Amendment 808 to House Bill 283 P.N. 282, Regular Session 2015-2016

H0283B0282A00808 KMK:JSL 04/22/15 #90 A00808

AMENDMENTS TO HOUSE BILL NO. 283

Sponsor: REPRESENTATIVE GROVE

Printer's No. 282

Amend Bill, page 1, lines 10 and 11, by striking out " in tax

for education, further providing for" in line 10 and all of line

11 and inserting

in tax for education, further providing for definitions, for

imposition of tax, for computation of tax, for exclusions

from tax, for credit against tax, for licenses, for

definitions, for imposition of tax, for time for filing

returns, for tax held in trust for the Commonwealth, for

discount, for assessment to recover erroneous refunds, for

refund of sales tax attributed to bad debt, for refunds,

providing for assessment after refunds, further providing for

interest, for additions to tax, for crimes and for keeping of

records; and providing for transfers;

in personal income tax, further providing for imposition, for

classes of income and for special poverty provisions;

establishing the Property Tax and Rent Relief Account; and

providing for restricted account and transfers to the

Property Tax Relief Fund;

in corporate net income tax, further providing for definitions,

for imposition, for reports and for payment of tax;

in bank and trust company shares, further providing for

imposition, for taxable amount, for apportionment and for

definitions;

in cigarette tax, further providing for incidence and rate of

tax and for floor tax;

providing for education reinvestment by imposing a severance tax

and a certain impact fee;

providing for a tobacco products tax;

providing for allocation of tax revenues and for property tax

relief and relief for renters;

providing for a manufacturing tax credit; prohibiting certain

agreements under the Promoting Employment Across Pennsylvania

Act;

in general provisions, further providing for underpayment of

estimated tax;

providing for transfers to a restricted account for the purpose

of the Public School Employees' Retirement Fund and to a city

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of first class in accordance with the Municipal Pension Plan

Funding Standard and Recovery Act and for payment of

additional cigarette tax;

and repealing provisions of the Taxpayer Relief Act and the

Promoting Employment Across Pennsylvania Act.

Amend Bill, page 1, lines 14 through 22; page 2, lines 1

through 12; by striking out all of said lines on said pages and

inserting

Section 1. The title of the act of March 4, 1971 (P.L.6,

No.2), known as the Tax Reform Code of 1971, is amended to read:

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

allocation of tax revenues, for property tax relief and

relief for renters and 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.

Section 1.1. Section 201(a), (b), (c), (f), (g), (i), (k),

(m), (o), (w), (y), (ll), (pp), (qq) and (tt) of the act,

amended or added August 4, 1991 (P.L.97, No.22), December 13,

1991 (P.L.373, No.40), June 30, 1995 (P.L.139, No.21), May 7,

1997 (P.L.85, No.7), April 23, 1998 (P.L.239, No.45), May 24,

2000 (P.L.106, No.23), June 29, 2002 (P.L.559, No.89) and July

25, 2007 (P.L.373, No.55), are amended and the section is

amended by adding subsections 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:

(a) "Soft drinks."

(1) All nonalcoholic beverages, whether carbonated or not,

such as soda water, ginger ale, coca cola, lime cola, pepsi

cola, Dr. Pepper, fruit juice when plain or carbonated water,

flavoring or syrup is added, carbonated water, orangeade,

lemonade, root beer or any and all preparations, commonly

referred to as "soft drinks," of whatsoever kind, and are

further described as including any and all beverages, commonly

referred to as "soft drinks," which are made with or without the

use of any syrup or any beverage commonly referred to as energy

drinks and flavored water of any type.

(2) The term "soft drinks" shall not include natural fruit

or vegetable juices or their concentrates, or non-carbonated

fruit juice drinks containing not less than twenty-five per cent

by volume of natural fruit juices or of fruit juice which has

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been reconstituted to its original state, or natural

concentrated fruit or vegetable juices reconstituted to their

original state, whether any of the foregoing natural juices are

frozen or unfrozen, sweetened or unsweetened, seasoned with salt

or spice or unseasoned, nor shall the term "soft drinks" include

coffee, coffee substitutes, tea, cocoa, natural fluid milk or

non-carbonated drinks made from milk derivatives.

(b) "Maintaining a place of business in this Commonwealth."

(1) Having, maintaining or using within this Commonwealth,

either directly or through a subsidiary, representative or an

agent, an office, distribution house, sales house, warehouse,

service enterprise or other place of business; or any agent of

general or restricted authority, or representative, irrespective

of whether the place of business, representative or agent is

located here, permanently or temporarily, or whether the person

or subsidiary maintaining the place of business, representative

or agent is authorized to do business within this Commonwealth.

(1.1) Providing taxable services within this Commonwealth.

(2) Engaging in any activity as a business within this

Commonwealth by any person, either directly or through a

subsidiary, representative or an agent, in connection with the

lease, sale or delivery of tangible personal property or the

performance of services thereon for use, storage or consumption

or in connection with the sale or delivery for use of the

services described in subclauses (11) through [(18)] (20) of

clause (k) of this section, including, but not limited to,

having, maintaining or using any office, distribution house,

sales house, warehouse or other place of business, any stock of

goods or any solicitor, canvasser, salesman, representative or

agent under its authority, at its direction or with its

permission, regardless of whether the person or subsidiary is

authorized to do business in this Commonwealth.

(3) Regularly or substantially soliciting orders within this

Commonwealth in connection with the lease, sale or delivery of

tangible personal property to or the performance thereon of

services or in connection with the sale or delivery of the

services described in subclauses (11) through [(18)] (20) of

clause (k) of this section for residents of this Commonwealth by

means of catalogues or other advertising, whether the orders are

accepted within or without this Commonwealth.

(3.1) Entering this Commonwealth by any person to provide

assembly, service or repair of tangible personal property,

either directly or through a subsidiary, representative or an

agent.

(3.2) Delivering tangible personal property to locations

within this Commonwealth if the delivery includes the unpacking,

positioning, placing or assembling of the tangible personal

property.

(3.3) Having any contact within this Commonwealth which

would allow the Commonwealth to require a person to collect and

remit tax under the Constitution of the United States.

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(3.4) Providing a customer's mobile telecommunications

service deemed to be provided by the customer's home service

provider under the Mobile Telecommunications Sourcing Act (4

U.S.C. § 116). For purposes of this clause, words and phrases

used in this clause shall have the meanings given to them in the

Mobile Telecommunications Sourcing Act.

(4) The term "maintaining a place of business in this

Commonwealth" shall not include:

(i) Owning or leasing of tangible or intangible property by

a person who has contracted with an unaffiliated commercial

printer for printing, provided that:

(A) the property is for use by the commercial printer; and

(B) the property is located at the Pennsylvania premises of

the commercial printer.

(ii) Visits by a person's employes or agents to the premises

in this Commonwealth of an unaffiliated commercial printer with

whom the person has contracted for printing in connection with

said contract.

fabricating[,] or compounding, [processing or other operations,]

engaged in as a business, which place any tangible personal

property in a form, composition or character different from that

in which it is acquired whether for sale or use by the

manufacturer, and shall include, but not be limited to--

(1) Every operation commencing with the first production

stage and ending with the completion of tangible personal

property having the physical qualities (including packaging, if

any, passing to the ultimate consumer) which it has when

transferred by the manufacturer to another. For purposes of this

clause, "operation" shall include clean rooms and their

component systems, including: environmental control systems,

antistatic vertical walls and manufacturing platforms and

floors, which are independent of the real estate; process piping

systems; specialized lighting systems; deionized water systems;

process vacuum and compressed air systems; process and specialty

gases; and alarm or warning devices specifically designed to

warn of threats to the integrity of the product or people. For

purposes of this clause, a "clean room" is a location with a

self-contained, sealed environment with a controlled, closed air

system independent from the facility's general environmental

control system.

(2) The publishing of books, newspapers, magazines and other

periodicals and printing.

(3) Refining, blasting, exploring, mining and quarrying for,

or otherwise extracting from the earth or from waste or stock

piles or from pits or banks any natural resources, minerals and

mineral aggregates including blast furnace slag.

(4) Building, rebuilding, repairing and making additions to,

or replacements in or upon vessels designed for commercial use

of registered tonnage of fifty tons or more when produced upon

special order of the purchaser, or when rebuilt, repaired or

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enlarged, or when replacements are made upon order of, or for

the account of the owner.

(5) Research having as its objective the production of a new

or an improved (i) product or utility service, or (ii) method of

producing a product or utility service, but in either case not

including market research or research having as its objective

the improvement of administrative efficiency.

(6) Remanufacture for wholesale distribution by a

remanufacturer of motor vehicle parts from used parts acquired

in bulk by the remanufacturer using an assembly line process

which involves the complete disassembly of such parts and

integration of the components of such parts with other used or

new components of parts, including the salvaging, recycling or

reclaiming of used parts by the remanufacturer.

(7) Remanufacture or retrofit by a manufacturer or

remanufacturer of aircraft, armored vehicles, other defense-

related vehicles having a finished value of at least fifty

thousand dollars ($50,000). Remanufacture or retrofit involves

the disassembly of such aircraft, vehicles, parts or components,

including electric or electronic components, the integration of

those parts and components with other used or new parts or

components, including the salvaging, recycling or reclaiming of

the used parts or components and the assembly of the new or used

aircraft, vehicles, parts or components. For purposes of this

clause, the following terms or phrases have the following

meanings:

(i) "aircraft" means fixed-wing aircraft, helicopters,

powered aircraft, tilt-rotor or tilt-wing aircraft, unmanned

aircraft and gliders;

(ii) "armored vehicles" means tanks, armed personnel

carriers and all other armed track or semitrack vehicles; or

(iii) "other defense-related vehicles" means trucks, truck-

tractors, trailers, jeeps and other utility vehicles, including

any unmanned vehicles.

(8) Remanufacture by a remanufacturer of locomotive parts

from used parts acquired in bulk by the remanufacturer using an

assembly line process which involves the complete disassembly of

such parts and integration of the components of such parts with

other used or new components of parts, including the salvaging,

recycling or reclaiming of used parts by the remanufacturer.

The term "manufacture" shall not include constructing,

altering, servicing, repairing or improving real estate or

repairing, servicing or installing tangible personal property,

nor the producing of a commercial motion picture, nor the

cooking, freezing or baking of fruits, vegetables, mushrooms,

fish, seafood, meats, poultry or bakery products.

* * *

(f) "Purchase at retail."

(1) The acquisition for a consideration of the ownership,

custody or possession of tangible personal property other than

for resale by the person acquiring the same when such

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acquisition is made for the purpose of consumption or use,

whether such acquisition shall be absolute or conditional, and

by whatsoever means the same shall have been effected.

(2) The acquisition of a license to use or consume, and the

rental or lease of tangible personal property, other than for

resale regardless of the period of time the lessee has

possession or custody of the property.

(3) The obtaining for a consideration of those services

described in subclauses (2), (3) and (4) of clause (k) of this

section other than for resale.

(4) A retention after March 7, 1956, of possession, custody

or a license to use or consume pursuant to a rental contract or

other lease arrangement (other than as security), other than for

resale.

(5) The obtaining for a consideration of those services

described in subclauses (11) through [(18)] (20) of clause (k)

of this section.

The term "purchase at retail" with respect to "liquor" and

"malt or brewed beverages" shall include the purchase of

"liquor" from any "Pennsylvania Liquor Store" by any person for

any purpose, and the purchase of "malt or brewed beverages" from

a "manufacturer of malt or brewed beverages," "distributor" or

"importing distributor" by any person for any purpose, except

purchases from a "manufacturer of malt or brewed beverages" by a

"distributor" or "importing distributor" or purchases from an

"importing distributor" by a "distributor" within the meaning of

the "Liquor Code." The term "purchase at retail" shall not

include any purchase of "malt or brewed beverages" from a

"retail dispenser" or any purchase of "liquor" or "malt or

brewed beverages" from a person holding a "retail liquor

license" within the meaning of and pursuant to the provisions of

the "Liquor Code," but shall include any purchase or acquisition

of "liquor" or "malt or brewed beverages" other than pursuant to

the provisions of the "Liquor Code."

(g) "Purchase price."

(1) The total value of anything paid or delivered, or

promised to be paid or delivered, whether it be money or

otherwise, in complete performance of a sale at retail or

purchase at retail, as herein defined, without any deduction on

account of the cost or value of the property sold, cost or value

of transportation, cost or value of labor or service, interest

or discount paid or allowed after the sale is consummated, any

other taxes imposed by the Commonwealth of Pennsylvania or any

other expense except that there shall be excluded any gratuity

or separately stated deposit charge for returnable containers.

(2) There shall be deducted from the purchase price the

value of any tangible personal property actually taken in trade

or exchange in lieu of the whole or any part of the purchase

price. For the purpose of this clause, the amount allowed by

reason of tangible personal property actually taken in trade or

exchange shall be considered the value of such property.

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(3) In determining the purchase price on the sale or use of

taxable tangible personal property or a service where, because

of affiliation of interests between the vendor and purchaser, or

irrespective of any such affiliation, if for any other reason

the purchase price declared by the vendor or taxpayer on the

taxable sale or use of such tangible personal property or

service is, in the opinion of the department, not indicative of

the true value of the article or service or the fair price

thereof, the department shall, pursuant to uniform and equitable

rules, determine the amount of constructive purchase price upon

the basis of which the tax shall be computed and levied. Such

rules shall provide for a constructive amount of purchase price

for each such sale or use which would naturally and fairly be

charged in an arms-length transaction in which the element of

common interest between the vendor or purchaser is absent or if

no common interest exists, any other element causing a

distortion of the price or value is likewise absent. For the

purpose of this clause where a taxable sale or purchase at

retail transaction occurs between a parent and a subsidiary,

affiliate or controlled corporation of such parent corporation,

there shall be a rebuttable presumption, that because of such

common interest such transaction was not at arms-length.

(4) Where there is a transfer or retention of possession or

custody, whether it be termed a rental, lease, service or

otherwise, of tangible personal property including, but not

limited to linens, aprons, motor vehicles, trailers, tires,

industrial office and construction equipment, and business

machines the full consideration paid or delivered to the vendor

or lessor shall be considered the purchase price, even though

such consideration be separately stated and be designated as

payment for processing, laundering, service, maintenance,

insurance, repairs, depreciation or otherwise. Where the vendor

or lessor supplies or provides an employe to operate such

tangible personal property, the value of the labor thus supplied

may be excluded and shall not be considered as part of the

purchase price if separately stated. There shall also be

included as part of the purchase price the value of anything

paid or delivered, or promised to be paid or delivered by a

lessee, whether it be money or otherwise, to any person other

than the vendor or lessor by reason of the maintenance,

insurance or repair of the tangible personal property which a

lessee has the possession or custody of under a rental contract

or lease arrangement.

(5) With respect to the tax imposed by subsection (b) of

section 202 upon any tangible personal property originally

purchased by the user of such property six months or longer

prior to the first taxable use of such property within the

Commonwealth, such user may elect to pay tax on a substituted

base determined by considering the purchase price of such

property for tax purposes to be equal to the prevailing market

price of similar tangible personal property at the time and

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place of such first use within the Commonwealth. Such election

must be made at the time of filing a tax return with the

department and reporting such tax liability and paying the

proper tax due plus all accrued penalties and interest, if there

be any, within six months of the due date of such report and

payment, as provided for by subsections (a) and (c) of section

217 of this article.

(6) The purchase price of employment agency services and

help supply services shall be the service fee paid by the

purchaser to the vendor or supplying entity. The term "service

fee," as used in this subclause, shall be the total charge or

fee of the vendor or supplying entity minus the costs of the

supplied employe which costs are wages, salaries, bonuses and

commissions, employment benefits, expense reimbursements and

payroll and withholding taxes, to the extent that these costs

are specifically itemized or that these costs in aggregate are

stated in billings from the vendor or supplying entity. To the

extent that these costs are not itemized or stated on the

billings, then the service fee shall be the total charge or fee

of the vendor or supplying entity. No other evidence of the

service fee is permissible.

(7) Unless the vendor separately states that portion of

[the] a billing which applies to [premium cable service as

defined in clause (ll) of this section] taxable tangible

personal property or services, the total bill [for the provision

of all cable services] shall be the purchase price.

(8) The purchase price of prebuilt housing shall be sixty

per cent of the manufacturer's selling price: Provided, however,

That a manufacturer of prebuilt housing who precollects tax from

a prebuilt housing builder at the time of the sale to the

prebuilt housing builder shall have the option to collect tax on

sixty per cent of the selling price or on one hundred per cent

of the actual cost of the supplies and materials used in the

manufacture of the prebuilt housing.

(9) Amounts representing on-the-spot cash discounts,

employee discounts, volume discounts, store discounts such as

"buy one, get one free," wholesaler's or trade discounts,

rebates and store or manufacturer's coupons shall establish a

new purchase price if both the name of the item and the name of

the item to which the coupon applies are described on the

invoice or cash register tape. An amount representing a discount

allowed for prompt payment of bills which is dependent upon an

event occurring after the completion of the sale may not be

deducted in computing the tax. A sale is completed when there is

a transfer of ownership of the property or services to the

purchaser.

* * *

(i) "Resale."

(1) Any transfer of ownership, custody or possession of

tangible personal property for a consideration, including the

grant of a license to use or consume and transactions where the

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possession of such property is transferred but where the

transferor retains title only as security for payment of the

selling price whether such transaction be designated as bailment

lease, conditional sale or otherwise.

(2) The physical incorporation of tangible personal property

as an ingredient or constituent into other tangible personal

property, which is to be sold in the regular course of business

or the performance of those services described in subclauses

(2), (3) and (4) of clause (k) of this section upon tangible

personal property which is to be sold in the regular course of

business or where the person incorporating such property has

undertaken at the time of purchase to cause it to be transported

in interstate commerce to a destination outside this

Commonwealth. The term "resale" shall include telecommunications

services purchased by a cable operator or video programmer that

are used to transport or deliver cable or video programming

services which are sold in the regular course of business.

(3) The term "resale" shall also include tangible personal

property purchased or having a situs within this Commonwealth

solely for the purpose of being processed, fabricated or

manufactured into, attached to or incorporated into tangible

personal property and thereafter transported outside this

Commonwealth for use [exclusively] in a construction contract

outside this Commonwealth.

(4) The term "resale" shall not include any sale of "malt or

brewed beverages" by a "retail dispenser," or any sale of

"liquor" or "malt or brewed beverages" by a person holding a

"retail liquor license" within the meaning of the "Liquor Code."

(5) The physical incorporation of tangible personal property

as an ingredient or constituent in the construction of

foundations for machinery or equipment the sale or use of which

is excluded from tax under the provisions of paragraphs (A),

(B), (C) and (D) of subclause (8) of clause (k) and

subparagraphs (i), (ii), (iii) and (iv) of paragraph (B) of

subclause (4) of clause (o) of this section, whether such

foundations at the time of construction or transfer constitute

tangible personal property or real estate.

(6) The sale at retail or use of taxable services performed

for resale in the ordinary course of business of the purchaser

of the same service as purchased.

(7) The sale at retail or use of otherwise taxable services

that are an integral, inseparable part of services that are

taxable.

* * *

(k) "Sale at retail."

(1) Any transfer, for a consideration, of the ownership,

custody or possession of tangible personal property, including

the grant of a license to use or consume whether such transfer

be absolute or conditional and by whatsoever means the same

shall have been effected.

(2) The rendition of the service of printing or imprinting

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of tangible personal property for a consideration for persons

who furnish, either directly or indirectly the materials used in

the printing or imprinting.

(3) The rendition for a consideration of the service of--

(i) Washing, cleaning, waxing, polishing or lubricating of

motor vehicles of another, whether or not any tangible personal

property is transferred in conjunction therewith; and

(ii) Inspecting motor vehicles pursuant to the mandatory

requirements of "The Vehicle Code."

(4) The rendition for a consideration 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 except wearing apparel or shoes

for a consideration, whether or not the services are performed

directly or by any means other than by coin-operated self-

service laundry equipment for wearing apparel or household goods

and whether or not any tangible personal property is transferred

in conjunction therewith, except such services as are rendered

in the construction, reconstruction, remodeling, repair or

maintenance of real estate[: Provided, however, That 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].

(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, 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.

utility service, or in constructing, reconstructing, remodeling,

repairing or maintaining the facilities which are directly used

in producing, delivering or rendering such service.

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(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

(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, bridge 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).

(9) Where tangible personal property or services are

utilized for purposes constituting a "sale at retail" and for

purposes excluded from the definition of "sale at retail," it

shall be presumed that such tangible personal property or

services are utilized for purposes constituting a "sale at

retail" and subject to tax unless the user thereof proves to the

department that the predominant purposes for which such tangible

personal property or services are utilized do not constitute a

"sale at retail."

(10) The term "sale at retail" with respect to "liquor" and

"malt or brewed beverages" shall include the sale of "liquor" by

any "Pennsylvania liquor store" to any person for any purpose,

and the sale of "malt or brewed beverages" by a "manufacturer of

malt or brewed beverages," "distributor" or "importing

distributor" to any person for any purpose, except sales by a

"manufacturer of malt or brewed beverages" to a "distributor" or

"importing distributor" or sales by an "importing distributor"

to a "distributor" within the meaning of the "Liquor Code." The

term "sale at retail" shall not include any sale of "malt or

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brewed beverages" by a "retail dispenser" or any sale of

"liquor" or "malt or brewed beverages" by a person holding a

"retail liquor license" within the meaning of and pursuant to

the provisions of the "Liquor Code," but shall include any sale

of "liquor" or "malt or brewed beverages" other than pursuant to

the provisions of the "Liquor Code."

(11) The rendition for a consideration of lobbying services.

(12) The rendition for a consideration of adjustment

services, collection services or credit reporting services.

(13) The rendition for a consideration of secretarial or

editing services.

(14) The rendition for a consideration of disinfecting or

pest control services, building maintenance or cleaning

services.

(15) The rendition for a consideration of employment agency

services or help supply services.

(17) The rendition for a consideration of lawn care service.

(18) The rendition for a consideration of self-storage

service.

(19) The rendition for a consideration of a mobile

telecommunications service.

(20) (i) Except as otherwise provided under section 204,

the rendition for a consideration of any service enumerated in

clause (dd).

(ii) The services shall be sourced as follows:

(A) if it is delivered to a location in this Commonwealth,

the service is taxable in this Commonwealth;

(B) if the service is delivered both to a location in and

outside of this Commonwealth, the service is taxable in the

Commonwealth based upon the percentage of total value of the

service delivered to a location in this Commonwealth;

under paragraphs (A) and (B), the service is deemed to be

delivered at the customer's billing address;

(D) if it cannot be determined where the service is taxable

under paragraphs (A), (B) and (C), the service is deemed to be

delivered at the location from which the service was ordered in

the customer's ordinary course of operations;

(E) if it cannot be determined where the service is taxable

under paragraphs (A), (B), (C) and (D), the service is deemed to

be delivered at the customer's billing address.

* * *

(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

2015/90KMK/HB0283A00808 - 12 -

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,

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 origination of the

telecommunications service.

(2) The term shall include the following, whether

electronically or digitally delivered or accessed, or whether

purchased singly, by subscription or in any other manner:

(i) video;

(ii) photographs;

(iii) books;

(iv) magazines;

(v) newspapers;

(vi) mailing lists;

(vii) any other otherwise taxable printed matter;

(viii) applications, commonly known as apps;

(ix) games;

(x) music;

(xi) any other audio;

(xii) software; or

(xiii) any other otherwise taxable tangible personal

property.

* * *

(o) "Use."

(1) The exercise of any right or power incidental to the

ownership, custody or possession of tangible personal property

and shall include, but not be limited to transportation, storage

or consumption.

(2) The obtaining by a purchaser of the service of printing

or imprinting of tangible personal property when such purchaser

furnishes, either directly or indirectly, the articles used in

the printing or imprinting.

(3) The obtaining by a purchaser of the services of (i)

washing, cleaning, waxing, polishing or lubricating of motor

vehicles whether or not any tangible personal property is

transferred to the purchaser in conjunction with such services,

and (ii) inspecting motor vehicles pursuant to the mandatory

requirements of "The Vehicle Code."

(4) The obtaining by a purchaser of the service of

repairing, altering, mending, pressing, fitting, dyeing,

laundering, drycleaning or cleaning tangible personal property

2015/90KMK/HB0283A00808 - 13 -

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

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--

(A) Any tangible personal property acquired and kept,

retained or over which power is exercised within this

Commonwealth on which the taxing of the storage, use or other

consumption thereof is expressly prohibited by the Constitution

of the United States or which is excluded from tax under other

provisions of this article.

(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, 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.

(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

2015/90KMK/HB0283A00808 - 14 -

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) construction

materials, supplies or equipment used to construct, reconstruct,

remodel, repair or maintain a building, road, bridge or similar

structure or (C) 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 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).

(5) Where tangible personal property or services are

utilized for purposes constituting a "use," as herein defined,

and for purposes excluded from the definition of "use," it shall

be presumed that such property or services are utilized for

purposes constituting a "sale at retail" and subject to tax

unless the user thereof proves to the department that the

predominant purposes for which such property or services are

utilized do not constitute a "sale at retail."

(6) The term "use" with respect to "liquor" and "malt or

brewed beverages" shall include the purchase of "liquor" from

any "Pennsylvania liquor store" by any person for any purpose

and the purchase of "malt or brewed beverages" from a

"manufacturer of malt or brewed beverages," "distributor" or

"importing distributor" by any person for any purpose, except

purchases from a "manufacturer of malt or brewed beverages" by a

"distributor" or "importing distributor," or purchases from an

"importing distributor" by a "distributor" within the meaning of

the "Liquor Code." The term "use" shall not include any purchase

of "malt or brewed beverages" from a "retail dispenser" or any

purchase of "liquor" or "malt or brewed beverages" from a person

holding a "retail liquor license" within the meaning of and

pursuant to the provisions of the "Liquor Code," but shall

include the exercise of any right or power incidental to the

ownership, custody or possession of "liquor" or "malt or brewed

beverages" obtained by the person exercising such right or power

in any manner other than pursuant to the provisions of the

"Liquor Code."

(7) The use of tangible personal property purchased at

retail upon which the services described in subclauses (2), (3)

and (4) of this clause have been performed shall be deemed to be

a use of said services by the person using said property.

2015/90KMK/HB0283A00808 - 15 -

(8) The term "use" shall not include the providing of a

motor vehicle to a nonprofit private or public school to be used

by such a school for the sole purpose of driver education.

(9) The obtaining by the purchaser of lobbying services.

(10) The obtaining by the purchaser of adjustment services,

collection services or credit reporting services.

(11) The obtaining by the purchaser of secretarial or

editing services.

(12) The obtaining by the purchaser of disinfecting or pest

control services, building maintenance or cleaning services.

(13) The obtaining by the purchaser of employment agency

services or help supply services.

(15) The obtaining by the purchaser of lawn care service.

(16) The obtaining by the purchaser of self-storage service.

(17) The obtaining by a construction contractor of tangible

personal property or services provided to tangible personal

property which will be used pursuant to a construction contract

whether or not the tangible personal property or services are

transferred.

(18) The obtaining of mobile telecommunications service by a

customer.

(19) Except as otherwise provided under section 204, the

obtaining by the purchaser of any service enumerated in clause

(dd).

* * *

(w) "Lobbying services." Providing the services of a

lobbyist, as defined in the definition of "lobbyist" in [section

2 of the act of September 30, 1961 (P.L.1778, No.712), known as

the "Lobbying Registration and Regulation Act."] 65 Pa.C.S. §

13A03 (relating to definitions).

* * *

(y) "Secretarial or editing services." Providing services

which include, but are not limited to, editing, letter writing,

proofreading, resume writing, typing, data or word processing,

including medical transcription services. Such services shall

not include court reporting and stenographic services.

* * *

(dd) "Miscellaneous services." Any of the following:

(1) Scenic and sightseeing transportation services.

Providing single-day or multiday scenic or sightseeing

transportation of passengers on land, water or in the air,

regardless of the mode of transportation, including, but not

limited to:

(i) cable car;

(ii) horse-drawn carriages;

(iii) monorail;

(iv) railroad;

(v) bus;

(vi) trolley;

(vii) human-drawn vehicle;

(viii) boat, including, but not limited to, charter fishing

2015/90KMK/HB0283A00808 - 16 -

boat, excursion boat, harbor sightseeing tour, hovercraft

services and swamp buggy and whale watching services; or

(ix) aerial scenic and sightseeing, including, but not

limited to, tramway, glider, helicopter, hot air balloon or

aircraft.

(2) Motor vehicle towing. Towing a motor vehicle plus

incidental services, including, but not limited to, storage and

emergency road repair services.

