Trial Engrossment of Amendment A00815 to House Bill 1138 P.N. 1195, Regular Session 2023-2024

A00815

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1138

Session of

2023

INTRODUCED BY WAXMAN, SAMUELSON, SCHLOSSBERG, BRENNAN, HILL-

EVANS, GALLAGHER, SANCHEZ, MADDEN, VENKAT, PIELLI, MALAGARI,

WARREN, PARKER, CERRATO AND KRAJEWSKI, MAY 10, 2023

REFERRED TO COMMITTEE ON CONSUMER PROTECTION, TECHNOLOGY AND

UTILITIES, MAY 10, 2023

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 sales and use tax, further providing for

definitions and for imposition of tax; and, in gross receipts

tax, further providing for imposition of tax; and, in general

provisions, further providing for method of filing.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Sections 201(k)(19), (m)(1), (o)(18) and (rr),

202(e.1) and (g) and, 1101(a), (a.1), (c.1), (j) and (k) and

3003.8 of the act of March 4, 1971 (P.L.6, No.2), known as the

Tax Reform Code of 1971, 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:

* * *

(k) "Sale at retail."

* * *

[(19) The rendition for a consideration of a mobile

telecommunications service.]

* * *

(m) "Tangible personal property."

(1) Corporeal personal property including, but not limited

to, goods, wares, merchandise, steam and natural and

manufactured and bottled gas for non-residential use,

electricity for non-residential use, prepaid telecommunications,

premium cable or premium video programming service, spirituous

or vinous liquor and malt or brewed beverages and soft drinks,

interstate telecommunications service originating or terminating

in the Commonwealth and charged to a service address in this

Commonwealth, intrastate telecommunications service with the

exception of (i) subscriber line charges and basic local

telephone service for residential use [and] (ii) charges for

telephone calls paid for by inserting money into a telephone

accepting direct deposits of money to operate and (iii) mobile

telecommunications services, provided further, the service

address of any intrastate telecommunications service is deemed

to be within this Commonwealth or within a political

subdivision, regardless of how or where billed or paid. In the

case of any such interstate or intrastate telecommunications

service, any charge paid through a credit or payment mechanism

which does not relate to a service address, such as a bank,

travel, credit or debit card, but not including prepaid

telecommunications, is deemed attributable to the address of

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origination of the telecommunications service.

* * *

(o) "Use."

* * *

[(18) The obtaining of mobile telecommunications service by

a customer.]

* * *

(rr) "Telecommunications service." Any one-way transmission

or any two-way, interactive transmission of sounds, signals or

other intelligence converted to like form which effects or is

intended to effect meaningful communications by electronic or

electromagnetic means via wire, cable, satellite, light waves,

microwaves, radio waves or other transmission media. The term

includes all types of telecommunication transmissions, such as

local, toll, wide-area or any other type of telephone service;

private line service; telegraph service; radio repeater service;

wireless communication service; personal communications system

service; [cellular telecommunication service;] specialized

mobile radio service; stationary two-way radio service; and

paging service. The term does not include any of the following:

(1) Subscriber charges for access to a video dial tone

system.

(2) Charges to video programmers for the transport of video

programming.

(3) Charges for access to the Internet. Access to the

Internet does not include any of the following:

(A) The transport over the Internet or any proprietary

network using the Internet protocol of telephone calls,

facsimile transmissions or other telecommunications traffic to

or from end users on the public switched telephone network if

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the signal sent from or received by an end user is not in an

Internet protocol.

(B) Telecommunication services purchased by an Internet

service provider to deliver access to the Internet to its

customers.

(4) Mobile telecommunications services.

* * *

Section 202. Imposition of Tax.--* * *

[(e.1) (1) Notwithstanding any other provision of this

article, the sale or use of prepaid mobile telecommunications

service evidenced by the transfer of tangible personal property

shall be subject to the tax imposed by subsections (a) and (b).

(2) The sale or use of prepaid mobile telecommunications

service not evidenced by the transfer of tangible personal

property shall be subject to the tax imposed by subsections (a)

and (b) and shall be deemed to occur at the purchaser's billing

address or the location associated with the mobile telephone

number or the point of sale, whichever is applicable.

(3) Notwithstanding clause (2), the sale or use of prepaid

mobile telecommunications service not evidenced by the transfer

of tangible personal property shall be taxed at the rate of six

per cent of the receipts collected on each sale if the service

provider elects to collect the tax imposed by this article on

receipts of each sale. The service provider shall notify the

department of its election and shall collect the tax on receipts

of each sale until the service provider notifies the department

otherwise.]

* * *

[(g) Notwithstanding any other provisions of this article

and in accordance with the Mobile Telecommunications Sourcing

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Act (4 U.S.C. § 116), the sale or use of mobile

telecommunications services which are deemed to be provided to a

customer by a home service provider under section 117(a) and (b)

of the Mobile Telecommunications Sourcing Act shall be subject

to the tax of six per cent of the purchase price, which tax

shall be collected by the home service provider from the

customer, and shall be paid over to the Commonwealth as herein

provided if the customer's place of primary use is located

within this Commonwealth, regardless of where the mobile

telecommunications services originate, terminate or pass

through. For purposes of this subsection, words and phrases used

in this subsection shall have the same meanings given to them in

the Mobile Telecommunications Sourcing Act.]

