PRINTER'S NO. 4777
No. 2929 Session of 2006
INTRODUCED BY ROHRER, DENLINGER, QUIGLEY, YEWCIC, LEH, WILT,
ARGALL, BAKER, BALDWIN, BARRAR, BASTIAN, BIRMELIN, BUNT,
CALTAGIRONE, CAPPELLI, CLYMER, CREIGHTON, FLEAGLE, FORCIER,
GABIG, GILLESPIE, GOODMAN, HALUSKA, HARRIS, HENNESSEY,
HERSHEY, KAUFFMAN, MACKERETH, MAITLAND, MARSICO, McILHATTAN,
S. MILLER, MUSTIO, PICKETT, PYLE, ROBERTS, SANTONI, SATHER,
SAYLOR, SCHRODER, SEMMEL, STEIL, STERN AND T. STEVENSON,
OCTOBER 17, 2006
REFERRED TO COMMITTEE ON APPROPRIATIONS, OCTOBER 17, 2006
AN ACT
1 Amending the act of April 9, 1929 (P.L.343, No.176), entitled,
2 as amended, "An act relating to the finances of the State
3 government; providing for the settlement, assessment,
4 collection, and lien of taxes, bonus, and all other accounts
5 due the Commonwealth, the collection and recovery of fees and
6 other money or property due or belonging to the Commonwealth,
7 or any agency thereof, including escheated property and the
8 proceeds of its sale, the custody and disbursement or other
9 disposition of funds and securities belonging to or in the
10 possession of the Commonwealth, and the settlement of claims
11 against the Commonwealth, the resettlement of accounts and
12 appeals to the courts, refunds of moneys erroneously paid to
13 the Commonwealth, auditing the accounts of the Commonwealth
14 and all agencies thereof, of all public officers collecting
15 moneys payable to the Commonwealth, or any agency thereof,
16 and all receipts of appropriations from the Commonwealth,
17 authorizing the Commonwealth to issue tax anticipation notes
18 to defray current expenses, implementing the provisions of
19 section 7(a) of Article VIII of the Constitution of
20 Pennsylvania authorizing and restricting the incurring of
21 certain debt and imposing penalties; affecting every
22 department, board, commission, and officer of the State
23 government, every political subdivision of the State, and
24 certain officers of such subdivisions, every person,
25 association, and corporation required to pay, assess, or
26 collect taxes, or to make returns or reports under the laws
27 imposing taxes for State purposes, or to pay license fees or
28 other moneys to the Commonwealth, or any agency thereof,
1 every State depository and every debtor or creditor of the
2 Commonwealth," providing for tax levies and information
3 related to taxes; authorizing the imposition of a personal
4 income tax or an earned income tax by a school district
5 subject to voter approval; providing for imposition of and
6 exclusions from the sales and use tax, for increase to the
7 personal income tax and realty transfer tax, for certain
8 licenses, for hotel occupancy tax, for procedure and
9 administration of the tax, for basic education funding for
10 2006-2007 school year, for expiration of authority to issue
11 certain debt, for reporting by local government units of debt
12 outstanding and for assumption of certain debt by the
13 Commonwealth; establishing the Education Operating Fund and
14 providing for disbursements therefrom; providing for
15 transfers from the Property Tax Relief Fund to the Education
16 Operating Fund; adding provisions relating to performance and
17 accountability technology; establishing the School Financing
18 Authority and providing for its powers and duties; providing
19 for certain rebates and assistance to senior citizens; and
20 repealing certain provisions of The Local Tax Enabling Act,
21 sales and use tax provisions of the Tax Reform Code of 1971,
22 the Senior Citizens Rebate and Assistance Act and the
23 Homeowner Tax Relief Act.
24 The General Assembly of the Commonwealth of Pennsylvania
25 hereby enacts as follows:
26 Section 1. The act of April 9, 1929 (P.L.343, No.176), known
27 as The Fiscal Code, is amended by adding articles to read:
28 ARTICLE VI-A
29 PERSONAL INCOME TAX
30 PART I
31 SCHOOL DISTRICT TAXATION
32 Section 601-A. Short title of article.
33 This article shall be known and may be cited as the School
34 District Personal Income Tax Authorization.
35 Section 602-A. Definitions.
36 The following words and phrases when used in this article
37 shall have the meanings given to them in this section unless the
38 context clearly indicates otherwise:
39 "Association." A partnership, limited partnership or other
40 unincorporated group of two or more persons.
41 "Business." An enterprise, activity, profession or other
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1 undertaking of an unincorporated nature conducted for profit or
2 ordinarily conducted for profit whether by a person, association
3 or other entity.
4 "Compensation." The classes of income included within the
5 definition of "compensation" set forth in section 301 of the act
6 of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
7 1971, and upon which are imposed a personal income tax by the
8 Commonwealth.
9 "Corporation." A corporation or joint stock association
10 organized under the laws of the United States or the
11 Commonwealth of Pennsylvania or any other state, territory,
12 foreign country or dependency.
13 "Current year." The calendar year or fiscal year for which
14 the tax is levied.
15 "Department." The Department of Community and Economic
16 Development of the Commonwealth.
17 "Domicile." The place where one lives and has his permanent
18 home and to which he has the intention of returning whenever he
19 is absent. Actual residence is not necessarily domicile because
20 domicile is the fixed place of abode which, in the intention of
21 the taxpayer, is permanent rather than transitory. Domicile is
22 the voluntarily fixed place of habitation of a person, not for a
23 mere special or limited purpose, but with the present intention
24 of making a permanent home, until some event occurs to induce
25 him to adopt some other permanent home. In the case of
26 businesses or associations, the domicile is any place where the
27 business or association is conducting or engaging in a business
28 for profit within a school district.
29 "Employer." A person, association, corporation, governmental
30 unit or other entity employing one or more persons, other than
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1 domestic servants, for compensation.
2 "Governing body." The board of school directors of a school
3 district except, for purposes of the levy and collection of any
4 tax in a school district of the first class, the city council.
5 "Net profits." The class of income described as "net
6 profits" in section 303 of the act of March 4, 1971 (P.L.6,
7 No.2), known as the Tax Reform Code of 1971, and upon which is
8 imposed a personal income tax by the Commonwealth.
9 "Nonresident." A person, association or other entity
10 domiciled outside the school district.
11 "Person" or "individual." A natural person.
12 "Personal income." The classes of income enumerated in
13 section 303 of the act of March 4, 1971 (P.L.6, No.2), known as
14 the Tax Reform Code of 1971, and upon which is imposed a
15 personal income tax by the Commonwealth.
16 "Political subdivision." A school district.
17 "Preceding year." The calendar year or fiscal year before
18 the current year.
19 "Public School Code." The act of March 10, 1949 (P.L.30,
20 No.14), known as the Public School Code of 1949.
21 "Register." The register provided for in this article.
22 "Resident." A person, association, corporation or other
23 entity:
24 (1) living in or maintaining a permanent or fixed place
25 of abode in a school district; or
26 (2) conducting or engaging in a business for profit
27 within a school district.
28 "School district." A school district of the first class,
29 first class A, second class, third class or fourth class,
30 including any independent school district.
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1 "Succeeding year." The calendar year or fiscal year
2 following the current year.
3 "Tax officer." The person, public employee or private agency
4 designated by a governing body to collect and administer a tax
5 imposed under this article, and the treasurer of a school
6 district of the first class A.
7 "Taxpayer." A person, association or other entity required
8 under this article to file a tax return or to pay a tax.
9 Section 603-A. Preemption.
10 No act of the General Assembly heretofore or hereinafter
11 enacted shall vacate or preempt any resolution passed or adopted
12 under the authority of this article, or any other act, providing
13 authority for the imposition of a tax by a school district,
14 unless the act of the General Assembly expressly vacates or
15 preempts the authority to pass or adopt such resolutions.
16 Section 604-A. Personal income tax authorization.
17 (a) School districts.--Except as provided in subsection (b),
18 each school district shall have the power and may, by
19 resolution, levy, assess and collect or provide for the levying,
20 assessment and collection of a tax for general revenue purposes
21 at a rate as it shall determine on personal income of the
22 residents of the school district and such other taxes that are
23 specifically permitted under this act. A school district may
24 only levy or increase the rate of personal income tax when that
25 school district complies with the provisions of subsection (c).
26 (b) Exclusions.--No school district or governing body shall
27 have any power or authority to levy, assess or collect:
28 (1) A tax based upon a flat rate or on a millage rate on
29 an assessed valuation of a particular trade, occupation or
30 profession, commonly known as an occupation tax.
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1 (2) A tax at a set or flat rate upon persons employed
2 within the taxing district, commonly known as an occupational
3 privilege tax.
4 (3) A per capita, poll, residence or similar head tax.
5 (4) A tax on personal property.
6 (5) The earned income tax previously levied under the
7 act of December 31, 1965 (P.L.1257, No.511), known as The
8 Local Tax Enabling Act.
9 (6) The earned income tax authorized under Article VI-B
10 (relating to earned income tax).
11 (7) Any tax not specifically authorized under this act.
12 (c) Adoption of referendum.--
13 (1) In order to levy a personal income tax under this
14 article, a governing body shall use the procedures set forth
15 in paragraphs (2), (3), (4), (5), (6) and (7).
16 (2) Subject to the notice and public hearing
17 requirements of paragraph (7), a governing body may levy the
18 personal income tax under this article only by obtaining the
19 approval of the electorate of the affected school district in
20 a public referendum at only the municipal election preceding
21 the fiscal year when the personal income tax will be
22 initially imposed or the rate increased. The referendum
23 question must state the initial rate of the proposed personal
24 income tax, the reason for the tax and the amount of proposed
25 budgeted revenue growth, if any, in the first fiscal year
26 following adoption of the referendum. The question shall be
27 in clear language that is readily understandable by a
28 layperson. For the purpose of illustration, a referendum
29 question may be framed as follows:
30 Do you favor the imposition of a personal income tax of
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1 X%?
2 A nonlegal interpretative statement must accompany the
3 question in accordance with section 201.1 of the act of June
4 3, 1937 (P.L.1333, No.320), known as the Pennsylvania
5 Election Code, that includes the following: the initial rate
6 of the personal income tax imposed under this article, the
7 estimated revenues to be derived from the initial rate of the
8 personal income tax imposed under this article.
9 (3) In the event a school district is located in more
10 than one county, petitions under this section shall be filed
11 with the election officials of the county wherein the
12 administrative offices of the school district are located.
13 (4) The election officials receiving a petition shall be
14 responsible for all administrative functions in reviewing and
15 certifying the validity of the petition and for making all
16 necessary communications with the school district.
17 (5) If the election officials of the county receiving
18 the petition certify that it is sufficient under this section
19 and determine that a question should be placed upon the
20 ballot, such decision shall be communicated to election
21 officials in any other county in which the school district is
22 also located. Election officials in the other county or
23 counties shall cooperate with election officials of the
24 county receiving the petition to ensure that an identical
25 question is placed on the ballot at the same election
26 throughout the entire school district.
27 (6) Election officials from each county involved shall
28 independently certify the results from their county to the
29 governing body.
30 (7) In order to levy the tax under this section, the
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1 governing body shall adopt a resolution which shall refer to
2 this article prior to placing a question on the ballot. Prior
3 to adopting a resolution imposing the tax authorized by this
4 section, the governing body shall give public notice of its
5 intent to adopt the resolution in the manner provided by
6 section 4 of the act of December 31, 1965 (P.L.1257, No.511),
7 known as The Local Tax Enabling Act, and shall conduct at
8 least one public hearing regarding the proposed adoption of
9 the resolution.
10 Section 605-A. Continuity of tax.
11 Every tax levied under the provisions of this article shall
12 continue in force on a calendar or fiscal year basis, as the
13 case may be, without annual reenactment unless the rate of the
14 tax is subsequently changed.
15 Section 606-A. Exemption of low-income persons.
16 (a) Low-income exemption.--Each school district shall exempt
17 any person who qualifies under the provisions of section 304 of
18 the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform
19 Code of 1971, from payment of any or all of the tax imposed
20 under section 604-A (relating to personal income tax
21 authorization).
22 (b) Procedures.--Each school district shall adopt procedures
23 for the processing of claims for these exemptions.
24 Section 607-A. Collection of personal income tax.
25 The tax officer shall be responsible for the collection of
26 all personal income tax imposed by a school district
27 Section 608-A. Limitation on assessment.
28 No assessment may be made of any personal income tax imposed
29 under this article more than five years after the date on which
30 such tax should have been paid except where a fraudulent return
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1 or no return has been filed.
2 Section 609-A. Distress and sale of property of taxpayer.
3 (a) General rule.--In case of the neglect or refusal of any
4 person, association or corporation to make payment of the amount
5 of any personal income tax due after two months from the date of
6 the tax notice, the Department of Revenue shall have the power
7 to levy the amount of such tax, penalty, interest and costs
8 thereon, not exceeding costs and charges allowed constables for
9 similar services by distress and sale of the goods and chattels
10 of such delinquent, wherever located, upon giving at least ten
11 days' public notice of such sale by one advertisement in a
12 newspaper of general circulation published in the county.
13 (b) Effect on return.--No failure to demand or collect any
14 taxes by distress and sale of goods and chattels shall
15 invalidate any return made, or lien filed for nonpayment of
16 taxes, or any tax sale for the collection of taxes.
17 Section 610-A. Collection of delinquent taxes from employers.
18 (a) General rule.--The Department of Revenue shall demand,
19 receive and collect from all employers employing persons owing
20 delinquent personal income taxes or having in possession unpaid
21 compensation belonging to any person or persons owing delinquent
22 personal income taxes upon the presentation of a written notice
23 and demand certifying that the information contained therein is
24 true and correct and containing the name of the taxpayer and the
25 amount of tax due.
26 (b) Response to notice.--Upon the presentation of such
27 written notice and demand, the employer shall deduct from the
28 compensation of such employees then owing, or thereafter due, a
29 sum sufficient to pay the amount of the delinquent personal
30 income taxes, interest, penalty and costs shown upon the written
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1 notice or demand, and shall pay the same to the Department of
2 Revenue by which such delinquent tax was levied within 60 days
3 after such notice was given.
4 (c) Limitation on deduction.--No more than 10% of the
5 compensation of the delinquent taxpayer may be deducted at any
6 one time for delinquent personal income taxes, penalty, interest
7 and costs.
8 (d) Deduction for costs.--Such employer shall be entitled to
9 deduct from the moneys collected from each employee the costs
10 incurred from the extra bookkeeping necessary to record such
11 transactions, not exceeding 2% of the amount collected and paid
12 over to the Department of Revenue.
13 (e) Forfeiture.--Upon the failure of any such employer to
14 deduct the amount of such taxes or to pay the same over to the
15 Department of Revenue, less the amount deducted under subsection
16 (d), within the time hereby required, such employer shall
17 forfeit and pay the amount of such tax for each such taxpayer
18 whose taxes are not withheld and paid over, or that are withheld
19 and not paid over together with a penalty of 10%, to be
20 recovered by a civil action to be instituted by the Department
21 of Revenue, as debts of like amount are now by law recoverable,
22 except that such person shall not have the benefit of any
23 exemption law or stay of execution.
24 (f) Collection rights preserved.--Nothing in this section
25 shall be deemed to affect or impair the right of any school
26 district or the Department of Revenue to pursue and collect
27 delinquent taxes validly imposed prior to the effective date of
28 this section.
29 Section 611-A. Collection of delinquent taxes from
30 Commonwealth.
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1 (a) General rule.--Upon presentation of a written notice and
2 demand under oath to the State Treasurer or any other fiscal
3 officer of the Commonwealth, or its boards, authorities,
4 agencies or commissions, it shall be the duty of the treasurer
5 or officer to deduct from the compensation then owing a sum
6 sufficient to pay the amount of the delinquent personal income
7 taxes, interest, penalty and costs shown on the written notice.
8 The same shall be paid to the Department of Revenue within 60
9 days after such notice is given.
10 (b) Limitation on deduction.--No more than 10% of the
11 compensation of the delinquent taxpayer may be deducted at any
12 one time for delinquent personal income taxes, interest, penalty
13 and costs.
14 (c) Collection rights preserved.--Nothing in this section
15 shall be deemed to affect or impair the right of a school
16 district or the Department of Revenue to pursue and collect
17 delinquent taxes validly imposed prior to the effective date of
18 this section.
19 Section 612-A. Notice to taxpayer.
20 The Department of Revenue shall, at least 15 days prior to
21 the presentation of a written notice and demand under section
22 610-A (relating to collection of delinquent taxes from
23 employers) or 611-A (relating to collection of delinquent taxes
24 from Commonwealth), notify the taxpayer owing the delinquent tax
25 by registered mail that a written notice and demand shall be
26 presented to his employer unless such tax is paid. The return
27 receipt card for registered mail shall be marked delivered to
28 addressee only, and the cost of notification by registered mail
29 shall be included in the costs for collecting taxes.
30 Section 613-A. Collection of taxes by suit.
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1 (a) General rule.--Each school district and the Department
2 of Revenue shall have power to collect unpaid taxes from
3 taxpayers and employers owing such taxes by a civil action or
4 other appropriate remedy. Upon judgment, execution may be issued
5 without any stay or benefit of any exemption law. The right to
6 collect unpaid taxes under the provisions of this section shall
7 not be affected by the fact that such taxes have been entered as
8 liens in the office of the prothonotary or the fact that the
9 property against which they were levied has been returned to the
10 county commissioners for taxes for prior years.