(3) Information services. Including:

(i) Software publishing services. Providing computer

software publishing or reproduction, including operations such

as:

(A) designing;

(B) providing documentation; or

support services to purchasers of packaged software, such as

applications software, games, operating systems, programming

language and compilation software, utility software or any other

packaged software.

(ii) Motion picture and video services. Providing one or

more of the following:

(A) Producing, or producing and distributing, motion

pictures, videos, television programs or television commercials.

(B) Distributing film and video productions to motion

picture theaters, television networks and stations and

exhibitors.

including theaters, drive-in theaters, airlines, cinemas and

festivals. For purposes of this paragraph, the taxable purchase

price shall be the amount charged to view the motion picture or

video which usually will be a ticket price.

(D) Providing postproduction and other services, including,

but not limited to, editing, film and tape transfer, titling,

subtitling, credits, closed-captioning, computer-produced

graphics, animation and special effects, as well as developing

and processing motion picture film.

(4) (Reserved).

(5) Investment advice services. Providing financial planning

or investment advice, including, but not limited to, consulting,

counseling or advisory services.

(6) Professional, scientific and technical services.

Providing one or more of the following:

(i) Legal services, including, but not limited to,

settlement services, title abstract and search services, jury

consulting services, notary public services, paralegal services,

patent agent services, patent filing and search services,

process serving services or trial consulting services.

(ii) Accounting services, including, but not limited to,

services rendered by certified or noncertified public

accountants, other accountants or bookkeepers, including, but

not limited to, auditing, tax preparation services, bookkeeping

2015/90KMK/HB0283A00808 - 17 -

services, payroll services, billing services or talent payment

services.

(iii) Architectural services, including, but not limited to,

planning and designing residential, institutional, leisure,

commercial and industrial buildings and structures by applying

knowledge of design, construction procedures, zoning

regulations, building codes and building materials, such as:

(A) architectural consulting, design and planning services,

(B) landscape architectural services;

(D) landscape planning services;

(E) city and town planning services;

(F) garden planning services;

(G) golf course design services;

(H) industrial land use services;

(I) land use design and planning services;

(J) ski area design and planning services; and

(K) urban, suburban and rural planning.

(iv) Engineering services, including, but not limited to:

(A) Applying physical laws and principles of engineering in

the design, development and utilization of machines, materials,

instruments, structures, processes and systems which may involve

any of the following activities:

(I) provision of advice;

(II) preparation of feasibility studies;

(III) consultation;

(IV) preparation of preliminary and final plans and designs;

(V) provision of technical services during the construction

or installation phase;

(VI) inspection and evaluation of engineering projects; and

(VII) related services.

(B) acoustical engineering;

(D) boat engineering;

(E) chemical engineering;

(F) civil engineering;

(G) combustion engineering;

(H) construction engineering;

(I) consulting engineering;

(J) design engineering;

(K) electrical engineering;

(L) environmental engineering;

(M) erosion control engineering;

(P) geological engineering;

(Q) geophysical engineering;

(R) heating equipment engineering;

(S) industrial engineering;

(T) logging engineering;

(U) marine engineering;

(V) mechanical engineering;

(W) mining engineering;

2015/90KMK/HB0283A00808 - 18 -

(X) petroleum engineering; and

(Y) traffic engineering.

(v) Drafting services, including but not limited to drawing

detailed layouts, plans and illustration of buildings,

structures, systems or components from engineering and

architectural specifications, such as blueprint drafting

services or other services offered by draftsmen.

(vi) Building inspection services, including, but not

limited to, evaluating any aspects of the building structure and

component systems or preparing a report on the physical

condition of the property, generally for buyers or others

involved in real estate transactions, such as services provided

by building inspection bureaus and establishments providing home

inspection services, and energy efficiency inspection services.

(vii) Geophysical surveying and mapping services, including,

but not limited to:

(A) gathering, interpreting and mapping geophysical data

which may be used in locating and measuring the extent of

subsurface resources, such as oil, gas and minerals, but may

also be used for conducting surveys for engineering purposes;

(B) using a variety of surveying techniques depending on the

purpose of the survey, including magnetic surveys, gravity

surveys, seismic surveys or electrical and electromagnetic

surveys;

(D) electrical geophysical surveying;

(E) electromagnetic geophysical surveying;

(F) geological surveying;

(G) gravity geophysical surveying;

(H) magnetic geophysical surveying;

(I) geophysical mapping services;

(J) radioactive geophysical surveying;

(K) remote sensing geophysical surveying;

(L) seismic geophysical surveying; or

(M) any other geophysical surveying and geophysical mapping

services.

(viii) Surveying and mapping services, except those services

under subparagraph (vii), including, but not limited to:

(A) surveying and mapping the surface of the earth,

including the sea floor;

(B) surveying and mapping areas above or below the surface

of the earth, such as the creation of view easements or

segregating rights in parcels of land by creating underground

utility easements, including, but not limited to:

(I) aerial surveying;

(II) cadastral surveying;

(III) cartographic surveying;

(IV) construction surveying;

(V) geographic information system-based mapping services;

(VI) geospatial mapping services;

(VII) hydrographic mapping services;

2015/90KMK/HB0283A00808 - 19 -

(VIII) hydrographic surveying services;

(IX) land surveying services;

(X) mapping services;

(XI) photogrammetric mapping services;

(XII) topographic mapping services;

(XIII) togographic surveying services; or

(XIV) any other surveying and mapping services.

(ix) Physical, chemical and other analytical testing

services, whether conducted onsite or in a laboratory,

including, but not limited to:

(A) acoustics or vibration testing;

(B) assaying;

testing;

(D) calibration and certification testing;

(E) electrical and electronic testing;

(F) geotechnical testing;

(G) mechanical testing;

(H) nondestructive testing;

(I) thermal testing;

(J) automobile proving and testing ground services;

(K) environmental testing;

(L) services provided by fire insurance underwriters'

laboratories;

(M) film badge testing;

(N) radiation testing;

(O) food testing;

(P) forensic services, other than medical;

(Q) geotechnical testing;

(R) hydrostatic testing;

(S) industrial testing;

(T) laboratory testing, except medical and veterinary;

(U) metallurgical testing;

(V) pollution control testing, except automotive emissions;

(W) product testing;

(X) radiation dosimetry;

(Y) radiographic testing;

(Z) radiographing welded joints on pipes and fittings;

(AA) radiographic inspection services;

(BB) radon testing;

(CC) seed testing;

(DD) soil testing;

(EE) thermal testing;

(FF) vibration testing;

(GG) x-ray inspection services; and

(HH) any other similar testing service.

(x) Interior design services, including, but not limited to:

(A) planning, designing and administering projects in

interior spaces to meet the physical and aesthetic needs of

people using the spaces, taking into consideration building

codes, health and safety regulations, traffic patterns and floor

2015/90KMK/HB0283A00808 - 20 -

planning, mechanical and electrical needs and interior fittings

and furniture;

(B) hospitality design;

(D) institutional design;

(E) commercial and corporate design;

(F) residential design; and

(G) interior decorating consulting.

(xi) Industrial design services, including, but not limited

to:

(A) creating and developing designs and specifications that

optimize the use, value and appearance of their products,

including the determination of the materials, construction,

mechanisms, shape, color and surface finishes of the product,

taking into consideration human characteristics and needs,

safety, market appeal and efficiency in production,

distribution, use and maintenance;

(B) automobile industrial design;

(D) hand tool industrial design;

(E) industrial design consulting;

(F) packaging industrial design;

(G) tool design; and

(H) any other industrial design.

(xii) Graphic design services, including, but not limited

to:

(A) planning, designing and managing the production of

visual communication in order to convey specific messages or

concepts, clarify complex information or project visual

identities, including, but not limited to:

(I) The design of printed materials, packaging, advertising,

signage systems and corporate identification; and

(II) generating drawings and illustrations requiring

technical accuracy or interpretative skills;

(B) graphic and commercial art services;

(D) visual communication design;

(E) corporate identification and logo design;

(F) graphic art and related services;

(G) graphic design;

(H) medical art and illustration services;

(I) silk screen design; and

(J) any other graphic design services.

(xiii) Specialized design services not listed under this

paragraph, including, but not limited to:

(A) providing professional design services, except

architectural, landscape architectural and engineering;

(B) interior, graphic and computer system design;

(D) costume design;

(E) fashion design;

2015/90KMK/HB0283A00808 - 21 -

(F) float design;

(G) fur design;

(H) jewelry design;

(I) lighting design;

(J) shoe design;

(K) textile design; and

(L) any other similar specialized design services.

(xiv) Customer computer programming services, including, but

not limited to, writing, modifying, testing and supporting

software to meet the needs of a particular customer. The

services include, but are not limited to:

(A) application software programming;

(B) software development;

(D) web page design; and

(E) any other similar computer programming services.

(xv) Customer systems design services, including, but not

limited to:

(A) planning and designing computer systems that integrate

computer hardware, software and communication technologies. The

hardware and software components of the system and installation,

training and support may be provided by the vendor of this

service or be provided by third parties.

(B) computer-aided design (CAD) services;

(D) computer-aided manufacturing (CAM) design services;

(E) computer hardware and software consulting;

(F) computer systems integration analysis services;

(G) computer systems integration consulting;

(H) information management computer systems design services;

(I) local area network (LAN) computer systems design

services;

(J) computer network systems design services;

(K) office automation computer design services; and

(L) other similar computer systems design services.

(xvi) Computer facilities management services, including,

but not limited to, providing on-site management and operation

of clients' computer systems or data processing facilities,

including support services.

(xvii) Other computer-related services, including, but not

limited to, disaster recovery services and software installation

services.

(xviii) Administrative management and general consulting

services including, but not limited to:

(A) providing operating advice and assistance to businesses

and other organizations on administrative management issues,

such as financial planning and budgeting, equity and asset

management, records management, office planning, strategic and

organizational planning, site selection, new business startup,

and business process improvement;

(B) general management consulting;

2015/90KMK/HB0283A00808 - 22 -

financial management;

(D) medical office management, records management,

reorganizational, site location or selection and strategic

planning services;

(E) human resource consulting;

(F) marketing consulting;

(G) process consulting;

(H) physical distribution consulting;

(I) logistics consulting; or

(J) other management consulting services.

(xix) Human resource consulting services, including, but not

limited to:

(A) providing advice, assistance and consulting services to

businesses and other organizations in human resource and

personnel policies, practices and procedures;

(B) employee benefits planning, communication and

administration;

(D) wage and salary administration;

(E) actuarial consulting, except insurance actuarial

services;

(F) employee assessment services;

(G) labor relations consulting;

(H) organization development consulting; or

(I) any other similar human resource consulting services.

(xx) Marketing consulting services, including, but not

limited to:

(A) providing operating advice, assistance and consulting

services to businesses and other organizations on marketing

issues, such as developing marketing objectives and policies,

sales forecasting, new product development and pricing,

licensing and franchise planning and marketing planning and

strategy;

(B) customer service management consulting services;

(D) sales management consulting services; and

(E) any other similar marketing consulting services.

(xxi) Process, physical distribution and logistics

consulting services, including, but not limited to:

(A) providing operating advice and assistance to businesses

and other organizations in:

(I) manufacturing operations improvement;

(II) productivity improvement;

(III) production planning and control;

(IV) quality assurance and quality control;

(V) inventory management;

(VI) distribution networks;

(VII) warehouse use, operations and utilization;

(VIII) transportation and shipment of goods and materials;

and

2015/90KMK/HB0283A00808 - 23 -

(IX) materials management and handling;

(B) customs consulting;

(D) freight rate consulting;

(E) freight rate auditing;

(F) freight traffic consulting;

(G) materials management consulting;

(H) tariff rate consulting;

(I) tariff rate information services; and

(J) any other similar process, physical distribution and

logistics consulting services.

(xxii) Other management consulting services, including

providing telecommunications and utility management consulting.

(xxiii) Environmental consulting services, including

providing advice, assistance, consulting to businesses and other

organizations on environmental issues, including the control of

environmental contamination from pollutants, toxic substances,

and hazardous materials and identifying problems, inspecting

buildings for hazardous materials and measuring and evaluating

risks and recommending solutions. The services include air and

water quality consulting, asbestos contamination consulting,

remediation consulting and environmental law consulting,

providing sanitation or site remediation consulting services.

(xxiv) Other scientific and technical consulting services,

including agricultural, agrology, agronomy, biological chemical,

dairy herd, economic, energy, entomology, geochemical,

horticultural, hydrology, livestock breeding, motion picture,

nuclear energy, physics, radio, safety, security and any other

similar scientific and technical consulting services.

(xxv) Research and development services in biotechnology,

physical, engineering and life sciences, including conducting

research and experimental development biotechnology and services

involving the study of the use of microorganisms and cellular

and biomolecular processes to develop or alter living or non-

living materials which may result in development of new

biotechnology processes or in prototypes of new or genetically

altered products that may be reproduced, utilized or implemented

by various industries, including physical, engineering, life

sciences, agriculture, electronics, environmental, bacteriology,

biology, botany, computers, chemistry, entomology, food,

fisheries, forests, genetics, geology, health, industry,

mathematics, medicine, oceanography, pharmacy, physics,

veterinary, cloning, DNA technologies, nanobiotechnology,

nucleic acid chemistry, protein engineering, recombinant DNA,

dentistry, electronics, experimental farms, fisheries, forestry,

guided missile and space vehicles and parts, photonics and other

allied subjects.

(xxvi) Research and development in social sciences and

humanities, including conducting research and analyses in

cognitive development, sociology, psychology, language,

behavior, economic, archeological, business, demographic,

2015/90KMK/HB0283A00808 - 24 -

historical and cultural preservation, sociology and any other

social science and humanities research and development services.

(xxvii) Advertising services, including creating advertising

campaigns and placing advertising in periodicals, newspapers and

on radio and television, or other media, which includes advice,

consulting, creative services, account management, production of

advertising material, media planning, buying and placing

advertising, distributing advertising or any other advertising

services. Services involving direct mail advertising include

direct mail advertising and creating, designing, preparing for

mailing or distribution and any other similar services involving

direct mail advertising. The term includes demonstration

services, display letter services, mannequin decorating, sign

lettering and painting, welcoming services and window dressing

or trimming services.

(xxviii) Public relations services design and implementation

of public relations campaigns to promote the interests and image

of any person, including lobbying, political consulting or any

similar public relations consulting.

(xxix) Media representative services including selling media

time or space for media owners, including magazine, newspaper,

publishers, radio or television or any other similar media.

(xxx) Display advertising services including creating and

designing public display advertising campaign materials

including printed, painted, electronic displays, or placing the

displays on indoor or outdoor billboards and panels, or on or

within transit vehicles or facilities, shopping malls, retail or

in-store displays and other display structures or sites.

(xxxi) Market research and public opinion polling services

including systematically gathering, recording, tabulating and

presenting marketing and public opinion data, including

broadcast media rating services, marketing analysis services,

opinion research services, political and public opinion polling,

statistical sampling services and any other similar market

research and public opinion polling services.

(xxxii) Translation and interpretation services including

translating written or other material and interpreting writing

and speech from one language to another including sign language

services.

(xxxiii) Veterinary services including services provided by

licensed veterinarians including providing and prescribing

medicine and performing surgery and any other service provided

by a veterinarian. The term includes testing services performed

by or for veterinarians.

(xxxiv) All professional, scientific and technical services,

other than the services defined in this paragraph including:

(A) Appraisal services, excluding real estate.

(B) Arbitration and conciliation services, except by

attorney or paralegal.

commodity inspection services.

2015/90KMK/HB0283A00808 - 25 -

(D) Consumer credit counseling services.

(E) Credit repair services.

(F) Electronic communication verification content services.

(G) Estate assessment or appraisal services.

(H) Handwriting analysis services.

(I) Handwriting expert services.

(J) Marine surveying.

(K) Ship appraisal services.

(L) Mediation product services, except by lawyer, attorney,

paralegal, family or social services.

(M) Meteorological services.

(N) Patent broker and marketing services.

(O) Patrolling and inspecting electric or gas transmission

lines.

(P) Quantity surveying.

(Q) Weather forecasting services.

(7) Office administration services. Providing office

administrative services, including financial planning, billing,

recordkeeping, personnel, distribution or logistics for others

on a contract or fee basis.

(8) Facilities support services. Providing staff to perform

support services within a client's facilities, including

janitorial, maintenance, trash disposal, guard, security, mail

routing, reception, laundry and related services. The term

includes providing private jail services or operating

correctional facilities on a contract or fee basis.

(9) Professional employment services. Providing human

resources and human resource management services to client

businesses by entities operating in a coemployment relationship

with client businesses or organizations and are specialized in

performing a wide range of human resource and personnel

management duties, including payroll, payroll tax, benefits

administration, workers' compensation, unemployment and human

resource administration. Services include payroll, including

withholding and remitting employment-related taxes, for some or

all of the employees of the employees' clients, serving as the

employer of those employees for benefits and related purposes or

providing any similar services provided by a professional

employment organization. The term includes employee leasing

services, labor leasing services and staff leasing services.

(10) Business support services. Providing one or more of the

following:

(i) Providing document preparation services, including

letter or resume writing, document editing or proofreading,

typing, word or data processing, desktop publishing, stenography

except court reporting or stenotype recording, transcription and

other secretarial services.

(ii) Answering telephone calls and relaying messages to

clients.

(iii) Providing telemarketing services on a contract or fee

basis for others, including promoting a client's product or

2015/90KMK/HB0283A00808 - 26 -

services by telephone, taking orders by telephone or soliciting

contributions by telephone.

(iv) Providing mailbox rental and other postal and mailing

services except direct mail advertising.

(v) Providing photocopying, duplicating, blueprinting,

scanning and other document copying services.

(vi) Providing facsimile and on-site computer rental

services.

(vii) Collecting payments for claims on behalf of or

remitting payments collected for clients.

(viii) Compiling or providing information including credit

and employment histories on individuals and credit histories on

businesses.

(ix) Repossessing tangible assets for a creditor.

(x) Providing reporting and stenotype recording of live

legal proceedings and transcribing recorded materials.

(11) Travel arrangements and reservation services.

Providing travel, tour or accommodations arrangement services,

assembling and planning tours, marketing and promoting

communities and facilities to businesses and leisure travelers

through a range of activities, including assisting organizations

in locating meeting and convention sites, providing travel

information on area attractions, lodging accommodations and

restaurants, providing maps and organizing group tours of local

historical, recreational and cultural attractions, providing

travel reservation services including airline, train, bus, ship,

car rental, hotel, time share, restaurant and sports and

theatrical ticket reservation services.

(12) Packaging and labeling services. Packaging or wrapping

client-owned materials, including labeling and imprinting.

Services include apparel folding and packaging, blister

packaging, kit assembling and packaging, folding and packaging

services, gift wrapping services, mounting merchandise or cards,

product sterilizing and packaging or shrink wrapping.

(13) Convention and trade show organizing. Organizing,

promoting or managing events, including business and trade

shows, conventions, conferences and meeting whether or not the

vendor manages and provides the staff to operate the facilities

in which these events take place. Events include automobile

shows, craft fairs, flower shows, home shows, trade fairs, trade

shows or other similar events.

(14) Other service. Other support services, including day-

to-day business and other organizational support services not

otherwise defined in this subsection, including auctioneering,

bartering services, bottle exchange services, cloth cutting,

bolting or winding, parking meter coin pick-up services, coupon

processing services, coupon redemption services, including

clearinghouse services, diving services, document shredding,

electric or other meter reading services, commercial

firefighting, flagging services, float decorating services,

inventory computing or taking service, license issuing services

2015/90KMK/HB0283A00808 - 27 -

except services provided by the Commonwealth, printing broker

services, tape slitting including cutting plastic or leather in

widths, textile cutting, trading stamp promotion and redemption

services or any other similar support service.

(15) Waste collection.

(i) Waste collection includes both:

(A) Collecting or hauling hazardous waste, nonhazardous

waste or recyclable materials within a local area.

(B) Operating hazardous or nonhazardous waste transfer

stations or landfills or recycling centers within a local area.

(ii) Services include ash collecting and hauling, garbage

collection services, local garbage hauling, recyclable materials

collection and local hauling, refuse and rubbish collection and

local hauling, hazardous and radioactive collecting and hauling

services and identifying, treating, packaging and labeling of

any waste materials.

(iii) The term includes brush and rubble collection and

local hauling, dump trucking of brush or rubble and any other

similar waste hauling and local collection services.

(16) Services other than tuition and housing provided by

junior colleges, colleges, universities, professional schools,

business schools, computer training schools, management training

schools, technical and trade schools and other schools. For

purposes of this paragraph the following shall apply:

(i) Junior college shall mean schools providing academic, or

academic and technical, courses in diverse settings and through

diverse means, and granting associate degrees, certificates or

diplomas below the baccalaureate level.

(ii) College, university and professional school services

shall mean schools providing academic courses in diverse

settings and through diverse means and granting degrees at

baccalaureate or graduate levels.

(iii) Business school and computer and management training

school services shall mean schools providing courses in diverse

settings and through diverse means, in office procedures,

secretarial and stenographic skills, basic office skills, office

machine operation, reception, communications, computer training

excluding computer repair but including computer programming,

software packages, computerized business systems, computer

electronics technology, computer operations, local area network

management and management, professional and career development.

(iv) Technical and trade school services shall mean schools

providing vocational and technical training, in a variety of

technical subjects and trades, including barbering, hair

styling, cosmetic arts, aviation, flight and apprenticeship

programs. These programs involve applied training as well as

course work.

(v) Other school services shall mean schools providing

instruction in:

(A) The arts, including dance, art, drama and music.

(B) Foreign language instruction including sign language.

2015/90KMK/HB0283A00808 - 28 -

tutoring services.

(D) Automobile driving instruction.

(17) Home health care services. Providing skilled nursing

services in the home, including the following:

(i) Personal care services.

(ii) Homemaker and companion services.

(iii) Physical therapy.

(iv) Medical social services.

(v) Medications.

(vi) Medical equipment and supplies.

(vii) Counseling.

(viii) Twenty-four-hour home care.

(ix) Occupation and vocational therapy.

(x) Dietary and nutritional services.

(xi) Speech therapy.

(x) Audiology.

(xi) High-tech care including intravenous therapy.

(18) Other ambulatory health care services. Providing

services including outpatient care centers, medical laboratories

and diagnostic imaging centers and home health care providers.

The term does not include offices of physicians, dentists and

other health practitioners providing ambulatory health care

services including ambulance services, blood and organ banks,

health screening, physical fitness evaluation and hearing

testing services, smoking cessation programs and pacemaker

monitoring services.

(19) Nursing care facility services.

(i) Services as defined under paragraph (17) except the

services provided at nursing care facilities, including

convalescent homes, group homes for the disabled, nursing homes,

hospices, rest homes, retirement homes and skilled nursing

facilities, provided the establishments provide nursing

facilities.

(ii) Providing inpatient nursing and rehabilitative services

for an extended period of time to individuals requiring nursing

care.

(19.1) Residential, intellectual and developmental

disability, mental health and substance abuse facility services.

Services provided by group homes and intermediate care

facilities providing residential care services for persons

diagnosed with intellectual and developmental disabilities and

mental health and substance abuse illnesses.

(20) Continuing care retirement community and assisted

living facility services for the elderly. Providing residential

and personal care services, with or without on-site nursing

care, for the elderly and other persons who:

(i) are unable to fully care for themselves; or

(ii) do not desire to live independently.

(21) Other residential care facility services. Providing

residential care not provided by the facilities described in

2015/90KMK/HB0283A00808 - 29 -

subclauses (1) through (20).

(22) Individual and family services. Providing

nonresidential social assistance services for children and youth

in such areas as adoption and foster care, drug prevention, life

skills training and positive social development; nonresidential

social assistance services to improve the quality of life for

the elderly, persons diagnosed with intellectual and

developmental disabilities or persons with disabilities in such

areas as day care, nonmedical home care or homemaker services,

social activities, group support, and companionship; and other

nonresidential individual and family social assistance services.

This subclause includes alcohol and drug counseling, ex-offender

rehabilitation services, marriage counseling; family mediation

services; parenting support services; referral services for

personal and social problems; private parole officer services;

traveler's aid services; social services; and any other similar

individual or family services.

(23) Community food and housing and emergency and other

relief services.

(i) Collecting, preparing and delivering food for the needy.

(ii) Distributing clothing and blankets to the poor.

(iii) Preparing and delivering meals to individuals who, by

reason of age, disability, or illness, are unable to prepare

meals for themselves.

(iv) Collecting and distributing salvageable or donated

food.

(v) Preparing and providing meals at fixed or mobile

locations, such as food banks and soup kitchens.

(vi) Providing community housing services such as short term

emergency shelters for victims of domestic violence, sexual

assault or child abuse; temporary residential shelters for the

homeless, runaway youths and patients and families caught in

medical crises; and transitional housing for low-income

individuals and families.

(vii) Providing volunteer construction or repair of low-cost

housing, in partnership with the homeowner, who may assist in

construction or repair work.

(viii) Providing repair of homes for elderly or disabled

homeowners.

(ix) Providing food, shelter, clothing, medical relief,

resettlement and counseling to victims of domestic or

international disasters or conflicts.

(24) Vocational rehabilitation services. Providing:

(i) vocational rehabilitation or habilitation services, such

as job counseling, job training and work experience, to

unemployed and underemployed individuals, individuals with

disabilities, and individuals who have job market disadvantages

because of lack of education, job skill or experience; and

(ii) providing training and employment to individuals with

disabilities, including:

(A) vocational rehabilitation job training facilities other

2015/90KMK/HB0283A00808 - 30 -

than entities identified in subclause (26); and

(B) sheltered workshops, such as work experience centers.

(25) Child day-care services. Providing day care for infants

or children or babysitting, including:

(i) care for older children other than at school;

(ii) pre-kindergarten schooling; and

(iii) any other similar child day-care service.

(26) Performing arts company, group or theater services:

(i) Providing live theatrical presentations including

musicals, operas, plays and comedy, improvisational, mime and

puppet shows.

(ii) Operating dinner theaters engaged in providing live

theatrical productions and food and beverages for consumption on

the premises.

(iii) Providing live theatrical dance presentations.

(iv) Providing live musical entertainment.

(v) This subclause does not include live musical

entertainment provided by any of the following:

(A) An elementary or secondary school.

(B) A nonprofit corporation or nonprofit incorporated

association under Federal law or State law.

Commonwealth as a nonprofit corporation or unincorporated

association under the laws of this Commonwealth. This paragraph

includes any youth or athletic, volunteer fire, ambulance,

religious, charitable, fraternal, veterans or civic association

and a separately chartered auxiliary of the association operated

on a nonprofit basis.

(27) Sports teams or club services.

(i) Providing live sporting events before a paying audience.

(ii) Operating racetracks.

(iii) Independent athletes or professional or

semiprofessional sports teams or clubs providing live sporting

or racing events before a paying audience.

(iv) Owners of racing participants, such as cars and horses,

providing the participants in racing events or other spectator

sports events.

(v) Sports trainers providing specialized services to

support participants in sports events or competitions.

(vi) This subclause does not include services provided by

any of the following:

(A) An elementary or secondary school.

(B) A nonprofit corporation or nonprofit incorporated

association under Federal law or State law.

Commonwealth as a nonprofit corporation or unincorporated

association under the laws of this Commonwealth. This paragraph

includes any youth or athletic, volunteer fire, ambulance,

religious, charitable, fraternal, veterans or civic association

and a separately chartered auxiliary of the association operated

on a nonprofit basis.

2015/90KMK/HB0283A00808 - 31 -

(28) Promoting performing arts, sports, and similar events.

(i) Booking, organizing, promoting or managing live

performing arts productions, sports events, fairs, concerts,

festivals and similar events.

(ii) Providing the staff to, or management of, the operate

facilities at which events referred to in subparagraph (i) are

held.

(29) Agency or management for artist, athlete, entertainer

and other public figure. Providing representation or management

of any creative and performing artist, sports figure,

entertainer or other public figure.

(30) Museum, historical site and similar institution

services. Providing exhibition of objects, sites and natural

wonders of historical, cultural or educational value, such as

provided by museums, historical sites, zoos, botanical gardens,

caverns and similar institutions. For purposes of this

subclause, the purchase price of the service is typically a

ticket or admission price.

(31) Amusement park and arcade services. Providing a variety

of attractions, such as mechanical rides, water rides, games,

shows, theme exhibits, refreshment stands and picnic grounds.

This subclause includes indoor play area services, electronic or

other game arcades, billiard salon services, family fun centers,

pinball machines, coin-operated games and rides and other

similar amusement park or arcade services. For purposes of this

subclause, the purchase price for amusement parks is typically a

ticket or admission price.

(32) Other amusement and recreation industry services.

(i) Providing miniature golf courses, golf courses and golf

courses along with dining facilities and other recreational

facilities which are known as country clubs.

