PRINTER'S NO. 197
No. 205 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 employment agency services or help supply
12 services.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Section 201(k), (o), (bb) and (cc) of the act of
16 March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
17 1971, amended or added August 4, 1991 (P.L.97, No.22) and
18 December 13, 1991 (P.L.373, No.40), are amended to read:
19 Section 201. Definitions.--The following words, terms and
20 phrases when used in this Article II shall have the meaning
21 ascribed to them in this section, except where the context
22 clearly indicates a different meaning:
1 * * *
2 (k) "Sale at retail."
3 (1) Any transfer, for a consideration, of the ownership,
4 custody or possession of tangible personal property, including
5 the grant of a license to use or consume whether personal
6 property, including the grant of a license to use or consume
7 whether such transfer be absolute or conditional and by
8 whatsoever means the same shall have been effected.
9 (2) The rendition of the service of printing or imprinting
10 of tangible personal property for a consideration for persons
11 who furnish, either directly or indirectly the materials used in
12 the printing or imprinting.
13 (3) The rendition for a consideration of the service of--
14 (i) Washing, cleaning, waxing, polishing or lubricating of
15 motor vehicles of another, whether or not any tangible personal
16 property is transferred in conjunction therewith; and
17 (ii) Inspecting motor vehicles pursuant to the mandatory
18 requirements of "The Vehicle Code."
19 (4) The rendition for a consideration of the service of
20 repairing, altering, mending, pressing, fitting, dyeing,
21 laundering, drycleaning or cleaning tangible personal property
22 other than wearing apparel or shoes, or applying or installing
23 tangible personal property as a repair or replacement part of
24 other tangible personal property except wearing apparel or shoes
25 for a consideration, whether or not the services are performed
26 directly or by any means other than by coin-operated self-
27 service laundry equipment for wearing apparel or household goods
28 and whether or not any tangible personal property is transferred
29 in conjunction therewith, except such services as are rendered
30 in the construction, reconstruction, remodeling, repair or
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1 maintenance of real estate: Provided, however, That this
2 subclause shall not be deemed to impose tax upon such services
3 in the preparation for sale of new items which are excluded from
4 the tax under clause (26) of section 204, or upon diaper
5 service.
6 (8) Any retention of possession, custody or a license to use
7 or consume tangible personal property or any further obtaining
8 of services described in subclauses (2), (3) and (4) of this
9 clause pursuant to a rental or service contract or other
10 arrangement (other than as security).
11 The term "sale at retail" shall not include (i) any such
12 transfer of tangible personal property or rendition of services
13 for the purpose of resale, or (ii) such rendition of services or
14 the transfer of tangible personal property including, but not
15 limited to, machinery and equipment and parts therefor and
16 supplies to be used or consumed by the purchaser directly in the
17 operations of--
18 (A) The manufacture of tangible personal property;
19 (B) Farming, dairying, agriculture, horticulture or
20 floriculture when engaged in as a business enterprise. The term
21 "farming" shall include the propagation and raising of ranch
22 raised fur-bearing animals and the propagation of game birds for
23 commercial purposes by holders of propagation permits issued
24 under 34 Pa.C.S. (relating to game);
25 (C) The producing, delivering or rendering of a public
26 utility service, or in constructing, reconstructing, remodeling,
27 repairing or maintaining the facilities which are directly used
28 in producing, delivering or rendering such service;
29 (D) Processing as defined in clause (d) of this section.
30 The exclusions provided in paragraphs (A), (B), (C) and (D)
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1 shall not apply to any vehicle required to be registered under
2 The Vehicle Code, except those vehicles used directly by a
3 public utility engaged in business as a common carrier; to
4 maintenance facilities; or to materials, supplies or equipment
5 to be used or consumed in the construction, reconstruction,
6 remodeling, repair or maintenance of real estate other than
7 directly used machinery, equipment, parts or foundations
8 therefor that may be affixed to such real estate.
9 The exclusions provided in paragraphs (A), (B), (C) and (D)
10 shall not apply to tangible personal property or services to be
11 used or consumed in managerial sales or other nonoperational
12 activities, nor to the purchase or use of tangible personal
13 property or services by any person other than the person
14 directly using the same in the operations described in
15 paragraphs (A), (B), (C) and (D) herein.