11 (b) Limitation of actions.--A suit brought to recover the
12 taxes under subsection (a) shall be instituted within three
13 years after the tax is due or within three years after a
14 declaration or return has been filed, whichever date is later,
15 except in the following cases:
16 (1) If no declaration or return was filed by any person
17 although a declaration or return was required to be filed
18 under provisions of the ordinance, there shall be no
19 limitation.
20 (2) If an examination of the declaration or return filed
21 by any person, or of other evidence relating to such
22 declaration or return in the possession of the Department of
23 Revenue, reveals a fraudulent evasion of taxes, there shall
24 be no limitation.
25 (3) If there is a substantial understatement of tax
26 liability of 25% or more and no fraud, suit shall be
27 instituted within six years.
28 (4) If any person has deducted taxes under the
29 provisions of the resolution, and has failed to pay the
30 amounts so deducted to the Department of Revenue, or if any
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1 person has willfully failed or omitted to make the deductions
2 required by this section, there shall be no limitation.
3 (c) Regulations.--The Department of Revenue, by regulation,
4 shall establish the procedures for collecting the personal
5 income tax and paying the full amount collected over to the
6 school district on a quarterly basis.
7 PART II
8 STATE TAXATION
9 Section 621-A. Increase to personal income tax.
10 (a) General rule.--In addition to the tax collected under
11 section 302 of the act of March 4, 1971 (P.L.6, No.2), known as
12 the Tax Reform Code of 1971, the Commonwealth shall impose the
13 tax set forth in subsection (b) in the same manner as the tax
14 under the Tax Reform Code of 1971.
15 (b) Imposition of tax.--
16 (1) Every resident individual, estate or trust shall be
17 subject to, and shall pay for the privilege of receiving each
18 of the classes of income hereinafter enumerated in section
19 303 of the Tax Reform Code of 1971, a tax upon each dollar of
20 income received by that resident during that resident's
21 taxable year at the rate of .55%.
22 (2) Every nonresident individual, estate or trust shall
23 be subject to, and shall pay for the privilege of receiving
24 each of the classes of income hereinafter enumerated in
25 section 303 of the Tax Reform Code of 1971 from sources
26 within this Commonwealth, a tax upon each dollar of income
27 received by that nonresident during that nonresident's
28 taxable year at the rate of .55%.
29 (c) Deposit in Education Operating Fund.--All moneys
30 collected under this section shall be deposited in the Education
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1 Operating Fund established under section 685-C.
2 (d) Definitions.--The words and phrases used in this section
3 shall have the same meaning given to them in Article III of the
4 Tax Reform Code of 1971.
5 Section 622-A. Increase to realty transfer tax.
6 (a) General rule.--In addition to the tax collected under
7 section 1102-C of the act of March 4, 1971 (P.L.6, No.2), known
8 as the Tax Reform Code of 1971, the Commonwealth shall impose
9 the tax set forth in subsection (b) in the same manner as the
10 tax under the Tax Reform Code of 1971.
11 (b) Imposition of tax.--
12 (1) Every person who makes, executes, delivers, accepts
13 or presents for recording any document or in whose behalf any
14 document is made, executed, delivered, accepted or presented
15 for recording, shall be subject to pay for and in respect to
16 the transaction or any part thereof, or for or in respect of
17 the vellum parchment or paper upon which such document is
18 written or printed, a State tax at the rate of two per cent
19 of the value of the real estate represented by such document,
20 which State tax shall be payable at the earlier of the time
21 the document is presented for recording or within thirty days
22 of acceptance of such document or within thirty days of
23 becoming an acquired company.
24 (2) The tax imposed under this section shall apply to
25 transactions that occur after January 1, 2007.
26 (c) Deposit into Education Operating Fund.--All moneys
27 collected under this section shall be deposited in the Education
28 Operating Fund established under section 685-C.
29 ARTICLE VI-B
30 EARNED INCOME TAX
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1 Section 601-B. Short title of article.
2 This article shall be known and may be cited as the School
3 District Earned Income Tax Authorization.
4 Section 602-B. Definitions.
5 The following words and phrases when used in this article
6 shall have the meanings given to them in this section unless the
7 context clearly indicates otherwise:
8 "Association." A partnership, limited partnership or other
9 unincorporated group of two or more persons.
10 "Business." An enterprise, activity, profession or other
11 undertaking of an unincorporated nature conducted for profit or
12 ordinarily conducted for profit whether by a person, association
13 or other entity.
14 "Corporation." A corporation or joint stock association
15 organized under the laws of the United States or the
16 Commonwealth of Pennsylvania or any other state, territory,
17 foreign country or dependency.
18 "Current year." The calendar year or fiscal year for which
19 the tax is levied.
20 "Department." The Department of Community and Economic
21 Development of the Commonwealth.
22 "Domicile." The place where one lives and has his permanent
23 home and to which he has the intention of returning whenever he
24 is absent. Actual residence is not necessarily domicile because
25 domicile is the fixed place of abode which, in the intention of
26 the taxpayer, is permanent rather than transitory. Domicile is
27 the voluntarily fixed place of habitation of a person, not for a
28 mere special or limited purpose, but with the present intention
29 of making a permanent home, until some event occurs to induce
30 him to adopt some other permanent home. In the case of
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1 businesses or associations, the domicile is any place where the
2 business or association is conducting or engaging in a business
3 for profit within a school district.
4 "Earned income." Compensation as determined under section
5 303 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
6 Reform Code of 1971, and regulations in 61 Pa. Code Pt. I Subpt.
7 B Art. V (relating to personal income tax). Employee business
8 expenses are allowable deductions as determined under Article
9 III of the Tax Reform Code of 1971. The amount of any housing
10 allowance provided to a member of the clergy shall not be
11 taxable as earned income.
12 "Employer." A person, association, corporation, governmental
13 unit or other entity employing one or more persons, other than
14 domestic servants for compensation.
15 "Governing body." The board of school directors of a school
16 district except, for the purpose of the levy and collection of
17 any tax in a school district of the first class, the city
18 council.
19 "Net profits." The net income from the operation of a
20 business, profession or other activity, except corporations,
21 determined under section 303 of the act of March 4, 1971 (P.L.6,
22 No.2), known as the Tax Reform Code of 1971, and regulations in
23 61 Pa. Code Pt. I Subpt. B Art. V (relating to personal income
24 tax). The term does not include income which is not paid for
25 services provided and which is in the nature of earnings from an
26 investment. For taxpayers engaged in the business, profession or
27 activity of farming, the term does not include:
28 (1) any interest earnings generated from any monetary
29 accounts or investment instruments of the farming business;
30 (2) any gain on the sale of farm machinery;
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1 (3) any gain on the sale of livestock held 12 months or
2 more for draft, breeding or dairy purposes; and
3 (4) any gain on the sale of other capital assets of the
4 farm.
5 "Nonresident." A person, association or other entity
6 domiciled outside the school district.
7 "Person" or "individual." A natural person.
8 "Political subdivision." A school district.
9 "Preceding year." The calendar year or fiscal year before
10 the current year.
11 "Register." The register provided for in this article.
12 "Resident." A person, association, corporation or other
13 entity:
14 (1) living in or maintaining a permanent or fixed place
15 of abode in a school district; or
16 (2) conducting or engaging in a business for profit
17 within a school district.
18 "School district." A school district of the first class,
19 first class A, second class, third class or fourth class,
20 including any independent school district.
21 "Succeeding year." The calendar year or fiscal year
22 following the current year.
23 "Tax officer." The person, public employee or private agency
24 designated by a governing body to collect and administer a tax
25 imposed under this article, and the treasurer of a school
26 district of the first class A.
27 "Taxpayer." A person, association or other entity required
28 under this article to file a tax return or to pay a tax.
29 Section 603-B. Preemption.
30 No act of the General Assembly heretofore or hereinafter
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1 enacted shall vacate or preempt any resolution passed or adopted
2 under the authority of this article, or any other act, providing
3 authority for the imposition of a tax by a school district,
4 unless the act of the General Assembly expressly vacates or
5 preempts the authority to pass or adopt such resolutions.
6 Section 604-B. Earned income tax authorization.
7 (a) School districts.--Except as provided in subsection (b),
8 each school district shall have the power and may, by
9 resolution, levy, assess and collect or provide for the levying,
10 assessment and collection of a tax for general revenue purposes
11 at a rate as it shall determine on earned income of the
12 residents of the school district and such other taxes that are
13 specifically authorized under this act. A school district may
14 only impose and increase the rate of earned income tax when that
15 school district complies with the provisions of subsection (c).
16 (b) Exclusions.--No school district shall have any power or
17 authority to levy, assess or collect:
18 (1) A tax based upon a flat rate or on a millage rate on
19 an assessed valuation of a particular trade, occupation or
20 profession, commonly known as an occupation tax.
21 (2) A tax at a set or flat rate upon persons employed
22 within the taxing district, commonly known as an occupational
23 privilege tax.
24 (3) A per capita, poll, residence or similar head tax.
25 (4) A tax on personal property.
26 (5) The earned income tax previously levied under the
27 act of December 31, 1965 (P.L.1257, No.511), known as The
28 Local Tax Enabling Act.
29 (6) The personal income tax authorized under this
30 article.
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1 (7) Any tax not specifically authorized under this act.
2 (c) Adoption of referendum.--
3 (1) In order to levy an earned income and net profits
4 tax under this article, a governing body shall use the
5 procedures set forth in paragraphs (2), (3), (4), (5), (6)
6 and (7).
7 (2) Subject to the notice and public hearing
8 requirements of paragraph (7), a governing body may levy the
9 earned income and net profits tax under this article only by
10 obtaining the approval of the electorate of the affected
11 school district in a public referendum at only the municipal
12 election preceding the fiscal year when the earned income and
13 net profits tax will be initially imposed or the rate
14 increased. The referendum question must state the initial
15 rate of the proposed earned income and net profits tax, the
16 reason for the tax and the amount of proposed budgeted
17 revenue growth, if any, in the first fiscal year following
18 adoption of the referendum. The question shall be in clear
19 language that is readily understandable by a layperson. For
20 the purpose of illustration, a referendum question may be
21 framed as follows:
22 Do you favor the imposition of an earned income and net
23 profits tax of X%?
24 A nonlegal interpretative statement must accompany the
25 question in accordance with section 201.1 of the act of June
26 3, 1937 (P.L.1333, No.320), known as the Pennsylvania
27 Election Code, that includes the following: the initial rate
28 of the earned income and net profits tax imposed under this
29 article and the estimated revenues to be derived from the
30 initial rate of the earned income and net profits tax imposed
20060H2929B4777 - 19 -
1 under this article.
2 (3) In the event a school district is located in more
3 than one county, petitions under this section shall be filed
4 with the election officials of the county wherein the
5 administrative offices of the school district are located.
6 (4) The election officials receiving a petition shall be
7 responsible for all administrative functions in reviewing and
8 certifying the validity of the petition and for making all
9 necessary communications with the school district.
10 (5) If the election officials of the county receiving
11 the petition certify that it is sufficient under this section
12 and determine that a question should be placed upon the
13 ballot, such decision shall be communicated to election
14 officials in any other county in which the school district is
15 also located. Election officials in the other county or
16 counties shall cooperate with election officials of the
17 county receiving the petition to ensure that an identical
18 question is placed on the ballot at the same election
19 throughout the entire school district.
20 (6) Election officials from each county involved shall
21 independently certify the results from their county to the
22 governing body.
23 (7) In order to levy the tax under this section, the
24 governing body shall adopt a resolution which shall refer to
25 this article prior to placing a question on the ballot. Prior
26 to adopting a resolution imposing the tax authorized by this
27 section, the governing body shall give public notice of its
28 intent to adopt the resolution in the manner provided by
29 section 4 of The Local Tax Enabling Act and shall conduct at
30 least one public hearing regarding the proposed adoption of
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1 the resolution.
2 Section 605-B. Continuity of tax.
3 Every tax levied under the provisions of this article shall
4 continue in force on a calendar or fiscal year basis, as the
5 case may be, without annual reenactment unless the rate of the
6 tax is subsequently changed.
7 Section 606-B. Exemption of low-income persons.
8 (a) General rule.--Each school district shall exempt any
9 person whose total income from all sources is less than $10,000
10 per year from the earned income tax, or any portion thereof.
11 (b) Procedures.--Each school district shall adopt procedures
12 for the processing of claims for these exemptions.
13 Section 607-B. Collection of earned income tax.
14 The tax officer shall be responsible for the collection of
15 all earned income tax imposed by a school district.
16 Section 608-B. Limitation on assessment.
17 No assessment may be made of any earned income tax imposed
18 under this article more than five years after the date on which
19 such tax should have been paid except where a fraudulent return
20 or no return has been filed.
21 Section 609-B. Distress and sale of property of taxpayer.
22 (a) General rule.--In case of the neglect or refusal of any
23 person, association or corporation to make payment of the amount
24 of any earned income tax due after two months from the date of
25 the tax notice, the tax officer shall have the power to levy the
26 amount of such tax, penalty, interest and costs thereon, not
27 exceeding costs and charges allowed constables for similar
28 services by distress and sale of the goods and chattels of such
29 delinquent, wherever located, upon giving at least ten days'
30 public notice of such sale by one advertisement in a newspaper
20060H2929B4777 - 21 -
1 of general circulation published in the county.
2 (b) Effect on return.--No failure to demand or collect any
3 taxes by distress and sale of goods and chattels shall
4 invalidate any return made, or lien filed for nonpayment of
5 taxes, or any tax sale for the collection of taxes.
6 Section 610-B. Collection of delinquent taxes from employers.
7 (a) General rule.--The tax officer shall demand, receive and
8 collect from all employers employing persons owing delinquent
9 earned income taxes or having in possession unpaid earned income
10 belonging to any person or persons owing delinquent earned
11 income taxes upon the presentation of a written notice and
12 demand certifying that the information contained therein is true
13 and correct and containing the name of the taxpayer and the
14 amount of tax due.
15 (b) Response to notice.--Upon the presentation of such
16 written notice and demand, the employer shall deduct from the
17 earned income of such employees then owing, or thereafter due, a
18 sum sufficient to pay the amount of the delinquent earned income
19 taxes, interest, penalty and costs shown upon the written notice
20 or demand, and shall pay the same to the tax officer by which
21 such delinquent tax was levied within 60 days after such notice
22 was given.
23 (c) Limitation on deduction.--No more than 10% of the
24 compensation of the delinquent taxpayer may be deducted at any
25 one time for delinquent earned income taxes, penalty, interest
26 and costs.
27 (d) Deduction for costs.--Such employer shall be entitled to
28 deduct from the moneys collected from each employee the costs
29 incurred from the extra bookkeeping necessary to record such
30 transactions, not exceeding 2% of the amount collected and paid
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1 over to the tax officer.
2 (e) Forfeiture.--Upon the failure of any such employer to
3 deduct the amount of such taxes or to pay the same over to the
4 tax officer, less the amount deducted under subsection (d),
5 within the time hereby required, such employer shall forfeit and
6 pay the amount of such tax for each such taxpayer whose taxes
7 are not withheld and paid over, or that are withheld and not
8 paid over together with a penalty of 10%, to be recovered by a
9 civil action to be instituted by the tax officer, as debts of
10 like amount are now by law recoverable, except that such person
11 shall not have the benefit of any exemption law or stay of
12 execution.
13 (f) Collection rights preserved.--Nothing in this section
14 shall be deemed to affect or impair the right of any school
15 district or the tax officer to pursue and collect delinquent
16 taxes validly imposed prior to the effective date of this
17 section.
18 Section 611-B. Collection of delinquent taxes from
19 Commonwealth.
20 (a) General rule.--Upon presentation of a written notice and
21 demand under oath to the State Treasurer or any other fiscal
22 officer of the Commonwealth, or its boards, authorities,
23 agencies or commissions, it shall be the duty of the treasurer
24 or officer to deduct from the compensation then owing a sum
25 sufficient to pay the amount of the delinquent earned income
26 taxes, interest, penalty and costs shown on the written notice.
27 The same shall be paid to the tax officer within 60 days after
28 such notice shall have been given.
29 (b) Limitation on deduction.--No more than 10% of the
30 compensation of the delinquent taxpayer may be deducted at any
20060H2929B4777 - 23 -
1 one time for delinquent earned income taxes, interest, penalty
2 and costs.
3 (c) Collection rights preserved.--Nothing in this section
4 shall be deemed to affect or impair the right of a school
5 district or the tax officer to pursue and collect delinquent
6 taxes validly imposed prior to the effective date of this
7 section.
8 Section 612-B. Notice to taxpayer.
9 The tax officer shall, at least 15 days prior to the
10 presentation of a written notice and demand under section 610-B
11 (relating to collection of delinquent taxes from employers) or
12 611-B (relating to collection of delinquent taxes from
13 Commonwealth), notify the taxpayer owing the delinquent tax by
14 registered mail that a written notice and demand shall be
15 presented to his employer unless such tax is paid. The return
16 receipt card for registered mail shall be marked delivered to
17 addressee only, and the cost of notification by registered mail
18 shall be included in the costs for collecting taxes.
