PRINTER'S NO. 924
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 -