PRINTER'S NO. 561
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
504
Session of
2015
INTRODUCED BY GABLER, BAKER, BENNINGHOFF, BOBACK, CALTAGIRONE,
CAUSER, CUTLER, EVERETT, GIBBONS, GROVE, A. HARRIS, IRVIN,
F. KELLER, M. K. KELLER, MAJOR, METCALFE, METZGAR, MILLARD,
OBERLANDER, PEIFER, PICKETT, RAPP, SANKEY, SAYLOR, SONNEY AND
WARNER, FEBRUARY 17, 2015
REFERRED TO COMMITTEE ON FINANCE, FEBRUARY 17, 2015
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," in tax for education, further providing for sales
and use tax for timbering.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 201(k)(8) and (o)(4)(B) of the act of
March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
1971, amended April 23, 1998 (P.L.239, No.45), are amended to
read:
Section 201. Definitions.--The following words, terms and
phrases when used in this Article II shall have the meaning
ascribed to them in this section, except where the context
clearly indicates a different meaning:
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(k) "Sale at retail."
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(8) Any retention of possession, custody or a license to use
or consume tangible personal property or any further obtaining
of services described in subclauses (2), (3) and (4) of this
clause pursuant to a rental or service contract or other
arrangement (other than as security).
The term "sale at retail" shall not include (i) any such
transfer of tangible personal property or rendition of services
for the purpose of resale, or (ii) such rendition of services or
the transfer of tangible personal property including, but not
limited to, machinery and equipment and parts therefor and
supplies to be used or consumed by the purchaser directly in the
operations of--
(A) The manufacture of tangible personal property.
(B) Farming, dairying, agriculture, timbering, horticulture
or floriculture when engaged in as a business enterprise. The
term "farming" shall include the propagation and raising of
ranch raised fur-bearing animals and the propagation of game
birds for commercial purposes by holders of propagation permits
issued under 34 Pa.C.S. (relating to game) and the propagation
and raising of horses to be used exclusively for commercial
racing activities. The term "timbering" shall include:
(1) The business of producing or harvesting trees from
forests, woodlots or tree farms for the purpose of the
commercial production of wood, paper or energy products derived
from wood.
(2) All operations prior to the transport of the harvested
product necessary for the removal of timber or forest products
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from the site, in-field processing of trees into logs or chips,
complying with environmental protection and safety requirements
applicable to the harvest of forest products, creating access to
the harvest site, loading of forest products onto highway
vehicles for transport to storage or processing facilities and
postharvest site reclamation, including those activities
necessary to improve timber growth or ensure natural or direct
reforestation of the site.
(C) The producing, delivering or rendering of a public
utility service, or in constructing, reconstructing, remodeling,
repairing or maintaining the facilities which are directly used
in producing, delivering or rendering such service.
(D) Processing as defined in clause (d) of this section.
The exclusions provided in paragraphs (A), (B), (C) and (D)
shall not apply to any vehicle required to be registered under
The Vehicle Code, except those vehicles used directly by a
public utility engaged in business as a common carrier; to
maintenance facilities; or to materials, supplies or equipment
to be used or consumed in the construction, reconstruction,
remodeling, repair or maintenance of real estate other than
directly used machinery, equipment, parts or foundations
therefor that may be affixed to such real estate.
The exclusions provided in paragraphs (A), (B), (C) and (D)
shall not apply to tangible personal property or services to be
used or consumed in managerial sales or other nonoperational
activities, nor to the purchase or use of tangible personal
property or services by any person other than the person
directly using the same in the operations described in
paragraphs (A), (B), (C) and (D) herein.
The exclusion provided in paragraph (C) shall not apply to
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(i) construction materials, supplies or equipment used to
construct, reconstruct, remodel, repair or maintain facilities
not used directly by the purchaser in the production, delivering
or rendition of public utility service, (ii) construction
materials, supplies or equipment used to construct, reconstruct,
remodel, repair or maintain a building, road or similar
structure, or (iii) tools and equipment used but not installed
in the maintenance of facilities used directly in the
production, delivering or rendition of a public utility service.
