SENATE AMENDED
        PRIOR PRINTER'S NOS. 1524, 2207, 2321,        PRINTER'S NO. 2877
        2849

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 1321 Session of 1991


        INTRODUCED BY EVANS, MAY 7, 1991

        SENATE AMENDMENTS TO HOUSE AMENDMENTS TO SENATE AMENDMENTS,
           DECEMBER 10, 1991

                                     AN ACT

     1  Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
     2     act relating to tax reform and State taxation by codifying
     3     and enumerating certain subjects of taxation and imposing
     4     taxes thereon; providing procedures for the payment,
     5     collection, administration and enforcement thereof; providing
     6     for tax credits in certain cases; conferring powers and
     7     imposing duties upon the Department of Revenue, certain
     8     employers, fiduciaries, individuals, persons, corporations
     9     and other entities; prescribing crimes, offenses and
    10     penalties," further providing for the scope of sales and use
    11     tax, for the definitions of "claimant," "dependent,"
    12     "household income," "total household income" and "poverty
    13     income" and for special tax provisions for poverty, for
    14     transfers to the Hazardous Sites Cleanup Fund and the Public
    15     Transportation Assistance Fund; further providing for reports
    16     by mutual thrift institutions; and making repeals.

    17     The General Assembly of the Commonwealth of Pennsylvania
    18  hereby enacts as follows:
    19     Section 1.  Section 201(g), (k)(8), (15), (16) and (18), (l),
    20  (m), (o)(4), (13) and (14), (z), (aa), (cc), (ii), (kk), (ll)
    21  and (mm) of the act of March 4, 1971 (P.L.6, No.2), known as the
    22  Tax Reform Code of 1971, amended or added August 4, 1991
    23  (P.L.97, No.22), are amended and the section is amended by

     1  adding subclauses to read:
     2     Section 201.  Definitions.--The following words, terms and
     3  phrases when used in this Article II shall have the meaning
     4  ascribed to them in this section, except where the context
     5  clearly indicates a different meaning:
     6     * * *
     7     (g)  "Purchase price."
     8     (1)  The total value of anything paid or delivered, or
     9  promised to be paid or delivered, whether it be money or
    10  otherwise, in complete performance of a sale at retail or
    11  purchase at retail, as herein defined, without any deduction on
    12  account of the cost or value of the property sold, cost or value
    13  of transportation, cost or value of labor or service, interest
    14  or discount paid or allowed after the sale is consummated, any
    15  other taxes imposed by the Commonwealth of Pennsylvania or any
    16  other expense except that there shall be excluded any gratuity
    17  or separately stated deposit charge for returnable containers.
    18     (2)  There shall be deducted from the purchase price the
    19  value of any tangible personal property actually taken in trade
    20  or exchange in lieu of the whole or any part of the purchase
    21  price. For the purpose of this clause, the amount allowed by
    22  reason of tangible personal property actually taken in trade or
    23  exchange shall be considered the value of such property.
    24     (3)  In determining the purchase price on the sale or use of
    25  taxable tangible personal property or a service where, because
    26  of affiliation of interests between the vendor and purchaser, or
    27  irrespective of any such affiliation, if for any other reason
    28  the purchase price declared by the vendor or taxpayer on the
    29  taxable sale or use of such tangible personal property or
    30  service is, in the opinion of the department, not indicative of
    19910H1321B2877                  - 2 -

     1  the true value of the article or service or the fair price
     2  thereof, the department shall, pursuant to uniform and equitable
     3  rules, determine the amount of constructive purchase price upon
     4  the basis of which the tax shall be computed and levied. Such
     5  rules shall provide for a constructive amount of purchase price
     6  for each such sale or use which would naturally and fairly be
     7  charged in an arms-length transaction in which the element of
     8  common interest between the vendor or purchaser is absent or if
     9  no common interest exists, any other element causing a
    10  distortion of the price or value is likewise absent. For the
    11  purpose of this clause where a taxable sale or purchase at
    12  retail transaction occurs between a parent and a subsidiary,
    13  affiliate or controlled corporation of such parent corporation,
    14  there shall be a rebuttable presumption, that because of such
    15  common interest such transaction was not at arms-length.
    16     (4)  Where there is a transfer or retention of possession or
    17  custody, whether it be termed a rental, lease, service or
    18  otherwise, of tangible personal property including, but not
    19  limited to linens, aprons, motor vehicles, trailers, tires,
    20  industrial office and construction equipment, and business
    21  machines the full consideration paid or delivered to the vendor
    22  or lessor shall be considered the purchase price, even though
    23  such consideration be separately stated and be designated as
    24  payment for processing, laundering, service, maintenance,
    25  insurance, repairs, depreciation or otherwise. Where the vendor
    26  or lessor supplies or provides an employe to operate such
    27  tangible personal property, the value of the labor thus supplied
    28  may be excluded and shall not be considered as part of the
    29  purchase price if separately stated. There shall also be
    30  included as part of the purchase price the value of anything
    19910H1321B2877                  - 3 -

