PRINTER'S NO. 2009
No. 1580 Session of 2007
INTRODUCED BY CALTAGIRONE, CLYMER, DALEY, GEIST, HENNESSEY,
SANTONI, SEIP, SIPTROTH, SURRA AND THOMAS, JUNE 20, 2007
REFERRED TO COMMITTEE ON FINANCE, JUNE 20, 2007
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, in sales and use tax, for
11 imposition of tax, for computation of tax and for alternative
12 imposition of tax and credits; providing, in sales and use
13 tax, for the deposit of certain sales tax revenue; further
14 providing, in personal income tax, for imposition of income
15 tax; and providing, in personal income tax, for the deposit
16 of the additional personal income tax revenue.
17 The General Assembly of the Commonwealth of Pennsylvania
18 hereby enacts as follows:
19 Section 1. Section 202 of the act of March 4, 1971 (P.L.6,
20 No.2), known as the Tax Reform Code of 1971, amended September
21 9, 1971 (P.L.437, No.105), October 4, 1978 (P.L.987, No.201),
22 April 23, 1998 (P.L.239, No.45), May 24, 2000 (P.L.106, No.23)
23 and June 29, 2002 (P.L.559, No.89), is amended to read:
24 Section 202. Imposition of Tax.--(a) There is hereby
1 imposed upon each separate sale at retail of tangible personal
2 property or services, as defined herein, within this
3 Commonwealth a tax [of six per cent] as prescribed under
4 subsection (h) of the purchase price, which tax shall be
5 collected by the vendor from the purchaser, and shall be paid
6 over to the Commonwealth as herein provided.
7 (b) There is hereby imposed upon the use, on and after the
8 effective date of this article, within this Commonwealth of
9 tangible personal property purchased at retail on or after the
10 effective date of this article, and on those services described
11 herein purchased at retail on and after the effective date of
12 this article, a tax [of six per cent] as prescribed under
13 subsection (h) of the purchase price, which tax shall be paid to
14 the Commonwealth by the person who makes such use as herein
15 provided, except that such tax shall not be paid to the
16 Commonwealth by such person where he has paid the tax imposed by
17 subsection (a) of this section or has paid the tax imposed by
18 this subsection (b) to the vendor with respect to such use. The
19 tax [at the rate of six per cent] imposed by this subsection
20 shall not be deemed applicable where the tax has been incurred
21 under the provisions of the "Tax Act of 1963 for Education."
22 (c) Notwithstanding any other provisions of this article,
23 the tax with respect to telecommunications service within the
24 meaning of [clause] subsection (m) of section 201 of this
25 article shall, except for telegrams paid for in cash at
26 telegraph offices, be computed [at the rate of six per cent] as
27 prescribed under subsection (h) upon the total amount charged to
28 customers for such services, irrespective of whether such charge
29 is based upon a flat rate or upon a message unit charge, but in
30 no event shall charges for telephone calls paid for by inserting
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1 money into a telephone accepting direct deposits of money to
2 operate be subject to this tax. A telecommunications service
3 provider shall have no responsibility or liability to the
4 Commonwealth for billing, collecting or remitting taxes that
5 apply to services, products or other commerce sold over
6 telecommunications lines by third-party vendors. To prevent
7 actual multistate taxation of interstate telecommunications
8 service, any taxpayer, upon proof that the taxpayer has paid a
9 similar tax to another state on the same interstate
10 telecommunications service, shall be allowed a credit against
11 the tax imposed by this section on the same interstate
12 telecommunications service to the extent of the amount of such
13 tax properly due and paid to such other state.
14 (d) Notwithstanding any other provisions of this article,
15 the sale or use of food and beverages dispensed by means of coin
16 operated vending machines shall be taxed [at the rate of six per
17 cent] as prescribed under subsection (h) of the receipts
18 collected from any such machine which dispenses food and
19 beverages heretofore taxable.
20 (e) (1) Notwithstanding any provisions of this article, the
21 sale or use of prepaid telecommunications evidenced by the
22 transfer of tangible personal property shall be subject to the
23 tax imposed by subsections (a) and (b).
24 (2) The sale or use of prepaid telecommunications not
25 evidenced by the transfer of tangible personal property shall be
26 subject to the tax imposed by subsections (a) and (b) and shall
27 be deemed to occur at the purchaser's billing address.
