, then the service
33 fee shall be the total charge or fee of the vendor or
34 supplying entity.
35 (7) Unless the vendor separately states that portion of
36 the billing which applies to premium cable service as defined
37 in clause (ll), the total bill for the provision of all cable
38 services shall be the purchase price.
39 (8) The purchase price of prebuilt housing shall be 60%
40 of the manufacturer's selling price, provided that a
41 manufacturer of prebuilt housing who precollects tax from a
42 prebuilt housing builder at the time of the sale to the
43 prebuilt housing builder shall have the option to collect tax
44 on 60% of the selling price or on 100% of the actual cost of
45 the supplies and materials used in the manufacture of the
46 prebuilt housing.
47 (h) "Purchaser." Any person who acquires, for a
48 consideration, the ownership, custody or possession by sale,
49 lease or otherwise of tangible personal property, or who obtains
50 services in exchange for a purchase price but not including an
51 employer who obtains services from his employees in exchange for
52 wages or salaries when such services are rendered in the
53 ordinary scope of their employment.
54 (i) "Resale."
55 (1) Any transfer of ownership, custody or possession of
56 tangible personal property for a consideration, including the
57 grant of a license to use or consume and transactions where
58 the possession of the property is transferred but where the
59 transferor retains title only as security for payment of the
HB1600A05384 - 28 -
1 selling price whether the transaction is designated as
2 bailment lease, conditional sale or otherwise.
3 (2) The physical incorporation of tangible personal
4 property as an ingredient or constituent into other tangible
5 personal property, which is to be sold in the regular course
6 of business or the performance of those services described in
7 subclauses (2), (3) and (4) of clause (k) upon tangible
8 personal property which is to be sold in the regular course
9 of business or where the person incorporating the property
10 has undertaken at the time of purchase to cause it to be
11 transported in interstate commerce to a destination outside
12 this Commonwealth. The term includes telecommunications
13 services purchased by a cable operator or video programmer
14 that are used to transport or deliver cable or video
15 programming services which are sold in the regular course of
16 business.
17 (3) The term also includes tangible personal property
18 purchased or having a situs within this Commonwealth solely
19 for the purpose of being processed, fabricated or
20 manufactured into, attached to or incorporated into tangible
21 personal property and thereafter transported outside this
22 Commonwealth for use exclusively outside this Commonwealth.
23 (4) The term does not include any sale of malt or brewed
24 beverages by a retail dispenser, or any sale of liquor or
25 malt or brewed beverages by a person holding a retail liquor
26 license within the meaning of the act of April 12, 1951
27 (P.L.90, No.21), known as the Liquor Code.
28 (5) The physical incorporation of tangible personal
29 property as an ingredient or constituent in the construction
30 of foundations for machinery or equipment the sale or use of
31 which is excluded from tax under the provisions of paragraphs
32 (A), (B), (C) and (D) of subclause (8) of clause (k) and
33 subparagraphs (i), (ii), (iii) and (iv) of paragraph (B) of
34 subclause (4) of clause (o), whether the foundations at the
35 time of construction or transfer constitute tangible personal
36 property or real estate.
37 (j) "Resident."
38 (1) Any natural person:
39 (i) who is domiciled in this Commonwealth; or
40 (ii) who maintains a permanent place of abode within
41 this Commonwealth and spends in the aggregate more than
42 60 days of the year within this Commonwealth.
43 (2) Any corporation:
44 (i) incorporated under the laws of this
45 Commonwealth;
46 (ii) authorized to do business or doing business
47 within this Commonwealth; or
48 (iii) maintaining a place of business within this
49 Commonwealth.
50 (3) Any association, fiduciary, partnership or other
51 entity:
52 (i) domiciled in this Commonwealth;
53 (ii) authorized to do business or doing business
54 within this Commonwealth; or
55 (iii) maintaining a place of business within this
56 Commonwealth.
57 (k) "Sale at retail."
58 (1) Any transfer, for a consideration, of the ownership,
59 custody or possession of tangible personal property,
HB1600A05384 - 29 -
1 including the grant of a license to use or consume whether
2 the transfer is absolute or conditional and by any means the
3 transfer is effected.
4 (2) The rendition of the service of printing or
5 imprinting of tangible personal property for a consideration
6 for persons who furnish, either directly or indirectly, the
7 materials used in the printing or imprinting.
8 (3) The rendition for a consideration of the service of:
9 (i) washing, cleaning, waxing, polishing or
10 lubricating of motor vehicles of another, regardless of
11 whether any tangible personal property is transferred in
12 conjunction with the activity; and
13 (ii) inspecting motor vehicles pursuant to the
14 mandatory requirements of 75 Pa.C.S. (relating to
15 vehicles).
16 (4) The rendition for a consideration of the service of
17 repairing, altering, mending, pressing, fitting, dyeing,
18 laundering, drycleaning or cleaning tangible personal
19 property other than wearing apparel or shoes, or applying or
20 installing tangible personal property as a repair or
21 replacement part of other tangible personal property other
22 than wearing apparel or shoes for a consideration, regardless
23 of whether the services are performed directly or by any
24 means other than by coin-operated self-service laundry
25 equipment for wearing apparel or household goods and whether
26 or not any tangible personal property is transferred in
27 conjunction with the activity, including such services as are
28 rendered in the construction, reconstruction, remodeling,
29 repair or maintenance of real estate.
30 (5) (Reserved).
31 (6) (Reserved).
32 (7) (Reserved).
33 (8) Any retention of possession, custody or a license to
34 use or consume tangible personal property or any further
35 obtaining of services described in subclauses (2), (3) and
36 (4) of this clause pursuant to a rental or service contract
37 or other arrangement (other than as security). The term does
38 not include:
39 (i) any transfer of tangible personal property or
40 rendition of services for the purpose of resale; or
41 (ii) the rendition of services or the transfer of
42 tangible personal property, including, but not limited
43 to, machinery and equipment and their parts and supplies
44 to be used or consumed by the purchaser directly in the
45 operations of:
46 (A) The manufacture of tangible personal
47 property.
48 (B) Farming, dairying, agriculture, horticulture
49 or floriculture when engaged in as a business
50 enterprise. The term "farming" includes the
51 propagation and raising of ranch raised fur-bearing
52 animals and the propagation of game birds for
53 commercial purposes by holders of propagation permits
54 issued under 34 Pa.C.S. (relating to game) and the
55 propagation and raising of horses to be used
56 exclusively for commercial racing activities.
57 (C) The producing, delivering or rendering of a
58 public utility service, or in constructing,
59 reconstructing, remodeling, repairing or maintaining
HB1600A05384 - 30 -
1 the facilities which are directly used in producing,
2 delivering or rendering the service.
3 (D) Processing as defined in clause (d). The
4 exclusions provided in this paragraph or paragraph
5 (A), (B) or (C) do not apply to any vehicle required
6 registered under 75 Pa.C.S. (relating to vehicles),
7 except those vehicles used directly by a public
8 utility engaged in business as a common carrier; to
9 maintenance facilities; or to materials, supplies or
10 equipment to be used or consumed in the construction,
11 reconstruction, remodeling, repair or maintenance of
12 real estate other than directly used machinery,
13 equipment, parts or foundations that may be affixed
14 to such real estate. The exclusions provided in this
15 paragraph or paragraph (A), (B) or (C) do not apply
16 to tangible personal property or services to be used
17 or consumed in managerial sales or other
18 nonoperational activities, nor to the purchase or use
19 of tangible personal property or services by any
20 person other than the person directly using the same
21 in the operations described in this paragraph or
22 paragraph (A), (B) or (C).
23 The exclusion provided in paragraph (C) does not apply to:
24 (i) construction materials, supplies or equipment
25 used to construct, reconstruct, remodel, repair or
26 maintain facilities not used directly by the purchaser in
27 the production, delivering or rendition of public utility
28 service;
29 (ii) construction materials, supplies or equipment
30 used to construct, reconstruct, remodel, repair or
31 maintain a building, road or similar structure; or
32 (iii) tools and equipment used but not installed in
33 the maintenance of facilities used directly in the
34 production, delivering or rendition of a public utility
35 service. The exclusions provided in paragraphs (A), (B),
36 (C) and (D) do not apply to the services enumerated in
37 clauses (k)(11) through (18) and (w) through (kk), except
38 that the exclusion provided in this subclause for
39 farming, dairying and agriculture shall apply to the
40 service enumerated in clause (z).
41 (9) Where tangible personal property or services are
42 utilized for purposes constituting a sale at retail and for
43 purposes excluded from the definition of "sale at retail," it
44 shall be presumed that the tangible personal property or
45 services are utilized for purposes constituting a sale at
46 retail and subject to tax unless the user proves to the
47 department that the predominant purposes for which such
48 tangible personal property or services are utilized do not
49 constitute a sale at retail.
50 (10) The term, with respect to liquor and malt or brewed
51 beverages, includes the sale of liquor by any Pennsylvania
52 liquor store to any person for any purpose, and the sale of
53 malt or brewed beverages by a manufacturer of malt or brewed
54 beverages, distributor or importing distributor to any person
55 for any purpose, except sales by a manufacturer of malt or
56 brewed beverages to a distributor or importing distributor or
57 sales by an importing distributor to a distributor within the
58 meaning of the act of April 12, 1951 (P.L.90, No.21), known
59 as the Liquor Code. The term does not include any sale of
HB1600A05384 - 31 -
1 malt or brewed beverages by a retail dispenser or any sale of
2 liquor or malt or brewed beverages by a person holding a
3 retail liquor license within the meaning of and pursuant to
4 the provisions of the Liquor Code, but shall include any sale
5 of liquor or malt or brewed beverages other than pursuant to
6 the provisions of the Liquor Code.
7 (11) The rendition for a consideration of lobbying
8 services.
9 (12) The rendition for a consideration of adjustment
10 services, collection services or credit reporting services.
11 (13) The rendition for a consideration of secretarial or
12 editing services.
13 (14) The rendition for a consideration of disinfecting
14 or pest control services, building maintenance or cleaning
15 services.
16 (15) The rendition for a consideration of employment
17 agency services or help supply services.
18 (16) (Reserved).
19 (17) The rendition for a consideration of lawn care
20 service.
21 (18) The rendition for a consideration of self-storage
22 service.
23 (19) The rendition for a consideration of a mobile
24 telecommunications service.
25 (20) (i) The rendition for a consideration of any
26 service, other than physician or dental services, when
27 the primary objective of the purchaser is the receipt of
28 any benefit of the service performed, as distinguished
29 from the receipt of property. In determining what is a
30 service, the intended use or stated objective of the
31 contracting parties shall not necessarily be controlling.
32 (ii) Any service performed in this Commonwealth
33 shall be subject to the tax imposed under this chapter
34 unless specifically exempted in this chapter. With
35 respect to services, other than telecommunication
36 services, the services shall be considered to be
37 performed in this Commonwealth if:
38 (A) performed completely in this Commonwealth;
39 (B) performed partially in this Commonwealth and
40 partially outside this Commonwealth when the
41 recipient or user of the service is located in this
42 Commonwealth;
43 (C) performed partially in this Commonwealth and
44 partially outside this Commonwealth if the recipient
45 or user of the service is not located in this
46 Commonwealth, but only to the extent of those
47 services actually performed in this Commonwealth; or
48 (D) the place of performance cannot be
49 determined if the recipient or user of the service is
50 located in this Commonwealth.
51 (iii) With respect to services, other than
52 telecommunication services, the services performed
53 partially in this Commonwealth and partially outside this
54 Commonwealth shall be presumed to have been performed
55 completely in this Commonwealth unless the taxpayer can
56 show the place of performance by clear and convincing
57 evidence.
58 (iv) With respect to interstate telecommunications
59 services, only those charges for interstate
HB1600A05384 - 32 -
1 telecommunications which originate or are terminated in
2 this Commonwealth and which are billed and charged to a
3 service address in this Commonwealth shall be subject to
4 tax.
5 (v) With respect to services, other than
6 telecommunication services, that are performed in this
7 Commonwealth for a recipient or user of the services
8 located in another state in which the services, had they
9 been performed in that state, would not be subject to a
10 sales or use tax under the laws of that state, then no
11 tax may be imposed under this chapter.
12 (vi) The tax on the sale or use of services shall
13 become due at the time payment or other consideration is
14 made for the portion of services actually paid.
15 (l) "Storage." Any keeping or retention of tangible
16 personal property within this Commonwealth for any purpose
17 including the interim keeping, retaining or exercising any right
18 or power over such tangible personal property. This term is in
19 no way limited to the provision of self-storage service.
20 (m) "Tangible personal property." Corporeal personal
21 property including, but not limited to, goods, wares,
22 merchandise, steam and natural and manufactured and bottled gas
23 for non-residential use, electricity for non-residential use,
24 prepaid telecommunications, premium cable or premium video
25 programming service, spirituous or vinous liquor and malt or
26 brewed beverages and soft drinks, interstate telecommunications
27 service originating or terminating in this Commonwealth and
28 charged to a service address in this Commonwealth, intrastate
29 telecommunications service with the exception of:
30 (1) Subscriber line charges and basic local telephone
31 service for residential use.
32 (2) Charges for telephone calls paid for by inserting
33 money into a telephone accepting direct deposits of money to
34 operate, provided further, the service address of any
35 intrastate telecommunications service is deemed to be within
36 this Commonwealth or within a political subdivision,
37 regardless of how or where billed or paid.
38 In the case of any interstate or intrastate telecommunications
39 service, any charge paid through a credit or payment mechanism
40 which does not relate to a service address, such as a bank,
41 travel, credit or debit card, but not including prepaid
42 telecommunications, is deemed attributable to the address of
43 origination of the telecommunications service.
44 (n) "Taxpayer." Any person required to pay or collect the
45 tax imposed by this chapter.
46 (o) "Use."
47 (1) The exercise of any right or power incidental to the
48 ownership, custody or possession of tangible personal
49 property and includes, but is not limited to, transportation,
50 storage or consumption.
51 (2) The obtaining by a purchaser of the service of
52 printing or imprinting of tangible personal property when the
53 purchaser furnishes, either directly or indirectly, the
54 articles used in the printing or imprinting.
55 (3) The obtaining by a purchaser of the services of:
56 (i) washing, cleaning, waxing, polishing or
57 lubricating of motor vehicles regardless of whether any
58 tangible personal property is transferred to the
59 purchaser in conjunction with the services; and
HB1600A05384 - 33 -
1 (ii) inspecting motor vehicles pursuant to the
2 mandatory requirements of 75 Pa.C.S. (relating to
3 vehicles).
4 (4) The obtaining by a purchaser of the service of
5 repairing, altering, mending, pressing, fitting, dyeing,
6 laundering, drycleaning or cleaning tangible personal
7 property other than wearing apparel or shoes or applying or
8 installing tangible personal property as a repair or
9 replacement part of other tangible personal property,
10 including, but not limited to, wearing apparel or shoes,
11 regardless of whether the services are performed directly or
12 by any means other than by means of coin-operated self-
13 service laundry equipment for wearing apparel or household
14 goods, and regardless of whether any tangible personal
15 property is transferred to the purchaser in conjunction with
16 the activity. The term use does not include:
17 (A) Any tangible personal property acquired and
18 kept, retained or over which power is exercised
19 within this Commonwealth on which the taxing of the
20 storage, use or other consumption thereof is
21 expressly prohibited by the Constitution of the
22 United States or which is excluded from tax under
23 other provisions of this chapter.
24 (B) The use or consumption of tangible personal
25 property, including, but not limited to, machinery
26 and equipment and parts therefor, and supplies or the
27 obtaining of the services described in subclauses
28 (2), (3) and (4) of this clause directly in the
29 operations of:
30 (i) The manufacture of tangible personal property.
31 (ii) Farming, dairying, agriculture, horticulture or
32 floriculture when engaged in as a business enterprise.
33 The term includes the propagation and raising of ranch-
34 raised furbearing animals and the propagation of game
35 birds for commercial purposes by holders of propagation
36 permits issued under 34 Pa.C.S. (relating to game) and
37 the propagation and raising of horses to be used
38 exclusively for commercial racing activities.
39 (iii) The producing, delivering or rendering of a
40 public utility service, or in constructing,
41 reconstructing, remodeling, repairing or maintaining the
42 facilities which are directly used in producing,
43 delivering or rendering such service.
44 (iv) Processing as defined in subclause (d).
45 The exclusions provided in subparagraphs (i), (ii), (iii)
46 and (iv) do not apply to any vehicle required to be
47 registered under 75 Pa.C.S. (relating to vehicles) except
48 those vehicles directly used by a public utility engaged
49 in the business as a common carrier; to maintenance
50 facilities; or to materials, supplies or equipment to be
51 used or consumed in the construction, reconstruction,
52 remodeling, repair or maintenance of real estate other
53 than directly used machinery, equipment, parts or
54 foundations therefor that may be affixed to such real
55 estate. The exclusions provided in subparagraphs (i),
56 (ii), (iii) and this subparagraph do not apply to
57 tangible personal property or services to be used or
58 consumed in managerial sales or other nonoperational
59 activities, nor to the purchase or use of tangible
HB1600A05384 - 34 -
1 personal property or services by any person other than
2 the person directly using the same in the operations
3 described in subparagraphs (i), (ii), (iii) and this
4 subparagraph. The exclusion provided in subparagraph
5 (iii) does not apply to:
6 (A) construction materials, supplies or
7 equipment used to construct, reconstruct, remodel,
8 repair or maintain facilities not used directly by
9 the purchaser in the production, delivering or
10 rendition of public utility service; or
11 (B) tools and equipment used but not installed
12 in the maintenance of facilities used directly in the
13 production, delivering or rendition of a public
14 utility service.
15 The exclusion provided in subparagraphs (i), (ii), (iii)
16 and this subparagraph does not apply to the services
17 enumerated in clauses (9) through (16) and (w) through
18 (kk), except that the exclusion provided in subparagraph
19 (ii) for farming, dairying and agriculture shall apply to
20 the service enumerated in clause (z).
21 (5) Where tangible personal property or services are
22 utilized for purposes constituting a use, and for purposes
23 excluded from the definition of "use," it shall be presumed
24 that the property or services are utilized for purposes
25 constituting a sale at retail and subject to tax unless the
26 user proves to the department that the predominant purposes
27 for which the property or services are utilized do not
28 constitute a sale at retail.
29 (6) The term, with respect to liquor and malt or brewed
30 beverages, includes the purchase of liquor from any
31 Pennsylvania Liquor Store by any person for any purpose and
32 the purchase of malt or brewed beverages from a manufacturer
33 of malt or brewed beverages, distributor or importing
34 distributor by any person for any purpose, except purchases
35 from a manufacturer of malt or brewed beverages by a
36 distributor or importing distributor, or purchases from an
37 importing distributor by a distributor within the meaning of
38 the act of April 12, 1951 (P.L.90, No.21), known as the
39 Liquor Code. The term does not include any purchase of malt
40 or brewed beverages from a retail dispenser or any purchase
41 of liquor or malt or brewed beverages from a person holding a
42 retail liquor license within the meaning of and pursuant to
43 the provisions of the Liquor Code, but includes the exercise
44 of any right or power incidental to the ownership, custody or
45 possession of liquor or malt or brewed beverages obtained by
46 the person exercising the right or power in any manner other
47 than pursuant to the provisions of the Liquor Code.
48 (7) The use of tangible personal property purchased at
49 retail on which the services described in subclauses (2), (3)
50 and (4) of this clause have been performed shall be deemed to
51 be a use of said services by the person using the property.
52 (8) (Reserved).
53 (9) The obtaining by the purchaser of lobbying services.
54 (10) The obtaining by the purchaser of adjustment
55 services, collection services or credit reporting services.
56 (11) The obtaining by the purchaser of secretarial or
57 editing services.
58 (12) The obtaining by the purchaser of disinfecting or
59 pest control services, building maintenance or cleaning
HB1600A05384 - 35 -
1 services.
2 (13) The obtaining by the purchaser of employment agency
3 services or help supply services.
4 (14) (Reserved).
5 (15) The obtaining by the purchaser of lawn care
6 service.
7 (16) The obtaining by the purchaser of self-storage
8 service.
9 (17) The obtaining by a construction contractor of
10 tangible personal property or services provided to tangible
11 personal property which will be used pursuant to a
12 construction contract regardless of whether the tangible
13 personal property or services are transferred.
14 (18) The obtaining of mobile telecommunications service
15 by a customer.
16 (19) (i) The obtaining by the purchaser of any service,
17 not otherwise set forth in this definition, other than
18 physician or dental services, when the primary objective
19 of the purchaser is the receipt of any benefit of the
20 service performed, as distinguished from the receipt of
21 property. In determining what is a service, the intended
22 use or stated objective of the contracting parties shall
23 not necessarily be controlling.
24 (ii) Any service performed in this Commonwealth
25 shall be subject to the tax imposed under this chapter
26 unless specifically exempted in this chapter. With
27 respect to services, other than telecommunication
28 services, such services shall be considered to be
29 performed in this Commonwealth if:
30 (A) performed completely in this Commonwealth;
31 (B) performed partially in this Commonwealth and
32 partially outside this Commonwealth when the
33 recipient or user of the service is located in this
34 Commonwealth;
35 (C) performed partially in this Commonwealth and
36 partially outside this Commonwealth if the recipient
37 or user of the service is not located in this
38 Commonwealth, but only to the extent of those
39 services actually performed in this Commonwealth; or
40 (D) the place of performance cannot be
41 determined if the recipient or user of the service is
42 located in this Commonwealth.
43 (iii) With respect to services, other than
44 telecommunication services, such services performed
45 partially in this Commonwealth and partially outside this
46 Commonwealth shall be presumed to have been performed
47 completely in this Commonwealth unless the taxpayer shows
48 the place of performance by clear and convincing
49 evidence.
50 (iv) With respect to interstate telecommunications
51 services, only those charges for interstate
52 telecommunications which originate or are terminated in
53 this Commonwealth and which are billed and charged to a
54 service address in this Commonwealth shall be subject to
55 tax.
56 (v) With respect to services, other than
57 telecommunication services, that are performed in this
58 Commonwealth for a recipient or user of the services
59 located in another state in which the services, had they
HB1600A05384 - 36 -
1 been performed in that state, would not be subject to a
2 sales or use tax under the laws of that state, then no
3 tax may be imposed under this chapter.
4 (p) "Vendor." Any person maintaining a place of business in
5 this Commonwealth, selling or leasing tangible personal
6 property, or rendering services, the sale or use of which is
7 subject to the tax imposed by this chapter but not including any
8 employee who in the ordinary scope of employment renders
9 services to his employer in exchange for wages and salaries.
10 (q) (Reserved).
11 (r) "Gratuity." Any amount paid or remitted for services
12 performed in conjunction with any sale of food or beverages, or
13 hotel or motel accommodations which amount is in excess of the
14 charges and the tax for such food, beverages or accommodations
15 regardless of the method of billing or payment.
16 (s) "Commercial aircraft operator." A person, excluding a
17 scheduled airline who engages in any or all of the following:
18 charter of aircraft, leasing of aircraft, aircraft sales,
19 aircraft rental, flight instruction, air freight or any other
20 flight activities for compensation.
21 (t) "Transient vendor."
22 (1) Any person who:
23 (i) brings into this Commonwealth, by automobile,
24 truck or other means of transportation, or purchases in
25 this Commonwealth tangible personal property the sale or
26 use of which is subject to the tax imposed by this
27 chapter or comes into this Commonwealth to perform
28 services the sale or use of which is subject to the tax
29 imposed by this chapter;
30 (ii) offers or intends to offer the tangible
31 personal property or services for sale at retail within
32 this Commonwealth; and
33 (iii) does not maintain an established office,
34 distribution house, saleshouse, warehouse, service
35 enterprise, residence from which business is conducted or
36 other place of business within this Commonwealth.
37 (2) The term does not include a person who delivers
38 tangible personal property within this Commonwealth pursuant
39 to orders for the property which were solicited or placed by
40 mail or other means.
41 (3) The term does not include a person who handcrafts
42 items for sale at special events, including, but not limited
43 to, fairs, carnivals, art and craft shows and other festivals
44 and celebrations within this Commonwealth.
45 (u) "Promoter." A person who either, directly or
46 indirectly, rents, leases or otherwise operates or grants
47 permission to any person to use space at a show for the display
48 for sale or for the sale of tangible personal property or
49 services subject to tax under section 702.
50 (v) "Show." An event, the primary purpose of which involves
51 the display or exhibition of any tangible personal property or
52 services for sale, including, but not limited to, a flea market,
53 antique show, coin show, stamp show, comic book show, hobby
54 show, automobile show, fair or any similar show, whether held
55 regularly or of a temporary nature, at which more than one
56 vendor displays for sale or sells tangible personal property or
57 services subject to tax under section 702.
58 (w) "Lobbying services." Providing the services of a
59 lobbyist, as defined in the definition of "lobbyist" in 65
HB1600A05384 - 37 -
1 Pa.C.S. Ch. 13 (relating to lobby regulation and disclosures).
2 (x) "Adjustment services, collection services or credit
3 reporting services." Providing collection or adjustments of
4 accounts receivable or mercantile or consumer credit reporting,
5 including, but not limited to, services of the type provided by
6 adjustment bureaus or collection agencies, consumer or
7 mercantile credit reporting bureaus, credit bureaus or agencies,
8 credit clearinghouses or credit investigation services. The term
9 does not include providing credit card service with collection
10 by a central agency, providing debt counseling or adjustment
11 services to individuals or billing or collection services
12 provided by local exchange telephone companies.
13 (y) "Secretarial or editing services." Providing services
14 which include, but are not limited to, editing, letter writing,
15 proofreading, resume writing, typing or word processing. The
16 term does not include court reporting and stenographic services.
17 (z) "Disinfecting or pest control services." Providing
18 disinfecting, termite control, insect control, rodent control or
19 other pest control services. The term includes, but is not
20 limited to, deodorant servicing of rest rooms, washroom
21 sanitation service, rest room cleaning service, extermination
22 service or fumigating service. As used in this clause, the term
23 "fumigating service" does not include the fumigation of
24 agricultural commodities or containers used for agricultural
25 commodities. As used in this clause, the term "insect control"
26 does not include the gypsy moth control spraying of trees which
27 are harvested for commercial purposes.
28 (aa) "Building maintenance or cleaning services." Providing
29 services which include, but are not limited to, janitorial, maid
30 or housekeeping service, office or interior building cleaning or
31 maintenance service, window cleaning service, floor waxing
32 service, lighting maintenance service such as bulb replacement,
33 cleaning, chimney cleaning service, acoustical tile cleaning
34 service, venetian blind cleaning, cleaning and maintenance of
35 telephone booths or cleaning and degreasing of service stations.
36 The term does not include: repairs on buildings and other
37 structures; the maintenance or repair of boilers, furnaces and
38 residential air conditioning equipment or their parts; the
39 painting, wallpapering or applying other like coverings to
40 interior walls, ceilings or floors; or the exterior painting of
41 buildings.
42 (bb) "Employment agency services." Providing employment
43 services to a prospective employer or employee other than
44 employment services provided by theatrical employment agencies
45 and motion picture casting bureaus. The term includes, but is
46 not limited to, services of the type provided by employment
47 agencies, executive placing services and labor contractor
48 employment agencies other than farm labor.
49 (cc) "Help supply services." Providing temporary or
50 continuing help where the help supplied is on the payroll of the
51 supplying person or entity, but is under the supervision of the
52 individual or business to which help is furnished. The term
53 includes, but is not limited to, service of a type provided by
54 labor and manpower pools, employee leasing services, office help
55 supply services, temporary help services, usher services,
56 modeling services or fashion show model supply services. The
57 term does not include: providing farm labor services or human
58 health-related services, including nursing, home health care and
59 personal care. As used in this clause, "personal care" shall
HB1600A05384 - 38 -
1 include providing at least one of the following types of
2 assistance to persons with limited ability for self-care:
3 (1) dressing, bathing or feeding;
4 (2) supervising self-administered medication;
5 (3) transferring a person to or from a bed or
6 wheelchair; or
7 (4) routine housekeeping chores when provided in
8 conjunction with and supplied by the same provider of the
9 assistance listed in subclause (1), (2) or (3).
10 (dd) (Reserved).
11 (ee) (Reserved).
12 (ff) (Reserved).
13 (gg) (Reserved).
14 (hh) (Reserved).
15 (ii) (Reserved).