     1  paid or delivered, or promised to be paid or delivered by a
     2  lessee, whether it be money or otherwise, to any person other
     3  than the vendor or lessor by reason of the maintenance,
     4  insurance or repair of the tangible personal property which a
     5  lessee has the possession or custody of under a rental contract
     6  or lease arrangement.
     7     (5)  With respect to the tax imposed by subsection (b) of
     8  section 202 upon any tangible personal property originally
     9  purchased by the user of such property six months or longer
    10  prior to the first taxable use of such property within the
    11  Commonwealth, such user may elect to pay tax on a substituted
    12  base determined by considering the purchase price of such
    13  property for tax purposes to be equal to the prevailing market
    14  price of similar tangible personal property at the time and
    15  place of such first use within the Commonwealth. Such election
    16  must be made at the time of filing a tax return with the
    17  department and reporting such tax liability and paying the
    18  proper tax due plus all accrued penalties and interest, if there
    19  be any, within six months of the due date of such report and
    20  payment, as provided for by subsections (a) and (c) of section
    21  217 of this article.
    22     (6)  The purchase price of employment agency services and
    23  help supply services shall be the service fee paid by the
    24  purchaser to the vendor or supplying entity. The term "service
    25  fee" as used in this subclause shall be the total charge or fee
    26  of the vendor or supplying entity minus the costs of the
    27  supplied employe which costs are wages, salaries, bonuses and
    28  commissions, employment benefits, expense reimbursements and
    29  payroll and withholding taxes, to the extent that these costs
    30  are specifically itemized or that these costs in aggregate are
    19910H1321B2877                  - 4 -

     1  stated in billings from the vendor or supplying entity. To the
     2  extent that these costs are not itemized or stated on the
     3  billings, then the service fee shall be the total charge or fee
     4  of the vendor or supplying entity.
     5     (7)  Unless the vendor separately states that portion of the
     6  billing which applies to premium cable service as defined in
     7  subsection (ll), the total bill for the provision of all cable
     8  services shall be the purchase price.
     9     * * *
    10     (k)  "Sale at retail."
    11     * * *
    12     (8)  Any retention of possession, custody or a license to use
    13  or consume tangible personal property or any further obtaining
    14  of services described in subclauses (2), (3) and (4) of this
    15  clause pursuant to a rental or service contract or other
    16  arrangement (other than as security).
    17     The term "sale at retail" shall not include (i) any such
    18  transfer of tangible personal property or rendition of services
    19  for the purpose of resale, or (ii) such rendition of services or
    20  the transfer of tangible personal property including, but not
    21  limited to, machinery and equipment and parts therefor and
    22  supplies to be used or consumed by the purchaser directly in the
    23  operations of--
    24     (A)  The manufacture of tangible personal property;
    25     (B)  Farming, dairying, agriculture, horticulture or
    26  floriculture when engaged in as a business enterprise. The term
    27  "farming" shall include the propagation and raising of ranch
    28  raised fur-bearing animals and the propagation of game birds for
    29  commercial purposes by holders of propagation permits issued
    30  under 34 Pa.C.S. (relating to game);
    19910H1321B2877                  - 5 -

     1     (C)  The producing, delivering or rendering of a public
     2  utility service, or in constructing, reconstructing, remodeling,
     3  repairing or maintaining the facilities which are directly used
     4  in producing, delivering or rendering such service;
     5     (D)  Processing as defined in clause (d) of this section.
     6     The exclusions provided in paragraphs (A), (B), (C) and (D)
     7  shall not apply to any vehicle required to be registered under
     8  The Vehicle Code, except those vehicles used directly by a
     9  public utility engaged in business as a common carrier; to
    10  maintenance facilities; or to materials, supplies or equipment
    11  to be used or consumed in the construction, reconstruction,
    12  remodeling, repair or maintenance of real estate other than
    13  directly used machinery, equipment, parts or foundations
    14  therefor that may be affixed to such real estate.
    15     The exclusions provided in paragraphs (A), (B), (C) and (D)
    16  shall not apply to tangible personal property or services to be
    17  used or consumed in managerial sales or other nonoperational
    18  activities, nor to the purchase or use of tangible personal
    19  property or services by any person other than the person
    20  directly using the same in the operations described in
    21  paragraphs (A), (B), (C) and (D) herein.
    22     The exclusion provided in paragraph (C) shall not apply to
    23  (i) construction materials, supplies or equipment used to
    24  construct, reconstruct, remodel, repair or maintain facilities
    25  not used directly by the purchaser in the production, delivering
    26  or rendition of public utility service, (ii) construction
    27  materials, supplies or equipment used to construct, reconstruct,
    28  remodel, repair or maintain a building, road or similar
    29  structure, or (iii) tools and equipment used but not installed
    30  in the maintenance of facilities used directly in the
    19910H1321B2877                  - 6 -

