PRINTER'S NO. 1680
No. 1505 Session of 1993
INTRODUCED BY NYCE, BOYES, TRELLO, CIVERA, CARONE, BARLEY,
D. W. SNYDER, SEMMEL, KING, TRUE, MASLAND, FAIRCHILD, CESSAR,
MILLER, NAILOR, ULIANA, TIGUE, MUNDY, KENNEY, SCHULER,
E. Z. TAYLOR, SAURMAN, BAKER, HESS, GRUPPO, HECKLER,
ARMSTRONG, FREEMAN, M. N. WRIGHT, MIHALICH, HUTCHINSON,
SANTONI, GEIST, GERLACH, ROONEY, SCHEETZ, YANDRISEVITS,
HARLEY, WAUGH, PLATTS, FLICK, BROWN, STEIL, STEELMAN,
BATTISTO, B. SMITH, CLARK, CLYMER, EGOLF AND DRUCE,
MAY 3, 1993
REFERRED TO COMMITTEE ON FINANCE, MAY 3, 1993
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," providing for manufactured housing.
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. Section 201(i), (k) and (m) of the act of March
14 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971,
15 amended August 4, 1991 (P.L.97, No.22) and December 13, 1991
16 (P.L.373, No.40), are amended and the section is amended by
17 adding a clause to read:
18 Section 201. Definitions.--The following words, terms and
1 phrases when used in this Article II shall have the meaning
2 ascribed to them in this section, except where the context
3 clearly indicates a different meaning:
4 * * *
5 (i) "Resale."
6 (1) Any transfer of ownership, custody or possession of
7 tangible personal property for a consideration, including the
8 grant of a license to use or consume and transactions where the
9 possession of such property is transferred but where the
10 transferor retains title only as security for payment of the
11 selling price whether such transaction be designated as bailment
12 lease, conditional sale or otherwise.
13 (2) The physical incorporation of tangible personal property
14 as an ingredient or constituent into other tangible personal
15 property, which is to be sold in the regular course of business
16 or the performance of those services described in subclauses
17 (2), (3) and (4) of clause (k) of this section upon tangible
18 personal property which is to be sold in the regular course of
19 business or where the person incorporating such property has
20 undertaken at the time of purchase to cause it to be transported
21 in interstate commerce to a destination outside this
22 Commonwealth.
23 (3) The term "resale" shall also include tangible personal
24 property purchased or having a situs within this Commonwealth
25 solely for the purpose of being processed, fabricated or
26 manufactured into, attached to or incorporated into tangible
27 personal property and thereafter transported outside this
28 Commonwealth for use exclusively outside this Commonwealth.
29 (4) The term "resale" shall not include any sale of "malt or
30 brewed beverages" by a "retail dispenser," or any sale of
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1 "liquor" or "malt or brewed beverages" by a person holding a
2 "retail liquor license" within the meaning of the "Liquor Code."
3 (5) The physical incorporation of tangible personal property
4 as an ingredient or constituent in the construction of
5 foundations for machinery or equipment the sale or use of which
6 is excluded from tax under the provisions of paragraphs (A),
7 (B), (C) and (D) of subclause (8) of clause (k) and
8 subparagraphs (i), (ii), (iii) and (iv) of paragraph (B) of
9 subclause (4) of clause (o) of this section, whether such
10 foundations at the time of construction or transfer constitute
11 tangible personal property or real estate.
12 (6) The term "resale" shall not include the transfer of
13 ownership, custody or possession of any manufactured housing for
14 a consideration, from a manufacturer to a dealer for further
15 transfer by that dealer to an ultimate consumer or, when there
16 is no dealer, from a manufacturer to an ultimate consumer, for
17 any use, including use as living quarters or commercial or
18 rental purposes.
19 * * *
20 (k) "Sale at retail."
21 (1) Any transfer, for a consideration, of the ownership,
22 custody or possession of tangible personal property, including
23 the grant of a license to use or consume whether such transfer
24 be absolute or conditional and by whatsoever means the same
25 shall have been effected.
26 (2) The rendition of the service of printing or imprinting
27 of tangible personal property for a consideration for persons
28 who furnish, either directly or indirectly the materials used in
29 the printing or imprinting.
30 (3) The rendition for a consideration of the service of--
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1 (i) Washing, cleaning, waxing, polishing or lubricating of
2 motor vehicles of another, whether or not any tangible personal
3 property is transferred in conjunction therewith; and
4 (ii) Inspecting motor vehicles pursuant to the mandatory
5 requirements of "The Vehicle Code."