(ii) Providing downhill, cross-country or related skiing

areas or operating equipment, such as ski lifts and tows.

(iii) Marinas, providing docking or storage facilities for

pleasure craft owners, with or without one or more related

activities. Examples are:

(A) retailing fuel and marine supplies; and

(B) repairing, maintaining or renting pleasure boats.

(iv) Providing fitness and recreational sports facilities

featuring exercise and other active physical fitness

conditioning or recreational sports activities, such as

swimming, skating, or racquet sports.

(v) Providing bowling centers.

(vi) Providing other recreational and amusement services.

(33) Recreational vehicle park and recreational camp

services.

(i) Providing recreational vehicle parks and campgrounds and

recreational and vacation camps.

(ii) Providing sites to accommodate campers and their

equipment, including tents, tent trailers, travel trailers and

recreational vehicles.

2015/90KMK/HB0283A00808 - 32 -

(iii) Providing overnight recreational camps, such as

children's camps, family vacation camps, hunting and fishing

camps and outdoor adventure retreats which offer trail riding,

white-water rafting, hiking and similar activities.

(34) Personal care services providing one or more of the

following:

(i) Hair care, facials or applying makeup other than

permanent makeup.

(ii) Cutting, trimming and styling male hair and shaving and

trimming male beards.

(iii) Cutting, trimming, shampooing, coloring, waving or

styling hair.

(iv) Nail care, such as manicures, pedicures and nail

extensions.

(v) Nonmedical services to assist clients in attaining or

maintaining a desired weight. This subparagraph includes saunas

and steam baths.

(vi) Color consulting.

(vii) Day spa services.

(viii) Hair removal.

(ix) Ear piercing.

(x) Hair replacement, other than by a physician.

(xi) Massage.

(xii) Scalp treatments.

(xiii) Tanning services.

(xiv) Tattooing.

(xv) Other similar personal care service.

(35) Death care services. Providing for the preparation of

the dead for burial or interment and conducting funerals. This

subclause includes:

(i) providing facilities for wakes;

(ii) arranging transportation for the dead;

(iii) selling caskets and related merchandise;

(iv) operating sites or structures reserved for the

interment of human or animal remains; and

(v) cremating the dead.

(36) Drycleaning and laundry services.

(i) Providing services at facilities with coin-operated or

similar self-service laundry and drycleaning equipment for

customer use on the premises.

(ii) Supplying and servicing coin-operated or similar self-

service laundry and drycleaning equipment for customer use in

places of business operated by others, such as apartments and

dormitories.

(iii) Providing drycleaning and laundering services.

(iv) Providing dropoff and pickup sites for laundries or

drycleaners.

(v) Providing specialty cleaning services for specific types

of garments and other textile items. Carpets and upholstery are

not subject to this subparagraph. Items such as the following

are subject to this subparagraph:

2015/90KMK/HB0283A00808 - 33 -

(A) Fur, leather or suede garments.

(B) Wedding gowns.

(D) Draperies and pillows.

(vi) Supplying, on a rental or contract basis, laundered

items, including:

(A) uniforms, gowns and coats and related work clothing,

including protective apparel;

(B) table linens;

(D) towels;

(E) diapers;

(F) clean room apparel; and

(G) dust-control items, such as treated mops, shop towels,

wiping towels, rugs, mats, dust tool covers and cloths.

(37) Other personal services.

(i) Providing pet care services, such as boarding, grooming,

sitting, and training pets.

(ii) Developing film or making photographic slides, prints,

and enlargements.

(iii) One-hour photofinishing labs providing film developing

or making photographic slides, prints and enlargements on a

short turnaround or while-you-wait basis.

(iv) Providing parking spaces for motor vehicles, usually on

an hourly, daily or monthly basis and offering valet parking

services.

(v) Baby shoe bronzing.

(vi) Bail bonding.

(vii) Balloon-o-gram services.

(viii) Coin-operated machine blood pressure testing.

(ix) Locker services.

(x) Providing photographic machines.

(xi) Providing scales.

(xii) Shoeshine services.

(xiii) Check room services.

(xiv) Comfort station services.

(xv) Concierge services.

(xvi) Consumer buying services.

(xvii) Credit card notification services, such as lost or

stolen reporting.

(xviii) Dating, social introduction and social escort

services.

(xix) Discount buying services, including medical cards and

similar negotiated discount plans for individuals.

(xx) Astrology, fortune-telling, numerology, palm reading,

physic and phrenology services.

(xxi) Genealogical investigation services.

(xxii) House sitting.

(xxiii) Identity theft protection services.

(xxiv) Party planning and wedding planning.

(xxv) Pay telephone services.

2015/90KMK/HB0283A00808 - 34 -

(xxvi) Personal fitness training.

(xxvii) Personal organizer services.

(xxviii) Personal shopping services.

(xxix) Porter services.

(xxx) Singing telegram services.

(xxxi) Wedding chapels. This subparagraph does not apply to

churches.

(xxxii) Similar services.

(38) Real estate agent and broker services. Acting as an

agent or broker in selling real estate for others or buying real

estate for others or renting real estate for others. The

services include auctioning real estate, real estate broker

services, real estate agent services and any other similar

services.

* * *

(ll) "[Premium cable or premium] Cable or video programming

service." That portion of cable television services, video

programming services, community antenna television services or

any other distribution of television, video, audio or radio

services which [meets all of the following criteria:

(1)] is transmitted with or without the use of wires to

purchasers.[;

(2) which consists substantially of programming

uninterrupted by paid commercial advertising which includes, but

is not limited to, programming primarily composed of

uninterrupted full-length motion pictures or sporting events,

pay-per-view, paid programming or like audio or radio

broadcasting; and

(3) does not constitute a component of a basic service tier

provided by a cable television system or a cable programming

service tier provided by a cable television system. A basic

service tier shall include all signals of domestic television

broadcast stations, any public, educational, governmental or

religious programming and any additional video programming

signals or service added to the basic service tier by the cable

operator. The basic service tier shall also include a single

additional lower-priced package of broadcast channels and access

information channels which is a subset of the basic service tier

as set forth above. A cable programming service tier includes

any video programming other than: (i) the basic service tier;

(ii) video programming offered on a pay-per-channel or pay-per-

view basis; or (iii) a combination of multiple channels of pay-

per-channel or pay-per-view programming offered as a package.]

If a purchaser receives or agrees to receive [premium] cable or

[premium] video programming service, then the following charges

are included in the purchase price: charges for installation or

repair of any [premium] cable or [premium] video programming

service, upgrade to include additional [premium] cable or

[premium] video programming service, downgrade to exclude all or

some [premium] cable or [premium] video programming service,

additional [premium] cable outlets in excess of ten or any other

2015/90KMK/HB0283A00808 - 35 -

charge or fee related to [premium] cable or [premium] video

programming services. The term shall not apply to transmissions

by public television, public radio services or official Federal,

State or local government cable services. Nor shall the term

apply to local origination programming which provides a variety

of public service programs unique to the community, programming

which provides coverage of public affairs issues which are

presented without commentary or analysis, including United

States Congressional proceedings, or programming which is

substantially related to religious subjects. Nor shall the term

"[premium] cable or [premium] video programming service" apply

to subscriber charges for access to a video dial tone system or

charges by a common carrier to a video programmer for the

transport of video programming.

* * *

(pp) "Building machinery and equipment." Generation

equipment, storage equipment, conditioning equipment,

distribution equipment and termination equipment, [which shall

be limited to the following] located in a building unless

specifically noted otherwise and part only of the following

systems:

(1) air conditioning limited to heating, cooling,

purification, humidification, dehumidification and ventilation;

(2) electrical;

(3) plumbing;

(4) communications limited to voice, video, data, sound,

master clock and noise abatement;

(5) alarms limited to fire, security and detection;

(6) control system limited to energy management, vehicular

traffic and parking lot and building access;

(7) medical system limited to diagnosis and treatment

equipment, medical gas, nurse call and doctor paging;

(8) laboratory system;

(9) cathodic protection system; or

(10) [furniture,] cabinetry and kitchen equipment.

The term shall include boilers, chillers, air cleaners,

humidifiers, fans, switchgear, pumps, telephones, speakers,

horns, motion detectors, dampers, actuators, grills, registers,

traffic signals, sensors, card access devices, guardrails,

[medial devices,] floor troughs and grates and laundry

equipment, together with integral coverings and enclosures,

whether or not the item constitutes a fixture or is otherwise

affixed to the real estate, whether or not damage would be done

to the item or its surroundings upon removal or whether or not

the item is physically located within a real estate structure.

The term "building machinery and equipment" shall not include

guardrail posts, pipes, fittings, pipe supports and hangers,

valves, underground tanks, wire, conduit, receptacle and

junction boxes, insulation, ductwork and coverings thereof, or

foundations or supports for any building machinery and

equipment, including light poles or bridge and road drainage

2015/90KMK/HB0283A00808 - 36 -

equipment.

(qq) "Real estate structure." A structure or item purchased

by a construction contractor pursuant to a construction contract

with:

(1) a charitable organization, a volunteer firemen's

organization, a nonprofit educational institution or a religious

organization for religious purposes and which qualifies as an

institution of purely public charity under the act of November

26, 1997 (P.L.508, No.55), known as the "Institutions of Purely

Public Charity Act";

(2) the United States; or

(3) the Commonwealth, its instrumentalities or political

subdivisions.

The term includes building machinery and equipment; developed

or undeveloped land; streets; roads; highways; parking lots;

stadiums and stadium seating; recreational courts; sidewalks;

foundations; structural supports; walls; floors; ceilings;

roofs; doors; canopies; millwork; elevators; windows and

external window coverings; [outdoor advertising boards or signs]

billboards; airport runways; bridges; dams; dikes; vehicular

traffic control devices, including vehicular traffic signs;

satellite dishes; antennas; guardrail posts; pipes; fittings;

pipe supports and hangers; valves; underground tanks; wire;

conduit; receptacle and junction boxes; insulation; ductwork and

coverings thereof; and any structure or item similar to any of

the foregoing, whether or not the structure or item constitutes

a fixture or is affixed to the real estate, or whether or not

damage would be done to the structure or item or its

surroundings upon removal. The term also includes foundations or

supports for any building machinery and equipment, including

light poles or bridge and road drainage equipment.

* * *

[(tt) "Commercial racing activities." Any of the following:

(1) Thoroughbred and harness racing at which pari-mutuel

wagering is conducted under the act of December 17, 1981

(P.L.435, No.135), known as the "Race Horse Industry Reform

Act."

(2) Fair racing sanctioned by the State Harness Racing

Commission.]

* * *

(eee) "Dentist." Doctors of dental medicine or doctors of

dental surgery, as defined in the act of May 1, 1933 (P.L.216,

No.76), known as "The Dental Law."

(fff) "Physician." Medical doctors, as defined in the act

of December 20, 1985 (P.L.457, No.112), known as the "Medical

Practice Act of 1985," or doctors of osteopathy, as defined in

the act of October 5, 1978 (P.L.1109, No.261), known as the

"Osteopathic Medical Practice Act."

Section 2. Section 202 of the act, amended September 9, 1971

(P.L.437, No.105), October 4, 1978 (P.L.987, No.201), April 23,

1998 (P.L.239, No.45), May 24, 2000 (P.L.106, No.23) and June

2015/90KMK/HB0283A00808 - 37 -

29, 2002 (P.L.559, No.89), is amended to read:

Section 202. Imposition of Tax.--(a) There is hereby

imposed upon each separate sale at retail of tangible personal

property or services, as defined herein, within this

Commonwealth a tax of six and six-tenths per cent of the

purchase price, which tax shall be collected by the vendor from

the purchaser, and shall be paid over to the Commonwealth as

herein provided.

(b) There is hereby imposed upon the use, on and after the

effective date of this article, within this Commonwealth of

tangible personal property purchased at retail on or after the

effective date of this article, and on those services described

herein purchased at retail on and after the effective date of

this article, a tax of six and six-tenths per cent of the

purchase price, which tax shall be paid to the Commonwealth by

the person who makes such use as herein provided, except that

such tax shall not be paid to the Commonwealth by such person

where he has paid the tax imposed by subsection (a) of this

section or has paid the tax imposed by this subsection (b) to

the vendor with respect to such use. The tax at the rate of six

and six-tenths per cent imposed by this subsection shall not be

deemed applicable where the tax has been incurred under the

provisions of the "Tax Act of 1963 for Education."

the tax with respect to telecommunications service within the

meaning of clause (m) of section 201 of this article shall,

except for telegrams paid for in cash at telegraph offices, be

computed at the rate of six and six-tenths per cent upon the

total amount charged to customers for such services,

irrespective of whether such charge is based upon a flat rate or

upon a message unit charge, but in no event shall charges for

telephone calls paid for by inserting money into a telephone

accepting direct deposits of money to operate be subject to this

tax. A telecommunications service provider shall have no

responsibility or liability to the Commonwealth for billing,

collecting or remitting taxes that apply to services, products

or other commerce sold over telecommunications lines by third-

party vendors. To prevent actual multistate taxation of

interstate telecommunications service, any taxpayer, upon proof

that the taxpayer has paid a similar tax to another state on the

same interstate telecommunications service, shall be allowed a

credit against the tax imposed by this section on the same

interstate telecommunications service to the extent of the

amount of such tax properly due and paid to such other state.

(d) Notwithstanding any other provisions of this article,

the sale or use of food and beverages dispensed by means of coin

operated vending machines shall be taxed at the rate of six and

six-tenths per cent of the receipts collected from any such

machine which dispenses food and beverages heretofore taxable.

(e) (1) Notwithstanding any provisions of this article, the

sale or use of prepaid telecommunications evidenced by the

2015/90KMK/HB0283A00808 - 38 -

transfer of tangible personal property shall be subject to the

tax imposed by subsections (a) and (b).

(2) The sale or use of prepaid telecommunications 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.

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

telecommunications service not evidenced by the transfer of

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

six-tenths 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.

(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

and six-tenths 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.

(f) Notwithstanding any other provision of this article, tax

with respect to sales of prebuilt housing shall be imposed on

the prebuilt housing builder at the time of the prebuilt housing

sale within this Commonwealth and shall be paid and reported by

the prebuilt housing builder to the department in the time and

manner provided in this article: Provided, however, That a

manufacturer of prebuilt housing may, at its option, precollect

the tax from the prebuilt housing builder at the time of sale to

the prebuilt housing builder. In any case where prebuilt housing

is purchased and the tax is not paid by the prebuilt housing

builder or precollected by the manufacturer, the prebuilt

housing purchaser shall remit tax directly to the department if

the prebuilt housing is used in this Commonwealth without regard

to whether the prebuilt housing becomes a real estate structure.

(g) Notwithstanding any other provisions of this article and

in accordance with the Mobile Telecommunications Sourcing Act (4

U.S.C. § 116), the sale or use of mobile telecommunications

2015/90KMK/HB0283A00808 - 39 -

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 3. Section 203 of the act is amended to read:

Section 203. Computation of Tax.--[The amount of tax imposed

by section 202 of this article shall be computed as follows:

(a) If the purchase price is ten cents (10¢) or less, no tax

shall be collected.

(b) If the purchase price is eleven cents (11¢) or more but

less than eighteen cents (18¢), one cent (1¢) shall be

collected.

but less than thirty-five cents (35¢), two cents (2¢) shall be

collected.

(d) If the purchase price is thirty-five cents (35¢) or more

but less than fifty-one cents (51¢), three cents (3¢) shall be

collected.

(e) If the purchase price is fifty-one cents (51¢) or more

but less than sixty-eight cents (68¢), four cents (4¢) shall be

collected.

(f) If the purchase price is sixty-eight cents (68¢) or more

but less than eighty-five cents (85¢), five cents (5¢) shall be

collected.

(g) If the purchase price is eighty-five cents (85¢) or more

but less than one dollar and one cent ($1.01), six cents (6¢)

shall be collected.

(h) If the purchase price is more than one dollar ($1.00),

six per centum of each dollar of purchase price plus the above

bracket charges upon any fractional part of a dollar in excess

of even dollars shall be collected.] The amount of tax due shall

be rounded to the nearest whole cent.

Section 4. Section 204 heading, (4), (5), (11), (13), (17),

(29), (30), (31), (32), (33), (34), (35), (36), (37), (38),

(39), (41), (45), (50), (53), (55), (57), (58), (61), (63),

(64), (65) and (66) of the act, amended or added August 31, 1971

(P.L.362, No.93), July 20, 1974 (P.L.535, No.183), October 17,

1974 (P.L.756, No.255), December 14, 1977 (P.L.322, No.93),

October 27, 1979 (P.L.242, No.79), December 8, 1980 (P.L.1117,

No.195), October 22, 1981 (P.L.314, No.109), December 19, 1985

(P.L.354, No.100), December 13, 1991 (P.L.373, No.40), June 16,

1994 (P.L.279, No.48), June 30, 1995 (P.L.139, No.21), May 7,

1997 (P.L.85, No.7), April 23, 1998 (P.L.239, No.45), May 24,

2015/90KMK/HB0283A00808 - 40 -

2000 (P.L.106, No.23), June 22, 2001 (P.L.353, No.23), June 29,

2002 (P.L.559, No.89), December 23, 2003 (P.L.250, No.46), July

6, 2006 (P.L.319, No.67), November 29, 2006 (P.L.1630, No.189)

and July 2, 2012 (P.L.751, No.85), are amended and the section

is amended by adding paragraphs to read:

Section 204. [Exclusions] Exemptions from Tax.--The tax

imposed by section 202 shall not be imposed upon any of the

following:

* * *

[(4) The sale at retail or use of disposable diapers; pre-

moistened wipes; incontinence products; colostomy deodorants;

toilet paper; sanitary napkins, tampons or similar items used

for feminine hygiene; or toothpaste, toothbrushes or dental

floss.]

(5) The sale at retail or use of steam, natural and

manufactured and bottled gas, fuel oil, electricity [or

intrastate subscriber line charges, basic local telephone

service or telegraph service] when purchased directly by the

user thereof solely for his own residential use [and charges for

telephone calls paid for by inserting money into a telephone

accepting direct deposits of money to operate].

* * *

(11) The sale at retail, or use of gasoline and other motor

fuels, the sales of which are otherwise subject to excise taxes

under [the act of May 21, 1931 (P.L.194), known as the "Liquid

Fuels Tax Act," and the act of January 14, 1952 (P.L.1965),

known as the "Fuel Use Tax Act."] 75 Pa.C.S. Ch. 90 (relating to

liquid fuels and fuels tax).

* * *

(13) The sale at retail, or use of wrapping paper, wrapping

twine, bags, cartons, tape, rope, labels, nonreturnable

containers and all other wrapping supplies, unless returnable,

when such use is incidental to the delivery of any personal

property, except that any charge for wrapping or packaging shall

be subject to tax at the rate imposed by section 202, unless the

property wrapped or packaged will be [resold] sold by the

purchaser of the wrapping or packaging service.

* * *

(17) The sale at retail or use of the following:

(A) hospital beds, iron lungs, kidney machines;

(B) prescription [or non-prescription medicines,] drugs

[or];

(D) crutches and wheelchairs for the use of [cripples and

invalids, artificial limbs, artificial eyes and artificial

hearing devices when designed to be worn on the person of the

purchaser or user, false teeth and materials used by a dentist

in dental treatment, eyeglasses when especially designed or

prescribed by an ophthalmologist, oculist or optometrist for the

personal use of the owner or purchaser and artificial braces and

supports designed solely for the use of crippled persons]

2015/90KMK/HB0283A00808 - 41 -

individuals with disabilities; or

(E) any [other] therapeutic, prosthetic or artificial device

designed for the use of a particular individual with a physical

incapacity, such as artificial limbs, eyes and hearing devices,

false teeth, prescription eyeglasses, braces and supports to

correct or alleviate a physical incapacity[, including but not

limited to hospital beds, iron lungs, and kidney machines].

* * *

(29) The sale at retail or use of food and beverages for

human consumption, except that this exclusion shall not apply

with respect to--

(i) Soft drinks;

(ii) Malt and brewed beverages and spirituous and vinous

liquors;

(iii) Food or beverages, whether sold for consumption on or

off the premises or on a "take-out" or "to go" basis or

delivered to the purchaser or consumer, when purchased (A) from

persons engaged in the business of catering; or (B) from persons

engaged in the business of operating establishments from which

ready-to-eat food and beverages are sold, including, but not

limited to, restaurants, cafes, lunch counters, private and

social clubs, taverns, dining cars, hotels, night clubs, fast

food operations, pizzerias, fairs, carnivals, lunch carts, ice

cream stands, snack bars, cafeterias, employe cafeterias,

theaters, stadiums, arenas, amusement parks, carryout shops,

coffee shops and other establishments whether mobile or

immobile. For purposes of this clause, a bakery, a pastry shop,

a donut shop, a delicatessen, a grocery store, a supermarket, a

farmer's market, a convenience store or a vending machine shall

not be considered an establishment from which food or beverages

ready to eat are sold except for the sale of meals, sandwiches,

food from salad bars, hand-dipped or hand-served iced based

products including ice cream and yogurt, hot soup, hot pizza and

other hot food items, brewed coffee and hot beverages. For

purposes of this subclause, beverages shall not include malt and

brewed beverages and spirituous and vinous liquors but shall

include soft drinks. The sale at retail of food and beverages at

or from a primary or secondary school or church in the ordinary

course of the activities of such organization is not subject to

tax. For purposes of this clause, the term "primary and

secondary school" is limited to a school with any of the grades

kindergarten through twelve.

(iv) Candy and gum regardless of the location from which the

candy and gum are sold.

[(30) The sale at retail or use of newspapers. For purposes

of this section, the term "newspaper" shall mean a "legal

newspaper" or a publication containing matters of general

interest and reports of current events which qualifies as a

"newspaper of general circulation" qualified to carry a "legal

advertisement" as those terms are defined in 45 Pa.C.S. § 101

(relating to definitions), not including magazines. This

2015/90KMK/HB0283A00808 - 42 -

exclusion shall also include any printed advertising materials

circulated with such newspaper regardless of where or by whom

such printed advertising material was produced.

(31) The sale at retail or use of caskets and burial vaults

for human remains and markers and tombstones for human graves.

(32) The sale at retail or use of flags of the United States

of America and the Commonwealth of Pennsylvania.

(33) The sale at retail or use of textbooks for use in

schools, colleges and universities, either public or private

when purchased in behalf of or through such schools, colleges or

universities provided such institutions of learning are

recognized by the Department of Education.

(34) The sale at retail, or use of motion picture film

rented or licensed from a distributor for the purpose of

commercial exhibition.

(35) The sale at retail or use of mail order catalogs and

direct mail advertising literature or materials, including

electoral literature or materials, such as envelopes, address

labels and a one-time license to use a list of names and mailing

addresses for each delivery of direct mail advertising

literature or materials, including electoral literature or

materials, through the United States Postal Service.]

(36) The sale at retail or use of rail [transportation

equipment] cars and locomotives used in the movement of

personalty.

[(37) The sale at retail of buses to be used under contract

with school districts that are replacements for buses destroyed

or lost in the flood of 1977 for a period ending December 31,

1977 in the counties of Armstrong, Bedford, Cambria, Indiana,

Jefferson, Somerset and Westmoreland, or the use of such buses.

(38) The sale at retail of horses, if at the time of

purchase, the seller is directed to ship or deliver the horse to

an out-of-State location, whether or not the charges for

shipment are paid for by the seller or the purchaser; the seller

shall obtain a bill of lading, either from the carrier or from

the purchaser, who, in turn has obtained the bill of lading from

the carrier, reflecting delivery to the out-of-State address to

which the horse has been shipped. The seller shall execute a

"Certificate of Delivery to Destination Outside of the

Commonwealth" for each bill of lading reflecting out-of-State

delivery. The seller shall be required to retain the certificate

of delivery form to justify the noncollection of sales tax with

respect to the transaction to which the form relates.

In transactions where a horse is sold by the seller and

delivered to a domiciled person, agent or corporation prior to

its being delivered to an out-of-State location, the

"Certificate of Delivery to Destination Outside of the

Commonwealth" form must have attached to it bills of lading both

for the transfer to the domiciled person, agent or corporation

and from the aforementioned to the out-of-State location.]

(39) The sale at retail or use of fish feed purchased by or

2015/90KMK/HB0283A00808 - 43 -

on behalf of sportsmen's clubs, fish cooperatives or nurseries

approved by the Pennsylvania Fish and Boat Commission.

* * *

[(41) The sale at retail of supplies and materials to

tourist promotion agencies, which receive grants from the

Commonwealth, for distribution to the public as promotional

material or the use of such supplies and materials by said

agencies for said purposes.]

* * *

[(45) The sale at retail or use of materials used in the

construction and erection of objects purchased by not-for-profit

organizations for purposes of commemoration and memorialization

of historical events, provided that the object is erected upon

publicly owned property or property to be conveyed to a public

entity upon the commemoration or memorialization of the

historical event.]

* * *

[(50) The sale at retail or use of subscriptions for

magazines. The term "magazine" refers to a periodical published

at regular intervals not exceeding three months and which are

circulated among the general public, containing matters of

general interest and reports of current events published for the

purpose of disseminating information of a public character or

devoted to literature, the sciences, art or some special

industry. This exclusion shall also include any printed

advertising material circulated with the periodical or

publication regardless of where or by whom the printed

advertising material was produced.]

* * *

[(53) The sale at retail or use of candy or gum regardless

of the location from which the candy or gum is sold.

(55) The sale at retail or use of horses to be used

exclusively for commercial racing activities and the sale at

retail and use of feed, bedding, grooming supplies, riding tack,

farrier services, portable stalls and sulkies for horses used

exclusively for commercial racing activities.]

* * *

(57) The sale at retail to or use by a construction

contractor of building machinery and equipment and services

thereto that are:

(i) transferred pursuant to a construction contract for any

charitable organization, volunteer firemen's organization,

volunteer firefighters' relief association, nonprofit

educational institution or religious organization for religious

purposes, provided that the building machinery and equipment and

services thereto are not used in any unrelated trade or

business; or

(ii) transferred to the United States or the Commonwealth or

its instrumentalities or political subdivisions[; or].

[(58) The sale at retail or use of a personal computer, a

peripheral device or an Internet access device, or a service

2015/90KMK/HB0283A00808 - 44 -

contract or single-user licensed software purchased in

conjunction with a personal computer, peripheral device or

Internet access device, during the exclusion period by an

individual purchaser for nonbusiness use. The exclusion does not

include a sale at retail or use of, leasing, rental or repair of

a personal computer, peripheral device or Internet access

device; mainframe computers; network servers; local area network

hubs; routers and network cabling; network operating systems;

multiple-user licensed software; minicomputers; hand-held

computers; personal digital assistants without Internet access;

hardware word processors; graphical calculators; video game

consoles; telephones; digital cameras; pagers; compact discs

encoded with music or movies; and digital versatile discs

encoded with music or movies. For purposes of this clause, the

phrase "exclusion period" means the period of time from August

5, 2001, to and including August 12, 2001, and from February 17,

2002, to and including February 24, 2002. For purposes of this

clause, "purchaser" means an individual who places an order and

pays the purchase price by cash or credit during the exclusion

period even if delivery takes place after the exclusion period.]

* * *

[(61) The sale at retail to or use of food and nonalcoholic

beverages by an airline which will transfer the food or

nonalcoholic beverages to passengers in connection with the

rendering of the airline service.]

* * *

[(63) The sale at retail or use of separately stated fees

paid pursuant to 13 Pa.C.S. § 9525 (relating to fees).

(64) The sale at retail to or use by a construction

contractor, employed by a public school district pursuant to a

construction contract, of any materials and building supplies

which, during construction or reconstruction, are made part of

any public school building utilized for instructional classroom

education within this Commonwealth, if the construction or

reconstruction:

(i) is necessitated by a disaster emergency, as defined in

35 Pa.C.S. § 7102 (relating to definitions); and

(ii) takes place during the period when there is a

declaration of disaster emergency under 35 Pa.C.S. § 7301(c)

(relating to general authority of Governor).

(65) The sale at retail or use of investment metal bullion

and investment coins. "Investment metal bullion" means any

elementary precious metal which has been put through a process

of smelting or refining, including, but not limited to, gold,

silver, platinum and palladium, and which is in such state or

condition that its value depends upon its content and not its

form. "Investment metal bullion" does not include precious metal

which has been assembled, fabricated, manufactured or processed

in one or more specific and customary industrial, professional,

aesthetic or artistic uses. "Investment coins" means numismatic

coins or other forms of money and legal tender manufactured of

2015/90KMK/HB0283A00808 - 45 -

gold, silver, platinum, palladium or other metal and of the

United States or any foreign nation with a fair market value

greater than any nominal value of such coins. "Investment coins"

does not include jewelry or works of art made of coins, nor does

it include commemorative medallions.]