* * *

Section 1101. Imposition of Tax.--(a) General Rule.--Every

pipeline company, conduit company, steamboat company, canal

company, slack water navigation company, transportation company,

and every other company, association, joint-stock association,

or limited partnership, now or hereafter incorporated or

organized by or under any law of this Commonwealth, or now or

hereafter organized or incorporated by any other state or by the

United States or any foreign government, and doing business in

this Commonwealth, and every copartnership, person or persons

owing, operating or leasing to or from another corporation,

company, association, joint-stock association, limited

partnership, copartnership, person or persons, any pipeline,

conduit, steamboat, canal, slack water navigation, or other

device for the transportation of freight, passengers, baggage,

or oil, except motor vehicles and railroads, and every limited

partnership, association, joint-stock association, corporation

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or company engaged in, or hereinafter engaged in, the

transportation of freight or oil within this State, and every

telephone company[,] or telegraph company [or provider of mobile

telecommunications services] now or hereafter incorporated or

organized by or under any law of this Commonwealth, or now or

hereafter organized or incorporated by any other state or by the

United States or any foreign government and doing business in

this Commonwealth, and every limited partnership, association,

joint-stock association, copartnership, person or persons,

engaged in telephone or telegraph business [or providing mobile

telecommunications services] in this Commonwealth, shall pay to

the State Treasurer, through the Department of Revenue, a tax of

forty-five mills with a surtax equal to five mills upon each

dollar of the gross receipts of the corporation, company or

association, limited partnership, joint-stock association,

copartnership, person or persons received from:

(1) passengers, baggage, oil and freight transported wholly

within this State; and

(2) telegraph or telephone messages transmitted wholly

within this State and telegraph or telephone messages

transmitted in interstate commerce where such messages originate

or terminate in this State and the charges for such messages are

billed to a service address in this State, except gross receipts

derived from:

(i) the sales of access to the Internet, as set forth in

Article II, made to the ultimate consumer;

(ii) the sales for resale to persons, partnerships,

associations, corporations, or political subdivisions subject to

the tax imposed by this article upon gross receipts derived from

such resale of telecommunications services, including:

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(A) telecommunications exchange access to interconnect with

a local exchange carrier's network;

(B) network elements on an unbundled basis; and

with providers of mobile telecommunications services; and

(iii) the sales of telephones, telephone handsets, modems,

[tablets and related accessories, including cases,] chargers,

[holsters,] clips, hands-free devices[, screen protectors] and

batteries[; and].

[(3) mobile telecommunications services messages sourced to

this Commonwealth based on the place of primary use standard set

forth in the Mobile Telecommunications Sourcing Act (4 U.S.C. §

117), except gross receipts derived from:

(i) the sales of access to the Internet, as set forth in

Article II, made to the ultimate consumer;

(ii) the sales for resale to persons, partnerships,

associations, corporations or political subdivisions subject to

the tax imposed by this article upon gross receipts derived from

such resale of mobile telecommunications services, including

sales of mobile telecommunications services to interconnect with

providers of telecommunications services; and

(iii) the sales of telephones, telephone handsets, modems,

tablets and related accessories, including cases, chargers,

holsters, clips, hands-free devices, screen protectors and

batteries.]

(a.1) Credit.--Telegraph or telephone companies [or

providers of mobile telecommunications services] that pay a

gross receipts tax to another state on messages or services

which are taxable under this article are entitled to a credit

against the tax due under this article. The credit allowed with

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respect to the messages or services shall not exceed the tax

under this article with respect to the messages or services.

* * *

[(c.1) Safe Harbor Base year.--For purposes of the estimated

tax requirements under sections 3003.2 and 3003.3, the "safe

harbor base year" tax amount for providers of mobile

telecommunications services shall be the amount that would have

been required to be paid by the taxpayer if the taxpayer had

been subject to this article.]

* * *

[(j) Schedule for Estimated Payments.--

(1) For calendar year 2004, the following schedule applies

to the payment of the tax under subsection (a)(3):

(i) Forty per cent of the estimated tax shall be due on

March 15, 2004.

(ii) Forty per cent of the estimated tax shall be due on

June 15, 2004.

(iii) Twenty per cent of the estimated tax shall be due on

September 15, 2004.

(2) For calendar years after 2004, the payment of the

estimated tax under subsection (a)(3) shall be due in accordance

with section 3003.2.

(k) Penalty for Substantial Underpayment of Initial

Estimated Gross Receipts Tax.--

(1) If the amount of the estimated gross receipts tax on

account of a taxpayer's first applicable taxable year under

subsection (a)(3) paid by a due date in subsection (j) is

underpaid, a penalty shall be imposed in the amount of five per

cent of the underpayment per month for the period of the

underpayment, up to a maximum of twenty-five per cent of the

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underpayment.

(2) The penalty imposed by this subsection is in addition to

any interest imposed on underpayments by section 3003.3.]

Section 2. This act shall take effect January 1, 2024, or

immediately, whichever is later.

Section 3003.8. Method of Filing.--(a) Notwithstanding any

provision of law, the Department of Revenue [may] shall allow

the electronic or telephonic filing of any tax return or

documents or remittance of payment for a fee or tax liability

under this act.

(b) For the purposes of this section, the Department of

Revenue may determine alternative methods for the following:

(1) signing, subscribing or verifying of a return,

statement or other document that shall have the same validity

and consequences as the actual signing by the taxpayer; and

(2) remittance of a payment for a fee or tax liability

under this act.

Section 2. The amendment of section 3003.8 of the act shall

apply to the filing of returns and remittance of payments

beginning after December 31, 2023.

Section 3. This act shall take effect as follows:

(1) The following shall take effect immediately:

(i) The amendment of section 3003.8 of the act.

(ii) Section 2 of this act.

(iii) This section.

(2) The remainder of this act shall take effect January

1, 2024, or immediately, whichever is later.

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