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12/04/2020 03:22 AM
Pennsylvania State Senate
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=S&SPick=20190&cosponId=27109
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Senate of Pennsylvania
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted: December 18, 2018 02:45 PM
From: Senator David G. Argall
To: All Senate members
Subject: Amendment to Act 45 of 1998 related to traffic signal exemptions
 
In the near future, I will introduce legislation that would formalize an interpretation being used by the Pennsylvania Department of Revenue related to the exemption of traffic signals to include all component parts of a traffic signal, foundation, pole and mast arms. Only the parts affixed to the ground including bolts, foundation or wiring are to be subject to PA’s sales and use tax.

Since 2011, Revenue has been holding contractors liable for the collection of sales taxes on the signal’s foundations, poles and mast arms. There was no formal policy change or no published notice—only audits of electrical contractors who service the transportation industry were held liable for the collection of the sales tax on the traffic signal foundations, poles and mast arms. Contractors who have not been audited (the majority of the industry) continue to bid projects without sales tax, while audited contractors now apply the sales tax to their bid packages.

My legislation would level the playing field in the marketplace. As you can imagine, contractors who have not been audited are winning bids due to their bids being 6% less than contractors who have been audited due to this sales and use tax discrepancy. The National Electrical Contractors Association (NECA) supports this legislation.



Introduced as SB463