(66) The sale at retail or use of copies of an official

document sold by a government agency or a court. For the

purposes of this clause, the following terms or phrases shall

have the following meanings:

(i) "court" includes:

(A) an "appellate court" as defined in 42 Pa.C.S. § 102

(relating to definitions);

(B) a "court of common pleas" as defined in 42 Pa.C.S. §

102;

(ii) "government agency" means an "agency" as defined in

section [1 of the act of June 21, 1957 (P.L.390, No.212),

referred to as the "Right-to-Know Law"] 102 of the act of

February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law;

(iii) "official document" means a "record" as defined in

section 1 of the "Right-to-Know Law." The term shall include

notes of court testimony, deposition transcripts, driving

records, accident reports, birth and death certificates, deeds,

divorce decrees and other similar documents.

* * *

(70) The sale at retail or use of tuition.

(71) The sale at retail or use of any the following

business, professional or technical services as defined in

section 201(dd) performed by a business and rendered to another

business:

(i) Legal services.

(ii) Architectural, engineering and related services.

(iii) Accounting, auditing and bookkeeping services.

(iv) Specialized design services.

(v) Advertising, public relations and related services.

(vi) Services to buildings and dwellings.

(vii) Scientific, environmental and technical consulting

services.

(viii) Scientific research and development services.

(ix) Information services.

(x) Administrative services.

(xi) Custom programming, design and data processing

services.

(72) The sale at retail or use of legal services relating to

family law or criminal law.

(73) The sale at retail or use of motion picture film rented

or licensed from a distributor for the purpose of commercial

exhibition.

(74) The sale at retail or use of services provided by

individuals under 18 years of age and not on behalf of another

person.

2015/90KMK/HB0283A00808 - 46 -

(75) The sale at retail or use of services provided by

employees to their employers in exchange for wages and salaries

when such services are rendered in the ordinary course of the

employment.

(76) The sale at retail or use of tangible personal property

or services transferred to a patient and paid for by Medicare

Part B.

(77) The sale at retail of a gun safe or gun lock. For the

purposes of this clause, the following words, terms and phrases

shall have the following meanings:

(i) "gun safe" means a self-contained enclosure specifically

designed and manufactured for the purpose of storing a firearm

and equipped with a padlock, key lock, combination lock or

similar locking device which, when locked, prevents the

unauthorized use of the firearm. The term does not include a gun

cabinet;

(ii) "gun lock" means an originally manufactured locking

device that when properly affixed and applied to a firearm is

designed to prevent the unintentional or unauthorized discharge

of the firearm. The term includes trigger locks, cable locks and

chamber locks.

Section 4.1. Section 205 of the act, amended June 9, 1978

(P.L.463, No.62), and July 12, 2006 (P.L.1137, No.116), is

amended to read:

Section 205. Alternate Imposition of Tax; Credits.--(a) If

any person actively and principally engaged in the business of

selling new or used motor vehicles, trailers or semi-trailers,

and registered with the department in the "dealer's class,"

acquires a motor vehicle, trailer or semi-trailer for the

purpose of resale, and prior to such resale, uses the motor

vehicle, trailer or semi-trailer for a taxable use under this

act, the person may pay a tax equal to six and six-tenths per

cent of the fair rental value of the motor vehicle, trailer or

semi-trailer during such use. This section shall not apply to

the use of a vehicle as a wrecker, parts truck, delivery truck

or courtesy car.

(b) A commercial aircraft operator who acquires an aircraft

for the purpose of resale, or lease, or is entitled to claim

another valid exemption at the time of purchase, and subsequent

to such purchase, periodically uses the same aircraft for a

taxable use under this act, may elect to pay a tax equal to six

and six-tenths per cent of the fair rental value of the aircraft

during such use.

Section 5. Sections 206 and 208 of the act, amended July 9,

2013 (P.L.270, No.52), are amended to read:

Section 206. Credit Against Tax.--(a) A credit against the

tax imposed by section 202 shall be granted with respect to

tangible personal property or services purchased for use outside

the Commonwealth equal to the tax paid to another state by

reason of the imposition by such other state of a tax similar to

the tax imposed by this article: Provided, however, That no such

2015/90KMK/HB0283A00808 - 47 -

credit shall be granted unless such other state grants

substantially similar tax relief by reason of the payment of tax

under this article [or under the Tax Act of 1963 for Education].

Section 208. Licenses.--(a) Every person maintaining a

place of business in this Commonwealth, selling or leasing

services or tangible personal property, the sale or use of which

is subject to tax and who has not hitherto obtained a license

from the department, shall, prior to the beginning of business

thereafter, make application to the department, on a form

prescribed by the department, for a license. If such person

maintains more than one place of business in this Commonwealth,

the license shall be issued for the principal place of business

in this Commonwealth.

(b) The department shall, after the receipt of an

application, issue the license applied for under subsection (a)

of this section, provided said applicant shall have filed all

required State tax reports and paid any State taxes not subject

to a timely perfected administrative or judicial appeal or

subject to a duly authorized deferred payment plan. Such license

shall be nonassignable. [All licensees as of the effective date

of this subsection shall be required to file for renewal of said

license on or before January 31, 1992. Licenses issued through

April 30, 1992, shall be based on a staggered renewal system

established by the department. Thereafter, any] Any license

issued shall be valid for a period of five years.

(b.1) If an applicant for a license or any person holding a

license has not filed all required State tax reports and paid

any State taxes not subject to a timely perfected administrative

or judicial appeal or subject to a duly authorized deferred

payment plan, the department may refuse to issue, may suspend or

may revoke said license. The department shall notify the

applicant or licensee of any refusal, suspension or revocation.

Such notice shall contain a statement that the refusal,

suspension or revocation may be made public. Such notice shall

be made by first class mail. An applicant or licensee aggrieved

by the determination of the department may file an appeal

pursuant to the provisions for administrative appeals in this

article, except that the appeal must be filed within thirty days

of the date of the notice. In the case of a suspension or

revocation which is appealed, the license shall remain valid

pending a final outcome of the appeals process. Notwithstanding

sections 274, 353(f), 408(b), 603, 702, 802, 904 and 1102 of the

act or any other provision of law to the contrary, if no appeal

is taken or if an appeal is taken and denied at the conclusion

of the appeal process, the department may disclose, by

publication or otherwise, the identity of a person and the fact

that the person's license has been refused, suspended or revoked

under this subsection. Disclosure may include the basis for

refusal, suspension or revocation.

Commonwealth for the purpose of selling or leasing services or

2015/90KMK/HB0283A00808 - 48 -

tangible personal property, the sale or use of which is subject

to tax, without having a valid license at the time of the sale

or lease shall be guilty of a summary offense and, upon

conviction thereof, be sentenced to pay a fine of not less than

three hundred dollars ($300) nor more than one thousand five

hundred ($1,500) and, in default thereof, to undergo

imprisonment of not less than five days nor more than thirty

days. The penalties imposed by this subsection shall be in

addition to any other penalties imposed by this article. For

purposes of this subsection, the offering for sale or lease of

any service or tangible personal property, the sale or use of

which is subject to tax, during any calendar day shall

constitute a separate violation. The Secretary of Revenue may

designate employes of the department to enforce the provisions

of this subsection. The employes shall exhibit proof of and be

within the scope of the designation when instituting proceedings

as provided by the Pennsylvania Rules of Criminal Procedure.

(d) Failure of any person to obtain a license shall not

relieve that person of liability to pay the tax imposed by this

article.

Section 6. Section 209 of the act, amended May 2, 1974

(P.L.269, No.75), is amended to read:

Section 209. Definitions.--(a) For the purposes of this

part V only, the following words, terms and phrases shall have

the meaning ascribed to them in this subsection, except where

the context clearly indicates a different meaning:

(1) "Hotel." A building or buildings in which the public

may, for a consideration, obtain sleeping accommodations. The

term "hotel" shall not include any charitable, educational or

religious institution summer camp for children, hospital or

nursing home.

(2) "Occupant." A person (other than a "permanent resident,"

as defined herein,) who, for a consideration, uses, possesses or

has a right to use or possess any room or rooms in a hotel under

any lease, concession, permit, right of access, license or

agreement.

(3) "Occupancy." The use or possession or the right to the

use or possession by any person (other than a "permanent

resident,") of any room or rooms in a hotel for any purpose or

the right to the use or possession of the furnishings or to the

services and accommodations accompanying the use and possession

of the room or rooms.

(4) "Operator." Any person operating a hotel or any online

hotel reservation service through which one may obtain a hotel

occupancy.

(5) "Permanent resident." Any occupant who has occupied or

has the right to occupancy of [any room or] the same number of

rooms in a hotel for at least thirty consecutive days.

(6) "Rent." The consideration received for occupancy valued

in money, whether received in money or otherwise, including all

receipts, cash, credits and property or services of any kind or

2015/90KMK/HB0283A00808 - 49 -

nature, and also any amount for which the occupant is liable for

the occupancy without any deduction therefrom whatsoever. The

term "rent" shall not include a gratuity.

(b) The following words, terms and phrases and words, terms

and phrases of similar import, when used in parts IV and VI of

this article for the purposes of those parts only, shall, in

addition to the meaning ascribed to them by section 201 of this

article, have the meaning ascribed to them in this subsection,

except where the context clearly indicates a different meaning:

(1) "Maintaining a place of business in this Commonwealth,"

being the operator of a hotel in this Commonwealth.

(2) "Purchase at retail," occupancy.

(3) "Purchase price," rent.

(4) "Purchaser," occupant.

(5) "Sale at retail," the providing of occupancy to an

occupant by an operator.

(6) "Tangible personal property," occupancy.

(7) "Vendor," operator.

(8) "Services," occupancy.

(9) "Use," occupancy.

Section 7. Section 210 of the act is amended to read:

Section 210. Imposition of Tax.--There is hereby imposed an

excise tax of six and six tenths per cent of the rent upon every

occupancy of a room or rooms in a hotel in this Commonwealth,

which tax shall be collected by the operator from the occupant

and paid over to the Commonwealth as herein provided.

Section 8. Section 217 of the act, amended July 2, 2012

(P.L.751, No.85), is amended to read:

Section 217. Time for Filing Returns.--(a) Quarterly and

Monthly Returns:

(1) For the year in which this article becomes effective and

in each year thereafter a return shall be filed quarterly by

every licensee on or before the twentieth day of April, July,

October and January for the three months ending the last day of

March, June, September and December.

(2) For the year in which this article becomes effective,

and in each year thereafter, a return shall be filed monthly

with respect to each month by every licensee whose actual tax

liability for the third calendar quarter of the preceding year

equals or exceeds six hundred dollars ($600) and is less than

twenty-five thousand dollars ($25,000). Such returns shall be

filed on or before the twentieth day of the next succeeding

month with respect to which the return is made. Any licensee

required to file monthly returns hereunder shall be relieved

from filing quarterly returns.

(3) With respect to every licensee whose actual tax

liability for the third calendar quarter of the preceding year

equals or exceeds twenty-five thousand dollars ($25,000) and is

less than one hundred thousand dollars ($100,000), the licensee

shall, on or before the twentieth day of each month, file a

single return consisting of all of the following:

2015/90KMK/HB0283A00808 - 50 -

(i) Either of the following:

(A) An amount equal to fifty per centum of the licensee's

actual tax liability for the same month in the preceding

calendar year if the licensee was a monthly filer or, if the

licensee was a quarterly or semi-annual filer, fifty per centum

of the licensee's average actual tax liability for that tax

period in the preceding calendar year. The average actual tax

liability shall be the actual tax liability for the tax period

divided by the number of months in that tax period. For

licensees that were not in business during the same month in the

preceding calendar year or were in business for only a portion

of that month, fifty per centum of the average actual tax

liability for each tax period the licensee has been in business.

If the licensee is filing a tax liability for the first time

with no preceding tax periods, the amount shall be zero.

(B) An amount equal to or greater than fifty per centum of

the licensee's actual tax liability for the same month.

(ii) An amount equal to the taxes due for the preceding

month, less any amounts paid in the preceding month as required

by subclause (i).

(4) With respect to each month by every licensee whose

actual tax liability for the third calendar quarter of the

preceding year equals or exceeds one hundred thousand dollars

($100,000), the licensee shall, on or before the twentieth day

of each month, file a single return consisting of the amounts

under clause (3)(i)(A) and (ii).

(5) The amount due under clause (3)(i) or (4) shall be due

the same day as the remainder of the preceding month's tax.

(6) The department shall determine whether the amounts

reported under clause (3) or (4) shall be remitted as one

combined payment or as two separate payments.

(7) The department may require the filing of the returns and

the payments for these types of filers by electronic means

approved by the department.

(8) Any licensee filing returns under clause (3) or (4)

shall be relieved of filing quarterly returns.

(9) If a licensee required to remit payments under clause

(3) or (4) fails to make a timely payment or makes a payment

which is less than the required amount, the department may, in

addition to any applicable penalties, impose an additional

penalty equal to five per centum of the amount due under clause

(3) or (4) which was not timely paid. The penalty under this

clause shall be determined when the tax return is filed for the

tax period.

(b) Annual Returns. [For the calendar year 1971, and for

each year thereafter, no] No annual return shall be filed,

except as may be required by rules and regulations of the

department promulgated and published at least sixty days prior

to the end of the year with respect to which the returns are

made. Where such annual returns are required licensees shall not

be required to file such returns prior to the twentieth day of

2015/90KMK/HB0283A00808 - 51 -

the year succeeding the year with respect to which the returns

are made.

to pay to the department any tax under this article, shall file

a return on or before the twentieth day of the month succeeding

the month in which such person becomes liable for the tax.

(d) Small Taxpayers. The department, by regulation, may

waive the requirement for the filing of quarterly return in the

case of any licensee whose individual tax collections do not

exceed seventy-five dollars ($75) per calendar quarter and may

provide for reporting on a less frequent basis in such cases.

Section 9. Sections 225, 227 and 233 of the act are amended

to read:

Section 225. Tax Held in Trust for the Commonwealth.--All

taxes collected by any person from purchasers in accordance with

this article and all taxes collected by any person from

purchasers under color of this article which have not been

properly refunded by such person to the purchaser shall

constitute a trust fund for the Commonwealth, and such trust

shall be enforceable against such person, his representatives

and any person (other than a purchaser to whom a refund has been

made properly) receiving any part of such fund without

consideration, or knowing that the taxpayer is committing a

breach of trust: Provided, however, That any person receiving

payment of a lawful obligation of the taxpayer from such fund

shall be presumed to have received the same in good faith and

without any knowledge of the breach of trust. Notwithstanding

any other provision of law, the department may enforce this

section within ten years of the date the tax was collected. Any

person, other than a taxpayer, against whom the department makes

any claim under this section shall have the same right to

petition and appeal as is given taxpayers by any provisions of

this part.

Section 227. Discount.--[If] Subject to subsection (b), if a

return is filed by a licensee and the tax shown to be due

thereon less any discount is paid all within the time

prescribed, the licensee shall be entitled, as compensation for

the expense of collecting and remitting the tax and as a

consideration of the prompt payment of the tax, to credit and

apply against the tax payable by him a discount of the lesser

of:

(1) one per cent of the amount of the tax collected [by him

on and after the effective date of this article, as compensation

for the expense of collecting and remitting the same and as a

consideration of the prompt payment thereof]; or

(2) as follows:

(i) twenty-five five dollars per return for a monthly filer;

(ii) seventy-five dollars per return for a quarterly filer;

(iii) one hundred and fifty dollars per return for a

semiannual filer.

2015/90KMK/HB0283A00808 - 52 -

Section 233. Assessment to Recover Erroneous Refunds.--The

department may, within two years of the granting of any refund

or credit, or within the period in which an assessment could

have been filed by the department with respect to the

transaction pertaining to which the refund was granted,

whichever period shall last occur, file an assessment to recover

any refund or part thereof or credit or part thereof which was

erroneously made or allowed for any reason.

Section 10. Section 247.1(b) of the act, amended July 25,

2007 (P.L.373, No.55), is amended to read:

Section 247.1. Refund of Sales Tax Attributed to Bad Debt.--

* * *

(b) The refund authorized by this section shall be limited

to the sales tax paid to the department that is attributed to

the bad debt, less any discount under section 227 of this act.

Partial payments by the purchaser shall first be applied to and

prorated between the original purchase price and the sales tax

due on the sale before being applied to any other charge, fee or

interest. Payments made on any transaction which includes both

taxable and nontaxable components shall be allocated

proportionally between the taxable and nontaxable components.

* * *

Section 11. Section 252 of the act, amended October 18, 2006

(P.L.1149, No.119), is amended to read:

Section 252. Refunds.--[The] (a) Except for a refund under

subsection (b), the department shall, pursuant to the provisions

of Article XXVII, refund all taxes, interest and penalties paid

to the Commonwealth under the provisions of this article and to

which the Commonwealth is not rightfully entitled. Such refunds

shall be made to the person, his heirs, successors, assigns or

other personal representatives, who actually paid the tax:

Provided, That no refund shall be made under this section with

respect to any payment made by reason of an assessment with

respect to which a taxpayer has filed a petition for

reassessment pursuant to section 2702 of Article XXVII to the

extent that said petition has been determined adversely to the

taxpayer by a decision which is no longer subject to further

review or appeal: Provided further, That nothing contained

herein shall be deemed to prohibit a taxpayer who has filed a

timely petition for reassessment from amending it to a petition

for refund where the petitioner has paid the tax assessed.

(b) The following shall apply to a construction contract:

(1) Notwithstanding any other provision of this act, a

refund may not be paid by the department for sales tax paid on a

transaction which the claimant alleges was a construction

contract. If the claimant alleges the transaction was a

construction contract, the claimant may request a refund from

the construction contractor within one year from the date the

tax was paid.

(2) If the tax was not properly due, the construction

contractor may refund the sales tax paid to the purchaser under

2015/90KMK/HB0283A00808 - 53 -

paragraph (1) if the vendor issues a credit memorandum to the

purchaser stating the amount of sales tax refunded.

(3) If a credit memorandum is issued, the construction

contractor may take a credit for the sales tax refunded on the

vendor's next sales tax return if the vendor pays the proper

amount of use tax due on the same return. The amount of credit

may not exceed the amount of tax due on the returns. Unused

credits may be carried forward to subsequent returns.

(4) If the department subsequently determined that the

transaction was subject to tax, the department may assess either

or both the construction contractor and purchaser within the

time period for assessment in section 258.

Section 12. The act is amended by adding a section to read:

Section 262. Assessment After Refunds.--Notwithstanding any

other provision of this act, if a sales or use tax refund is

granted, the department may assess another party to the

transaction on which the refund was granted within three years

of the date of the refund.

Section 13. (Reserved).

Section 14. Section 268(b) of the act, amended June 29, 2002

(P.L.559, No.89), is amended and the section is amended by

adding a subsection to read:

Section 268. Crimes.--* * *

(b) Other Crimes. (1) Except as otherwise provided by

subsection (a) of this section, any person who advertises or

holds out or states to the public or to any purchaser or user,

directly or indirectly, that the tax or any part thereof imposed

by this article will be absorbed by such person, or that it will

not be added to the purchase price of the tangible personal

property or services described in subclauses (2), (3), (4) and

(11) through [(18)] (20) of clause (k) of section 201 of this

article sold or, if added, that the tax or any part thereof will

be refunded, other than when such person refunds the purchase

price because of such property being returned to the vendor, and

any person selling or leasing tangible personal property or said

services the sale or use of which by the purchaser is subject to

tax hereunder, who shall wilfully fail to collect the tax from

the purchaser and timely remit the same to the department, and

any person who shall wilfully fail or neglect to timely file any

return or report required by this article or any taxpayer who

shall refuse to timely pay any tax, penalty or interest imposed

or provided for by this article, or who shall wilfully fail to

preserve his books, papers and records as directed by the

department, or any person who shall refuse to permit the

department or any of its authorized agents to examine his books,

records or papers, or who shall knowingly make any incomplete,

false or fraudulent return or report, or who shall do, or

attempt to do, anything whatever to prevent the full disclosure

of the amount or character of taxable sales purchases or use

made by himself or any other person, or shall provide any person

with a false statement as to the payment of tax with respect to

2015/90KMK/HB0283A00808 - 54 -

particular tangible personal property or said services, or shall

make, utter or issue a false or fraudulent exemption

certificate, shall be guilty of a misdemeanor, and, upon

conviction thereof, shall be sentenced to pay a fine not

exceeding one thousand dollars ($1000) and costs of prosecution,

or undergo imprisonment not exceeding one year, or both:

Provided, however, That any person maintaining a place of

business outside this Commonwealth may absorb the tax with

respect to taxable sales made in the normal course of business

to customers present at such place of business without being

subject to the above penalty and fines: and Provided further,

That advertising tax-included prices shall be permissible, if

the prepaid services are sold by the service provider, for

prepaid telecommunications services not evidenced by the

transfer of tangible personal property or for prepaid mobile

telecommunications services.

[(2) The penalties imposed by this section shall be in

addition to any other penalties imposed by any provision of this

article.]

any person who purchases, installs or uses in this Commonwealth

an automated sales suppression device or zapper or phantomware

with the intent to defeat or evade the determination of an

amount due under this part commits a misdemeanor.

(i) Any person who, for commercial gain, sells, purchases,

installs, transfers or possesses in this Commonwealth an

automated sales suppression device or zapper or phantom-ware

with the knowledge that the sole purpose of the device is to

defeat or evade the determination of an amount due under this

part commits an offense which shall be punishable by a fine

specified under subparagraph (ii) or by imprisonment for not

more than one year, or by both. A person who uses an automated

sales suppression device or zapper or phantomware shall be

liable for all taxes, interest and penalties due as a result of

the use of that device.

(ii) If a person is guilty of an offense under paragraph (1)

and the person sold, installed, transferred or possessed not

more than three automated sales suppression devices or zappers

or phantomware, the person commits an offense punishable by a

fine of not more than five thousand dollars ($5,000).

(iii) If a person commits an offense under paragraph (1) and

the person sold, installed, transferred or possessed more than

three automated sales suppression devices or zappers or

phantomware, the person commits an offense punishable by a fine

of not more than ten thousand dollars ($10,000).

(2) This subsection shall not apply to a corporation that

possesses an automated sales suppression device or zapper or

phantomware for the sole purpose of developing hardware or

software to combat the evasion of taxes by use of automated

sales suppression devices or zappers or phantomware.

(3) For purposes of this subsection:

2015/90KMK/HB0283A00808 - 55 -

"Automated sales suppression device" or "zapper" means a

software program carried on a memory stick or removable compact

disc, accessed through an Internet link or through any other

means, that falsifies the electronic records of electronic cash

registers and other point-of-sale systems, including, but not

limited to, transaction data and transaction reports.

"Electronic cash register" means a device that keeps a

electronic device or computer system designed to record

transaction data for the purpose of computing, compiling or

processing retail sales transaction data in whatever manner.

"Phantomware" means a hidden programming option, which is

either preinstalled or installed at a later time, embedded in

the operating system of an electronic cash register or hardwired

into the electronic cash register that can be used to create a

virtual second till or may eliminate or manipulate a transaction

record that may or may not be preserved in digital formats to

represent the true or manipulated record of transactions in the

electronic cash register.

"Transaction data" includes information regarding items

purchased by a customer, the price for each item, a taxability

determination for each item, a segregated tax amount for each of

the taxed items, the amount of cash or credit tendered, the net

amount returned to the customer in change, the date and time of

the purchase, the name, address and identification number of the

vendor and the receipt or invoice number of the transaction.

(d) This section shall not preclude prosecution under any

other law.

(e) The penalties imposed by this section shall be in

addition to any other penalties imposed by any provision of this

article.

Section 15. Section 271(d) of the act is amended to read:

Section 271. Keeping of Records.--* * *

(d) Keeping of Separate Records. Any [person doing business

as a retail dealer] vendor who at the same time is engaged in

another business or businesses which do not involve the making

of sales taxable under this article, shall keep separate books

and records of his businesses so as to show the sales taxable

under this article separately from his sales not taxable

hereunder. If any such person fails to keep such separate books

and records, he shall be liable for tax at the rate designated

in section 202 of this article upon the entire purchase price of

sales from both or all of his businesses.

* * *

Section 16. The act is amended by adding a section to read:

Section 281.3. Transfers.--Beginning February 1, 2016, the

department shall make equal monthly transfers from revenues

collected under this article to a restricted revenue account in

the General Fund. Revenue from the restricted revenue account

shall be transferred to the Public School Employees' Retirement

Fund. The Secretary of the Budget shall annually certify the

2015/90KMK/HB0283A00808 - 56 -

amount that the department is to transfer to the Public School

Employees' Retirement Fund for each fiscal year.

Section 17. Section 302 of the act, amended December 23,

2003 (P.L.250, No.46), is amended to read:

Section 302. Imposition of Tax.--(a) Every resident

individual, estate or trust shall be subject to, and shall pay

for the privilege of receiving each of the classes of income

hereinafter enumerated in section 303, a tax upon each dollar of

income received by that resident during that resident's taxable

year at the rate of [three and seven hundredths] three and seven

tenths per cent.

(b) Every nonresident individual, estate or trust shall be

subject to, and shall pay for the privilege of receiving each of

the classes of income hereinafter enumerated in section 303 from

sources within this Commonwealth, a tax upon each dollar of

income received by that nonresident during that nonresident's

taxable year at the rate of [three and seven hundredths] three

and seven tenths per cent.

Section 18. Section 303(a)(7) of the act, amended July 21,

1983 (P.L.63, No.29), is amended to read:

Section 303. Classes of Income.--(a) The classes of income

referred to above are as follows:

* * *

(7) Gambling and lottery winnings [other than prizes of the

Pennsylvania State Lottery].

* * *

Section 19. Section 304 of the act, amended December 13,

1991 (P.L.373, No.40) and December 23, 2003 (P.L.250, No.46), is

amended to read:

Section 304. Special Tax Provisions for Poverty.--(a) The

General Assembly, in recognition of the powers contained in

section 2(b)(ii) of Article VIII of the Constitution of the

Commonwealth of Pennsylvania which provides therein for the

establishing as a class or classes of subjects of taxation the

property or privileges of persons who, because of poverty are

determined to be in need of special tax provisions hereby

declares as its legislative intent and purpose to implement such

power under such constitutional provision by establishing

special tax provisions as hereinafter provided in this act.

(b) The General Assembly having determined that there are

persons within this Commonwealth whose incomes are such that

imposition of a tax thereon would deprive them and their

dependents of the bare necessities of life and having further

determined that poverty is a relative concept inextricably

joined with actual income and the number of people dependent

upon such income deems it to be a matter of public policy to

provide special tax provisions for that class of persons

hereinafter designated to relieve their economic burden.

claimant who meets the following standards of eligibility

established by this act as the test for poverty shall be deemed

2015/90KMK/HB0283A00808 - 57 -

a separate class of subject of taxation, and, as such, shall be

entitled to the benefit of the special provisions of this act.

(d) Any claim for special tax provisions hereunder shall be

determined in accordance with the following:

(1) If the poverty income of the claimant during an entire

taxable year is [six thousand five hundred dollars ($6,500)]

eight thousand seven hundred dollars ($8,700) or less, or, in

the case of a married claimant, if the joint poverty income of

the claimant and the claimant's spouse during an entire taxable

year is [thirteen thousand dollars ($13,000)] seventeen thousand

four hundred dollars ($17,400) or less, the claimant shall be

entitled to a refund or forgiveness of any moneys which have

been paid over to (or would except for the provisions of this

act be payable to) the Commonwealth under the provisions of this

article, with an additional income allowance of nine thousand

five hundred dollars ($9,500) for each dependent of the

claimant. For purposes of this subsection, a claimant shall not

be considered to be married if:

(i) The claimant and the claimant's spouse file separate

returns; and

(ii) The claimant and the claimant's spouse live apart at

all times during the last six months of the taxable year or are

separated pursuant to a written separation agreement.

(2) If the poverty income of the claimant during an entire

taxable year does not exceed the poverty income limitations

prescribed by clause (1) by more than the dollar category

contained in subclauses (i), (ii), (iii), (iv), (v), (vi),

(vii), (viii) or (ix) of this clause, the claimant shall be

entitled to a refund or forgiveness based on the per centage

prescribed in such subclauses of any moneys which have been paid

over to (or would have been except for the provisions herein be

payable to) the Commonwealth under this article:

(i) Ninety per cent if not in excess of two hundred fifty

dollars ($250).

(ii) Eighty per cent if not in excess of five hundred

dollars ($500).

(iii) Seventy per cent if not in excess of seven hundred

fifty dollars ($750).

(iv) Sixty per cent if not in excess of one thousand dollars

($1,000).

(v) Fifty per cent if not in excess of one thousand two

hundred fifty dollars ($1,250).