16 (jj) "Lawn care service." Providing services for lawn
17 upkeep, including, but not limited to, fertilizing, lawn mowing,
18 shrubbery trimming or other lawn treatment services.
19 (kk) "Self-storage service." Providing a building, a room
20 in a building or a secured area within a building with separate
21 access provided for each purchaser of self-storage service,
22 primarily for the purpose of storing personal property. The term
23 does not include service involving:
24 (1) safe deposit boxes by financial institutions;
25 (2) storage in refrigerator or freezer units;
26 (3) storage in commercial warehouses;
27 (4) facilities for goods distribution; and
28 (5) lockers in airports, bus stations, museums and other
29 public places.
30 (ll) "Premium cable or premium video programming service."
31 That portion of cable television services, video programming
32 services, community antenna television services or any other
33 distribution of television, video, audio or radio services which
34 meets all of the following criteria:
35 (1) is transmitted with or without the use of wires to
36 purchasers;
37 (2) which consists substantially of programming
38 uninterrupted by paid commercial advertising, including, but
39 not limited to, programming primarily composed of
40 uninterrupted full-length motion pictures or sporting events,
41 pay-per-view, paid programming or like audio or radio
42 broadcasting; and
43 (3) does not constitute a component of a basic service
44 tier provided by a cable television system or a cable
45 programming service tier provided by a cable television
46 system. A basic service tier includes all signals of domestic
47 television broadcast stations, any public, educational,
48 governmental or religious programming and any additional
49 video programming signals or service added to the basic
50 service tier by the cable operator. The basic service tier
51 also includes a single additional lower-priced package of
52 broadcast channels and access information channels which is a
53 subset of the basic service tier as set forth above. A cable
54 programming service tier includes any video programming other
55 than:
56 (i) the basic service tier;
57 (ii) video programming offered on a pay-per-channel
58 or pay-per-view basis; or
59 (iii) a combination of multiple channels of pay-per-
HB1600A05384 - 39 -
1 channel or pay-per-view programming offered as a package.
2 If a purchaser receives or agrees to receive premium cable or
3 premium video programming service, then the following charges
4 are included in the purchase price: charges for installation or
5 repair of any premium cable or premium video programming
6 service, upgrade to include additional premium cable or premium
7 video programming service, downgrade to exclude all or some
8 premium cable or premium video programming service, additional
9 premium cable outlets in excess of ten or any other charge or
10 fee related to premium cable or premium video programming
11 services. The term does not apply to: transmissions by public
12 television, public radio services or official Federal, State or
13 local government cable services; local origination programming
14 which provides a variety of public service programs unique to
15 the community, programming which provides coverage of public
16 affairs issues which are presented without commentary or
17 analysis, including United States Congressional proceedings, or
18 programming which is substantially related to religious
19 subjects; or subscriber charges for access to a video dial tone
20 system or charges by a common carrier to a video programmer for
21 the transport of video programming.
22 (mm) (Reserved).
23 (nn) "Construction contract." A written or oral contract or
24 agreement for the construction, reconstruction, remodeling,
25 renovation or repair of real estate or a real estate structure.
26 The term shall not apply to services which are taxable under
27 clauses (k)(14) and (17) and (o)(12) and (15).
28 (oo) "Construction contractor." A person who performs an
29 activity pursuant to a construction contract, including a
30 subcontractor.
31 (pp) "Building machinery and equipment." Generation
32 equipment, storage equipment, conditioning equipment,
33 distribution equipment and termination equipment, limited to the
34 following:
35 (1) air conditioning limited to heating, cooling,
36 purification, humidification, dehumidification and
37 ventilation;
38 (2) electrical;
39 (3) plumbing;
40 (4) communications limited to voice, video, data, sound,
41 master clock and noise abatement;
42 (5) alarms limited to fire, security and detection;
43 (6) control system limited to energy management, traffic
44 and parking lot and building access;
45 (7) medical system limited to diagnosis and treatment
46 equipment, medical gas, nurse call and doctor paging;
47 (8) laboratory system;
48 (9) cathodic protection system; or
49 (10) furniture, cabinetry and kitchen equipment.
50 The term includes boilers, chillers, air cleaners, humidifiers,
51 fans, switchgear, pumps, telephones, speakers, horns, motion
52 detectors, dampers, actuators, grills, registers, traffic
53 signals, sensors, card access devices, guardrails, medial
54 devices, floor troughs and grates and laundry equipment,
55 together with integral coverings and enclosures, regardless of
56 whether: the item constitutes a fixture or is otherwise affixed
57 to the real estate; damage would be done to the item or its
58 surroundings on removal; or the item is physically located
59 within a real estate structure. The term does not include
HB1600A05384 - 40 -
1 guardrail posts, pipes, fittings, pipe supports and hangers,
2 valves, underground tanks, wire, conduit, receptacle and
3 junction boxes, insulation, ductwork and coverings.
4 (qq) "Real estate structure." A structure or item purchased
5 by a construction contractor pursuant to a construction contract
6 with:
7 (1) a charitable organization, a volunteer firemen's
8 organization, a nonprofit educational institution or a
9 religious organization for religious purposes and which
10 qualifies as an institution of purely public charity under
11 the act of November 26, 1997 (P.L.508, No.55), known as the
12 Institutions of Purely Public Charity Act;
13 (2) the United States; or
14 (3) the Commonwealth, its instrumentalities or political
15 subdivisions.
16 The term includes building machinery and equipment; developed or
17 undeveloped land; streets; roads; highways; parking lots;
18 stadiums and stadium seating; recreational courts; sidewalks;
19 foundations; structural supports; walls; floors; ceilings;
20 roofs; doors; canopies; millwork; elevators; windows and
21 external window coverings; outdoor advertising boards or signs;
22 airport runways; bridges; dams; dikes; traffic control devices,
23 including traffic signs; satellite dishes; antennas; guardrail
24 posts; pipes; fittings; pipe supports and hangers; valves;
25 underground tanks; wire; conduit; receptacle and junction boxes;
26 insulation; ductwork and coverings; and any structure or item
27 similar to any of the foregoing, regardless of whether the
28 structure or item constitutes a fixture or is affixed to the
29 real estate; or damage would be done to the structure or item or
30 its surroundings on removal.
31 (rr) "Telecommunications service." Any one-way transmission
32 or any two-way, interactive transmission of sounds, signals or
33 other intelligence converted to like form which effects or is
34 intended to effect meaningful communications by electronic or
35 electromagnetic means via wire, cable, satellite, light waves,
36 microwaves, radio waves or other transmission media. The term
37 includes all types of telecommunication transmissions, local,
38 toll, wide-area or any other type of telephone service; private
39 line service; telegraph service; radio repeater service;
40 wireless communication service; personal communications system
41 service; cellular telecommunication service; specialized mobile
42 radio service; stationary two-way radio service; and paging
43 service. The term does not include any of the following:
44 (1) Subscriber charges for access to a video dial tone
45 system.
46 (2) Charges to video programmers for the transport of
47 video programming.
48 (3) Charges for access to the Internet. Access to the
49 Internet does not include any of the following:
50 (i) The transport over the Internet or any
51 proprietary network using the Internet protocol of
52 telephone calls, facsimile transmissions or other
53 telecommunications traffic to or from end users on the
54 public switched telephone network if the signal sent from
55 or received by an end user is not in an Internet
56 protocol.
57 (ii) Telecommunication services purchased by an
58 Internet service provider to deliver access to the
59 Internet to its customers.
HB1600A05384 - 41 -
1 (4) Mobile telecommunications services.
2 (ss) "Internet." The international nonproprietary computer
3 network of both Federal and non-Federal interoperable packet
4 switched data networks.
5 (tt) "Commercial racing activities." Any of the following:
6 (1) Thoroughbred and harness racing at which pari-mutuel
7 wagering is conducted under the act of December 17, 1981
8 (P.L.435, No.135), known as the Race Horse Industry Reform
9 Act.
10 (2) Fair racing sanctioned by the State Harness Racing
11 Commission.
12 (uu) "Prepaid telecommunications." A tangible item
13 containing a prepaid authorization number that can be used
14 solely to obtain telecommunications service, including any
15 renewal or increases in the prepaid amount.
16 (vv) "Prebuilt housing." Either of the following:
17 (1) Manufactured housing, including mobile homes, which
18 bears a label as required by and referred to in the act of
19 November 17, 1982 (P.L.676, No.192), known as the
20 Manufactured Housing Construction and Safety Standards
21 Authorization Act.
22 (2) Industrialized housing as defined in the act of May
23 11, 1972 (P.L.286, No.70), known as the Industrialized
24 Housing Act.
25 (ww) "Used prebuilt housing." Prebuilt housing that was
26 previously subject to a sale to a prebuilt housing purchaser.
27 (xx) "Prebuilt housing builder." A person who makes a
28 prebuilt housing sale to a prebuilt housing purchaser.
29 (yy) "Prebuilt housing sale." A sale of prebuilt housing to
30 a prebuilt housing purchaser, including a sale to a landlord,
31 without regard to whether the person making the sale is
32 responsible for installing the prebuilt housing or whether the
33 prebuilt housing becomes a real estate structure upon
34 installation. Temporary installation by a prebuilt housing
35 builder for display purposes of a unit held for resale shall not
36 be considered occupancy for residential purposes.
37 (zz) "Prebuilt housing purchaser." A person who purchases
38 prebuilt housing in a transaction and who intends to occupy the
39 unit for residential purposes in this Commonwealth.
40 (aaa) "Mobile telecommunications service." Mobile
41 telecommunications service as that term is defined in the Mobile
42 Telecommunications Sourcing Act (Public Law 106-252, 4 U.S.C. §
43 116 et seq.).
44 (bbb) "Fiscal Code." The act of April 9, 1929 (P.L.343,
45 No.176), known as The Fiscal Code.
46 (ccc) "Prepaid mobile telecommunications service." Mobile
47 telecommunications service which is paid for in advance and
48 which enables the origination of calls using an access number,
49 authorization code or both, regardless of whether manually or
50 electronically dialed, if the remaining amount of units of the
51 prepaid mobile telecommunications service is known by the
52 service provider of the prepaid mobile telecommunications
53 service on a continuous basis. The term does not include the
54 advance purchase of mobile telecommunications service if the
55 purchase is pursuant to a service contract between the service
56 provider and customer and if the service contract requires the
57 customer to make periodic payments to maintain the mobile
58 telecommunications service.
59 (ddd) "Call center." The physical location in this
HB1600A05384 - 42 -
1 Commonwealth:
2 (1) where at least 150 employees are employed to
3 initiate or answer telephone calls;
4 (2) where there are at least 200 telephone lines; and
5 (3) which utilizes an automated call distribution system
6 for customer telephone calls in one or more of the following
7 activities:
8 (i) customer service and support;
9 (ii) technical assistance;
10 (iii) help desk service;
11 (iv) providing information;
12 (v) conducting surveys;
13 (vi) revenue collections; or
14 (vii) receiving orders or reservations.
15 For purposes of this clause, a physical location may include
16 multiple buildings utilized by a taxpayer located within this
17 Commonwealth. Transactions for which purchase agreements are
18 executed after June 30, 2000.
19 (eee) "Dental services." The general and usual services
20 rendered and care administered by doctors of dental medicine or
21 doctors of dental surgery, as defined in the act of May 1, 1933
22 (P.L.216, No.76), known as The Dental Law.
23 (fff) "Physician services." The general and usual services
24 rendered and care administered by medical doctors, as defined in
25 the act of December 20, 1985 (P.L.457, No.112), known as the
26 Medical Practice Act of 1985, or doctors of osteopathy, as
27 defined in the act of October 5, 1978 (P.L.1109, No.261), known
28 as the Osteopathic Medical Practice Act.
29 (ggg) "Clothing." All vesture, wearing apparel, raiments,
30 garments, footwear and other articles of clothing, including
31 clothing patterns and items that are to be a component part of
32 clothing, worn or carried on or about the human body including,
33 but not limited to, all accessories, ornamental wear, formal day
34 or evening apparel and articles made of fur on the hide or pelt
35 or any material imitative of fur and articles of which such fur,
36 real, imitation or synthetic, is the component material of chief
37 value and sporting goods and clothing not normally used or worn
38 when not engaged in sports.
39 (hhh) "Food and beverages." All food and beverages for
40 human consumption, including, but not limited to:
41 (1) Soft drinks.
42 (2) Malt and brewed beverages and spiritous and vinous
43 liquors.
44 (3) Food or beverages, whether sold for consumption on
45 or off the premises of on a take-out or to go basis or
46 delivered to the purchaser or consumer, when purchased:
47 (i) from persons engaged in the business of
48 catering; or
49 (ii) from persons engaged in the business of
50 operating establishments from which ready-to-eat food and
51 beverages are sold, including, but not limited to,
52 restaurants, cafes, lunch counters, private and social
53 clubs, taverns, dining cars, hotels, night clubs, fast
54 food operations, pizzerias, fairs, carnivals, lunch
55 carts, ice cream stands, snack bars, cafeterias, employee
56 cafeterias, theaters, stadiums, arenas, amusement parks,
57 carryout shops, coffee shops and other establishments
58 whether mobile or immobile.
59 For purposes of this clause, a bakery, a pastry shop, a donut
HB1600A05384 - 43 -
1 shop, a delicatessen, a grocery store, a supermarket, a farmer's
2 market, a convenience store or a vending machine shall not be
3 considered an establishment from which food or beverages ready
4 to eat are sold except for the sale of meals, sandwiches, food
5 from salad bars, hand-dipped or hand-served ice-based products
6 including ice cream and yogurt, hot soup, hot pizza and other
7 hot food items, brewed coffee and hot beverages. For purposes of
8 this subclause, beverages shall not include malt and brewed
9 beverages and spiritous and vinous liquors but shall include
10 soft drinks.
11 SUBCHAPTER B
12 SALES AND USE TAX
13 Section 702. Imposition of tax.
14 (a) Tax on certain sales at retail and uses of tangible
15 personal property and services.--
16 (1) There is hereby imposed on each separate sale at
17 retail of tangible personal property or services in this
18 Commonwealth a tax of 6% of the purchase price, which tax
19 shall be collected by the vendor from the purchaser, and
20 shall be paid over to the Commonwealth as provided in this
21 chapter.
22 (2) There is hereby imposed on the use in this
23 Commonwealth of tangible personal property purchased at
24 retail and on those services purchased at retail a tax of 6%
25 of the purchase price, which tax shall be paid to the
26 Commonwealth by the person who makes such use as provided
27 under this chapter, except that the tax shall not be paid to
28 the Commonwealth by the person where the person has paid the
29 tax imposed by paragraph (1) or has paid the tax imposed by
30 this subsection to the vendor with respect to the use.
31 (b) (Reserved).
32 (c) Telecommunications service.--
33 (1) Notwithstanding any other provisions of this
34 chapter, the tax with respect to telecommunications service
35 within the meaning of "tangible personal property" in section
36 701 shall be computed at the rate of 6% on the total amount
37 charged to customers for the services, irrespective of
38 whether such charge is based on a flat rate or on a message
39 unit charge.
40 (2) A telecommunications service provider shall have no
41 responsibility or liability to the Commonwealth for billing,
42 collecting or remitting taxes that apply to services,
43 products or other commerce sold over telecommunications lines
44 by third-party vendors.
45 (3) To prevent actual multistate taxation of interstate
46 telecommunications service, any taxpayer, on proof that the
47 taxpayer has paid a similar tax to another state on the same
48 interstate telecommunications service, shall be allowed a
49 credit against the tax imposed by this section on the same
50 interstate telecommunications service to the extent of the
51 amount of the tax properly due and paid to the other state.
52 (d) Coin-operated vending machines.--Notwithstanding any
53 other provisions of this chapter, the sale or use of food and
54 beverages dispensed by means of coin-operated vending machines
55 shall be taxed at the rate of 6% of the receipts collected from
56 any coin-operated vending machine which dispenses food and
57 beverages that were previously taxable.
58 (e) Prepaid telecommunications.--
59 (1) Notwithstanding any provisions of this chapter, the
HB1600A05384 - 44 -
1 sale or use of prepaid telecommunications evidenced by the
2 transfer of tangible personal property shall be subject to
3 the tax imposed by subsection (a).
4 (2) The sale or use of prepaid telecommunications not
5 evidenced by the transfer of tangible personal property shall
6 be subject to the tax imposed by subsection (a) and shall be
7 deemed to occur at the purchaser's billing address.
8 (3) (i) Notwithstanding paragraph (2), the sale or use
9 of prepaid telecommunications service not evidenced by
10 the transfer of tangible personal property shall be taxed
11 at the rate of 6% of the receipts collected on each sale
12 if the service provider elects to collect the tax imposed
13 by this chapter on receipts of each sale.
14 (ii) The service provider shall notify the
15 department of its election and shall collect the tax on
16 receipts of each sale until the service provider notifies
17 the department otherwise.
18 (e.1) Prepaid mobile telecommunications service.--
19 (1) Notwithstanding any other provision of this chapter,
20 the sale or use of prepaid mobile telecommunications service
21 evidenced by the transfer of tangible personal property shall
22 be subject to the tax imposed by subsection (a).
23 (2) The sale or use of prepaid mobile telecommunications
24 service not evidenced by the transfer of tangible personal
25 property shall be subject to the tax imposed by subsection
26 (a) and shall be deemed to occur at the purchaser's billing
27 address or the location associated with the mobile telephone
28 number or the point of sale, whichever is applicable.
29 (3) (i) Notwithstanding paragraph (2), the sale or use
30 of prepaid mobile telecommunications service not
31 evidenced by the transfer of tangible personal property
32 shall be taxed at the rate of 6% of the receipts
33 collected on each sale if the service provider elects to
34 collect the tax imposed by this chapter on receipts of
35 each sale.
36 (ii) The service provider shall notify the
37 department of its election and shall collect the tax on
38 receipts of each sale until the service provider notifies
39 the department otherwise.
40 (f) Prebuilt housing.--
41 (1) Notwithstanding any other provision of this chapter,
42 tax with respect to sales of prebuilt housing shall be
43 imposed on the prebuilt housing builder at the time of the
44 prebuilt housing sale within this Commonwealth and shall be
45 paid and reported by the prebuilt housing builder to the
46 department in the time and manner provided in this chapter.
47 (2) A manufacturer of prebuilt housing may, at its
48 option, precollect the tax from the prebuilt housing builder
49 at the time of sale to the prebuilt housing builder.
50 (3) In any case where prebuilt housing is purchased and
51 the tax is not paid by the prebuilt housing builder or
52 precollected by the manufacturer, the prebuilt housing
53 purchaser shall remit tax directly to the department if the
54 prebuilt housing is used in this Commonwealth without regard
55 to whether the prebuilt housing becomes a real estate
56 structure.
57 (g) Home service providers.--
58 (1) Notwithstanding any other provisions of this chapter
59 and in accordance with the Mobile Telecommunications Sourcing
HB1600A05384 - 45 -
1 Act (Public Law 106-252, 4 U.S.C. § 116 et seq.), the sale or
2 use of mobile telecommunications services which are deemed to
3 be provided to a customer by a home service provider under 4
4 U.S.C. § 117 (relating to sourcing rules) shall be subject to
5 the tax of 6% of the purchase price, which tax shall be
6 collected by the home service provider from the customer, and
7 shall be paid over to the Commonwealth as provided in this
8 chapter if the customer's place of primary use is located
9 within this Commonwealth, regardless of where the mobile
10 telecommunications services originate, terminate or pass
11 through.
12 (2) For purposes of this subsection, words and phrases
13 used in this subsection shall have the same meanings given to
14 them in the Mobile Telecommunications Sourcing Act.
15 Section 703. Computation of tax.
16 (a) Table to be published.--Within 60 days of the effective
17 date of this section, the department shall prepare and publish
18 as a notice in the Pennsylvania Bulletin a table setting forth
19 the amount of tax imposed under section 702 for purchase prices
20 that are less than $1.
21 (b) Deposit into Education Operating Fund.--The tax
22 collected under section 702 shall be deposited into the
23 Education Operating Fund.
24 SUBCHAPTER C
25 EXCLUSIONS FROM SALES AND USE TAX
26 Section 704. Exclusions from tax.
27 The tax imposed by section 702 shall not be imposed upon any
28 of the following:
29 (1) The sale at retail or use of tangible personal
30 property (other than motor vehicles, trailers, semi-trailers,
31 motor boats, aircraft or other similar tangible personal
32 property required under either Federal law or laws of this
33 Commonwealth to be registered or licensed) or services sold
34 by or purchased from a person not a vendor in an isolated
35 transaction or sold by or purchased from a person who is a
36 vendor but is not a vendor with respect to the tangible
37 personal property or services sold or purchased in such
38 transaction, provided that inventory and stock in trade so
39 sold or purchased shall not be excluded from the tax by the
40 provisions of this subsection.
41 (2) The use of tangible personal property purchased by a
42 nonresident person outside of, and brought into this
43 Commonwealth for use therein for a period not to exceed seven
44 days, or for any period of time when such nonresident is a
45 tourist or vacationer and, in either case not consumed within
46 the Commonwealth.
47 (3) (i) The use of tangible personal property purchased
48 outside this Commonwealth for use outside this
49 Commonwealth by a then nonresident natural person or a
50 business entity not actually doing business within this
51 Commonwealth, who later brings the tangible personal
52 property into this Commonwealth in connection with the
53 person's or entity's establishment of a permanent
54 business or residence in this Commonwealth, provided that
55 the property was purchased more than six months prior to
56 the date it was first brought into this Commonwealth or
57 prior to the establishment of the business or residence,
58 whichever first occurs.
59 (ii) This paragraph shall not apply to tangible
HB1600A05384 - 46 -
1 personal property temporarily brought into this
2 Commonwealth for the performance of contracts for the
3 construction, reconstruction, remodeling, repairing and
4 maintenance of real estate.
5 (4) The sale at retail or use of disposable diapers;
6 premoistened wipes; incontinence products; colostomy
7 deodorants; toilet paper; sanitary napkins, tampons or
8 similar items used for feminine hygiene; or toothpaste,
9 toothbrushes or dental floss.
10 (5) The sale at retail or use of steam, natural and
11 manufactured and bottled gas, fuel oil, electricity or
12 intrastate subscriber line charges, basic local telephone
13 service or telegraph service when purchased directly by the
14 user solely for the user's own residential use and charges
15 for telephone calls paid for by inserting money into a
16 telephone accepting direct deposits of money to operate.
17 (6) (Reserved).
18 (7) (Reserved).
19 (8) (Reserved).
20 (9) (Reserved).
21 (10) (i) The sale at retail to or use by any charitable
22 organization, volunteer firefighters' organization or
23 nonprofit educational institution or a religious
24 organization for religious purposes of tangible personal
25 property or services other than pursuant to a
26 construction contract.
27 (ii) This paragraph shall not apply with respect to
28 any tangible personal property or services used in any
29 unrelated trade or business carried on by the
30 organization or institution or with respect to any
31 materials, supplies and equipment used and transferred to
32 the organization or institution in the construction,
33 reconstruction, remodeling, renovation, repairs and
34 maintenance of any real estate structure, other than
35 building machinery and equipment, except materials and
36 supplies when purchased by the organization or
37 institution for routine maintenance and repairs.
38 (11) The sale at retail, or use of gasoline and other
39 motor fuels, the sales of which are otherwise subject to
40 excise taxes under 75 Pa.C.S. Ch. 90 (relating to liquid
41 fuels and fuels tax).
42 (12) (i) The sale at retail to, or use by the United
43 States, this Commonwealth or its instrumentalities or
44 political subdivisions, nonpublic schools, charter
45 schools, cyber charter schools or vocational schools of
46 tangible personal property or services.
47 (ii) This paragraph includes the sale at retail to a
48 supervisor of a home education program of tangible
49 personal property or services used exclusively for the
50 home education program.
51 (iii) As used in this paragraph, the terms
52 "nonpublic school," "charter school," "cyber charter
53 school," "vocational school," "supervisor" and "home
54 education program" shall have the meanings given to them
55 in the Public School Code of 1949.
56 (13) (Reserved).
57 (14) (Reserved).
58 (15) (Reserved).
59 (16) (Reserved).
HB1600A05384 - 47 -
1 (17) The sale at retail or use of prescription
2 medicines, drugs or medical supplies, crutches and
3 wheelchairs for the use of persons with disabilities and
4 invalids, artificial limbs, artificial eyes and artificial
5 hearing devices when designed to be worn on the person of the
6 purchaser or user, false teeth and materials used by a
7 dentist in dental treatment, eyeglasses when especially
8 designed or prescribed by an ophthalmologist, oculist or
9 optometrist for the personal use of the owner or purchaser
10 and artificial braces and supports designed solely for the
11 use of persons with disabilities or any other therapeutic,
12 prosthetic or artificial device designed for the use of a
13 particular individual to correct or alleviate a physical
14 incapacity, including, but not limited to, hospital beds,
15 iron lungs and kidney machines.
16 (18) The sale at retail or use of coal.
17 (19) (Reserved).
18 (20) (Reserved).
19 (21) (Reserved).
20 (22) (Reserved).
21 (23) (Reserved).
22 (24) (Reserved).
23 (25) The sale at retail or use of water.
24 (26) The sale at retail or use of all vesture, wearing
25 apparel, raiments, garments, footwear and other articles of
26 clothing, including clothing patterns and items that are to
27 be a component part of clothing, worn or carried on or about
28 the human body but all accessories, ornamental wear, formal
29 day or evening apparel, and articles made of fur on the hide
30 or pelt or any material imitative of fur and articles of
31 which such fur, real, imitation or synthetic, is the
32 component material of chief value, but only if such value is
33 more than three times the value of the next most valuable
34 component material, and sporting goods and clothing not
35 normally used or worn when not engaged in sports shall not be
36 excluded from the tax.
37 (27) (Reserved).
38 (28) (Reserved).
39 (29) The sale at retail or use of food and beverages for
40 human consumption, except that this exclusion shall not apply
41 with respect to:
42 (i) soft drinks;
43 (ii) malt and brewed beverages and spirituous and
44 vinous liquors;
45 (iii) food or beverages, whether sold for
46 consumption on or off the premises or on a "take-out" or
47 "to go" basis or delivered to the purchaser or consumer,
48 when purchased (A) from persons engaged in the business
49 of catering; or (B) from persons engaged in the business
50 of operating establishments from which ready-to-eat food
51 and beverages are sold, including, but not limited to,
52 restaurants, cafes, lunch counters, private and social
53 clubs, taverns, dining cars, hotels, night clubs, fast
54 food operations, pizzerias, fairs, carnivals, lunch
55 carts, ice cream stands, snack bars, cafeterias, employee
56 cafeterias, theaters, stadiums, arenas, amusement parks,
57 carryout shops, coffee shops and other establishments
58 whether mobile or immobile. For purposes of this
59 paragraph, a bakery, a pastry shop, a donut shop, a
HB1600A05384 - 48 -
1 delicatessen, a grocery store, a supermarket, a farmer's
2 market, a convenience store or a vending machine shall
3 not be considered an establishment from which food or
4 beverages ready to eat are sold except for the sale of
5 meals, sandwiches, food from salad bars, hand-dipped or
6 hand-served iced based products, including ice cream and
7 yogurt, hot soup, hot pizza and other hot food items,
8 brewed coffee and hot beverages. For purposes of this
9 subparagraph, beverages shall not include malt and brewed
10 beverages and spirituous and vinous liquors but shall
11 include soft drinks. The sale at retail of food and
12 beverages at or from a school or church in the ordinary
13 course of the activities of such organization is not
14 subject to tax. Notwithstanding any other provision of
15 this paragraph or act to the contrary, the sale at retail
16 or use of candy or gum, regardless of the location from
17 which the candy or gum is sold, is subject to tax.
18 (30) (i) The sale at retail or use of any printed or
19 other form of advertising materials regardless of where
20 or by whom the advertising material was produced.
21 (ii) This paragraph shall not include the sale at
22 retail or use of mail order catalogs and direct mail
23 advertising literature or materials, including electoral
24 literature or materials, such as envelopes, address
25 labels and a one-time license to use a list of names and
26 mailing addresses for each delivery of direct mail
27 advertising literature or materials, including electoral
28 literature or materials, through the United States Postal
29 Service.
30 (31) (Reserved).
31 (32) (Reserved).
32 (33) (Reserved).
33 (34) (Reserved).
34 (35) (Reserved).
35 (36) The sale at retail or use of rail transportation
36 equipment used in the movement of personalty.
