See other bills
under the
same topic
                                                       PRINTER'S NO. 924

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 762 Session of 2005


        INTRODUCED BY MANN, CALTAGIRONE, CREIGHTON, GEIST, GEORGE,
           HUTCHINSON, KILLION, S. MILLER, SAINATO, SATHER AND
           YOUNGBLOOD, MARCH 14, 2005

        REFERRED TO COMMITTEE ON FINANCE, MARCH 14, 2005

                                     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 and help supply
    12     services.

    13     The General Assembly of the Commonwealth of Pennsylvania
    14  hereby enacts as follows:
    15     Section 1.  Section 201(g)(6), (k), (o), (bb) and (cc) of the
    16  act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
    17  of 1971, amended or added August 4, 1991 (P.L.97, No.22),
    18  December 13, 1991 (P.L.373, No.40), May 7, 1997 (P.L.85, No.7),
    19  April 23, 1998 (P.L.239, No.45) and June 29, 2002 (P.L.559,
    20  No.89), are amended to read:
    21     Section 201.  Definitions.--The following words, terms and
    22  phrases when used in this Article II shall have the meaning


     1  ascribed to them in this section, except where the context
     2  clearly indicates a different meaning:
     3     * * *
     4     (g)  "Purchase price."
     5     * * *
     6     [(6)  The purchase price of employment agency services and
     7  help supply services shall be the service fee paid by the
     8  purchaser to the vendor or supplying entity. The term "service
     9  fee," as used in this subclause, shall be the total charge or
    10  fee of the vendor or supplying entity minus the costs of the
    11  supplied employe which costs are wages, salaries, bonuses and
    12  commissions, employment benefits, expense reimbursements and
    13  payroll and withholding taxes, to the extent that these costs
    14  are specifically itemized or that these costs in aggregate are
    15  stated in billings from the vendor or supplying entity. To the
    16  extent that these costs are not itemized or stated on the
    17  billings, then the service fee shall be the total charge or fee
    18  of the vendor or supplying entity.]
    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--
    20050H0762B0924                  - 2 -     

     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
    20050H0762B0924                  - 3 -     

     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) and the propagation and
    12  raising of horses to be used exclusively for commercial racing
    13  activities.
    14     (C)  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     (D)  Processing as defined in clause (d) of this section.
    19     The exclusions provided in paragraphs (A), (B), (C) and (D)
    20  shall not apply to any vehicle required to be registered under
    21  The Vehicle Code, except those vehicles used directly by a
    22  public utility engaged in 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.
    28     The exclusions provided in paragraphs (A), (B), (C) and (D)
    29  shall not apply to tangible personal property or services to be
    30  used or consumed in managerial sales or other nonoperational
    20050H0762B0924                  - 4 -     

     1  activities, nor to the purchase or use of tangible personal
     2  property or services by any person other than the person
     3  directly using the same in the operations described in
     4  paragraphs (A), (B), (C) and (D) herein.
     5     The exclusion provided in paragraph (C) shall not apply to
     6  (i) 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, (ii) construction
    10  materials, supplies or equipment used to construct, reconstruct,
    11  remodel, repair or maintain a building, road or similar
    12  structure, or (iii) tools and equipment used but not installed
    13  in the maintenance of facilities used directly in the
    14  production, delivering or rendition of a public utility service.
    15     The exclusions provided in paragraphs (A), (B), (C) and (D)
    16  shall not apply to the services enumerated in clauses (k)(11)
    17  through (18) and (w) through (kk), except that the exclusion
    18  provided in this subclause for farming, dairying and agriculture
    19  shall apply to the service enumerated in clause (z).
    20     (9)  Where tangible personal property or services are
    21  utilized for purposes constituting a "sale at retail" and for
    22  purposes excluded from the definition of "sale at retail," it
    23  shall be presumed that such tangible personal property or
    24  services are utilized for purposes constituting a "sale at
    25  retail" and subject to tax unless the user thereof proves to the
    26  department that the predominant purposes for which such tangible
    27  personal property or services are utilized do not constitute a
    28  "sale at retail."
    29     (10)  The term "sale at retail" with respect to "liquor" and
    30  "malt or brewed beverages" shall include the sale of "liquor" by
    20050H0762B0924                  - 5 -     

