PRINTER'S NO. 192
No. 199 Session of 1997
INTRODUCED BY TILGHMAN, JANUARY 23, 1997
REFERRED TO FINANCE, JANUARY 23, 1997
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," repealing certain provisions imposing sales and
11 use tax on secretarial or editing services.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. Section 201(k), (o) and (y) of the act of March
15 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971,
16 amended or added August 4, 1991 (P.L.97, No.22) and December 13,
17 1991 (P.L.373, No.40), are amended to read:
18 Section 201. Definitions.--The following words, terms and
19 phrases when used in this Article II shall have the meaning
20 ascribed to them in this section, except where the context
21 clearly indicates a different meaning:
22 * * *
1 (k) "Sale at retail."
2 (1) Any transfer, for a consideration, of the ownership,
3 custody or possession of tangible personal property, including
4 the grant of a license to use or consume whether such transfer
5 be absolute or conditional and by whatsoever means the same
6 shall have been effected.
7 (2) The rendition of the service of printing or imprinting
8 of tangible personal property for a consideration for persons
9 who furnish, either directly or indirectly the materials used in
10 the printing or imprinting.
11 (3) The rendition for a consideration of the service of--
12 (i) Washing, cleaning, waxing, polishing or lubricating of
13 motor vehicles of another, whether or not any tangible personal
14 property is transferred in conjunction therewith; and
15 (ii) Inspecting motor vehicles pursuant to the mandatory
16 requirements of "The Vehicle Code."
17 (4) The rendition for a consideration of the service of
18 repairing, altering, mending, pressing, fitting, dyeing,
19 laundering, drycleaning or cleaning tangible personal property
20 other than wearing apparel or shoes, or applying or installing
21 tangible personal property as a repair or replacement part of
22 other tangible personal property except wearing apparel or shoes
23 for a consideration, whether or not the services are performed
24 directly or by any means other than by coin-operated self-
25 service laundry equipment for wearing apparel or household goods
26 and whether or not any tangible personal property is transferred
27 in conjunction therewith, except such services as are rendered
28 in the construction, reconstruction, remodeling, repair or
29 maintenance of real estate: Provided, however, That this
30 subclause shall not be deemed to impose tax upon such services
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1 in the preparation for sale of new items which are excluded from
2 the tax under clause (26) of section 204, or upon diaper
3 service.
4 (8) Any retention of possession, custody or a license to use
5 or consume tangible personal property or any further obtaining
6 of services described in subclauses (2), (3) and (4) of this
7 clause pursuant to a rental or service contract or other
8 arrangement (other than as security).
9 The term "sale at retail" shall not include (i) any such
10 transfer of tangible personal property or rendition of services
11 for the purpose of resale, or (ii) such rendition of services or
12 the transfer of tangible personal property including, but not
13 limited to, machinery and equipment and parts therefor and
14 supplies to be used or consumed by the purchaser directly in the
15 operations of--
16 (A) The manufacture of tangible personal property;
17 (B) Farming, dairying, agriculture, horticulture or
18 floriculture when engaged in as a business enterprise. The term
19 "farming" shall include the propagation and raising of ranch
20 raised fur-bearing animals and the propagation of game birds for
21 commercial purposes by holders of propagation permits issued
22 under 34 Pa.C.S. (relating to game);
23 (C) The producing, delivering or rendering of a public
24 utility service, or in constructing, reconstructing, remodeling,
25 repairing or maintaining the facilities which are directly used
26 in producing, delivering or rendering such service;
27 (D) Processing as defined in clause (d) of this section.
28 The exclusions provided in paragraphs (A), (B), (C) and (D)
29 shall not apply to any vehicle required to be registered under
30 The Vehicle Code, except those vehicles used directly by a
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1 public utility engaged in business as a common carrier; to
2 maintenance facilities; or to materials, supplies or equipment
3 to be used or consumed in the construction, reconstruction,
4 remodeling, repair or maintenance of real estate other than
5 directly used machinery, equipment, parts or foundations
6 therefor that may be affixed to such real estate.