     1  production, delivering or rendition of a public utility service.
     2     The exclusions provided in paragraphs (A), (B), (C) and (D)
     3  shall not apply to the services enumerated in clauses (k)(11)
     4  through (18) and (w) through (kk) except that the exclusion
     5  provided in this subclause, for farming, dairying and
     6  agriculture shall apply to the service enumerated in clause (z).
     7     * * *
     8     (15)  The rendition for a consideration of employment agency
     9  services[,] or help supply services [or other personnel supply
    10  services].
    11     (16)  [The rendition for a consideration of computer           <--
    12  programming services [or other computer-related services,         <--
    13  including, but not limited to], providing computer integrated     <--
    14  systems design, computer processing, data preparation or
    15  processing services, information retrieval services [or],         <--
    16  computer facilities management services or other computer-        <--
    17  related services..] THE RENDITION FOR A CONSIDERATION OF          <--
    18  COMPUTER PROGRAMMING SERVICES; COMPUTER INTEGRATED SYSTEMS
    19  DESIGN SERVICES; COMPUTER PROCESSING, DATA PREPARATION OR
    20  PROCESSING SERVICES; INFORMATION RETRIEVAL SERVICES; COMPUTER
    21  FACILITIES MANAGEMENT SERVICES; OR OTHER COMPUTER-RELATED
    22  SERVICES. AT A MINIMUM, SUCH SERVICES SHALL NOT INCLUDE SERVICES
    23  THAT ARE PART OF ELECTRONIC FUND TRANSFERS, ELECTRONIC FINANCIAL
    24  TRANSACTIONS OR SERVICES, BANKING OR TRUST SERVICES; OR
    25  MANAGEMENT OR ADMINISTRATIVE SERVICES, INCLUDING TRANSFER
    26  AGENCY, SHAREHOLDER, CUSTODIAL AND PORTFOLIO ACCOUNTING
    27  SERVICES, PROVIDED DIRECTLY TO ANY ENTITY THAT DULY QUALIFIES TO
    28  BE TAXED AS A REGULATED INVESTMENT COMPANY OR A REAL ESTATE
    29  INVESTMENT TRUST UNDER THE PROVISIONS OF THE INTERNAL REVENUE
    30  CODE OF 1986 (PUBLIC LAW 99-514, 26 U.S.C. § 1 ET SEQ.), OR TO
    19910H1321B2877                  - 7 -

     1  AN ENTITY THAT PROVIDES SUCH SERVICES TO AN ENTITY SO
     2  QUALIFYING.
     3     * * *
     4     (18)  The rendition for a consideration of [storage] self-
     5  storage service.
     6     (l)  "Storage."  Any keeping or retention of tangible
     7  personal property within this Commonwealth for any purpose
     8  including the interim keeping, retaining or exercising any right
     9  or power over such tangible personal property. This term is in
    10  no way limited to the provision of [storage] self-storage
    11  service.
    12     (m)  "Tangible personal property." Corporeal personal
    13  property including, but not limited to, goods, wares,
    14  merchandise, steam and natural and manufactured and bottled gas
    15  for non-residential use, electricity for non-residential use,
    16  [pay television, except for minimum pay television] premium
    17  cable service, spirituous or vinous liquor and malt or brewed
    18  beverages and soft drinks, interstate telephone, telegraph and
    19  telecommunications service originating or terminating in the
    20  Commonwealth and charged to a service address in this
    21  Commonwealth, intrastate telephone, telegraph and
    22  telecommunications service with the exception of subscriber line
    23  charges and basic local telephone service for residential use,
    24  provided further, the service address of any intrastate
    25  telephone, telegraph or telecommunications service is deemed to
    26  be within this Commonwealth or within a political subdivision,
    27  regardless of how or where billed or paid. In the case of any
    28  such interstate or intrastate telephone, telegraph and
    29  telecommunications service, any charge paid through a credit or
    30  payment mechanism which does not relate to a service address,
    19910H1321B2877                  - 8 -

     1  such as a bank, travel, credit or debit card, is deemed
     2  attributable to the address of origination of the telephone,
     3  telegraph or telecommunications service.
     4     * * *
     5     (o)  "Use."
     6     * * *
     7     (4)  The obtaining by a purchaser of the service of
     8  repairing, altering, mending, pressing, fitting, dyeing,
     9  laundering, drycleaning or cleaning tangible personal property
    10  other than wearing apparel or shoes or applying or installing
    11  tangible personal property as a repair or replacement part of
    12  other tangible personal property other than wearing apparel or
    13  shoes, whether or not the services are performed directly or by
    14  any means other than by means of coin-operated self-service
    15  laundry equipment for wearing apparel or household goods, and
    16  whether or not any tangible personal property is transferred to
    17  the purchaser in conjunction therewith, except such services as
    18  are obtained in the construction, reconstruction, remodeling,
    19  repair or maintenance of real estate: Provided, however, That
    20  this subclause shall not be deemed to impose tax upon such
    21  services in the preparation for sale of new items which are
    22  excluded from the tax under clause (26) of section 204, or upon
    23  diaper service: And provided further, That the term "use" shall
    24  not include--
    25     (A)  Any tangible personal property acquired and kept,
    26  retained or over which power is exercised within this
    27  Commonwealth on which the taxing of the storage, use or other
    28  consumption thereof is expressly prohibited by the Constitution
    29  of the United States or which is excluded from tax under other
    30  provisions of this article.
    19910H1321B2877                  - 9 -