6 (4) The rendition for a consideration of the service of
7 repairing, altering, mending, pressing, fitting, dyeing,
8 laundering, drycleaning or cleaning tangible personal property
9 other than wearing apparel or shoes, or applying or installing
10 tangible personal property as a repair or replacement part of
11 other tangible personal property except wearing apparel or shoes
12 for a consideration, whether or not the services are performed
13 directly or by any means other than by coin-operated self-
14 service laundry equipment for wearing apparel or household goods
15 and whether or not any tangible personal property is transferred
16 in conjunction therewith, except such services as are rendered
17 in the construction, reconstruction, remodeling, repair or
18 maintenance of real estate: Provided, however, That this
19 subclause shall not be deemed to impose tax upon such services
20 in the preparation for sale of new items which are excluded from
21 the tax under clause (26) of section 204, or upon diaper
22 service.
23 (8) Any retention of possession, custody or a license to use
24 or consume tangible personal property or any further obtaining
25 of services described in subclauses (2), (3) and (4) of this
26 clause pursuant to a rental or service contract or other
27 arrangement (other than as security).
28 The term "sale at retail" shall not include (i) any such
29 transfer of tangible personal property or rendition of services
30 for the purpose of resale, or (ii) such rendition of services or
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1 the transfer of tangible personal property including, but not
2 limited to, machinery and equipment and parts therefor and
3 supplies to be used or consumed by the purchaser directly in the
4 operations of--
5 (A) The manufacture of tangible personal property;
6 (B) Farming, dairying, agriculture, horticulture or
7 floriculture when engaged in as a business enterprise. The term
8 "farming" shall include the propagation and raising of ranch
9 raised fur-bearing animals and the propagation of game birds for
10 commercial purposes by holders of propagation permits issued
11 under 34 Pa.C.S. (relating to game);
12 (C) The producing, delivering or rendering of a public
13 utility service, or in constructing, reconstructing, remodeling,
14 repairing or maintaining the facilities which are directly used
15 in producing, delivering or rendering such service;
16 (D) Processing as defined in clause (d) of this section.
17 The exclusions provided in paragraphs (A), (B), (C) and (D)
18 shall not apply to any vehicle required to be registered under
19 The Vehicle Code, except those vehicles used directly by a
20 public utility engaged in business as a common carrier; to
21 maintenance facilities; or to materials, supplies or equipment
22 to be used or consumed in the construction, reconstruction,
23 remodeling, repair or maintenance of real estate other than
24 directly used machinery, equipment, parts or foundations
25 therefor that may be affixed to such real estate.
26 The exclusions provided in paragraphs (A), (B), (C) and (D)
27 shall not apply to tangible personal property or services to be
28 used or consumed in managerial sales or other nonoperational
29 activities, nor to the purchase or use of tangible personal
30 property or services by any person other than the person
19930H1505B1680 - 5 -
1 directly using the same in the operations described in
2 paragraphs (A), (B), (C) and (D) herein.
3 The exclusion provided in paragraph (C) shall not apply to
4 (i) construction materials, supplies or equipment used to
5 construct, reconstruct, remodel, repair or maintain facilities
6 not used directly by the purchaser in the production, delivering
7 or rendition of public utility service, (ii) construction
8 materials, supplies or equipment used to construct, reconstruct,
9 remodel, repair or maintain a building, road or similar
10 structure, or (iii) tools and equipment used but not installed
11 in the maintenance of facilities used directly in the
12 production, delivering or rendition of a public utility service.
13 The exclusions provided in paragraphs (A), (B), (C) and (D)
14 shall not apply to the services enumerated in clauses (k)(11)
15 through (18) and (w) through (kk), except that the exclusion
16 provided in this subclause for farming, dairying and agriculture
17 shall apply to the service enumerated in clause (z).
18 (9) Where tangible personal property or services are
19 utilized for purposes constituting a "sale at retail" and for
20 purposes excluded from the definition of "sale at retail," it
21 shall be presumed that such tangible personal property or
22 services are utilized for purposes constituting a "sale at
23 retail" and subject to tax unless the user thereof proves to the
24 department that the predominant purposes for which such tangible
25 personal property or services are utilized do not constitute a
26 "sale at retail."