37 (37) (Reserved).
38 (38) (Reserved).
39 (39) The sale at retail or use of fish feed purchased by
40 or on behalf of sportsmen's clubs, fish cooperatives or
41 nurseries approved by the Pennsylvania Fish Commission.
42 (40) (Reserved).
43 (41) (Reserved).
44 (42) The sale or use of brook trout (salvelinus
45 fontinalis), brown trout (Salmo trutta) or rainbow trout
46 (Salmo gairdneri).
47 (43) The sale at retail or use of buses to be used
48 exclusively for the transportation of children for school
49 purposes.
50 (44) The sale at retail or use of firewood.
51 (45) (Reserved).
52 (46) The sale at retail or use of tangible personal
53 property purchased in accordance with the Food Stamp Act of
54 1977, as amended (Public Law 95-113, 7 U.S.C. §§ 2011-2029).
55 (47) (Reserved).
56 (48) (Reserved).
57 (49) (i) The sale at retail or use of food and
58 beverages by nonprofit associations which support sports
59 programs.
HB1600A05384 - 49 -
1 (ii) The following words and phrases when used in
2 this paragraph shall have the meanings given to them in
3 this subparagraph unless the context clearly indicates
4 otherwise:
5 "Nonprofit association." An entity which is
6 organized as a nonprofit corporation or nonprofit
7 unincorporated association under the laws of this
8 Commonwealth or the United States or any entity which is
9 authorized to do business in this Commonwealth as a
10 nonprofit corporation or unincorporated association under
11 the laws of this Commonwealth, including, but not limited
12 to, youth or athletic associations, volunteer fire,
13 ambulance, religious, charitable, fraternal, veterans,
14 civic, or any separately chartered auxiliary of the
15 foregoing, if organized and operated on a nonprofit
16 basis.
17 "Sports program." Baseball, softball, football,
18 basketball, soccer and any other competitive sport
19 formally recognized as a sport by the United States
20 Olympic Committee as specified by and under the
21 jurisdiction of the Amateur Sports Act of 1978 (Public
22 Law 95-606, 36 U.S.C. Ch. 2205), the Amateur Athletic
23 Union or the National Collegiate Athletic Association.
24 The term shall be limited to a program or that portion of
25 a program that is organized for recreational purposes and
26 whose activities are substantially for such purposes and
27 which is primarily for participants who are 18 years of
28 age or younger or whose 19th birthday occurs during the
29 year of participation or the competitive season,
30 whichever is longer. There shall, however, be no age
31 limitation for programs operated for persons with
32 physical handicaps or persons with mental retardation.
33 "Support." The funds raised from sales are used to
34 pay the expenses of a sports program or the nonprofit
35 association sells the food and beverages at a location
36 where a sports program is being conducted under this
37 chapter or the Tax Reform Code of 1971.
38 (50) (Reserved).
39 (51) (Reserved).
40 (52) (Reserved).
41 (53) (Reserved).
42 (54) (Reserved).
43 (55) (Reserved).
44 (56) The sale at retail or use of tangible personal
45 property or services used, transferred or consumed in
46 installing or repairing equipment or devices designed to
47 assist persons in ascending or descending a stairway when:
48 (i) The equipment or devices are used by a person
49 who, by virtue of a physical disability, is unable to
50 ascend or descend stairs without the aid of such
51 equipment or device.
52 (ii) The equipment or device is installed or used in
53 the person's place of residence.
54 (iii) A physician has certified the physical
55 disability of the person in whose residence the equipment
56 or device is installed or used.
57 (57) (Reserved).
58 (58) (Reserved).
59 (59) The sale at retail or use of molds and related mold
HB1600A05384 - 50 -
1 equipment used directly and predominantly in the manufacture
2 of products, regardless of whether the person that holds
3 title to the equipment manufactures a product.
4 (60) (Reserved).
5 (61) (Reserved).
6 (62) The sale at retail or use of tangible personal
7 property or services which are directly used in farming,
8 dairying or agriculture when engaged in as a business
9 enterprise, regardless of whether the sale is made to the
10 person directly engaged in the business enterprise or to a
11 person contracting with the person directly engaged in the
12 business enterprise for the production of food.
13 (63) (Reserved).
14 (64) The sale at retail to or use by a construction
15 contractor, employed by a public school district pursuant to
16 a construction contract, of any materials and building
17 supplies which, during construction or reconstruction, are
18 made part of any public school building utilized for
19 instructional classroom education within this Commonwealth,
20 if the construction or reconstruction:
21 (i) is necessitated by a disaster emergency, as
22 defined in 35 Pa.C.S. § 7102 (relating to definitions);
23 and
24 (ii) takes place during the period when there is a
25 declaration of disaster emergency under 35 Pa.C.S. §
26 7301(c) (relating to general authority of Governor).
27 (65) The sale at retail or use of investment metal
28 bullion and investment coins. "Investment metal bullion"
29 means any elementary precious metal which has been put
30 through a process of smelting or refining, including, but not
31 limited to, gold, silver, platinum and palladium, and which
32 is in such state or condition that its value depends upon its
33 contents and not its form. The term does not include precious
34 metal which has been assembled, fabricated, manufactured or
35 processed in one or more specific and customary industrial,
36 professional, aesthetic or artistic uses. "Investment coins"
37 means numismatic coins or other forms of money or legal
38 tender manufactured of gold, silver, platinum, palladium or
39 other metal and of the United States or any foreign nation
40 with a fair market value greater than any nominal value of
41 such coins. The term does not include jewelry or works of art
42 made of coins, nor does it include commemorative medallions.
43 (66) (Reserved).
44 (67) The sale at retail of medical goods or services by
45 a hospital, as defined in the act of December 20, 1985
46 (P.L.457, No.112), known as the Medical Practice Act of 1985.
47 (68) The sale at retail of medical or dental services,
48 including charges for office visits.
49 (69) The sale at retail or use of goods or services that
50 are part of a Medicare Part B transaction.
51 (70) The sale at retail or use of transportation of
52 persons provided or funded by the Federal, State or local
53 government.
54 (71) The sale at retail of insurance premiums.
55 (72) The sale at retail, between an owner of real
56 property and a financial institution, of a mortgage.
57 (73) An investment or gain on an investment, including,
58 but not limited to, bank deposits, stocks and bonds,
59 including any commissions, maintenance costs and other
HB1600A05384 - 51 -
1 charges, which commissions, maintenance costs and other
2 charges related to the making of such investment or a gain
3 thereon.
4 (74) The rental of real property.
5 (75) The sale at retail of tuition.
6 (76) The sale at retail to or use by a business of any
7 of the following:
8 (i) Legal services.
9 (ii) Accounting, auditing and bookkeeping services.
10 (iii) Engineering services.
11 (iv) Research.
12 (v) Computer services and data processing.
13 (77) The sale at retail to or use by a person of legal
14 services rendered by an attorney where the payment is made
15 pursuant to a contingency fee based upon a percentage of the
16 amount recovered with respect to a legal claim or dispute.
17 (78) The sale at retail to or use by a person of the
18 services rendered by or under the supervision of a licensed
19 real estate broker, associate broker or salesperson in
20 connection with any aspect of the sale, lease or acquisition
21 of any interest in real property.
22 (79) The sale at retail, or the use of motion picture
23 film rented or licensed from a distributor for the purpose of
24 commercial exhibition.
25 (80) The sale at retail or use of services performed by
26 minors under 18 years of age.
27 (81) The sale at retail or use of services performed by
28 any person to the extent that the recipient or user of such
29 services receives those services free of charge.
30 (82) The sale at retail or use of services provided by
31 employees to their employers in exchange for wages and
32 salaries when such services are rendered in the ordinary
33 course of employment.
34 (83) The sale at retail or use of services performed for
35 resale in the ordinary course of business of the purchaser or
36 user of such services.
37 (84) The sale at retail or use of services that are
38 otherwise taxable that are an integral, inseparable part of
39 the services that are to be sold or used and that are
40 taxable.
41 Section 705. Alternate imposition of tax.
42 (a) General rule.--If any person actively and principally
43 engaged in the business of selling new or used motor vehicles,
44 trailers or semitrailers, and registered with the department in
45 the "dealer's class," acquires a motor vehicle, trailer or
46 semitrailer for the purpose of resale, and prior to such resale,
47 uses the motor vehicle, trailer or semitrailer for a taxable use
48 under this chapter or the Tax Reform Code of 1971, the person
49 may pay a tax equal to 6% of the fair rental value of the motor
50 vehicle, trailer or semitrailer during use.
51 (b) Aircraft.--A commercial aircraft operator who acquires
52 an aircraft for the purpose of resale, or lease, or is entitled
53 to claim another valid exemption at the time of purchase, and
54 subsequent to the purchase, periodically uses the same aircraft
55 for a taxable use under this chapter or the Tax Reform Code of
56 1971, may elect to pay a tax equal to 6% of the fair rental
57 value of the aircraft during such use.
58 (c) Applicability.--This section shall not apply to the use
59 of a vehicle as a wrecker, parts truck, delivery truck or
HB1600A05384 - 52 -
1 courtesy car.
2 Section 706. Credit against tax.
3 (a) Tax paid to another state.--
4 (1) A credit against the tax imposed by section 702
5 shall be granted with respect to tangible personal property
6 or services purchased for use outside the Commonwealth equal
7 to the tax paid to another state by reason of the imposition
8 by the other state of a tax similar to the tax imposed by
9 this chapter.
10 (2) No credit under paragraph (1) shall be granted
11 unless the other state grants substantially similar tax
12 relief by reason of the payment of tax under this chapter or
13 under the Tax Reform Code of 1971.
14 (b) Telecommunications services.--A credit against the tax
15 imposed by section 702 on telecommunications services shall be
16 granted to a call center for gross receipts tax paid by a
17 telephone company on the receipts derived from the sale of
18 incoming and outgoing interstate telecommunications services to
19 the call center under section 1101(a)(2) of the Tax Reform Code
20 of 1971. The following apply:
21 (1) A telephone company, on request, shall notify a call
22 center of the amount of gross receipts tax paid by the
23 telephone company on the receipts derived from the sale of
24 incoming and outgoing interstate telecommunications services
25 to the call center.
26 (2) A call center that is eligible for the credit in
27 this subsection may apply for a tax credit as set forth in
28 this subsection.
29 (3) By February 15, a taxpayer must submit an
30 application to the department for gross receipts tax paid on
31 the receipts derived from the sale of incoming and outgoing
32 interstate telecommunications services incurred in the prior
33 calendar year.
34 (4) By April 15 of the calendar year following the close
35 of the calendar year during which the gross receipts tax was
36 incurred, the department shall notify the applicant of the
37 amount of the applicant's tax credit approved by the
38 department.
39 (5) The total amount of tax credits provided for in this
40 subsection and approved by the department shall not exceed
41 $30,000,000 in any fiscal year. If the total amount of tax
42 credits applied for by all applicants exceeds the amount
43 allocated for those credits, then the credit to be received
44 by each applicant shall be determined as follows:
45 (i) Divide:
46 (A) the tax credit applied for by the applicant;
47 by
48 (B) the total of all tax credits applied for by
49 all applicants.
50 (ii) Multiply:
51 (A) the quotient under subparagraph (i); by
52 (B) the amount allocated for all tax credits.
53 SUBCHAPTER D
54 LICENSES
55 Section 708. Licenses.
56 (a) Duty to obtain license.--Every person maintaining a
57 place of business in this Commonwealth, selling or leasing
58 services or tangible personal property, the sale or use of which
59 is subject to tax and who has not obtained a license from the
HB1600A05384 - 53 -
1 department, shall, prior to the beginning of business, make
2 application to the department, on a form prescribed by the
3 department, for a license. If such person maintains more than
4 one place of business in this Commonwealth, the license shall be
5 issued for the principal place of business in this Commonwealth.
6 (b) Criteria for issuance of license.--
7 (1) The department shall, after the receipt of an
8 application, issue the license applied for under subsection
9 (a) if the applicant filed all required State tax reports and
10 paid any State taxes not subject to a timely perfected
11 administrative or judicial appeal or subject to a duly
12 authorized deferred payment plan. The license shall be
13 nonassignable.
14 (2) All licenses in effect on the effective date of this
15 section under former Article III of the Tax Reform Code of
16 1971 and all licenses issued or renewed on or after the
17 effective date of this section shall be valid for a period of
18 five years.
19 (b.1) Refusal of license.--
20 (1) If an applicant for a license or any person holding
21 a license has not filed all required State tax reports and
22 paid any State taxes not subject to a timely perfected
23 administrative or judicial appeal or subject to a duly
24 authorized deferred payment plan, the department may refuse
25 to issue, may suspend or may revoke said license.
26 (2) The department shall notify the applicant or
27 licensee of any refusal, suspension or revocation. The notice
28 shall contain a statement that the refusal, suspension or
29 revocation may be made public. The notice shall be made by
30 first class mail.
31 (3) An applicant or licensee aggrieved by the
32 determination of the department may file an appeal pursuant
33 to the provisions for administrative appeals in this chapter.
34 In the case of a suspension or revocation which is appealed,
35 the license shall remain valid pending a final outcome of the
36 appeals process.
37 (4) Notwithstanding section 774 or sections 353(f),
38 408(b), 603, 702, 802, 904 and 1102 of the Tax Reform Code of
39 1971, or any other provision of law to the contrary, if no
40 appeal is taken or if an appeal is taken and denied at the
41 conclusion of the appeal process, the department may
42 disclose, by publication or otherwise, the identity of a
43 person and the fact that the person's license has been
44 refused, suspended or revoked under this subsection.
45 Disclosure may include the basis for refusal, suspension or
46 revocation.
47 (c) Penalties.--
48 (1) A person that maintains a place of business in this
49 Commonwealth for the purpose of selling or leasing services
50 or tangible personal property, the sale or use of which is
51 subject to tax, without having first been licensed by the
52 department shall be guilty of a summary offense and, upon
53 conviction thereof, be sentenced to pay a fine of not less
54 than $300 nor more than $1,500 and, in default thereof, a
55 term of imprisonment of not less than five days nor more than
56 30 days.
57 (2) The penalties imposed by this subsection shall be in
58 addition to any other penalties imposed by this chapter.
59 (3) For purposes of this subsection, the offering for
HB1600A05384 - 54 -
1 sale or lease of any service or tangible personal property,
2 the sale or use of which is subject to tax, during any
3 calendar day shall constitute a separate violation.
4 (4) The secretary may designate employees of the
5 department to enforce the provisions of this subsection. The
6 employees shall exhibit proof of and be within the scope of
7 the designation when instituting proceedings as provided by
8 the Pennsylvania Rules of Criminal Procedure.
9 (d) Effect of failure to obtain license.--Failure of any
10 person to obtain a license shall not relieve that person of
11 liability to pay the tax imposed by this chapter.
12 SUBCHAPTER E
13 HOTEL OCCUPANCY TAX
14 Section 709. Definitions.
15 (a) General rule.--The following words and phrases when used
16 in this subchapter shall have the meanings given to them in this
17 section unless the context clearly indicates otherwise:
18 "Hotel." A building or buildings in which the public may,
19 for a consideration, obtain sleeping accommodations. The term
20 does not include any charitable, educational or religious
21 institution summer camp for children, hospital or nursing home.
22 "Occupancy." The use or possession or the right to the use or
23 possession by any person, other than a permanent resident, of
24 any room or rooms in a hotel for any purpose or the right to the
25 use or possession of the furnishings or to the services and
26 accommodations accompanying the use and possession of the room
27 or rooms.
28 "Occupant." A person, other than a permanent resident, who,
29 for a consideration, uses, possesses or has a right to use or
30 possess any room or rooms in a hotel under any lease,
31 concession, permit, right of access, license or agreement.
32 "Operator." Any person who operates a hotel.
33 "Permanent resident." Any occupant who has occupied or has
34 the right to occupancy of any room or rooms in a hotel for at
35 least 30 consecutive days.
36 "Rent." The consideration received for occupancy valued in
37 money, whether received in money or otherwise, including all
38 receipts, cash, credits and property or services of any kind or
39 nature, and also any amount for which the occupant is liable for
40 the occupancy without any deduction. The term "rent" shall not
41 include a gratuity.
42 (b) Other definitions.--The following words and phrases,
43 when used in Subchapters D and F, shall, in addition to the
44 meaning ascribed to them by section 701, have the meaning
45 ascribed to them in this subsection, except where the context
46 clearly indicates a different meaning:
47 "Maintaining a place of business in this Commonwealth."
48 Being the operator of a hotel in this Commonwealth.
49 "Purchase at retail." Occupancy.
50 "Purchase price." Rent.
51 "Purchaser." Occupant.
52 "Sale at retail." The providing of occupancy to an occupant
53 by an operator.
54 "Services." Occupancy.
55 "Tangible personal property." Occupancy.
56 "Use." Occupancy.
57 "Vendor." Operator.
58 Section 710. Imposition of tax.
59 There is hereby imposed an excise tax of 6% of the rent on
HB1600A05384 - 55 -
1 every occupancy of a room or rooms in a hotel in this
2 Commonwealth, which tax shall be collected by the operator from
3 the occupant and paid over to the Commonwealth as provided in
4 this chapter and deposited into the Education Operating Fund.
5 Section 711. Seasonal tax returns.
6 Notwithstanding any other provisions in this chapter or the
7 Tax Reform Code of 1971, the department may, by regulation,
8 waive the requirement for the filing of quarterly returns in the
9 case of any operator whose hotel is operated only during certain
10 seasons of the year, and may provide for the filing of returns
11 by such persons at times other than those provided by section
12 721.
13 SUBCHAPTER F
14 PROCEDURE AND ADMINISTRATION
15 Section 715. Persons required to make returns.
16 Every person required to pay tax to the department or collect
17 and remit tax to the department shall file returns with respect
18 to the tax.
19 Section 716. Form of returns.
20 The returns required by section 715 shall be on forms
21 prescribed by the department and shall show such information
22 with respect to the taxes imposed by this chapter as the
23 department may reasonably require.
24 Section 717. Time for filing returns.
25 (a) Monthly reporting.--A return shall be filed monthly with
26 respect to each month by every licensee whose total tax reported
27 or, in the event no report is filed, the total tax which should
28 have been reported, for the third calendar quarter of the
29 preceding year equals or exceeds $600. The returns shall be
30 filed on or before the 20th day of the next succeeding month
31 with respect to which the return is made. Any licensee required
32 to file monthly returns under this chapter shall be relieved
33 from filing quarterly returns.
34 (b) Annual reporting.--No annual return shall be filed,
35 except as may be required by rules and regulations of the
36 department promulgated and published at least 60 days prior to
37 the end of the year with respect to which the returns are made.
38 Where such annual returns are required, licensees shall not be
39 required to file such returns prior to the 20th day of the year
40 succeeding the year with respect to which the returns are made.
41 (c) Persons other than licensees.--Any person, other than a
42 licensee, liable to pay to the department any tax under this
43 chapter, shall file a return on or before the 20th day of the
44 month succeeding the month in which the person becomes liable
45 for the tax.
46 (d) Waivers.--The department, by regulation, may waive the
47 requirement for the filing of quarterly return in the case of
48 any licensee whose individual tax collections do not exceed $75
49 per calendar quarter and may provide for reporting on a less
50 frequent basis in such cases.
51 Section 718. Extension of time for filing returns.
52 The department may, on written application and for good cause
53 shown, grant a reasonable extension of time for filing any
54 return required under this subchapter. However, the time for
55 making a return shall not be extended for more than three
56 months.
57 Section 719. Place for filing returns.
58 Returns shall be filed with the department at its main office
59 or at any branch office which it may designate for filing
HB1600A05384 - 56 -
1 returns.
2 Section 720. Timely mailing treated as timely filing and
3 payment.
4 (a) General rule.--Notwithstanding the provisions of any
5 State tax law to the contrary, whenever a report or payment of
6 all or any portion of a State tax is required by law to be
7 received by the department or other agency of the Commonwealth
8 on or before a day certain, the taxpayer shall be deemed to have
9 complied with the law if the letter transmitting the report or
10 payment of the tax which has been received by the department is
11 postmarked by the United States Postal Service on or prior to
12 the final day on which the payment is to be received.
13 (b) Presentation of receipt.--For the purposes of this
14 chapter, presentation of a receipt indicating that the report or
15 payment was mailed by registered or certified mail on or before
16 the due date shall be evidence of timely filing and payment.
17 Section 721. Payment of tax.
18 When a return of tax is required under this subchapter, the
19 person required to make the return shall pay the tax to the
20 department.
21 Section 722. Time of payment.
22 (a) General rule.--The tax imposed by this chapter and
23 incurred or collected by a licensee shall be due and payable by
24 the licensee on the day the return is required to be filed under
25 the provisions of section 717 and the payment must accompany the
26 return for the preceding period.
27 (b) Other payments.--If the amount of tax due for the
28 preceding year as shown by the annual return of a taxpayer is
29 greater than the amount already paid by the taxpayer in
30 connection with the taxpayer's monthly or quarterly returns, the
31 taxpayer shall send with the annual return a remittance for the
32 unpaid amount of tax for the year.
33 (c) Persons other than licensees.--Any person other than a
34 licensee liable to pay any tax under this chapter shall remit
35 the tax at the time of filing the return required by this
36 chapter.
37 Section 723. Other times for payment.
38 In the event that the department authorizes a taxpayer to
39 file a return at other times than those specified in section
40 717, the tax due shall be paid at the time the return is filed.
41 Section 724. Place for payment.
42 The tax imposed by this chapter shall be paid to the
43 department at the place fixed for filing the return.
44 Section 725. Tax held in trust for Commonwealth.
45 (a) General rule.--All taxes collected by any person from
46 purchasers in accordance with this chapter and all taxes
47 collected by any person from purchasers under color of this
48 chapter which have not been properly refunded by the person to
49 the purchaser shall constitute a trust fund for the
50 Commonwealth, and such trust shall be enforceable against such
51 person, the person's representatives and any person, other than
52 a purchaser to whom a refund has been made properly, receiving
53 any part of the fund without consideration, or knowing that the
54 taxpayer is committing a breach of trust.
55 (b) Presumption.--Any person receiving payment of a lawful
56 obligation of the taxpayer from the fund identified under
57 subsection (a) shall be presumed to have received the same in
58 good faith and without any knowledge of the breach of trust.
59 (c) Right to petition and appeal.--Any person, other than a
HB1600A05384 - 57 -
1 taxpayer, against whom the department makes any claim under this
2 section shall have the same right to petition and appeal as is
3 given taxpayers by any provisions of this subchapter.
4 Section 726. Local receivers of use tax.
5 (a) General rule.--In every county, except counties of the
6 first class, the county treasurer shall receive use tax due and
7 payable under this chapter from any person other than a
8 licensee. The receiving of the taxes shall be pursuant to rules
9 and regulations promulgated by the department and on forms
10 furnished by the department.
11 (b) Deduction for administrative costs.--Each county
12 treasurer shall remit to the department all use taxes received
13 under the authority of this section minus the costs of
14 administering this section not to exceed 1% of the amount of use
15 taxes received, which amount shall be retained in lieu of any
16 commission otherwise allowable by law for the collection of the
17 tax.
18 Section 727. Discount.
19 If a return is filed by a licensee and the tax shown to be
20 due thereon less any discount is paid all within the time
21 prescribed, the licensee shall be entitled to credit and apply
22 against the tax payable by the licensee a discount of 1% of the
23 amount of the tax collected by the licensee, as compensation for
24 the expense of collecting and remitting the same and as
25 consideration of the prompt payment.
26 Section 728. (Reserved).
27 Section 729. (Reserved).
28 Section 730. Assessment.
29 The department shall make the inquiries, determinations and
30 assessments of the tax, including interest, additions and
31 penalties, imposed by this chapter. A notice of assessment and
32 demand for payment shall be mailed by certified mail to the
33 taxpayer. The notice shall set forth the basis of the
34 assessment.
35 Section 731. Mode and time of assessment.
36 (a) Duty to examine.--
37 (1) Within a reasonable time after any return is filed,
38 the department shall examine it and, if the return shows a
39 greater tax due or collected than the amount of tax remitted
40 with the return, the department shall issue an assessment for
41 the difference, together with an addition of 3% of the
42 difference, which shall be paid to the department within ten
43 days after a notice of the assessment has been mailed to the
44 taxpayer.
45 (2) If such assessment is not paid within ten days,
46 there shall be added and paid to the department an additional
47 3% of the difference for each month during which the
48 assessment remains unpaid. The total of all additions shall
49 not exceed 18% of the difference shown on the assessment.
50 (b) Underestimated tax on returns.--
51 (1) If the department determines that any return or
52 returns of any taxpayer understates the amount of tax due, it
53 shall determine the proper amount and shall ascertain the
54 difference between the amount of tax shown in the return and
55 the amount determined. The difference may be referred to as
56 the deficiency.
57 (2) The department shall send a notice of assessment for
58 the deficiency and the reasons to the taxpayer.
59 (3) The taxpayer shall pay the deficiency to the
HB1600A05384 - 58 -
1 department within 30 days after a notice of the assessment
2 has been mailed to the taxpayer.
3 (c) Estimated assessments.--
4 (1) In the event that any taxpayer fails to file a
5 return required by this chapter, the department may make an
6 estimated assessment, based on information available, of the
7 proper amount of tax owed by the taxpayer and shall send a
8 notice of assessment in the estimated amount to the taxpayer.
9 (2) The taxpayer shall pay the tax within 30 days after
10 a notice of the estimated assessment has been mailed to the
11 taxpayer.
12 (d) Studies.--
13 (1) The department may conduct the studies necessary to
14 compute effective rates by business classification, based
15 upon the ratio between the tax required to be collected and
16 taxable sales and to use such rates in arriving at the
17 apparent tax liability of a taxpayer.
18 (2) Any assessment based on such rates shall be prima
19 facie correct, except that the rate shall not be considered
20 where a taxpayer establishes the rate is based on a sample
21 inapplicable to the taxpayer.
22 Section 732. Reassessment.
23 Any taxpayer against whom an assessment is made may petition
24 the department for a reassessment under Article XXVII of the Tax
25 Reform Code of 1971.
26 Section 733. (Reserved).
27 Section 734. Review by Board of Finance and Revenue.
28 (a) Procedure.--
29 (1) Within 60 days after the date of mailing of notice
30 by the department of the decision on any petition for
31 reassessment filed with it, the person against whom the
32 assessment was made may, by petition, request the Board of
33 Finance and Revenue to review the decision.
34 (2) The failure of the department to notify the
35 petitioner of a decision within the time provided by section
36 732 shall act as a denial of such petition, and a petition
37 for review may be filed with the Board of Finance and Revenue
38 within 120 days of the date prior to which the department
39 should have mailed to the petitioner its notice of decision.
40 (b) Contents of petition for review.--Each petition for
41 review filed under this section shall state specifically the
42 reasons on which the petitioner relies, or shall incorporate by
43 reference the petition for reassessment in which the reasons are
44 stated. The petition shall be supported by affidavit that it is
45 not made for the purpose of delay and that the facts set forth
46 in the petition are true.
47 (c) Action by board.--
48 (1) The Board of Finance and Revenue shall act finally
49 in disposing of petitions filed with it within six months
50 after they have been received.
51 (2) In the event of the failure of the board to dispose
52 of any petition within six months, the action taken by the
53 department, upon the petition for reassessment, shall be
54 sustained.
55 (3) The Board of Finance and Revenue may sustain the
56 action taken by the department on the petition for
57 reassessment, or it may reassess the tax due on such basis as
58 it deems according to law.
59 (4) The board shall give notice of its action to the
HB1600A05384 - 59 -
1 department and to the petitioner.
2 Section 735. (Reserved).
3 Section 736. Burden of proof.
4 In all cases of petitions for reassessment, review or appeal,
5 the burden of proof shall be on the petitioner or appellant, as
6 applicable.
7 Section 737. Collection of tax.
8 (a) General rule.--The department shall collect the tax in
9 the manner provided by law for the collection of taxes imposed
10 by the laws of this Commonwealth.
11 (b) Collection by persons maintaining a place of business in
12 the Commonwealth.--
13 (1) Every person maintaining a place of business in this
14 Commonwealth and selling or leasing tangible personal
15 property or services, the sale or use of which is subject to
16 tax shall collect the tax from the purchaser or lessee at the
17 time of making the sale or lease, and shall remit the tax to
18 the department, unless the collection and remittance is
19 otherwise provided for in this chapter.
