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Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20170&cosponId=22823
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House of Representatives
Session of 2017 - 2018 Regular Session

MEMORANDUM

Posted: February 8, 2017 11:28 AM
From: Representative Thomas R. Caltagirone
To: All House members
Subject: Clarification of Sales Tax Exemption for Traffic Signal Constuction
 
In the near future, I plan to reintroduce HB 437. This legislation will correct what I believe to be a significant misinterpretation of the sales and use tax provisions of the tax reform code. I recently became aware that the Department of Revenue is assessing tax on the sale of foundation material, poles and mast arms used in traffic signal construction. The tax code provides an exemption for “traffic signals” as long as the traffic signal will be transferred to a tax exempt governmental entity. In the past the Department of Revenue is now interpreting the exemption for “traffic signal” under “building machinery and equipment” to exempt only the light assembly (the assembly that holds the red, yellow and green light).

This narrow interpretation of the term “traffic signals” is causing our local municipalities to pay sales tax that we never intended that they pay and it is increasing the cost to install or maintain traffic signals. I want to make certain that citizens and local municipalities are protected from this hidden tax. This bill passed out of the House Finance Committee last session 23-0.

Previous cosponsors include: CARROLL, MILLARD, THOMAS, LONGIETTI, D. COSTA, R. MILLER, COHEN, DAVIS, MAHONEY, GROVE, MURT, GABLER, READSHAW, GILLEN, SWANGER, BARBIN and NEILSON

Please join me in sponsoring this legislation.



Introduced as HB1254