19 Section 613-B. Collection of taxes by suit.
20 (a) General rule.--Each school district and the tax officer
21 shall have power to collect unpaid taxes from taxpayers and
22 employers owing such taxes by a civil action or other
23 appropriate remedy. Upon judgment, execution may be issued
24 without any stay or benefit of any exemption law. The right to
25 collect unpaid taxes under the provisions of this section shall
26 not be affected by the fact that such taxes have been entered as
27 liens in the office of the prothonotary or the fact that the
28 property against which they were levied has been returned to the
29 county commissioners for taxes for prior years.
30 (b) Limitation of actions.--A suit brought to recover the
20060H2929B4777 - 24 -
1 taxes under subsection (a) shall be instituted within three
2 years after the tax is due or within three years after a
3 declaration or return has been filed, whichever date is later,
4 except in the following cases:
5 (1) If no declaration or return was filed by any person,
6 although a declaration or return was required to be filed
7 under provisions of the ordinance, there shall be no
8 limitation.
9 (2) If an examination of the declaration or return filed
10 by any person, or of other evidence relating to such
11 declaration or return in the possession of the tax officer,
12 reveals a fraudulent evasion of taxes, there shall be no
13 limitation.
14 (3) If there is a substantial understatement of tax
15 liability of 25% or more and no fraud, suit shall be
16 instituted within six years.
17 (4) If any person has deducted taxes under the
18 provisions of the resolution, and has failed to pay the
19 amounts so deducted to the tax officer, or if any person has
20 willfully failed or omitted to make the deductions required
21 by this section, there shall be no limitation.
22 (c) Regulations.--The tax officer shall establish the
23 procedures for collecting the earned income tax and paying the
24 full amount collected over to the school district on a quarterly
25 basis.
26 ARTICLE VI-C
27 TAX FOR EDUCATION
28 PART I
29 DEFINITIONS
30 Section 601-C. Definitions.--The following words, terms and
20060H2929B4777 - 25 -
1 phrases when used in this article shall have the meaning
2 ascribed to them in this section, except where the context
3 clearly indicates a different meaning:
4 (a) "Soft drinks." All nonalcoholic beverages, whether
5 carbonated or not, such as soda water, ginger ale, coca cola,
6 lime cola, pepsi cola, Dr. Pepper, fruit juice when plain or
7 carbonated water, flavoring or syrup is added, carbonated water,
8 orangeade, lemonade, root beer or any and all preparations,
9 commonly referred to as "soft drinks," of whatsoever kind, and
10 are further described as including any and all beverages,
11 commonly referred to as "soft drinks," which are made with or
12 without the use of any syrup. The term "soft drinks" shall not
13 include natural fruit or vegetable juices or their concentrates,
14 or non-carbonated fruit juice drinks containing not less than
15 twenty-five per cent by volume of natural fruit juices or of
16 fruit juice which has been reconstituted to its original state,
17 or natural concentrated fruit or vegetable juices reconstituted
18 to their original state, whether any of the foregoing natural
19 juices are frozen or unfrozen, sweetened or unsweetened,
20 seasoned with salt or spice or unseasoned, nor shall the term
21 "soft drinks" include coffee, coffee substitutes, tea, cocoa,
22 natural fluid milk or non-carbonated drinks made from milk
23 derivatives.
24 (b) "Maintaining a place of business in this Commonwealth."
25 (1) Having, maintaining or using within this Commonwealth,
26 either directly or through a subsidiary, representative or an
27 agent, an office, distribution house, sales house, warehouse,
28 service enterprise or other place of business; or any agent of
29 general or restricted authority, or representative, irrespective
30 of whether the place of business, representative or agent is
20060H2929B4777 - 26 -
1 located here, permanently or temporarily, or whether the person
2 or subsidiary maintaining the place of business, representative
3 or agent is authorized to do business within this Commonwealth.
4 (2) Engaging in any activity as a business within this
5 Commonwealth by any person, either directly or through a
6 subsidiary, representative or an agent, in connection with the
7 lease, sale or delivery of tangible personal property or the
8 performance of services thereon for use, storage or consumption
9 or in connection with the sale or delivery for use of the
10 services described in subclauses (11) through (18) of clause (k)
11 of this section, including, but not limited to, having,
12 maintaining or using any office, distribution house, sales
13 house, warehouse or other place of business, any stock of goods
14 or any solicitor, canvasser, salesman, representative or agent
15 under its authority, at its direction or with its permission,
16 regardless of whether the person or subsidiary is authorized to
17 do business in this Commonwealth.
18 (3) Regularly or substantially soliciting orders within this
19 Commonwealth in connection with the lease, sale or delivery of
20 tangible personal property to or the performance thereon of
21 services or in connection with the sale or delivery of the
22 services described in subclauses (11) through (18) of clause (k)
23 of this section for residents of this Commonwealth by means of
24 catalogues or other advertising, whether the orders are accepted
25 within or without this Commonwealth.
26 (3.1) Entering this Commonwealth by any person to provide
27 assembly, service or repair of tangible personal property,
28 either directly or through a subsidiary, representative or an
29 agent.
30 (3.2) Delivering tangible personal property to locations
20060H2929B4777 - 27 -
1 within this Commonwealth if the delivery includes the unpacking,
2 positioning, placing or assembling of the tangible personal
3 property.
4 (3.3) Having any contact within this Commonwealth which
5 would allow the Commonwealth to require a person to collect and
6 remit tax under the Constitution of the United States.
7 (3.4) Providing a customer's mobile telecommunications
8 service deemed to be provided by the customer's home service
9 provider under the Mobile Telecommunications Sourcing Act (4
10 U.S.C. § 116). For purposes of this clause, words and phrases
11 used in this clause shall have the meanings given to them in the
12 Mobile Telecommunications Sourcing Act.
13 (4) The term "maintaining a place of business in this
14 Commonwealth" shall not include:
15 (i) Owning or leasing of tangible or intangible property by
16 a person who has contracted with an unaffiliated commercial
17 printer for printing, provided that:
18 (A) the property is for use by the commercial printer; and
19 (B) the property is located at the Pennsylvania premises of
20 the commercial printer.
21 (ii) Visits by a person's employes or agents to the premises
22 in this Commonwealth of an unaffiliated commercial printer with
23 whom the person has contracted for printing in connection with
24 said contract.
25 (c) "Manufacture." The performance of manufacturing,
26 fabricating, compounding, processing or other operations,
27 engaged in as a business, which place any tangible personal
28 property in a form, composition or character different from that
29 in which it is acquired whether for sale or use by the
30 manufacturer, and shall include, but not be limited to--
20060H2929B4777 - 28 -
1 (1) Every operation commencing with the first production
2 stage and ending with the completion of tangible personal
3 property having the physical qualities (including packaging, if
4 any, passing to the ultimate consumer) which it has when
5 transferred by the manufacturer to another;
6 (2) The publishing of books, newspapers, magazines and other
7 periodicals and printing;
8 (3) Refining, blasting, exploring, mining and quarrying for,
9 or otherwise extracting from the earth or from waste or stock
10 piles or from pits or banks any natural resources, minerals and
11 mineral aggregates including blast furnace slag;
12 (4) Building, rebuilding, repairing and making additions to,
13 or replacements in or upon vessels designed for commercial use
14 of registered tonnage of fifty tons or more when produced upon
15 special order of the purchaser, or when rebuilt, repaired or
16 enlarged, or when replacements are made upon order of, or for
17 the account of the owner;
18 (5) Research having as its objective the production of a new
19 or an improved (i) product or utility service, or (ii) method of
20 producing a product or utility service, but in either case not
21 including market research or research having as its objective
22 the improvement of administrative efficiency.
23 (6) Remanufacture for wholesale distribution by a
24 remanufacturer of motor vehicle parts from used parts acquired
25 in bulk by the remanufacturer using an assembly line process
26 which involves the complete disassembly of such parts and
27 integration of the components of such parts with other used or
28 new components of parts, including the salvaging, recycling or
29 reclaiming of used parts by the remanufacturer.
30 (7) Remanufacture or retrofit by a manufacturer or
20060H2929B4777 - 29 -
1 remanufacturer of aircraft, armored vehicles, other defense-
2 related vehicles having a finished value of at least fifty
3 thousand dollars ($50,000). Remanufacture or retrofit involves
4 the disassembly of such aircraft, vehicles, parts or components,
5 including electric or electronic components, the integration of
6 those parts and components with other used or new parts or
7 components, including the salvaging, recycling or reclaiming of
8 the used parts or components and the assembly of the new or used
9 aircraft, vehicles, parts or components. For purposes of this
10 clause, the following terms or phrases have the following
11 meanings:
12 (i) "aircraft" means fixed-wing aircraft, helicopters,
13 powered aircraft, tilt-rotor or tilt-wing aircraft, unmanned
14 aircraft and gliders;
15 (ii) "armored vehicles" means tanks, armed personnel
16 carriers and all other armed track or semitrack vehicles; or
17 (iii) "other defense-related vehicles" means trucks, truck-
18 tractors, trailers, jeeps and other utility vehicles, including
19 any unmanned vehicles.
20 The term "manufacture" shall not include constructing,
21 altering, servicing, repairing or improving real estate or
22 repairing, servicing or installing tangible personal property,
23 nor the cooking, freezing or baking of fruits, vegetables,
24 mushrooms, fish, seafood, meats, poultry or bakery products.
25 (c.1) "Blasting." The use of any combustible or explosive
26 composition in the removal of material resources, minerals and
27 mineral aggregates from the earth including the separation of
28 the dirt, waste and refuse in which they are found.
29 (d) "Processing." The performance of the following
30 activities when engaged in as a business enterprise:
20060H2929B4777 - 30 -
1 (1) The filtering or heating of honey, the cooking, baking
2 or freezing of fruits, vegetables, mushrooms, fish, seafood,
3 meats, poultry or bakery products, when the person engaged in
4 such business packages such property in sealed containers for
5 wholesale distribution.
6 (1.1) The processing of fruits or vegetables by cleaning,
7 cutting, coring, peeling or chopping and treating to preserve,
8 sterilize or purify and substantially extend the useful shelf
9 life of the fruits or vegetables, when the person engaged in
10 such activity packages such property in sealed containers for
11 wholesale distribution.
12 (2) The scouring, carbonizing, cording, combing, throwing,
13 twisting or winding of natural or synthetic fibers, or the
14 spinning, bleaching, dyeing, printing or finishing of yarns or
15 fabrics, when such activities are performed prior to sale to the
16 ultimate consumer.
17 (3) The electroplating, galvanizing, enameling, anodizing,
18 coloring, finishing, impregnating or heat treating of metals or
19 plastics for sale or in the process of manufacturing.
20 (3.1) The blanking, shearing, leveling, slitting or burning
21 of metals for sale to or use by a manufacturer or processor.
22 (4) The rolling, drawing or extruding of ferrous and non-
23 ferrous metals.
24 (5) The fabrication for sale of ornamental or structural
25 metal or of metal stairs, staircases, gratings, fire escapes or
26 railings (not including fabrication work done at the
27 construction site).
28 (6) The preparation of animal feed or poultry feed for sale.
29 (7) The production, processing and bottling of non-alcoholic
30 beverages for wholesale distribution.
20060H2929B4777 - 31 -
1 (8) The operation of a saw mill or planing mill for the
2 production of lumber or lumber products for sale. The operation
3 of a saw mill or planing mill begins with the unloading by the
4 operator of the saw mill or planing mill of logs, timber,
5 pulpwood or other forms of wood material to be used in the saw
6 mill or planing mill.
7 (9) The milling for sale of flour or meal from grains.
8 (9.1) The aging, stripping, conditioning, crushing and
9 blending of tobacco leaves for use as cigar filler or as
10 components of smokeless tobacco products for sale to
11 manufacturers of tobacco products.
12 (10) The slaughtering and dressing of animals for meat to be
13 sold or to be used in preparing meat products for sale, and the
14 preparation of meat products including lard, tallow, grease,
15 cooking and inedible oils for wholesale distribution.
16 (11) The processing of used lubricating oils.
17 (12) The broadcasting of radio and television programs of
18 licensed commercial or educational stations.
19 (13) The cooking or baking of bread, pastries, cakes,
20 cookies, muffins and donuts when the person engaged in such
21 activity sells such items at retail at locations that do not
22 constitute an establishment from which ready-to-eat food and
23 beverages are sold. For purposes of this clause, a bakery, a
24 pastry shop and a donut shop shall not be considered an
25 establishment from which ready-to-eat food and beverages are
26 sold.
27 (14) The cleaning and roasting and the blending, grinding or
28 packaging for sale of coffee from green coffee beans or the
29 production of coffee extract.
30 (15) The preparation of dry or liquid fertilizer for sale.
20060H2929B4777 - 32 -
1 (16) The production, processing and packaging of ice for
2 wholesale distribution.
3 (17) The producing of mobile telecommunications services.
4 (e) "Person." Any natural person, association, fiduciary,
5 partnership, corporation or other entity, including the
6 Commonwealth of Pennsylvania, its political subdivisions and
7 instrumentalities and public authorities. Whenever used in any
8 clause prescribing and imposing a penalty or imposing a fine or
9 imprisonment, or both, the term "person," as applied to an
10 association, shall include the members thereof and, as applied
11 to a corporation, the officers thereof.
12 (f) "Purchase at retail."
13 (1) The acquisition for a consideration of the ownership,
14 custody or possession of tangible personal property other than
15 for resale by the person acquiring the same when such
16 acquisition is made for the purpose of consumption or use,
17 whether such acquisition shall be absolute or conditional, and
18 by whatsoever means the same shall have been effected.
19 (2) The acquisition of a license to use or consume, and the
20 rental or lease of tangible personal property, other than for
21 resale regardless of the period of time the lessee has
22 possession or custody of the property.
23 (3) The obtaining for a consideration of those services
24 described in subclauses (2), (3) and (4) of clause (k) of this
25 section other than for resale.
26 (4) A retention after March 7, 1956, of possession, custody
27 or a license to use or consume pursuant to a rental contract or
28 other lease arrangement (other than as security), other than for
29 resale.
30 (5) The obtaining for a consideration of those services
20060H2929B4777 - 33 -
1 described in subclauses (11) through (18) of clause (k) of this
2 section.
3 The term "purchase at retail" with respect to "liquor" and
4 "malt or brewed beverages" shall include the purchase of
5 "liquor" from any "Pennsylvania Liquor Store" by any person for
6 any purpose, and the purchase of "malt or brewed beverages" from
7 a "manufacturer of malt or brewed beverages," "distributor" or
8 "importing distributor" by any person for any purpose, except
9 purchases from a "manufacturer of malt or brewed beverages" by a
10 "distributor" or "importing distributor" or purchases from an
11 "importing distributor" by a "distributor" within the meaning of
12 the "Liquor Code." The term "purchase at retail" shall not
13 include any purchase of "malt or brewed beverages" from a
14 "retail dispenser" or any purchase of "liquor" or "malt or
15 brewed beverages" from a person holding a "retail liquor
16 license" within the meaning of and pursuant to the provisions of
17 the "Liquor Code," but shall include any purchase or acquisition
18 of "liquor" or "malt or brewed beverages" other than pursuant to
19 the provisions of the "Liquor Code."
20 (g) "Purchase price."
21 (1) The total value of anything paid or delivered, or
22 promised to be paid or delivered, whether it be money or
23 otherwise, in complete performance of a sale at retail or
24 purchase at retail, as herein defined, without any deduction on
25 account of the cost or value of the property sold, cost or value
26 of transportation, cost or value of labor or service, interest
27 or discount paid or allowed after the sale is consummated, any
28 other taxes imposed by the Commonwealth of Pennsylvania or any
29 other expense except that there shall be excluded any gratuity
30 or separately stated deposit charge for returnable containers.
20060H2929B4777 - 34 -
1 (2) There shall be deducted from the purchase price the
2 value of any tangible personal property actually taken in trade
3 or exchange in lieu of the whole or any part of the purchase
4 price. For the purpose of this clause, the amount allowed by
5 reason of tangible personal property actually taken in trade or
6 exchange shall be considered the value of such property.
7 (3) In determining the purchase price on the sale or use of
8 taxable tangible personal property or a service where, because
9 of affiliation of interests between the vendor and purchaser, or
10 irrespective of any such affiliation, if for any other reason
11 the purchase price declared by the vendor or taxpayer on the
12 taxable sale or use of such tangible personal property or
13 service is, in the opinion of the department, not indicative of
14 the true value of the article or service or the fair price
15 thereof, the department shall, pursuant to uniform and equitable
16 rules, determine the amount of constructive purchase price upon
17 the basis of which the tax shall be computed and levied. Such
18 rules shall provide for a constructive amount of purchase price
19 for each such sale or use which would naturally and fairly be
20 charged in an arms-length transaction in which the element of
21 common interest between the vendor or purchaser is absent or if
22 no common interest exists, any other element causing a
23 distortion of the price or value is likewise absent. For the
24 purpose of this clause where a taxable sale or purchase at
25 retail transaction occurs between a parent and a subsidiary,
26 affiliate or controlled corporation of such parent corporation,
27 there shall be a rebuttable presumption, that because of such
28 common interest such transaction was not at arms-length.
