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Senate of Pennsylvania
Session of 2017 - 2018 Regular Session


Posted: August 15, 2018 12:31 PM
From: Senator Scott E. Hutchinson
To: All Senate members
Subject: Strategic Development Area Reform
In the near future, I plan to introduce legislation that provides for a revision of the sales and use tax exemption on the purchase of certain services or goods to a qualified business located within a strategic development area.

Currently, the sales at retail of services or tangible personal property, other than motor vehicles, to a qualified business for the exclusive use, consumption and utilization of the tangible personal property or service by a qualified business at its facility located within a strategic development area are exempt from the sales and use tax imposed under Article II of the Tax Reform Code. However, the Department of Revenue’s recent interpretation of the term “exclusive use” has led to businesses being taxed on items that are tools of business solely because they are used in any capacity outside of the business facility.

For example, if a business buys laptops for their employees to use at work, and those employees take them home, they would no longer qualify under the “exclusive use” provision. If a worker uses the laptop at home for incidental amounts of time, the laptop should still be considered something that is a work item.

It is my belief that the original legislative intent of the Strategic Development Area sales and use tax exemption was to allow for businesses to take advantage of the exemption regardless of incidental use of the items outside of the business’ location. This legislation will clarify the term “exclusive use” to better reflect the original intent and to allow businesses to have more flexibility to invest and grow through the use of these important tax deductions.

I hope that you would please join me in sponsoring this critical legislation. If you have any questions regarding this legislation please contact Nathan Akers in my office at 787-9684 or nakers@pasen.gov.

Introduced as SB1268