     1     (B)  The use or consumption of tangible personal property,
     2  including but not limited to machinery and equipment and parts
     3  therefor, and supplies or the obtaining of the services
     4  described in subclauses (2), (3) and (4) of this clause directly
     5  in the operations of--
     6     (i)  The manufacture of tangible personal property;
     7     (ii)  Farming, dairying, agriculture, horticulture or
     8  floriculture when engaged in as a business enterprise. The term
     9  "farming" shall include the propagation and raising of ranch-
    10  raised furbearing animals and the propagation of game birds for
    11  commercial purposes by holders of propagation permits issued
    12  under 34 Pa.C.S. (relating to game);
    13     (iii)  The producing, delivering or rendering of a public
    14  utility service, or in constructing, reconstructing, remodeling,
    15  repairing or maintaining the facilities which are directly used
    16  in producing, delivering or rendering such service;
    17     (iv)  Processing as defined in subclause (d) of this section.
    18     The exclusions provided in subparagraphs (i), (ii), (iii) and
    19  (iv) shall not apply to any vehicle required to be registered
    20  under The Vehicle Code except those vehicles directly used by a
    21  public utility engaged in the business as a common carrier; to
    22  maintenance facilities; or to materials, supplies or equipment
    23  to be used or consumed in the construction, reconstruction,
    24  remodeling, repair or maintenance of real estate other than
    25  directly used machinery, equipment, parts or foundations
    26  therefor that may be affixed to such real estate. The exclusions
    27  provided in subparagraphs (i), (ii), (iii) and (iv) shall not
    28  apply to tangible personal property or services to be used or
    29  consumed in managerial sales or other nonoperational activities,
    30  nor to the purchase or use of tangible personal property or
    19910H1321B2877                 - 10 -

     1  services by any person other than the person directly using the
     2  same in the operations described in subparagraphs (i), (ii),
     3  (iii) and (iv).
     4     The exclusion provided in subparagraph (iii) shall not apply
     5  to (A) construction materials, supplies or equipment used to
     6  construct, reconstruct, remodel, repair or maintain facilities
     7  not used directly by the purchaser in the production, delivering
     8  or rendition of public utility service or (B) tools and
     9  equipment used but not installed in the maintenance of
    10  facilities used directly in the production, delivering or
    11  rendition of a public utility service.
    12     The exclusion provided in subparagraphs (i), (ii), (iii) and
    13  (iv) shall not apply to the services enumerated in clauses
    14  (o)(9) through [(15)] (16) and (w) through (kk), except that the
    15  exclusion provided in subparagraph (ii) for farming, dairying
    16  and agriculture shall apply to the service enumerated in clause
    17  (z).
    18     * * *
    19     (13)  The obtaining by the purchaser of employment agency
    20  services[,] or help supply services [or other personnel supply
    21  services].
    22     (14)  [The obtaining by the purchaser of computer programming  <--
    23  services [or other computer-related services, including, but not  <--
    24  limited to], providing computer integrated systems design,        <--
    25  computer processing, data preparation or processing services,
    26  information retrieval services [or], computer facilities          <--
    27  management services or other computer-related services..] THE     <--
    28  OBTAINING BY THE PURCHASER OF COMPUTER PROGRAMMING SERVICES;
    29  COMPUTER INTEGRATED SYSTEMS DESIGN SERVICES; COMPUTER
    30  PROCESSING, DATA PREPARATION OR PROCESSING SERVICES; INFORMATION
    19910H1321B2877                 - 11 -

     1  RETRIEVAL SERVICES; COMPUTER FACILITIES MANAGEMENT SERVICES; OR
     2  OTHER COMPUTER-RELATED SERVICES. AT A MINIMUM, SUCH SERVICES
     3  SHALL NOT INCLUDE SERVICES THAT ARE PART OF ELECTRONIC FUND
     4  TRANSFERS, ELECTRONIC FINANCIAL TRANSACTIONS OR SERVICES,
     5  BANKING OR TRUST SERVICES; OR MANAGEMENT OR ADMINISTRATIVE
     6  SERVICES, INCLUDING TRANSFER AGENCY, SHAREHOLDER, CUSTODIAL AND
     7  PORTFOLIO ACCOUNTING SERVICES, PROVIDED DIRECTLY TO ANY ENTITY
     8  THAT DULY QUALIFIES TO BE TAXED AS A REGULATED INVESTMENT
     9  COMPANY OR A REAL ESTATE INVESTMENT TRUST UNDER THE PROVISIONS
    10  OF THE INTERNAL REVENUE CODE OF 1986 (PUBLIC LAW 99-514, 26
    11  U.S.C. § 1 ET SEQ.), OR TO AN ENTITY THAT PROVIDES SUCH SERVICES
    12  TO AN ENTITY SO QUALIFYING.
    13     * * *
    14     (16)  The obtaining by the purchaser of self-storage service.
    15     * * *
    16     (z)  "Disinfecting or pest control services."  Providing
    17  disinfecting, termite control, insect control, rodent control or
    18  other pest control services. Such services include, but are not
    19  limited to, deodorant servicing of rest rooms, washroom
    20  sanitation service, rest room cleaning service, extermination
    21  service or fumigating service. As used in this clause, the term
    22  "fumigating service" shall not include the fumigation of
    23  agricultural commodities or containers used for agricultural
    24  commodities. As used in this clause, the term "insect control"
    25  shall not include the spraying of trees which are harvested for
    26  commercial purposes for gypsy moth control.
    27     (aa)  "Building maintenance or cleaning services."  Providing
    28  services which include, but are not limited to, janitorial, maid
    29  or housekeeping service, office or interior building cleaning or
    30  maintenance service, window cleaning service, floor waxing
    19910H1321B2877                 - 12 -