29 (4) Where there is a transfer or retention of possession or
30 custody, whether it be termed a rental, lease, service or
20060H2929B4777 - 35 -
1 otherwise, of tangible personal property including, but not
2 limited to linens, aprons, motor vehicles, trailers, tires,
3 industrial office and construction equipment, and business
4 machines the full consideration paid or delivered to the vendor
5 or lessor shall be considered the purchase price, even though
6 such consideration be separately stated and be designated as
7 payment for processing, laundering, service, maintenance,
8 insurance, repairs, depreciation or otherwise. Where the vendor
9 or lessor supplies or provides an employe to operate such
10 tangible personal property, the value of the labor thus supplied
11 may be excluded and shall not be considered as part of the
12 purchase price if separately stated. There shall also be
13 included as part of the purchase price the value of anything
14 paid or delivered, or promised to be paid or delivered by a
15 lessee, whether it be money or otherwise, to any person other
16 than the vendor or lessor by reason of the maintenance,
17 insurance or repair of the tangible personal property which a
18 lessee has the possession or custody of under a rental contract
19 or lease arrangement.
20 (5) With respect to the tax imposed by subsection (b) of
21 section 602-C upon any tangible personal property originally
22 purchased by the user of such property six months or longer
23 prior to the first taxable use of such property within the
24 Commonwealth, such user may elect to pay tax on a substituted
25 base determined by considering the purchase price of such
26 property for tax purposes to be equal to the prevailing market
27 price of similar tangible personal property at the time and
28 place of such first use within this Commonwealth. Such election
29 must be made at the time of filing a tax return with the
30 department and reporting such tax liability and paying the
20060H2929B4777 - 36 -
1 proper tax due plus all accrued penalties and interest, if there
2 be any, within six months of the due date of such report and
3 payment, as provided for by subsections (a) and (c) of section
4 617-C of this article.
5 (6) The purchase price of employment agency services and
6 help supply services shall be the service fee paid by the
7 purchaser to the vendor or supplying entity. The term "service
8 fee," as used in this subclause, shall be the total charge or
9 fee of the vendor or supplying entity minus the costs of the
10 supplied employe which costs are wages, salaries, bonuses and
11 commissions, employment benefits, expense reimbursements and
12 payroll and withholding taxes, to the extent that these costs
13 are specifically itemized or that these costs in aggregate are
14 stated in billings from the vendor or supplying entity. To the
15 extent that these costs are not itemized or stated on the
16 billings, then the service fee shall be the total charge or fee
17 of the vendor or supplying entity.
18 (7) Unless the vendor separately states that portion of the
19 billing which applies to premium cable service as defined in
20 clause (ll) of this section, the total bill for the provision of
21 all cable services shall be the purchase price.
22 (8) The purchase price of prebuilt housing shall be sixty
23 per cent of the manufacturer's selling price: Provided, however,
24 That a manufacturer of prebuilt housing who precollects tax from
25 a prebuilt housing builder at the time of the sale to the
26 prebuilt housing builder shall have the option to collect tax on
27 sixty per cent of the selling price or on one hundred per cent
28 of the actual cost of the supplies and materials used in the
29 manufacture of the prebuilt housing.
30 (h) "Purchaser." Any person who acquires, for a
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1 consideration, the ownership, custody or possession by sale,
2 lease or otherwise, of tangible personal property, or who
3 obtains services in exchange for a purchase price but not
4 including an employer who obtains services from his employes in
5 exchange for wages or salaries when such services are rendered
6 in the ordinary scope of their employment.
7 (i) "Resale."
8 (1) Any transfer of ownership, custody or possession of
9 tangible personal property for a consideration, including the
10 grant of a license to use or consume and transactions where the
11 possession of such property is transferred but where the
12 transferor retains title only as security for payment of the
13 selling price whether such transaction be designated as bailment
14 lease, conditional sale or otherwise.
15 (2) The physical incorporation of tangible personal property
16 as an ingredient or constituent into other tangible personal
17 property, which is to be sold in the regular course of business
18 or the performance of those services described in subclauses
19 (2), (3) and (4) of clause (k) of this section upon tangible
20 personal property which is to be sold in the regular course of
21 business or where the person incorporating such property has
22 undertaken at the time of purchase to cause it to be transported
23 in interstate commerce to a destination outside this
24 Commonwealth. The term "resale" shall include telecommunications
25 services purchased by a cable operator or video programmer that
26 are used to transport or deliver cable or video programming
27 services which are sold in the regular course of business.
28 (3) The term "resale" shall also include tangible personal
29 property purchased or having a situs within this Commonwealth
30 solely for the purpose of being processed, fabricated or
20060H2929B4777 - 38 -
1 manufactured into, attached to or incorporated into tangible
2 personal property and thereafter transported outside this
3 Commonwealth for use exclusively outside this Commonwealth.
4 (4) The term "resale" shall not include any sale of "malt or
5 brewed beverages" by a "retail dispenser," or any sale of
6 "liquor" or "malt or brewed beverages" by a person holding a
7 "retail liquor license" within the meaning of the "Liquor Code."
8 (5) The physical incorporation of tangible personal property
9 as an ingredient or constituent in the construction of
10 foundations for machinery or equipment the sale or use of which
11 is excluded from tax under the provisions of paragraphs (A),
12 (B), (C) and (D) of subclause (8) of clause (k) and
13 subparagraphs (i), (ii), (iii) and (iv) of paragraph (B) of
14 subclause (4) of clause (o) of this section, whether such
15 foundations at the time of construction or transfer constitute
16 tangible personal property or real estate.
17 (j) "Resident."
18 (1) Any natural person (i) who is domiciled in the
19 Commonwealth, or (ii) who maintains a permanent place of abode
20 within the Commonwealth and spends in the aggregate more than
21 sixty days of the year within the Commonwealth.
22 (2) Any corporation (i) incorporated under the laws of this
23 Commonwealth, or (ii) authorized to do business or doing
24 business within this Commonwealth, or (iii) maintaining a place
25 of business within this Commonwealth.
26 (3) Any association, fiduciary, partnership or other entity
27 (i) domiciled in this Commonwealth, or (ii) authorized to do
28 business or doing business within this Commonwealth, or (iii)
29 maintaining a place of business within this Commonwealth.
30 (k) "Sale at retail."
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1 (1) Any transfer, for a consideration, of the ownership,
2 custody or possession of tangible personal property, including
3 the grant of a license to use or consume whether such transfer
4 be absolute or conditional and by whatsoever means the same
5 shall have been effected.
6 (2) The rendition of the service of printing or imprinting
7 of tangible personal property for a consideration for persons
8 who furnish, either directly or indirectly the materials used in
9 the printing or imprinting.
10 (3) The rendition for a consideration of the service of--
11 (i) Washing, cleaning, waxing, polishing or lubricating of
12 motor vehicles of another, whether or not any tangible personal
13 property is transferred in conjunction therewith; and
14 (ii) Inspecting motor vehicles pursuant to the mandatory
15 requirements of "The Vehicle Code."
16 (4) The rendition for a consideration of the service of
17 repairing, altering, mending, pressing, fitting, dyeing,
18 laundering, drycleaning or cleaning tangible personal property
19 including, but not limited to, wearing apparel or shoes, or
20 applying or installing tangible personal property as a repair or
21 replacement part of other tangible personal property including,
22 but not limited to, wearing apparel or shoes for a
23 consideration, whether or not the services are performed
24 directly or by any means other than by coin-operated self-
25 service laundry equipment for wearing apparel or household goods
26 and whether or not any tangible personal property is transferred
27 in conjunction therewith, including such services as are
28 rendered in the construction, reconstruction, remodeling, repair
29 or maintenance of real estate.
30 (5) (Reserved).
20060H2929B4777 - 40 -
1 (6) (Reserved).
2 (7) (Reserved).
3 (8) Any retention of possession, custody or a license to use
4 or consume tangible personal property or any further obtaining
5 of services described in subclauses (2), (3) and (4) of this
6 clause pursuant to a rental or service contract or other
7 arrangement (other than as security).
8 The term "sale at retail" shall not include (i) any such
9 transfer of tangible personal property or rendition of services
10 for the purpose of resale, or (ii) such rendition of services or
11 the transfer of tangible personal property including, but not
12 limited to, machinery and equipment and parts therefor and
13 supplies to be used or consumed by the purchaser directly in the
14 operations of--
15 (A) The manufacture of tangible personal property.
16 (B) Farming, dairying, agriculture, horticulture or
17 floriculture when engaged in as a business enterprise. The term
18 "farming" shall include the propagation and raising of ranch
19 raised fur-bearing animals and the propagation of game birds for
20 commercial purposes by holders of propagation permits issued
21 under 34 Pa.C.S. (relating to game) and the propagation and
22 raising of horses to be used exclusively for commercial racing
23 activities.
24 (C) The producing, delivering or rendering of a public
25 utility service, or in constructing, reconstructing, remodeling,
26 repairing or maintaining the facilities which are directly used
27 in producing, delivering or rendering such service.
28 (D) Processing as defined in clause (d) of this section.
29 The exclusions provided in paragraphs (A), (B), (C) and (D)
30 shall not apply to any vehicle required to be registered under
20060H2929B4777 - 41 -
1 The Vehicle Code, except those vehicles used directly by a
2 public utility engaged in business as a common carrier; to
3 maintenance facilities; or to materials, supplies or equipment
4 to be used or consumed in the construction, reconstruction,
5 remodeling, repair or maintenance of real estate other than
6 directly used machinery, equipment, parts or foundations
7 therefor that may be affixed to such real estate.
8 The exclusions provided in paragraphs (A), (B), (C) and (D)
9 shall not apply to tangible personal property or services to be
10 used or consumed in managerial sales or other nonoperational
11 activities, nor to the purchase or use of tangible personal
12 property or services by any person other than the person
13 directly using the same in the operations described in
14 paragraphs (A), (B), (C) and (D) herein.
15 The exclusion provided in paragraph (C) shall not apply to
16 (i) construction materials, supplies or equipment used to
17 construct, reconstruct, remodel, repair or maintain facilities
18 not used directly by the purchaser in the production, delivering
19 or rendition of public utility service, (ii) construction
20 materials, supplies or equipment used to construct, reconstruct,
21 remodel, repair or maintain a building, road or similar
22 structure, or (iii) tools and equipment used but not installed
23 in the maintenance of facilities used directly in the
24 production, delivering or rendition of a public utility service.
25 The exclusions provided in paragraphs (A), (B), (C) and (D)
26 shall not apply to the services enumerated in clauses (k)(11)
27 through (18) and (w) through (kk), except that the exclusion
28 provided in this subclause for farming, dairying and agriculture
29 shall apply to the service enumerated in clause (z).
30 (9) Where tangible personal property or services are
20060H2929B4777 - 42 -
1 utilized for purposes constituting a "sale at retail" and for
2 purposes excluded from the definition of "sale at retail," it
3 shall be presumed that such tangible personal property or
4 services are utilized for purposes constituting a "sale at
5 retail" and subject to tax unless the user thereof proves to the
6 department that the predominant purposes for which such tangible
7 personal property or services are utilized do not constitute a
8 "sale at retail."
9 (10) The term "sale at retail" with respect to "liquor" and
10 "malt or brewed beverages" shall include the sale of "liquor" by
11 any "Pennsylvania liquor store" to any person for any purpose,
12 and the sale of "malt or brewed beverages" by a "manufacturer of
13 malt or brewed beverages," "distributor" or "importing
14 distributor" to any person for any purpose, except sales by a
15 "manufacturer of malt or brewed beverages" to a "distributor" or
16 "importing distributor" or sales by an "importing distributor"
17 to a "distributor" within the meaning of the "Liquor Code." The
18 term "sale at retail" shall not include any sale of "malt or
19 brewed beverages" by a "retail dispenser" or any sale of
20 "liquor" or "malt or brewed beverages" by a person holding a
21 "retail liquor license" within the meaning of and pursuant to
22 the provisions of the "Liquor Code," but shall include any sale
23 of "liquor" or "malt or brewed beverages" other than pursuant to
24 the provisions of the "Liquor Code."
25 (11) The rendition for a consideration of lobbying services.
26 (12) The rendition for a consideration of adjustment
27 services, collection services or credit reporting services.
28 (13) The rendition for a consideration of secretarial or
29 editing services.
30 (14) The rendition for a consideration of disinfecting or
20060H2929B4777 - 43 -
1 pest control services, building maintenance or cleaning
2 services.
3 (15) The rendition for a consideration of employment agency
4 services or help supply services.
5 (16) (Reserved).
6 (17) The rendition for a consideration of lawn care service.
7 (18) The rendition for a consideration of self-storage
8 service.
9 (19) The rendition for a consideration of a mobile
10 telecommunications service.
11 (20) (i) The rendition for a consideration of any service,
12 other than physician or dental services, when the primary
13 objective of the purchaser is the receipt of any benefit of the
14 service performed, as distinguished from the receipt of
15 property. In determining what is a service, the intended use or
16 stated objective of the contracting parties shall not
17 necessarily be controlling.
18 (ii) Any service performed in Pennsylvania shall be subject
19 to the tax imposed under this article unless specifically
20 exempted in this article. With respect to services, other than
21 telecommunication services, such services shall be considered to
22 be performed in Pennsylvania if:
23 (A) performed completely in Pennsylvania;
24 (B) performed partially in Pennsylvania and partially
25 outside of Pennsylvania when the recipient or user of the
26 service is located in Pennsylvania;
27 (C) performed partially in Pennsylvania and partially
28 outside of Pennsylvania if the recipient or user of the service
29 is not located in Pennsylvania, but only to the extent of those
30 services actually performed in Pennsylvania; or
20060H2929B4777 - 44 -
1 (D) the place of performance cannot be determined if the
2 recipient or user of the service is located in Pennsylvania.
3 (iii) With respect to services, other than telecommunication
4 services, such services performed partially in Pennsylvania and
5 partially outside of Pennsylvania shall be presumed to have been
6 performed completely in Pennsylvania unless the taxpayer can
7 show the place of performance by clear and convincing evidence.
8 (iv) With respect to interstate telecommunications services,
9 only those charges for interstate telecommunications which
10 originate or are terminated in this Commonwealth and which are
11 billed and charged to a service address in Pennsylvania shall be
12 subject to tax.
13 (v) With respect to services, other than telecommunication
14 services, that are performed in this Commonwealth for a
15 recipient or user of the services located in another state in
16 which the services, had they been performed in that state, would
17 not be subject to a sales or use tax under the laws of that
18 state, then no tax may be imposed under this article.
19 (l) "Storage." Any keeping or retention of tangible
20 personal property within this Commonwealth for any purpose
21 including the interim keeping, retaining or exercising any right
22 or power over such tangible personal property. This term is in
23 no way limited to the provision of self-storage service.
24 (m) "Tangible personal property." Corporeal personal
25 property including, but not limited to, goods, wares,
26 merchandise, steam and natural and manufactured and bottled gas
27 for non-residential use, electricity for non-residential use,
28 prepaid telecommunications, premium cable or premium video
29 programming service, spirituous or vinous liquor and malt or
30 brewed beverages and soft drinks, interstate telecommunications
20060H2929B4777 - 45 -
1 service originating or terminating in the Commonwealth and
2 charged to a service address in this Commonwealth, intrastate
3 telecommunications service with the exception of (i) subscriber
4 line charges and basic local telephone service for residential
5 use and (ii) charges for telephone calls paid for by inserting
6 money into a telephone accepting direct deposits of money to
7 operate, provided further, the service address of any intrastate
8 telecommunications service is deemed to be within this
9 Commonwealth or within a political subdivision, regardless of
10 how or where billed or paid. In the case of any such interstate
11 or intrastate telecommunications service, any charge paid
12 through a credit or payment mechanism which does not relate to a
13 service address, such as a bank, travel, credit or debit card,
14 but not including prepaid telecommunications, is deemed
15 attributable to the address of origination of the
16 telecommunications service.
17 (n) "Taxpayer." Any person required to pay or collect the
18 tax imposed by this article.
19 (o) "Use."
20 (1) The exercise of any right or power incidental to the
21 ownership, custody or possession of tangible personal property
22 and shall include, but not be limited to transportation, storage
23 or consumption.
24 (2) The obtaining by a purchaser of the service of printing
25 or imprinting of tangible personal property when such purchaser
26 furnishes, either directly or indirectly, the articles used in
27 the printing or imprinting.
28 (3) The obtaining by a purchaser of the services of (i)
29 washing, cleaning, waxing, polishing or lubricating of motor
30 vehicles whether or not any tangible personal property is
20060H2929B4777 - 46 -
1 transferred to the purchaser in conjunction with such services,
2 and (ii) inspecting motor vehicles pursuant to the mandatory
3 requirements of "The Vehicle Code."
4 (4) The obtaining by a purchaser of the service of
5 repairing, altering, mending, pressing, fitting, dyeing,
6 laundering, drycleaning or cleaning tangible personal property
7 including, but not limited to, wearing apparel or shoes or
8 applying or installing tangible personal property as a repair or
9 replacement part of other tangible personal property including,
10 but not limited to, wearing apparel or shoes, whether or not the
11 services are performed directly or by any means other than by
12 means of coin-operated self-service laundry equipment for
13 wearing apparel or household goods, and whether or not any
14 tangible personal property is transferred to the purchaser in
15 conjunction therewith. The term "use" shall not include--
16 (A) Any tangible personal property acquired and kept,
17 retained or over which power is exercised within this
18 Commonwealth on which the taxing of the storage, use or other
19 consumption thereof is expressly prohibited by the Constitution
20 of the United States or which is excluded from tax under other
21 provisions of this article.