20 (2) (i) Every person not otherwise required to collect
21 tax that delivers tangible personal property to a
22 location within this Commonwealth and that unpacks,
23 positions, places or assembles the tangible personal
24 property shall collect the tax from the purchaser at the
25 time of delivery and shall remit the tax to the
26 department if the person delivering the tangible personal
27 property is responsible for collecting any portion of the
28 purchase price of the tangible personal property
29 delivered and the purchaser has not provided the person
30 with proof that the tax imposed by this chapter has been
31 or will be collected by the seller or that the purchaser
32 provided the seller with a valid exemption certificate.
33 (ii) Every person required to collect tax under this
34 paragraph shall be deemed to be selling or leasing
35 tangible personal property or services, the sale or use
36 of which is subject to the tax imposed under section 702.
37 (3) Any person required under this chapter to collect
38 tax from another person, who shall fail to collect the proper
39 amount of the tax, shall be liable for the full amount of the
40 tax which the person should have collected.
41 (c) Certificate for tax-exempt sales or leases.--
42 (1) If the tax does not apply to the sale or lease of
43 tangible personal property or services, the purchaser or
44 lessee shall furnish to the vendor a certificate indicating
45 that the sale is not legally subject to the tax. The
46 certificate shall be in substantially such form as the
47 department may, by regulation, prescribe.
48 (2) Where the tangible personal property or service is
49 of a type which is never subject to the tax imposed or where
50 the sale or lease is in interstate commerce, the certificate
51 need not be furnished.
52 (3) Where a series of transactions are not subject to
53 tax, a purchaser or user may furnish the vendor with a single
54 exemption certificate in substantially such form and valid
55 for such period of time as the department may, by regulation,
56 prescribe.
57 (4) The department shall provide all school districts
58 and intermediate units with a permanent tax exemption number.
59 (5) An exemption certificate, which is complete and
HB1600A05384 - 60 -
1 regular and on its face discloses a valid basis of exemption
2 if taken in good faith, shall relieve the vendor from the
3 liability imposed by this section.
4 (6) An exemption certificate:
5 (i) accepted by a vendor from a natural person
6 domiciled within this Commonwealth or any association,
7 fiduciary, partnership, corporation or other entity,
8 either authorized to do business within this Commonwealth
9 or having an established place of business within this
10 Commonwealth, in the ordinary course of the vendor's
11 business;
12 (ii) which on its face discloses a valid basis of
13 exemption consistent with the activity of the purchaser
14 and character of the property or service being purchased
15 or which is provided to the vendor by a charitable,
16 religious, educational or volunteer firefighters'
17 organization;
18 (iii) contains the organization's charitable
19 exemption number; and
20 (iv) which, in the case of any purchase costing $200
21 or more, is accompanied by a sworn declaration on a form
22 to be provided by the department of an intended usage of
23 the property or service which would render it nontaxable,
24 shall be presumed to be taken in good faith and the burden of
25 proving otherwise shall be on the department.
26 (d) Waivers.--
27 (1) The department may authorize a purchaser or lessee
28 who acquires tangible personal property or services under
29 circumstances which make it impossible at the time of
30 acquisition to determine the manner in which the tangible
31 personal property or service will be used, to pay the tax
32 directly to the department, and waive the collection of the
33 tax by the vendor.
34 (2) No such authority shall be granted or exercised,
35 except on application to the department, and the issuance by
36 the department, in its discretion, of a direct payment
37 permit.
38 (3) If a direct payment permit is granted, its use shall
39 be subject to conditions specified by the department, and the
40 payment of tax on all acquisitions pursuant to the permit
41 shall be made directly to the department by the permit
42 holder.
43 Section 738. Collection of tax on motor vehicles, trailers and
44 semitrailers.
45 (a) General rule.--Notwithstanding the provisions of section
46 737(b)(1), tax due on the sale at retail or use of a motor
47 vehicle, trailer or semitrailer, except mobile homes as defined
48 in 75 Pa.C.S (relating to vehicles), required by law to be
49 registered with the department under the provisions of 75
50 Pa.C.S. shall be paid by the purchaser or user directly to the
51 department on application to the department for an issuance of a
52 certificate of title on the motor vehicle, trailer or
53 semitrailer.
54 (b) No issuance of certificate of title without payment of
55 tax.--
56 (1) The department shall not issue a certificate of
57 title until the tax has been paid, or evidence satisfactory
58 to the department has been given to establish that tax is not
59 due.
HB1600A05384 - 61 -
1 (2) The department may cancel or suspend any record of
2 certificate of title or registration of a motor vehicle,
3 trailer or semitrailer when the check received in payment of
4 the tax on the vehicle is not paid on demand.
5 (c) First encumbrance.--The tax shall be considered as a
6 first encumbrance against the vehicle and the vehicle may not be
7 transferred without first payment in full of the tax and any
8 interest additions or penalties which shall accrue in accordance
9 with this chapter.
10 Section 739. Precollection of tax.
11 (a) Authorization.--
12 (1) Except as otherwise provided under paragraph (2),
13 the department may, by regulation, authorize or require
14 particular categories of vendors selling tangible personal
15 property for resale to precollect from the purchaser the tax
16 which the purchaser will collect on making a sale at retail
17 of the tangible personal property.
18 (2) The department, pursuant to this section, may not
19 require a vendor to precollect tax from a purchaser who
20 purchases for resale more than $1,000 worth of tangible
21 personal property from the vendor per year.
22 (b) No license required.--In any case in which a vendor has
23 been authorized to prepay the tax to the person from whom the
24 vendor purchased the tangible personal property for resale, the
25 vendor authorized to prepay the tax may, under the regulations
26 of the department, be relieved from the duty to secure a license
27 if the duty arises only by reason of the vendor's sale of the
28 tangible personal property with respect to which the vendor is,
29 under authorization of the department, to prepay the tax.
30 (c) Reimbursement.--
31 (1) The vendor, on making a sale at retail of tangible
32 personal property with respect to which the vendor has
33 prepaid the tax, must separately state at the time of resale
34 the proper amount of tax on the transaction, and reimburse
35 itself on account of the taxes which the vendor has
36 previously prepaid.
37 (2) If the vendor collects a greater amount of tax in
38 any reporting period than the vendor previously prepaid on
39 purchase of the goods with respect to which the vendor
40 prepaid the tax, the vendor must file a return and remit the
41 balance to the Commonwealth at the time at which a return
42 would otherwise be due with respect to the sales.
43 Section 740. Bulk and auction sales.
44 A person who sells or causes to be sold at auction, or who
45 sells or transfers in bulk, 51% or more of any stock, of goods,
46 wares or merchandise of any kind, fixtures, machinery,
47 equipment, buildings or real estate, involved in a business for
48 which the person is licensed or required to be licensed under
49 this chapter, or is liable for filing use tax returns in
50 accordance with this chapter, shall be subject to the provisions
51 of section 1403 of The Fiscal Code.
52 Section 741. Collection on failure to request reassessment,
53 review or appeal.
54 (a) General rule.--The department may collect any tax:
55 (1) If an assessment of tax is not paid within ten days
56 or 30 days, as the case may be, after notice of the
57 assessment to the taxpayer and no petition for reassessment
58 has been filed.
59 (2) Within 60 days from the date of reassessment, if no
HB1600A05384 - 62 -
1 petition for review has been filed.
2 (3) Within 30 days from the date of the decision of the
3 Board of Finance and Revenue on a petition for review, or of
4 the expiration of the board's time for acting on the
5 petition, if no appeal has been made.
6 (4) In all cases of judicial sales, receiverships,
7 assignments or bankruptcies.
8 (b) Limitation on defenses.--
9 (1) Subject to the provisions of paragraph (2), in any
10 such case in a proceeding for the collection of the taxes,
11 the person against whom the taxes were assessed shall not be
12 permitted to set up any ground of defense that might have
13 been determined by the department, the Board of Finance and
14 Revenue or the courts.
15 (2) The defense of failure of the department to mail
16 notice of assessment or reassessment to the taxpayer and the
17 defense of payment of assessment or reassessment may be
18 raised in proceedings for collection by a motion to stay the
19 proceedings.
20 Section 742. Lien for taxes.
21 (a) Nature and effect of lien.--
22 (1) If any person liable to pay any tax neglects or
23 refuses to pay the same after demand, the amount, including
24 any interest, addition or penalty, together with any costs
25 that may accrue in addition, shall be a lien in favor of the
26 Commonwealth on the property, both real and personal, of the
27 person but only after same has been entered and docketed of
28 record by the prothonotary of the county where the property
29 is situated.
30 (2) The department may, at any time, transmit to the
31 prothonotaries of the respective counties certified copies of
32 all liens for taxes imposed by this chapter or the Tax Reform
33 Code of 1971 and penalties and interest.
34 (3) Each prothonotary receiving the lien shall enter and
35 docket the lien of record in the prothonotary's office, which
36 lien shall be indexed as judgments are now indexed.
37 (4) No prothonotary shall require, as a condition
38 precedent to the entry of the liens, the payment of the costs
39 incident thereto.
40 (b) Priority status.--
41 (1) The lien imposed under this section shall have
42 priority from the date of its recording, and shall be fully
43 paid and satisfied out of the proceeds of any judicial sale
44 of property before any other obligation, judgment, claim,
45 lien or estate to which the property may subsequently become
46 subject, except costs of the sale and of the writ on which
47 the sale was made, and real estate taxes and municipal claims
48 against such property, but shall be subordinate to mortgages
49 and other liens existing and duly recorded or entered of
50 record prior to the recording of the tax lien.
51 (2) In the case of a judicial sale of property, subject
52 to a lien imposed under this section, on a lien or claim over
53 which the lien imposed under this section has priority, the
54 sale shall discharge the lien imposed under this section to
55 the extent only that the proceeds are applied to its payment,
56 and the lien shall continue in full force and effect as to
57 the balance remaining unpaid.
58 (3) There shall be no inquisition or condemnation upon
59 any judicial sale of real estate made by the Commonwealth
HB1600A05384 - 63 -
1 pursuant to the provisions of this section.
2 (4) (i) The lien of the taxes, interest and penalties,
3 shall continue for five years from the date of entry, and
4 may be revived and continued in the manner now or
5 hereafter provided for renewal of judgments, or as may be
6 provided in The Fiscal Code, and a writ of execution may
7 directly issue upon the lien without the issuance and
8 prosecution to judgment of a writ of scire facias.
9 (ii) Not less than ten days before issuance of any
10 execution on the lien, notice of the filing and the
11 effect of the lien shall be sent by registered mail to
12 the taxpayer at the taxpayer's last known post office
13 address.
14 (iii) The lien shall have no effect on any stock of
15 goods, wares or merchandise regularly sold or leased in
16 the ordinary course of business by the person against
17 whom the lien has been entered, unless and until a writ
18 of execution has been issued and a levy made on the stock
19 of goods, wares and merchandise.
20 (c) Penalty.--Any willful failure of any prothonotary to
21 carry out any duty imposed on the prothonotary under this
22 section shall be a misdemeanor, and, upon conviction, the
23 prothonotary shall be sentenced to pay a fine not more than
24 $1,000 and costs of prosecution or to a term of imprisonment not
25 exceeding one year, or both.
26 (d) Priority payment from distribution.--
27 (1) Except as otherwise provided under the law, in the
28 distribution, voluntary or compulsory, in receivership,
29 bankruptcy or otherwise, of the property or estate of any
30 person, all taxes imposed by this chapter which are due and
31 unpaid and are not collectible under section 725 shall be
32 paid from the first money available for distribution in
33 priority to all other claims and liens, except insofar as the
34 laws of the United States may give a prior claim to the
35 Federal Government.
36 (2) Any person charged with the administration or
37 distribution of the property or estate, who violates the
38 provisions of this section, shall be personally liable for
39 any taxes imposed by this chapter, which are accrued and
40 unpaid and are chargeable against the person whose property
41 or estate is being administered or distributed.
42 (e) Construction.--Subject to the limitations contained in
43 this chapter as to the assessment of taxes, nothing contained in
44 this section shall be construed to restrict, prohibit or limit
45 the use by the department in collecting taxes finally due and
46 payable of any other remedy or procedure available at law or
47 equity for the collection of debts.
48 Section 743. Suit for taxes.
49 (a) General rule.--At any time within three years after any
50 tax or any amount of tax shall be finally due and payable, the
51 department may commence an action in the courts of this
52 Commonwealth, of any state or of the United States, in the name
53 of the Commonwealth, to collect the amount of tax due together
54 with additions, interest, penalties and costs in the manner
55 provided at law or in equity for the collection of ordinary
56 debts.
57 (b) Prosecution by Attorney General.--The Attorney General
58 shall prosecute the action and, except as provided in this
59 chapter, the provisions of the Rules of Civil Procedure and the
HB1600A05384 - 64 -
1 provisions of the laws of this Commonwealth relating to civil
2 procedures and remedies shall, to the extent that they are
3 applicable, be available in such proceedings.
4 (c) Construction.--The provisions of this section are in
5 addition to any process, remedy or procedure for the collection
6 of taxes provided by this chapter or by the laws of this
7 Commonwealth, and this section is neither limited by nor
8 intended to limit any such process, remedy or procedure.
9 Section 744. Tax suit comity.
10 The courts of this Commonwealth shall recognize and enforce
11 liabilities for sales and use taxes, lawfully imposed by any
12 other state if the other state extends a like comity to this
13 Commonwealth.
14 Section 745. Service.
15 (a) General rule.--Any person who maintains a place of
16 business in this Commonwealth is deemed to have appointed the
17 Secretary of the Commonwealth as the person's agent for the
18 acceptance of service of process or notice in any proceedings
19 for the enforcement of the civil provisions of this chapter, and
20 any service made upon the Secretary of the Commonwealth as agent
21 shall be of the same legal force and validity as if the service
22 had been personally made on the person.
23 (b) Substitute service.--Where service cannot be made on the
24 person in the manner provided by other laws of this Commonwealth
25 relating to service of process, service may be made on the
26 Secretary of the Commonwealth and, in such case, a copy of the
27 process or notice shall also be personally served on any agent
28 or representative of the person who may be found within this
29 Commonwealth, or where no such agent or representative may be
30 found a copy of the process or notice shall be sent by
31 registered mail to the person at the last known address of the
32 person's principal place of business, home office or residence.
33 Section 746. Collection and payment of tax on credit sales.
34 If any sale subject to tax under this chapter is wholly or
35 partly on credit, the vendor shall require the purchaser to pay
36 in cash at the time the sale is made, or within 30 days
37 thereafter, the total amount of tax due upon the entire purchase
38 price. The vendor shall remit the tax to the department,
39 regardless of whether payment was made by the purchaser to the
40 vendor, with the next return required to be filed under section
41 717.
42 Section 747. Prepayment of tax.
43 (a) General rule.--Whenever a vendor is prohibited by law or
44 governmental regulation to charge and collect the purchase price
45 in advance of or at the time of delivery, the vendor shall
46 prepay the tax as required by section 722, but in that case, if
47 the purchaser fails to pay to the vendor the total amount of the
48 purchase price and the tax and the amount is written off as
49 uncollectible by the vendor, the vendor shall not be liable for
50 the tax and shall be entitled to a credit or refund of the tax
51 paid.
52 (b) Subsequent collection of tax.--If the purchase price is
53 thereafter collected, in whole or in part, the amount collected
54 shall be first applied to the payment of the entire tax portion
55 of the bill, and shall be remitted to the department by the
56 vendor with the first return filed after such collection.
57 (c) Time period for refund.--Tax prepaid shall be subject to
58 refund on petition to the department under the provisions of
59 section 752, filed within 105 days of the close of the fiscal
HB1600A05384 - 65 -
1 year in which the accounts are written off.
2 Section 747.1. Refund of sales tax attributed to bad debt.
3 (a) General rule.--A vendor may file a petition for refund
4 of sales tax paid to the department that is attributed to a bad
5 debt if all of the following apply:
6 (1) The purchaser fails to pay the vendor the total
7 purchase price.
8 (2) The purchase price is written off, either in whole
9 or in part, as a bad debt on the vendor's books and records.
10 (3) The bad debt has been deducted for Federal income
11 tax purposes under section 166 of the Internal Revenue Code
12 of 1986 (Public Law 99-514, 26 U.S.C. § 166).
13 The petition must be filed with the department under Article
14 XXVII of the Tax Reform Code of 1971 within the time limitations
15 prescribed by section 3003.1 of the Tax Reform Code of 1971.
16 (b) Limitation.--
17 (1) The refund authorized by this section shall be
18 limited to the sales tax paid to the department that is
19 attributed to the bad debt, less any discount under section
20 727.
21 (2) Partial payments by the purchaser to the vendor
22 shall be prorated between the original purchase price and the
23 sales tax due on the sale.
24 (3) Payments made to a vendor on any transaction which
25 includes both taxable and nontaxable components shall be
26 allocated proportionally between the taxable and nontaxable
27 components.
28 (c) Assignment.--A vendor may assign its right to petition
29 and receive a refund of sales tax attributed to a bad debt to an
30 affiliated entity. A vendor may not assign its right to petition
31 and receive a refund of sales tax attributed to a bad debt to
32 any other person.
33 (d) Items not refundable.--No refund shall be granted under
34 this section for interest, finance charges or expenses incurred
35 in attempting to collect any amount receivable.
36 (e) Contents of petition for refund.--The documentation,
37 procedures and methods for claiming and calculating the refund
38 allowed under this section shall be in such form as the
39 department may prescribe.
40 (f) Subsequent collection.--If the purchase price that is
41 attributed to a prior bad debt refund is collected in whole or
42 in part, the vendor or affiliated entity shall remit the
43 proportional tax to the department with the first return filed
44 after the collection.
45 (g) Interest prohibited.--Notwithstanding the provisions of
46 section 806.1 of the act of April 9, 1929 (P.L.343, No.176),
47 known as The Fiscal Code, no interest shall be paid by the
48 Commonwealth on refunds of sales tax attributed to bad debt
49 under this section.
50 (h) Administration.--
51 (1) No refund or credit of sales tax shall be made for
52 any uncollected purchase price or bad debt except as
53 authorized by this section.
54 (2) No deduction or credit for bad debt may be taken on
55 any return filed with the department.
56 (3) This section shall provide the exclusive procedure
57 for claiming a refund or credit of sales tax attributed to
58 uncollected purchase price or bad debt.
59 (i) Definition.--For purposes of this section, the term
HB1600A05384 - 66 -
1 "affiliated entity" means any corporation that is part of the
2 same affiliated group as the vendor as defined by section
3 1504(a)(1) of the Internal Revenue Code of 1986.
4 Section 748. Registration of transient vendors.
5 (a) General rule.--Prior to conducting business or otherwise
6 commencing operations in this Commonwealth, a transient vendor
7 shall register with the department. The application for
8 registration shall be in such form and contain such information
9 as the department, by regulation, shall prescribe and shall set
10 forth truthfully and accurately the information desired by the
11 department. This registration shall be renewed and updated
12 annually.
13 (b) Certificate to be issued.--After registration and the
14 posting of the bond required by section 748.1, the department
15 shall issue to the transient vendor a certificate valid for one
16 year. On renewal of registration, the department shall issue a
17 new certificate valid for one year, if the department is
18 satisfied that the transient vendor has complied with the
19 provisions of this chapter.
20 (c) Possession and exhibition of certificate.--The transient
21 vendor shall possess the certificate at all times when
22 conducting business within this Commonwealth and shall exhibit
23 the certificate upon demand by authorized employees of the
24 department or any law enforcement officer.
25 (d) Contents of certificate.--The certificate issued by the
26 department shall state that the transient vendor named in the
27 certificate has registered with the department and shall provide
28 notice to the transient vendor that:
29 (1) The transient vendor must notify the department in
30 writing before it enters this Commonwealth to conduct
31 business, of the location or locations where it intends to
32 conduct business and the date or dates on which it intends to
33 conduct business.
34 (2) Failure to notify or giving false information to the
35 department may result in suspension or revocation of the
36 transient vendor's certificate.
37 (3) Conducting business in this Commonwealth after a
38 certificate has been suspended or revoked may result in
39 criminal conviction and the imposition of fines or other
40 penalties.
41 Section 748.1. Bond.
42 (a) General rule.--Upon registration with the department, a
43 transient vendor shall also post a bond with the department in
44 the amount of $500 as surety for compliance with the provisions
45 of this chapter. After a period of demonstrated compliance with
46 these provisions or, if the transient vendor provides the
47 license number of a promoter who has notified the department of
48 a show, in accordance with the provisions of section 748.6(a),
49 the department may reduce the amount of bond required of a
50 transient vendor or may eliminate the bond entirely.
51 (b) Voluntary suspension of certificate.--A transient vendor
52 may file a request for voluntary suspension of certificate with
53 the department. If the department is satisfied that the
54 provisions of this chapter have been complied with and has
55 possession of the transient vendor's certificate, it shall
56 return the bond posted to the transient vendor.
57 Section 748.2. Notification to department.
58 (a) General rule.--Prior to entering this Commonwealth to
59 conduct business, a transient vendor shall notify the department
HB1600A05384 - 67 -
1 in writing of the location or locations where it intends to
2 conduct business and the date or dates on which it intends to
3 conduct business.
4 (b) Inspection of records.--While conducting business in
5 this Commonwealth, the transient vendor shall permit authorized
6 employees of the department to inspect its sales records,
7 including, but not limited to, sales receipts and inventory or
8 price lists and to permit inspection of the tangible personal
9 property offered for sale at retail.
10 (c) Conditions for suspension or revocation of
11 certificate.--The department may suspend or revoke a certificate
12 issued to a transient vendor if the transient vendor:
13 (1) fails to notify the department as required by
14 subsection (a);
15 (2) provides the department with false information
16 regarding the conduct of business in this Commonwealth;
17 (3) fails to collect sales tax on all tangible personal
18 property or services sold subject to the sales tax; or
19 (4) fails to file with the department a tax return as
20 required by section 717.
21 (d) Regulations.--The department shall promulgate the rules
22 and regulations necessary to implement this section.
23 Section 748.3. Seizure of property.
24 (a) General rule.--If a transient vendor conducting business
25 in this Commonwealth fails to exhibit a valid certificate on
26 demand by authorized employees of the department, those
27 authorized employees shall seize, without warrant, the tangible
28 personal property and the automobile, truck or other means of
29 transportation used to transport or carry that property. All
30 property seized shall be deemed contraband and shall be subject
31 to immediate forfeiture proceedings instituted by the department
32 pursuant to procedures adopted by regulation, except as
33 otherwise provided by this section.
34 (b) Release of seized property.--Property seized pursuant to
35 subsection (a) shall be released on:
36 (1) presentation of a valid certificate to authorized
37 employees of the department; or
38 (2) registration by the transient vendor with the
39 department and the posting of a bond in the amount of $500,
40 either immediately or within 15 days after the property is
41 seized.
42 Section 748.4. Fines.
43 Any transient vendor conducting business in this Commonwealth
44 while its certificate is suspended or revoked, as provided by
45 sections 748.1(b) and 748.2(c), commits a misdemeanor of the
46 third degree and, upon conviction, shall be sentenced to pay a
47 fine of not more than $2,500 for each offense.
48 Section 748.5. Transient vendors subject to chapter.
49 Except as otherwise provided, a transient vendor shall be
50 subject to the provisions of this chapter in the same manner as
51 a vendor who maintains a place of business in this Commonwealth.
52 Section 748.6. Promoters.
53 (a) General rule.--A promoter of a show or shows in this
54 Commonwealth may annually file with the department an
55 application for a promoter's license stating the location and
56 dates of such show or shows. The application shall be filed at
57 least 30 days prior to the opening of the first show and shall
58 be in such form as the department may prescribe.
59 (b) License.--
HB1600A05384 - 68 -
1 (1) Except as otherwise provided in this chapter, the
2 department shall, within 15 days after receipt of an
3 application for a license, issue to the promoter without
4 charge a license to operate such shows.
5 (2) If application for a license under this section has
6 been timely filed and if the license has not been received by
7 the promoter prior to the opening of the show, the
8 authorization contained in this section with respect to the
9 obtaining of a promoter's license shall be deemed to have
10 been complied with, unless or until the promoter receives
11 notice from the department denying the application for a
12 promoter's license.
13 (c) Compliance.--Any promoter who is a vendor under the
14 provisions of section 701 shall comply with all the provisions
15 of this chapter applicable to vendors and with the provisions of
16 this section applicable to promoters.
17 (d) Prohibited conduct.--No licensed promoter shall permit
18 any person to display for sale or to sell tangible personal
19 property or services subject to tax under section 702 at a show
20 unless the person is licensed under section 708 and provides to
21 the promoter the information required under law.
22 (e) Penalties.--
23 (1) Any licensed promoter who:
24 (i) permits any person to display for sale or to
25 sell tangible personal property or service without first
26 having been licensed under section 708;
27 (ii) fails to maintain records of a show as required
28 by law; or
29 (iii) knowingly maintains false records or fails to
30 comply with any provision contained in this section or
31 any regulation promulgated by the department pertaining
32 to shows,
33 shall be subject to denial of a license or the revocation of
34 any existing license issued pursuant to this section.
35 (2) The department may deny the promoter a license
36 certificate to operate a show for a period of not more than
37 six months from the date of such denial. The penalty shall be
38 in addition to any other penalty imposed by this chapter.
39 (3) Within 20 days of notice of denial or revocation of
40 a license by the department, the promoter may petition the
41 department for a hearing pursuant to 2 Pa.C.S. (relating to
42 administrative law and procedure).
43 Section 749. (Reserved).
44 Section 750. (Reserved).
45 Section 751. (Reserved).
46 Section 752. Refunds.
47 (a) General rule.--Subject to the provisions of subsection
48 (b), the department shall, pursuant to the provisions of Article
49 XXVII of the Tax Reform Code of 1971, refund all taxes, interest
50 and penalties paid to the Commonwealth under the provisions of
51 this chapter and to which the Commonwealth is not rightfully
52 entitled. The refunds shall be made to the person, the person's
53 heirs, successors, assigns or other personal representatives,
54 who actually paid the tax.
55 (b) Exception.--No refund shall be made under this section
56 with respect to any payment made by reason of an assessment with
57 respect to which a taxpayer has filed a petition for
58 reassessment pursuant to section 2702 of the Tax Reform Code of
59 1971 to the extent that the petition has been determined
HB1600A05384 - 69 -
1 adversely to the taxpayer by a decision which is no longer
2 subject to further review or appeal.
3 (c) Construction.--Nothing contained in this section shall
4 be deemed to prohibit a taxpayer who has filed a timely petition
5 for reassessment from amending it to a petition for refund where
6 the petitioner has paid the tax assessed.
7 Section 753. Refund petition.
8 (a) General rule.--Except as provided for in subsection (b)
9 and section 756, the refund or credit of tax, interest or
10 penalty provided for by section 752 shall be made only where the
11 person who has actually paid the tax files a petition for refund
12 with the department under Article XXVII of the Tax Reform Code
13 of 1971, within the limits of section 3003.1 of the Tax Reform
14 Code of 1971.
15 (b) Assessments.--A refund or credit of tax, interest or
16 penalty paid as a result of an assessment made by the department
17 under section 731 shall be made only where the person who has
18 actually paid the tax files with the department a petition for a
19 refund with the department under Article XXVII of the Tax Reform
20 Code of 1971 within the time limits of section 3003.1 of the Tax
21 Reform Code of 1971. The filing of a petition for refund under
22 the provisions of this subsection shall not affect the abatement
23 of interest, additions or penalties to which the person may be
24 entitled by reason of the person's payment of the assessment.
25 Section 754. (Reserved).
26 Section 755. (Reserved).
27 Section 756. Extended time for filing special petition for
28 refund.
29 (a) General rule.--Any party to a transaction who has paid
30 tax by reason of a transaction with respect to which the
31 department is assessing tax against another person may, within
32 six months after the filing by the department of the assessment
33 against the other person, file a special petition for refund,
34 notwithstanding the person's failure to timely file a petition
35 pursuant to section 3003.1 of the Tax Reform Code of 1971. The
36 provisions of Article XXVII of the Tax Reform Code of 1971 shall
37 be applicable to the special petition for refund, except that
38 the department need not act on the petition until there is a
39 final determination as to the propriety of the assessment filed
40 against the other party to the transaction. Where a petition is
41 filed under this provision in order to take advantage of the
42 extended period of limitations, overpayments by the petitioner
43 shall be refunded but only to the extent of the actual tax,
44 without consideration of interest and penalties, paid by the
45 other party to the transaction.