     1  service, lighting maintenance service such as bulb replacement,
     2  cleaning, chimney cleaning service, acoustical tile cleaning
     3  service, venetian blind cleaning, cleaning and maintenance of
     4  telephone booths or cleaning and degreasing of service stations.
     5  This term shall not include repairs on buildings and other
     6  structures; nor shall this term include the maintenance or
     7  repair of boilers, furnaces or parts thereof; the painting,
     8  wallpapering or applying other like coverings to interior walls,
     9  ceilings or floors; or the exterior painting of buildings.
    10     * * *
    11     (cc)  "Help supply services."  Providing temporary or
    12  continuing help where the help supplied is on the payroll of the
    13  supplying person or entity, but is under the supervision of the
    14  individual or business to which help is furnished. Such services
    15  include, but are not limited to, service of a type provided by
    16  labor and manpower pools, employe leasing services, office help
    17  supply services, temporary help services, usher services,
    18  modeling services or fashion show model supply services. Such
    19  services shall not include providing farm labor services. The
    20  term shall not include human health-related services, including
    21  nursing, home health care and personal care. As used in this
    22  clause, "personal care" shall include providing at least one of
    23  the following types of assistance to persons with limited
    24  ability for self-care:
    25     (1)  dressing, bathing or feeding;
    26     (2)  supervising self-administered medication;
    27     (3)  transferring a person to or from a bed or wheelchair; or
    28     (4)  routine housekeeping chores when provided in conjunction
    29  with and supplied by the same provider of the assistance listed
    30  in subclause (1), (2) or (3).
    19910H1321B2877                 - 13 -

     1     * * *
     2     (ii)  "Other computer-related services."  Supplying computer-
     3  related services not described elsewhere in clauses (dd) through
     4  (hh). Such services include, but are not limited to, computer
     5  consulting services; data base development and data processing
     6  consulting services; disk, diskette or tape conversion services;
     7  disk, diskette or tape recertification services; computer
     8  hardware and software requirement analysis services; software
     9  documentation services; software installation services; software
    10  training services if provided in conjunction with the purchase
    11  of software; or reformatting or editing services.
    12     * * *
    13     (kk)  "[Storage] Self-storage service."  [A] Providing a
    14  building [or portion of], a room in a building or [similar
    15  structure for purposes] a secured area within a building with
    16  separate access provided for each purchaser of self-storage
    17  service, primarily for the purpose of storing [corporeal]
    18  personal property[, including, but not limited to, goods, wares
    19  or merchandise, spiritous or vinous liquor and malt or brewed
    20  beverages, furniture and household goods, automobiles, furs,
    21  textiles, perishable goods under refrigeration, farm products,
    22  cotton compresses or tobacco]. The term excludes providing:
    23     (1)  safe deposit boxes by financial institutions;
    24     (2)  storage [of such property which is unloaded from
    25  maritime vessels and then later stored or which is stored and
    26  then later loaded on maritime vessels when such storage or
    27  loading takes place within twenty-five miles of a "port
    28  district," as defined by the act of July 10, 1989 (P.L.291,
    29  No.50), known as the "Philadelphia Regional Port Authority
    30  Act."] in refrigerator or freezer units;
    19910H1321B2877                 - 14 -

     1     (3)  storage in commercial warehouses;
     2     (4)  facilities for goods distribution; and
     3     (5)  lockers in airports, bus stations, museums and other
     4  public places.
     5     [(ll)  "Pay television."  Cable television; community antenna
     6  television; or any other distribution of television, video or
     7  radio services, with or without the use of wires, to subscribers
     8  or paying customers or users, including, but not limited to,
     9  installation and repair services, single-event video service or
    10  any service having any connection with such services.]
    11     (ll)  "Premium cable service."  That portion of cable
    12  television services; community antenna television services; or
    13  any other distribution of television, video, audio or radio
    14  services which meets all of the following criteria:
    15     (1)  is transmitted with or without the use of wires to
    16  purchasers; and
    17     (2)  which consists substantially of programming
    18  uninterrupted by paid commercial advertising which includes, but
    19  it is not limited to, programming primarily composed of
    20  uninterrupted full-length motion pictures or sporting events,
    21  pay-per-view, paid programming or like audio or radio
    22  broadcasting.
    23     If a purchaser receives or agrees to receive premium cable
    24  service, then the following charges are included in the purchase
    25  price: charges for installation or repair of any premium cable
    26  service; upgrade to include additional premium cable service;
    27  downgrade to exclude all or some premium cable service;
    28  additional premium cable outlets in excess of ten; or any other
    29  charge or fee related to premium cable services. The term shall
    30  not apply to transmissions by public television, public radio
    19910H1321B2877                 - 15 -