22 (B) The use or consumption of tangible personal property,
23 including but not limited to machinery and equipment and parts
24 therefor, and supplies or the obtaining of the services
25 described in subclauses (2), (3) and (4) of this clause directly
26 in the operations of--
27 (i) The manufacture of tangible personal property.
28 (ii) Farming, dairying, agriculture, horticulture or
29 floriculture when engaged in as a business enterprise. The term
30 "farming" shall include the propagation and raising of ranch-
20060H2929B4777 - 47 -
1 raised furbearing animals and the propagation of game birds for
2 commercial purposes by holders of propagation permits issued
3 under 34 Pa.C.S. (relating to game) and the propagation and
4 raising of horses to be used exclusively for commercial racing
5 activities.
6 (iii) The producing, delivering or rendering of a public
7 utility service, or in constructing, reconstructing, remodeling,
8 repairing or maintaining the facilities which are directly used
9 in producing, delivering or rendering such service.
10 (iv) Processing as defined in subclause (d) of this section.
11 The exclusions provided in subparagraphs (i), (ii), (iii) and
12 (iv) shall not apply to any vehicle required to be registered
13 under The Vehicle Code except those vehicles directly used by a
14 public utility engaged in the business as a common carrier; to
15 maintenance facilities; or to materials, supplies or equipment
16 to be used or consumed in the construction, reconstruction,
17 remodeling, repair or maintenance of real estate other than
18 directly used machinery, equipment, parts or foundations
19 therefor that may be affixed to such real estate. The exclusions
20 provided in subparagraphs (i), (ii), (iii) and (iv) shall not
21 apply to tangible personal property or services to be used or
22 consumed in managerial sales or other nonoperational activities,
23 nor to the purchase or use of tangible personal property or
24 services by any person other than the person directly using the
25 same in the operations described in subparagraphs (i), (ii),
26 (iii) and (iv).
27 The exclusion provided in subparagraph (iii) shall not apply
28 to (A) construction materials, supplies or equipment used to
29 construct, reconstruct, remodel, repair or maintain facilities
30 not used directly by the purchaser in the production, delivering
20060H2929B4777 - 48 -
1 or rendition of public utility service or (B) tools and
2 equipment used but not installed in the maintenance of
3 facilities used directly in the production, delivering or
4 rendition of a public utility service.
5 The exclusion provided in subparagraphs (i), (ii), (iii) and
6 (iv) shall not apply to the services enumerated in clauses
7 (o)(9) through (16) and (w) through (kk), except that the
8 exclusion provided in subparagraph (ii) for farming, dairying
9 and agriculture shall apply to the service enumerated in clause
10 (z).
11 (5) Where tangible personal property or services are
12 utilized for purposes constituting a "use," as herein defined,
13 and for purposes excluded from the definition of "use," it shall
14 be presumed that such property or services are utilized for
15 purposes constituting a "sale at retail" and subject to tax
16 unless the user thereof proves to the department that the
17 predominant purposes for which such property or services are
18 utilized do not constitute a "sale at retail."
19 (6) The term "use" with respect to "liquor" and "malt or
20 brewed beverages" shall include the purchase of "liquor" from
21 any "Pennsylvania liquor store" by any person for any purpose
22 and the purchase of "malt or brewed beverages" from a
23 "manufacturer of malt or brewed beverages," "distributor" or
24 "importing distributor" by any person for any purpose, except
25 purchases from a "manufacturer of malt or brewed beverages" by a
26 "distributor" or "importing distributor," or purchases from an
27 "importing distributor" by a "distributor" within the meaning of
28 the "Liquor Code." The term "use" shall not include any purchase
29 of "malt or brewed beverages" from a "retail dispenser" or any
30 purchase of "liquor" or "malt or brewed beverages" from a person
20060H2929B4777 - 49 -
1 holding a "retail liquor license" within the meaning of and
2 pursuant to the provisions of the "Liquor Code," but shall
3 include the exercise of any right or power incidental to the
4 ownership, custody or possession of "liquor" or "malt or brewed
5 beverages" obtained by the person exercising such right or power
6 in any manner other than pursuant to the provisions of the
7 "Liquor Code."
8 (7) The use of tangible personal property purchased at
9 retail upon which the services described in subclauses (2), (3)
10 and (4) of this clause have been performed shall be deemed to be
11 a use of said services by the person using said property.
12 (8) (Reserved).
13 (9) The obtaining by the purchaser of lobbying services.
14 (10) The obtaining by the purchaser of adjustment services,
15 collection services or credit reporting services.
16 (11) The obtaining by the purchaser of secretarial or
17 editing services.
18 (12) The obtaining by the purchaser of disinfecting or pest
19 control services, building maintenance or cleaning services.
20 (13) The obtaining by the purchaser of employment agency
21 services or help supply services.
22 (14) (Reserved).
23 (15) The obtaining by the purchaser of lawn care service.
24 (16) The obtaining by the purchaser of self-storage service.
25 (17) The obtaining by a construction contractor of tangible
26 personal property or services provided to tangible personal
27 property which will be used pursuant to a construction contract
28 whether or not the tangible personal property or services are
29 transferred.
30 (18) The obtaining of mobile telecommunications service by a
20060H2929B4777 - 50 -
1 customer.
2 (19) (i) The obtaining by the purchaser of any service, not
3 otherwise set forth in this definition, other than physician or
4 dental services, when the primary objective of the purchaser is
5 the receipt of any benefit of the service performed, as
6 distinguished from the receipt of property. In determining what
7 is a service, the intended use or stated objective of the
8 contracting parties shall not necessarily be controlling.
9 (ii) Any service performed in Pennsylvania shall be subject
10 to the tax imposed under this article unless specifically
11 exempted in this article. With respect to services, other than
12 telecommunication services, such services shall be considered to
13 be performed in Pennsylvania if:
14 (A) performed completely in Pennsylvania;
15 (B) performed partially in Pennsylvania and partially
16 outside of Pennsylvania when the recipient or user of the
17 service is located in Pennsylvania;
18 (C) performed partially in Pennsylvania and partially
19 outside of Pennsylvania if the recipient or user of the service
20 is not located in Pennsylvania, but only to the extent of those
21 services actually performed in Pennsylvania; or
22 (D) the place of performance cannot be determined if the
23 recipient or user of the service is located in Pennsylvania.
24 (iii) With respect to services, other than telecommunication
25 services, such services performed partially in Pennsylvania and
26 partially outside of Pennsylvania shall be presumed to have been
27 performed completely in Pennsylvania unless the taxpayer can
28 show the place of performance by clear and convincing evidence.
29 (iv) With respect to interstate telecommunications services,
30 only those charges for interstate telecommunications which
20060H2929B4777 - 51 -
1 originate or are terminated in this Commonwealth and which are
2 billed and charged to a service address in Pennsylvania shall be
3 subject to tax.
4 (v) With respect to services, other than telecommunication
5 services, that are performed in this Commonwealth for a
6 recipient or user of the services located in another state in
7 which the services, had they been performed in that state, would
8 not be subject to a sales or use tax under the laws of that
9 state, then no tax may be imposed under this article.
10 (p) "Vendor." Any person maintaining a place of business in
11 this Commonwealth, selling or leasing tangible personal
12 property, or rendering services, the sale or use of which is
13 subject to the tax imposed by this article but not including any
14 employe who in the ordinary scope of employment renders services
15 to his employer in exchange for wages and salaries.
16 (q) "Department." The Department of Revenue of the
17 Commonwealth of Pennsylvania.
18 (r) "Gratuity." Any amount paid or remitted for services
19 performed in conjunction with any sale of food or beverages, or
20 hotel or motel accommodations which amount is in excess of the
21 charges and the tax thereon for such food, beverages or
22 accommodations regardless of the method of billing or payment.
23 (s) "Commercial aircraft operator." A person, excluding
24 scheduled airlines, who engages in any or all of the following:
25 charter of aircraft, leasing of aircraft, aircraft sales,
26 aircraft rental, flight instruction, air freight or any other
27 flight activities for compensation.
28 (t) "Transient vendor."
29 (1) Any person who--
30 (i) Brings into the Commonwealth, by automobile, truck or
20060H2929B4777 - 52 -
1 other means of transportation, or purchases in the Commonwealth
2 tangible personal property the sale or use of which is subject
3 to the tax imposed by this article or comes into the
4 Commonwealth to perform services the sale or use of which is
5 subject to the tax imposed by this article;
6 (ii) Offers or intends to offer such tangible personal
7 property or services for sale at retail within the Commonwealth;
8 and
9 (iii) Does not maintain an established office, distribution
10 house, saleshouse, warehouse, service enterprise, residence from
11 which business is conducted or other place of business within
12 the Commonwealth.
13 (2) The term shall not include a person who delivers
14 tangible personal property within the Commonwealth pursuant to
15 orders for such property which were solicited or placed by mail
16 or other means.
17 (3) The term shall not include a person who handcrafts items
18 for sale at special events, including, but not limited to,
19 fairs, carnivals, art and craft shows and other festivals and
20 celebrations within this Commonwealth.
21 (u) "Promoter." A person who either, directly or
22 indirectly, rents, leases or otherwise operates or grants
23 permission to any person to use space at a show for the display
24 for sale or for the sale of tangible personal property or
25 services subject to tax under section 602-C of this article.
26 (v) "Show." An event, the primary purpose of which involves
27 the display or exhibition of any tangible personal property or
28 services for sale, including, but not limited to, a flea market,
29 antique show, coin show, stamp show, comic book show, hobby
30 show, automobile show, fair or any similar show, whether held
20060H2929B4777 - 53 -
1 regularly or of a temporary nature, at which more than one
2 vendor displays for sale or sells tangible personal property or
3 services subject to tax under section 602-C of this article.
4 (w) "Lobbying services." Providing the services of a
5 lobbyist, as defined in the definition of "lobbyist" in section
6 2 of the act of September 30, 1961 (P.L.1778, No.712), known as
7 the "Lobbying Registration and Regulation Act."
8 (x) "Adjustment services, collection services or credit
9 reporting services." Providing collection or adjustments of
10 accounts receivable or mercantile or consumer credit reporting,
11 including, but not limited to, services of the type provided by
12 adjustment bureaus or collection agencies, consumer or
13 mercantile credit reporting bureaus, credit bureaus or agencies,
14 credit clearinghouses or credit investigation services. Such
15 services do not include providing credit card service with
16 collection by a central agency, providing debt counseling or
17 adjustment services to individuals or billing or collection
18 services provided by local exchange telephone companies.
19 (y) "Secretarial or editing services." Providing services
20 which include, but are not limited to, editing, letter writing,
21 proofreading, resume writing, typing or word processing. Such
22 services shall not include court reporting and stenographic
23 services.
24 (z) "Disinfecting or pest control services." Providing
25 disinfecting, termite control, insect control, rodent control or
26 other pest control services. Such services include, but are not
27 limited to, deodorant servicing of rest rooms, washroom
28 sanitation service, rest room cleaning service, extermination
29 service or fumigating service. As used in this clause, the term
30 "fumigating service" shall not include the fumigation of
20060H2929B4777 - 54 -
1 agricultural commodities or containers used for agricultural
2 commodities. As used in this clause, the term "insect control"
3 shall not include the spraying of trees which are harvested for
4 commercial purposes for gypsy moth control.
5 (aa) "Building maintenance or cleaning services." Providing
6 services which include, but are not limited to, janitorial, maid
7 or housekeeping service, office or interior building cleaning or
8 maintenance service, window cleaning service, floor waxing
9 service, lighting maintenance service such as bulb replacement,
10 cleaning, chimney cleaning service, acoustical tile cleaning
11 service, venetian blind cleaning, cleaning and maintenance of
12 telephone booths or cleaning and degreasing of service stations.
13 This term shall not include repairs on buildings and other
14 structures; nor shall this term include the maintenance or
15 repair of boilers, furnaces and residential air conditioning
16 equipment or parts thereof; the painting, wallpapering or
17 applying other like coverings to interior walls, ceilings or
18 floors; or the exterior painting of buildings.
19 (bb) "Employment agency services." Providing employment
20 services to a prospective employer or employe other than
21 employment services provided by theatrical employment agencies
22 and motion picture casting bureaus. Such services shall include,
23 but are not limited to, services of the type provided by
24 employment agencies, executive placing services and labor
25 contractor employment agencies other than farm labor.
26 (cc) "Help supply services." Providing temporary or
27 continuing help where the help supplied is on the payroll of the
28 supplying person or entity, but is under the supervision of the
29 individual or business to which help is furnished. Such services
30 include, but are not limited to, service of a type provided by
20060H2929B4777 - 55 -
1 labor and manpower pools, employe leasing services, office help
2 supply services, temporary help services, usher services,
3 modeling services or fashion show model supply services. Such
4 services shall not include providing farm labor services. The
5 term shall not include human health-related services, including
6 nursing, home health care and personal care. As used in this
7 clause, "personal care" shall include providing at least one of
8 the following types of assistance to persons with limited
9 ability for self-care:
10 (1) dressing, bathing or feeding;
11 (2) supervising self-administered medication;
12 (3) transferring a person to or from a bed or wheelchair; or
13 (4) routine housekeeping chores when provided in conjunction
14 with and supplied by the same provider of the assistance listed
15 in subclause (1), (2) or (3).
16 (dd) "Computer programming services." (Reserved).
17 (ee) "Computer integrated systems design." (Reserved).
18 (ff) "Computer-processing, data preparation or processing
19 services." (Reserved).
20 (gg) "Information retrieval services." (Reserved).
21 (hh) "Computer facilities management services." (Reserved).
22 (ii) "Other computer-related services." (Reserved).
23 (jj) "Lawn care service." Providing services for lawn
24 upkeep, including, but not limited to, fertilizing, lawn mowing,
25 shrubbery trimming or other lawn treatment services.
26 (kk) "Self-storage service." Providing a building, a room
27 in a building or a secured area within a building with separate
28 access provided for each purchaser of self-storage service,
29 primarily for the purpose of storing personal property. The term
30 excludes providing:
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1 (1) safe deposit boxes by financial institutions;
2 (2) storage in refrigerator or freezer units;
3 (3) storage in commercial warehouses;
4 (4) facilities for goods distribution; and
5 (5) lockers in airports, bus stations, museums and other
6 public places.
7 (ll) "Premium cable or premium video programming service."
8 That portion of cable television services, video programming
9 services, community antenna television services or any other
10 distribution of television, video, audio or radio services which
11 meets all of the following criteria:
12 (1) is transmitted with or without the use of wires to
13 purchasers;
14 (2) which consists substantially of programming
15 uninterrupted by paid commercial advertising which includes, but
16 is not limited to, programming primarily composed of
17 uninterrupted full-length motion pictures or sporting events,
18 pay-per-view, paid programming or like audio or radio
19 broadcasting; and
20 (3) does not constitute a component of a basic service tier
21 provided by a cable television system or a cable programming
22 service tier provided by a cable television system. A basic
23 service tier shall include all signals of domestic television
24 broadcast stations, any public, educational, governmental or
25 religious programming and any additional video programming
26 signals or service added to the basic service tier by the cable
27 operator. The basic service tier shall also include a single
28 additional lower-priced package of broadcast channels and access
29 information channels which is a subset of the basic service tier
30 as set forth above. A cable programming service tier includes
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1 any video programming other than: (i) the basic service tier;
2 (ii) video programming offered on a pay-per-channel or pay-per-
3 view basis; or (iii) a combination of multiple channels of pay-
4 per-channel or pay-per-view programming offered as a package.
5 If a purchaser receives or agrees to receive premium cable or
6 premium video programming service, then the following charges
7 are included in the purchase price: charges for installation or
8 repair of any premium cable or premium video programming
9 service, upgrade to include additional premium cable or premium
10 video programming service, downgrade to exclude all or some
11 premium cable or premium video programming service, additional
12 premium cable outlets in excess of ten or any other charge or
13 fee related to premium cable or premium video programming
14 services. The term shall not apply to transmissions by public
15 television, public radio services or official Federal, State or
16 local government cable services. Nor shall the term apply to
17 local origination programming which provides a variety of public
18 service programs unique to the community, programming which
19 provides coverage of public affairs issues which are presented
20 without commentary or analysis, including United States
21 Congressional proceedings, or programming which is substantially
22 related to religious subjects. Nor shall the term "premium cable
23 or premium video programming service" apply to subscriber
24 charges for access to a video dial tone system or charges by a
25 common carrier to a video programmer for the transport of video
26 programming.
27 (mm) "Minimum pay television." (Reserved).
28 (nn) "Construction contract." A written or oral contract or
29 agreement for the construction, reconstruction, remodeling,
30 renovation or repair of real estate or a real estate structure.
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1 The term shall not apply to services which are taxable under
2 clauses (k)(14) and (17) and (o)(12) and (15).
3 (oo) "Construction contractor." A person who performs an
4 activity pursuant to a construction contract, including a
5 subcontractor.
6 (pp) "Building machinery and equipment." Generation
7 equipment, storage equipment, conditioning equipment,
8 distribution equipment and termination equipment, which shall be
9 limited to the following:
10 (1) air conditioning limited to heating, cooling,
11 purification, humidification, dehumidification and ventilation;
12 (2) electrical;
13 (3) plumbing;
14 (4) communications limited to voice, video, data, sound,
15 master clock and noise abatement;
16 (5) alarms limited to fire, security and detection;
17 (6) control system limited to energy management, traffic and
18 parking lot and building access;
19 (7) medical system limited to diagnosis and treatment
20 equipment, medical gas, nurse call and doctor paging;
21 (8) laboratory system;
22 (9) cathodic protection system; or
23 (10) furniture, cabinetry and kitchen equipment.