16 The exclusion provided in paragraph (C) shall not apply to
17 (i) construction materials, supplies or equipment used to
18 construct, reconstruct, remodel, repair or maintain facilities
19 not used directly by the purchaser in the production, delivering
20 or rendition of public utility service, (ii) construction
21 materials, supplies or equipment used to construct, reconstruct,
22 remodel, repair or maintain a building, road or similar
23 structure, or (iii) tools and equipment used but not installed
24 in the maintenance of facilities used directly in the
25 production, delivering or rendition of a public utility service.
26 The exclusions provided in paragraphs (A), (B), (C) and (D)
27 shall not apply to the services enumerated in clauses (k)(11)
28 through (18) and (w) through (kk), except that the exclusion
29 provided in this subclause for farming, dairying and agriculture
30 shall apply to the service enumerated in clause (z).
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1 (9) Where tangible personal property or services are
2 utilized for purposes constituting a "sale at retail" and for
3 purposes excluded from the definition of "sale at retail," it
4 shall be presumed that such tangible personal property or
5 services are utilized for purposes constituting a "sale at
6 retail" and subject to tax unless the user thereof proves to the
7 department that the predominant purposes for which such tangible
8 personal property or services are utilized do not constitute a
9 "sale at retail."
10 (10) The term "sale at retail" with respect to "liquor" and
11 "malt or brewed beverages" shall include the sale of "liquor" by
12 any "Pennsylvania liquor store" to any person for any purpose,
13 and the sale of "malt or brewed beverages" by a "manufacturer of
14 malt or brewed beverages," "distributor" or "importing
15 distributor" to any person for any purpose, except sales by a
16 "manufacturer of malt or brewed beverages" to a "distributor" or
17 "importing distributor" or sales by an "importing distributor"
18 to a "distributor" within the meaning of the "Liquor Code." The
19 term "sale at retail" shall not include any sale of "malt or
20 brewed beverages" by a "retail dispenser" or any sale of
21 "liquor" or "malt or brewed beverages" by a person holding a
22 "retail liquor license" within the meaning of and pursuant to
23 the provisions of the "Liquor Code," but shall include any sale
24 of "liquor" or "malt or brewed beverages" other than pursuant to
25 the provisions of the "Liquor Code."
26 (11) The rendition for a consideration of lobbying services.
27 (12) The rendition for a consideration of adjustment
28 services, collection services or credit reporting services.
29 (13) The rendition for a consideration of secretarial or
30 editing services.
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1 (14) The rendition for a consideration of disinfecting or
2 pest control services, building maintenance or cleaning
3 services.
4 [(15) The rendition for a consideration of employment agency
5 services or help supply services.]
6 (16) The rendition for a consideration of computer
7 programming services; computer-integrated systems design
8 services; computer processing, data preparation or processing
9 services; information retrieval services; computer facilities
10 management services; or other computer-related services. At a
11 minimum, such services shall not include services that are part
12 of electronic fund transfers, electronic financial transactions
13 or services, banking or trust services, or management or
14 administrative services, including transfer agency, shareholder,
15 custodial and portfolio accounting services, provided directly
16 to any entity that duly qualifies to be taxed as a regulated
17 investment company or a real estate investment trust under the
18 provisions of the Internal Revenue Code of 1986 (Public Law 99-
19 514, 26 U.S.C. § 1 et seq.) or to an entity that provides such
20 services to an entity so qualifying.
21 (17) The rendition for a consideration of lawn care service.
22 (18) The rendition for a consideration of self-storage
23 service.
24 * * *
25 (o) "Use."
26 (1) The exercise of any right or power incidental to the
27 ownership, custody or possession of tangible personal property
28 and shall include, but not be limited to transportation, storage
29 or consumption.
30 (2) The obtaining by a purchaser of the service of printing
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1 or imprinting of tangible personal property when such purchaser
2 furnishes, either directly or indirectly, the articles used in
3 the printing or imprinting.
4 (3) The obtaining by a purchaser of the services of (i)
5 washing, cleaning, waxing, polishing or lubricating of motor
6 vehicles whether or not any tangible personal property is
7 transferred to the purchaser in conjunction with such services,
8 and (ii) inspecting motor vehicles pursuant to the mandatory
9 requirements of "The Vehicle Code."