     1  services or official Federal, State or local government cable
     2  services. Nor, shall the term apply to local origination
     3  programming which provides a variety of public service programs
     4  unique to the community; programming which provides coverage of
     5  public affairs issues which are presented without commentary or
     6  analysis, including United States Congressional proceedings; or
     7  programming which is substantially related to religious
     8  subjects.
     9     [(mm)  "Minimum pay television."  That portion of pay
    10  television for which a periodic minimum fee is paid to receive
    11  pay television on an ongoing basis.]
    12     Section 2.  Section 204(4), (29) and (30) of the act, amended
    13  August 4, 1991 (P.L.97, No.22), are amended to read:
    14     Section 204.  Exclusions from Tax.--The tax imposed by
    15  section 202 shall not be imposed upon
    16     * * *
    17     (4)  The sale at retail or use of disposable diapers, pre-
    18  moistened wipes; incontinence products[,]; colostomy deodorants;
    19  toilet paper[,]; sanitary napkins, tampons or similar items used
    20  for feminine hygiene; or toothpaste, toothbrushes or dental
    21  floss.
    22     * * *
    23     (29)  The sale at retail or use of food and beverages for
    24  human consumption including candy and gum, except that this
    25  exclusion shall not apply with respect to--
    26     (i)  Soft drinks;
    27     (ii)  Malt and brewed beverages and spirituous and vinous
    28  liquors;
    29     (iii)  Food or beverages [ready to eat], whether sold for
    30  consumption on or off the premises or on a "take-out" or "to go"
    19910H1321B2877                 - 16 -

     1  basis or delivered to the purchaser or consumer, when purchased
     2  [(i)] (A) from persons engaged in the business of catering[, or
     3  (ii)]; or (B) from persons engaged in the business of operating
     4  establishments from which ready to eat food and beverages are
     5  sold, including, but not limited to, restaurants, cafes, lunch
     6  counters, private and social clubs, taverns, dining cars,
     7  hotels, night clubs, fast food operations, pizzerias, fairs,
     8  carnivals, lunch carts, ice cream stands, [vending machines,]
     9  snack bars, cafeterias, employe cafeterias, theaters, stadiums,
    10  arenas, amusement parks, carryout shops, coffee shops[, bakery,
    11  pastry and donut shops] and other establishments whether mobile
    12  or immobile [from which food or beverages ready to eat are
    13  sold]. For purposes of this clause, a bakery, a pastry shop, a
    14  donut shop, a delicatessen, grocery store, supermarket, farmer's
    15  market or a convenience store shall not be considered an
    16  establishment from which food or beverages ready to eat are sold
    17  except for the sale of meals, [cooked chicken,] sandwiches,
    18  [prepared salads,] food from salad bars, [prepared desserts,]
    19  hand-dipped or hand-served iced based products including ice
    20  cream and yogurt, hot soup, hot pizza and other hot food items,
    21  brewed coffee and hot beverages. For purposes of this subclause,
    22  beverages shall not include malt and brewed beverages and
    23  spirituous and vinous liquors but shall include soft drinks. The
    24  sale at retail of food and beverages at or from a school or
    25  church in the ordinary course of the activities of such
    26  organization is not subject to tax.
    27     (30)  [The sale at retail or use of periodicals and
    28  publications which are published at regular intervals not
    29  exceeding three months, and which are circulated among the
    30  general public and containing matters of general interest and
    19910H1321B2877                 - 17 -

     1  reports of current events published for the purpose of
     2  disseminating information of a public character or devoted to
     3  literature, the sciences, art or some special industry. This
     4  exclusion shall also include any printed advertising material
     5  circulated with such periodical or publication regardless of
     6  where or by whom such printed advertising material was
     7  produced.] The sale at retail or use of newspapers. For purposes
     8  of this section the term "newspaper" shall mean a "legal
     9  newspaper" or a publication containing matters of general
    10  interest and reports of current events which qualifies as a
    11  "newspaper of general circulation" qualified to carry a "legal
    12  advertisement" as those terms are defined in 45 Pa.C.S. § 101
    13  (relating to definitions) not including magazines. This
    14  exclusion shall also include any printed advertising materials
    15  circulated with such newspaper regardless of where or by whom
    16  such printed advertising material was produced.
    17     * * *
    18     Section 3.  The act is amended by adding a section to read:
    19     Section 281.2.  Transfers to Public Transportation Assistance
    20  Fund.--(a)  All revenues received on or after July 1, 1992, from
    21  the imposition of the tax on periodicals shall be transferred to
    22  the Public Transportation Assistance Fund according to the
    23  formula set forth in subsection (b).
    24     (b)  Within 30 days of the close of any calendar month, .44
    25  per cent (.0044) of the taxes received in the previous month
    26  under this article, less any amounts collected in that previous
    27  calendar month under former 74 Pa.C.S. § 1314(d) (relating to
    28  Public Assistance Transportation Fund), shall be transferred to
    29  the Public Assistance Transportation Fund established under 74
    30  Pa.C.S. § 1314(a).
    19910H1321B2877                 - 18 -