     1  any "Pennsylvania liquor store" to any person for any purpose,
     2  and the sale of "malt or brewed beverages" by a "manufacturer of
     3  malt or brewed beverages," "distributor" or "importing
     4  distributor" to any person for any purpose, except sales by a
     5  "manufacturer of malt or brewed beverages" to a "distributor" or
     6  "importing distributor" or sales by an "importing distributor"
     7  to a "distributor" within the meaning of the "Liquor Code." The
     8  term "sale at retail" shall not include any sale of "malt or
     9  brewed beverages" by a "retail dispenser" or any sale of
    10  "liquor" or "malt or brewed beverages" by a person holding a
    11  "retail liquor license" within the meaning of and pursuant to
    12  the provisions of the "Liquor Code," but shall include any sale
    13  of "liquor" or "malt or brewed beverages" other than pursuant to
    14  the provisions of the "Liquor Code."
    15     (11)  The rendition for a consideration of lobbying services.
    16     (12)  The rendition for a consideration of adjustment
    17  services, collection services or credit reporting services.
    18     (13)  The rendition for a consideration of secretarial or
    19  editing services.
    20     (14)  The rendition for a consideration of disinfecting or
    21  pest control services, building maintenance or cleaning
    22  services.
    23     [(15)  The rendition for a consideration of employment agency
    24  services or help supply services.]
    25     (17)  The rendition for a consideration of lawn care service.
    26     (18)  The rendition for a consideration of self-storage
    27  service.
    28     * * *
    29     (o)  "Use."
    30     (1)  The exercise of any right or power incidental to the
    20050H0762B0924                  - 6 -     

     1  ownership, custody or possession of tangible personal property
     2  and shall include, but not be limited to transportation, storage
     3  or consumption.
     4     (2)  The obtaining by a purchaser of the service of printing
     5  or imprinting of tangible personal property when such purchaser
     6  furnishes, either directly or indirectly, the articles used in
     7  the printing or imprinting.
     8     (3)  The obtaining by a purchaser of the services of (i)
     9  washing, cleaning, waxing, polishing or lubricating of motor
    10  vehicles whether or not any tangible personal property is
    11  transferred to the purchaser in conjunction with such services,
    12  and (ii) inspecting motor vehicles pursuant to the mandatory
    13  requirements of "The Vehicle Code."
    14     (4)  The obtaining by a purchaser of the service of
    15  repairing, altering, mending, pressing, fitting, dyeing,
    16  laundering, drycleaning or cleaning tangible personal property
    17  other than wearing apparel or shoes or applying or installing
    18  tangible personal property as a repair or replacement part of
    19  other tangible personal property other than wearing apparel or
    20  shoes, whether or not the services are performed directly or by
    21  any means other than by means of coin-operated self-service
    22  laundry equipment for wearing apparel or household goods, and
    23  whether or not any tangible personal property is transferred to
    24  the purchaser in conjunction therewith, except such services as
    25  are obtained in the construction, reconstruction, remodeling,
    26  repair or maintenance of real estate: Provided, however, That
    27  this subclause shall not be deemed to impose tax upon such
    28  services in the preparation for sale of new items which are
    29  excluded from the tax under clause (26) of section 204, or upon
    30  diaper service: And provided further, That the term "use" shall
    20050H0762B0924                  - 7 -     

     1  not include--
     2     (A)  Any tangible personal property acquired and kept,
     3  retained or over which power is exercised within this
     4  Commonwealth on which the taxing of the storage, use or other
     5  consumption thereof is expressly prohibited by the Constitution
     6  of the United States or which is excluded from tax under other
     7  provisions of this article.
     8     (B)  The use or consumption of tangible personal property,
     9  including but not limited to machinery and equipment and parts
    10  therefor, and supplies or the obtaining of the services
    11  described in subclauses (2), (3) and (4) of this clause directly
    12  in the operations of--
    13     (i)  The manufacture of tangible personal property.
    14     (ii)  Farming, dairying, agriculture, horticulture or
    15  floriculture when engaged in as a business enterprise. The term
    16  "farming" shall include the propagation and raising of ranch-
    17  raised furbearing animals and the propagation of game birds for
    18  commercial purposes by holders of propagation permits issued
    19  under 34 Pa.C.S. (relating to game) and the propagation and
    20  raising of horses to be used exclusively for commercial racing
    21  activities.
    22     (iii)  The producing, delivering or rendering of a public
    23  utility service, or in constructing, reconstructing, remodeling,
    24  repairing or maintaining the facilities which are directly used
    25  in producing, delivering or rendering such service.
    26     (iv)  Processing as defined in subclause (d) of this section.
    27     The exclusions provided in subparagraphs (i), (ii), (iii) and
    28  (iv) shall not apply to any vehicle required to be registered
    29  under The Vehicle Code except those vehicles directly used by a
    30  public utility engaged in the business as a common carrier; to
    20050H0762B0924                  - 8 -     

     1  maintenance facilities; or to materials, supplies or equipment
     2  to be used or consumed in the construction, reconstruction,
     3  remodeling, repair or maintenance of real estate other than
     4  directly used machinery, equipment, parts or foundations
     5  therefor that may be affixed to such real estate. The exclusions
     6  provided in subparagraphs (i), (ii), (iii) and (iv) shall not
     7  apply to tangible personal property or services to be used or
     8  consumed in managerial sales or other nonoperational activities,
     9  nor to the purchase or use of tangible personal property or
    10  services by any person other than the person directly using the
    11  same in the operations described in subparagraphs (i), (ii),
    12  (iii) and (iv).
    13     The exclusion provided in subparagraph (iii) shall not apply
    14  to (A) construction materials, supplies or equipment used to
    15  construct, reconstruct, remodel, repair or maintain facilities
    16  not used directly by the purchaser in the production, delivering
    17  or rendition of public utility service or (B) tools and
    18  equipment used but not installed in the maintenance of
    19  facilities used directly in the production, delivering or
    20  rendition of a public utility service.
    21     The exclusion provided in subparagraphs (i), (ii), (iii) and
    22  (iv) shall not apply to the services enumerated in clauses
    23  (o)(9) through (16) and (w) through (kk), except that the
    24  exclusion provided in subparagraph (ii) for farming, dairying
    25  and agriculture shall apply to the service enumerated in clause
    26  (z).
    27     (5)  Where tangible personal property or services are
    28  utilized for purposes constituting a "use," as herein defined,
    29  and for purposes excluded from the definition of "use," it shall
    30  be presumed that such property or services are utilized for
    20050H0762B0924                  - 9 -     