10 (4) The obtaining by a purchaser of the service of
11 repairing, altering, mending, pressing, fitting, dyeing,
12 laundering, drycleaning or cleaning tangible personal property
13 other than wearing apparel or shoes or applying or installing
14 tangible personal property as a repair or replacement part of
15 other tangible personal property other than wearing apparel or
16 shoes, whether or not the services are performed directly or by
17 any means other than by means of coin-operated self-service
18 laundry equipment for wearing apparel or household goods, and
19 whether or not any tangible personal property is transferred to
20 the purchaser in conjunction therewith, except such services as
21 are obtained in the construction, reconstruction, remodeling,
22 repair or maintenance of real estate: Provided, however, That
23 this subclause shall not be deemed to impose tax upon such
24 services in the preparation for sale of new items which are
25 excluded from the tax under clause (26) of section 204, or upon
26 diaper service: And provided further, That the term "use" shall
27 not include--
28 (A) Any tangible personal property acquired and kept,
29 retained or over which power is exercised within this
30 Commonwealth on which the taxing of the storage, use or other
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1 consumption thereof is expressly prohibited by the Constitution
2 of the United States or which is excluded from tax under other
3 provisions of this article.
4 (B) The use or consumption of tangible personal property,
5 including but not limited to machinery and equipment and parts
6 therefor, and supplies or the obtaining of the services
7 described in subclauses (2), (3) and (4) of this clause directly
8 in the operations of--
9 (i) The manufacture of tangible personal property;
10 (ii) Farming, dairying, agriculture, horticulture or
11 floriculture when engaged in as a business enterprise. The term
12 "farming" shall include the propagation and raising of ranch-
13 raised furbearing animals and the propagation of game birds for
14 commercial purposes by holders of propagation permits issued
15 under 34 Pa.C.S. (relating to game);
16 (iii) The producing, delivering or rendering of a public
17 utility service, or in constructing, reconstructing, remodeling,
18 repairing or maintaining the facilities which are directly used
19 in producing, delivering or rendering such service;
20 (iv) Processing as defined in subclause (d) of this section.
21 The exclusions provided in subparagraphs (i), (ii), (iii) and
22 (iv) shall not apply to any vehicle required to be registered
23 under The Vehicle Code except those vehicles directly used by a
24 public utility engaged in the business as a common carrier; to
25 maintenance facilities; or to materials, supplies or equipment
26 to be used or consumed in the construction, reconstruction,
27 remodeling, repair or maintenance of real estate other than
28 directly used machinery, equipment, parts or foundations
29 therefor that may be affixed to such real estate. The exclusions
30 provided in subparagraphs (i), (ii), (iii) and (iv) shall not
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1 apply to tangible personal property or services to be used or
2 consumed in managerial sales or other nonoperational activities,
3 nor to the purchase or use of tangible personal property or
4 services by any person other than the person directly using the
5 same in the operations described in subparagraphs (i), (ii),
6 (iii) and (iv).
7 The exclusion provided in subparagraph (iii) shall not apply
8 to (A) construction materials, supplies or equipment used to
9 construct, reconstruct, remodel, repair or maintain facilities
10 not used directly by the purchaser in the production, delivering
11 or rendition of public utility service or (B) tools and
12 equipment used but not installed in the maintenance of
13 facilities used directly in the production, delivering or
14 rendition of a public utility service.
15 The exclusion provided in subparagraphs (i), (ii), (iii) and
16 (iv) shall not apply to the services enumerated in clauses
17 (o)(9) through (16) and (w) through (kk), except that the
18 exclusion provided in subparagraph (ii) for farming, dairying
19 and agriculture shall apply to the service enumerated in clause
20 (z).
21 (5) Where tangible personal property or services are
22 utilized for purposes constituting a "use," as herein defined,
23 and for purposes excluded from the definition of "use," it shall
24 be presumed that such property or services are utilized for
25 purposes constituting a "sale at retail" and subject to tax
26 unless the user thereof proves to the department that the
27 predominant purposes for which such property or services are
28 utilized do not constitute a "sale at retail."