24 The term shall include boilers, chillers, air cleaners,
25 humidifiers, fans, switchgear, pumps, telephones, speakers,
26 horns, motion detectors, dampers, actuators, grills, registers,
27 traffic signals, sensors, card access devices, guardrails,
28 medial devices, floor troughs and grates and laundry equipment,
29 together with integral coverings and enclosures, whether or not
30 the item constitutes a fixture or is otherwise affixed to the
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1 real estate, whether or not damage would be done to the item or
2 its surroundings upon removal or whether or not the item is
3 physically located within a real estate structure. The term
4 "building machinery and equipment" shall not include guardrail
5 posts, pipes, fittings, pipe supports and hangers, valves,
6 underground tanks, wire, conduit, receptacle and junction boxes,
7 insulation, ductwork and coverings thereof.
8 (qq) "Real estate structure." A structure or item purchased
9 by a construction contractor pursuant to a construction contract
10 with:
11 (1) a charitable organization, a volunteer firemen's
12 organization, a nonprofit educational institution or a religious
13 organization for religious purposes and which qualifies as an
14 institution of purely public charity under the act of November
15 26, 1997 (P.L.508, No.55), known as the "Institutions of Purely
16 Public Charity Act";
17 (2) the United States; or
18 (3) the Commonwealth, its instrumentalities or political
19 subdivisions.
20 The term includes building machinery and equipment; developed
21 or undeveloped land; streets; roads; highways; parking lots;
22 stadiums and stadium seating; recreational courts; sidewalks;
23 foundations; structural supports; walls; floors; ceilings;
24 roofs; doors; canopies; millwork; elevators; windows and
25 external window coverings; outdoor advertising boards or signs;
26 airport runways; bridges; dams; dikes; traffic control devices,
27 including traffic signs; satellite dishes; antennas; guardrail
28 posts; pipes; fittings; pipe supports and hangers; valves;
29 underground tanks; wire; conduit; receptacle and junction boxes;
30 insulation; ductwork and coverings thereof; and any structure or
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1 item similar to any of the foregoing, whether or not the
2 structure or item constitutes a fixture or is affixed to the
3 real estate, or whether or not damage would be done to the
4 structure or item or its surroundings upon removal.
5 (rr) "Telecommunications service." Any one-way transmission
6 or any two-way, interactive transmission of sounds, signals or
7 other intelligence converted to like form which effects or is
8 intended to effect meaningful communications by electronic or
9 electromagnetic means via wire, cable, satellite, light waves,
10 microwaves, radio waves or other transmission media. The term
11 includes all types of telecommunication transmissions, such as
12 local, toll, wide-area or any other type of telephone service;
13 private line service; telegraph service; radio repeater service;
14 wireless communication service; personal communications system
15 service; cellular telecommunication service; specialized mobile
16 radio service; stationary two-way radio service; and paging
17 service. The term does not include any of the following:
18 (1) Subscriber charges for access to a video dial tone
19 system.
20 (2) Charges to video programmers for the transport of video
21 programming.
22 (3) Charges for access to the Internet. Access to the
23 Internet does not include any of the following:
24 (A) The transport over the Internet or any proprietary
25 network using the Internet protocol of telephone calls,
26 facsimile transmissions or other telecommunications traffic to
27 or from end users on the public switched telephone network if
28 the signal sent from or received by an end user is not in an
29 Internet protocol.
30 (B) Telecommunication services purchased by an Internet
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1 service provider to deliver access to the Internet to its
2 customers.
3 (4) Mobile telecommunications services.
4 (ss) "Internet." The international nonproprietary computer
5 network of both Federal and non-Federal interoperable packet
6 switched data networks.
7 (tt) "Commercial racing activities." Any of the following:
8 (1) Thoroughbred and harness racing at which pari-mutuel
9 wagering is conducted under the act of December 17, 1981
10 (P.L.435, No.135), known as the "Race Horse Industry Reform
11 Act."
12 (2) Fair racing sanctioned by the State Harness Racing
13 Commission.
14 (uu) "Prepaid telecommunications." A tangible item
15 containing a prepaid authorization number that can be used
16 solely to obtain telecommunications service, including any
17 renewal or increases in the prepaid amount.
18 (vv) "Prebuilt housing." Either of the following:
19 (1) Manufactured housing, including mobile homes, which
20 bears a label as required by and referred to in the act of
21 November 17, 1982 (P.L.676, No.192), known as the "Manufactured
22 Housing Construction and Safety Standards Authorization Act."
23 (2) Industrialized housing as defined in the act of May 11,
24 1972 (P.L.286, No.70), known as the "Industrialized Housing
25 Act."
26 (ww) "Used prebuilt housing." Prebuilt housing that was
27 previously subject to a sale to a prebuilt housing purchaser.
28 (xx) "Prebuilt housing builder." A person who makes a
29 prebuilt housing sale to a prebuilt housing purchaser.
30 (yy) "Prebuilt housing sale." A sale of prebuilt housing to
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1 a prebuilt housing purchaser, including a sale to a landlord,
2 without regard to whether the person making the sale is
3 responsible for installing the prebuilt housing or whether the
4 prebuilt housing becomes a real estate structure upon
5 installation. Temporary installation by a prebuilt housing
6 builder for display purposes of a unit held for resale shall not
7 be considered occupancy for residential purposes.
8 (zz) "Prebuilt housing purchaser." A person who purchases
9 prebuilt housing in a transaction and who intends to occupy the
10 unit for residential purposes in this Commonwealth.
11 (aaa) "Mobile telecommunications service." Mobile
12 telecommunications service as that term is defined in the Mobile
13 Telecommunications Sourcing Act (4 U.S.C. § 116).
14 (bbb) "Fiscal Code." The act of April 9, 1929 (P.L.343,
15 No.176), known as "The Fiscal Code."
16 (ccc) "Prepaid mobile telecommunications service." Mobile
17 telecommunications service which is paid for in advance and
18 which enables the origination of calls using an access number,
19 authorization code or both, whether manually or electronically
20 dialed, if the remaining amount of units of the prepaid mobile
21 telecommunications service is known by the service provider of
22 the prepaid mobile telecommunications service on a continuous
23 basis. The term does not include the advance purchase of mobile
24 telecommunications service if the purchase is pursuant to a
25 service contract between the service provider and customer and
26 if the service contract requires the customer to make periodic
27 payments to maintain the mobile telecommunications service.
28 (ddd) "Call center." The physical location in this
29 Commonwealth:
30 (1) where at least one hundred and fifty employes are
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1 employed to initiate or answer telephone calls;
2 (2) where there are at least two hundred telephone lines;
3 and
4 (3) which utilizes an automated call distribution system for
5 customer telephone calls in one or more of the following
6 activities:
7 (A) customer service and support;
8 (B) technical assistance;
9 (C) help desk service;
10 (D) providing information;
11 (E) conducting surveys;
12 (F) revenue collections; or
13 (G) receiving orders or reservations.
14 For purposes of this clause, a physical location may include
15 multiple buildings utilized by a taxpayer located within this
16 Commonwealth. transactions for which purchase agreements are
17 executed after June 30, 2000.
18 (eee) "Dental services." The general and usual services
19 rendered and care administered by doctors of dental medicine or
20 doctors of dental surgery, as defined in the act of May 1, 1933
21 (P.L.216, No.76), known as "The Dental Law."
22 (fff) "Physician services." The general and usual services
23 rendered and care administered by medical doctors, as defined in
24 the act of December 20, 1985 (P.L.457, No.112), known as the
25 "Medical Practice Act of 1985," or doctors of osteopathy, as
26 defined in the act of October 5, 1978 (P.L.1109, No.261), known
27 as the "Osteopathic Medical Practice Act."
28 PART II
29 IMPOSITION OF TAX
30 Section 602-C. Imposition of Tax.--(a) There is hereby
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1 imposed upon each separate sale at retail of tangible personal
2 property or services, as defined herein, within this
3 Commonwealth a tax of five per cent of the purchase price, which
4 tax shall be collected by the vendor from the purchaser, and
5 shall be paid over to the Commonwealth as herein provided.
6 (b) There is hereby imposed upon the use within this
7 Commonwealth of tangible personal property purchased at retail
8 and on those services described herein purchased at retail a tax
9 of five per cent of the purchase price, which tax shall be paid
10 to the Commonwealth by the person who makes such use as herein
11 provided, except that such tax shall not be paid to the
12 Commonwealth by such person where he has paid the tax imposed by
13 subsection (a) of this section or has paid the tax imposed by
14 this subsection (b) to the vendor with respect to such use.
15 (c) Notwithstanding any other provisions of this article,
16 the tax with respect to telecommunications service within the
17 meaning of clause (m) of section 601-C of this article shall be
18 computed at the rate of five per cent upon the total amount
19 charged to customers for such services, irrespective of whether
20 such charge is based upon a flat rate or upon a message unit
21 charge. A telecommunications service provider shall have no
22 responsibility or liability to the Commonwealth for billing,
23 collecting or remitting taxes that apply to services, products
24 or other commerce sold over telecommunications lines by third-
25 party vendors. To prevent actual multistate taxation of
26 interstate telecommunications service, any taxpayer, upon proof
27 that the taxpayer has paid a similar tax to another state on the
28 same interstate telecommunications service, shall be allowed a
29 credit against the tax imposed by this section on the same
30 interstate telecommunications service to the extent of the
20060H2929B4777 - 65 -
1 amount of such tax properly due and paid to such other state.
2 (d) Notwithstanding any other provisions of this article,
3 the sale or use of food and beverages dispensed by means of coin
4 operated vending machines shall be taxed at the rate of five per
5 cent of the receipts collected from any such machine which
6 dispenses food and beverages heretofore taxable.
7 (e) (1) Notwithstanding any provisions of this article, the
8 sale or use of prepaid telecommunications evidenced by the
9 transfer of tangible personal property shall be subject to the
10 tax imposed by subsections (a) and (b).
11 (2) The sale or use of prepaid telecommunications not
12 evidenced by the transfer of tangible personal property shall be
13 subject to the tax imposed by subsections (a) and (b) and shall
14 be deemed to occur at the purchaser's billing address.
15 (3) Notwithstanding clause (2), the sale or use of prepaid
16 telecommunications service not evidenced by the transfer of
17 tangible personal property shall be taxed at the rate of five
18 per cent of the receipts collected on each sale if the service
19 provider elects to collect the tax imposed by this article on
20 receipts of each sale. The service provider shall notify the
21 department of its election and shall collect the tax on receipts
22 of each sale until the service provider notifies the department
23 otherwise.
24 (e.1) (1) Notwithstanding any other provision of this
25 article, the sale or use of prepaid mobile telecommunications
26 service evidenced by the transfer of tangible personal property
27 shall be subject to the tax imposed by subsections (a) and (b).
28 (2) The sale or use of prepaid mobile telecommunications
29 service not evidenced by the transfer of tangible personal
30 property shall be subject to the tax imposed by subsections (a)
20060H2929B4777 - 66 -
1 and (b) and shall be deemed to occur at the purchaser's billing
2 address or the location associated with the mobile telephone
3 number or the point of sale, whichever is applicable.
4 (3) Notwithstanding clause (2), the sale or use of prepaid
5 mobile telecommunications service not evidenced by the transfer
6 of tangible personal property shall be taxed at the rate of five
7 per cent of the receipts collected on each sale if the service
8 provider elects to collect the tax imposed by this article on
9 receipts of each sale. The service provider shall notify the
10 department of its election and shall collect the tax on receipts
11 of each sale until the service provider notifies the department
12 otherwise.
13 (f) Notwithstanding any other provision of this article, tax
14 with respect to sales of prebuilt housing shall be imposed on
15 the prebuilt housing builder at the time of the prebuilt housing
16 sale within this Commonwealth and shall be paid and reported by
17 the prebuilt housing builder to the department in the time and
18 manner provided in this article: Provided, however, That a
19 manufacturer of prebuilt housing may, at its option, precollect
20 the tax from the prebuilt housing builder at the time of sale to
21 the prebuilt housing builder. In any case where prebuilt housing
22 is purchased and the tax is not paid by the prebuilt housing
23 builder or precollected by the manufacturer, the prebuilt
24 housing purchaser shall remit tax directly to the department if
25 the prebuilt housing is used in this Commonwealth without regard
26 to whether the prebuilt housing becomes a real estate structure.
27 (g) Notwithstanding any other provisions of this article and
28 in accordance with the Mobile Telecommunications Sourcing Act (4
29 U.S.C. § 116), the sale or use of mobile telecommunications
30 services which are deemed to be provided to a customer by a home
20060H2929B4777 - 67 -
1 service provider under section 117(a) and (b) of the Mobile
2 Telecommunications Sourcing Act shall be subject to the tax of
3 five per cent of the purchase price, which tax shall be
4 collected by the home service provider from the customer, and
5 shall be paid over to the Commonwealth as herein provided if the
6 customer's place of primary use is located within this
7 Commonwealth, regardless of where the mobile telecommunications
8 services originate, terminate or pass through. For purposes of
9 this subsection, words and phrases used in this subsection shall
10 have the same meanings given to them in the Mobile
11 Telecommunications Sourcing Act.
12 Section 603-C. Computation of Tax.--(a) Within sixty days of
13 the effective date of this section, the department shall prepare
14 and publish as a notice in the Pennsylvania Bulletin a table
15 setting forth the amount of tax imposed under section 602-C for
16 purchase prices that are less than one dollar ($1.00).
17 (b) The tax collected under section 602-C shall be deposited
18 into the Education Operating Fund.
19 PART III
20 EXCLUSIONS FROM TAX
21 Section 604-C. Exclusions from Tax.--The tax imposed by
22 section 602-C shall not be imposed upon any of the following:
23 (1) The sale at retail or use of tangible personal property
24 (other than motor vehicles, trailers, semi-trailers, motor
25 boats, aircraft or other similar tangible personal property
26 required under either Federal law or laws of this Commonwealth
27 to be registered or licensed) or services sold by or purchased
28 from a person not a vendor in an isolated transaction or sold by
29 or purchased from a person who is a vendor but is not a vendor
30 with respect to the tangible personal property or services sold
20060H2929B4777 - 68 -
1 or purchased in such transaction: Provided, That inventory and
2 stock in trade so sold or purchased, shall not be excluded from
3 the tax by the provisions of this subsection.
4 (2) The use of tangible personal property purchased by a
5 nonresident person outside of, and brought into this
6 Commonwealth for use therein for a period not to exceed seven
7 days, or for any period of time when such nonresident is a
8 tourist or vacationer and, in either case not consumed within
9 the Commonwealth.
10 (3) The use of tangible personal property purchased outside
11 this Commonwealth for use outside this Commonwealth by a then
12 nonresident natural person or a business entity not actually
13 doing business within this Commonwealth, who later brings such
14 tangible personal property into this Commonwealth in connection
15 with his establishment of a permanent business or residence in
16 this Commonwealth: Provided, That such property was purchased
17 more than six months prior to the date it was first brought into
18 this Commonwealth or prior to the establishment of such business
19 or residence, whichever first occurs. This exclusion shall not
20 apply to tangible personal property temporarily brought into
21 Pennsylvania for the performance of contracts for the
22 construction, reconstruction, remodeling, repairing and
23 maintenance of real estate.
24 (4) (Reserved).
25 (5) The sale at retail or use of steam, natural and
26 manufactured and bottled gas, fuel oil, electricity or
27 intrastate subscriber line charges, basic local telephone
28 service or telegraph service when purchased directly by the user
29 thereof solely for his own residential use and charges for
30 telephone calls paid for by inserting money into a telephone
20060H2929B4777 - 69 -
1 accepting direct deposits of money to operate.
2 (6) (Reserved).
3 (7) (Reserved).
4 (8) (Reserved).
5 (9) (Reserved).
6 (10) The sale at retail to or use by (i) any charitable
7 organization, volunteer firemen's organization or nonprofit
8 educational institution, or (ii) a religious organization for
9 religious purposes of tangible personal property or services
10 other than pursuant to a construction contract: Provided,
11 however, That the exclusion of this clause shall not apply with
12 respect to any tangible personal property or services used in
13 any unrelated trade or business carried on by such organization
14 or institution or with respect to any materials, supplies and
15 equipment used and transferred to such organization or
16 institution in the construction, reconstruction, remodeling,
17 renovation, repairs and maintenance of any real estate
18 structure, other than building machinery and equipment, except
19 materials and supplies when purchased by such organizations or
20 institutions for routine maintenance and repairs.
21 (11) The sale at retail, or use of gasoline and other motor
22 fuels, the sales of which are otherwise subject to excise taxes
23 under 75 Pa.C.S. Ch. 90 (relating to liquid fuels and fuels
24 tax).
25 (12) The sale at retail to, or use by the United States,
26 this Commonwealth or its instrumentalities or political
27 subdivisions, nonpublic schools, charter schools, cyber charter
28 schools or vocational schools of tangible personal property or
29 services. The clause includes the sale at retail to a supervisor
30 of a home education program of tangible personal property or
20060H2929B4777 - 70 -
1 services used exclusively for the home education program.
2 "Nonpublic school," "charter school," "cyber charter school,"
3 "vocational school," "supervisor" and "home education program"
4 shall have the meanings given to them in the act of March 10,
5 1949 (P.L.30, No.14), known as the "Public School Code of 1949."