     1  purposes constituting a "sale at retail" and subject to tax
     2  unless the user thereof proves to the department that the
     3  predominant purposes for which such property or services are
     4  utilized do not constitute a "sale at retail."
     5     (6)  The term "use" with respect to "liquor" and "malt or
     6  brewed beverages" shall include the purchase of "liquor" from
     7  any "Pennsylvania liquor store" by any person for any purpose
     8  and the purchase of "malt or brewed beverages" from a
     9  "manufacturer of malt or brewed beverages," "distributor" or
    10  "importing distributor" by any person for any purpose, except
    11  purchases from a "manufacturer of malt or brewed beverages" by a
    12  "distributor" or "importing distributor," or purchases from an
    13  "importing distributor" by a "distributor" within the meaning of
    14  the "Liquor Code." The term "use" shall not include any purchase
    15  of "malt or brewed beverages" from a "retail dispenser" or any
    16  purchase of "liquor" or "malt or brewed beverages" from a person
    17  holding a "retail liquor license" within the meaning of and
    18  pursuant to the provisions of the "Liquor Code," but shall
    19  include the exercise of any right or power incidental to the
    20  ownership, custody or possession of "liquor" or "malt or brewed
    21  beverages" obtained by the person exercising such right or power
    22  in any manner other than pursuant to the provisions of the
    23  "Liquor Code."
    24     (7)  The use of tangible personal property purchased at
    25  retail upon which the services described in subclauses (2), (3)
    26  and (4) of this clause have been performed shall be deemed to be
    27  a use of said services by the person using said property.
    28     (8)  The term "use" shall not include the providing of a
    29  motor vehicle to a nonprofit private or public school to be used
    30  by such a school for the sole purpose of driver education.
    20050H0762B0924                 - 10 -     

     1     (9)  The obtaining by the purchaser of lobbying services.
     2     (10)  The obtaining by the purchaser of adjustment services,
     3  collection services or credit reporting services.
     4     (11)  The obtaining by the purchaser of secretarial or
     5  editing services.
     6     (12)  The obtaining by the purchaser of disinfecting or pest
     7  control services, building maintenance or cleaning services.
     8     [(13)  The obtaining by the purchaser of employment agency
     9  services or help supply services.]
    10     (15)  The obtaining by the purchaser of lawn care service.
    11     (16)  The obtaining by the purchaser of self-storage service.
    12     (17)  The obtaining by a construction contractor of tangible
    13  personal property or services provided to tangible personal
    14  property which will be used pursuant to a construction contract
    15  whether or not the tangible personal property or services are
    16  transferred.
    17     (18)  The obtaining of mobile telecommunications service by a
    18  customer.
    19     * * *
    20     [(bb)  "Employment agency services."  Providing employment
    21  services to a prospective employer or employe other than
    22  employment services provided by theatrical employment agencies
    23  and motion picture casting bureaus. Such services shall include,
    24  but are not limited to, services of the type provided by
    25  employment agencies, executive placing services and labor
    26  contractor employment agencies other than farm labor.
    27     (cc)  "Help supply services."  Providing temporary or
    28  continuing help where the help supplied is on the payroll of the
    29  supplying person or entity, but is under the supervision of the
    30  individual or business to which help is furnished. Such services
    20050H0762B0924                 - 11 -     

     1  include, but are not limited to, service of a type provided by
     2  labor and manpower pools, employe leasing services, office help
     3  supply services, temporary help services, usher services,
     4  modeling services or fashion show model supply services. Such
     5  services shall not include providing farm labor services. The
     6  term shall not include human health-related services, including
     7  nursing, home health care and personal care. As used in this
     8  clause, "personal care" shall include providing at least one of
     9  the following types of assistance to persons with limited
    10  ability for self-care:
    11     (1)  dressing, bathing or feeding;
    12     (2)  supervising self-administered medication;
    13     (3)  transferring a person to or from a bed or wheelchair; or
    14     (4)  routine housekeeping chores when provided in conjunction
    15  with and supplied by the same provider of the assistance listed
    16  in subclause (1), (2) or (3).]
    17     * * *
    18     Section 2.  This act shall take effect July 1, 2005.








    A25L72MSP/20050H0762B0924       - 12 -