     1     (c)  In fiscal year 1991-1992, the Secretary of Revenue will
     2  ensure that ten million dollars ($10,000,000) is deposited in
     3  the Public Assistance Transportation Fund from the combination
     4  of revenues received under former 74 Pa.C.S. § 1314(d) and
     5  transfers of periodical taxes received under this article.
     6     Section 4.  Sections 301(c.2), (e.1), (i.1), (i.2) and (o.2)
     7  and 304 of the act, amended or added August 4, 1991 (P.L.97,
     8  No.22), are amended to read:
     9     Section 301.  Definitions.--The following words, terms and
    10  phrases when used in this article shall have the meaning
    11  ascribed to them in this section except where the context
    12  clearly indicates a different meaning. Any reference in this
    13  article to the Internal Revenue Code shall include the Internal
    14  Revenue Code of 1954, as amended to the date on which this
    15  article is effective:
    16     * * *
    17     (c.2)  "Claimant" means a person[:
    18     (1)]  who is subject to the tax imposed under this article,
    19  is not a dependent of another person, but is entitled to claim
    20  against such tax the poverty tax provisions as provided by this
    21  act[;
    22     (2)  who has a taxable year of not less than twelve months;
    23  and
    24     (3)  with respect to whom no deduction under section 151 of
    25  the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C.
    26  § 1 et seq.), as amended, is allowable to any nonhousehold
    27  member for a taxable year beginning in the calendar year in
    28  which the claimant's taxable year begins].
    29     * * *
    30     (e.1)  "Dependent" means [any nonhousehold member with
    19910H1321B2877                 - 19 -

     1  respect to whom a deduction under section 151 of the Internal
     2  Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.),
     3  as amended, is allowable to the claimant for the claimant's
     4  taxable year or to a household member for the claimant's taxable
     5  year] a spouse or child who derives more than one-half of his
     6  total support during the entire taxable year from a claimant
     7  entitled to claim the poverty exemption. Any person who is a
     8  dependent pursuant to the provisions of the Internal Revenue
     9  Code during a taxable year shall prima facie be deemed a
    10  dependent for purposes of this act.
    11     * * *
    12     [(i.1)  "Total household income" means all poverty income
    13  received by a claimant and every other household member for the
    14  taxable year of the claimant.
    15     (i.2)  "Household member" means any individual who, for more
    16  than one-half of the taxable year of the claimant, has as his
    17  principal place of abode the same home as the claimant and is a
    18  member of the same household as the claimant.]
    19     * * *
    20     (o.2)  "Poverty income" means for the purpose of determining
    21  eligibility for special tax provisions [all taxable and
    22  nontaxable income from whatever source derived, including, but
    23  not limited to, salaries, wages, bonuses, commissions, income
    24  from self-employment, alimony, support money, cash public
    25  assistance and relief, the gross amount of any pensions or
    26  annuities including railroad retirement benefits, all benefits
    27  received under the Social Security Act (Public Law 74-271, 42
    28  U.S.C. § 301 et seq.) except Medicare benefits, all benefits
    29  received under State unemployment insurance laws and veterans'
    30  disability payments, all interest received from the Federal or
    19910H1321B2877                 - 20 -

     1  any State government, or any instrumentality or political
     2  subdivision thereof, realized capital gains, rentals, workmen's
     3  compensation and the gross amount of loss of time insurance
     4  benefits, life insurance benefits and proceeds, except the first
     5  five thousand dollars ($5,000) of the total of death benefit
     6  payments, and gifts of cash or property, other than transfers by
     7  gift between members of a household, in excess of a total value
     8  of three hundred dollars ($300), but shall not include surplus
     9  food or other relief in kind supplied by a governmental agency
    10  or property tax or rent rebate or inflation dividend] all moneys
    11  or property (including interest, gains or income derived from
    12  obligations which are statutorily free from State or local
    13  taxation under any other act of the General Assembly of the
    14  Commonwealth of Pennsylvania or under the laws of the United
    15  States) received of whatever nature and from whatever source
    16  derived but not including (i) periodic payments for sickness and
    17  disability other than regular wages received during a period of
    18  sickness or disability; or (ii) disability, retirement or other
    19  payments arising under workmen's compensation acts, occupational
    20  disease acts and similar legislation by any government; or (iii)
    21  payments commonly recognized as old age or retirement benefits
    22  paid to persons retired from service after reaching a specific
    23  age or after a stated period of employment; or (iv) payments
    24  commonly known as public assistance, or unemployment
    25  compensation payments by any governmental agency; or (v)
    26  payments to reimburse actual expenses; or (vi) payments made by
    27  employers or labor unions for programs covering hospitalization,
    28  sickness, disability or death, supplemental unemployment
    29  benefits, strike benefits, social security and retirement; or
    30  (vii) any compensation received by United States servicemen
    19910H1321B2877                 - 21 -

     1  serving in a combat zone.
     2     * * *
     3     Section 304.  Special Tax Provisions for Poverty.--(a)  The
     4  General Assembly, in recognition of the powers contained in
     5  section 2(b)(ii) of Article VIII of the Constitution of the
     6  Commonwealth of Pennsylvania which provides therein for the
     7  establishing as a class or classes of subjects of taxation the
     8  property or privileges of persons who, because of poverty are
     9  determined to be in need of special tax provisions hereby
    10  declares as its legislative intent and purpose to implement such
    11  power under such constitutional provision by establishing
    12  special tax provisions as hereinafter provided in this act.
    13     (b)  The General Assembly having determined that there are
    14  persons within this Commonwealth whose incomes are such that
    15  imposition of a tax thereon would deprive them and their
    16  dependents of the bare necessities of life and having further
    17  determined that poverty is a relative concept inextricably
    18  joined with actual income and the number of people dependent
    19  upon such income deems it to be a matter of public policy to
    20  provide special tax provisions for that class of persons
    21  hereinafter designated to relieve their economic burden.
    22     (c)  For the taxable year [1991] 1974 and each year
    23  thereafter any claimant who meets the following standards of
    24  eligibility established by this act as the test for poverty
    25  shall be deemed a separate class of subject of taxation, and, as
    26  such, shall be entitled to the benefit of the special provisions
    27  of this act.
    28     (d)  Any claim for special tax provisions hereunder shall be
    29  determined in accordance with the following:
    30     (1)  If [total household income is seven thousand dollars
    19910H1321B2877                 - 22 -