46 (b) Purpose.--The purpose of this section is to avoid
47 duplicate payment of tax where a determination is made by the
48 department that one party to a transaction is subject to tax,
49 and another party to the transaction has previously paid tax
50 with respect to the transaction and, as such, this section shall
51 be construed as extending right beyond that provided for by
52 section 753, and not to limit the other section.
53 Section 757. (Reserved).
54 Section 758. Limitation on assessment and collection.
55 The amount of the tax imposed by this chapter or the Tax
56 Reform Code of 1971 shall be assessed within three years after
57 the date when the return provided for by section 717(a) or (c)
58 is filed or the end of the year in which the tax liability
59 arises, whichever occurs later. Any assessment may be made at
HB1600A05384 - 70 -
1 any time during the period notwithstanding that the department
2 may have made one or more previous assessments against the
3 taxpayer for the year in question, or for any part of the year.
4 In any case, no credit shall be given for any penalty previously
5 assessed or paid.
6 Section 759. Failure to file return.
7 Where no return is filed, the amount of the tax due may be
8 assessed and collected at any time as to taxable transactions
9 not reported.
10 Section 760. False or fraudulent return.
11 Where the taxpayer willfully files a false or fraudulent
12 return with intent to evade the tax imposed by this chapter, the
13 amount of tax due may be assessed and collected at any time.
14 Section 761. Extension of limitation period.
15 Notwithstanding any other provisions of this subchapter
16 where, before the expiration of the period prescribed in that
17 other provision for the assessment of a tax, a taxpayer has
18 consented in writing that the period be extended, the amount of
19 tax due may be assessed at any time within the extended period.
20 The period so extended may be extended further by subsequent
21 consents in writing made before the expiration of the extended
22 period.
23 Section 762. (Reserved).
24 Section 763. (Reserved).
25 Section 764. (Reserved).
26 Section 765. Interest.
27 If any amount of tax imposed by this chapter is not paid to
28 the department on or before the last date prescribed for
29 payment, interest on the amount at the rate of .75% per month
30 for each month, or fraction thereof, from the date, shall be
31 paid for the period from the last date to the date paid. The
32 last date prescribed for payment shall be determined under
33 section 722(a) or (c) without regard to any extension of time
34 for payment. In the case of any amount assessed as a deficiency
35 or as an estimated assessment, the date prescribed for payment
36 shall be 30 days after notice of the assessment.
37 Section 766. Additions to tax.
38 (a) Failure to file return.--In the case of failure to file
39 any return required by section 715 on the date prescribed for
40 the return, determined with regard to any extension of time for
41 filing, and, in the case in which a return filed understates the
42 true amount due by more than 50%, there shall be added to the
43 amount of tax actually due 5% of the amount of the tax if the
44 failure to file a proper return is for not more than one month,
45 with an additional 5% for each additional month, or fraction
46 thereof, during which such failure continues, not exceeding 25%
47 in the aggregate. In every case at least $2 shall be added.
48 (b) Addition for understatement.--There shall be added to
49 every assessment under section 731(b) an addition equal to 5% of
50 the amount of the understatement and no addition to the tax
51 shall be paid under section 731(a).
52 (c) Interest.--If the department assesses a tax according to
53 section 731(a), (b) or (c), there shall be added to the amount
54 of the deficiency interest at the rate of .75% per month for
55 each month, or fraction thereof, from the date prescribed by
56 subsection (a) or section 722(c) for the payment of the tax to
57 the date of notice of the assessment.
58 Section 767. Penalties.
59 (a) General rule.--The penalties, additions, interest and
HB1600A05384 - 71 -
1 liabilities provided by this chapter shall be paid on notice and
2 demand by the department, and shall be assessed and collected in
3 the same manner as taxes. Except as otherwise provided, any
4 reference in this chapter to tax imposed by this chapter shall
5 be deemed also to refer to the penalties, additions, interest
6 and liabilities provided by this chapter.
7 (b) Monetary penalty.--Any person who willfully attempts, in
8 any manner, to evade or defeat the tax imposed by this chapter,
9 or the payment thereof, or to assist any other person to evade
10 or defeat the tax imposed by this chapter, or the payment
11 thereof, or to receive a refund improperly shall, in addition to
12 other penalties provided by law, be liable for a penalty equal
13 to one-half of the total amount of the tax evaded.
14 (c) Burden of proof.--In any direct proceeding arising out
15 of a petition for reassessment or refund as provided in this
16 chapter, in which an issue of fact is raised with respect to
17 whether a return is fraudulent or with respect to the propriety
18 of the imposition by the department of the penalty prescribed in
19 subsection (b), the burden of proof with respect to the issue
20 shall be on the department.
21 Section 768. Criminal offenses.
22 (a) False returns.--Any person who with intent to defraud
23 the Commonwealth willfully makes, or causes to be made, any
24 return required by this chapter which is false commits a
25 misdemeanor and, upon conviction, shall be sentenced to pay a
26 fine of not more than $2,000 or to imprisonment not exceeding
27 three years, or both.
28 (b) Other offenses.--Except as otherwise provided by
29 subsection (a) and subject to the provisions of subsection (c),
30 any person who:
31 (1) advertises or holds out or states to the public or
32 to any purchaser or user, directly or indirectly, that the
33 tax or any part imposed by this chapter will be absorbed by
34 the person, or that it will not be added to the purchase
35 price of the tangible personal property or services described
36 in section 701(k)(2), (3), (4) and (11) through (18) sold or,
37 if added, that the tax or any part will be refunded, other
38 than when the person refunds the purchase price because of
39 the property being returned to the vendor;
40 (2) sells or leases tangible personal property or the
41 services, the sale or use of which by the purchaser is
42 subject to tax under this chapter, and willfully fails to
43 collect the tax from the purchaser and timely remit the same
44 to the department;
45 (3) willfully fails or neglects to timely file any
46 return or report required by this chapter or, as a taxpayer,
47 refuses to timely pay any tax, penalty or interest imposed or
48 provided for by this chapter, or willfully fails to preserve
49 the person's books, papers and records as directed by the
50 department;
51 (4) refuses to permit the department or any of its
52 authorized agents to examine the person's books, records or
53 papers, or who knowingly makes any incomplete, false or
54 fraudulent return or report;
55 (5) does or attempts to do anything to prevent the full
56 disclosure of the amount or character of taxable sales
57 purchases or use made by himself or any other person;
58 (6) provides any person with a false statement as to the
59 payment of tax with respect to particular tangible personal
HB1600A05384 - 72 -
1 property or services; or
2 (7) makes, utters or issues a false or fraudulent
3 exemption certificate;
4 commits a misdemeanor and, upon conviction shall be sentenced to
5 pay a fine of not more than $1,000 and costs of prosecution or
6 to imprisonment for not more than one year, or both.
7 (c) Exceptions.--
8 (1) Any person who maintains a place of business outside
9 this Commonwealth may absorb the tax with respect to taxable
10 sales made in the normal course of business to customers
11 present at that place of business without being subject to
12 the penalty and fines.
13 (2) Advertising tax-included prices shall be
14 permissible, if the prepaid services are sold by the service
15 provider, for prepaid telecommunications services not
16 evidenced by the transfer of tangible personal property or
17 for prepaid mobile telecommunications services.
18 (d) Penalties are cumulative.--The penalties imposed by this
19 section shall be in addition to any other penalties imposed by
20 any provision of this chapter.
21 Section 769. Abatement of additions or penalties.
22 On the filing of a petition for reassessment or a petition
23 for refund as provided under this chapter by a taxpayer,
24 additions or penalties imposed on the taxpayer by this chapter
25 or the Tax Reform Code of 1971 may be waived or abated, in whole
26 or in part, where the petitioner has established that the
27 petitioner has acted in good faith, without negligence and with
28 no intent to defraud.
29 Section 770. Rules and regulations.
30 (a) General rule.--The department shall enforce the
31 provisions of this chapter and shall prescribe, adopt,
32 promulgate and enforce rules and regulations not inconsistent
33 with the provisions of this chapter, relating to any matter or
34 thing pertaining to the administration and enforcement of the
35 provisions of this chapter, and the collection of taxes,
36 penalties and interest imposed by this chapter. The department
37 may prescribe the extent, if any, to which any of the rules and
38 regulations shall be applied without retroactive effect.
39 (b) Determination of purchase price.--
40 (1) In determining the purchase price of taxable sales
41 where, because of affiliation of interests between the vendor
42 and the purchaser or irrespective of any such affiliation, if
43 for any other reason, the purchase price of the sale is in
44 the opinion of the department not indicative of the true
45 value of the article or the fair price of the article, the
46 department shall, pursuant to uniform and equitable rules,
47 determine the amount of constructive purchase price on the
48 basis of which the tax shall be computed and levied.
49 (2) The rules shall provide for a constructive amount of
50 a purchase price for each sale, which price shall equal a
51 price for the article which would naturally and fairly be
52 charged in an arm's-length transaction in which the element
53 of common interests between vendor and purchaser or, if no
54 common interest exists, any other element causing a
55 distortion of the price or value is absent.
56 (3) For the purpose of this chapter where a taxable sale
57 occurs between a parent corporation and a subsidiary
58 affiliate or controlled corporation of such parent, there
59 shall be a rebuttable presumption that because of such common
HB1600A05384 - 73 -
1 interest the transaction was not at arm's-length.
2 Section 771. Keeping of records.
3 (a) Persons liable for taxes.--Every person liable for any
4 tax imposed by this chapter, or for the collection of the tax,
5 shall keep the records, render such statements, make the returns
6 and comply with the rules and regulations as the department may,
7 from time to time, prescribe regarding matters pertinent to the
8 person's business. Whenever in the judgment of the department it
9 is necessary, it may require any person, by notice served on the
10 person, or by regulations, to make the returns, render the
11 statements or keep the records as the department deems
12 sufficient to show whether the person is liable to pay or
13 collect tax under this chapter.
14 (b) Persons collecting taxes.--Any person liable to collect
15 tax from another person under the provisions of this chapter
16 shall file reports, keep records, make payments and be subject
17 to interest and penalties as provided for under this chapter, in
18 the same manner as if the person were directly subject to the
19 tax.
20 (c) Nonresidents.--
21 (1) A nonresident who does business in this Commonwealth
22 as a retail dealer shall keep adequate records of the
23 business and of the tax due with respect to the business,
24 which records shall at all times be retained within this
25 Commonwealth unless retention outside this Commonwealth is
26 authorized by the department.
27 (2) No taxes collected from purchasers shall be sent
28 outside this Commonwealth without the written consent of and
29 in accordance with conditions prescribed by the department.
30 (3) The department may require a taxpayer who desires to
31 retain records or tax collections outside this Commonwealth
32 to assume reasonable out-of-State audit expenses.
33 (d) Retail dealers.--
34 (1) Any person doing business as a retail dealer who at
35 the same time is engaged in another business which does not
36 involve the making of sales taxable under this chapter shall
37 keep separate books and records of the person's businesses so
38 as to show the sales taxable under this chapter separately
39 from the sales not taxable under this chapter.
40 (2) If the person fails to keep such separate books and
41 records, the person shall be liable for tax at the rate
42 designated in section 702 on the entire purchase price of
43 sales from both or all of the person's businesses.
44 (e) Segregation of taxes required.--
45 (1) In those instances where a vendor gives no sales
46 memoranda or uses registers showing only total sales, the
47 vendor shall adopt some method of segregating tax from sales
48 receipts and keep records showing the segregation, all in
49 accordance with proper accounting and business practices.
50 (2) A vendor may apply to the department for permission
51 to use a collection and recording procedure which will show
52 the information as the law requires with reasonable accuracy
53 and simplicity. The application must contain a detailed
54 description of the procedure to be adopted.
55 (3) Permission to use the proposed procedure is not to
56 be construed as relieving the vendor from remitting the full
57 amount of tax collected.
58 (4) The department may revoke the permission on 30 days'
59 notice to the vendor.
HB1600A05384 - 74 -
1 (5) Refusal of the department to grant permission in
2 advance to use the procedure shall not be construed to
3 invalidate a procedure which on examination shows the
4 information as the law requires.
5 Section 771.1. Reports and records of promoters.
6 Every licensed promoter shall keep a record of the date and
7 place of each show and the name, address, sales, use and hotel
8 occupancy license number of every person whom the licensed
9 promoter permits to display for sale or to sell tangible
10 personal property or services subject to tax under section 702
11 at the show. The records shall be open for inspection and
12 examination at any reasonable time by the department or a duly
13 authorized representative, and the records shall, unless the
14 department consents in writing to an earlier destruction, be
15 preserved for three years after the date the report was filed or
16 the date it was due, whichever occurs later, except that the
17 department may by regulation require that they be kept for a
18 longer period of time.
19 Section 772. Examinations.
20 (a) Power of department.--The department or any of its
21 authorized agents may examine the books, papers and records of
22 any taxpayer in order to verify the accuracy and completeness of
23 any return made or if no return was made, to ascertain and
24 assess the tax imposed by this chapter. The department may
25 require the preservation of all such books, papers and records
26 for any period deemed proper by it but not to exceed three years
27 from the end of the calendar year to which the records relate.
28 (b) Duty of taxpayers.--Every taxpayer shall give to the
29 department, or its agent, the means, facilities and opportunity
30 for the examinations and investigation.
31 (c) Other powers of department.--
32 (1) The department is further authorized to examine any
33 person, under oath, concerning taxable sales or use by any
34 taxpayer or concerning any other matter relating to the
35 enforcement or administration of this chapter, and to this
36 end may compel the production of books, papers and records
37 and the attendance of all persons whether as parties or
38 witnesses whom it believes to have knowledge of such matters.
39 (2) The procedure for such hearings or examinations
40 shall be the same as that provided by the act of April 9,
41 1929 (P.L.343, No.176), known as The Fiscal Code, relating to
42 inquisitorial powers of fiscal officers.
43 Section 773. Records and examinations of delivery agents.
44 Every agent for the purpose of delivery of goods shipped into
45 this Commonwealth by a nonresident, including, but not limited
46 to, a common carrier, shall maintain adequate records of such
47 deliveries pursuant to rules and regulations adopted by the
48 department and shall make the records available to the
49 department upon request after due notice.
50 Section 774. Unauthorized disclosure.
51 Any information gained by the department as a result of any
52 return, examination, investigation, hearing or verification
53 required or authorized by this chapter shall be confidential,
54 except for official purposes and except in accordance with
55 proper judicial order or as otherwise provided by law, and any
56 person unlawfully divulging such information commits a
57 misdemeanor and, upon conviction, shall be sentenced to pay a
58 fine of not more than $1,000 and costs of prosecution or to
59 imprisonment for not more than one year, or both.
HB1600A05384 - 75 -
1 Section 775. Cooperation with other governments.
2 Notwithstanding the provisions of section 774, the department
3 may permit the Commissioner of Internal Revenue of the United
4 States, or the proper officer of any state, or the authorized
5 representative of either such officer, to inspect the tax
6 returns of any taxpayer, or may furnish to the officer or to the
7 officer's authorized representative an abstract of the return of
8 any taxpayer, or supply the officer or the authorized
9 representative with information concerning any item contained in
10 any return or disclosed by the report of any examination or
11 investigation of the return of any taxpayer. This permission
12 shall be granted only if the statutes of the United States or of
13 such other state, as the case may be, grant substantially
14 similar privileges to the proper officer of the Commonwealth
15 charged with the administration of this chapter.
16 Section 776. Interstate compacts.
17 (a) General rule.--The Governor, or the Governor's
18 authorized representative, may confer with the Governor and the
19 authorized representatives of other states with respect to
20 reciprocal use tax collection between the Commonwealth and such
21 other states.
22 (b) Other powers.--The Governor, or the Governor's
23 authorized representative, may join with the authorities of
24 other states to conduct joint investigations, to exchange
25 information, hold joint hearings and enter into compacts or
26 interstate agreements with such other states to accomplish
27 uniform reciprocal use tax collections between those states who
28 are parties to any compact or interstate agreement and the
29 Commonwealth.
30 Section 777. Bonds.
31 (a) Procedure.--
32 (1) Whenever the department, in its discretion, deems it
33 necessary to protect the revenues to be obtained under the
34 provisions of this chapter, it may require any nonresident
35 natural person or any foreign corporation, association,
36 fiduciary, partnership or other entity, not authorized to do
37 in this Commonwealth or not having an established place of
38 business in this Commonwealth and subject to the tax imposed
39 by section 702, to file a bond issued by a surety company
40 authorized to do business in this Commonwealth and approved
41 by the Insurance Commissioner as to solvency and
42 responsibility, in such amounts as it may fix, to secure the
43 payment of any tax or penalties due, or which may become due,
44 from a natural person or corporation.
45 (2) In order to protect the revenues to be obtained
46 under the provisions of this chapter, the department shall
47 require any nonresident natural person or any foreign
48 corporation, association, fiduciary, partnership or entity,
49 who or which is a building contractor, or who or which is a
50 supplier delivering building materials for work in this
51 Commonwealth and is not authorized to do business in this
52 Commonwealth or does not have an established place of
53 business in this Commonwealth and is subject to the tax
54 imposed by section 702, to file a bond issued by a surety
55 company authorized to do business in this Commonwealth and
56 approved by the Insurance Commissioner as to solvency and
57 responsibility, in the amounts as it may fix, to secure the
58 payments of any tax or penalties due, or which may become
59 due, from a natural person, corporation or other entity.
HB1600A05384 - 76 -
1 (3) The department may also require a bond of any person
2 petitioning the department for reassessment, in the case of
3 any assessment over $500 or where it is of the opinion that
4 the ultimate collection is in jeopardy.
5 (4) (i) The department may, for a period of three
6 years, require a bond of any person who has on three or
7 more occasions within a 12-month period either filed a
8 return or made payment to the department more than 30
9 days late.
10 (ii) If the department determines that a taxpayer is
11 to file a bond, the department shall give notice to the
12 taxpayer to that effect, specifying the amount of the
13 bond required.
14 (iii) The taxpayer shall file a bond within five
15 days after the giving of the notice by the department
16 unless, within the five-day period, the taxpayer requests
17 in writing a hearing before the secretary or the
18 secretary's representative at which hearing the
19 necessity, propriety and amount of the bond shall be
20 determined by the secretary or a representative. The
21 determination shall be final and shall be complied within
22 15 days after notice is mailed to the taxpayer.
23 (b) Alternative security.--
24 (1) In lieu of the bond required by this section,
25 securities approved by the department, or cash in the amount
26 as it may prescribe, may be deposited.
27 (2) Such securities or cash shall be kept in the custody
28 of the department, who may, at any time, without notice to
29 the depositor, apply them to any tax and/or interest or
30 penalties due, and for that purpose the securities may be
31 sold by the department, at public or private sale, on five
32 days' written notice to the depositor.
33 (c) Lien may be filed.--
34 (1) The department may file a lien pursuant to section
35 742 against any taxpayer who fails to file a bond when
36 required to do so under this section.
37 (2) All funds received on execution of the judgment on
38 the lien shall be refunded to the taxpayer with 3% interest
39 should a final determination be made that the taxpayer does
40 not owe any payment to the department.
41 SUBCHAPTER G
42 FUNDING PROVISIONS
43 Section 780. (Reserved).
44 Section 781. Appropriation for refunds.
45 So much of the proceeds of the tax imposed by this chapter as
46 shall be necessary for the payment of refunds, enforcement or
47 administration under this chapter is hereby appropriated for
48 those purposes.
49 Section 781.1. Construction.
50 To the extent that the language of this chapter is identical
51 to that of equivalent provisions in the former act of March 6,
52 1956 (P.L.1228, No.381), known as the Tax Act of 1963 for
53 Education, or Article II of the Tax Reform Code of 1971, that
54 language shall be deemed a reenactment of such identical
55 provisions.
56 Section 781.2. Transfers to Public Transportation Reserve Fund.
57 (a) Establishment of fund.--The amount of additional
58 revenues that are generated by taxes received under this chapter
59 that are necessary to replace the revenue earmarked for
HB1600A05384 - 77 -
1 transportation under 74 Pa.C.S. § 1506 (relating to fund), not
2 to exceed 4.4% of such additional revenues, shall be deposited
3 in the Public Transportation Reserve Fund which is hereby
4 established in the State Treasury and shall be disbursed as
5 provided under an act of the General Assembly enacted after the
6 effective date of this section.
7 (b) Time period for transfers.--Within 30 days of the close
8 of a calendar month, 1.01% of the taxes and other sums specified
9 in subsection (a) received in the prior calendar month shall be
10 transferred to the Public Transportation Reserve Fund.
11 Section 782. Transfers to Education Operating Fund.
12 (a) Legislative intent.--It is the intent of the General
13 Assembly to broaden the sales and use tax base in order to
14 provide funds for the operating expenses of school districts and
15 as a means to abolish the school property tax.
16 (b) Source of funding for transfers.--Except as otherwise
17 provided under section 781.2, all revenues received on or after
18 January 1, 2008, from the tax imposed by this chapter shall be
19 transferred to the Education Operating Fund.
20 CHAPTER 9
21 SENIOR CITIZENS PROPERTY TAX AND
22 RENT REBATE ASSISTANCE
23 Section 901. Scope of chapter.
24 This chapter provides senior citizens with assistance in the
25 form of property tax and rent rebates.
26 Section 902. (Reserved).
27 Section 903. Definitions.
28 The following words and phrases when used in this chapter
29 shall have the meanings given to them in this section unless the
30 context clearly indicates otherwise:
31 "Board." The Board of Finance and Revenue of the
32 Commonwealth.
33 "Claimant." A person who files a claim for property tax
34 rebate or rent rebate in lieu of property taxes and:
35 (1) was at least 65 years of age or whose spouse, if a
36 member of the household, was at least 65 years of age during
37 a calendar year in which real property taxes, rent and
38 inflation costs were due and payable;
39 (2) was a widow or widower and was at least 50 years of
40 age during a calendar year or part thereof in which real
41 property taxes, rent and inflation costs were due and
42 payable; or
43 (3) was a permanently disabled person 18 years of age or
44 older during a calendar year or part thereof in which the
45 real property taxes, rent and inflation costs were due and
46 payable.
47 "Homestead." A dwelling, whether owned or rented, and so
48 much of the land surrounding it, as is reasonably necessary for
49 the use of the dwelling as a home, occupied by a claimant. The
50 term includes, but is not limited to:
51 (1) Premises occupied by reason of ownership or lease in
52 a cooperative housing corporation.
53 (2) A mobile home which is assessed as realty for local
54 property tax purposes and the land, if owned or rented by the
55 claimant, upon which the mobile home is situated, and any
56 other similar living accommodation.
57 (3) A part of a multidwelling or multipurpose building
58 and a part of the land upon which it is built.
59 (4) Premises occupied by reason of the claimant's
HB1600A05384 - 78 -
1 ownership or rental of a dwelling located on land owned by a
2 nonprofit incorporated association, of which the claimant is
3 a member, if the claimant is required to pay a pro rata share
4 of the property taxes levied against the association's land.
5 (5) Premises occupied by a claimant if the claimant is
6 required by law to pay a property tax by reason of the
7 claimant's ownership or rental, including a possessory
8 interest, in the dwelling, the land or both. An owner
9 includes a person in possession under a contract of sale,
10 deed of trust, life estate, joint tenancy or tenancy in
11 common or by reason of statutes of descent and distribution.
12 "Household income." All income received by a claimant and
13 the claimant's spouse while residing in their homestead during
14 the calendar year for which a rebate is claimed.
15 "Income." All income from whatever source derived,
16 including, but not limited to:
17 (1) Salaries, wages, bonuses, commissions, income from
18 self-employment, alimony, support money, cash public
19 assistance and relief.
20 (2) The gross amount of any pensions or annuities,
21 including railroad retirement benefits for calendar years
22 prior to 1999 and 50% of railroad retirement benefits for
23 calendar years 1999 and thereafter.
24 (3) All benefits received under the Social Security Act
25 (49 Stat. 620, 42 U.S.C. § 301 et seq.), except Medicare
26 benefits, for calendar years prior to 1999, and 50% of all
27 benefits received under the Social Security Act, except
28 Medicare benefits, for calendar years 1999 and thereafter.
29 (4) All benefits received under State unemployment
30 insurance laws and veterans' disability payments.
31 (5) All interest received from the Federal or any state
32 government or any instrumentality or political subdivision
33 thereof.
34 (6) Realized capital gains and rentals.
35 (7) Workers' compensation.
36 (8) The gross amount of loss of time insurance benefits,
37 life insurance benefits and proceeds, except the first $5,000
38 of the total of death benefit payments.
39 (9) Gifts of cash or property, other than transfers by
40 gift between members of a household, in excess of a total
41 value of $300.
42 The term does not include surplus food or other relief in kind
43 supplied by a governmental agency, property tax or rent rebate
44 or inflation dividend.
45 "Inflation costs." The additional costs of those essential
46 consumer needs of senior citizens in this Commonwealth. The term
47 includes, but is not limited to, the additional cost of medical
48 prescriptions, energy needs, transportation and food and
49 clothing essentials.
50 "Permanently disabled person." A person who is unable to
51 engage in any substantial gainful activity by reason of any
52 medically determinable physical or mental impairment which can
53 be expected to continue indefinitely, except as provided in
54 section 904(b)(3) and (c).
55 "Real property taxes." All taxes on a homestead, exclusive
56 of municipal assessments, delinquent charges and interest, due
57 and payable during a calendar year.
58 "Rent rebate in lieu of property taxes." Twenty percent of
59 the gross amount actually paid in cash or its equivalent in any
HB1600A05384 - 79 -
1 calendar year to a landlord in connection with the occupancy of
2 a homestead by a claimant, irrespective of whether such amount
3 constitutes payment solely for the right of occupancy or
4 otherwise.
5 "Widow" or "widower." The surviving wife or the surviving
6 husband, as the case may be, of a deceased individual and who
7 has not remarried except as provided in section 904(b)(3) and
8 (c).
9 Section 904. Property tax, rent rebate and inflation cost.
10 (a) Schedule of rebates.--
11 (1) The amount of any claim for property tax rebate or
12 rent rebate in lieu of property taxes for real property taxes
13 or rent due and payable during calendar years 1985 and
14 thereafter shall be determined in accordance with the
15 following schedule:
16 Percentage of Real Property Taxes
17 or Rent Rebate in Lieu of
18 Household Income Property Taxes Allowed as Rebate
19 $ 0 - $4,999 100%
20 5,000 - 5,499 100
21 5,500 - 5,999 90
22 6,000 - 6,499 80
23 6,500 - 6,999 70
24 7,000 - 7,499 60
25 7,500 - 7,999 50
26 8,000 - 8,499 40
27 8,500 - 8,999 35
28 9,000 - 9,999 25
29 10,000 - 11,999 20
30 12,000 - 12,999 15
31 13,000 - 15,000 10
32 (2) To all claimants eligible for a property tax or rent
33 rebate pursuant to paragraph (1), there shall be paid an
34 inflation dividend determined in accordance with the
35 following schedule:
36 Household Income Dividend
37 $ 0 - $4,999 $125
38 5,000 - 5,499 100
39 5,500 - 5,999 100
40 6,000 - 6,499 75
41 6,500 - 6,999 75
42 7,000 - 7,499 60
43 7,500 - 7,999 60
44 8,000 - 8,499 45
45 8,500 - 8,999 45
46 9,000 - 9,999 30
47 10,000 - 11,999 30
48 12,000 - 12,999 30
49 13,000 - 15,000 20
50 (b) Limitations on claims.--
51 (1) No claim shall be allowed if the amount of property
52 tax or rent rebate computed in accordance with this section
53 is less than $10, and the maximum amount of property tax or
54 rent rebate payable shall not exceed $500.
55 (2) No claim shall be allowed if the claimant is a
56 tenant of an owner of real property exempt from real property
57 taxes.
58 (c) Apportionment and public assistance.--
59 (1) If any of the following exist relating to a claim:
HB1600A05384 - 80 -
1 (i) a homestead is owned or rented and occupied for
2 only a portion of a year or is owned or rented in part by
3 a person who does not meet the qualifications for a
4 claimant, exclusive of any interest owned or leased by a
5 claimant's spouse;
6 (ii) the claimant is a widow or widower who
7 remarries; or
8 (iii) the claimant is a formerly disabled person who
9 is no longer disabled,
10 the department shall apportion the real property taxes or
11 rent in accordance with the period or degree of ownership or
12 leasehold or eligibility of the claimant in determining the
13 amount of rebate for which a claimant is eligible.