(vi) Forty per cent if not in excess of one thousand five

hundred dollars ($1,500).

(vii) Thirty per cent if not in excess of one thousand seven

hundred fifty dollars ($1,750).

(viii) Twenty per cent if not in excess of two thousand

dollars ($2,000).

(ix) Ten per cent if not in excess of two thousand two

hundred fifty dollars ($2,250).

(3) If an individual has a taxable year of less than twelve

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months, the poverty income thereof shall be annualized in such

manner as the department may prescribe.

Section 20. The act is amended by adding a section to read:

Section 360. Restricted account and transfers to the

Property Tax Relief Fund.--There is established in the General

Fund a restricted account to be known as the Property Tax and

Rent Relief Account that shall be for property tax and rent

relief. Beginning January 2016, the Department of Revenue shall

make equal monthly transfers from revenue collected under this

article to the restricted account under this section. Beginning

October 2016 and each October thereafter, the revenue in the

restricted account under this section shall be transferred to

the Property Tax Relief Fund. The Secretary of the Budget shall

annually certify the amount that the department is to transfer

to the fund for each calendar year.

Section 21. Section 401(3)1(a) and (t), 2(a)(16.1) and 4(c)

(1)(A) and (5) of the act, amended or added May 12, 1999

(P.L.26, No.4), October 9, 2009 (P.L.451, No.48) and July 9,

2013 (P.L.270, No.52), are amended, clause (3) is amended by

adding subclauses, clause (3)4(c)(2)(B) is amended by adding a

subparagraph, clause (3)4(c) is amended by adding paragraphs and

the section is amended by adding clauses to read:

Section 401. Definitions.--The following words, terms, and

phrases, when used in this article, shall have the meaning

ascribed to them in this section, except where the context

clearly indicates a different meaning:

* * *

(3) "Taxable income." 1. (a) In case the entire business

of the corporation is transacted within this Commonwealth, for

any taxable year which begins on or after January 1, 1971,

taxable income for the calendar year or fiscal year as returned

to and ascertained by the Federal Government or that is not

required to file a return with the Federal Government, or in the

case of a corporation participating in the filing of

consolidated returns to the Federal Government, the taxable

income which would have been returned to and ascertained by the

Federal Government if separate returns had been made to the

Federal Government for the current and prior taxable years,

subject, however, to any correction thereof, for fraud, evasion,

or error as finally ascertained by the Federal Government.

* * *

(t) (1) Except as provided in paragraph (2), (3) or (4) for

taxable years beginning after December 31, 2014, and in addition

to any authority the department has on the effective date of

this paragraph to deny a deduction related to a fraudulent or

sham transaction, no deduction shall be allowed for an

intangible expense or cost, or an interest expense or cost,

paid, accrued or incurred directly or indirectly in connection

with one or more transactions with an affiliated entity. In

calculating taxable income under this paragraph, when the

taxpayer is engaged in one or more transactions with an

2015/90KMK/HB0283A00808 - 59 -

affiliated entity that was subject to tax in this Commonwealth

or another state or possession of the United States on a tax

base that included the intangible expense or cost, or the

interest expense or cost, paid, accrued or incurred by the

taxpayer, the taxpayer shall receive a credit against tax due in

this Commonwealth in an amount equal to the apportionment factor

of the taxpayer in this Commonwealth multiplied by the greater

of the following:

(A) the tax liability of the affiliated entity with respect

to the portion of its income representing the intangible expense

or cost, or the interest expense or cost, paid, accrued or

incurred by the taxpayer; or

(B) the tax liability that would have been paid by the

affiliated entity under subparagraph (A) if that tax liability

had not been offset by a credit.

The credit issued under this paragraph shall not exceed the

taxpayer's liability in this Commonwealth attributable to the

net income taxed as a result of the adjustment required by this

paragraph.

(2) The adjustment required by paragraph (1) shall not apply

to a transaction that did not have as the principal purpose the

avoidance of tax due under this article and was done at arm's

length rates and terms.

(3) The adjustment required by paragraph (1) shall not apply

to a transaction between a taxpayer and an affiliated entity

domiciled in a foreign nation which has in force a comprehensive

income tax treaty with the United States providing for the

allocation of all categories of income subject to taxation, or

the withholding of tax, on royalties, licenses, fees and

interest for the prevention of double taxation of the respective

nations' residents and the sharing of information.

(4) The adjustment required by paragraph (1) shall not apply

to a transaction where an affiliated entity directly or

indirectly paid, accrued or incurred a payment to a person who

is not an affiliated entity, if the payment is paid, accrued or

incurred on the intangible expense or cost, or interest expense

or cost, and is equal to or less than the taxpayer's

proportional share of the transaction. The taxpayer's

proportional share shall be based on relative sales, assets,

liabilities or another reasonable method.

(5) The adjustment required under paragraph (1) shall not

apply to a transaction between the taxpayer and an affiliated

entity if the taxpayer and the affiliated entity file a combined

report in this State and the intangible expense or cost or

interest expense or cost are eliminated pursuant to the

definition of "combined business income" in section 401(15).

2. In case the entire business of any corporation, other

than a corporation engaged in doing business as a regulated

investment company as defined by the Internal Revenue Code of

1986, is not transacted within this Commonwealth, the tax

imposed by this article shall be based upon such portion of the

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taxable income of such corporation for the fiscal or calendar

year, as defined in subclause 1 hereof, and may be determined as

follows:

(a) Division of Income.

* * *

(16.1) (A) Sales from the sale, lease, rental or other use

of real property, if the real property is located in this State.

If a single parcel of real property is located both in and

outside this State, the sale is in this State based upon the

percentage of original cost of the real property located in this

State.

(B) (I) Sales from the rental, lease or licensing of

tangible personal property, if the customer first obtained

possession of the tangible personal property in this State.

(II) If the tangible personal property is subsequently taken

out of this State, the taxpayer may use a reasonably determined

estimate of usage in this State to determine the extent of sale

in this State.

delivered to a location in this State. If the service is

delivered both to a location in and outside this State, the sale

is in this State based upon the percentage of total value of the

service delivered to a location in this State.

(II) If the state or states of assignment under unit (I)

cannot be determined for a customer who is an individual that is

not a sole proprietor, a service is deemed to be delivered at

the customer's billing address.

(III) If the state or states of assignment under unit (I)

cannot be determined for a customer, except for a customer under

unit (II), a service is deemed to be delivered at the location

from which the services were ordered in the customer's regular

course of operations. If the location from which the services

were ordered in the customer's regular course of operations

cannot be determined, a service is deemed to be delivered at the

customer's billing address.

(D) Sales from the licensing of intangible property are in

this State if a licensee utilized the property in this State. If

the property was used both inside and outside this State, the

sale is in this State in proportion to the utilization of the

intangible property in this State to the utilization of the

intangible property everywhere.

* * *

4. * * *

(A) (I) For taxable years beginning before January 1, 2007,

two million dollars ($2,000,000);

(II) For taxable years beginning after December 31, 2006,

the greater of twelve and one-half per cent of taxable income as

determined under subclause 1 or, if applicable, subclause 2 or

three million dollars ($3,000,000);

(III) For taxable years beginning after December 31, 2008,

2015/90KMK/HB0283A00808 - 61 -

the greater of fifteen per cent of taxable income as determined

under subclause 1 or, if applicable, subclause 2 or three

million dollars ($3,000,000);

(IV) For taxable years beginning after December 31, 2009,

the greater of twenty per cent of taxable income as determined

under subclause 1 or, if applicable, subclause 2 or three

million dollars ($3,000,000);

(V) For taxable years beginning after December 31, 2013, the

greater of twenty-five per cent of taxable income as determined

under subclause 1 or, if applicable, subclause 2 or four million

dollars ($4,000,000);

(VI) For taxable years beginning after December 31, 2014,

the greater of thirty per cent of taxable income as determined

under subclause 1 or, if applicable, subclause 2 or five million

dollars ($5,000,000); [or]

(VII) For taxable years beginning after December 31, 2015,

the greater of twelve and one-half per cent of taxable income as

determined under subclause 1 or, if applicable, subclause 2 or

three million dollars ($3,000,000); or

* * *

(2) * * *

(B) The earliest net loss shall be carried over to the

earliest taxable year to which it may be carried under this

schedule. The total net loss deduction allowed in any taxable

year shall not exceed:

* * *

(VII) The greater of twelve and one-half per cent of the

taxable income as determined under subclause 1 or, if

applicable, subclause 2 or three million dollars ($3,000,000)

for taxable years beginning after December 31, 2015.

(3) Any member of a unitary business that has an unused net

loss from taxable years that began prior to January 1, 2016, or

that generated net losses while a member of a unitary business

may only use the net loss for taxable years beginning after

December 31, 2015, and only to the extent of the member's

apportionable share of combined business income. The net loss

may not be used by other members of the same unitary business.

(4) Any net loss realized for a taxable year that begins

after December 31, 2015, which is unused by a corporation which

subsequently becomes a member of another unitary business may

only be used by that corporation.

* * *

5. (a) For taxable years beginning after December 31, 2015,

business income of a unitary business that consists of two or

more corporations shall be the combined business income of all

members of the unitary business, as determined on a water's edge

basis.

(b) Each member of a unitary business shall apportion the

combined business income of the unitary business by multiplying

the combined business income of the unitary business by the

member's sales factor, the numerator of which shall be the

2015/90KMK/HB0283A00808 - 62 -

member's sales attributable to this State and denominator of

which shall be the combined sales of all members of the unitary

business. In computing the sales of each member for purposes of

apportionment, the following are excluded from the numerator and

denominator:

(1) Receipts from transactions between or among members of

the unitary business that are deferred under 26 CFR 1.1502-13

(relating to intercompany transactions).

(2) Business income of certain entities excluded from the

definition of "combined business income."

(3) Dividends excluded from the definition of "combined

business income."

member of the group that would otherwise apportion the member's

business income under section 401(3)2.(b), (c), (d) or (e) shall

convert the member's apportionment formula into a single sales

fraction, as prescribed by the department.

(d) Nonbusiness income of each member of a unitary business

shall be allocated as provided in paragraphs (5), (6), (7) and

(8) of phrase (a) of subclause 2 of the definition of "taxable

income."

(e) The taxable income of a member of a unitary business

shall include the member's apportioned share of the combined

business income of the unitary business plus the member's

nonbusiness income or loss allocated to this State, minus the

member's net loss deduction.

(f) The Secretary of Revenue shall make adjustments to

insure that a corporation does not incur an unfair penalty nor

realize an unfair benefit because the corporation is required to

compute the corporation's combined business income as provided

in this subclause. Fairness shall be measured by whether the

corporation's income allocated and apportioned to this State

fairly reflects the corporation's share of the unitary business

conducted in this State in the taxable year.

6. (a) In any case of two or more organizations, trades or

businesses, regardless of whether they are incorporated,

organized in the United States or affiliated, owned or

controlled, directly or indirectly, by the same interests, the

Secretary of Revenue may distribute, apportion or allocate gross

income, deductions, credits or allowances between or among the

organizations, trades or businesses, if the Secretary of Revenue

determines that the distribution, apportionment or allocation is

necessary to prevent evasion of taxes or clearly to reflect the

income of any of the organizations, trades or businesses.

(b) In the case of any transfer or license of intangible

property within the meaning of section 936(h)(3)(B) of the

Internal Revenue Code (26 U.S.C. § 936(h)(3)(B)), the income

with respect to the transfer or license shall be commensurate

with the income attributable to the intangible property.

under this section, the Secretary of Revenue shall generally

2015/90KMK/HB0283A00808 - 63 -

follow the rules, regulations and procedures of the Internal

Revenue Service in making audits under section 482 of the

Internal Revenue Code (26 U.S.C. § 482) consistent with this act

and 61 Pa. Code (relating to revenue).

(d) No inference shall be drawn from an Internal Revenue

Service failure to audit international transactions pursuant to

section 482 of the Internal Revenue Code or Subchapter N of

Chapter 1 of Subtitle A of the Internal Revenue Code (26 U.S.C.

Subt. A Ch. 1 Subch. N) and it shall not be presumed that any of

the transactions were correctly reported.

* * *

(5) "Taxable year." [The] 1. Except as set forth in

subclause 2, the taxable year which the corporation, or any

consolidated group with which the corporation participates in

the filing of consolidated returns, actually uses in reporting

taxable income to the Federal Government[.], or which the

corporation would have used in reporting taxable income to the

Federal Government had it been required to report its taxable

income to the Federal Government. With regard to the tax imposed

by Article IV of this act (relating to the Corporate Net Income

Tax), the terms "annual year," "fiscal year," "annual or fiscal

year," "tax year" and "tax period" shall be the same as the

corporation's taxable year, as defined in this [paragraph]

subclause or subclause 2.

2. Each member of a unitary business shall have a common

taxable year for purposes of computing tax due under this

article. The taxable year for the purposes shall be the common

taxable year adopted, in a manner prescribed by the department,

by all members of a unitary business. The common taxable year

must be used by each member of the unitary business in the year

of adoption and each future year unless otherwise permitted by

the department.

* * *

(11) "Tax haven." Means:

1. A jurisdiction that at the beginning of a taxable year is

a tax haven as identified by the Organization for Economic Co-

operation and Development.

2. Bermuda.

3. The Cayman Islands.

4. The Bailiwick of Jersey.

5. The Grand Duchy of Luxembourg.

(12) "Unitary business." A single economic enterprise that

is made up of separate parts of a single corporation, of a

commonly controlled group of corporations, or both, that are

sufficiently interdependent, integrated and interrelated through

their activities so as to provide a synergy and mutual benefit

that produces a sharing or exchange of value among them and a

significant flow of value to the separate parts. A unitary

business shall include only those parts and corporations which

may be included as a unitary business under the Constitution of

the United States.

2015/90KMK/HB0283A00808 - 64 -

(13) "Water's-edge basis." A system of reporting that

includes the business income and apportionment factors of

certain entities of a unitary business, described as follows:

1. The business income and apportionment factors of any

member incorporated in the United States or formed under the

laws of any state of the United States, the District of

Columbia, any territory or possession of the United States or

the Commonwealth of Puerto Rico.

2. The business income and apportionment factors of any

member, regardless of the place incorporated or formed, if the

average of its property, payroll and sales factors within the

United States is twenty per cent or more.

3. The business income and apportionment factor of any

member which is a domestic international sales corporation as

described in sections 991, 992, 993 and 994 of the Internal

Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §§ 991, 992,

993 and 994); a foreign sales corporation as described in former

sections 921, 922, 923, 924, 925, 926 and 927 of the Internal

Revenue Code of 1986 (formerly 26 U.S.C. §§ 921, 922, 923, 924,

925, 926 and 927); or any member which is an export trade

corporation, as described in sections 970 and 971 of the

Internal Revenue Code of 1986 (26 U.S.C. §§ 970 and 971).

4. Any member not described in subclauses 1, 2 and 3 shall

include the portion of the member's business income derived from

or attributable to sources within the United States, as

determined under the Internal Revenue Code of 1986 without

regard to Federal treaties, and the member's apportionment

factors related to the business income.

5. Any member that is a "controlled foreign corporation" as

defined in section 957 of the Internal Revenue Code of 1986 (26

U.S.C. § 957), to the extent the business income of that member

is income defined in section 952 of the Internal Revenue Code of

1986 (26 U.S.C. § 952), Subpart F income, not excluding lower-

tier subsidiaries' distributions of the income which were

previously taxed, determined without regard to Federal treaties,

and the apportionment factors related to that income; any item

of income received by a controlled foreign corporation and the

apportionment factors related to the income shall be excluded if

the corporation establishes to the satisfaction of the Secretary

of Revenue that such income was subject to an effective rate of

income tax imposed by a foreign country greater than ninety per

cent of the maximum rate of tax specified in section 11 of the

Internal Revenue Code of 1986 (26 U.S.C. § 11). The effective

rate of income tax determination shall be based upon the

methodology set forth under 26 CFR 1.954-1 (relating to foreign

base company income).

6. The business income and apportionment factors of any

member that is not described in subclause 1, 2, 3, 4 and 5 and

that is doing business in a tax haven. The business income and

apportionment factors of a corporation doing business in a tax

haven shall be excluded if the corporation establishes to the

2015/90KMK/HB0283A00808 - 65 -

satisfaction of the Secretary of Revenue that its income was

subject to an effective rate of income tax imposed by a country

greater than ninety per cent of the maximum rate of tax

specified in section 11 of the Internal Revenue Code of 1986 (26

U.S.C. § 11).

(14) "Commonly controlled group." For a corporation, the

corporation is a member of a group of two or more corporations

and more than fifty per cent of the voting stock, or controlling

interest, of each member of the group is directly or indirectly

owned by a common owner or by common owners, either corporate or

noncorporate, or by one or more of the member corporations of

the group.

(15) "Combined business income." The aggregate taxable

income or loss of all members of a unitary business, subject to

apportionment except:

1. Income from an intercompany transaction between members

of a unitary business shall be deferred in a manner similar to

26 CFR 1.1502-13.

2. Dividends paid by one member of a unitary business to

another to the extent the dividends are included in business

income of the payee corporation.

3. Income of the following corporations shall not be

included in the determination of combined business income:

(a) any entity subject to taxation under Article VII, VIII,

IX or XV;

(b) any entity specified in the definition of "institution"

in section 701.5 that would be subject to taxation under Article

VII if it were doing business in this Commonwealth as defined in

section 701.5;

that would be subject to taxation under Article VIII were it

incorporated in this State;

(d) any entity specified as an insurance company,

association or exchange in Article IX that would be subject to

taxation under Article IX were it transacting insurance business

in this State;

(e) any entity specified in the definition of "institution"

in section 1501 that would be subject to taxation under Article

XV were it located, as defined in section 1501, in this State;

(f) any entity that is a "small corporation", as defined in

section 301(s.2).

(16) "Member." A corporation that is a member of the

unitary business. The term does not include a corporation listed

in clause (15)3.

Section 22. Section 402(b) of the act, amended June 29, 2002

(P.L.559, No.89), is amended to read:

Section 402. Imposition of Tax.--* * *

(b) The annual rate of tax on corporate net income imposed

by subsection (a) for taxable years beginning for the calendar

year or fiscal year on or after the dates set forth shall be as

2015/90KMK/HB0283A00808 - 66 -

follows:

Taxable Year Tax Rate

[January 1, 1995, and each

taxable year thereafter 9.99%]

January 1, 1995, through taxable

years ending December 31,

2015 9.99%

January 1, 2016, to December 31,

2016 5.99%

January 1, 2017, to December 31,

2017 5.49%

January 1, 2018, to December 31,

2018, and each taxable year

thereafter 4.99%

* * *

Section 23. Section 403 of the act is amended by adding

subsections to read:

Section 403. Reports and Payment of Tax.--* * *

(a.1) The following apply:

(1) Each corporation that is a member of a unitary business

that consists of two or more corporations, unless excluded by

the provisions of this article, shall file as part of a combined

annual report. The corporations of the unitary business shall

designate one member that is subject to tax under this article

to file the combined annual report and to act as agent on behalf

of all other members of the unitary business. Each corporation

that is a member of a unitary business shall be liable for its

tax liability under this article. The agent shall be liable for

the aggregate amount of the unitary business' tax liability

pursuant to this article.

(2) The oath or affirmation of the designated member's

president, vice president or other principal officer, and of its

treasurer or assistant treasurer shall constitute the oath or

affirmation of each corporation that is a member of that unitary

business.

(3) The designated member shall transmit to the department

upon a form prescribed by the department, an annual combined

report under oath or affirmation of the designated member's

president, vice president or other principal officer, and of the

designated treasurer or assistant treasurer.

(4) In addition to the information required in subsection

(a), the report shall include:

(i) Each corporation included in the unitary business.

(ii) Necessary data, both in the aggregate and for each

corporation of the unitary business, that includes the

computation of tax liability for each corporation of the unitary

business.

(iii) Any other information that the department may require.

(a.2) A corporation that is a member of a unitary business

of two or more corporations must compute the corporation's

business income and apportionment factors on a water's-edge

2015/90KMK/HB0283A00808 - 67 -

basis.

* * *

Section 24. Section 404 of the act is amended to read:

Section 404. Consolidated Reports.--The department shall not

permit any corporation owning or controlling, directly or

indirectly, any of the voting capital stock of another

corporation or of other corporations, subject to the provisions

of this article, to make a consolidated report[, showing the

combined net income].

Section 25. Sections 701, 701.1 and 701.4(3)(xiii) of the

act, amended July 9, 2013 (P.L.270, No.52), are amended to read:

Section 701. Imposition of Tax.--(a) Every institution

doing business in this Commonwealth shall, on or before March 15

in each and every year, make to the Department of Revenue a

report in writing, verified as required by law, setting forth

the full number of shares of the capital stock subscribed for or

issued, as of the preceding January 1, by such institution, and

the taxable amount of such shares of capital stock determined

pursuant to section 701.1.

(b) It shall be the duty of the Department of Revenue to

assess such shares for the calendar years beginning January 1,

1971 through January 1, 1983, at the rate of fifteen mills and

for the calendar years beginning January 1, 1984 through January

1, 1988, at the rate of one and seventy-five one thousandths per

cent and for the calendar year beginning January 1, 1989, at the

rate of 10.77 per cent and for the calendar years beginning

January 1, 1990, [through January 1, 2013,] and each year

thereafter at the rate of 1.25 per cent [and for the calendar

year beginning January 1, 2014, and each calendar year

thereafter at the rate of 0.89 per cent] upon each dollar of

taxable amount thereof, the taxable amount of each share of

stock to be ascertained and fixed pursuant to section 701.1, and

dividing this amount by the number of shares.

in this Commonwealth, at the time of making every report

required by this section, to compute the tax and to pay the

amount of said tax to the State Treasurer, through the

Department of Revenue either from its general fund, or from the

amount of said tax collected from its shareholders. Provided,

That in case any institution shall collect, annually, from the

shareholders thereof said tax, according to the provisions of

this article, that have been subscribed for or issued, and pay

the same into the State Treasury, through the Department of

Revenue, the shares, and so much of the capital and profits of

such institution as shall not be invested in real estate, shall

be exempt from local taxation under the laws of this

Commonwealth; and such institution shall not be required to make

any report to the local assessor or county commissioners of its

personal property owned by it in its own right for purposes of

taxation and shall not be required to pay any tax thereon.

Section 701.1. Ascertainment of Taxable Amount; Exclusion of

2015/90KMK/HB0283A00808 - 68 -

United States Obligations.--(a) The taxable amount of shares

shall be ascertained and fixed by the book value of total bank

equity capital as determined by the Reports of Condition at the

end of the preceding calendar year in accordance with the

requirements of the Board of Governors of the Federal Reserve

System, the Comptroller of the Currency, the Federal Deposit

Insurance Corporation or other applicable regulatory authority.

If an institution does not file the Reports of Condition, book

values shall be determined by generally accepted accounting

principles as of the end of the preceding calendar year.

(b) A deduction for the value of United States obligations

shall be provided from the taxable amount of shares in an amount

equal to the same percentage of total bank equity capital as the

book value of obligations of the United States bears to the book

value of the total assets[, except that, for the value of shares

reported on tax returns due on March 15, 2008, and thereafter].

In computing the deduction for United States obligations, any

goodwill recorded as a result of the use of purchase accounting

for an acquisition or combination as described in this section

and occurring after June 30, 2001, [may] shall be subtracted

from the book value of total bank equity capital and disregarded

in determining the deduction provided for obligations of the

United States. For purposes of this article, United States

obligations shall be obligations coming within the scope of 31

U.S.C. § 3124 (relating to exemption from taxation). [In the

case of institutions which do not file such Reports of

Condition, book values shall be determined by generally accepted

accounting principles as of the end of the preceding calendar

year.]

(b.1) A deduction for goodwill shall be provided from the

taxable amount of shares in an amount equal to the value of

goodwill recorded as a result of the use of purchase accounting

for an acquisition or combination as described in this section

and occurring after June 30, 2001.

(1) a mere change in identity, form or place of organization

of one institution, however effected, shall be treated as if a

single institution had been in existence prior to as well as

after such change; and

(2) if there is a combination of two or more institutions

into one, the book values and deductions for United States

obligations from the Reports of Condition of the constituent

institutions shall be combined. For purposes of this section, a

combination shall include any acquisition required to be

accounted for by using the purchase method in accordance with

generally accepted accounting principles or a statutory merger

or consolidation.

Section 701.4. Apportionment.--An institution may apportion

its taxable amount of shares determined under section 701.1 in

accordance with this subsection if the institution is subject to

tax in another state based on or measured by net worth, gross

2015/90KMK/HB0283A00808 - 69 -

receipts, net income or some similar base of taxation, or if it

could be subject to such tax, whether or not such a tax has in

fact been enacted. The following shall apply:

* * *

(3) The receipts factor is a fraction, the numerator of

which is total receipts located in this Commonwealth and the

denominator of which is the total receipts located in all

states. The method of calculating receipts for purposes of the

denominator shall be the same as the method used in determining

receipts for purposes of the numerator. The location of receipts

shall be determined as follows:

* * *

(xiii) The following shall apply to receipts from an

institution's investment assets and activity and trading assets

and activity:

(A) Interest, dividends, net gains equal to zero or above,

and other income from investment assets and activities and from

trading assets and activities shall be included in the receipts

factor. Investment assets and activities and trading assets and

activities shall include investment securities, trading account

assets, Federal funds, securities purchased and sold under

agreements to resell or repurchase, options, futures contracts,

forward contracts and notional principal contracts such as

swaps, equities and foreign currency transactions. For the

investment and trading assets and activities under subclauses

(I) and (II), the receipts factor shall include the amounts

under subclauses (I) and (II). The following shall apply:

(I) The receipts factor shall include the amount by which

interest from Federal funds sold and securities purchased under

resale agreements exceeds interest expense on Federal funds

purchased and securities sold under repurchase agreements.

(II) The receipts factor shall include the amount by which

interest, dividends, gains and other income from trading assets

and activities, including assets and activities in the matched

book, in the arbitrage book and foreign currency transactions,

exceed amounts paid in lieu of interest, amounts paid in lieu of

dividends and losses from the assets and activities.

(B) The numerator of the receipts factor shall include

[interest, dividends, net gains, equal to zero or above, and

other income from investment assets and activities and from

trading assets and activities] the receipts under clause (A)

that are attributable to this Commonwealth using one of the

following alternative methods:

(I) Method 1. The numerator shall be determined by

multiplying the total amount of receipts [from trading assets

and activities] under clause (A) by a fraction, the numerator of

which is the total amount of all other receipts attributable to

this Commonwealth and the denominator of which is the total

amount of all other receipts.

(II) Method 2. The numerator shall be determined by

multiplying the total amount of receipts under clause (A) by a

2015/90KMK/HB0283A00808 - 70 -

fraction, the numerator of which is the average value of the

assets which generate the receipts which are properly assigned

to a regular place of business of the institution within this

Commonwealth and the denominator of which is the average value

of all such assets.

methods under clause (B), the institution shall use the method

on all subsequent returns unless the institution receives prior

permission from the Department of Revenue to use a different

method.

(D) The following shall apply:

(I) An institution electing to use Method 2 shall have the

burden of proving that an investment asset or activity or

trading asset or activity was properly assigned to a regular

place of business outside of this Commonwealth by demonstrating

that the day-to-day decisions regarding the asset or activity

occurred at a regular place of business outside this

Commonwealth.

(II) If the day-to-day decisions regarding an investment

asset or activity or trading asset or activity occur at more

than one regular place of business and one regular place of

business is in this Commonwealth and one regular place of

business is outside this Commonwealth, the asset or activity

shall be considered to be located at the regular place of

business of the institution where the investment or trading

policies or guidelines with respect to the asset or activity are

established.

(III) Unless the institution demonstrates to the contrary,

the investment or trading policies and guidelines under

subclause (II) shall be presumed to be established at the

commercial domicile of the institution.

[(E) Receipts apportioned under this subparagraph shall be

separately apportioned for:

(I) interest, dividends, net gains and other income from

investment assets and activities in an investment account;

(II) interest from Federal funds sold and purchased and from

securities purchased under resale agreements and securities sold

under repurchase agreements; and

(III) interest, dividends, gains and other income from

trading assets and activities, including assets and activities

in the matched book, in the arbitrage book and foreign currency

transactions.]

* * *

Section 26. The definitions of "doing business in this

Commonwealth" and "receipts" in section 701.5 of the act,

amended July 9, 2013 (P.L.270, No.52), are amended to read:

Section 701.5. Definitions.--The following words, terms and

phrases when used in this article shall have the meaning

ascribed to them in this section, except where the context

clearly indicates a different meaning:

* * *

2015/90KMK/HB0283A00808 - 71 -

"Doing business in this Commonwealth." As follows:

(1) An institution is engaged in doing business in this

Commonwealth and is subject to the tax imposed under this

article if it satisfies any of the following requirements [and

generates gross receipts apportioned to this Commonwealth under

section 701.4 in excess of $100,000]:

(i) The institution has an office or branch in this

Commonwealth.

