SENATE AMENDED PRIOR PRINTER'S NOS. 1524, 2207, 2321, PRINTER'S NO. 2877 2849
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. D5L84RZ/19910H1321B2877 - 25 -