7 The exclusions provided in paragraphs (A), (B), (C) and (D)
8 shall not apply to tangible personal property or services to be
9 used or consumed in managerial sales or other nonoperational
10 activities, nor to the purchase or use of tangible personal
11 property or services by any person other than the person
12 directly using the same in the operations described in
13 paragraphs (A), (B), (C) and (D) herein.
14 The exclusion provided in paragraph (C) shall not apply to
15 (i) construction materials, supplies or equipment used to
16 construct, reconstruct, remodel, repair or maintain facilities
17 not used directly by the purchaser in the production, delivering
18 or rendition of public utility service, (ii) construction
19 materials, supplies or equipment used to construct, reconstruct,
20 remodel, repair or maintain a building, road or similar
21 structure, or (iii) tools and equipment used but not installed
22 in the maintenance of facilities used directly in the
23 production, delivering or rendition of a public utility service.
24 The exclusions provided in paragraphs (A), (B), (C) and (D)
25 shall not apply to the services enumerated in clauses (k)(11)
26 through (18) and (w) through (kk), except that the exclusion
27 provided in this subclause for farming, dairying and agriculture
28 shall apply to the service enumerated in clause (z).
29 (9) Where tangible personal property or services are
30 utilized for purposes constituting a "sale at retail" and for
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1 purposes excluded from the definition of "sale at retail," it
2 shall be presumed that such tangible personal property or
3 services are utilized for purposes constituting a "sale at
4 retail" and subject to tax unless the user thereof proves to the
5 department that the predominant purposes for which such tangible
6 personal property or services are utilized do not constitute a
7 "sale at retail."
8 (10) The term "sale at retail" with respect to "liquor" and
9 "malt or brewed beverages" shall include the sale of "liquor" by
10 any "Pennsylvania liquor store" to any person for any purpose,
11 and the sale of "malt or brewed beverages" by a "manufacturer of
12 malt or brewed beverages," "distributor" or "importing
13 distributor" to any person for any purpose, except sales by a
14 "manufacturer of malt or brewed beverages" to a "distributor" or
15 "importing distributor" or sales by an "importing distributor"
16 to a "distributor" within the meaning of the "Liquor Code." The
17 term "sale at retail" shall not include any sale of "malt or
18 brewed beverages" by a "retail dispenser" or any sale of
19 "liquor" or "malt or brewed beverages" by a person holding a
20 "retail liquor license" within the meaning of and pursuant to
21 the provisions of the "Liquor Code," but shall include any sale
22 of "liquor" or "malt or brewed beverages" other than pursuant to
23 the provisions of the "Liquor Code."
24 (11) The rendition for a consideration of lobbying services.
25 (12) The rendition for a consideration of adjustment
26 services, collection services or credit reporting services.
27 [(13) The rendition for a consideration of secretarial or
28 editing services.]
29 (14) The rendition for a consideration of disinfecting or
30 pest control services, building maintenance or cleaning
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1 services.
2 (15) The rendition for a consideration of employment agency
3 services or help supply services.
4 (16) The rendition for a consideration of computer
5 programming services; computer-integrated systems design
6 services; computer processing, data preparation or processing
7 services; information retrieval services; computer facilities
8 management services; or other computer-related services. At a
9 minimum, such services shall not include services that are part
10 of electronic fund transfers, electronic financial transactions
11 or services, banking or trust services, or management or
12 administrative services, including transfer agency, shareholder,
13 custodial and portfolio accounting services, provided directly
14 to any entity that duly qualifies to be taxed as a regulated
15 investment company or a real estate investment trust under the
16 provisions of the Internal Revenue Code of 1986 (Public Law 99-
17 514, 26 U.S.C. § 1 et seq.) or to an entity that provides such
18 services to an entity so qualifying.
19 (17) The rendition for a consideration of lawn care service.
20 (18) The rendition for a consideration of self-storage
21 service.
22 * * *
23 (o) "Use."