     1  ($7,000)] the poverty income of the claimant during an entire
     2  taxable year is six thousand three hundred dollars ($6,300) or
     3  less, the claimant shall be entitled to a refund or forgiveness
     4  of any moneys which have been paid over to (or would except for
     5  the provisions of this act be payable to) the Commonwealth under
     6  the provisions of this article, with an additional income
     7  allowance of [two thousand dollars ($2,000) for each dependent
     8  and household member] one thousand five hundred dollars ($1,500)
     9  for the first additional dependent and an additional income
    10  allowance of one thousand dollars ($1,000) for each additional
    11  dependent of the claimant.
    12     (2)  If [total household income does not exceed the] the
    13  poverty income of the claimant during an entire taxable year
    14  does not exceed the poverty income limitations prescribed by
    15  clause (1) by more than the dollar category contained in
    16  subclauses (i), (ii), (iii), (iv), (v), (vi), (vii), (viii) or
    17  (ix) of this clause, the claimant shall be entitled to a refund
    18  or forgiveness based on the per centage prescribed in such
    19  subclauses of any moneys which have been paid over to (or would
    20  except for the provisions herein be payable to) the Commonwealth
    21  under this article:
    22     (i)  Ninety per cent if not in excess of one hundred dollars
    23  ($100).
    24     (ii)  Eighty per cent if not in excess of two hundred dollars
    25  ($200).
    26     (iii)  Seventy per cent if not in excess of three hundred
    27  dollars ($300).
    28     (iv)  Sixty per cent if not in excess of four hundred dollars
    29  ($400).
    30     (v)  Fifty per cent if not in excess of five hundred dollars
    19910H1321B2877                 - 23 -

     1  ($500).
     2     (vi)  Forty per cent if not in excess of six hundred dollars
     3  ($600).
     4     (vii)  Thirty per cent if not in excess of seven hundred
     5  dollars ($700).
     6     (viii)  Twenty per cent if not in excess of eight hundred
     7  dollars ($800).
     8     (ix)  Ten per cent if not in excess of nine hundred dollars
     9  ($900).
    10     Section 5.  Section 602.3 of the act is amended by adding a
    11  subsection to read:
    12     Section 602.3.  Deposit of Proceeds; Appropriation.--* * *
    13     (c)  The transfer of any proceeds resulting from the one-half
    14  mill tax imposed pursuant to this article to the Hazardous Site
    15  Cleanup Fund as authorized in subsection (a) shall not be
    16  applicable to fiscal year 1991-1992. In lieu of the 1991-1992
    17  fiscal year transfer, the Governor shall authorize the transfer
    18  of proceeds in excess of seventeen million dollars ($17,000,000)
    19  from the revenue resulting from the one-half mill tax imposed
    20  pursuant to this article to the Hazardous Site Cleanup Fund
    21  pursuant to the transfer schedule set forth in subsection (a).
    22  The Governor may transfer any unexpended portion of the
    23  seventeen million dollars ($17,000,000) to the Hazardous Site
    24  Cleanup Fund.
    25     Section 6.  Section 1502.5 of the act, added October 14, 1988
    26  (P.L.737, No.106), is amended to read:
    27     [Section 1502.5.  Sunset.--The provisions regarding
    28  apportionment, credits and additional filing requirements in
    29  accordance with sections 1502.1, 1502.2 and 1502.3 of this
    30  article shall not be applicable for calendar year 1992 and each
    19910H1321B2877                 - 24 -

     1  calendar year thereafter and fiscal years beginning in 1992 and
     2  each fiscal year thereafter.]
     3     Section 7.  The provisions of 74 Pa.C.S. § 1314(d) are
     4  repealed.
     5     Section 8.  The Secretary of Revenue shall facilitate the
     6  transfer of funds under section 281.2 of the act.
     7     Section 9.  It is the intent of the General Assembly that the
     8  Department of Revenue levy, assess and collect the tax imposed
     9  by section 202 of this act on retail sales from vending machines
    10  in the same manner and on the same taxable item as was in effect
    11  prior to August 4, 1991.
    12     Section 10.  The amendment of sections 301 and 304 of the act
    13  shall be retroactive to January 1, 1991.
    14     Section 11.  This act shall take effect as follows:
    15         (1)  The amendment or addition of sections 201(g),
    16     (k)(8), (15), (16) and (18), (l), (m), (o)(4), (13), (14) and
    17     (16), (z), (aa), (cc), (ii), (kk), (ll) and (mm), 204(4),      <--
    18     (29) and (30) 204(30) and 281.2 of the act shall take effect
    19     January 1, 1992.
    20         (2)  Sections 7 and 8 of this act shall take effect
    21     January 1, 1992.
    22         (3)  The remainder of this act shall take effect
    23     immediately.





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