(ii) One or more employes, representatives, independent

contractors or agents of the institution conduct business

activities of the institution in this Commonwealth.

(iii) A person, including an employe, representative,

independent contractor, agent or affiliate of the institution,

or an employe, representative, independent contractor or agent

of an affiliate of the institution, directly or indirectly

solicits business in this Commonwealth by or for the benefit of

the institution, through:

(A) person-to-person contact, mail, telephone or other

electronic means; or

(B) the use of advertising published, produced or

distributed in this Commonwealth.

(iv) The institution owns, leases or uses real or personal

property in this Commonwealth to conduct its business

activities.

(v) The institution holds a security interest, mortgage or

lien in real or personal property located in this Commonwealth.

(vi) A basis exists under section 701.4 to apportion the

institution's receipts to this Commonwealth.

(vii) The institution has a physical presence in this

Commonwealth for a period of more than one day during the tax

year or conducts an activity sufficient to create a nexus in

this Commonwealth for tax purposes under the Constitution of the

United States.

(2) The term shall not include:

(i) The use by the institution of a professional performing

a service on behalf of the institution in this Commonwealth if

the services are not significantly associated with the

institution's ability to establish and maintain a market in this

Commonwealth.

(ii) The mere use of financial intermediaries in this

Commonwealth by an institution for the processing or transfer of

checks, credit card receivables, commercial paper and similar

items.

* * *

"Receipts." [As follows:

(1) Except as provided under paragraph (2), an item included

in taxable income returned to and ascertained by the Federal

Government.

(2) If consolidated returns are filed with the Federal

Government, an item that would be included in taxable income

returned to and ascertained by the Federal Government if a

2015/90KMK/HB0283A00808 - 72 -

separate return had been made to the Federal Government by the

institution, including the taxable income of a subsidiary of the

institution that are disregarded entities for purposes of

Federal taxation.] The total of all items of income reported on

the income statement of the institution's Reports of Condition

or, if the institution does not file a Reports of Condition, on

an income statement completed in accordance with generally

accepted accounting principles.

* * *

Section 27. Sections 1206 and 1206.1 of the act, amended

October 9, 2009 (P.L.451, No.48), are amended to read:

Section 1206. Incidence and Rate of Tax.--An excise tax is

hereby imposed and assessed upon the sale or possession of

cigarettes within this Commonwealth at the rate of [eight]

thirteen cents per cigarette.

Section 1206.1. Floor Tax.--(a) The following apply:

(1) A person who possesses cigarettes on which the tax

imposed by section 1206 has been paid as of the effective date

of this section shall pay an additional tax at a rate of [one

and twenty-five hundredths] five cents per cigarette. The tax

shall be paid and reported on a form prescribed by the

department within ninety days of the effective date of this

section.

(2) On or after the effective date of this paragraph, a

person that possesses little cigars in a package which is

similar to a package of cigarettes other than little cigars and

which contains twenty to twenty-five little cigars shall pay a

tax at the rate of [eight] five cents per little cigar. The tax

shall be paid and reported on a form prescribed by the

department within ninety days of the effective date of this

paragraph.

(3) [After January 3, 2010,] On or after October 1, 2015, a

retailer that possesses little cigars on which the tax imposed

by this article has not been paid shall pay a tax at the rate of

[eight] five cents per little cigar. The tax shall be paid and

reported on a form prescribed by the department within ninety

days of the effective date of this paragraph.

(b) If a cigarette dealer fails to file the report required

by subsection (a) or fails to pay the tax imposed by subsection

(a), the department may, in addition to the interest and

penalties provided in section 1278, do any of the following:

(1) Impose an administrative penalty equal to the amount of

tax evaded or not paid. The penalty shall be added to the tax

evaded or not paid and assessed and collected at the same time

and in the same manner as the tax.

(2) Suspend or revoke a cigarette dealer's license.

a person who wilfully omits, neglects or refuses to comply with

a duty imposed under subsection (a) commits a misdemeanor and

shall, upon conviction, be sentenced to pay a fine of not less

than two thousand five hundred dollars ($2,500) nor more than

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five thousand dollars ($5,000), to serve a term of imprisonment

not to exceed thirty days or both.

Section 28. The act is amended by adding articles to read:

ARTICLE XI-E

EDUCATION REINVESTMENT

PART I

SEVERANCE TAX

Section 1101-E. Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Association." A partnership, limited partnership or any

other form of unincorporated enterprise owned or conducted by

two or more persons.

"Barrel." Forty-two United States gallons at an atmospheric

pressure of 231 cubic inches of liquid at a standard temperature

of 60 degrees Fahrenheit.

"Corporation." A corporation, joint stock association,

limited liability company, business trust or any other

incorporated enterprise organized under the laws of the United

States, this Commonwealth or any other state, territory or

foreign country or dependency.

"Department." The Department of Revenue of the Commonwealth.

"Dry natural gas." Hydrocarbon gases, consisting mostly of

methane, that remain after the natural gas liquid portion of the

natural gas stream has been removed and any volume of

nonhydrocarbon gases have been removed in sufficient quantity to

render the gas marketable. The term includes consumer-grade

natural gas or pipeline-quality natural gas.

"Gross proceeds." The value, whether in money or other

property, actually proceeding from the sale of property, without

a deduction for the cost of property sold or expenses of any

kind.

"Gross value." The gross proceeds received or receivable for

property transferred, except as follows:

(1) In a transaction involving related parties, gross

proceeds of the property transferred may not be less than the

fair market value of similar grade and quality property.

(2) In the absence of a sale, gross proceeds of the

property transferred may not be less than the fair market

value of similar grade and quality property.

(3) In a transaction where property is transferred for

the purpose of processing and resale, gross proceeds of the

property transferred may not be less than the fair market

value of similar grade and quality property.

(4) Under no circumstance shall the gross proceeds be

less than $20.00 per barrel.

"Meter." A device to measure the passage of volumes of gases

or liquids past a certain point.

"Natural gas." A fossil fuel consisting of a mixture of

hydrocarbon gases, including methane, ethane, propane, butane,

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carbon dioxide, oxygen, nitrogen and hydrogen sulfide and other

gas species. The term includes natural gas from oil fields known

as associated gas or casing head gas, natural gas fields known

as nonassociated gas, coal beds, shale beds and other

formations.

"Natural gas liquids." Hydrocarbons including ethane,

propane, butane, isobutane and pentane that are separated from

natural gas as liquids through the process of absorption,

condensation, adsorption, cooling in gas separators, gas

processing or cycling plants.

"Person." Includes a corporation, partnership, limited

liability company, business trust, other association, a

government entity other than the Commonwealth, estate, trust,

foundation or natural person.

"Producer." A person who engages or continues within this

Commonwealth in the business of severing natural gas for sale,

profit or commercial use.

"Producing site." A point of severance, including a well and

its associated zones and multilateral well bores, that is

capable of producing natural gas from an unconventional

formation.

"Related parties." Two or more people, organizations or

businesses owned or controlled directly or indirectly by the

same interests. Control exists if a contract or lease, either

written or oral, is entered into where one party severs or

processes natural gas owned or held by another party and the

owner or lessor participates in the severing, processing or

marketing of the natural gas or receives any value other than an

arm's-length passive royalty interest.

"Reporting period." A calendar month in which natural gas is

severed.

"Sales meter." A meter at the point where natural gas is

sold or transported to a purchaser or the market.

"Sever." The extraction or other removal of natural gas from

an unconventional formation in this Commonwealth.

"Storage field." A natural formation or other site that is

used to store natural gas that did not originate from and has

been transplanted into such formation or site.

"Stripper well." A producing site that produced an average

of less than 50 units of natural gas per day during the calendar

year immediately preceding a reporting period.

"Tax." The tax imposed under this article.

"Taxpayer." A person subject to the tax imposed by this

article.

"Unconventional formation." A geological shale formation

existing below the base of the Elk Sandstone or its geologic

equivalent stratigraphic interval where natural gas generally

cannot be produced at economic flow rates or in economic volumes

except by vertical or horizontal well bores stimulated by

hydraulic fracture treatments or using multilateral well bores

or other techniques to expose more of the formation to the well

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bore.

"Unit." A thousand cubic feet (Mcf) of natural gas at a

temperature of 60 degrees Fahrenheit and an absolute pressure of

14.73 pounds per square inch, in accordance with American Gas

Association (AGA) standards and according to Boyle's law for the

measurement of gas under varying pressures with deviations

therefrom as follows:

(1) The average absolute atmospheric pressure shall be

assumed to be 14.4 pounds to the square inch, regardless of

actual elevation or location of point of delivery above sea

level or variations in such atmospheric pressure from time to

time.

(2) The temperature of the gas passing the meters shall

be determined by the continuous use of a recording

thermometer installed so that the thermometer may properly

record the temperature of the gas flowing through the meters.

The arithmetic average of the temperature recorded each 24-

hour day shall be used in computing gas volumes. If a

recording thermometer is not installed, or if installed and

not operating properly, an average flowing temperature of 60

degrees Fahrenheit shall be used in computing gas volume.

(3) The specific gravity of the gas shall be determined

by tests made by the use of an Edwards or Acme gravity

balance, annually, or at intervals as are found necessary in

practice. Specific gravity shall be used in computing gas

volumes.

(4) The deviation of the natural gas from Boyle's law

shall be determined by tests annually or at other shorter

intervals as are found necessary in practice. The apparatus

and the method to be used in making the tests shall be in

accordance with recommendations of the Natural Bureau of

Standards of the Department of Commerce, or Report No. 3 of

the Gas Measurement Committee of the American Gas

Association, or any amendments thereof. The results of the

tests shall be used in computing the volume of gas delivered.

"Wellhead meter." A meter placed at a producing site to

measure the actual volume of natural gas severed.

Section 1102-E. Imposition of tax.

(a) Imposition.--There is hereby levied a privilege tax on

every producer.

(b) Rate.--The tax imposed under subsection (a) shall be the

sum of the following:

(1) Four and seven tenths cents of each unit of natural

gas severed measured at the wellhead meter.

(2) Five percent of the average market price as

calculated in section 1103-E of the dry natural gas derived

from the natural gas severed.

(3) Five percent of the gross value of the natural gas

liquids derived from the natural gas severed as shown by the

gross proceeds derived from the sale by the producer.

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not be imposed upon the following:

(1) Natural gas, dry natural gas or natural gas liquids

severed under a natural gas lease and provided to a lessor

for no consideration.

(2) Natural gas, dry natural gas or natural gas liquids

severed from a stripper well.

(3) Natural gas, dry natural gas or natural gas liquids

severed from a storage field.

Section 1103-E. Calculation and publication of average market

price.

The department shall calculate the average market price per

unit of dry natural gas for each calendar quarter. The average

market price shall be the weighted average price per unit for

all major Commonwealth distribution hubs on the interstate

natural gas pipeline system for the three months prior to the

calendar quarter. The department shall publish a notice of the

average market price which shall be at least $2.97 per unit for

each calendar quarter in the Pennsylvania Bulletin not later

than within 30 days of the beginning of each calendar quarter.

Section 1104-E. Prohibition.

A producer may not make the tax imposed under section 1102-E

on natural gas severed under a natural gas lease, an obligation,

indebtedness or liability of a landowner, leaseholder or other

person in possession of real property upon which the removal or

extraction occurs.

Section 1104.1-E. Existing agreements.

A provision of an agreement, which is in existence prior to

the effective date of this section, which violates section 1104-

E is declared to be illegal, contrary to public policy and null

and void.

Section 1104.2-E. Future agreements.

On or after the effective date of this section, a provision

of an agreement in violation of section 1104-E is declared to be

illegal, contrary to public policy and null and void.

Section 1105-E. Return and payment.

(a) Return.--Each producer is required to file a return with

the department, on a form to be prescribed by the department,

reporting all severed natural gas per reporting period and the

tax due as imposed under section 1102-E.

(b) Filing.--The return required by subsection (a) must be

filed with the department on or before the 20th day of the

fourth calendar month after a reporting period.

on the day the return is required to be filed and becomes

delinquent if not remitted to the department by that date.

Section 1106-E. Natural gas severance tax licensing.

(a) License required.--Each producer subject to tax under

this part must apply to the department for a severance tax

license before severing natural gas from this Commonwealth.

Producers who have been severing natural gas from this

Commonwealth prior to the effective date of this part must

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obtain a license from the department within six months from the

effective date of this part. All other producers must obtain a

license before severing natural gas from this Commonwealth. A

producer is liable for the tax imposed by this article without

regard to whether the producer obtains or is required to obtain

a license.

(b) Fee.--The department may charge an application fee to

cover the administrative costs associated with the application

and licensing process. If the department charges an application

fee, the department may not issue a license until the producer

has paid the application fee.

the producer is required to provide a declaration of all sites

in this Commonwealth used for the severance of natural gas. The

declaration is to include all producing sites and sites which

are stripper wells. The producer is required to update the

declaration when the producer adds or removes a producing site

in this Commonwealth or when there is a change in the status of

a producing site. The producer shall update the declaration

within 30 days after any calendar month in which a change to the

declaration occurs.

(d) Department duties.--The department shall, after the

receipt of an application, issue the license applied for under

subsection (a), if the applicant filed all required State tax

reports and paid any State taxes not subject to a timely

perfected administrative or judicial appeal or subject to a duly

authorized deferred payment plan. The license shall be

nonassignable. Each producer shall be required to renew the

license on a staggered renewal system established by the

department. After the initial staggered period, a license issued

shall be valid for a period of five years.

(e) State taxes.--If an applicant for a license or a person

holding a license has not filed all required State tax reports

and paid any State taxes not subject to a timely perfected

administrative or judicial appeal or subject to a duly

authorized deferred payment plan, the department may refuse to

issue, suspend or revoke the license. The department shall

notify the applicant or registrant of a refusal, suspension or

revocation. The notice shall contain a statement that the

refusal, suspension or revocation may be made public. The notice

shall be made by first class mail. An applicant or registrant

aggrieved by the determination of the department may file an

appeal of the determination in the same manner as provided for

reassessments of tax under section 1108-E of this article. In

the case of a suspension or revocation which is appealed, the

license shall remain valid pending a final outcome of the

appeal. Notwithstanding any other provision of law to the

contrary, if no appeal is taken or if an appeal is taken and

denied at the conclusion of the appeal process, the department

may disclose, by publication or otherwise, the identity of a

person and evidence that the person's license has been refused,

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suspended or revoked under this subsection. Disclosure may

include the basis for refusal, suspension or revocation.

(f) Severing without a license.--A person that severs

natural gas in this Commonwealth without holding a valid license

under this section shall be guilty of a summary offense and,

upon conviction thereof, be sentenced to pay a fine of not less

than $300 nor more than $1,500 and, in default thereof, to

undergo imprisonment of not less than five days nor more than 30

days. The penalties imposed by this subsection shall be in

addition to any other penalties imposed by this article. For

purposes of this subsection, the severing of natural gas during

any calendar day shall constitute a separate violation. The

Secretary of Revenue may designate employees of the department

to enforce the provisions of this subsection. The employees

shall exhibit proof of and be within the scope of the

designation when instituting proceedings as provided by the

Pennsylvania Rules of Criminal Procedure.

(g) Liability.--Failure to obtain a license does not relieve

a person from liability for the tax imposed by this part.

(h) Civil penalty.--In addition to any tax, interest or

other penalty due under this act, the department shall impose a

civil penalty of 10 ¢ per unit severed during the period a

producer is required to and does not have a license. The penalty

shall be assessed and collected under this part.

Section 1107-E. Meters.

A producer shall provide for and maintain discrete wellhead

and sales meters. A producer shall ensure that all meters are

maintained according to industry standards.

Section 1108-E. Administration of tax.

Unless otherwise noted to the contrary, Article II, Part VI,

Chapters IV-VIII shall apply to this act.

Section 1109-E. Records.

The records to be maintained include:

(1) Wellhead and sales meter charts for each reporting

period and the meter calibration and maintenance records. If

turbine meters are in use, the maintenance records will be

made available to the department upon request.

(2) All records, statements, and other instruments

furnished to a producer by any person to whom the producer

delivers for sale, transport or other delivery of any natural

gas.

(3) Records, statements and other instruments as the

department may prescribe by regulation.

PART II

IMPACT FEE

Section 1121-E. Definitions.

The following words and phrases when used in this part shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Commission." The Pennsylvania Public Utility Commission.

"Department." The Department of Revenue of the Commonwealth.

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"Fund." The Unconventional Gas Well Fund.

"Highway mileage." The number of miles of public roads and

streets most recently certified by the Department of

Transportation as eligible for distribution of liquid fuels

funds under the act of June 1, 1956 (1955 P.L.1944, No.655),

referred to as the Liquid Fuels Tax Municipal Allocation Law.

"Municipality." A borough, city, town or township.

"Number of spud unconventional gas wells." The most recent

numerical count of spud unconventional gas wells on the

inventory maintained and provided to the commission by the

Department of Environmental Protection as of the last day of

each month.

"Population." As follows:

(1) Population of this Commonwealth and population of a

county shall be determined using the United States Census

Bureau's most recently released Annual Estimates of the

Resident Population for Counties of Pennsylvania.

(2) Population of a municipality shall be determined

using the United States Census Bureau's most recently

released Annual Estimates for the Resident Population for

Incorporated Places in Pennsylvania.

(3) Population of municipalities not included in the

report referenced under paragraph (2) shall be determined

using the United States Census Bureau's most recently

released Annual Estimates of the Resident Population for

Minor Civil Divisions in Pennsylvania.

"Spud." The actual start of drilling an unconventional gas

well.

"Unconventional gas well." A bore hole drilled or being

drilled for the purpose of or to be used for the production of

natural gas from an unconventional formation.

Section 1122-E. Powers of commission.

The commission may make inquiries and determinations

necessary to make distributions under this part.

Section 1123-E. Well information.

(a) List of wells.--The Department of Environmental

Protection shall provide the commission and, upon request, a

county with a list of all spud unconventional gas wells for

which the department has issued permits. The Department of

Environmental Protection shall update the list and provide it to

the commission on a monthly basis.

(b) Notification to commission.--A producer shall notify the

commission of the following within 30 days after a calendar

month in which the change occurs:

(1) The spudding of an unconventional gas well.

(2) The initiation of production at an unconventional

gas well.

(3) The removal of an unconventional gas well from

production.

the department each month of the information collected under

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subsection (b).

Section 1124-E. Unconventional Gas Well Fund.

The Unconventional Gas Well Fund established in the State

Treasury by 58 Pa.C.S. § 2314 (relating to distribution of fee)

shall continue and shall be administered by the commission.

Section 1125-E. Appropriation and distribution to conservation

districts and State agencies.

(a) Transfer.--From revenue collected under this article for

each calendar year, the department shall transfer to the fund,

to the extent available, the following amounts which are

appropriated and shall be distributed by the commission in the

following order of priority:

(1) To county conservation districts, $8,000,000 as

follows:

(i) The amount of $4,000,000 shall be distributed by

dividing the amount equally among conservation districts

for uses consistent with the act of May 15, 1945

(P.L.547, No.217), known as the Conservation District

Law.

(ii) The amount of $4,000,000 shall be distributed

by the State Conservation Commission in a manner

consistent with the Conservation District Law and the

provisions of 25 Pa. Code Ch. 83 Subch. B (relating to

Conservation District Fund Allocation Program-Statement

of Policy).

(2) To the Pennsylvania Fish and Boat Commission,

$1,200,000 for costs relating to the review of applications

for permits to drill unconventional gas wells.

(3) To the Department of Environmental Protection,

$6,200,000 for the administration of this article and the

enforcement of acts relating to clean air and clean water.

(4) To the Pennsylvania Emergency Management Agency,

$950,000 for emergency response planning, training and

coordination related to natural gas production from

unconventional gas wells.

(5) To the Office of the State Fire Commissioner,

$950,000 for the development, delivery and sustainment of

training and grant programs for first responders and the

acquisition of specialized equipment for response to

emergencies relating to natural gas production from

unconventional gas wells.

(6) To the Department of Transportation, $2,000,000 for

rail freight assistance.

(7) To the commission, $1,200,000 for costs associated

with implementing this chapter.

(b) Report.--An agency or organization that receives money

under this section shall, by October 31, 2016, and October 31 of

each year thereafter, submit to the Secretary of the Budget and

the Appropriations Committee of the Senate and the

Appropriations Committee of the House of Representatives a

report itemizing and explaining the use of the money.

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shall be contingent on availability of funds. If sufficient

funds are not available, the commission shall disburse funds on

a pro rata basis.

Section 1126-E. Appropriation and distribution to counties and

municipalities.

(a) Transfer.--Beginning June 30, 2017, after the transfer

of the amount under section 1125-E from revenue collected under

this article for each calendar year, the department shall

transfer to the fund, to the extent available, $123,151,000,

which amount is appropriated to counties and municipalities for

purposes authorized under subsection (d). Counties and

municipalities, where appropriate, may jointly fund projects

that cross jurisdictional lines. The commission shall distribute

the funds appropriated in this subsection as follows by July 1,

2016, and each July 1 thereafter:

(1) Thirty-six percent shall be distributed to counties

in which a spud unconventional gas well is located. The

amount distributed to each county shall be determined under

the following formula:

(i) Divide:

(A) the number of spud unconventional gas wells

in the county; by

(B) the number of spud unconventional gas wells

in this Commonwealth.

(ii) Multiply:

(A) the quotient under subparagraph (i); by

(B) the amount available for distribution under

paragraph (3).

(2) Thirty-seven percent shall be distributed to

municipalities in which a spud unconventional gas well is

located. The amount distributed to each municipality shall be

determined under the following formula:

(i) Divide:

(A) the number of spud unconventional gas wells

in the municipality; by

(B) the number of spud unconventional gas wells

in this Commonwealth.

(ii) Multiply:

(A) the quotient under subparagraph (i) by

(B) the amount available for distribution under

this paragraph.

(3) Twenty-seven percent shall be distributed to

municipalities located in a county in which a spud

unconventional gas well is located. The amount distributed to

each municipality shall be made as follows:

(i) Divide:

(A) the number of spud unconventional gas wells

in the county; by

(B) the number of spud unconventional gas wells

in this Commonwealth.

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(ii) Multiply:

(A) the quotient under subparagraph (i); by

(B) the amount available for distribution under

this paragraph.

(iii) Fifty percent of the product under

subparagraph (ii) shall be distributed to each

municipality in which a spud unconventional gas well is

located, that is contiguous with a municipality in which

a spud unconventional gas well is located or that is

located within five linear miles of a spud unconventional

gas well. The distribution shall be made as follows:

(A) Fifty percent of the amount available under

this subparagraph to each municipality under the

following formula:

(I) Divide:

(a) the population of the eligible

municipality within the county; by

(b) the total population of the eligible

municipalities within the county.

(II) Multiply:

(a) the quotient under subclause (I); by

(b) the amount allocated to the county

under this subparagraph.

(B) Fifty percent of the amount available under

this subparagraph shall be distributed to each

municipality under the following formula:

(I) Divide:

(a) the highway mileage of the eligible

municipality within the county; by

(b) the total highway mileage of the

eligible municipalities with the county.

(II) Multiply:

(a) the quotient under subclause (I); by

(b) the amount allocated to the county

under this subparagraph.

(iv) Fifty percent of the product under subparagraph

(ii) shall be distributed to each municipality in the

county regardless of whether an unconventional gas well

is located in the municipality. The distribution shall be

made as follows:

(A) Fifty percent of the amount available under

this subparagraph shall be distributed to each

municipality under the following formula:

(I) Divide:

(a) the population of the municipality

within the county; by

(b) the total population of the county.

(II) Multiply:

(a) the quotient under subclause (I); by

(b) the amount allocated to the county

under this paragraph.

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(B) Fifty percent of the amount available under

this subparagraph shall be distributed to each

municipality under the following formula:

(I) Divide:

(a) the highway mileage of the

municipality within the county; by

(b) the total highway mileage of the

county.

(II) Multiply:

(a) the quotient under subclause (I); by

(b) the amount allocated to the county

under this subparagraph.

(b) Restriction.--The following shall apply:

(1) The amount allocated to each municipality under

subsection (a) may not exceed the greater of $500,000 or 50%

of the total budget for the prior fiscal year beginning with

the 2010 budget year and continuing every year thereafter,

adjusted to reflect any upward changes in the Consumer Price

Index for All Urban Consumers for the Pennsylvania, New

Jersey, Delaware and Maryland area in the preceding 12

months. The remaining money after allocation under subsection

(a) shall be retained by the commission and transferred to

the Commonwealth Financing Authority.

(2) The remaining funds under paragraph (1) shall be

used for grants to schools, hospitals and small businesses to

obtain access to natural gas:

(i) The Commonwealth Financing Authority shall give

priority to applications that will result in adjoining

residential and nonresidential properties obtaining

natural gas.

(ii) Grants may provide for up to 50% of the cost of

the project.

under subsection (a) shall use the funds received only for the

following purposes associated with natural gas production from

unconventional gas wells within the county or municipality and

in a manner consistent with the provisions of 58 Pa.C.S. Ch. 33

(relating to local ordinances relating to oil and gas

operations):

(1) Construction, reconstruction, maintenance and repair

of roadways, bridges and public infrastructure.

(2) Water, storm water and sewer systems including

construction, reconstruction, maintenance and repair.

(3) Emergency preparedness and public safety, including

law enforcement and fire services, hazardous material

response, 911 service operations, equipment acquisition and

other services.

(4) Environmental programs, including trails, parks and

recreation, open space, flood plain management, conservation

districts and agricultural preservation.

(5) Preservation and reclamation of surface and

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subsurface waters and water supplies.

(6) Tax reductions, including homestead exclusions.

(7) Projects to increase the availability of safe and

affordable housing to residents.

(8) Records management systems and personnel in the

office of recorder of deeds, geographic information systems

and information technology.

(9) The delivery of social services.

(10) Judicial services.

(11) For deposit into the county or municipality's

capital reserve fund if the funds are used solely for a

purpose under this subsection.

(12) Career and technical centers for training of

workers in the oil and gas industry.

(13) Local or regional planning initiatives under the

act of July 31, 1968 (P.L.805, No.247), known as the

Pennsylvania Municipalities Planning Code.

(14) Grants to residential property owners, schools,

hospitals and small businesses to obtain access to natural

gas.

(d) Prohibition.--Funds distributed under subsection (a) may

not be used for the purpose of litigation.

(e) Availability of funds.--Distribution of funds under this

section shall be contingent on availability of funds. If

sufficient funds are not available, the commission shall

disburse funds on a pro rata basis.

Section 1127-E. Housing affordability and rehabilitation

enhancement fund.

(a) Transfer to Housing Affordability and Rehabilitation

Fund.--After the transfer of the amount under section 1125-E and

section 1126-E, from revenue collected under this article for

each calendar year, the department shall transfer $9,647,000 to

the Housing Affordability and Rehabilitation Enhancement Fund.

(b) Purposes.--Funds under subsection (a) shall be used for

the following purposes:

(1) To provide support to projects in a county in which

producing unconventional gas wells are located that increase

availability of quality, safe, affordable housing for low-

income and moderate-income individuals or families, persons

with disabilities or elderly persons.

(2) To provide rental assistance in a county in which

producing unconventional gas wells are located to persons or

families whose household income does not exceed the area

median income.

this section may be used in fifth, sixth, seventh and eighth

class counties.

Section 1128-E. Projects of Statewide significance.

(a) Distribution.--After the transfer of the amount under

sections 1125-E, 1126-E and 1127-E from revenue collected under

this article for each calendar year, the department shall

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transfer, to the extent available, $82,101,000 to the fund,

which amount is appropriated and shall be distributed by the

commission by July 1, as follows:

(1) To the Commonwealth Financing Authority, $16,500,000

for grants to eligible applicants for the following:

(i) Acid mines, including damage, abatement and

cleanup and mine reclamation, with priority given to

projects that recycle and treat water for use in drilling

operations.

(ii) Orphan or abandoned oil and gas well plugging.

(iii) Complying with the act of January 24, 1966

(1965 P.L.1535, No.537), known as the Pennsylvania Sewage

Facilities Act.

(iv) Planning acquisition, development,

rehabilitation and repair of green ways, recreational

trails, open space, parks and beautification projects.

(v) Programs to establish baseline water quality

data on private water supplies.

(vi) Watershed programs and related projects.

(vii) Flood control projects. Up to 25% of the funds

distributed to the Commonwealth Financing Authority under

this paragraph may be utilized for projects under this

subparagraph.