14 (2) A claimant who receives public assistance from the
15 Department of Public Welfare shall not be eligible for rent
16 rebate in lieu of property taxes or an inflation dividend
17 during those months within which the claimant receives public
18 assistance.
19 (d) Government subsidies.--Rent shall not include subsidies
20 provided by or through a governmental agency.
21 Section 905. Filing of claim.
22 (a) General rule.--Except as otherwise provided in
23 subsection (b), a claim for property tax or rent rebate shall be
24 filed with the department on or before the 30th day of June of
25 the year next succeeding the end of the calendar year in which
26 real property taxes or rent was due and payable.
27 (b) Exception.--A claim filed after the June 30 deadline
28 until December 31 of such calendar year shall be accepted by the
29 secretary as long as funds are available to pay the benefits to
30 the late filing claimant.
31 (c) Payments from State Lottery Fund.--No reimbursement on a
32 claim shall be made from the State Lottery Fund earlier than the
33 day following the 30th day of June provided in this chapter on
34 which that claim may be filed with the department.
35 (d) Eligibility of claimants.--
36 (1) Only one claimant from a homestead each year shall
37 be entitled to the property tax or rent rebate.
38 (2) If two or more persons are able to meet the
39 qualifications for a claimant, they may determine who the
40 claimant shall be.
41 (3) If they are unable to agree, the department shall
42 determine to whom the rebate is to be paid.
43 Section 906. Proof of claim.
44 (a) Contents.--Each claim shall include:
45 (1) Reasonable proof of household income.
46 (2) The size and nature of the property claimed as a
47 homestead.
48 (3) The rent, tax receipt or other proof that the real
49 property taxes on the homestead have been paid or rent in
50 connection with the occupancy of a homestead has been paid.
51 (4) If the claimant is a widow or widower, a declaration
52 of such status in such manner as prescribed by the secretary.
53 (b) Proof of disability.--
54 (1) Proof that a claimant is eligible to receive
55 disability benefits under the Social Security Act (49 Stat.
56 620, 42 U.S.C. § 301 et seq.) shall constitute proof of
57 disability under this chapter.
58 (2) No person who has been found not to be disabled by
59 the Social Security Administration shall be granted a rebate
HB1600A05384 - 81 -
1 under this chapter.
2 (3) A claimant not covered under the Social Security Act
3 shall be examined by a physician designated by the department
4 and such status determined using the same standards used by
5 the Social Security Administration.
6 (c) Direct payment of taxes or rent not required.--It shall
7 not be necessary that such taxes or rent were paid directly by
8 the claimant if the rent or taxes have been paid when the claim
9 is filed.
10 (d) Proof of age on first claim.--The first claim filed
11 shall include proof that the claimant or the claimant's spouse
12 was at least 65 years of age, or at least 50 years of age in the
13 case of a widow or widower during the calendar year in which
14 real property taxes or rent were due and payable.
15 Section 907. Incorrect claim.
16 Whenever on audit of a claim the department finds the claim
17 to have been incorrectly determined, it shall redetermine the
18 correct amount of the claim and notify the claimant of the
19 reason for the redetermination and the amount of the corrected
20 claim.
21 Section 908. Funds for payment of claims.
22 (a) Payment.--Approved claims shall be paid from the State
23 Lottery Fund established by the act of August 26, 1971 (P.L.351,
24 No.91), known as the State Lottery Law.
25 (b) Minimum funding level.--Not less than the percentage of
26 the State Lottery Fund expended in the fiscal year beginning
27 July 1, 2007, for the provision of property tax relief and rent
28 rebate in lieu of property taxes shall be transferred from the
29 State Lottery Fund each year into a restricted account within
30 the State Lottery Fund, which account is hereby established and
31 shall be known as the Property Tax and Rent Rebate Restricted
32 Account. The moneys of the account shall be expended for the
33 sole purpose of providing property tax relief and rent rebates
34 in lieu of property taxes as provided by law.
35 (c) Restrictions on use of Gaming Fund.--No moneys in the
36 Gaming Fund shall be transferred to the State Lottery Fund or
37 otherwise used for the purposes of this chapter.
38 Section 909. Claim forms and rules and regulations.
39 Necessary rules and regulations shall be prescribed by a
40 committee consisting of the Secretary of Aging, the Secretary of
41 Revenue and the Secretary of Community and Economic Development.
42 The Secretary of Aging shall serve as the chairman of the
43 committee. The department shall receive all applications,
44 determine the eligibility of claimants, hear appeals, disburse
45 payments and make available suitable forms for the filing of
46 claims.
47 Section 910. Fraudulent claims and conveyances to obtain
48 benefits.
49 (a) Civil penalty.--In any case in which a claim is
50 excessive and was filed with fraudulent intent, the claim shall
51 be disallowed in full, and a penalty of 25% of the amount
52 claimed shall be imposed. The penalty and the amount of the
53 disallowed claim, if the claim has been paid, shall bear
54 interest at the rate of 1.5% per month from the date of the
55 claim until repaid.
56 (b) Criminal penalty.--The claimant and any person who
57 assisted in the preparation or filing of a fraudulent claim
58 commits a misdemeanor of the third degree and, upon conviction
59 thereof, shall be sentenced to pay a fine not exceeding $1,000
HB1600A05384 - 82 -
1 or to imprisonment not exceeding one year, or both.
2 (c) Disallowance for receipt of title.--A claim shall be
3 disallowed if the claimant received title to the homestead
4 primarily for the purpose of receiving property tax rebate.
5 Section 911. Petition for redetermination.
6 (a) Right to file.--A claimant whose claim is either denied,
7 corrected or otherwise adversely affected by the department may
8 file with the department a petition for redetermination on forms
9 supplied by the department within 90 days after the date of
10 mailing of written notice by the department of such action.
11 (b) Contents.--The petition shall set forth the grounds upon
12 which the claimant alleges that such departmental action is
13 erroneous or unlawful, in whole or part, and shall contain an
14 affidavit or affirmation that the facts contained in the
15 petition are true and correct.
16 (c) Extension of time for filing.--
17 (1) An extension of time for filing the petition may be
18 allowed for cause but may not exceed 120 days.
19 (2) The department shall hold such hearings as may be
20 necessary for the purpose of redetermination, and each
21 claimant who has duly filed such petition for redetermination
22 shall be notified by the department of the time when and the
23 place where such hearing in the claimant's case will be held.
24 (d) Time period for decision.--The department shall, within
25 six months after receiving a filed petition for redetermination,
26 dispose of the matters raised by such petition and shall mail
27 notice of the department's decision to the claimant.
28 Section 912. Review by Board of Finance and Revenue.
29 (a) Right to review.--Within 90 days after the date of
30 official receipt by the claimant of notice mailed by the
31 department of its decision on a petition for redetermination
32 filed with it, the claimant who is adversely affected by the
33 decision may by petition request the board to review such
34 action.
35 (b) Effect of no decision from department.--The failure of
36 the department to officially notify the claimant of a decision
37 within the six-month period provided for by section 911 shall
38 act as a denial of the petition, and a petition for review may
39 be filed with the board within 120 days after written notice is
40 officially received by the claimant that the department has
41 failed to dispose of the petition within the six-month period.
42 (c) Contents of petition for redetermination.--A petition
43 for redetermination filed under this section shall state the
44 reasons upon which the claimant relies or shall incorporate by
45 reference the petition for redetermination in which such reasons
46 were stated. The petition shall be supported by affidavit that
47 the facts set forth therein are correct and true.
48 (d) Time period for decision.--The board shall act in
49 disposition of petitions filed with it within six months after
50 they have been received, and, in the event of failure of the
51 board to dispose of any petition within six months, the action
52 taken by the department upon the petition for redetermination
53 shall be deemed sustained.
54 (e) Relief authorized by board.--The board may sustain the
55 action taken by the department on the petition for
56 redetermination or it may take such other action as it shall
57 deem necessary and consistent with provisions of this chapter.
58 (f) Form of notice.--Notice of the action of the board shall
59 be given by mail to the department and to the claimant.
HB1600A05384 - 83 -
1 Section 913. Appeal.
2 A claimant aggrieved by a decision of the board may appeal
3 from the decision of the board in the manner provided by law for
4 appeals from decisions of the board in tax cases.
5 CHAPTER 11
6 LIMITATIONS ON SCHOOL DISTRICT TAXATION
7 Section 1101. Authority to levy taxes and effect of future
8 Constitutional amendment.
9 (a) Abrogating authority to impose certain taxes.--
10 (1) The authority of any school district to levy, assess
11 and collect any real property tax under the Public School
12 Code of 1949, or any other act shall expire in accordance
13 with the schedule set forth under section 1102, at midnight
14 December 31, 2007.
15 (2) The authority of a school district to impose or
16 continue any tax adopted pursuant to the Local Tax Enabling
17 Act or a school per capita tax pursuant to the Public School
18 Code of 1949 or to impose or continue any other tax not
19 authorized under this act shall expire at midnight on
20 December 31, 2008.
21 (3) The authority of a city of the first class to impose
22 or continue to provide for the imposition or continuation of
23 any tax, including, but not limited to, the real property
24 tax, for the use of a school district of the first class that
25 is not specifically authorized under this act shall expire in
26 accordance with the schedule set forth under section 1102(b).
27 (4) No political subdivision that may impose a tax on
28 the transfer of real property shall have the authority to
29 increase the rate of its realty transfer tax pursuant to
30 Article XI-D of the Tax Reform Code of 1971, the Local Tax
31 Enabling Act or any other law above the rate in effect for
32 that political subdivision as of June 30, 2007, or the rate
33 of .5%, whichever rate is greater.
34 (b) Collection of certain taxes unaffected.--The provisions
35 of this section or any other provision of this act shall not
36 prevent or interfere with any action of any school district to
37 collect any tax owed by any taxpayer prior to the repeal of any
38 law authorizing such tax after such law is repealed pursuant to
39 this act.
40 (c) Limitations on adoption of personal income taxes
41 authorized under Chapter 3 and earned income taxes authorized
42 under Chapter 5.--A school district that adopts a personal
43 income tax pursuant to Chapter 3 may not adopt an earned income
44 tax under Chapter 5. A school district that adopts an earned
45 income tax under Chapter 5 may not adopt a personal income tax
46 under Chapter 3.
47 Section 1102. Transitional taxes.
48 (a) Transitional taxes for school districts other than
49 school districts of the first class.--Notwithstanding any other
50 provision of the Public School Code of 1949 or any other law to
51 the contrary:
52 (1) Any school district, other than a school district of
53 the first class, may continue to levy, assess and collect a
54 real property tax for the fiscal years 2008-2009, 2009-2010
55 and 2010-2011, subject to the limitations set forth in
56 paragraphs (2), (3), (4) and (5), and may continue to levy,
57 assess and collect taxes, other than realty transfer taxes,
58 pursuant to the Local Tax Enabling Act and the school per
59 capita tax until midnight on December 31, 2008.
HB1600A05384 - 84 -
1 (2) For fiscal year 2008-2009, the rate of real property
2 tax shall be calculated to generate 75% of the revenue
3 generated by the real property tax for the 2006-2007 fiscal
4 year.
5 (3) For fiscal year 2009-2010, the rate of the real
6 property tax shall be calculated to generate 50% of the
7 revenue generated by the real property tax for the 2006-2007
8 fiscal year.
9 (4) For fiscal year 2010-2011, the rate of the real
10 property tax shall be calculated to generate 25% of the
11 revenue generated by the real property tax for the 2006-2007
12 fiscal year.
13 (5) For all fiscal years beginning after June 30, 2011,
14 no school district shall have any power or authority to levy,
15 assess and collect any real property tax.
16 (b) Transitional taxes for school districts of the first
17 class.--Notwithstanding any other provision of the Public School
18 Code of 1949 or any other law to the contrary:
19 (1) Subject to the provisions set forth in paragraphs
20 (2), (3) and (4), any school district of the first class and
21 city of the first class may continue to levy, assess and
22 collect a real property tax and all other taxes in existence
23 on July 31, 2007, at the rates in effect on that date as
24 reduced in accordance with this subsection, for the use of a
25 coterminous school district of the first class for fiscal
26 years 2008-2009, 2009-2010 and 2010-2011. The authority to
27 levy, assess and collect such taxes for the use of
28 coterminous school districts shall expire at midnight on
29 December 31, 2011.
30 (2) For fiscal year 2008-2009, all taxes identified
31 under paragraph (1) shall be calculated to generate 75% of
32 the revenue generated by all such taxes for the 2006-2007
33 fiscal year.
34 (3) For fiscal year 2009-2010, all taxes identified
35 under paragraph (1) shall be calculated to generate 50% of
36 the revenue generated by those taxes for the 2006-2007 fiscal
37 year.
38 (4) For fiscal year 2010-2011, all taxes identified
39 under paragraph (1) shall be calculated to generate 25% of
40 the revenue generated by those taxes for the 2006-2007 fiscal
41 year.
42 (5) For all fiscal years beginning after June 30, 2011,
43 no city of the first class shall have any power or authority
44 to levy, assess and collect any of the taxes identified under
45 paragraph (1) for school purposes.
46 Section 1103. Consideration of State appropriations or
47 reimbursements.
48 The personal income or earned income tax levied shall not be
49 invalidated by reason of the fact that in determining the amount
50 to be raised by such tax no deduction was made for
51 appropriations or reimbursements paid or payable by the
52 Commonwealth to the school district.
53 Section 1104. Taxes for cities and school districts of the
54 first class.
55 Notwithstanding any other provision of the Public School Code
56 of 1949 or any other law to the contrary:
57 (1) Nothing in this act shall be construed to limit or
58 impair a city of the first class from levying, assessing or
59 collecting any tax for municipal purposes or from increasing
HB1600A05384 - 85 -
1 the millage for real estate taxes or revenues if the revenues
2 derived from the real property tax are used solely for
3 municipal purposes.
4 (2) The reduction in real property tax millage in cities
5 of the first class shall be made in four equal installments
6 beginning with the 2008-2009 fiscal year and shall reduce the
7 millage by not less than 60% from the millage in effect on
8 July 30, 2007.
9 CHAPTER 12
10 INDEBTEDNESS
11 Section 1201. Expiration of authority to issue debt.
12 Notwithstanding any other provision of 53 Pa.C.S. Pt. VII,
13 Subpt. B (relating to indebtedness and borrowing) or any other
14 law to the contrary, no school district, including a school
15 district of the first class, shall incur any electoral debt,
16 lease rental debt or nonelectoral debt under 53 Pa.C.S. Pt. VII,
17 Subpt. B after the effective date of this section.
18 Section 1202. Notices and reporting by school districts of debt
19 outstanding.
20 (a) Duties.--
21 (1) (i) On or before March 31, 2008, each school
22 district, including a school district of the first class,
23 shall identify the outstanding amount of all electoral
24 debt, lease rental debt or nonelectoral debt incurred as
25 of June 30, 2008, and shall notify on or before March 31,
26 2008, each holder of the bonds or notes of such debt of
27 the amount owed to each holder as of December 31, 2007.
28 The notice shall inform the holders of the provisions of
29 this section and section 1203.
30 (ii) A holder of a bond or note of such debt shall
31 have the right to dispute the amount stated as owed to
32 the holder in the notice, provided that the holder
33 notifies the local government unit in writing prior to
34 April 15, 2008. A holder that fails to file a dispute
35 under this subparagraph shall waive the right to dispute
36 the amount owed to the holder after the Commonwealth
37 assumes the debt of the school district under section
38 1203.
39 (iii) A school district that receives a written
40 dispute from a holder under subparagraph (ii) shall
41 attempt to resolve the dispute by May 1, 2008.
42 (2) On or before June 30, 2008, each school district,
43 including a school district of the first class, shall certify
44 and report to the Department of Revenue the outstanding
45 amount of all electoral debt, lease rental debt or
46 nonelectoral debt incurred as of December 31, 2007, together
47 with any information requested by the department in order for
48 the Commonwealth to comply with the requirements of this
49 section and section 1203.
50 (b) Audit by Department of Revenue.--
51 (1) The Department of Revenue shall audit each report
52 submitted under subsection (a) and shall certify the amount
53 of each report and the total aggregate amount of all reports
54 to the State Treasurer and the Education Operating Fund Board
55 on or before June 30, 2008.
56 (2) If the Department of Revenue disputes all or any
57 portion of a report submitted under subsection (a), the
58 department shall not include such amount in the certification
59 to the State Treasurer and the Education Operating Fund Board
HB1600A05384 - 86 -
1 and shall notify the school district in writing of the
2 exclusion from the certification.
3 Section 1203. Assumption of school district debt by
4 Commonwealth.
5 (a) General rule.--Except as otherwise provided in
6 subsection (b), the Commonwealth shall assume on June 30, 2008,
7 the outstanding amount of all electoral debt, lease debt or
8 nonelectoral debt certified in the report submitted by the
9 Department of Revenue to the State Treasurer and the Education
10 Operating Fund Board. Such debt shall be managed and
11 administered by the School Financing Authority established under
12 section 1309, and repaid from the Education Operating Fund as
13 provided by law.
14 (b) Exceptions.--The Commonwealth may not assume:
15 (1) Any of the outstanding debt of a school district
16 that fails to certify and file a report with the Department
17 of Revenue as required by section 1202.
18 (2) That portion of the outstanding debt included in a
19 report filed by a school district, but which the Department
20 of Revenue does not include in its certification to the State
21 Treasurer and the Education Operating Fund Board under
22 section 1202(b)(2).
23 Section 1204. Power to apply for debt and limitations.
24 The board of school directors in any school district may, in
25 any year after December 31, 2009, apply for an indebtedness in
26 the form of bonds and notes to secure the same, payable as
27 provided by 53 Pa.C.S. Pt. VII, Subpt. B (relating to
28 indebtedness and borrowing) or any amendment or re-enactment
29 thereof, for any or all of the following purposes:
30 (1) To purchase or acquire proper sites, buildings or
31 grounds for school use, or any lands additional to any
32 existing school sites or grounds.
33 (2) To erect, enlarge, equip or furnish any building for
34 school use.
35 (3) To repair, remodel or rebuild any building of the
36 school district.
37 (4) To lease for an extended period building facilities
38 or portions of buildings constructed for school use and/or
39 existing building facilities or portions of existing building
40 facilities altered for school use.
41 (5) To refund certain bonds, as provided in this
42 chapter.
43 (6) To fund temporary indebtedness incurred for
44 permanent improvements, or in anticipation of proceeds from a
45 bond issue.
46 Section 1205. Referendum requirement.
47 (a) General rule.--No debt shall be incurred pursuant to
48 section 1204 unless the requirements of subsection (b) are
49 satisfied.
50 (b) Adoption of referendum.--
51 (1) In order to incur debt specified in subsection (a),
52 the governing body shall use the procedures set forth in this
53 subsection.
54 (2) (i) Subject to the notice and public hearing
55 requirements of this subsection, a governing body may
56 incur debt specified in subsection (a) only by obtaining
57 the approval of the electorate of the affected school
58 district in a public referendum at only the municipal
59 election preceding the fiscal year when the debt will be
HB1600A05384 - 87 -
1 initially incurred.
2 (ii) The question shall be in clear language that is
3 readily understandable by a layperson. For the purpose of
4 illustration, a referendum question may be framed as
5 follows:
6 Do you favor the creation of debt in the amount of X
7 for school district purposes?
8 (iii) A nonlegal interpretative statement must
9 accompany the question in accordance with section 201.1
10 of the act of June 3, 1937 (P.L.1333, No.320), known as
11 the Pennsylvania Election Code.
12 (3) In the event a school district is located in more
13 than one county, petitions under this section shall be filed
14 with the election officials of the county in which the
15 administrative offices of the school district are located.
16 (4) The election officials who receive a petition shall
17 perform all administrative functions in reviewing and
18 certifying the validity of the petition and conduct all
19 necessary communications with the school district.
20 (5) (i) If the election officials of the county who
21 receive the petition certify that it is sufficient under
22 this section and determine that a question should be
23 placed on the ballot, the decision shall be communicated
24 to election officials in any other county in which the
25 school district is also located.
26 (ii) Election officials in the other county or
27 counties shall cooperate with election officials of the
28 county receiving the petition to ensure that an identical
29 question is placed on the ballot at the same election
30 throughout the entire school district.
31 (6) Election officials from each county involved shall
32 independently certify the results from their county to the
33 governing body.
34 (7) (i) In order to incur debt under this section, the
35 governing body shall adopt a resolution which refers to
36 this chapter prior to placing a question on the ballot.
37 (ii) Prior to adopting a resolution incurring debt
38 authorized by this section, the governing body shall give
39 public notice of its intent to adopt the resolution and
40 shall conduct at least one public hearing regarding the
41 proposed adoption of the resolution.
42 Section 1206. Temporary debt.
43 (a) Authorization.--Any school district having no
44 indebtedness or whose indebtedness, incurred or created without
45 the assent of the electors thereof, is less than an amount equal
46 to the standard disbursement for that school district made
47 pursuant to section 1304 for the immediately preceding fiscal
48 year may, at any time, for the purpose of providing funds in any
49 fiscal year for current expenses and debt service, for permanent
50 improvements, the acquiring of school buses, or in anticipation
51 of proceeds from a bond issue already officially authorized and,
52 except in school districts of the first class, approved by the
53 Department of Community and Economic Development, with such
54 limitations and for such length of term as provided in this
55 chapter, by or through its board of school directors, incur, in
56 addition to any bonds therein authorized, a temporary debt or
57 borrow money, and issue an obligation or obligations therefor,
58 under the seal of the district, if any, properly executed by the
59 president and attested by the secretary thereof, and bearing
HB1600A05384 - 88 -
1 interest not exceeding the legal rate, but no such obligation
2 shall be sold for less than par. The incurring of any such
3 temporary debt, or borrowing money upon such obligation, shall
4 receive the affirmative vote of not less than two-thirds of the
5 members of the board of school directors.
6 (b) Permanent improvements.--In addition, any school
7 district may, as provided in this section, incur a temporary
8 debt or borrow money for permanent improvements, where no bond
9 issue has been previously officially authorized, and refund such
10 temporary indebtedness by the issue of bonds, in the manner
11 provided by law, when the exact amount required for such
12 permanent improvement becomes known.
13 Section 1207. Limit on temporary debt for current expenses and
14 debt service.
15 The total amount of temporary indebtedness incurred for
16 current expenses and debt service shall at no time exceed an
17 amount equal to the standard disbursement for that school
18 district made pursuant to section 1304 for the immediately
19 preceding fiscal year. All loans shall be paid out of the
20 receipts available, or pledged for repayment when the funds are
21 received. The total amount of the temporary indebtedness for
22 such purpose remaining unpaid at the close of the fiscal year
23 shall become an obligation on the following year's budget and
24 shall be included in the following year's budget.
25 Section 1208. Emergency loans for current expenses and debt
26 service.
27 (a) General rule.--In case of an emergency, any school
28 district in any fiscal year, after borrowing money in
29 anticipation of current revenues to the full extent permitted by
30 law and finding the receipts from the loans, together with all
31 other receipts, to be inadequate to meet the expenditures of the
32 official fiscal year's budget, may appeal to the Education
33 Operating Fund Board for permission to incur a temporary debt
34 for the purpose of providing funds for current expenses and debt
35 service and shall present to the Education Operating Fund Board
36 the financial statements or reports as the Education Operating
37 Fund Board may require to give adequate facts relative to the
38 necessity of the increase in indebtedness. The Education
39 Operating Fund Board may, after due examination of the need of
40 the school district, grant or refuse permission to the school
41 district to borrow additional funds for current expenses and
42 debt service beyond the amount permitted by law. In case of
43 approval, the Education Operating Fund Board shall designate the
44 maximum length of the term and shall set a maximum limit of the
45 total amount of the temporary indebtedness that the school
46 district may incur during the fiscal year in addition to all
47 temporary indebtedness for other purposes outstanding at the
48 time of the approval.
49 (b) Limitations.--All temporary indebtedness, for the
50 purpose of current expenses and debt service by a school
51 district shall not exceed the standard disbursement for that
52 school district made pursuant to section 1304 for the
53 immediately preceding fiscal year.
54 Section 1209. Limit on temporary debt for permanent
55 improvements and tax levy.
56 The total amount of temporary indebtedness incurred in any
57 school district for the purpose of permanent improvements and
58 the acquiring of school buses, except obligations incurred under
59 law, shall never exceed an amount equal to the standard
HB1600A05384 - 89 -
1 disbursement for that school district made pursuant to section
2 1304 for the immediately preceding fiscal year. Except where
3 such temporary indebtedness is to be refunded by the issue of
4 bonds, as authorized, at or before the time of incurring
5 indebtedness for such purpose, provision shall be made for the
6 collection of an annual tax sufficient to pay the interest and
7 also the principal thereof within the term of such indebtedness,
8 as provided by law.
9 Section 1210. Limit on temporary debt in anticipation of
10 proceeds of bond issue.
11 (a) General rule.--The total amount of temporary
12 indebtedness incurred in anticipation of proceeds from a bond
13 issue shall not exceed 75% of the full amount of bonds
14 authorized by the bond issue.
15 (b) Payment.--All obligations, other than bonds, issued by
16 any school district in anticipation of proceeds from a bond
17 issue shall be paid in full, together with interest, out of the
18 proceeds of the bond issue within one year and six months from
19 the date of authorization of the bond issue.
20 Section 1211. Borrowing in anticipation of current revenue.
21 School districts may borrow money in anticipation of current
22 revenues to an amount not exceeding the anticipated current
23 revenues, which amount shall be pledged for the payment of the
24 loan or loans, and issue notes or other form of obligation,
25 executed by the president of the board of school directors and
26 attested by the secretary of the board under the seal of the
27 school district securing the loans. The notes, or other form of
28 obligation, shall mature and be payable during the current
29 fiscal year in which the money is borrowed. No borrowing shall
30 constitute an increase of indebtedness within the meaning of
31 section 8 of Article IX of the Constitution of Pennsylvania, or
32 any of the provisions of any other law. The notes shall bear
33 interest at a rate not exceeding 6% per annum, payable at
34 maturity or in advance, and may be sold at either public or
35 private sale for not less than par. If the loans are not repaid
36 in whole or in part during the fiscal year in which they are
37 made, they, or such amounts as remain unpaid, shall become an
38 obligation upon the following year's budget and shall be
39 included and paid not later than the first day of July of such
40 following year, in school districts of the first class, and not
41 later than the first day of November of the following year, in
42 school districts of the second, third, and fourth class. The
43 incurring of the obligations shall receive the affirmative vote
44 of not less than two-thirds of the members of the board of
45 school directors.
46 Section 1212. Mandatory reduction in local personal income tax
47 and earned income tax.
48 (a) Duty to reduce tax.--
49 (1) Each school district shall reduce the local personal
50 income tax adopted pursuant to Chapter 3 or earned income tax
51 adopted pursuant to Chapter 5, whichever is applicable, to
52 the full extent that the amount of money needed for the
53 payment of any obligations on debt authorized under this
54 chapter is reduced or eliminated.
55 (2) If a school district fails to comply with this
56 section, the EOF board shall reduce the standard disbursement
57 to that school board for each applicable fiscal year in the
58 amount of the reduction required, but not implemented, for
59 that year, together with a penalty equal to 10% of the
HB1600A05384 - 90 -
1 required reduction.
2 (b) Construction.--Nothing in this section shall be
3 construed to prohibit the school district from seeking an
4 increase in any tax reduced pursuant to this section in
5 accordance with the referendum procedure provided under Chapters
6 3 and 5.
7 CHAPTER 13
8 FUNDING PROVISIONS
9 Section 1301. Definitions.
10 The following words and phrases when used in this chapter
11 shall have the meanings given to them in this section unless the
12 context clearly indicates otherwise:
13 "Authority." The School Financing Authority established
14 under section 1309.
15 "Average per pupil expenditure." An amount equal to a school
16 district's current expenditures for a school year to include
17 General Fund expenditures in the functional classifications of
18 instruction, support services and operation of noninstructional
19 services, as designated in the Manual of Accounting and Related
20 Financial Procedures for Pennsylvania School Systems, divided by
21 the average daily membership of the school district for the same
22 school year.