24 (1) The exercise of any right or power incidental to the
25 ownership, custody or possession of tangible personal property
26 and shall include, but not be limited to transportation, storage
27 or consumption.
28 (2) The obtaining by a purchaser of the service of printing
29 or imprinting of tangible personal property when such purchaser
30 furnishes, either directly or indirectly, the articles used in
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1 the printing or imprinting.
2 (3) The obtaining by a purchaser of the services of (i)
3 washing, cleaning, waxing, polishing or lubricating of motor
4 vehicles whether or not any tangible personal property is
5 transferred to the purchaser in conjunction with such services,
6 and (ii) inspecting motor vehicles pursuant to the mandatory
7 requirements of "The Vehicle Code."
8 (4) The obtaining by a purchaser of the service of
9 repairing, altering, mending, pressing, fitting, dyeing,
10 laundering, drycleaning or cleaning tangible personal property
11 other than wearing apparel or shoes or applying or installing
12 tangible personal property as a repair or replacement part of
13 other tangible personal property other than wearing apparel or
14 shoes, whether or not the services are performed directly or by
15 any means other than by means of coin-operated self-service
16 laundry equipment for wearing apparel or household goods, and
17 whether or not any tangible personal property is transferred to
18 the purchaser in conjunction therewith, except such services as
19 are obtained in the construction, reconstruction, remodeling,
20 repair or maintenance of real estate: Provided, however, That
21 this subclause shall not be deemed to impose tax upon such
22 services in the preparation for sale of new items which are
23 excluded from the tax under clause (26) of section 204, or upon
24 diaper service: And provided further, That the term "use" shall
25 not include--
26 (A) Any tangible personal property acquired and kept,
27 retained or over which power is exercised within this
28 Commonwealth on which the taxing of the storage, use or other
29 consumption thereof is expressly prohibited by the Constitution
30 of the United States or which is excluded from tax under other
19970S0199B0192 - 7 -
1 provisions of this article.
2 (B) The use or consumption of tangible personal property,
3 including but not limited to machinery and equipment and parts
4 therefor, and supplies or the obtaining of the services
5 described in subclauses (2), (3) and (4) of this clause directly
6 in the operations of--
7 (i) The manufacture of tangible personal property;
8 (ii) Farming, dairying, agriculture, horticulture or
9 floriculture when engaged in as a business enterprise. The term
10 "farming" shall include the propagation and raising of ranch-
11 raised furbearing animals and the propagation of game birds for
12 commercial purposes by holders of propagation permits issued
13 under 34 Pa.C.S. (relating to game);
14 (iii) The producing, delivering or rendering of a public
15 utility service, or in constructing, reconstructing, remodeling,
16 repairing or maintaining the facilities which are directly used
17 in producing, delivering or rendering such service;
18 (iv) Processing as defined in subclause (d) of this section.
19 The exclusions provided in subparagraphs (i), (ii), (iii) and
20 (iv) shall not apply to any vehicle required to be registered
21 under The Vehicle Code except those vehicles directly used by a
22 public utility engaged in the business as a common carrier; to
23 maintenance facilities; or to materials, supplies or equipment
24 to be used or consumed in the construction, reconstruction,
25 remodeling, repair or maintenance of real estate other than
26 directly used machinery, equipment, parts or foundations
27 therefor that may be affixed to such real estate. The exclusions
28 provided in subparagraphs (i), (ii), (iii) and (iv) shall not
29 apply to tangible personal property or services to be used or
30 consumed in managerial sales or other nonoperational activities,
19970S0199B0192 - 8 -
1 nor to the purchase or use of tangible personal property or
2 services by any person other than the person directly using the
3 same in the operations described in subparagraphs (i), (ii),
4 (iii) and (iv).
5 The exclusion provided in subparagraph (iii) shall not apply
6 to (A) construction materials, supplies or equipment used to
7 construct, reconstruct, remodel, repair or maintain facilities
8 not used directly by the purchaser in the production, delivering
9 or rendition of public utility service or (B) tools and
10 equipment used but not installed in the maintenance of
11 facilities used directly in the production, delivering or
12 rendition of a public utility service.