6 (13) (Reserved).
7 (14) (Reserved).
8 (15) (Reserved).
9 (16) (Reserved).
10 (17) The sale at retail or use of prescription medicines,
11 drugs or medical supplies, crutches and wheelchairs for the use
12 of cripples and invalids, artificial limbs, artificial eyes and
13 artificial hearing devices when designed to be worn on the
14 person of the purchaser or user, false teeth and materials used
15 by a dentist in dental treatment, eyeglasses when especially
16 designed or prescribed by an ophthalmologist, oculist or
17 optometrist for the personal use of the owner or purchaser and
18 artificial braces and supports designed solely for the use of
19 crippled persons or any other therapeutic, prosthetic or
20 artificial device designed for the use of a particular
21 individual to correct or alleviate a physical incapacity,
22 including but not limited to hospital beds, iron lungs, and
23 kidney machines.
24 (18) The sale at retail or use of coal.
25 (19) (Reserved).
26 (20) (Reserved).
27 (21) (Reserved).
28 (22) (Reserved).
29 (23) (Reserved).
30 (24) (Reserved).
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1 (25) The sale at retail or use of water.
2 (26) (Reserved).
3 (27) (Reserved).
4 (28) (Reserved).
5 (29) The sale at retail or use of fresh meat, including, but
6 not limited to, meat from cattle, swine, poultry, fish and
7 shellfish, in addition to bread in loaf form, milk or a milk
8 substitute, cream or a cream substitute, cheese, eggs or egg
9 mixes, fresh vegetables, fresh fruit, fresh juices, peanut
10 butter, baby food or a federally approved item for the Women,
11 Infants and Children Program under section 17 of the Child
12 Nutrition Act of 1966 (Public Law 89-642, 42 U.S.C. § 1786).
13 (29.1) The sale at retail or use of food and beverages at or
14 from a school, whether public or private, or church in the
15 ordinary course of the activities of such organization is not
16 subject to tax.
17 (30) The sale at retail or use of any printed or other form
18 of advertising materials regardless of where or by whom such
19 advertising material was produced. This exclusion shall not
20 include the sale at retail or use of mail order catalogs and
21 direct mail advertising literature or materials, including
22 electoral literature or materials, such as envelopes, address
23 labels and a one-time license to use a list of names and mailing
24 addresses for each delivery of direct mail advertising
25 literature or materials, including electoral literature or
26 materials, through the United States Postal Service.
27 (31) (Reserved).
28 (32) (Reserved).
29 (33) (Reserved).
30 (34) (Reserved).
20060H2929B4777 - 72 -
1 (35) (Reserved).
2 (36) The sale at retail or use of rail transportation
3 equipment used in the movement of personalty.
4 (37) (Reserved).
5 (38) (Reserved).
6 (39) The sale at retail or use of fish feed purchased by or
7 on behalf of sportsmen's clubs, fish cooperatives or nurseries
8 approved by the Pennsylvania Fish Commission.
9 (40) (Reserved).
10 (41) (Reserved).
11 (42) The sale or use of brook trout (salvelinus fontinalis),
12 brown trout (Salmo trutta) or rainbow trout (Salmo gairdneri).
13 (43) (Reserved).
14 (44) The sale at retail or use of firewood.
15 (45) (Reserved).
16 (46) The sale at retail or use of tangible personal property
17 purchased in accordance with the Food Stamp Act of 1977, as
18 amended (Public Law 95-113, 7 U.S.C. §§ 2011-2029).
19 (47) (Reserved).
20 (48) (Reserved).
21 (49) The sale at retail or use of food and beverages by
22 nonprofit associations which support sports programs. For
23 purposes of this clause, the phrases:
24 (i) "nonprofit association" means an entity which is
25 organized as a nonprofit corporation or nonprofit unincorporated
26 association under the laws of this Commonwealth or the United
27 States or any entity which is authorized to do business in this
28 Commonwealth as a nonprofit corporation or unincorporated
29 association under the laws of this Commonwealth, including, but
30 not limited to, youth or athletic associations, volunteer fire,
20060H2929B4777 - 73 -
1 ambulance, religious, charitable, fraternal, veterans, civic, or
2 any separately chartered auxiliary of the foregoing, if
3 organized and operated on a nonprofit basis;
4 (ii) (reserved);
5 (iii) (reserved);
6 (iv) "sports program" means baseball (including softball),
7 football, basketball, soccer and any other competitive sport
8 formally recognized as a sport by the United States Olympic
9 Committee as specified by and under the jurisdiction of the
10 Amateur Sports Act of 1978 (Public Law 95-606, 36 U.S.C. § 371
11 et seq.), the Amateur Athletic Union or the National Collegiate
12 Athletic Association. The term shall be limited to a program or
13 that portion of a program that is organized for recreational
14 purposes and whose activities are substantially for such
15 purposes and which is primarily for participants who are 18
16 years of age or younger or whose 19th birthday occurs during the
17 year of participation or the competitive season, whichever is
18 longer. There shall, however, be no age limitation for programs
19 operated for persons with physical handicaps or persons with
20 mental retardation;
21 (v) "support" means the funds raised from sales are used to
22 pay the expenses of a sports program or the nonprofit
23 association sells the food and beverages at a location where a
24 sports program is being conducted under this article or act of
25 March 4, 1971 (P.L.6, No.2), known as the "Tax Reform Code of
26 1971."
27 (50) (Reserved).
28 (51) (Reserved).
29 (52) (Reserved).
30 (53) (Reserved).
20060H2929B4777 - 74 -
1 (54) (Reserved).
2 (55) (Reserved).
3 (56) The sale at retail or use of tangible personal property
4 or services used, transferred or consumed in installing or
5 repairing equipment or devices designed to assist persons in
6 ascending or descending a stairway when:
7 (i) The equipment or devices are used by a person who, by
8 virtue of a physical disability, is unable to ascend or descend
9 stairs without the aid of such equipment or device.
10 (ii) The equipment or device is installed or used in such
11 person's place of residence.
12 (iii) A physician has certified the physical disability of
13 the person in whose residence the equipment or device is
14 installed or used.
15 (57) (Reserved).
16 (58) (Reserved).
17 (59) The sale at retail or use of molds and related mold
18 equipment used directly and predominantly in the manufacture of
19 products, regardless of whether the person that holds title to
20 the equipment manufactures a product.
21 (60) (Reserved).
22 (61) (Reserved).
23 (62) The sale at retail or use of tangible personal property
24 or services which are directly used in farming, dairying or
25 agriculture when engaged in as a business enterprise whether or
26 not the sale is made to the person directly engaged in the
27 business enterprise or to a person contracting with the person
28 directly engaged in the business enterprise for the production
29 of food.
30 (63) (Reserved).
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1 (64) The sale at retail to or use by a construction
2 contractor, employed by a public school district pursuant to a
3 construction contract, of any materials and building supplies
4 which, during construction or reconstruction, are made part of
5 any public school building utilized for instructional classroom
6 education within this Commonwealth, if the construction or
7 reconstruction:
8 (i) is necessitated by a disaster emergency, as defined in
9 35 Pa.C.S. § 7102 (relating to definitions); and
10 (ii) takes place during the period when there is a
11 declaration of disaster emergency under 35 Pa.C.S. § 7301(c)
12 (relating to general authority of Governor).
13 (65) The sale at retail of medical goods or services by a
14 hospital, as defined in the act of December 20, 1985 (P.L.457,
15 No.112), known as the "Medical Practice Act of 1985."
16 (66) The sale at retail of medical or dental services,
17 including charges for office visits.
18 (67) The sale at retail or use of goods or services that are
19 part of a Medicare Part B transaction.
20 (68) The sale at retail or use of transportation of persons
21 provided or funded by the Federal, State or local government.
22 (69) The sale at retail of insurance premiums.
23 (70) The sale at retail, between an owner of real property
24 and a financial institution, of a mortgage.
25 (71) An investment or gain on an investment, including, but
26 not limited to, bank deposits, stocks and bonds.
27 (72) Rental of real property.
28 (73) The sale at retail of tuition.
29 (74) The sale at retail to or use by a business of any of
30 the following:
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1 (i) Legal services.
2 (ii) Accounting, auditing and bookkeeping services.
3 (iii) Engineering services.
4 (iv) Research.
5 (v) Computer services and data processing.
6 Section 605-C. Alternate Imposition of Tax; Credits.--(a)
7 If any person actively and principally engaged in the business
8 of selling new or used motor vehicles, trailers or semi-
9 trailers, and registered with the department in the "dealer's
10 class," acquires a motor vehicle, trailer or semi-trailer for
11 the purpose of resale, and prior to such resale, uses the motor
12 vehicle, trailer or semi-trailer for a taxable use under this
13 article or the act of March 4, 1971 (P.L.6, No.2), known as the
14 "Tax Reform Code of 1971," such person may pay a tax equal to
15 five per cent of the fair rental value of the motor vehicle,
16 trailer or semi-trailer during such use. This section shall not
17 apply to the use of a vehicle as a wrecker, parts truck,
18 delivery truck or courtesy car.
19 (b) A commercial aircraft operator who acquires an aircraft
20 for the purpose of resale, or lease, or is entitled to claim
21 another valid exemption at the time of purchase, and subsequent
22 to such purchase, periodically uses the same aircraft for a
23 taxable use under this article or the Tax Reform Code of 1971,
24 may elect to pay a tax equal to five per cent of the fair rental
25 value of the aircraft during such use.
26 Section 606-C. Credit Against Tax.--(a) A credit against
27 the tax imposed by section 602-C shall be granted with respect
28 to tangible personal property or services purchased for use
29 outside the Commonwealth equal to the tax paid to another state
30 by reason of the imposition by such other state of a tax similar
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1 to the tax imposed by this article: Provided, however, That no
2 such credit shall be granted unless such other state grants
3 substantially similar tax relief by reason of the payment of tax
4 under this article or under the "Tax Act of 1963 for Education."
5 (b) A credit against the tax imposed by section 602-C on
6 telecommunications services shall be granted to a call center
7 for gross receipts tax paid by a telephone company on the
8 receipts derived from the sale of incoming and outgoing
9 interstate telecommunications services to the call center under
10 section 1101(a)(2). The following apply:
11 (1) A telephone company, upon request, shall notify a call
12 center of the amount of gross receipts tax paid by the telephone
13 company on the receipts derived from the sale of incoming and
14 outgoing interstate telecommunications services to the call
15 center.
16 (2) A call center that is eligible for the credit in this
17 subsection may apply for a tax credit as set forth in this
18 subsection.
19 (3) By February 15, a taxpayer must submit an application to
20 the department for gross receipts tax paid on the receipts
21 derived from the sale of incoming and outgoing interstate
22 telecommunications services incurred in the prior calendar year.
23 (4) By April 15 of the calendar year following the close of
24 the calendar year during which the gross receipts tax was
25 incurred, the department shall notify the applicant of the
26 amount of the applicant's tax credit approved by the department.
27 (5) The total amount of tax credits provided for in this
28 subsection and approved by the department shall not exceed
29 thirty million dollars ($30,000,000) in any fiscal year. If the
30 total amount of tax credits applied for by all applicants
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1 exceeds the amount allocated for those credits, then the credit
2 to be received by each applicant shall be determined as follows:
3 (i) Divide:
4 (A) the tax credit applied for by the applicant; by
5 (B) the total of all tax credits applied for by all
6 applicants.
7 (ii) Multiply:
8 (A) the quotient under subparagraph (i); by
9 (B) the amount allocated for all tax credits.
10 PART IV
11 LICENSES
12 Section 608-C. Licenses.--(a) Every person maintaining a
13 place of business in this Commonwealth, selling or leasing
14 services or tangible personal property, the sale or use of which
15 is subject to tax and who has not hitherto obtained a license
16 from the department, shall, prior to the beginning of business
17 thereafter, make application to the department, on a form
18 prescribed by the department, for a license. If such person
19 maintains more than one place of business in this Commonwealth,
20 the license shall be issued for the principal place of business
21 in this Commonwealth.
22 (b) The department shall, after the receipt of an
23 application, issue the license applied for under subsection (a)
24 of this section, provided said applicant shall have filed all
25 required State tax reports and paid any State taxes not subject
26 to a timely perfected administrative or judicial appeal or
27 subject to a duly authorized deferred payment plan. Such license
28 shall be nonassignable. All licensees as of March 4, 1971, shall
29 be required to file for renewal of said license on or before
30 January 31, 1992. Licenses issued through April 30, 1992, shall
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1 be based on a staggered renewal system established by the
2 department. Thereafter, any license issued shall be valid for a
3 period of five years.
4 (b.1) If an applicant for a license or any person holding a
5 license has not filed all required State tax reports and paid
6 any State taxes not subject to a timely perfected administrative
7 or judicial appeal or subject to a duly authorized deferred
8 payment plan, the department may refuse to issue, may suspend or
9 may revoke said license. The department shall notify the
10 applicant or licensee of any refusal, suspension or revocation.
11 Such notice shall contain a statement that the refusal,
12 suspension or revocation may be made public. Such notice shall
13 be made by first class mail. An applicant or licensee aggrieved
14 by the determination of the department may file an appeal
15 pursuant to the provisions for administrative appeals in this
16 article. In the case of a suspension or revocation which is
17 appealed, the license shall remain valid pending a final outcome
18 of the appeals process. Notwithstanding section 674-C of this
19 article or sections 353(f), 408(b), 603, 702, 802, 904 and 1102
20 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
21 Reform Code of 1971, or any other provision of law to the
22 contrary, if no appeal is taken or if an appeal is taken and
23 denied at the conclusion of the appeal process, the department
24 may disclose, by publication or otherwise, the identity of a
25 person and the fact that the person's license has been refused,
26 suspended or revoked under this subsection. Disclosure may
27 include the basis for refusal, suspension or revocation.
28 (c) A person that maintains a place of business in this
29 Commonwealth for the purpose of selling or leasing services or
30 tangible personal property, the sale or use of which is subject
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1 to tax, without having first been licensed by the department
2 shall be guilty of a summary offense and, upon conviction
3 thereof, be sentenced to pay a fine of not less than three
4 hundred dollars ($300) nor more than one thousand five hundred
5 ($1,500) and, in default thereof, to undergo imprisonment of not
6 less than five days nor more than thirty days. The penalties
7 imposed by this subsection shall be in addition to any other
8 penalties imposed by this article. For purposes of this
9 subsection, the offering for sale or lease of any service or
10 tangible personal property, the sale or use of which is subject
11 to tax, during any calendar day shall constitute a separate
12 violation. The Secretary of Revenue may designate employes of
13 the department to enforce the provisions of this subsection. The
14 employes shall exhibit proof of and be within the scope of the
15 designation when instituting proceedings as provided by the
16 Pennsylvania Rules of Criminal Procedure.
17 (d) Failure of any person to obtain a license shall not
18 relieve that person of liability to pay the tax imposed by this
19 article.
20 PART V
21 HOTEL OCCUPANCY TAX
22 Section 609-C. Definitions.--(a) For the purposes of this
23 Part V only, the following words, terms and phrases shall have
24 the meaning ascribed to them in this subsection, except where
25 the context clearly indicates a different meaning:
26 (1) "Hotel." A building or buildings in which the public
27 may, for a consideration, obtain sleeping accommodations. The
28 term "hotel" shall not include any charitable, educational or
29 religious institution summer camp for children, hospital or
30 nursing home.
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1 (2) "Occupant." A person (other than a "permanent resident,"
2 as defined herein,) who, for a consideration, uses, possesses or
3 has a right to use or possess any room or rooms in a hotel under
4 any lease, concession, permit, right of access, license or
5 agreement.
6 (3) "Occupancy." The use or possession or the right to the
7 use or possession by any person (other than a "permanent
8 resident,") of any room or rooms in a hotel for any purpose or
9 the right to the use or possession of the furnishings or to the
10 services and accommodations accompanying the use and possession
11 of the room or rooms.
12 (4) "Operator." Any person operating a hotel.
13 (5) "Permanent resident." Any occupant who has occupied or
14 has the right to occupancy of any room or rooms in a hotel for
15 at least thirty consecutive days.
16 (6) "Rent." The consideration received for occupancy valued
17 in money, whether received in money or otherwise, including all
18 receipts, cash, credits and property or services of any kind or
19 nature, and also any amount for which the occupant is liable for
20 the occupancy without any deduction therefrom whatsoever. The
21 term "rent" shall not include a gratuity.
22 (b) The following words, terms and phrases and words, terms
23 and phrases of similar import, when used in Parts IV and VI for
24 the purposes of those parts only, shall, in addition to the
25 meaning ascribed to them by section 601-C of this article, have
26 the meaning ascribed to them in this subsection, except where
27 the context clearly indicates a different meaning:
28 (1) "Maintaining a place of business in this Commonwealth,"
29 being the operator of a hotel in this Commonwealth.
30 (2) "Purchase at retail," occupancy.
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1 (3) "Purchase price," rent.
2 (4) "Purchaser," occupant.
3 (5) "Sale at retail," the providing of occupancy to an
4 occupant by an operator.
5 (6) "Tangible personal property," occupancy.
6 (7) "Vendor," operator.
7 (8) "Services," occupancy.
8 (9) "Use," occupancy.