27 (10) The term "sale at retail" with respect to "liquor" and
28 "malt or brewed beverages" shall include the sale of "liquor" by
29 any "Pennsylvania liquor store" to any person for any purpose,
30 and the sale of "malt or brewed beverages" by a "manufacturer of
19930H1505B1680 - 6 -
1 malt or brewed beverages," "distributor" or "importing
2 distributor" to any person for any purpose, except sales by a
3 "manufacturer of malt or brewed beverages" to a "distributor" or
4 "importing distributor" or sales by an "importing distributor"
5 to a "distributor" within the meaning of the "Liquor Code." The
6 term "sale at retail" shall not include any sale of "malt or
7 brewed beverages" by a "retail dispenser" or any sale of
8 "liquor" or "malt or brewed beverages" by a person holding a
9 "retail liquor license" within the meaning of and pursuant to
10 the provisions of the "Liquor Code," but shall include any sale
11 of "liquor" or "malt or brewed beverages" other than pursuant to
12 the provisions of the "Liquor Code."
13 (11) The rendition for a consideration of lobbying services.
14 (12) The rendition for a consideration of adjustment
15 services, collection services or credit reporting services.
16 (13) The rendition for a consideration of secretarial or
17 editing services.
18 (14) The rendition for a consideration of disinfecting or
19 pest control services, building maintenance or cleaning
20 services.
21 (15) The rendition for a consideration of employment agency
22 services or help supply services.
23 (16) The rendition for a consideration of computer
24 programming services; computer-integrated systems design
25 services; computer processing, data preparation or processing
26 services; information retrieval services; computer facilities
27 management services; or other computer-related services. At a
28 minimum, such services shall not include services that are part
29 of electronic fund transfers, electronic financial transactions
30 or services, banking or trust services, or management or
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1 administrative services, including transfer agency, shareholder,
2 custodial and portfolio accounting services, provided directly
3 to any entity that duly qualifies to be taxed as a regulated
4 investment company or a real estate investment trust under the
5 provisions of the Internal Revenue Code of 1986 (Public Law 99-
6 514, 26 U.S.C. § 1 et seq.) or to an entity that provides such
7 services to an entity so qualifying.
8 (17) The rendition for a consideration of lawn care service.
9 (18) The rendition for a consideration of self-storage
10 service.
11 (19) Any material or equipment purchased by an individual
12 engaged in the business of constructing any manufactured
13 housing, if the material is to be physically incorporated into
14 the housing during the construction process.
15 * * *
16 (m) "Tangible personal property." Corporeal personal
17 property including, but not limited to, goods, wares,
18 merchandise, steam and natural and manufactured and bottled gas
19 for non-residential use, electricity for non-residential use,
20 premium cable service, spirituous or vinous liquor and malt or
21 brewed beverages and soft drinks, interstate telephone,
22 telegraph and telecommunications service originating or
23 terminating in the Commonwealth and charged to a service address
24 in this Commonwealth, intrastate telephone, telegraph and
25 telecommunications service with the exception of subscriber line
26 charges and basic local telephone service for residential use,
27 provided further, the service address of any intrastate
28 telephone, telegraph or telecommunications service is deemed to
29 be within this Commonwealth or within a political subdivision,
30 regardless of how or where billed or paid. In the case of any
19930H1505B1680 - 8 -
1 such interstate or intrastate telephone, telegraph and
2 telecommunications service, any charge paid through a credit or
3 payment mechanism which does not relate to a service address,
4 such as a bank, travel, credit or debit card, is deemed
5 attributable to the address of origination of the telephone,
6 telegraph or telecommunications service. The term "tangible
7 personal property" shall not include the transfer of ownership,
8 custody or possession for a consideration of any new or preowned
9 manufactured housing sold in this Commonwealth.
10 * * *
11 (nn) "Manufactured housing." Preconstructed, sectional or
12 modular housing. The term "manufactured housing" includes:
13 (1) a manufactured housing unit or mobile home which bears a
14 label, as required by and referred to in the act of November 17,
15 1982 (P.L.676, No.192), known as the "Manufactured Housing
16 Construction and Safety Standards Authorization Act," which
17 certifies that it conforms to Federal construction and safety
18 standards adopted pursuant to the National Manufactured Housing
19 Construction and Safety Standards Act of 1974 (Public Law 93-
20 383, 42 U.S.C. § 5401 et seq.); and
21 (2) industrialized housing, as defined in the act of May 11,
22 1972 (P.L.286, No.70), known as the "Industrialized Housing
23 Act."
24 Section 2. Section 237(b) of the act, amended December 28,
25 1972 (P.L.1633, No.340), is amended to read:
26 Section 237. Collection of Tax.--* * *
27 (b) Collection by Persons Maintaining a Place of Business in
28 the Commonwealth. (1) Every person maintaining a place of
29 business in this Commonwealth and selling or leasing tangible
30 personal property or services[, including the selling or leasing
19930H1505B1680 - 9 -
1 as tangible personal property mobilehomes as defined in "The
2 Vehicle Code" whether or not a certificate of title is issued by
3 the department,] the sale or use of which is subject to tax
4 shall collect the tax from the purchaser or lessee at the time
5 of making the sale or lease, and shall remit the tax to the
6 department.