13 The exclusion provided in subparagraphs (i), (ii), (iii) and
14 (iv) shall not apply to the services enumerated in clauses
15 (o)(9) through (16) and (w) through (kk), except that the
16 exclusion provided in subparagraph (ii) for farming, dairying
17 and agriculture shall apply to the service enumerated in clause
18 (z).
19 (5) Where tangible personal property or services are
20 utilized for purposes constituting a "use," as herein defined,
21 and for purposes excluded from the definition of "use," it shall
22 be presumed that such property or services are utilized for
23 purposes constituting a "sale at retail" and subject to tax
24 unless the user thereof proves to the department that the
25 predominant purposes for which such property or services are
26 utilized do not constitute a "sale at retail."
27 (6) The term "use" with respect to "liquor" and "malt or
28 brewed beverages" shall include the purchase of "liquor" from
29 any "Pennsylvania liquor store" by any person for any purpose
30 and the purchase of "malt or brewed beverages" from a
19970S0199B0192 - 9 -
1 "manufacturer of malt or brewed beverages," "distributor" or
2 "importing distributor" by any person for any purpose, except
3 purchases from a "manufacturer of malt or brewed beverages" by a
4 "distributor" or "importing distributor," or purchases from an
5 "importing distributor" by a "distributor" within the meaning of
6 the "Liquor Code." The term "use" shall not include any purchase
7 of "malt or brewed beverages" from a "retail dispenser" or any
8 purchase of "liquor" or "malt or brewed beverages" from a person
9 holding a "retail liquor license" within the meaning of and
10 pursuant to the provisions of the "Liquor Code," but shall
11 include the exercise of any right or power incidental to the
12 ownership, custody or possession of "liquor" or "malt or brewed
13 beverages" obtained by the person exercising such right or power
14 in any manner other than pursuant to the provisions of the
15 "Liquor Code."
16 (7) The use of tangible personal property purchased at
17 retail upon which the services described in subclauses (2), (3)
18 and (4) of this clause have been performed shall be deemed to be
19 a use of said services by the person using said property.
20 (8) The term "use" shall not include the providing of a
21 motor vehicle to a nonprofit private or public school to be used
22 by such a school for the sole purpose of driver education.
23 (9) The obtaining by the purchaser of lobbying services.
24 (10) The obtaining by the purchaser of adjustment services,
25 collection services or credit reporting services.
26 [(11) The obtaining by the purchaser of secretarial or
27 editing services.]
28 (12) The obtaining by the purchaser of disinfecting or pest
29 control services, building maintenance or cleaning services.
30 (13) The obtaining by the purchaser of employment agency
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1 services or help supply services.
2 (14) The obtaining by the purchaser of computer programming
3 services; computer-integrated systems design services; computer
4 processing, data preparation or processing services; information
5 retrieval services; computer facilities management services; or
6 other computer-related services. At a minimum, such services
7 shall not include services that are part of electronic fund
8 transfers, electronic financial transactions or services,
9 banking or trust services, or management or administrative
10 services, including transfer agency, shareholder, custodial and
11 portfolio accounting services, provided directly to any entity
12 that duly qualifies to be taxed as a regulated investment
13 company or a real estate investment trust under the provisions
14 of the Internal Revenue Code of 1986 (Public Law 99-514, 26
15 U.S.C. § 1 et seq.) or to an entity that provides such services
16 to an entity so qualifying.
17 (15) The obtaining by the purchaser of lawn care service.
18 (16) The obtaining by the purchaser of self-storage service.
19 * * *
20 [(y) "Secretarial or editing services." Providing services
21 which include, but are not limited to, editing, letter writing,
22 proofreading, resume writing, typing or word processing. Such
23 services shall not include court reporting and stenographic
24 services.]
25 * * *
26 Section 2. This act shall take effect immediately.
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