23 "Average per pupil expenditure for each public school student
24 in the Commonwealth." An amount equal to the current
25 expenditures for all school districts for a school year to
26 include General Fund expenditures in the functional
27 classifications of instruction, support services and operation
28 of noninstructional services, as designated in the Manual of
29 Accounting and Related Financial Procedures for Pennsylvania
30 School Systems, divided by the total number of public school
31 students constituting average daily membership for all school
32 districts in this Commonwealth for the same school year.
33 "Board." The Education Operating Fund Board established
34 under section 1308.
35 "Consumer Price Index" or "CPR." The lesser of:
36 (1) the average annual percentage increase in the
37 Consumer Price Index for All Urban Consumers (CPI-U) for the
38 Pennsylvania, New Jersey and Maryland area for the preceding
39 calendar year, as reported by the United States Department of
40 Labor, Bureau of Labor Statistics; or
41 (2) the percentage increase in sales and use tax
42 collected under section 702 from the previous calendar year.
43 "Distressed district prevention and emergency disbursements."
44 Disbursements authorized from the Education Trust Reserve
45 Account under section 1305(b).
46 "Education Operating Fund" or "EOF." The Education Operating
47 Fund established under section 1302.
48 "Education Trust Reserve Account" or "ETR account." The
49 Education Trust Reserve Account established under section 1305.
50 "Equity disbursements." Disbursements authorized from the
51 School Equity Account under section 1306(c).
52 "Nonqualified operating expenses." The total dollar amount
53 of the following from the preceding fiscal year:
54 (1) any one-time, nonrecurring expense;
55 (2) disbursements from operating-type reserve
56 accumulations which were a source of funding from Federal,
57 State or local sources;
58 (3) school district-specific programs initiated and paid
59 for from school district sources of nontax funds;
HB1600A05384 - 91 -
1 (4) school district costs, including, but not limited
2 to, health care benefit costs that are assumed by the
3 Commonwealth, including the Education Operating Fund, after
4 the effective date of this section;
5 (5) direct school property tax administration and
6 collection costs; and
7 (6) debt service payments that the school district would
8 have made for the applicable fiscal year if the Commonwealth
9 had not assumed the school district's debt obligation
10 pursuant to Chapter 12.
11 "Qualifying line items." The following line items or
12 substantially identical line items in any general appropriations
13 act that authorize payments or reimbursements to a school
14 district:
15 (1) Payment of basic education funding to school
16 districts.
17 (2) Payments on account of special education of
18 exceptional children.
19 (3) Payments on account of pupil transportation.
20 (4) Payments on account of annual rental or sinking fund
21 charges on school buildings, including charter schools.
22 (5) Payments for early intervention services.
23 (6) Reimbursements to school districts for their charter
24 school payments.
25 (7) Special education-approved private schools.
26 (8) Payments on account of nonpublic and charter school
27 pupil transportation.
28 (9) Payment for tuition to school districts providing
29 education to nonresident orphaned children placed in private
30 homes by the court and nonresident inmates of children's
31 institutions.
32 (10) Grants to school districts to assist in meeting
33 Federal matching requirements for grants received under the
34 Child Nutrition Act of 1966 (Public Law 89-642, 42 U.S.C. §
35 1771 et seq.) and to aid in providing a food program for
36 needy children.
37 (11) Programs of education and training at youth
38 development centers and the monitoring of programs of
39 education and training provided to incarcerated juveniles.
40 (12) Payment on account of homebound instruction.
41 (13) Payments of annual fixed charges to school
42 districts in lieu of taxes for land acquired by the
43 Commonwealth for water conservation or flood prevention.
44 (14) Education of indigent children at charitable
45 hospitals.
46 "School District Equity Account." The School District Equity
47 Account established under section 1306(a).
48 "School Equity Capital Construction Fund" or "SECCF." The
49 School Equity Capital Construction Fund established under
50 section 1311.
51 "Standard disbursements." Disbursements made on a quarterly
52 basis from the Education Operating Fund as authorized under
53 section 1304.
54 "Student enrollment adjustment." A dollar amount determined
55 from the preceding fiscal year based on the net increase or
56 decrease in the total average daily membership of students
57 enrolled in that school district between the opening and the
58 closing of the school term that occurs within that preceding
59 fiscal year converted to a dollar amount as determined by the
HB1600A05384 - 92 -
1 Education Operating Fund Board. The transfer of a public school
2 student to a cyber school, charter school, facility for
3 receiving special education or other alternative school shall
4 not be deemed to decrease the number of students enrolled in a
5 school district for purposes of reducing the standard
6 distribution to a school district for any fiscal year in which
7 the school district pays at least $2,000 toward the education of
8 any such student.
9 Section 1302. Education Operating Fund.
10 (a) Establishment.--The Education Operating Fund is
11 established in the State Treasury.
12 (b) Contents.--
13 (1) The fund shall consist of:
14 (i) All moneys collected by the department under
15 section 321, Chapter 7 and section 1307.
16 (ii) Any other moneys required by this act or other
17 law to be deposited into the fund.
18 (2) (i) On or before July 1, 2008, each school district
19 shall transfer a sum of money equal to its ending
20 unreserved, undesignated fund balance as of July 1, 2007
21 to the Education Operating Fund.
22 (ii) As used in this paragraph, "ending unreserved,
23 undesignated fund balance" means that portion of the
24 school district's general fund balance which is
25 appropriable for expenditure or not legally or otherwise
26 segregated for a specific or tentative future use, at the
27 close of the fiscal year for which a school district's
28 budget was adopted and held in the general fund accounts
29 of the school district.
30 (c) Separate fund.--The fund and all accounts of the fund
31 shall be separate from all other funds of the Commonwealth and
32 shall not be subject to borrowing by or transfer to the General
33 Fund or any other fund in the State Treasury.
34 (d) Continuing appropriation.--All money placed in the fund
35 and in the ETR Account and the School District Equity Account
36 and the interest they accrue are hereby appropriated to the
37 board on a continuing basis and may be expended by the board
38 only for the purposes authorized under this act.
39 Section 1303. Cash flow funding forecasts.
40 (a) Scope and purpose.--
41 (1) This section imposes a duty on school districts to
42 provide the board with certain cash flow funding forecasts.
43 (2) The purpose of the cash flow funding forecasts is to
44 assist the board to make distressed district prevention and
45 emergency disbursements to school districts under section
46 1306 and to improve the ability of school districts to
47 monitor and plan their expenditures in a more fiscally
48 effective manner.
49 (b) Annual submission of funding forecasts.--On or before
50 July 1, 2009, and continuing annually thereafter, each school
51 district shall submit to the board a preliminary annual cash
52 flow funding forecast relating to school district operations
53 that need to be funded from the fund for the following fiscal
54 year for the calendar quarters ending September 30, December 31,
55 March 31 and June 30.
56 (c) Contents.--The cash flow funding forecast shall be
57 referenced to the fiscal year then ending and may only include
58 operating expenditure categories included in the school
59 district's budget for that fiscal year. The budget contained in
HB1600A05384 - 93 -
1 the forecast:
2 (1) May not exceed actual operating expenditures for the
3 2007-2008 fiscal year plus estimated debt service on all debt
4 as of December 31, 2006, and, in succeeding years, may not
5 exceed actual operating expenditures for the prior fiscal
6 year as modified by the student enrollment adjustment. Any
7 tax revenue collections for the period July 1, 2007, through
8 June 30, 2010, shall be itemized and deducted in the
9 forecasting funding requirements. Fund increases shall be
10 factored into these forecasts.
11 (2) May not include expenditures based on the one-time
12 use of reserves set up in prior years.
13 (3) Shall report all estimated requirements net of any
14 available school district operating reserves and all other
15 receipts and sources of tax revenue collections of any kind
16 through the fiscal year beginning July 1, 2011, and each
17 fiscal year thereafter, except as authorized by local
18 referendum after July 1, 2011.
19 (4) Shall apply all noncapital expenditure reserves
20 against the forecasted net funding requirements.
21 (5) Shall treat debt service for capital expenditures as
22 separate line items and exclude debt service approved by
23 referendum.
24 (d) Quarterly updates.--On or before July 1, 2008, and
25 continuing quarterly thereafter on the last day of each quarter,
26 each school district shall submit to the board a cash flow
27 funding forecast quarterly update relating to school district
28 operations that need to be funded from the fund for the current
29 year.
30 Section 1304. Standard disbursements to school districts from
31 Education Operating Fund.
32 (a) Standard draw requests by school districts.--For the
33 fiscal year beginning July 1, 2008, and continuing each fiscal
34 year thereafter, each school district shall submit on a
35 quarterly basis to the board a draw request for a standard
36 disbursement, which draw request shall be filed no later than 30
37 days prior to the beginning of the next quarter. The board shall
38 prescribe the form and content of the draw request for a
39 standard disbursement.
40 (b) Standard disbursement formula.--After receipt and review
41 of the quarterly draw requests submitted by school districts
42 under subsection (a), the board shall make standard
43 disbursements from the fund to each school district, other than
44 a school district of the first class, on or before the last day
45 of each quarter as follows:
46 (1) For the fiscal year beginning July 1, 2008, the
47 amount of each quarterly standard disbursement for each
48 school district, as adjusted by subtracting nonqualified
49 operating expenses, in accordance with paragraph (6), shall
50 be equal to 25% of the following:
51 (i) a dollar amount which shall be equal to all
52 payments and reimbursements received by the school
53 district for the 2007-2008 fiscal year from qualifying
54 line items in a general appropriations act that
55 authorizes payments and reimbursements to the school
56 district for that fiscal year as adjusted by the
57 percentage increase in the CPI for calendar year 2007 and
58 by the student enrollment adjustment;
59 (ii) the dollar amount equal to the 25% reduction in
HB1600A05384 - 94 -
1 real property tax revenues resulting from the application
2 of section 1102(a)(2) for that fiscal year;
3 (iii) fifty percent of the dollar amount collected
4 from school per capita tax during calendar year 2008; and
5 (iv) fifty percent of the dollar amount collected
6 from the Local Tax Enabling Act during calendar year
7 2008.
8 (2) For the fiscal year beginning July 1, 2009, the
9 amount of each quarterly standard disbursement to the school
10 district, as adjusted by subtracting nonqualified operating
11 expenses, in accordance with paragraph (6), shall be equal to
12 25% of the following:
13 (i) a dollar amount equal to the sum calculated
14 pursuant to paragraph (1)(i) as adjusted by the
15 percentage increase in the CPI for calendar year 2008 in
16 accordance with paragraph (6);
17 (ii) the dollar amount equal to the 50% reduction in
18 real property tax revenues resulting from the application
19 of section 1102(a)(3) for that fiscal year as adjusted by
20 the percentage increase in the CPI for calendar year 2008
21 and by the student enrollment adjustment;
22 (iii) the dollar amount collected from the school
23 per capita tax and the Local Tax Enabling Act during
24 calendar year 2008; and
25 (iv) a dollar amount equal to the equity
26 disbursement received by the school district for the
27 2008-2009 fiscal year pursuant to section 1306(c)(2).
28 (3) For the fiscal year beginning July 1, 2010, the
29 amount of each quarterly standard disbursement to a school
30 district as adjusted by subtracting nonqualified operating
31 expenses, in accordance with paragraph (6), shall be equal to
32 25% of the following:
33 (i) a dollar amount equal to the sum calculated
34 pursuant to paragraph (2)(i) and (iv) as adjusted by the
35 percentage increase in the CPI for calendar year 2009 and
36 by the student enrollment adjustment;
37 (ii) the dollar amount equal to the 75% reduction in
38 real property tax revenues resulting from the application
39 of section 1102(a)(4) as adjusted by the percentage
40 increase in the CPI for 2009 and by the student
41 enrollment adjustment;
42 (iii) the dollar amount calculated pursuant to
43 paragraph (2)(iii) as adjusted by the percentage increase
44 in the CPI for 2009; and
45 (iv) a dollar amount equal to the equity
46 disbursement received by the school district for the
47 2009-2010 fiscal year pursuant to section 1306(c)(3).
48 (4) For the fiscal year beginning July 1, 2011, the
49 amount of each quarterly standard disbursement to a school
50 district as adjusted by subtracting nonqualified operating
51 expenses, in accordance with paragraph (6), shall be equal to
52 25% of the following:
53 (i) a dollar amount equal to the sum calculated
54 pursuant to paragraph (3)(i) and (iv) as adjusted by the
55 percentage increase in the CPI for calendar year 2010 and
56 by the student enrollment adjustment;
57 (ii) a dollar amount equal to loss of revenues
58 resulting from the complete elimination of the real
59 property tax as adjusted by the percentage increase in
HB1600A05384 - 95 -
1 the CPI for 2010;
2 (iii) the dollar amount calculated pursuant to
3 paragraph (3)(iii) as adjusted by the percentage increase
4 in the CPI for 2010; and
5 (iv) a dollar amount equal to the equity
6 disbursement received by the school district for the
7 2010-2011 fiscal year pursuant to section 1306(c)(3).
8 (5) For the fiscal year beginning 2012 and for each
9 fiscal year thereafter, the amount of each quarterly
10 disbursement shall be equal to 25% of the standard
11 disbursement made in the preceding fiscal year, which shall
12 include the equity disbursement made pursuant to section
13 1306(c)(3), as adjusted by the percentage increase in the CPI
14 for the preceding calendar year and the student enrollment
15 adjustment and by subtracting nonqualified operating expenses
16 in accordance with paragraph (6).
17 (6) Any subtraction from the standard disbursement for
18 nonqualified operating expenses shall only modify the
19 standard disbursement for the applicable fiscal year and such
20 subtractions shall not be factored into the standard
21 disbursements for any subsequent fiscal year.
22 (c) Standard disbursement formula for school districts of
23 the first class.--After receipt and review of the quarterly draw
24 requests submitted by school districts under subsection (a), the
25 board shall make standard disbursements from the fund to each
26 school district of the first class on or before the last day of
27 each quarter as follows:
28 (1) For the fiscal year beginning July 1, 2008, the
29 amount of each quarterly standard disbursement for each
30 school district of the first class, as adjusted by
31 subtracting nonqualified operating expenses, in accordance
32 with paragraph (7), shall be equal to 25% of the following:
33 (i) a sum which shall be equal to all payments and
34 reimbursements received by the school district for the
35 2007-2008 fiscal year from qualifying line items in a
36 general appropriations act that authorizes payments and
37 reimbursements to the school district for the fiscal year
38 as adjusted by the percentage increase in the CPI for
39 calendar year 2007 and by the student enrollment
40 adjustment; and
41 (ii) the dollar amount equal to the 25% reduction in
42 real property tax and other tax revenues resulting from
43 the application of section 1102(b)(2) for that fiscal
44 year.
45 (2) For the fiscal year beginning July 1, 2009, the
46 amount of each quarterly standard disbursement to a school
47 district of the first class, as adjusted by subtracting
48 nonqualified operating expenses, in accordance with paragraph
49 (7), shall be equal to 25% of the following:
50 (i) a dollar amount equal to the sum calculated
51 pursuant to paragraph (1)(i) as adjusted by the
52 percentage increase in the CPI for calendar year 2008 and
53 by the student enrollment adjustment;
54 (ii) the dollar amount equal to the 50% reduction in
55 real property tax and other tax revenues resulting from
56 the application of section 1102(b)(3) for that fiscal
57 year as adjusted by the percentage increase in the CPI
58 for 2008; and
59 (iii) a dollar amount equal to the equity
HB1600A05384 - 96 -
1 disbursement received by the school district for the
2 2008-2009 fiscal year pursuant to section 1306(c)(2).
3 (3) For the fiscal year beginning July 1, 2010, the
4 amount of each quarterly standard disbursement to a school
5 district of the first class as adjusted by subtracting
6 nonqualified operating expenses, in accordance with paragraph
7 (7), shall be equal to 25% of the following:
8 (i) a dollar amount equal to the sum calculated
9 pursuant to paragraph (2)(i) and (iii) as adjusted by the
10 percentage increase in the CPI for calendar year 2009 and
11 by the student enrollment adjustment;
12 (ii) the dollar amount equal to the 75% reduction in
13 real property tax and other tax revenue resulting from
14 the application of section 1102(b)(4) as adjusted by the
15 percentage increase in the CPI for 2009; and
16 (iii) a dollar amount equal to the equity
17 disbursement received by the school district for the
18 2009-2010 fiscal year pursuant to section 1306(c)(3).
19 (4) For the fiscal year beginning July 1, 2011, the
20 amount of each quarterly standard disbursement to a school
21 district of the first class, as adjusted by subtracting
22 nonqualified operating expenses, in accordance with paragraph
23 (7), shall be equal to 25% of the following:
24 (i) a dollar amount equal to the sum calculated
25 pursuant to paragraph (3)(i) and (iii) as adjusted by the
26 percentage increase in the CPI for calendar year 2010 and
27 by the student enrollment adjustment;
28 (ii) a dollar amount equal to loss of real property
29 and other tax revenues resulting from the complete
30 implementation of section 1102(b) as adjusted by the
31 percentage increase in the CPI for 2010; and
32 (iii) a dollar amount equal to the equity
33 disbursement received by the school district for the
34 2010-2011 fiscal year pursuant to section 1306(c)(3).
35 (5) For the fiscal year beginning 2012 and for each
36 fiscal year thereafter, the amount of each quarterly
37 disbursement to each school district of the first class shall
38 be equal to 25% of the standard disbursement made in the
39 immediately preceding fiscal year, which shall include the
40 equity disbursement made pursuant to section 1306(c)(3), as
41 adjusted by the percentage increase in the CPI for the
42 preceding calendar year and the student enrollment adjustment
43 and by subtracting nonqualified operating expenses in
44 accordance with paragraph (7).
45 (6) Any financial assistance provided by a city of the
46 first class to a school district of the first class for the
47 fiscal year beginning on July 1, 2008, and each succeeding
48 fiscal year, shall be deemed a nonqualified operating expense
49 for purposes of this section.
50 (7) Any subtraction from the standard disbursement for
51 nonqualified operating expenses shall only modify the
52 standard disbursement for the applicable fiscal year and such
53 subtractions shall not be factored into the standard
54 disbursement for any subsequent fiscal year.
55 (d) Mandatory duty to pay.--The standard disbursements under
56 this section shall be paid from the EOF regardless of whether
57 the minimum balance has been attained in the ETR Account as set
58 forth under this chapter.
59 (e) Construction.--Distressed school district and emergency
HB1600A05384 - 97 -
1 disbursements and Federal funds appropriated by the Commonwealth
2 shall not be incorporated into the standard disbursements
3 authorized by this section and shall not be deemed to be
4 nonqualified expenses.
5 (f) Limitation on funding reduction for decline in student
6 enrollment.--Notwithstanding anything in this act to the
7 contrary, a reduction in the standard disbursement for a decline
8 in student enrollment shall only be made to the extent that a
9 decline in student enrollment reduces the student enrollment by
10 more than 10% from the student enrollment in that school
11 district at the beginning of the 2008-2009 fiscal year.
12 Section 1305. Education Trust Reserve Account and distressed
13 district prevention and emergency disbursements.
14 (a) Establishment of Education Trust Reserve Account.--The
15 Education Trust Reserve Account is hereby established as a
16 restricted account within the fund. The account shall be
17 administered by the board in accordance with this section.
18 (b) Distressed district prevention and emergency
19 disbursements.--
20 (1) (i) As a precondition for making any distressed
21 district prevention and emergency disbursements during
22 the 2008-2009 fiscal year, the ETR Account must have a
23 balance, on June 30, 2008, which is not less than 15% of
24 the amount specified under section 1304(b)(1)(i) and
25 (c)(1)(i) for all school districts for the 2007-2008
26 fiscal year, as adjusted by the change in the consumer
27 price index and as adjusted by the collective student
28 enrollment adjustments and the nonqualified operating
29 expenses determined for all the school districts.
30 (ii) As a precondition for making such disbursements
31 during the 2009-2010 fiscal year and each succeeding
32 fiscal year, the ETR Account must have a balance on June
33 30 immediately preceding the disbursement fiscal year
34 which is not less than 15% of the revenues allocated by
35 law for all school districts for the fiscal year
36 preceding the disbursement fiscal year, as adjusted by
37 the change in the consumer price index and as adjusted by
38 the student enrollment adjustments and the nonqualified
39 operating expenses determined for all school districts
40 for the immediately preceding 12-month period.
41 (iii) The determination of the amount specified
42 under section 1304(b)(1)(i) and (c)(1)(i) revenues
43 allocated for all school districts for purposes of this
44 paragraph shall be calculated by aggregating the sum
45 determined for each school district pursuant to section
46 1304(b)(1)(i) and (c)(1)(i).
47 (2) (i) After disbursements are made pursuant to
48 sections 1304 and 1307 and after any necessary moneys are
49 expended to maintain the mandatory minimum 15% ETR
50 Account balance as provided in paragraph (1),
51 disbursements authorized by this subsection shall be made
52 as provided in this paragraph.
53 (ii) An amount equal to not more than 1 1/4% of the
54 remaining moneys in the EOF and the School District
55 Equity Account or up to $125,000,000, whichever is
56 greater, may be disbursed by the board each quarter
57 during the 2008-2009, 2009-2010 and 2010-2011 fiscal
58 years for distressed district prevention and emergency
59 disbursements.
HB1600A05384 - 98 -
1 (iii) An amount which shall not exceed .75% of the
2 remaining moneys in the EOF and the School District
3 Equity Account may be disbursed by the board for each
4 quarter during the 2011-2012 fiscal year and each
5 succeeding fiscal year for each quarter for the sole
6 purpose of assisting school districts that are facing
7 major and unanticipated fiscal emergencies.
8 (c) Scope of distressed district prevention and emergency
9 disbursements.--Distressed district prevention and emergency
10 disbursements may only be expended for the purpose of preventing
11 school districts that are experiencing severe financial
12 difficulties from beginning distressed school districts pursuant
13 to Article VI of the Public School Code of 1949 and for the
14 purpose of assisting school districts that are facing major and
15 unanticipated fiscal emergencies.
16 (d) Transfers to Education Trust Reserve Account.--Except
17 for the moneys necessary to make the disbursements required by
18 sections 1304 and 1307, the board shall immediately transfer all
19 moneys deposited in the EOF and the School District Equity
20 Account, between the effective date of this section and June 30,
21 2008, into the ETR Account until the ETR Account attains a
22 balance of $3,000,000,000 and after June 30, 2008, the board
23 shall continue to transfer sufficient moneys from the EOF and
24 the School District Equity Account into the ETR Account to
25 assure the account achieves and maintains a balance of
26 $3,000,000,000 or the mandatory minimum 15% balance mandated
27 under subsection (b), whichever is greater. The balance in the
28 ETR Account shall not exceed 25% of the revenues allocated in
29 accordance with subsection (b)(1).
30 (e) Applicability.--This section shall not apply to moneys
31 received by the board pursuant to section 1306(b).
32 (f) Definition.--As used in this section, the term
33 "normalized calculated balance" shall have the meaning given to
34 it by the board.
35 Section 1306. Equity disbursements to school districts from
36 School District Equity Account.
37 (a) Establishment of School District Equity Account.--The
38 School District Equity Account is hereby established as a
39 restricted account within the fund. The account shall be
40 administered by the board in accordance with this section.
41 (b) Funding.--The account shall be funded by quarterly
42 transfers of all moneys deposited into the Property Tax Relief
43 Fund established under 4 Pa.C.S. § 1409 (relating to property
44 tax relief fund) which quarterly transfers are hereby
45 authorized.
46 (c) Equity disbursements.--
47 (1) In addition to any standard disbursement or
48 distressed district prevention and emergency disbursement
49 made by the board under this chapter, the board, for the
50 2008-2009 fiscal year and for each fiscal year thereafter,
51 shall make equity disbursements to qualified school districts
52 on a quarterly basis in accordance with this section and
53 section 1304.
54 (2) The board shall distribute 100% of the moneys
55 transferred into the School District Equity Account pursuant
56 to subsection (b) during the 2008-2009 fiscal year in equal
57 quarterly amounts, to all school districts as equity
58 disbursements for the 2008-2009 fiscal year in accordance
59 with the formula prescribed in subsection (e). All equity
HB1600A05384 - 99 -
1 disbursements distributed pursuant to this paragraph shall be
2 incorporated into each school district's standard
3 disbursement for the 2009-2010 fiscal year.
4 (3) The board shall distribute 50% of the moneys
5 transferred into the School District Equity Account pursuant
6 to subsection (b) in each succeeding fiscal year in equal
7 quarterly amounts to all school districts for the applicable
8 fiscal year in accordance with the formula prescribed in
9 subsection (e). Fifty percent of all equity disbursements
10 distributed pursuant to this paragraph shall be incorporated
11 into each school district's standard disbursement in the
12 fiscal year immediately following the fiscal year for which
13 the school district receives such equity disbursement
14 pursuant to this paragraph. The remaining 50% of the moneys
15 that are not distributed in accordance with this paragraph
16 shall be utilized in accordance with subsection (f).
17 (4) (i) Before any equity disbursements may be made for
18 any quarter pursuant to this section, the moneys in the
19 School District Equity Account shall first be expended to
20 make the standard disbursements to the extent that there
21 are insufficient funds in the EOF to pay such standard
22 disbursements and then to assure that the mandatory 15%
23 minimum balance required under section 1305(b) is
24 maintained.
25 (ii) All moneys remaining in he account shall be
26 disbursed to qualified school districts as equity
27 disbursements and distressed district prevention and
28 emergency disbursements to the extent permitted under
29 this section and section 1305.
30 (d) Mandated per pupil expenditure levied through equity
31 disbursements.--The board shall continue making equity
32 disbursements pursuant to subsection (c)(2) and (3) until the
33 average per pupil expenditure for each public school student in
34 this Commonwealth equals $10,000 or such higher average per
35 pupil expenditure for each public school student in this
36 Commonwealth as may be established pursuant to a subsequently
37 enacted law that prescribes a higher average per pupil
38 expenditure for each public school student in this Commonwealth.
39 (e) Distribution formula.--The board shall make the equity
40 disbursements provided for under subsection (d) in the following
41 manner:
42 (1) The board shall first distribute equity
43 disbursements in a manner that assures that the average per
44 pupil expenditure for each school district equals the average
45 per pupil expenditure for each public school student in this
46 Commonwealth for the preceding fiscal year.
47 (2) Any remaining funds available for distribution as
48 equity disbursements in the applicable fiscal year shall be
49 distributed in a manner that increases the average per pupil
50 expenditure for each school district by the same percentage
51 until the per pupil expenditure prescribed in subsection (d)
52 is attained in each school district with an average per pupil
53 expenditure below the average per pupil expenditure
54 prescribed in subsection (d).
55 (f) Remaining funds.--Fifty-percent of the moneys provided
56 for in subsection (b) that are not expended in accordance with
57 subsection (c)(2) and (3) shall be utilized in the following
58 order of priority:
59 (1) For standard disbursements in accordance with
HB1600A05384 - 100 -
1 section 1304, to the extent there are insufficient available
2 funds in the EOF to make a full standard disbursement in any
3 fiscal year.
4 (2) For transfers to the ETR Account, insofar as such
5 transfer may be necessary to maintain the reserves in that
6 account required under this chapter.
7 Section 1307. Other disbursements from Education Operating
8 Fund.
9 (a) Retirement and pension payments.--For the fiscal year
10 beginning July 1, 2008, and for each fiscal year thereafter, the
11 amount of each quarterly disbursement to school districts shall
12 occur only after the State Treasurer has made payment from the
13 EOF on requisition from the board of the annual amount due for
14 payment of the Commonwealth's share of Federal Social Security
15 taxes for public school employees and for payment of the
16 required retirement contribution for public school employees.
17 (b) Debt payments.--For the fiscal year beginning July 1,
18 2008, and for each fiscal year thereafter, the amount of each
19 quarterly payment to school districts shall occur only after the
20 State Treasurer has made payment from the EOF on requisition
21 from the board of the annual amount due for school district debt
22 assumed by the Commonwealth pursuant to law.
23 Section 1307.1. School District Grant and Incentive Programs
24 Fund.
25 (a) Establishment.--The School District Grant and Incentive
26 Programs Fund is established in the State Treasury and shall be
27 administered by the board.
28 (b) Transfers.--
29 (1) For each quarter that the board approves payments
30 under sections 1304 and 1307, the board shall determine the
31 balance in the EOF after making such payments and shall
32 transfer the amount of the balance to the School District
33 Grant and Incentive Programs Fund.
34 (2) This subsection shall not apply to any moneys
35 received by the board pursuant to section 1306(b).