7 (2) Any person required under this article to collect tax
8 from another person, who shall fail to collect the proper amount
9 of such tax, shall be liable for the full amount of the tax
10 which he should have collected.
11 * * *
12 Section 3. Section 1101-C of the act is amended by adding a
13 definition to read:
14 Section 1101-C. Definitions.--The following words when used
15 in this article shall have the meanings ascribed to them in this
16 section:
17 * * *
18 "Manufactured housing." Preconstructed, sectional or modular
19 housing. The term "manufactured housing" includes:
20 (1) a manufactured housing unit or mobilehome which bears a
21 label, as required by and referred to in the act of November 17,
22 1982 (P.L.676, No.192), known as the "Manufactured Housing
23 Construction and Safety Standards Authorization Act," which
24 certifies that it conforms to Federal construction and safety
25 standards adopted pursuant to the National Manufactured Housing
26 Construction and Safety Standards Act of 1974 (Public Law 93-
27 383, 42 U.S.C. § 5401 et seq.); and
28 (2) industrialized housing, as defined in the act of May 11,
29 1972 (P.L.286, No.70), known as the "Industrialized Housing
30 Act."
19930H1505B1680 - 10 -
1 Section 4. The act is amended by adding a section to read:
2 Section 1102-C.1. Imposition of Tax on Manufactured
3 Housing.--(a) Every person, including a dealer not otherwise
4 subject to tax pursuant to section 1102-C of this article, who
5 transfers the ownership, custody or possession of the
6 manufactured housing for a consideration, shall collect from the
7 purchaser thereof a State tax at the rate of two per cent of the
8 value of the manufactured housing, which value shall be
9 determined by the total amount billed by the person transferring
10 the ownership, custody or possession. This State tax shall be
11 collected at the time the transfer of the ownership, custody or
12 possession of the manufactured housing and shall be payable to
13 the department. Payment of the tax imposed by this section may,
14 but need not, be evidenced by the affixing of a documentary
15 stamp or stamps.
16 (b) Within thirty days of the receipt of the amount of the
17 tax imposed by this section, the department shall transmit one-
18 half of such amount to the recorder of deeds in the county in
19 which is located the political subdivision where the
20 manufactured housing will be permanently attached to land or
21 connected with water, gas, electric or sewage facilities. As
22 required by section 6(c) of the act of November 1, 1971
23 (P.L.495, No.113), entitled, as amended, "An act providing for
24 the compensation of county officers in counties of the second
25 through eighth classes, for compensation of district attorneys
26 in cities and counties of the first class, for the disposition
27 of fees, for filing of bonds in certain cases and for duties of
28 certain officers," the recorder of deeds shall be the collection
29 agent for the political subdivision levying a local realty
30 transfer tax. If the political subdivision does not levy a local
19930H1505B1680 - 11 -
1 realty transfer tax, the recorder of deeds shall deposit the
2 amount of the tax in the general fund of the county.
3 (c) Manufactured housing to which this section applies, and
4 pursuant to which the tax provided for by this section has been
5 collected and paid, shall not be subject to local real estate
6 transfer taxes or deed transfer taxes pursuant to Article XI-D
7 of this act or to section 2(1) of the act of December 31, 1965
8 (P.L.1257, No.511), known as "The Local Tax Enabling Act."
9 Section 5. Section 1102-C.3 of the act is amended by adding
10 a clause to read:
11 Section 1102-C.3. Excluded Transactions.--The tax imposed by
12 section 1102-C shall not be imposed upon:
13 * * *
14 (23) The first sale of manufactured housing which is not
15 real estate.
16 Section 6. This act shall apply on January 1, 1994, with
17 respect to new manufactured housing transferred from a
18 manufacturer to a dealer or, if there is no dealer, to an
19 ultimate consumer on or after that date. This act shall apply on
20 January 1, 1994, with respect to used manufactured housing
21 transferred to an ultimate consumer on or after that date.
22 Manufactured housing transferred prior to that date shall be
23 subject to tax as provided for under existing law.
24 Section 7. This act shall take effect immediately.
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