The exclusions provided in paragraphs (A), (B), (C) and (D)
shall not apply to the services enumerated in clauses (k)(11)
through (18) and (w) through (kk), except that the exclusion
provided in this subclause for farming, dairying and agriculture
shall apply to the service enumerated in clause (z).
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(o) "Use."
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(4) The obtaining by a purchaser of the service of
repairing, altering, mending, pressing, fitting, dyeing,
laundering, drycleaning or cleaning tangible personal property
other than wearing apparel or shoes or applying or installing
tangible personal property as a repair or replacement part of
other tangible personal property other than wearing apparel or
shoes, whether or not the services are performed directly or by
any means other than by means of coin-operated self-service
laundry equipment for wearing apparel or household goods, and
whether or not any tangible personal property is transferred to
the purchaser in conjunction therewith, except such services as
are obtained in the construction, reconstruction, remodeling,
repair or maintenance of real estate: Provided, however, That
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this subclause shall not be deemed to impose tax upon such
services in the preparation for sale of new items which are
excluded from the tax under clause (26) of section 204, or upon
diaper service: And provided further, That the term "use" shall
not include--
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(B) The use or consumption of tangible personal property,
including but not limited to machinery and equipment and parts
therefor, and supplies or the obtaining of the services
described in subclauses (2), (3) and (4) of this clause directly
in the operations of--
(i) The manufacture of tangible personal property.
(ii) Farming, dairying, agriculture, timbering, horticulture
or floriculture when engaged in as a business enterprise. The
term "farming" shall include the propagation and raising of
ranch-raised furbearing animals and the propagation of game
birds for commercial purposes by holders of propagation permits
issued under 34 Pa.C.S. (relating to game) and the propagation
and raising of horses to be used exclusively for commercial
racing activities. The term "timbering" shall include:
(1) The business of producing or harvesting trees from
forests, woodlots or tree farms for the purpose of the
commercial production of wood, paper or energy products derived
from wood.
(2) All operations prior to the transport of the harvested
product necessary for the removal of timber or forest products
from the site, in-field processing of trees into logs or chips,
complying with environmental protection and safety requirements
applicable to the harvest of forest products, creating access to
the harvest site, loading of forest products onto highway
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vehicles for transport to storage or processing facilities and
postharvest site reclamation, including those activities
necessary to improve timber growth or ensure natural or direct
reforestation of the site.
(iii) The producing, delivering or rendering of a public
utility service, or in constructing, reconstructing, remodeling,
repairing or maintaining the facilities which are directly used
in producing, delivering or rendering such service.
(iv) Processing as defined in subclause (d) of this section.
The exclusions provided in subparagraphs (i), (ii), (iii) and
(iv) shall not apply to any vehicle required to be registered
under The Vehicle Code except those vehicles directly used by a
public utility engaged in the business as a common carrier; to
maintenance facilities; or to materials, supplies or equipment
to be used or consumed in the construction, reconstruction,
remodeling, repair or maintenance of real estate other than
directly used machinery, equipment, parts or foundations
therefor that may be affixed to such real estate. The exclusions
provided in subparagraphs (i), (ii), (iii) and (iv) shall not
apply to tangible personal property or services to be used or
consumed in managerial sales or other nonoperational activities,
nor to the purchase or use of tangible personal property or
services by any person other than the person directly using the
same in the operations described in subparagraphs (i), (ii),
(iii) and (iv).
The exclusion provided in subparagraph (iii) shall not apply
to (A) construction materials, supplies or equipment used to
construct, reconstruct, remodel, repair or maintain facilities
not used directly by the purchaser in the production, delivering
or rendition of public utility service or (B) tools and
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equipment used but not installed in the maintenance of
facilities used directly in the production, delivering or
rendition of a public utility service.
The exclusion provided in subparagraphs (i), (ii), (iii) and
(iv) shall not apply to the services enumerated in clauses (o)
(9) through (16) and (w) through (kk), except that the exclusion
provided in subparagraph (ii) for farming, dairying and
agriculture shall apply to the service enumerated in clause (z).
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Section 2. This act shall take effect in 60 days.
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