36 (c) Appropriations.--The General Assembly may appropriate
37 money from the School District Grant and Incentive Payment
38 Programs Fund to the Department of Education for the
39 administration of programs that offer grants or incentives to
40 school districts in order to achieve academic and other
41 education-related goals and standards.
42 (d) Proportionate reductions in disbursements.--In the event
43 that moneys in the School District Grant and Incentive Payment
44 Programs Fund are insufficient to fund the appropriations from
45 this fund, the Department of Education shall reduce
46 disbursements from this fund each appropriation by the same
47 percentage.
48 Section 1307.2. Other appropriations.
49 Nothing in this act shall preclude the General Assembly from
50 making appropriations out of the General Fund and other
51 Commonwealth funds for the maintenance and support of public
52 education.
53 Section 1308. Education Operating Fund Board.
54 (a) Establishment.--The Education Operating Fund Board is
55 hereby established. The board shall consist of the following
56 members:
57 (1) The Secretary of Education, while serving in this
58 capacity.
59 (2) The Secretary of Revenue, while serving in this
HB1600A05384 - 101 -
1 capacity.
2 (3) The executive director of the School Financing
3 Authority, while serving in this capacity.
4 (4) Four legislative appointees.
5 (i) Appointments are as follows:
6 (A) One individual appointed by the President
7 pro tempore of the Senate.
8 (B) One individual appointed by the Minority
9 Leader of the Senate.
10 (C) One individual appointed by the Majority
11 Leader of the House of Representatives.
12 (D) One individual appointed by the Minority
13 Leader of the House of Representatives.
14 (ii) A legislative appointee shall be removed from
15 office by the appointing authority:
16 (A) for misconduct in office, willful neglect of
17 duty or conduct evidencing unfitness for office or
18 incompetence; or
19 (B) upon conviction of an offense graded as a
20 felony, an infamous crime or an equivalent offense
21 under Federal law or the law of another jurisdiction.
22 (iii) An individual appointed to the board pursuant
23 to subparagraph (i) may not be a member of the General
24 Assembly or staff of a member of the General Assembly.
25 (b) Chairperson to be selected.--The members shall select a
26 member of the board to serve as chairperson and shall select
27 from among themselves such officers as they shall determine.
28 (c) Meetings.--The board shall meet at least six times a
29 year at such times and places as it shall determine. Special
30 meetings may be called by the chairman or at the request of a
31 majority of the members of the board.
32 (d) Quorum.--Five members of the board shall constitute a
33 quorum.
34 (e) Reimbursement of expenses.--The members of the board
35 shall be entitled to no compensation for their services as
36 members of the board but shall be entitled to reimbursement for
37 all necessary and reasonable expenses incurred in connection
38 with the performance of their duties as members of the board.
39 (f) Fiduciary status.--The members of the board and the
40 professional personnel of the board shall stand in a fiduciary
41 relationship with the Commonwealth and the authority as to the
42 moneys in the accounts of the authority and investments of the
43 authority.
44 (g) Standard of care.--The members of the board in
45 performance of their duties under this section shall exercise
46 the standard of care required by 20 Pa.C.S. Ch. 73 (relating to
47 municipalities investments).
48 (h) Appointments.--Appointing authorities shall appoint
49 initial members to the board within 30 days of the effective
50 date of this section. Whenever a vacancy occurs on the board,
51 the appointing authority shall appoint a successor member within
52 30 days of the vacancy.
53 (i) Powers.--The board shall:
54 (1) approve standard disbursements from the fund,
55 distressed district prevention and emergency distributions
56 and equity distributions;
57 (2) have perpetual existence as a corporation;
58 (3) sue and be sued, implead and be impleaded, complain
59 and defend, in all courts;
HB1600A05384 - 102 -
1 (4) adopt, use and alter at will a corporate seal;
2 (5) make bylaws for the management and regulation of its
3 affairs;
4 (6) appoint officers, agents, employees and servants,
5 prescribe their duties and fix their compensation;
6 (7) make contracts of every name and nature, and execute
7 all instruments necessary or convenient for the carrying-on
8 of its business, including, but not limited to, the
9 Commonwealth school districts;
10 (8) without limitation of the foregoing, borrow money
11 and accept grants from and enter into contracts, leases or
12 other transaction with any Federal agency, for carrying out
13 the purposes of the board; and
14 (9) do all acts and things necessary or convenient to
15 carry out the powers granted to it by this act or any other
16 acts.
17 Section 1309. School Financing Authority.
18 (a) Establishment.--The School Financing Authority is hereby
19 established.
20 (b) Membership.--The authority shall consist of the
21 following members:
22 (1) The Secretary of Education, while serving in this
23 capacity.
24 (2) The State Treasurer, while serving in this capacity.
25 (3) The executive director of the Education Operating
26 Fund Board, while serving in this capacity.
27 (4) Four persons, one of whom shall be appointed by the
28 President pro tempore, one appointed by the Minority Leader
29 of the Senate, one appointed by the Majority Leader of the
30 House of Representatives and one appointed by the Minority
31 Leader of the House of Representatives. None of these
32 appointees may be a member of the General Assembly or a staff
33 member of the General Assembly. A legislative appointee shall
34 be removed from office by the appointing authority:
35 (i) for misconduct in office, willful neglect of
36 duty or conduct evidencing unfitness for office or
37 incompetence; or
38 (ii) upon conviction of an offense graded as a
39 felony, an infamous crime, an offense under this act or
40 an equivalent offense under Federal law or the law of
41 another jurisdiction.
42 (c) Powers and duties.--
43 (1) The authority shall manage and administer all public
44 school district debt, including, but not limited to,
45 consolidating, securitizing, financing, refinancing or
46 recalling debt for public school facilities for use as a part
47 of the public school system of the Commonwealth. The
48 authority shall be responsible for the management and
49 administration of all school district debt and such other
50 related debt as may be assumed by the Commonwealth.
51 (2) Subject to the provisions in paragraph (3), the
52 authority is hereby granted and shall have and may exercise
53 all the powers necessary or convenient for the carrying out
54 of the purposes identified in paragraph (1), including, but
55 not limited to, the following:
56 (i) To have perpetual existence as a corporation.
57 (ii) To sue and be sued, implead and be impleaded,
58 complain and defend in all courts.
59 (iii) To adopt, use and alter at will a corporate
HB1600A05384 - 103 -
1 seal.
2 (iv) To acquire, purchase, hold, lease as lessee and
3 use any property real, personal or mixed, tangible or
4 intangible, or any interest therein, necessary or
5 desirable, for carrying out the purposes of the authority
6 and to sell, lease as lessor, transfer and dispose of any
7 property or any interest therein at any time acquired by
8 it.
9 (v) To finance projects by making loans to any
10 eligible school district, which loans may be evidenced by
11 and secured as may be provided in loan agreements, which
12 may contain such provisions as the authority shall
13 determine necessary or desirable for the security or
14 protection of the authority or its bondholders. All such
15 provisions shall be a part of the contract with the
16 holders of the bonds of the authority issued with respect
17 to such project.
18 (vi) To acquire by purchase, lease or otherwise, for
19 carrying out the purposes of the authority.
20 (vii) To make bylaws for the management and
21 regulations of its affairs.
22 (viii) To make contracts of every name and nature
23 and to execute all instruments necessary or convenient
24 for the carrying on of its business, including, but not
25 limited to, school districts.
26 (ix) To enter into contracts with the board of
27 school directors of any school district, for the purpose
28 of acquiring, financing, refinancing, constructing,
29 improving, furnishing and equipping school district
30 facilities as a part of the public school system of this
31 Commonwealth under the provisions approved by a
32 referendum vote by the district electorate on either the
33 newly proposed debt or specific terms and amounts of debt
34 previously approved by the authority.
35 (x) Without limitation of the other provisions of
36 this subsection, to borrow money and accept grants from,
37 and to enter into contracts, leases or other transaction
38 with any Federal agency, for carrying out the purposes of
39 the authority.
40 (xi) To petition the Commonwealth to obtain
41 additional public funding for debt service for school
42 districts unable to raise sufficient funds for essential
43 project debt service.
44 (xii) To underwrite all long-term capital debt for
45 all public school districts after June 30, 2008.
46 (xiii) To take all actions necessary and proper to
47 ensure that the payments made by the Education Operating
48 Fund for school district debt are made at the lowest
49 possible cost of capital funds providing the best return
50 for fund expenditures.
51 (xiv) To pledge, hypothecate or otherwise encumber,
52 all or any of the revenues or receipts of the authority
53 as security for all, or any of, the obligations of the
54 authority.
55 (xv) To do all acts and things necessary or
56 convenient to carry out the powers granted to it by this
57 section, this act or any other act.
58 (d) Prohibition.--
59 (1) The authority shall have no power, at any time or in
HB1600A05384 - 104 -
1 any manner, to pledge the credit or taxing power of the
2 Commonwealth or any of its school districts, nor shall any of
3 its obligations or debts be deemed to be obligations of the
4 Commonwealth or any of its school districts, nor shall the
5 Commonwealth or any of its school districts be liable for the
6 payment of principal or interest on such obligations.
7 (2) All school district debt service payments made by
8 the fund for consolidating, securitizing, financing,
9 refinancing or recalling school district debt shall be
10 obligations of the fund or the school districts and not of
11 the authority.
12 (3) All contracts between the authority and school
13 districts shall be conditioned upon voter approval, in
14 accordance with standards and regulations prescribed by the
15 department. The Department of Education shall review and
16 approve each school district project referendum including all
17 terms, conditions and amount of debt to be voted upon prior
18 to such referendum to determine:
19 (i) The extent to which they conform to general
20 State and county requirements.
21 (ii) The amount of debt.
22 (iii) The adequacy of the proposed project.
23 (iv) The ability of the local school district or
24 districts to amortize the cost of the project and to
25 defray the cost of operation and maintenance.
26 (4) No contract may be executed between the authority
27 and school districts without the specific written approval of
28 the board.
29 Section 1310. Reduction of sales and use tax for education.
30 (a) General rule.--The tax reduction provided for in this
31 section shall not occur until school equity disbursements for
32 all public school students in this Commonwealth attain the level
33 prescribed in section 1306(d) and until the criteria set forth
34 in subsections (b) and (c), whichever subsection is applicable,
35 are met.
36 (b) Initial reduction.--
37 (1) When the board determines that the EOF, the ETR
38 Account and the School District Equity Account have
39 maintained a normalized calculated balance that collectively
40 exceeds the annual standard disbursement to all school
41 districts for the immediately preceding fiscal year by at
42 least 40% for a period of eight consecutive quarters, the
43 board, in consultation with the Department of Revenue, shall
44 publish this determination as a notice in the Pennsylvania
45 Bulletin. The notice shall specify:
46 (i) the amount of money in the EOF and other
47 accounts in excess of 40% of the standard disbursement to
48 all school districts on the last day of the fiscal year
49 immediately preceding this determination; and
50 (ii) the percentage by which the normalized
51 calculated balance exceeds such standardized disbursement
52 for the fiscal year preceding the board's determination.
53 (2) Beginning with the first quarter occurring 30 days
54 after such publication, the Department of Revenue shall
55 reduce the rate of the tax imposed under Subchapter B of
56 Chapter 7 by the amount in excess of 40% of the standard
57 disbursement as published in the Pennsylvania Bulletin
58 pursuant to this subsection.
59 (c) Subsequent tax reduction.--
HB1600A05384 - 105 -
1 (1) Whenever the EOF, the ETR Account and the School
2 District Equity Account attain a normalized calculated
3 balance that collectively exceeds the standard disbursement
4 to school districts in the immediately preceding fiscal year
5 by a percentage that exceeds the percentage last published
6 pursuant to subsection (b) or this subsection for a period of
7 eight consecutive quarters, the board, in consultation with
8 the Department of Revenue, shall publish this determination
9 as a notice in the Pennsylvania Bulletin. The notice shall
10 specify:
11 (i) the collective amount of money in the EOF and
12 other accounts in excess of the standard disbursement to
13 all school districts on the last day of the fiscal year
14 immediately preceding this determination; and
15 (ii) the percentage published in connection with the
16 last tax reduction effectuated under this section.
17 (2) Following such publication, the Department of
18 Revenue shall further reduce the rate of such tax by the
19 amount that equals the difference between the amount of money
20 in the EOF and its accounts on the last day of the fiscal
21 year published in accordance with this subsection and the
22 amount published in connection with the immediately preceding
23 tax reduction effectuated pursuant to this section.
24 (d) Restriction on tax increases.--Once the tax rate for a
25 tax imposed under Subchapter B of Chapter 7 is reduced pursuant
26 to this subsection, that rate of tax may only be increased by a
27 law enacted by the General Assembly.
28 (e) Increments.--Any tax reduction implemented in accordance
29 with this section shall be made in increments of not less than
30 .10%.
31 (f) Definition.--As used in this section, the term
32 "normalized calculated balance" shall mean the rolling 12-month
33 average of the collective balance in the EOF, the ETR Account
34 and the School District Equity Account, as determined each
35 quarter by the board for the eight quarters immediately
36 preceding each quarter.
37 Section 1311. School Equity Capital Construction Fund.
38 (a) Establishment.--The School Equity Capital Construction
39 Fund is established in the State Treasury.
40 (b) Contents.--
41 (1) The School Equity Capital Construction Fund shall
42 consist of:
43 (i) All moneys received pursuant to subsection (f).
44 (ii) All payments received from school districts in
45 connection with any financing provided to such school
46 districts by the authority.
47 (iii) All other moneys received pursuant to this act
48 or any other law or from any other source.
49 (c) Separate fund.--The SECCF shall be separate from all
50 other funds of the Commonwealth and shall not be subject to
51 borrowing by or transfer to the General Fund or any other fund
52 in the State Treasury.
53 (d) Continuing appropriations.--All moneys placed in the
54 SECCF and the interest it accrues are hereby appropriated to the
55 authority on a continuing basis and may be utilized by the
56 authority only for the purposes authorized under this act.
57 (e) Loans to school district.--The authority may utilize
58 moneys in the SECCF to make loans, including interest-free
59 loans, to school districts for projects authorized under section
HB1600A05384 - 106 -
1 1204.
2 (f) Distribution of funds to SECCF.--
3 (1) Except as otherwise provided in subsection (g), the
4 board, in each fiscal year, may transfer from the Education
5 Operating Fund to the SECCF a sum that shall not be less than
6 25% nor more than 100% of the incremental savings resulting
7 from the Commonwealth assumption of debt pursuant to section
8 1203 as applied to the applicable fiscal year.
9 (2) As used in this section, the term "incremental
10 savings" means the difference between the Commonwealth's debt
11 assumption payments in the first full fiscal year in which
12 such payments are made and the Commonwealth debt assumption
13 payments scheduled for the applicable fiscal year for which
14 the board makes a transfer of funds to the SECCF pursuant to
15 this subsection.
16 (g) Cap on transfers to SECCF.--No payments shall be made to
17 the SECCF pursuant to subsection (f) to the extent that such
18 payments will cause the total amount of money in the SECCF to
19 exceed $10,000,000,000.
20 (h) Use of SECCF for equity remediation.--The authority may
21 only utilize moneys transferred to the SECCF pursuant to this
22 section to assist school districts that require equity
23 remediation assistance as determined by the authority for the
24 construction of projects authorized under this section and
25 section 1204 and which are approved by voter referendum pursuant
26 to section 1205.
27 (i) Limitation.--No funds shall be transferred from the
28 Education Operating Fund to the SECCF for any fiscal year to the
29 extent that it is necessary to utilize such funds for the
30 purpose of making standard disbursements pursuant to section
31 1304 and for making payments required under section 1307.
32 Section 1312. School Equity Distribution Task Force.
33 (a) Establishment.--A School Equity Distribution Task Force
34 shall be constituted every ten years beginning in 2017 for the
35 purpose of conducting a comprehensive study on the adequacy and
36 equity of existing funding for public education in this
37 Commonwealth or selecting and supervising the conduct of such a
38 study by a qualified person or entity. The task force shall
39 prepare a report, together with recommendations for the General
40 Assembly. Each report shall be completed by November 30 of the
41 immediately following calendar year and shall be a public
42 record.
43 (b) Composition of task force and selection of chairman.--
44 The task force shall consist of five members. The Governor, the
45 President pro tempore of the Senate, the Speaker of the House of
46 Representatives and the Minority Leader of the Senate and the
47 Minority Leader of the House of Representatives shall each
48 appoint one member to the task force. The task force shall
49 select a chairman from its membership.
50 (c) Term of task force.--The task force shall hold its
51 organizing meeting on the date scheduled by the Governor in
52 April of the applicable year and shall complete its report by
53 November 30 of the immediately following calendar year.
54 (d) Notice.--The Governor shall notify the President pro
55 tempore of the Senate, the Speaker of the House of
56 Representatives, the Minority Leader of the Senate and the
57 Minority Leader of the House of Representatives of the
58 organizing meeting for the task force on the date specified in
59 subsection (c) of the applicable year and advise the leaders of
HB1600A05384 - 107 -
1 the need to make their respective appointments before that date.
2 CHAPTER 15
3 SCHOOL DISTRICT FISCAL EFFICIENCY TOOLS
4 Section 1501. Purpose of chapter.
5 The purpose of this chapter is to provide school districts
6 with the tools necessary to achieve maximum fiscal effectiveness
7 in the performance of their powers and duties and to provide a
8 thorough and efficient system of public education at the lowest
9 possible cost to the citizens of this Commonwealth.
10 Section 1502. Data-driven decision-making technology
11 requirements.
12 (a) General rule.--No later than July 1, 2010, each school
13 district shall enter into a contract with a data-driven
14 decision-making total systems vendor and submit a copy of the
15 contract to the Department of Education.
16 (b) Required elements.--The contract shall include, but not
17 be limited to, the following elements as components of data-
18 driven decision making:
19 (1) The use of large, integrated databases that connect
20 relevant information from other sources into a single
21 accessible format. The databases shall allow the school
22 district, intermediate unit and the Department of Education
23 to look at data from multiple operational systems across
24 multiple dimensions, including time. The system contracted
25 shall have the advantage of importing and analyzing data from
26 a variety of other systems that cannot otherwise communicate
27 with each other.
28 (2) Assessment and diagnostic tools that determine
29 students' mastery levels of standards, powerful assessment
30 solutions, which provide instant feedback for diagnostic use
31 by teachers, and robust data warehousing and analysis
32 solutions which provide historical and longitudinal
33 capabilities for using and managing data effectively for
34 student performance improvement.
35 (3) Curriculum management systems to integrate each
36 teacher's curriculum planning, lesson plans and grade
37 reporting into a standards-based system.
38 (4) Instruction and practice systems to align curriculum
39 and instructional resources to State and local standards.
40 (5) Student information systems primarily concerned with
41 issues of day-to-day student administration.
42 (6) Data analysis and reporting systems to allow
43 analysis and student performance over time and across
44 variables like district, school, program or classroom. The
45 systems shall include messaging and collaboration technology.
46 (7) Definitive goals toward increasing the value and
47 return of data-driven decision-making technology investment,
48 project management integrated with State education goals and
49 time lines, requirements specification definitions, the
50 formation of both an implementation team and an evaluation
51 committee and planned verification meetings as a result of
52 contract implementation.
53 (8) Quality instruction integrated with formative
54 assessment and supported by data-driven action research that
55 informs professional practice and instructional
56 effectiveness.
57 Section 1503. Certified operations reports.
58 (a) Duty of school districts to file.--During the fiscal
59 year beginning July 1, 2009, and each fiscal year thereafter,
HB1600A05384 - 108 -
1 each school district shall submit certified operations reports
2 to the Department of Education. The report shall consist of
3 independent third-party certification that contracts have been
4 or are being completed in school district operations.
5 (b) Contents.--The certification reports shall state
6 whether:
7 (1) The data-driven decision-making systems installed
8 will provide a robust data architecture that are optimized
9 based on prescribed district data requirements.
10 (2) The systems installed will provide a powerful and
11 easy to use "user reporting and analysis" interface.
12 (3) The systems installed and implemented will
13 facilitate the school district's ability to improve student
14 achievement and organizational efficiency economy; impact the
15 quality of education; are designed with students in mind; and
16 discriminate as to what changes or decisions can be made to
17 have the best outcomes for students.
18 (4) Compliance with State district integration
19 objectives is being satisfied to the extent that the district
20 superintendent has a basis for expecting to report the
21 evidence required in the July 1, 2011, report.
22 Section 1504. Superintendent report.
23 (a) Duty of superintendents to file.--During the fiscal year
24 beginning July 1, 2010, and each fiscal year thereafter, each
25 superintendent shall submit to the Department of Education a
26 comprehensive report for the district, indicating that the
27 intended purposes and goals, performance and accountability
28 technology are being realized in practice, whether data-driven
29 decisions are affecting the district allocations of its budget
30 and funding requests from the Education Operating Fund.
31 (b) Contents.--The superintendent's report shall include,
32 but not be limited to, an administrative and technology
33 assessment of the district's schools' ability to:
34 (1) Generate reports on standards, curriculum,
35 instructional approaches and progress based on the analysis
36 of student and teacher population subgroups which lead to
37 improved instruction approaches.
38 (2) Create a variety of additional reports as needed to
39 analyze information deemed critical to students, teachers and
40 school administration that measure academic progress and meet
41 the requirements of the Department of Education.
42 (3) Provide essential accountability results for
43 district schools and meet prescribed accountability reports
44 for the district as determined by the Department of
45 Education.
46 (4) Evaluate technology progress to drive better
47 decision making for curriculum and other factors affecting
48 student and school achievement and other district goals.
49 (5) Make fiscal budget decisions reallocating the use of
50 moneys from the Education Operating Fund to better prioritize
51 all aspects of each school's and district's educational
52 processes.
53 (6) Analyze factors that impact learning and enable
54 action to help improve student achievement.
55 (7) Document improvement and share information with
56 other schools, districts and State education agencies.
57 Section 1505. Annual performance report.
58 (a) Duty of school district to file.--During the fiscal year
59 beginning July 1, 2010, and each fiscal year thereafter, each
HB1600A05384 - 109 -
1 school district shall submit to the Department of Education a
2 comprehensive annual report, indicating how the intended
3 purposes and goals of performance and accountability technology
4 are being realized in the administration of the district, and
5 that includes clear case studies, white papers and other
6 documents which indicate that data-driven decisions are
7 affecting the district allocations of its budget and moneys from
8 the Education Operating Fund to achieve acceptable levels of
9 performance as set by peer benchmark or other evaluations.
10 (b) Contents.--The annual performance report shall include,
11 but not be limited to, the following:
12 (1) A continuing report of the prior year's subjects
13 addressed by the superintendent report, amended with changes
14 deemed appropriate by the board of the school district.
15 (2) A demonstration of ways in which the district's
16 data-driven analysis is beginning to enable the evaluation of
17 student progress, ways in which daily results are cycled
18 through a data warehouse to map curriculum for assignments
19 and test results.
20 (3) Actions taken to improve learning by improving
21 instructional approaches with data-driven analysis,
22 integrating and building on existing technology, offering
23 access to learning resources and continuing improvement by
24 tracking performance.
25 (4) A demonstration of the factors that are district-
26 causing trends, identify root causes of performance and
27 analyze the effectiveness of changes initiated in the
28 learning environment.
29 (5) A demonstration of budget decisions directly
30 affected by changes in the districts' efforts to improve
31 student achievement and increase administrative efficiency by
32 focusing on student improvement in a new era of technology
33 application to education.
34 (6) An assessment of the future direction to be taken
35 for continuing performance improvement and advances in data-
36 driven decision making to determine economic efficiencies and
37 financial discipline achievable in budget allocations and
38 spending decisions.
39 CHAPTER 17
40 MISCELLANEOUS PROVISIONS
41 Section 1701. Transitional provision.
42 (a) Sales and use tax.--Notwithstanding the repeal of
43 Article II of the Tax Reform Code of 1971, under section 1704,
44 the department shall have the authority to enforce the
45 collection of taxes imposed for transactions that occur prior to
46 the effective date of this section under former Article II of
47 the Tax Reform Code of 1971. The taxes collected after January
48 1, 2008, regardless of the transaction date, shall be deposited
49 into the Education Operating Fund.
50 (b) Other taxes.--Notwithstanding the repeal of any
51 provision of the Public School Code of 1949, the Local Tax
52 Enabling Act, as applied to school districts or of any other law
53 authorizing school districts to impose taxes, a governing body
54 shall have the authority to enforce, after the effective date of
55 the repeal, the collection of taxes levied and assessed under
56 those former provisions prior to the effective date of the
57 repeal under section 1704(2).
58 Section 1702. Construction.
59 Any and all references in any other act to Article II or any
HB1600A05384 - 110 -
1 provision in Article II of the act of March 4, 1971 (P.L.6,
2 No.2), known as the Tax Reform Code of 1971, shall be deemed a
3 reference to Chapter 7 or the corresponding provisions in
4 Chapter 7 of this act.
5 Section 1703. Severability.
6 The provisions of this act are severable as follows:
7 (1) If any provision of this act is held invalid, the
8 invalidity shall not affect other provisions or applications
9 of this act which can be given effect without the invalid
10 provision or application.
11 (2) Under no circumstances shall the invalidity of any
12 provision or application of this act affect the validity of
13 any provision in this act that abolishes the power of the
14 governing body and any school district and city of the first
15 class or any other political subdivision to levy, assess or
16 collect a tax on any interest in real property for school
17 purposes.
18 Section 1704. Repeals.
19 (a) Intent.--The General Assembly declares that the repeals
20 under subsection (b) are necessary to effectuate this act.
21 (b) Provisions.--The following acts and parts of acts are
22 repealed:
23 (1) Section 631 of the act of March 10, 1949 (P.L.30,
24 No.14), known as the Public School Code of 1949, is repealed.
25 (2) The school per capita tax, which tax is authorized
26 pursuant to section 679 of the Public School Code of 1949, is
27 repealed.
28 (3) Article XXV of the Public School Code of 1949 is
29 repealed insofar as Article XXV authorized Commonwealth
30 payments and reimbursements to school districts that have
31 been incorporated into the standard disbursements formula as
32 provided in section 1304 of this act.
33 (4) Any provision of the Public School Code of 1949 and
34 of any other law relating to the authority of any school
35 district to levy, assess and collect any tax on real property
36 and the power of any city of the first class to levy, assess
37 and collect any tax real property for school purposes is
38 repealed upon the expiration of the respective schedule
39 prescribed in sections 1101 and 1102.
40 (5) Any provision of the act of the Public School Code
41 of 1949 and any other law relating to debt is repealed to the
42 extent that it is inconsistent with this act.
43 (6) Any provision of the Public School Code of 1949 and
44 any home rule charter adopted pursuant thereto is repealed
45 insofar as it is inconsistent with this act.
46 (7) Any provision of the act of August 9, 1963 (P.L.643,
47 No.341), known as the First Class City Public Education Home
48 Rule Act, and any home rule school district charter adopted
49 pursuant thereto is repealed insofar as it is inconsistent
50 with this act.
51 (8) The act of December 31, 1965 (P.L.1257, No.511),
52 known as The Local Tax Enabling Act, is repealed insofar as
53 it authorizes the levy, assessment and collection by school
54 districts of any tax as of midnight on December 31, 2008.
55 (9) Article II of the act of March 4, 1971 (P.L.6,
56 No.2), known as the Tax Reform Code of 1971, is repealed.
57 (10) Chapter 13 of the act of June 27, 2006 (1st
58 Sp.Sess., P.L.1873, No.1), known as the Taxpayer Relief Act,
59 is repealed.
HB1600A05384 - 111 -
1 (11) All acts and parts of acts that are inconsistent
2 with this act are repealed to the extent of such
3 inconsistency.
4 Section 1705. Applicability.
5 This act shall apply as follows:
6 (1) Section 1704(9) shall apply at midnight on December
7 31, 2007.
8 (2) Chapter 7 shall apply January 1, 2008.
9 Section 1706. Effective date.
10 This act shall take effect as follows:
11 (1) Section 1704(2) and (8) shall take effect at
12 midnight on December 31, 2008.
13 (2) Chapters 3, 4 and 5 shall take effect January 1,
14 2009.
15 (3) The remainder of this act shall take effect
16 immediately.
A15L90DMS/HB1600A05384 - 112 -