PRINTER'S NO. 642
No. 579 Session of 2003
INTRODUCED BY GREENLEAF, C. WILLIAMS, CORMAN, LEMMOND, FUMO,
WAGNER, KASUNIC, TOMLINSON, RAFFERTY, PILEGGI, WAUGH,
SCHWARTZ, M. WHITE, ROBBINS, ORIE, TARTAGLIONE AND COSTA,
APRIL 7, 2003
REFERRED TO FINANCE, APRIL 7, 2003
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 definition of "sale at
11 retail."
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. Section 201(k)(8) of the act of March 4, 1971
15 (P.L.6, No.2), known as the Tax Reform Code of 1971, amended
16 April 23, 1998 (P.L.239, No.45), is amended and the section is
17 amended by adding clauses 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:
1 * * *
2 (k) "Sale at retail."
3 * * *
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, including resale of items purchased
12 for resale by schools, school-related organizations and
13 nonprofit associations supporting or sponsoring sports programs,
14 or (ii) such rendition of services or the transfer of tangible
15 personal property including, but not limited to, machinery and
16 equipment and parts therefor and supplies to be used or consumed
17 by the purchaser directly in the 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) and the propagation and
25 raising of horses to be used exclusively for commercial racing
26 activities.
27 (C) The producing, delivering or rendering of a public
28 utility service, or in constructing, reconstructing, remodeling,
29 repairing or maintaining the facilities which are directly used
30 in producing, delivering or rendering such service.
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1 (D) Processing as defined in clause (d) of this section.
2 The exclusions provided in paragraphs (A), (B), (C) and (D)
3 shall not apply to any vehicle required to be registered under
4 The Vehicle Code, except those vehicles used directly by a
5 public utility engaged in business as a common carrier; to
6 maintenance facilities; or to materials, supplies or equipment
7 to be used or consumed in the construction, reconstruction,
8 remodeling, repair or maintenance of real estate other than
9 directly used machinery, equipment, parts or foundations
10 therefor that may be affixed to such real estate.
11 The exclusions provided in paragraphs (A), (B), (C) and (D)
12 shall not apply to tangible personal property or services to be
13 used or consumed in managerial sales or other nonoperational
14 activities, nor to the purchase or use of tangible personal
15 property or services by any person other than the person
16 directly using the same in the operations described in
17 paragraphs (A), (B), (C) and (D) herein.
18 The exclusion provided in paragraph (C) shall not apply to
19 (i) construction materials, supplies or equipment used to
20 construct, reconstruct, remodel, repair or maintain facilities
21 not used directly by the purchaser in the production, delivering
22 or rendition of public utility service, (ii) construction
23 materials, supplies or equipment used to construct, reconstruct,
24 remodel, repair or maintain a building, road or similar
25 structure, or (iii) tools and equipment used but not installed
26 in the maintenance of facilities used directly in the
27 production, delivering or rendition of a public utility service.
28 The exclusions provided in paragraphs (A), (B), (C) and (D)
29 shall not apply to the services enumerated in clauses (k)(11)
30 through (18) and (w) through (kk), except that the exclusion
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1 provided in this subclause for farming, dairying and agriculture
2 shall apply to the service enumerated in clause (z).
3 * * *
4 (ddd) "Nonprofit association." An entity which is organized
5 as a nonprofit corporation or nonprofit unincorporated
6 association under the laws of this Commonwealth or the United
7 States or any entity which is authorized to do business in this
8 Commonwealth as a nonprofit corporation or unincorporated
9 association under the laws of this Commonwealth, including, but
10 not limited to, youth or athletic associations, volunteer fire,
11 ambulance, religious, charitable, fraternal, veterans, civic,
12 county fair or agricultural associations, or any separately
13 chartered auxiliary of the foregoing, if organized and operated
14 on a nonprofit basis.
15 (eee) "Sports program." Baseball (including softball),
16 football, basketball, soccer and any other competitive sport
17 formally recognized as a sport by the United States Olympic
18 Committee as specified by and under the jurisdiction of the
19 Amateur Sports Act of 1978 (Public Law 95-606, 36 U.S.C. § 371
20 et seq.), the Amateur Athletic Union or the National Collegiate
21 Athletic Association. The term shall be limited to a program or
22 that portion of a program that is organized for recreational
23 purposes and whose activities are substantially for such
24 purposes and which is primarily for participants who are 18
25 years of age or younger or whose 19th birthday occurs during the
26 year of participation or the competitive season, whichever is
27 longer. There shall, however, be no age limitation for programs
28 operated for persons who are physically handicapped or mentally
29 retarded.
30 Section 2. This act shall take effect in 60 days.
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