(2) To the Environmental Stewardship Fund, $8,210,080.

(3) To the Highway Bridge Improvement Restricted Account

within the Motor License Fund, $20,525,200 to counties to be

distributed to fund the cost of the replacement or repair of

locally owned at-risk deteriorated bridges. Funds shall be

distributed to counties proportionately based on the

population of the county as follows:

(i) In each county, the distribution shall be

according to the following formula:

(A) Divide:

(I) the total population of the county; by

(II) the total population of this

Commonwealth;

(B) express the quotient under clause (A) as a

percentage.

(I) the percentage under clause (B); by

(II) the amount of money to be distributed

under this paragraph.

(ii) Each county shall receive a minimum of $40,000,

to the extent funds are available.

(iii) The Department of Transportation shall release

money under this paragraph upon approval of a plan

submitted by a county or municipality to repair an at-

risk deteriorated bridge. The plan must include funding

for replacement or repair.

(iv) A county of the first or second class may

submit a plan to use the county's funds under this

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paragraph for at-risk deteriorated bridges owned by a

public transportation authority.

(4) For water and sewer projects, $22,000,000. The

following shall apply:

(i) Fifty percent of the amount distributed under

this paragraph shall be transferred to the Pennsylvania

Infrastructure Investment Authority to be used in

accordance with the act of March 1, 1988 (P.L.82, No.16),

known as the Pennsylvania Infrastructure Investment

Authority Act.

(ii) Fifty percent of the amount distributed under

this paragraph shall be transferred to the H2O PA program

to be used by the Commonwealth Financing Authority in

accordance with section 301 of the act of July 9, 2008

(P.L.908, No.63), known as the H2O PA Act. The

prohibition on grants for projects located in a city or

county of the first or second class under section 301 of

the H2O PA Act shall not apply to funds distributed to

the H2O PA program under this subparagraph.

(5) For the planning, acquisition, development,

rehabilitation and repair of green ways, recreational trails,

open space, natural areas, community conservation and

beautification projects, community and heritage parks and

water resource management, $12,500,000. Funds may be used to

acquire lands for recreational or conservation purposes and

land damaged or prone to drainage by storms or flooding.

Funds shall be distributed to counties proportionately based

on the population of the county as follows:

(i) In each county, the distribution shall be

according to the following formula:

(A) Divide:

(I) the total population of the county; by

(II) the total population of this

Commonwealth.

(B) Express the quotient under clause (A) as a

percentage.

(I) the percentage under clause (B); by

(II) the amount of funds available under

this paragraph.

(ii) Each county shall receive a minimum of $25,000

to the extent funds are available.

(b) Availability of funds.--Distribution of funds under this

section shall be contingent on availability of funds. If

sufficient funds are not available, the commission shall

disburse funds on a pro rata basis.

(1) Funds distributed under subsection (a) may not be

used for the purpose of public relations, outreach not

directly related to project implementation, communications,

lobbying or litigation.

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(2) Funds distributed under subsection (a) may not be

used by an authorized organization as defined in 27 Pa.C.S. §

6103 (relating to definitions) for land acquisition unless

the authorized organization has obtained the written consent

of the county and municipality in which the land is situated.

(d) Coordination.--The Department of Environmental

Protection and the Department of Conservation and Natural

Resources shall review each application for funding as requested

by the Commonwealth Financing Authority and provide

recommendations on priority of projects and project approval.

(e) Remaining funds.--Any funds remaining after the

transfers under this section shall be transferred to the

Hazardous Sites Cleanup Fund.

Section 1129-E. Projects of Statewide importance.

(a) Transfer.--After the transfer of the amounts under

sections 1125-E, 1126-E, 1127-E and 1128-E from revenue

collected under this article for each calendar year, the

department shall transfer the following amounts, to the extent

available, to be distributed as follows:

(1) The sum of $10,000,000 to the Department of

Environmental Protection, with $5,000,000 going to the well

plugging account and the remainder to supplement the

operations under section 1901-A of the act of April 9, 1929

(P.L.177, No.175), known as The Administrative Code of 1929.

(2) In fiscal year beginning July 1, 2016, an amount up

to $15,000,000 shall be transferred to the Department of

Community and Economic Development to support an economic

growth program.

(3) In fiscal year beginning July 1, 2017, an amount up

to $30,000,000 shall be transferred to the Department of

Community and Economic Development to support an economic

growth period.

(4) In fiscal year beginning July 1, 2018, and each

fiscal year thereafter, an amount up to $55,000,000 shall be

transferred to the Department of Community and Economic

Development to support an economic growth program.

(b) Account.--There is hereby established the Economic

Development Restricted Account in the General Fund. Money

transferred under subsection (a)(2), (3) and (4) shall be

deposited into the Economic Development Restricted Account and

appropriated for the purposes of subsection (a)(2), (3) and (4).

ARTICLE XII-A

TOBACCO PRODUCTS TAX

Section 1201-A. Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Cigar." Any roll of tobacco wrapped in tobacco.

"Cigarette." As defined in section 1201.

"Consumer." An individual who purchases tobacco products for

personal use and not for resale.

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"Contraband." Any tobacco product for which the tax imposed

by this article has not been paid.

"Dealer." A wholesaler or retailer. Nothing in this article

shall preclude any person from being a wholesaler or retailer,

provided the person meets the requirements for a license in each

category of dealer.

"Department." The Department of Revenue of the Commonwealth.

"Electronic cigarettes." As follows:

(1) An electronic oral device, such as one composed of a

heating element and battery or electronic circuit, or both,

which provides a vapor of nicotine or any other substance and

the use or inhalation of which simulates smoking.

(2) The term includes:

(i) A device as described in paragraph (1),

notwithstanding whether the device is manufactured,

distributed, marketed or sold as an e-cigarette, e-cigar

and e-pipe or under any other product, name or

description.

(ii) A liquid or substance placed in an electronic

cigarette.

"Manufacturer." A person that produces tobacco products.

"Person." An individual, unincorporated association,

company, corporation, joint stock company, group, agency,

syndicate, trust or trustee, receiver, fiduciary, partnership,

conservator, any political subdivision of the Commonwealth or

any other state. If used in any of the provisions of this

article prescribing or imposing penalties, the term "person" as

applied to a partnership, unincorporated association or other

joint venture, shall mean the partners or members of the

partnership, unincorporated association or other joint venture,

and as applied to a corporation, shall mean each officer and

director of the corporation.

"Purchase price." The total value of anything paid or

delivered, or promised to be paid or delivered, money or

otherwise, in complete performance of a sale or purchase,

without any deduction on account of the cost or value of the

property sold, cost or value of transportation, cost or value of

labor or service, interest or discount paid or allowed after the

sale is consummated, any other taxes imposed by the Commonwealth

or any other expense.

"Retailer." A person that purchases or receives tobacco

products from any source for the purpose of sale to a consumer,

or who owns, leases or otherwise operates one or more vending

machines for the purpose of sale of tobacco products to the

ultimate consumer. The term includes a vending machine operator

or a person that buys, sells, transfers or deals in tobacco

products and is not licensed as a tobacco products wholesaler

under this article.

"Roll-your-own tobacco." Any tobacco which, because of the

tobacco's appearance, type, packaging or labeling, is suitable

for use and is likely to be offered to, or purchased by,

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consumers as tobacco for making cigarettes.

"Sale." Any transfer of ownership, custody or possession of

tobacco products for consideration; any exchange, barter or

gift; or any offer to sell or transfer the ownership, custody or

possession of tobacco products for consideration.

"Taxpayer." Any person subject to tax under this article.

"Tobacco products." Cigars, cigarillos, cheroots, stogies,

periques, granulated, plug cut, crimp cut, ready rubbed and

other smoking tobacco, roll-your-own tobacco, snuff, dry snuff,

snuff flour, cavendish, plug and twist tobacco, fine-cut and

other chewing tobaccos, shorts, refuse scraps, clippings,

cuttings and sweepings of tobacco and other kinds and forms of

tobacco, prepared in such manner as to be suitable for chewing

or ingesting or for smoking in a pipe or otherwise, or both for

chewing and smoking, including e-cigarettes. The term does not

include any item subject to the tax under section 1202.

"Unclassified importer." A person in this Commonwealth that

acquires a tobacco product from any source on which the tax

imposed by this article was not paid and that is not a person

otherwise required to be licensed under the provisions of this

article. The term includes, but is not limited to, consumers who

purchase tobacco products using the Internet or mail order

catalogs for personal possession or use in this Commonwealth.

"Vending machine operator." A person who places or services

one or more tobacco product vending machines whether owned,

leased or otherwise operated by the person at locations from

which tobacco products are sold to the consumer. The owner or

tenant of the premises upon which a vending machine is placed

shall not be considered a vending machine operator if the

owner's or tenant's sole remuneration therefrom is a flat rental

fee or commission based upon the number or value of tobacco

products sold from the machine, unless the owner or tenant

actually owns the vending machine or leases the vending machine

under an agreement whereby any profits from the sale of the

tobacco products directly inure to the owner's or tenant's

benefit.

"Wholesaler." A person engaged in the business of selling

tobacco products that receives, stores, sells, exchanges or

distributes tobacco products to retailers or other wholesalers

in this Commonwealth or retailers who purchase from a

manufacturer or from another wholesaler who has not paid the tax

imposed by this article.

Section 1202-A. Incidence and rate of tax.

(a) Imposition.--A tobacco products tax is hereby imposed on

the dealer, manufacturer or any person at the time the tobacco

product is first sold to a retailer in this Commonwealth at the

rate of 40% on the purchase price charged to the retailer for

the purchase of any tobacco product. The tax shall be collected

from the retailer by whomever sells the tobacco product to the

retailer and remitted to the department. Any person required to

collect this tax shall separately state the amount of tax on an

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invoice or other sales document.

(b) Retailer.--If the tax is not collected by the seller

from the retailer, the tax is imposed on the retailer at the

time of purchase at the same rate as in subsection (a) based on

the retailer's purchase price of the tobacco products. The

retailer shall remit the tax to the department.

unclassified importer at the time of purchase at the same rate

as in subsection (a) based on the unclassified importer's

purchase price of the tobacco products. The unclassified

importer shall remit the tax to the department.

(d) Exceptions.--The tax shall not be imposed on any tobacco

products that:

(1) are exported for sale outside this Commonwealth; or

(2) are not subject to taxation by the Commonwealth

pursuant to any laws of the United States.

Section 1203-A. Floor tax.

(a) Payment.--Any retailer that, as of the effective date of

this article, possesses tobacco products subject to the tax

imposed by section 1202-A, shall pay the tax on the tobacco

products in accordance with the rates specified in section 1202-

A. The tax shall be paid and reported on a form prescribed by

the department within 90 days of the effective date of this

section.

(b) Administrative penalty; license.--If a retailer fails to

file the report required by subsection (a) or fails to pay the

tax imposed by subsection (a), the department may, in addition

to the interest and penalties provided in section 1215-A, do any

of the following:

(1) Impose an administrative penalty equal to the amount

of tax evaded or not paid. The penalty shall be added to the

tax evaded or not paid and assessed and collected at the same

time and in the same manner as the tax.

(2) Suspend, revoke or refuse to issue the retailer's

license.

under subsection (b), a person that willfully omits, neglects or

refuses to comply with a duty imposed under subsection (a)

commits a misdemeanor and shall, if convicted, be sentenced to

pay a fine of not less than $2,500 nor more than $5,000, to

serve a term of imprisonment not to exceed 30 days, or both.

Section 1204-A. Remittance of tax to department.

Wholesalers, retailers, unclassified importers and

manufacturers shall file monthly reports on a form prescribed by

the department by the 20th day of the month following the sale

or purchase of tobacco products from any other source on which

the tax levied by this article has not been paid. The tax is due

at the time the report is due. The department may required the

filing of reports and payment of tax on a less frequent basis at

its discretion.

Section 1205-A. (Reserved).

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Section 1206-A. Procedures for claiming refund.

A claim for a refund of tax imposed by this article under

section 3003.1 and Article XXVII shall be in the form and

contain the information prescribed by the department by

regulation.

Section 1207-A. Sales or possession of tobacco product when tax

not paid.

(a) Sales or possession.--Any person who sells or possesses

any tobacco product for which the proper tax has not been paid

commits a summary offense and shall, upon conviction, be

sentenced to pay costs of prosecution and a fine of not less

than $100 not more than $1,000 or to imprisonment for not more

than 60 days, or both, at the discretion of the court. Any

tobacco products purchased from a wholesaler properly licensed

under this article shall be presumed to have the proper taxes

paid.

(b) Tax evasion.--Any person that shall falsely or

fraudulently, maliciously, intentionally or willfully with

intent to evade the payment of the tax imposed by this article

sells or possesses any tobacco product for which the proper tax

has not been paid commits a felony and shall, upon conviction,

be sentenced to pay costs of prosecution and a fine of not more

than $15,000 or to imprisonment for not more than five years, or

both, at the discretion of the court.

Section 1208-A. Assessment.

The department is authorized to make the inquiries,

determinations and assessments of the tax, including interest,

additions and penalties, imposed by this article.

Section 1209-A. (Reserved).

Section 1210-A. (Reserved).

Section 1211-A. Failure to file return.

Where no return is filed, the amount of the tax due may be

assessed and collected at any time as to taxable transactions

not reported.

Section 1212-A. False or fraudulent return.

Where the taxpayer willfully files a false or fraudulent

return with intent to evade the tax imposed by this article, the

amount of tax due may be assessed and collected at any time.

Section 1213-A. Extension of limitation period.

Notwithstanding any other provision of this article, where,

before the expiration of the period prescribed for the

assessment of a tax, a taxpayer has consented, in writing, that

the period be extended, the amount of tax due may be assessed at

any time within the extended period. The period so extended may

be extended further by subsequent consents, in writing, made

before the expiration of the extended period.

Section 1214-A. Failure to furnish information, returning false

information or failure to permit inspection.

(a) Penalty.--Any taxpayer who fails to keep or make any

record, return, report, inventory or statement, or keeps or

makes any false or fraudulent record, return, report, inventory

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or statement required by this article commits a misdemeanor and

shall, upon conviction, be sentenced to pay costs of prosecution

and a fine of $500 and to imprisonment for not more than one

year, or both, at the discretion of the court.

(b) Examination.--The department is authorized to examine

the books and records, the stock of tobacco products and the

premises and equipment of any taxpayer in order to verify the

accuracy of the payment of the tax imposed by this article. The

person subject to an examination shall give to the department or

its duly authorized representative, the means, facilities and

opportunity for the examination. Willful refusal to cooperate

with or permit an examination to the satisfaction of the

department shall be sufficient grounds for the suspension or

revocation of a taxpayer's license. In addition, a person who

willfully refuses to cooperate with or permit an examination to

the satisfaction of the department commits a misdemeanor and

shall, upon conviction, be sentenced to pay costs of prosecution

and a fine of $500 or to imprisonment for not more than one

year, or both, at the discretion of the court.

manufacturer shall keep and maintain for a period of four years

records in the form prescribed by the department. The records

shall be maintained at the location for which the license is

issued.

(d) Reports.--A dealer or manufacturer shall file reports at

times and in the form prescribed by the department.

(e) Records; manufacturer or wholesaler.--A manufacturer or

wholesaler located or doing business in this Commonwealth who

sells tobacco products to a wholesale license holder in this

Commonwealth shall keep records showing:

(1) The number and kind of tobacco products sold.

(2) The date the tobacco products were sold.

(3) The name and license number of the dealer the

tobacco products were sold to.

(4) The total weight of each of the tobacco products

sold to the license holder.

(5) The place where the tobacco products were shipped.

(6) The name of the common carrier.

(f) Manufacturer or wholesaler.--A manufacturer or

wholesaler shall file with the department, on or before the 20th

of each month, a report showing the information listed in

subsection (e) for the previous month.

Section 1215-A. Other violations; peace officers; fines.

Sections 1278, 1279, 1280 and 1291 are incorporated by

reference into and shall apply to the tax imposed by this

article.

Section 1216-A. Sales reporting.

For purposes of reporting sales of roll-your-own tobacco

under the act of June 22, 2000 (P.L.394, No.54) , known as the

Tobacco Settlement Agreement Act, 0.09 ounces of tobacco shall

constitute one individual unit sold.

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Section 1217-A. (Reserved).

Section 1218-A. (Reserved).

Section 1219-A. Records of shipments and receipts of tobacco

products required.

The department may, in its discretion, require reports from

any common or contract carrier who transports tobacco products

to any point or points within this Commonwealth, and from any

bonded warehouseman or bailee who has in the possession of the

warehouseman or bailee any tobacco products. The reports shall

contain the information concerning shipments of tobacco products

that the department determines to be necessary for the

administration of this article. All common and contract

carriers, bailees and warehousemen shall permit the examination

by the department or its authorized agents of any records

relating to the shipment or receipt of tobacco products.

Section 1220-A. Licensing of dealers and manufacturers.

(a) Prohibition.--No person, unless all sales of tobacco

products are exempt from Pennsylvania tobacco products tax,

shall sell, transfer or deliver any tobacco products in this

Commonwealth without first obtaining the proper license provided

for in this article.

(b) Application.--An applicant for a dealer's or

manufacturer's license shall complete and file an application

with the department. The application shall be in the form and

contain information prescribed by the department and shall set

forth truthfully and accurately the information desired by the

department. If the application is approved, the department shall

license the dealer or manufacturer for a period of one year and

the license may be renewed annually thereafter.

Section 1221-A. Licensing of manufacturers.

Any manufacturer doing business within this Commonwealth

shall first obtain a license to sell tobacco products by

submitting an application to the department containing the

information requested by the department and designating a

process agent. If a manufacturer designates no process agent,

the manufacturer shall be deemed to have made the Secretary of

State its agent for the service of process in this Commonwealth.

Section 1222-A. Licensing of wholesalers.

(a) Requirements.--Applicants for a wholesale license or

renewal of that license shall meet the following requirements:

(1) The premises on which the applicant proposes to

conduct business are adequate to protect the revenue.

(2) The applicant is a person of reasonable financial

stability and reasonable business experience.

(3) The applicant, or any shareholder controlling more

than 10% of the stock if the applicant is a corporation or

any officer or director if the applicant is a corporation,

shall not have been convicted of any crime involving moral

turpitude.

(4) The applicant shall not have failed to disclose any

material information required by the department, including

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information that the applicant has complied with this article

by providing a signed statement under penalty of perjury.

(5) The applicant shall not have made any material false

statement in the application.

(6) The applicant shall not have violated any provision

of this article.

(7) The applicant shall have filed all required State

tax reports and paid any State taxes not subject to a timely

perfected administrative or judicial appeal or subject to a

duly authorized deferred payment plan.

(b) Multiple locations.--The wholesale license shall be

valid for one specific location only. Wholesalers with more than

one location shall obtain a license for each location.

Section 1223-A. Licensing of retailers.

Applicants for retail license or renewal of that license

shall meet the following requirements:

(1) The premises in which the applicant proposes to

conduct business are adequate to protect the revenues.

(2) The applicant shall not have failed to disclose any

material information required by the department.

(3) The applicant shall not have any material false

statement in the application.

(4) The applicant shall not have violated any provision

of this article.

(5) The applicant shall have filed all required State

tax reports and paid any State taxes not subject to a timely

perfected administrative or judicial appeal or subject to a

duly authorized deferred payment plan.

Section 1224-A. License for tobacco products vending machines.

Each tobacco products vending machine shall have a current

retail license which shall be conspicuously and visibly placed

on the machine. There shall be conspicuously and visibly placed

on every tobacco products vending machine the name and address

of the owner and the name and address of the operator.

Section 1225-A. License fees and issuance and display of

license.

(a) At the time of making any application or license renewal

application:

(1) An applicant for a tobacco products manufacturers

license shall pay the department a license fee of $1,500.

(2) An applicant for a wholesale tobacco products

dealer's license shall pay to the department a license fee of

$1,500.

(3) An applicant for a retail tobacco products dealer's

license shall pay to the department a license fee of $25.

(4) An applicant for a vending machine tobacco products

dealer's license shall pay to the department a license fee of

$25.

(b) Proration.--Fees shall not be prorated.

and payment of the fees, the department shall issue the proper

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license which must be conspicuously displayed at the location

for which it has been issued.

Section 1226-A. Electronic filing.

The department may at its discretion require that any or all

returns, reports or registrations that are required to be filed

under this article be filed electronically. Failure to

electronically file any return, report, registration or other

information the department may direct to be filed electronically

shall subject the taxpayer to a penalty of 5% of the tax due on

the return, up to a maximum of $1,000, but not less than $10.

This penalty shall be assessed at any time and collected in the

manner provided in this article. This penalty shall be in

addition to any civil penalty imposed in this article for

failure to furnish information or file a return. The criminal

penalty for failure to file a return electronically shall be the

same as the criminal penalty for failure to furnish information

or file a return under this article.

Section 1227-A. Expiration of license.

(a) Expiration.--A license shall expire on the last day of

June next succeeding the date upon which it was issued unless

the department at an earlier date suspends, surrenders or

revokes the license.

(b) Violation.--After the expiration date of the license or

sooner if the license is suspended, surrendered or revoked, it

shall be illegal for any dealer to engage directly or indirectly

in the business heretofore conducted by the dealer for which the

license was issued. Any licensee who shall, after the expiration

date of the license, engage in the business theretofore

conducted by the licensee either by way of purchase, sale,

distribution or in any other manner directly or indirectly

engaged in the business of dealing with tobacco products for

profit shall be in violation of this article and be subject to

the penalties provided in this article.

Section 1228-A. Administration powers and duties.

(a) Department.--The administration of this article is

hereby vested in the department. The department shall adopt

rules and regulations for the enforcement of this article. The

department may impose fees as may be necessary to cover the

costs incurred in administering this section.

(b) Joint administration.--The department is authorized to

jointly administer this article with other provisions of this

act, including joint reporting of information, forms, returns,

statements, documents or other information submitted to the

department.

Section 1229-A. Sales without license.

(a) Penalty.--Any person who shall, without being the holder

of a proper unexpired dealer's license, engage in purchasing,

selling, distributing or in any other manner directly or

indirectly engaging in the business of dealing with tobacco

products for profit commits a summary offense and shall, upon

conviction, be sentenced to pay costs of prosecution and a fine

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of not less than $250 nor more than $1,000, or to imprisonment

for not more than 30 days, or both, at the discretion of the

court.

(b) Prima facie evidence.--Open display of tobacco products

in any manner shall be prima facie evidence that the person

displaying such tobacco products is directly or indirectly

engaging in the business of dealing with tobacco products for

profit.

Section 1230-A. Violations and penalties.

(a) Suspension.--The license of any person who violates this

article may be suspended after due notice and opportunity for a

hearing for a period of not less than five days or more than 30

days for a first violation and shall be revoked or suspended for

any subsequent violation.

(b) Fine.--In addition to the provisions of subsection (a),

upon adjudication of a first violation, the person shall be

fined not less than $2,500 nor more than $5,000. For subsequent

violations, the person shall, upon adjudication thereof, be

fined not less than $5,000 nor more than $15,000.

(b), (c), or (d), or 1225-A(c), shall be subject to a civil

penalty not to exceed $300 per violation but shall not be

subject to subsections (a) and (b).

Section 1231-A. Property rights.

(a) Incorporation.--Subject to subsection (b), section 1285

is incorporated by reference into and shall apply to this

article.

(b) Alterations.--

(1) References in section 1285 to cigarettes shall apply

to tobacco products in this article.

(2) References in section 1285 to 2,000 or more

unstamped cigarettes shall apply to tobacco products worth at

least $500 in this article.

(3) References in section 1285 to more than 200

unstamped cigarettes shall apply to tobacco products worth at

least $50 in this article.

Section 1232-A. Sample of tobacco products.

(a) Samples.--The department shall, by regulation, govern

the receipt, distribution of and payment of tax on sample

tobacco products issued for free distribution.

(b) Construction.--Nothing in this article or the

regulations promulgated under this article shall prohibit the

bringing into this Commonwealth by a manufacturer samples of

tobacco products to be delivered and distributed only through

licensed dealers or the manufacturers or their sales

representatives. The tax shall be paid by the manufacturer

provided all such packs bear the legend "all applicable State

taxes have been paid." Under no circumstances shall any untaxed

tobacco products be sold within this Commonwealth.

Section 1233-A. Labeling and packaging.

It shall be unlawful to knowingly possess, sell, give,

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transfer or deliver to any person, any tobacco product where the

packaging of which has been modified or altered by a person

other than the original manufacturer. Modification or alteration

shall include the placement of a sticker, writing or mark to

cover information on the packages. For purposes of this section,

a tobacco product package shall not be construed to have been

modified or altered by a person other than the manufacturer if

the most recent modification or alteration was made by the

manufacturer or person authorized by the manufacturer and

approved by the department.

Section 1234-A. Information exchange.

The department is authorized to exchange information with any

other Federal, State or local enforcement agency for purposes of

enforcing this article.

ARTICLE XVI

SCHOOL DISTRICT TAX RELIEF

SUBARTICLE A

PRELIMINARY PROVISIONS

Section 1601. Scope.

This article relates to school district tax relief .

Section 1602. Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Allocation minimum." A numerical value of 0.2.

"Average daily membership." As defined in section 2501(3) of

the Public School Code.

"Department." The Department of Revenue of the Commonwealth.

"Earned income." As defined in section 501 of The Local Tax

Enabling Act.

"Equalized millage." As defined in section 2501(9.2) of the

Public School Code.

"Estimated local revenue calculation." The compensation and

net profits component of the 2012 personal income valuation

certified by the Secretary of Revenue as in section 2501(9.1) of

the Public School Code, multiplied by 0.1%.

"Farmstead." As defined in 53 Pa.C.S. § 8582 (relating to

definitions).

"Farmstead property." As defined in 53 Pa.C.S. § 8582.

"Fund." The Property Tax Relief Fund established under 4

Pa.C.S. § 1409 (relating to Property Tax Relief Fund).

"Homestead." As defined in 53 Pa.C.S. § 8401 (relating to

definitions).

"Homestead property." As defined in 53 Pa.C.S. § 8401.

"Local tax revenue." The revenue from taxes actually levied

and assessed by a school district, including delinquent taxes.

The term does not include interest or dividend earnings, Federal

or State grants, contracts or appropriations, income generated

from operations or any other source which is not derived from

taxes levied and assessed by a school district.

"Market value/income aid ratio." As defined in section

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2501(14.1) of the Public School Code.

"Net profits." As defined in section 501 of The Local Tax

Enabling Act.

"Personal income." Income enumerated in section 303, as

determined by the Department of Revenue, subject to any

correction t hereof for fraud, evasion or error as finally

determined by the Commonwealth.

"Personal income valuation." As defined in section 2501(9.1)

of the Public School Code.

"Property tax reduction index." A quotient equal to the sum

of the numerical rank of a school district's personal income

valuation per average daily membership, the numerical rank of

its market value/income aid ratio, the numerical rank of its

equalized millage and the numerical rank of its school tax

ratio, divided by 1,000.

"Public School Code." The act of March 10, 1949 (P.L.30,

No.14), known as the Public School Code of 1949.

"Residential property tax." The dollar value of real

property taxes paid by residential property owners in a school

district, determined by multiplying the real property taxes

collected by the school district by the percentage of the total

property value in the school district classified as residential

by the State Tax Equalization Board and including any property

tax reduction allocation under Chapter 5 of the Taxpayer Relief

Act.

"Secretary." The Secretary of the Budget.

"School district." A school district of the first class,

first class A, second class, third class or fourth class.

"School tax ratio." The dollar value of local taxes

collected by the school district or by a city of the first class

for a school district of the first class divided by the personal

income valuation of the school district.

"Taxpayer Relief Act." The act of June 27, 2006 (1st

Sp.Sess., P.L.1873, No.1), known as the Taxpayer Relief Act.

"The Local Tax Enabling Act." The act of December 31, 1965

(P.L.1257, No.511), known as The Local Tax Enabling Act.

SUBARTICLE B

SCHOOL PROPERTY TAX REDUCTIONS

Section 1611. Distributions to school districts.

(a) General rule.--The Secretary of Education shall make

distributions to each school district as provided in this

section .

(b) Amount of distributions.--Each school district shall

receive allocations calculated by the Department of Education as

follows:

(1) Array the 2012 personal income valuation divided by

the 2012-2013 average daily membership, the 2014-2015 market

value/income aid ratio, the 2012-2013 equalized millage and

the 2012-2013 school tax ratio of each school district in

rank order and assign each school district a discreet

numerical rank for its personal income valuation per average

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daily membership, its market value/income aid ratio, its

equalized millage and its school tax ratio. For the numerical

rank of a school district's personal income valuation per

average daily membership, the school district with the lowest

personal income valuation per average daily membership shall

have the highest numerical rank. For the numerical rank of a

school district's market value/income aid ratio, the school

district with the highest market value/income aid ratio shall

have the highest numerical rank, provided that all school

districts with a market value/income aid ratio equal to 0.15

shall receive a ranking of 1. For the numerical rank of a

school district's equalized millage, the school district with

the highest equalized millage shall have the highest

numerical rank. For the numerical rank of a school district's

school tax ratio, the school district with the highest school

tax ratio shall have the highest numerical rank.