28 (3) Notwithstanding clause (2), the sale or use of prepaid
29 telecommunications service not evidenced by the transfer of
30 tangible personal property shall be taxed [at the rate of six
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1 per cent] as prescribed under subsection (h) of the receipts
2 collected on each sale if the service provider elects to collect
3 the tax imposed by this article on receipts of each sale. The
4 service provider shall notify the department of its election and
5 shall collect the tax on receipts of each sale until the service
6 provider notifies the department otherwise.
7 (e.1) (1) Notwithstanding any other provision of this
8 article, the sale or use of prepaid mobile telecommunications
9 service evidenced by the transfer of tangible personal property
10 shall be subject to the tax imposed by subsections (a) and (b).
11 (2) The sale or use of prepaid mobile telecommunications
12 service not evidenced by the transfer of tangible personal
13 property shall be subject to the tax imposed by subsections (a)
14 and (b) and shall be deemed to occur at the purchaser's billing
15 address or the location associated with the mobile telephone
16 number or the point of sale, whichever is applicable.
17 (3) Notwithstanding clause (2), the sale or use of prepaid
18 mobile telecommunications service not evidenced by the transfer
19 of tangible personal property shall be taxed [at the rate of six
20 per cent] as prescribed under subsection (h) of the receipts
21 collected on each sale if the service provider elects to collect
22 the tax imposed by this article on receipts of each sale. The
23 service provider shall notify the department of its election and
24 shall collect the tax on receipts of each sale until the service
25 provider notifies the department otherwise.
26 (f) Notwithstanding any other provision of this article, tax
27 with respect to sales of prebuilt housing shall be imposed on
28 the prebuilt housing builder at the time of the prebuilt housing
29 sale within this Commonwealth and shall be paid and reported by
30 the prebuilt housing builder to the department in the time and
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1 manner provided in this article: Provided, however, That a
2 manufacturer of prebuilt housing may, at its option, precollect
3 the tax from the prebuilt housing builder at the time of sale to
4 the prebuilt housing builder. In any case where prebuilt housing
5 is purchased and the tax is not paid by the prebuilt housing
6 builder or precollected by the manufacturer, the prebuilt
7 housing purchaser shall remit tax directly to the department if
8 the prebuilt housing is used in this Commonwealth without regard
9 to whether the prebuilt housing becomes a real estate structure.
10 (g) Notwithstanding any other provisions of this article and
11 in accordance with the Mobile Telecommunications Sourcing Act (4
12 U.S.C. § 116), the sale or use of mobile telecommunications
13 services which are deemed to be provided to a customer by a home
14 service provider under section 117(a) and (b) of the Mobile
15 Telecommunications Sourcing Act shall be subject to the tax [of
16 six per cent] as prescribed under subsection (h) of the purchase
17 price, which tax shall be collected by the home service provider
18 from the customer, and shall be paid over to the Commonwealth as
19 herein provided if the customer's place of primary use is
20 located within this Commonwealth, regardless of where the mobile
21 telecommunications services originate, terminate or pass
22 through. For purposes of this subsection, words and phrases used
23 in this subsection shall have the same meanings given to them in
24 the Mobile Telecommunications Sourcing Act.
25 (h) The rate of tax to be imposed under this section shall
26 be as follows:
27 (1) For taxable years ending December 31, 2007, six per
28 cent.
29 (2) For taxable years beginning after December 31, 2007, and
30 ending before January 1, 2009, six and six tenths per cent.
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1 (3) For taxable years beginning after December 31, 2008, and
2 ending before January 1, 2010, seven and twenty-six hundredths
3 per cent.
4 (4) For taxable years beginning after December 31, 2009, and
5 ending before January 1, 2011, seven and ninety-nine hundredths
6 per cent.
7 (5) For taxable years beginning after December 31, 2010, and
8 ending before January 1, 2012, eight and seventy-eight
9 hundredths per cent.
10 (6) For taxable years beginning after January 1, 2012, nine
11 and sixty-six hundredths per cent.
12 Section 2. Section 203 of the act is amended to read:
13 Section 203. Computation of Tax.--The department shall
14 promulgate regulations to assist in computing the amount of tax
15 imposed by section 202. [of this article shall be computed as
16 follows:
17 (a) If the purchase price is ten cents (10¢) or less, no tax
18 shall be collected.
19 (b) If the purchase price is eleven cents (11¢) or more but
20 less than eighteen cents (18¢), one cent (1¢) shall be
21 collected.
22 (c) If the purchase price is eighteen cents (18¢) or more
23 but less than thirty-five cents (35¢), two cents (2¢) shall be
24 collected.
25 (d) If the purchase price is thirty-five cents (35¢) or more
26 but less than fifty-one cents (51¢), three cents (3¢) shall be
27 collected.