29 (6) The term "use" with respect to "liquor" and "malt or
30 brewed beverages" shall include the purchase of "liquor" from
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1 any "Pennsylvania liquor store" by any person for any purpose
2 and the purchase of "malt or brewed beverages" from a
3 "manufacturer of malt or brewed beverages," "distributor" or
4 "importing distributor" by any person for any purpose, except
5 purchases from a "manufacturer of malt or brewed beverages" by a
6 "distributor" or "importing distributor," or purchases from an
7 "importing distributor" by a "distributor" within the meaning of
8 the "Liquor Code." The term "use" shall not include any purchase
9 of "malt or brewed beverages" from a "retail dispenser" or any
10 purchase of "liquor" or "malt or brewed beverages" from a person
11 holding a "retail liquor license" within the meaning of and
12 pursuant to the provisions of the "Liquor Code," but shall
13 include the exercise of any right or power incidental to the
14 ownership, custody or possession of "liquor" or "malt or brewed
15 beverages" obtained by the person exercising such right or power
16 in any manner other than pursuant to the provisions of the
17 "Liquor Code."
18 (7) The use of tangible personal property purchased at
19 retail upon which the services described in subclauses (2), (3)
20 and (4) of this clause have been performed shall be deemed to be
21 a use of said services by the person using said property.
22 (8) The term "use" shall not include the providing of a
23 motor vehicle to a nonprofit private or public school to be used
24 by such a school for the sole purpose of driver education.
25 (9) The obtaining by the purchaser of lobbying services.
26 (10) The obtaining by the purchaser of adjustment services,
27 collection services or credit reporting services.
28 (11) The obtaining by the purchaser of secretarial or
29 editing services.
30 (12) The obtaining by the purchaser of disinfecting or pest
19970S0205B0197 - 10 -
1 control services, building maintenance or cleaning services.
2 [(13) The obtaining by the purchaser of employment agency
3 services or help supply services.]
4 (14) The obtaining by the purchaser of computer programming
5 services; computer-integrated systems design services; computer
6 processing, data preparation or processing services; information
7 retrieval services; computer facilities management services; or
8 other computer-related services. At a minimum, such services
9 shall not include services that are part of electronic fund
10 transfers, electronic financial transactions or services,
11 banking or trust services, or management or administrative
12 services, including transfer agency, shareholder, custodial and
13 portfolio accounting services, provided directly to any entity
14 that duly qualifies to be taxed as a regulated investment
15 company or a real estate investment trust under the provisions
16 of the Internal Revenue Code of 1986 (Public Law 99-514, 26
17 U.S.C. § 1 et seq.) or to an entity that provides such services
18 to an entity so qualifying.
19 (15) The obtaining by the purchaser of lawn care service.
20 (16) The obtaining by the purchaser of self-storage service.
21 * * *
22 [(bb) "Employment agency services." Providing employment
23 services to a prospective employer or employe other than
24 employment services provided by theatrical employment agencies
25 and motion picture casting bureaus. Such services shall include,
26 but are not limited to, services of the type provided by
27 employment agencies, executive placing services and labor
28 contractor employment agencies other than farm labor.
29 (cc) "Help supply services." Providing temporary or
30 continuing help where the help supplied is on the payroll of the
19970S0205B0197 - 11 -
1 supplying person or entity, but is under the supervision of the
2 individual or business to which help is furnished. Such services
3 include, but are not limited to, service of a type provided by
4 labor and manpower pools, employe leasing services, office help
5 supply services, temporary help services, usher services,
6 modeling services or fashion show model supply services. Such
7 services shall not include providing farm labor services. The
8 term shall not include human health-related services, including
9 nursing, home health care and personal care. As used in this
10 clause, "personal care" shall include providing at least one of
11 the following types of assistance to persons with limited
12 ability for self-care:
13 (1) dressing, bathing or feeding;
14 (2) supervising self-administered medication;
15 (3) transferring a person to or from a bed or wheelchair; or
16 (4) routine housekeeping chores when provided in conjunction
17 with and supplied by the same provider of the assistance listed
18 in subclause (1), (2) or (3).]
19 * * *
20 Section 2. This act shall take effect immediately.
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