(2) Assign each school district a property tax reduction

index which shall be the greater of the calculation under

this article or the property tax reduction index under the

Taxpayer Relief Act.

(3) Calculate the property tax reduction allocation as

follows:

(i) Multiply the school district's 2012-2013 average

daily membership by the school district's property tax

reduction index.

(ii) Multiply the product under subparagraph (i) by

the dollar amount necessary to allocate $3,800,000,000

under this paragraph and paragraphs (4), (5) and (6).

(iii) If applicable, provide for the allocation

minimum under paragraph (4), the amount of taxes credited

under paragraph (5) and any reduction required under

paragraph (6).

(4) If the sum of the allocation under this sub section

and the estimated local revenue calculation is less than the

product of the residential property taxes collected during

the 2012-2013 fiscal year and the allocation minimum for a

school district, the school district shall receive an

additional amount so that the sum of the total allocation

under paragraph (3) and this paragraph and the estimated

local revenue calculation is equal to the product of the

residential property taxes collected during the 2012-2013

fiscal year and the allocation minimum.

(5) Each school district shall receive an allocation in

the amount of any taxes credited under section 324 of the

Taxpayer Relief Act.

(6) A school district may not receive an allocation

under this sub section that exceeds the total amount of

property tax revenue received by the school district for the

2012-2013 fiscal year, including any property tax reduction

allocation under Chapter 5 of the Taxpayer Relief Act.

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15 of each year thereafter , the secretary shall certify that

there is projected to be sufficient revenue in the fund for

distribution in the following fiscal year and shall notify the

Secretary of Education of the amount available for distribution

to school districts. The Secretary of Education shall notify

each school district of the school district's allocation under

this article no later than May 1 of each year. The secretary

shall publish notification of the certification in the

Pennsylvania Bulletin.

(d) Frequency of distributions.--Distributions to school

districts under this section shall be made in October of each

year in which a distribution occurs.

(e) Use of proceeds.--Except as provided in section 1691,

the following shall apply:

(1) A school district shall use the allocation under

sub section (b) to fund exclusions for homestead and farmstead

property.

(2) A school district shall utilize an allocation under

sub section (b) in excess of the revenue required to fund the

maximum homestead and farmstead exclusions authorized under

53 Pa.C.S. § 8586 (relating to limitations) to reduce the

property tax rate on all properties subject to the property

tax in the school district.

Section 1612. Homestead and farmstead exclusions.

(a) Homestead and farmstead exclusion process.--Each fiscal

year in which a school district receives an allocation under

section 1611, the district shall calculate a homestead and

farmstead exclusion for the purpose of reducing school district

property taxes. The school district shall adopt a resolution

implementing the homestead and farmstead exclusion no later than

the last day of the fiscal year immediately preceding the fiscal

year in which the homestead and farmstead exclusions shall take

effect.

(b) Tax notice.--A school district shall itemize the

homestead and farmstead exclusion on tax bills sent to homestead

and farmstead owners indicating the original amount of tax

liability, the amount of any reduction in the property tax rate

on all properties of the exclusion and the net amount of tax due

after the exclusion and any reduction on all properties are

applied. The tax bill shall be easily understandable and include

a notice under sub section (c).

include with the homestead or farmstead owner's tax bill a

notice that the tax bill includes a homestead or farmstead

exclusion. The notice shall at a minimum take the following

form:

NOTICE OF PROPERTY TAX RELIEF

Your enclosed tax bill includes a tax reduction for your

homestead and/or farmstead property. You have received

tax relief through a homestead and/or farmstead exclusion

which has been provided under the S chool District Tax

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Relief Act, a law passed by the Pennsylvania General

Assembly designed to reduce your property taxes.

If the school district has reduced the property tax rate on all

properties subject to the property tax in the school district

under section 1611(e)(2):

(1) The notice included with the homestead or farmstead

owner's tax bill shall at a minimum take the following form:

NOTICE OF PROPERTY TAX RELIEF

Your enclosed tax bill includes a tax reduction. You

have received tax relief through a homestead and/or

farmstead exclusion and additional tax relief through

a reduction in your property tax rate which have been

provided under the S chool District Tax Relief Act, a

law passed by the Pennsylvania General Assembly

designed to reduce your property taxes.

(2) A school district shall include with all property

tax bills other than those for a homestead or farmstead owner

a notice that the tax bill includes a property tax reduction.

The notice shall at a minimum take the following form:

NOTICE OF PROPERTY TAX RELIEF

Your enclosed tax bill includes a tax reduction. You

have received tax relief through a reduction in your

property tax rate which has been provided under the

S chool District Tax Relief Act, a law passed by the

Pennsylvania General Assembly designed to reduce your

property taxes.

(d) Exception.--In the case of a school district of the

first class, section 1691 shall apply.

Section 1613. Additional limits on future property tax

increases.

(a) Restrictions.--Notwithstanding section 688(a) of the

Public School Code, no school district may approve an increase

in real property taxes unless the school district has adopted a

budget that includes an estimated ending unassigned fund balance

equal to or less than 4% of its total budgeted expenditures.

(b) Continuation of prohibitions.--Section 333 of the

Taxpayer Relief Act, as amended, shall remain in effect.

SUBARTICLE C

RELIEF FOR RENTERS

Section 1621. Definitions.

The following words and phrases when used in this subarticle

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Claimant." A person who files a claim for supplemental rent

rebate relief.

"Homestead." A rented dwelling and as much of the land

surrounding the rental dwelling as is reasonably necessary for

the use of the dwelling as a home occupied by a claimant. The

term includes:

(1) Premises occupied by reason of a lease in a

cooperative housing corporation.

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(2) Mobile homes which are assessed as realty for local

property tax purposes and the land, if rented by the

claimant, upon which the mobile home is situated and other

similar living accommodations.

(3) A part of a multidwelling or multipurpose building

and a part of the land upon which the building is built.

(4) Premises occupied by reason of the claimant's rental

of a dwelling located on land owned by a nonprofit

incorporated association, of which the claimant is a member,

if the claimant is required to pay a pro rata share of the

property taxes levied against the association's land.

(5) Premises occupied by a claimant if the claimant is

required by law to pay a property tax by reason of the

claimant's rental, including a possessory interest, in the

dwelling, the land or both.

"Household income." Income received by a claimant and each

other individual residing in the homestead during the calendar

year for which a rebate is claimed.

"Income." As defined in Chapter 13 of the Taxpayer Relief

Act.

"Supplemental rent rebate relief." Amounts actually paid in

cash or its equivalent in any calendar year to a landlord in

connection with the occupancy of a homestead by a claimant,

irrespective of whether the amount constitutes payment solely

for the right of occupancy.

Section 1622. Supplemental rent rebate relief.

(a) Schedule.--The amount of any claim for supplemental rent

rebate relief for rent due and payable during calendar year 2015

and each calendar year thereafter shall be determined in

accordance with the following:

Household Income

Amount of Rent Rebate in

Lieu of Property Taxes

Allowed as Rebate

$0 - $50,000 $500

(b) Limitations on claims.--

(1) No claim under sub section (a) shall be allowed if

the claimant obtains rent rebate in lieu of property tax

relief under Chapter 13 of the Taxpayer Relief Act.

(2) No claim under sub section (a) shall be allowed if

the claimant is a child who is a dependent for purposes of

section 151 of the Internal Revenue Code of 1986 (Public Law

99-514, 26 U.S.C. § 151).

(3) Only one resident of a homestead occupied by

multiple residents may apply for supplemental rent rebate

relief under sub section (a). If two or more residents are

able to meet the qualification for a claimant, the residents

may determine who the claimant shall be and, in the absence

of a determination, the department shall determine to whom

the rebate is to be paid.

assistance from the Department of Human Services shall not be

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eligible for supplemental rent rebate relief during a month

within which the claimant receives public assistance.

(d) Government subsidy.--Rent may not include a subsidy

provided by or through a governmental agency.

Section 1623. Filing of claim.

(a) General rule.--Except as provided in sub section (b), a

claim for supplemental rent rebate relief must be filed with the

department on or before June 30 of the year next succeeding the

end of the calendar year in which the rent was due and payable.

(b) Exception.--A claim filed after the June 30 deadline

until December 31 of that year shall be accepted by the

department if funds are available to pay the benefits to the

late-filing claimant.

Section 1624. Proof of claim.

(a) Contents.--Each claim shall include:

(1) Reasonable proof of household income.

(2) The size and nature of the property claimed as a

homestead.

(3) The rent receipt or other proof that rent in

connection with the occupancy of the homestead has been paid.

(4) Other information required by the department.

(b) Direct payment of rent.--The department may not require

that rent was paid directly by the claimant if the rent has been

paid when the claim is filed.

Section 1625. Incorrect claim.

If an audit of a claim finds the claim to have been

incorrectly determined, the department shall redetermine the

correct amount of the claim and notify the claimant of the

reason for the redetermination and the amount of the corrected

claim.

Section 1626. Claim forms.

The department shall:

(1) Receive all applications.

(2) Determine the eligibility of claimants.

(3) Hear appeals.

(4) Disburse payments.

(5) Make available suitable forms for the filing of

claims.

Section 1627. Fraudulent claims.

(a) Civil penalty.--If a claim is excessive and was filed

with fraudulent intent, the claim shall be disallowed in full,

and a penalty of 25% of the amount claimed shall be imposed. The

penalty and the amount of the disallowed claim, if the claim has

been paid, shall bear interest at the rate of 1.5% per month

from the date of the claim until the claim is repaid.

(b) Criminal penalty.--The claimant and any person who

assisted in the preparation of filing a fraudulent claim commits

a misdemeanor of the third degree and, upon conviction, shall be

sentenced to pay a fine not exceeding $1,000 or to imprisonment

not exceeding one year, or both.

Section 1628. Applicability.

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Section s 1311, 1312 and 1313 of the Taxpayer Relief Act,

shall apply to claims filed under this subarticle .

Section 1629. Regulations.

The department may promulgate regulations to implement this

subarticle .

SUBARTICLE Z

MISCELLANEOUS PROVISIONS

Section 1691. Applicability to school districts of the first

class.

(a) School districts of the first class.--The allocation

under section 1611 for a school district of the first class

shall be paid by the Department of Education to a city of the

first class.

(b) Reduction of taxes in a city of the first class.--

Notwithstanding the provisions of section 1611(e), an allocation

under section 1611(b) for a school district of the first class

shall be used as follows:

(1) The governing body of a city of the first class

shall repeal and fully offset the elimination of the local

option cigarette tax established under 53 Pa.C.S. § 8722

(relating to local option cigarette tax in school districts

of the first class), based on the total annualized revenue

received from the tax in the first full fiscal year in which

it was levied.

(2) Notwithstanding Article II-B, the governing body of

a city of the first class shall reduce and fully offset the

reduction from 1% to 0.4% in the rate of a sales and use tax

imposed by a city of the first class under Article II-B,

based on the total revenue projected to be received from the

tax in the 2016-2017 fiscal year. Article II-B shall apply to

the receipt and use of the funds as if the funds were

generated by the sales and use tax imposed by a city of the

first class.

(3) The governing body of a city of the first class

shall reduce any tax imposed on the wages of residents and

nonresidents under the authority of the act of August 5, 1932

(Sp.Sess., P.L.45, No.45), referred to as the Sterling Act,

in accordance with the following:

(i) For residents, by an amount equal to the amount

of the property tax reduction allocation that would be

calculated for a school district of the first class under

section 1611(b), excluding the allocation in section

1611(b)(5), if:

(A) The total amount available for distribution

was $2,000,000,000.

(B) The maximum modifier and minimum modifier

are applied as defined in the Taxpayer Relief Act.

(3)(iii) of the Taxpayer Relief Act had applied.

(ii) For nonresidents, by an amount in excess of the

limitations set forth in section 505(a)(3)(iii) of the

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Taxpayer Relief Act had the limitations applied to the

property tax reduction allocation that would be

calculated for a school district of the first class under

section 1611(b), excluding the allocation in section

1611(b)(5), if the amount available for distribution was

$2,000,000,000 and the maximum modifier and minimum

modifier applied as defined in the Taxpayer Relief Act.

(iii) The reductions under this paragraph shall be

in addition to any reductions included in an approved

five-year financial plan of a city of the first class in

effect on January 1, 2015. The reductions shall replace

any reductions under section 505(d) of the Taxpayer

Relief Act. Except as otherwise provided, the reductions

shall be implemented in a manner consistent with Chapter

7 of the Taxpayer Relief Act.

(4) For the remaining allocation, as provided under

section 1611(e).

Section 1692. Additional provisions.

(a) Other provisions.--Any school district property tax

reduction approved under Subchapter D of Chapter 3 of the

Taxpayer Relief Act shall continue in effect.

(b) Applicability.--Except as otherwise provided, a school

district shall remain subject to the Taxpayer Relief Act.

ARTICLE XVIII-G

MANUFACTURING TAX CREDIT

Section 1801-G. Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Annual taxable payroll." The total amount of wages paid by

an employer for the base year or year one, as applicable, from

which personal income tax under Article III is withheld.

"Base year." The four calendar quarters preceding the start

date.

"Department." The Department of Community and Economic

Development of the Commonwealth.

"Manufacturing tax credit." A tax credit for which the

department has issued a certificate under this article.

"New job." A newly created full-time job which has an

average wage, at least equal to the county average wage where

the job is located and which includes employer provided health

benefits.

"Start date." The first day of the calendar quarter in which

an application is submitted to the department unless the

applicant requests and the department agrees to a later start

date.

"Taxpayer." A company that is engaged in the creation of a

new item of tangible personal property for sale.

"Wages." Remuneration paid by an employer to an individual

with respect to the individual's employment.

"Year one." The four calendar quarters immediately following

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the start date.

Section 1802-G. Eligibility.

In order to be eligible to receive a manufacturing tax

credit, a taxpayer must demonstrate to the department the

following:

(1) The ability of the taxpayer to create an increase in

the taxpayer's annual taxable payroll by at least $1,000,000

in year one through the creation of new jobs.

(2) The ability to maintain a new job for a period of at

least five years from the start date.

(3) The intent to maintain operations in this

Commonwealth for a period of at least five years from the

start date.

Section 1803-G. Procedure.

(a) Application.--A taxpayer must complete and submit to the

department a manufacturing tax credit application on a form and

in a manner as determined by the department.

(b) Creation of new jobs.--The taxpayer must agree to create

in year one at least one new job that increases the taxpayer's

annual taxable payroll above the base year annual taxable

payroll by $1,000,000. The taxpayer must agree to retain the new

job for at least five years from the start date.

application, the department and the taxpayer shall execute a

commitment letter containing the following:

(1) A description of the new job created.

(2) The number of new jobs to be created.

(3) The amount of private capital investment in the

project.

(4) The increase in year one of the annual taxable

payroll for a new job above the base year amount of annual

taxable payroll.

(5) The maximum manufacturing tax credit amount the

taxpayer may claim.

(6) A signed statement that the taxpayer intends to

maintain operations in this Commonwealth for at least five

years from the start date.

(7) Any other information as the department deems

appropriate.

(d) Commitment letter.--After a commitment letter has been

signed by both the Commonwealth and the taxpayer, the taxpayer

must increase the annual taxable payroll in year one by at least

$1,000,000 above the base year amount from the creation of a new

job up to the maximum manufacturing tax credit amount specified

in the commitment letter. If the taxpayer does not increase the

annual taxable payroll as provided under this subsection, the

commitment letter shall be revoked and deemed to be null and

void.

Section 1804-G. Manufacturing tax credit.

(a) Maximum amount.--A taxpayer may claim a manufacturing

tax credit of up to 5% of the taxpayer's increase in annual

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taxable payroll, if the annual taxable payroll increases in year

one by at least $1,000,000 above the base year amount from the

creation of a new job up to the maximum manufacturing tax credit

amount specified in the commitment letter.

(b) Determination.--The annual taxable payroll in year one

for a new job shall be the sum of the amount of annual taxable

payroll in year one for the new jobs created after the base

year.

the taxpayer has increased the annual taxable payroll in year

one by at least $1,000,000 above the base year amount from the

creation of a new job up to the maximum manufacturing tax credit

amount and any other conditions required by the department and

specified in the commitment letter, the taxpayer shall receive a

manufacturing tax credit certificate and filing information.

(d) Applicable taxes.--A taxpayer may apply the

manufacturing tax credit to 100% of the tax liability of the

taxpayer under Article III, IV, VI, VII, VIII, IX, XI or XV.

(e) Term.--A taxpayer may claim the manufacturing tax credit

for a period determined by the department, not to exceed the

earlier of:

(1) five years from the date the taxpayer receives the

manufacturing tax credit certificate; or

(2) six years from the start date.

(f) Availability.--A manufacturing tax credit shall be made

available by the department on a first-come, first-served basis.

(g) Limitation.--Each fiscal year, $5,000,000 in

manufacturing tax credits shall be made available to the

department and may be awarded by the department in accordance

with this article. In any fiscal year, the department may

reissue or assign prior fiscal year manufacturing tax credits

which have been recaptured under section 1806-G(a) or (b) and

may award prior fiscal year manufacturing tax credits not

previously issued. Prior fiscal year manufacturing tax credits

may be reissued, assigned or awarded by the department without

limitation under section 1806-G(a) or (b).

Section 1805-G. Limitations.

The following apply to manufacturing tax credits:

(1) Carry over. If the taxpayer cannot use the entire

amount of the manufacturing tax credit for the taxable year

in which the manufacturing tax credit is first approved, the

excess may be carried over to succeeding taxable years and

used as a credit against the qualified tax liability of the

taxpayer for the taxable years. Each time the manufacturing

tax credit is carried over to a succeeding taxable year, the

manufacturing tax credit shall be reduced by the amount of

the manufacturing tax credit used as a credit during the

immediately preceding taxable year. The manufacturing tax

credit may be carried over and applied to succeeding taxable

years for no more than three taxable years following the

first taxable year for which the taxpayer was entitled to

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claim the credit.

(2) Application. A manufacturing tax credit approved by

the department in a taxable year first shall be applied

against the taxpayer's qualified tax liability for the

current taxable year as of the date on which the credit was

approved before the manufacturing tax credit can be applied

against any tax liability under paragraph (1).

(3) No carryback or refund. A taxpayer shall not be

entitled to carry back or obtain a refund of all or any

portion of an unused manufacturing tax credit granted to the

taxpayer under this article.

(4) Sale or assignment. The following shall apply:

(i) A taxpayer, upon application to and approval by

the department, may sell or assign, in whole or in part,

a manufacturing tax credit granted to the taxpayer.

(ii) The department and the Department of Revenue

shall jointly issue guidelines for the approval of

applications under this paragraph.

(iii) Before an application is approved, the

Department of Revenue must make a finding that the

applicant has filed all required State tax reports and

returns for all applicable taxable years and paid any

balance of State tax due as determined at settlement,

assessment or determination by the Department of Revenue.

(iv) Notwithstanding any other provision of law, the

Department of Revenue must settle, assess or determine

the tax of an applicant under this paragraph within 90

days of the filing of each required final return or

report in accordance with section 806.1(a)(5) of the act

of April 9, 1929 (P.L.343, No.176), known as The Fiscal

Code.

(5) Purchaser or assignee. The following apply:

(i) The purchaser or assignee of all or a portion of

a manufacturing tax credit under paragraph (4) must

immediately claim the credit in the taxable year in which

the purchase or assignment is made.

(ii) The amount of the manufacturing tax credit that

a purchaser or assignee may use against any one qualified

tax liability may not exceed 50% of the qualified tax

liability for the taxable year.

(iii) The purchaser or assignee may not carry

forward, carry back or obtain a refund of or sell or

assign the manufacturing tax credit.

(iv) The purchaser or assignee must notify the

Department of Revenue of the seller or assignor of the

manufacturing tax credit in compliance with procedures

specified by the Department of Revenue.

Section 1806-G. Penalties.

(a) Failure to maintain operations.--A taxpayer which

receives a manufacturing tax credit and fails to substantially

maintain existing operations related to the manufacturing tax

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credits in this Commonwealth for a period of at least five years

from the start date must refund to the Commonwealth the total

amount of manufacturing tax credits granted. The Department of

Revenue may issue an assessment, including interest, additions

and penalties, for the total amount of each manufacturing tax

credit to be refunded to the Commonwealth.

(b) Failure to maintain jobs.--A taxpayer which receives a

manufacturing tax credit and fails to maintain a new job for a

period of at least five years from the start date must refund to

the Commonwealth the total amount of manufacturing tax credits

granted. The Department of Revenue may issue an assessment,

including interest, additions and penalties, for the total

amount of manufacturing tax credits to be refunded to the

Commonwealth.

subsections (a) and (b) if it is determined that a company's

operations were not maintained or the new jobs were not created

because of circumstances beyond the company's control.

Circumstances shall include natural disasters, unforeseen

industry trends or a loss of a major supplier or market.

Section 1807-G. Guidelines.

The department shall develop and publish guidelines necessary

to implement this article.

Section 29. Section 3003.3(d) of the act, amended October

18, 2006 (P.L.1149, No.119), is amended and the section is

amended by adding a subsection to read:

Section 3003.3. Underpayment of Estimated Tax.--* * *

(d) Notwithstanding the provisions of the preceding

subsections and except as provided under subsection (d.1) ,

interest with respect to any underpayment of any installment of

estimated tax shall not be imposed if the total amount of all

payments of estimated tax made on or before the last date

prescribed for the payment of such installment equals or exceeds

the amount which would have been required to be paid on or

before such date if the estimated tax were an amount equal to

the tax computed at the rates applicable to the taxable year,

including any minimum tax imposed, but otherwise on the basis of

the facts shown on the report of the taxpayer for, and the law

applicable to, the safe harbor base year, adjusted for any

changes to sections 401, 601, 602 and 1101 enacted for the

taxable year, if a report showing a liability for tax was filed

by the taxpayer for the safe harbor base year. If the total

amount of all payments of estimated tax made on or before the

last date prescribed for the payment of such installment does

not equal or exceed the amount required to be paid per the

preceding sentence, but such amount is paid after the date the

installment was required to be paid, then the period of

underpayment shall run from the date the installment was

required to be paid to the date the amount required to be paid

per the preceding sentence is paid. Provided, that if the total

tax for the safe harbor base year exceeds the tax shown on such

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report by ten per cent or more, the total tax adjusted to

reflect the current tax rate shall be used for purposes of this

subsection. In the event that the total tax for the safe harbor

base year exceeds the tax shown on the report by ten per cent or

more, interest resulting from the utilization of such total tax

in the application of the provisions of this subsection shall

not be imposed if, within forty-five days of the mailing date of

each assessment, payments are made such that the total amount of

all payments of estimated tax equals or exceeds the amount which

would have been required to be paid on or before such date if

the estimated tax were an amount equal to the total tax adjusted

to reflect the current tax rate. In any case in which the

taxable year for which an underpayment of estimated tax may

exist is a short taxable year, in determining the tax shown on

the report or the total tax for the safe harbor base year, the

tax will be reduced by multiplying it by the ratio of the number

of installment payments made in the short taxable year to the

number of installment payments required to be made for the full

taxable year.

(d.1) With respect to any underpayment of an installment of

estimated corporate net income tax for any tax year that begins

in year 2016 or 2017 by a corporation required to file a

combined report under section 403(a.1)(1), interest shall not be

imposed if the total amount of each payment of estimated

corporate net income tax made on or before the last date

prescribed for the payment of the installment equals or exceeds

the amount which would have been required to be paid on or

before the date if the estimated tax were an amount equal to the

combined tax shown on the reports of all the members of the

unitary business for the safe harbor base year computed at the

rate applicable to the taxable year.

Section 30. Notwithstanding any other provision of law, any

additional revenue collected under the act of June 5, 1991

(P.L.9, No.6), known as the Pennsylvania Intergovernmental

Cooperation Authority Act for Cities of the First Class, that is

generated by the amendment of Article II of the act shall be

transferred to a city of the first class in accordance with the

act of December 18, 1984 (P.L.1005, No.205), known as the

Municipal Pension Plan Funding Standard and Recovery Act.

Section 31. For tax on services defined in section 201(dd),

(eee) and (fff) of the act, if contracts for the sale of the

services have been entered into prior to the effective date of

this section, the tax under Article II of the act shall be

prorated as follows:

(1) Determine the total value of the contract.

(2) Multiply the total value of the contract by the

ratio of:

(i) the remaining term of the contract on the

effective date of this section; to

(ii) the total term of the contract.

Section 32. Notwithstanding the provisions of the act of

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December 31, 1965 (P.L.1257, No.511), known as The Local Tax

Enabling Act, the amendments to Article II contained in this act

shall not preempt any tax imposed by a unit of local government

as of the effective date of this act unless specifically

provided in this act.

Section 32.1. Repeals are as follows:

(1) The General Assembly declares that the repeal under

paragraph (2) is necessary to effectuate the addition of

Article XVI of the act.

(2) Section 342, 343, 503(a) and 505(b) of the act of

June 27, 2006 (1st Sp.Sess., P.L.1873, No.1), known as the

Taxpayer Relief Act, are repealed.

(3) The General Assembly declares that the repeal under

paragraph (4) is necessary to effectuate the addition of

Article XVIII-G of the act.

(4) The act of October 25, 2012 (P.L.1664, No.206),

known as the Promoting Employment Across Pennsylvania Act, is

repealed.

Section 33. Notwithstanding section 314 of the act of

October 25, 2012 (P.L.1664, No.206), known as the Promoting

Employment Across Pennsylvania Act, no agreement under the

Promoting Employment Across Pennsylvania Act may be entered into

after June 30, 2015.

Section 34. The amendment of the following provisions shall

apply to taxes imposed under Article VII of the act for calendar

years beginning after December 31, 2013:

(1) Section 701(b) of the act.

(2) Section 701.1 of the act.

(3) Section 701.4(3)(xiii) of the act.

(4) The definitions of "doing business in this

Commonwealth" and "receipts" in section 701.5 of the act.

Section 35. The amendment of section 304 of the act shall

apply to tax years beginning after December 31, 2014.

Section 36. The amendment or addition of the following

provisions shall apply to taxable years beginning after December

31, 2015:

(1) The following provisions of section 401 of the act:

(i) Clause (3):

(A) 1(a) and (t),

(B) 2(a)(16.1) and (f).

(ii) Clauses (5), (11), (12), (13), (14), (15) and

(16).

(2) Section 402(b) of the act.

(3) Section 403(a.1) and (a.2) of the act.

(4) Section 404 of the act.

(5) Section 3003.3(d) and (d.1) of the act.

Section 37. This act shall take effect as follows:

(1) The following provisions shall take effect

immediately:

(i) This section.

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(ii) The amendment or addition of sections 302, 303,

304, 360, 701, 701.1 and 701.4(3)(xiii) and the

definitions of "doing business in this Commonwealth" and

"receipts" in section 701.5 of the act.

(2) The amendment of sections 302 and 303 of the act

shall take effect July 1, 2015.

(3) The following provisions shall take effect October

1, 2015, or immediately, whichever is later:

(i) Section 32 of this act.

(ii) The amendment or addition of sections 1206,

1206.1 and Article XII-A of the act.

(4) The following provisions shall take effect January

1, 2016, or immediately, whichever is later:

(i) Sections 30 and 31 of this act.

(ii) The amendment or addition of sections 201(a),

(b), (c), (f), (g), (i), (k), (m), (o), (w), (y), (dd),

(ll), (pp), (qq), (tt), (eee) and (fff), 202, 203, 204

heading, (4), (5), (11), (13), (17), (29), (30), (31),

(32), (33), (34), (35), (36), (37), (38), (39), (41),

(45), (50), (53), (55), (57), (58), (61), (63), (64),

(65), (66), (70), (71), (72) (73), (74), (75) and (76),

206, 208, 209, 210, 217, 225, 227, 233, 247.1(b), 252,

262, 265, 266(c), 268(b) and (c), 271(d), 281.3 and

Article XI-E of the act.

(5) The addition of section 204(77) of the act shall

take effect in 60 days.

(6) Sections 1622 and 1623 of the act and section 32.1

of this act shall take effect upon publication in the

Pennsylvania Bulletin of notice that the Secretary of the

Budget has certified the availability of funds under section

1621(c) of the act.

(7) The addition of Article XVIII-G of the act shall

take effect in 90 days.

(8) The remainder of this act shall take effect July 1,

2015, or immediately, whichever is later.

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