28 (e) If the purchase price is fifty-one cents (51¢) or more
29 but less than sixty-eight cents (68¢), four cents (4¢) shall be
30 collected.
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1 (f) If the purchase price is sixty-eight cents (68¢) or more
2 but less than eighty-five cents (85¢), five cents (5¢) shall be
3 collected.
4 (g) If the purchase price is eighty-five cents (85¢) or more
5 but less than one dollar and one cent ($1.01), six cents (6¢)
6 shall be collected.
7 (h) If the purchase price is more than one dollar ($1.00),
8 six per centum of each dollar of purchase price plus the above
9 bracket charges upon any fractional part of a dollar in excess
10 of even dollars shall be collected.]
11 Section 3. Section 205 of the act, amended June 9, 1978
12 (P.L.463, No.62) and July 12, 2006 (P.L.1137, No.116), is
13 amended to read:
14 Section 205. Alternate Imposition of Tax; Credits.--(a) If
15 any person actively and principally engaged in the business of
16 selling new or used motor vehicles, trailers or semi-trailers,
17 and registered with the department in the "dealer's class,"
18 acquires a motor vehicle, trailer or semi-trailer for the
19 purpose of resale, and prior to such resale, uses the motor
20 vehicle, trailer or semi-trailer for a taxable use under this
21 act, the person may pay a tax equal to [six per cent] the rate
22 of tax prescribed under section 202(h) of the fair rental value
23 of the motor vehicle, trailer or semi-trailer during such use.
24 This section shall not apply to the use of a vehicle as a
25 wrecker, parts truck, delivery truck or courtesy car.
26 (b) A commercial aircraft operator who acquires an aircraft
27 for the purpose of resale, or lease, or is entitled to claim
28 another valid exemption at the time of purchase, and subsequent
29 to such purchase, periodically uses the same aircraft for a
30 taxable use under this act, may elect to pay a tax equal to [six
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1 per cent] the rate of tax prescribed under section 202(h) of the
2 fair rental value of the aircraft during such use.
3 Section 4. The act is amended by adding a section to read:
4 Section 281.3. Transfers to Property Tax Reduction Fund.--
5 Notwithstanding any other law to the contrary, all revenues
6 received by the department after December 31, 2008, from the
7 increase in the rate of sales and use tax shall be transferred
8 monthly to the Property Tax Reduction Fund.
9 Section 5. Section 302 of the act, amended December 23, 2003
10 (P.L.250, No.46), is amended to read:
11 Section 302. Imposition of Tax.--(a) Every resident
12 individual, estate or trust shall be subject to, and shall pay
13 for the privilege of receiving each of the classes of income
14 hereinafter enumerated in section 303, a tax upon each dollar of
15 income received by that resident during that resident's taxable
16 year at the rate [of three and seven hundredths per cent] as
17 prescribed under subsection (c).
18 (b) Every nonresident individual, estate or trust shall be
19 subject to, and shall pay for the privilege of receiving each of
20 the classes of income hereinafter enumerated in section 303 from
21 sources within this Commonwealth, a tax upon each dollar of
22 income received by that nonresident during that nonresident's
23 taxable year at the rate [of three and seven hundredths per
24 cent.] prescribed under subsection (c).
25 (c) The rate of tax to be imposed under this section shall
26 be as follows:
27 (1) For taxable years ending December 31, 2007, three and
28 seven hundredths per cent.
29 (2) For taxable years beginning after December 31, 2007, and
30 ending before January 1, 2009, three and thirty-eight hundredths
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1 per cent.
2 (3) For taxable years beginning after December 31, 2008, and
3 ending before January 1, 2010, three and seventy-one hundredths
4 per cent.
5 (4) For taxable years beginning after December 31, 2009, and
6 ending before January 2011, four and eight hundredths per cent.
7 (5) For taxable years beginning after December 31, 2010, and
8 ending January 1, 2012, four and forty-nine hundredths per cent.
9 (6) For taxable years beginning after January 1, 2012, four
10 and ninety four hundredths per cent.
11 Section 6. The act is amended by adding a section to read:
12 Section 360.1. Transfers to Property Tax Reduction Fund.--
13 Notwithstanding any other law to the contrary, all revenues
14 received by the department after December 31, 2007, from the
15 increase in the rate of personal income tax under section 302
16 shall be transferred monthly to the Property Tax Reduction Fund.
17 Section 7. This act shall apply to tax years beginning after
18 December 31, 2007.
19 Section 8. This act shall take effect immediately.
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