9 Section 610-C. Imposition of Tax.--There is hereby imposed
10 an excise tax of six per cent of the rent upon every occupancy
11 of a room or rooms in a hotel in this Commonwealth, which tax
12 shall be collected by the operator from the occupant and paid
13 over to the Commonwealth as herein provided.
14 Section 611-C. Seasonal Tax Returns.--Notwithstanding any
15 other provisions in this article or the act of March 4, 1971
16 (P.L.6, No.2), known as the "Tax Reform Code of 1971," the
17 department may, by regulation, waive the requirement for the
18 filing of quarterly returns in the case of any operator whose
19 hotel is operated only during certain seasons of the year, and
20 may provide for the filing of returns by such persons at times
21 other than those provided by section 621-C.
22 PART VI
23 PROCEDURE AND ADMINISTRATION
24 CHAPTER I
25 RETURNS
26 Section 615-C. Persons Required to Make Returns.--Every
27 person required to pay tax to the department or collect and
28 remit tax to the department shall file returns with respect to
29 such tax.
30 Section 616-C. Form of Returns.--The returns required by
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1 section 615-C shall be on forms prescribed by the department,
2 and shall show such information with respect to the taxes
3 imposed by this article as the department may reasonably
4 require.
5 CHAPTER II
6 TIME AND PLACE FOR FILING RETURNS
7 Section 617-C. Time for Filing Returns.-- (a) (1) For 1971
8 and in each year thereafter a return shall be filed quarterly
9 by every licensee on or before the twentieth day of April,
10 July, October and January for the three months ending the
11 last day of March, June, September and December.
12 (2) For 1971 and in each year thereafter, a return shall be
13 filed monthly with respect to each month by every licensee whose
14 total tax reported, or in the event no report is filed, the
15 total tax which should have been reported, for the third
16 calendar quarter of the preceding year equals or exceeds six
17 hundred dollars ($600). Such returns shall be filed on or before
18 the twentieth day of the next succeeding month with respect to
19 which the return is made. Any licensee required to file monthly
20 returns hereunder shall be relieved from filing quarterly
21 returns.
22 (b) For the calendar year 1971, and for each year
23 thereafter, no annual return shall be filed, except as may be
24 required by rules and regulations of the department promulgated
25 and published at least sixty days prior to the end of the year
26 with respect to which the returns are made. Where such annual
27 returns are required licensees shall not be required to file
28 such returns prior to the twentieth day of the year succeeding
29 the year with respect to which the returns are made.
30 (c) Any person, other than a licensee, liable to pay to the
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1 department any tax under this article, shall file a return on or
2 before the twentieth day of the month succeeding the month in
3 which such person becomes liable for the tax.
4 (d) The department, by regulation, may waive the requirement
5 for the filing of quarterly return in the case of any licensee
6 whose individual tax collections do not exceed seventy-five
7 dollars ($75) per calendar quarter and may provide for reporting
8 on a less frequent basis in such cases.
9 Section 618-C. Extension of Time for Filing Returns.--The
10 department may, on written application and for good cause shown,
11 grant a reasonable extension of time for filing any return
12 required under this part. However, the time for making a return
13 shall not be extended for more than three months.
14 Section 619-C. Place for Filing Returns.--Returns shall be
15 filed with the department at its main office or at any branch
16 office which it may designate for filing returns.
17 Section 620-C. Timely Mailing Treated as Timely Filing and
18 Payment.--Notwithstanding the provisions of any State tax law to
19 the contrary, whenever a report or payment of all or any portion
20 of a State tax is required by law to be received by the
21 Pennsylvania Department of Revenue or other agency of the
22 Commonwealth on or before a day certain, the taxpayer shall be
23 deemed to have complied with such law if the letter transmitting
24 the report or payment of such tax which has been received by the
25 department is postmarked by the United States Postal Service on
26 or prior to the final day on which the payment is to be
27 received.
28 For the purposes of this article, presentation of a receipt
29 indicating that the report or payment was mailed by registered
30 or certified mail on or before the due date shall be evidence of
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1 timely filing and payment.
2 CHAPTER III
3 PAYMENT OF TAX
4 Section 621-C. Payment.--When a return of tax is required
5 under this part, the person required to make the return shall
6 pay the tax to the department.
7 Section 622-C. Time of Payment.--(a) The tax imposed by
8 this article and incurred or collected by a licensee shall be
9 due and payable by the licensee on the day the return is
10 required to be filed under the provisions of section 617-C and
11 such payment must accompany the return for such preceding
12 period,
13 (b) If the amount of tax due for the preceding year as shown
14 by the annual return of any taxpayer is greater than the amount
15 already paid by him in connection with his monthly or quarterly
16 returns he shall send with such annual return a remittance for
17 the unpaid amount of tax for the year.
18 (c) Other Payments. Any person other than a licensee liable
19 to pay any tax under this article shall remit the tax at the
20 time of filing the return required by this article.
21 Section 623-C. Other Times for Payment.--In the event that
22 the department authorizes a taxpayer to file a return at other
23 times than those specified in section 617-C, the tax due shall
24 be paid at the time such return is filed.
25 Section 624-C. Place for Payment.--The tax imposed by this
26 article shall be paid to the department at the place fixed for
27 filing the return.
28 Section 625-C. Tax Held in Trust for the Commonwealth.--All
29 taxes collected by any person from purchasers in accordance with
30 this article and all taxes collected by any person from
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1 purchasers under color of this article which have not been
2 properly refunded by such person to the purchaser shall
3 constitute a trust fund for the Commonwealth, and such trust
4 shall be enforceable against such person, his representatives
5 and any person (other than a purchaser to whom a refund has been
6 made properly) receiving any part of such fund without
7 consideration, or knowing that the taxpayer is committing a
8 breach of trust: Provided, however, That any person receiving
9 payment of a lawful obligation of the taxpayer from such fund
10 shall be presumed to have received the same in good faith and
11 without any knowledge of the breach of trust. Any person, other
12 than a taxpayer, against whom the department makes any claim
13 under this section shall have the same right to petition and
14 appeal as is given taxpayers by any provisions of this part.
15 Section 626-C. Local Receivers of Use Tax.--Beginning on and
16 after March 4, 1971, in every county, except in counties of the
17 first class, the county treasurer is hereby authorized to
18 receive use tax due and payable under the provisions of this
19 article from any person other than a licensee. The receiving of
20 such taxes shall be pursuant to rules and regulations
21 promulgated by the department and upon forms furnished by the
22 department. Each county treasurer shall remit to the department
23 all use taxes received under the authority of this section minus
24 the costs of administering this provision not to exceed one per
25 cent of the amount of use taxes received, which amount shall be
26 retained in lieu of any commission otherwise allowable by law
27 for the collection of such tax.
28 Section 627-C. Discount.--If a return is filed by a licensee
29 and the tax shown to be due thereon less any discount is paid
30 all within the time prescribed, the licensee shall be entitled
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1 to credit and apply against the tax payable by him a discount of
2 one per cent of the amount of the tax collected by him on and
3 after March 4, 1971, as compensation for the expense of
4 collecting and remitting the same and as a consideration of the
5 prompt payment thereof.
6 CHAPTER IV
7 ASSESSMENT AND COLLECTION OF TAX
8 Section 630-C. Assessment.--The department is authorized and
9 required to make the inquiries, determinations and assessments
10 of the tax (including interest, additions and penalties) imposed
11 by this article.
12 Section 631-C. Mode and Time of Assessment.--(a) Within a
13 reasonable time after any return is filed, the department shall
14 examine it and, if the return shows a greater tax due or
15 collected than the amount of tax remitted with the return, the
16 department shall issue an assessment for the difference,
17 together with an addition of three per cent of such difference,
18 which shall be paid to the department within ten days after a
19 notice of the assessment has been mailed to the taxpayer. If
20 such assessment is not paid within ten days, there shall be
21 added thereto and paid to the department an additional three per
22 cent of such difference for each month thereof during which the
23 assessment remains unpaid, but the total of all additions shall
24 not exceed eighteen per cent of the difference shown on the
25 assessment.
26 (b) If the department determines that any return or returns
27 of any taxpayer understates the amount of tax due, it shall
28 determine the proper amount and shall ascertain the difference
29 between the amount of tax shown in the return and the amount
30 determined, such difference being hereafter sometimes referred
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1 to as the "deficiency." A notice of assessment for the
2 deficiency and the reasons therefor shall then be sent to the
3 taxpayer. The deficiency shall be paid to the department within
4 thirty days after a notice of the assessment thereof has been
5 mailed to the taxpayer.
6 (c) In the event that any taxpayer fails to file a return
7 required by this article, the department may make an estimated
8 assessment (based on information available) of the proper amount
9 of tax owing by the taxpayer. A notice of assessment in the
10 estimated amount shall be sent to the taxpayer. The tax shall be
11 paid within thirty days after a notice of such estimated
12 assessment has been mailed to the taxpayer.
13 (d) The department is authorized to make the studies
14 necessary to compute effective rates by business classification,
15 based upon the ratio between the tax required to be collected
16 and taxable sales and to use such rates in arriving at the
17 apparent tax liability of a taxpayer.
18 Any assessment based upon such rates shall be prima facie
19 correct, except that such rate shall not be considered where a
20 taxpayer establishes that such rate is based on a sample
21 inapplicable to him.
22 Section 632-C. Reassessment.--Any taxpayer against whom an
23 assessment is made may petition the department for a
24 reassessment. Notice of an intention to file such a petition
25 shall be given to the department within thirty days of the date
26 the notice of assessment was mailed to the taxpayer, except that
27 the department for due cause may accept such notice within
28 ninety days of the date the notice of assessment was mailed. The
29 department by registered mail shall supply the taxpayer with a
30 statement setting forth in reasonable detail the basis of the
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1 assessment within thirty days after receipt of the taxpayer's
2 notice of intention to file a petition for reassessment. A
3 petition for reassessment shall thereafter be filed within
4 thirty days after such basis of assessment has been mailed to
5 the taxpayer. Such petition shall set forth in reasonable detail
6 the grounds upon which the taxpayer claims that the assessment
7 is erroneous or unlawful, in whole or in part, and shall be
8 accompanied by an affidavit or affirmation that the facts
9 contained therein are true and correct and that the petition is
10 not interposed for delay. An extension of time for filing the
11 petition may be allowed for cause but in no case shall such
12 extension exceed one hundred twenty days. The department shall
13 hold such hearings as may be necessary for the purpose, at such
14 times and places as it may determine, and each taxpayer who has
15 duly filed such petition for reassessment shall be notified by
16 the department of the time when, and the place where, such
17 hearing in his case will be held.
18 It shall be the duty of the department, within six months
19 after receiving a filed petition for reassessment, to dispose of
20 the issue raised by such petition and mail notice of the
21 department's decision to the petitioner: Provided, however, That
22 the taxpayer and the department may, by stipulation, extend such
23 disposal time by not more than six additional months.
24 Section 633-C. Assessment to Recover Erroneous Refunds.--The
25 department may, within two years of the granting of any refund
26 or credit, or within the period in which an assessment could
27 have been filed by the department with respect to the
28 transaction pertaining to which the refund was granted,
29 whichever period shall last occur, file an assessment to recover
30 any refund or part thereof or credit or part thereof which was
20060H2929B4777 - 90 -
1 erroneously made or allowed.
2 Section 634-C. Review by Board of Finance and Revenue.--
3 Within sixty days after the date of mailing of notice by the
4 department of the decision on any petition for reassessment
5 filed with it, the person against whom such assessment was made
6 may, by petition, request the Board of Finance and Revenue to
7 review such decision. The failure of the department to notify
8 the petitioner of a decision within the time provided for by
9 section 632-C shall act as a denial of such petition, and a
10 petition for review may be filed with the Board of Finance and
11 Revenue within one hundred twenty days of the date prior to
12 which the department should have mailed to the petitioner its
13 notice of decision. Every petition for review filed hereunder
14 shall state specifically the reasons on which the petitioner
15 relies, or shall incorporate by reference the petition for
16 reassessment in which the reasons are stated. The petition shall
17 be supported by affidavit that it is not made for the purpose of
18 delay and that the facts set forth therein are true. The Board
19 of Finance and Revenue shall act finally in disposing of
20 petitions filed with it within six months after they have been
21 received. In the event of the failure of the board to dispose of
22 any petition within six months, the action taken by the
23 department, upon the petition for reassessment, shall be
24 sustained. The Board of Finance and Revenue may sustain the
25 action taken by the department on the petition for reassessment,
26 or it may reassess the tax due on such basis as it deems
27 according to law. The board shall give notice of its action to
28 the department and to the petitioner.
29 Section 635-C. Appeal to Commonwealth Court.--Any person
30 aggrieved by the decision of the Board of Finance and Revenue or
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1 by the board's failure to act upon a petition for review within
2 six months may appeal in the manner now or hereafter provided by
3 law for appeals in the case of tax settlements.
4 Section 636-C. Burden of Proof.--In all cases of petitions
5 for reassessment, review or appeal, the burden of proof shall be
6 upon the petitioner or appellant, as the case may be.
7 Section 637-C. Collection of Tax.--(a) The department shall
8 collect the tax in the manner provided by law for the collection
9 of taxes imposed by the laws of this Commonwealth.
10 (b) Collection by persons maintaining a place of business in
11 the Commonwealth:
12 (1) Every person maintaining a place of business in this
13 Commonwealth and selling or leasing tangible personal property
14 or services, the sale or use of which is subject to tax shall
15 collect the tax from the purchaser or lessee at the time of
16 making the sale or lease, and shall remit the tax to the
17 department, unless such collection and remittance is otherwise
18 provided for in this article.
19 (1.1) Every person not otherwise required to collect tax
20 that delivers tangible personal property to a location within
21 this Commonwealth and that unpacks, positions, places or
22 assembles the tangible personal property shall collect the tax
23 from the purchaser at the time of delivery and shall remit the
24 tax to the department if the person delivering the tangible
25 personal property is responsible for collecting any portion of
26 the purchase price of the tangible personal property delivered
27 and the purchaser has not provided the person with proof that
28 the tax imposed by this article has been or will be collected by
29 the seller or that the purchaser provided the seller with a
30 valid exemption certificate. Every person required to collect
20060H2929B4777 - 92 -
1 tax under this clause shall be deemed to be selling or leasing
2 tangible personal property or services, the sale or use of which
3 is subject to the tax imposed under section 602-C.
4 (2) Any person required under this article to collect tax
5 from another person, who shall fail to collect the proper amount
6 of such tax, shall be liable for the full amount of the tax
7 which he should have collected.
8 (c) If the tax does not apply to the sale or lease of
9 tangible personal property or services, the purchaser or lessee
10 shall furnish to the vendor a certificate indicating that the
11 sale is not legally subject to the tax. The certificate shall be
12 in substantially such form as the department may, by regulation,
13 prescribe. Where the tangible personal property or service is of
14 a type which is never subject to the tax imposed or where the
15 sale or lease is in interstate commerce, such certificate need
16 not be furnished. Where a series of transactions are not subject
17 to tax, a purchaser or user may furnish the vendor with a single
18 exemption certificate in substantially such form and valid for
19 such period of time as the department may, by regulation,
20 prescribe. The department shall provide all school districts and
21 intermediate units with a permanent tax exemption number. An
22 exemption certificate, which is complete and regular and on its
23 face discloses a valid basis of exemption if taken in good
24 faith, shall relieve the vendor from the liability imposed by
25 this section. An exemption certificate accepted by a vendor from
26 a natural person domiciled within this Commonwealth or any
27 association, fiduciary, partnership, corporation or other
28 entity, either authorized to do business within this
29 Commonwealth or having an established place of business within
30 this Commonwealth, in the ordinary course of the vendor's
20060H2929B4777 - 93 -
1 business, which on its face discloses a valid basis of exemption
2 consistent with the activity of the purchaser and character of
3 the property or service being purchased or which is provided to
4 the vendor by a charitable, religious, educational or volunteer
5 firemen's organization and contains the organization's
6 charitable exemption number and which, in the case of any
7 purchase costing two hundred dollars ($200) or more, is
8 accompanied by a sworn declaration on a form to be provided by
9 the department of an intended usage of the property or service
10 which would render it nontaxable, shall be presumed to be taken
11 in good faith and the burden of proving otherwise shall be on
12 the Department of Revenue.
13 (d) The department may authorize a purchaser or lessee who
14 acquires tangible personal property or services under
15 circumstances which make it impossible at the time of
16 acquisition to determine the manner in which the tangible
17 personal property or service will be used, to pay the tax
18 directly to the department, and waive the collection of the tax
19 by the vendor. No such authority shall be granted or exercised,
20 except upon application to the department, and the issuance by
21 the department, in its discretion, of a direct payment permit.
22 If a direct payment permit is granted, its use shall be subject
23 to conditions specified by the department, and the payment of
24 tax on all acquisitions pursuant to the permit shall be made
25 directly to the department by the permit holder.
26 Section 638-C. Collection of Tax on Motor Vehicles, Trailers
27 and Semi-Trailers.--Notwithstanding the provisions of clause (1)
28 of subsection (b) of section 637-C of this article, tax due on
29 the sale at retail or use of a motor vehicle, trailer or semi-
30 trailer, except mobilehomes as defined in "The Vehicle Code,"
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1 required by law to be registered with the department under the
2 provisions of "The Vehicle Code" shall be paid by the purchaser
3 or user directly to the department upon application to the
4 department for an issuance of a certificate of title upon such
5 motor vehicle, trailer or semi-trailer. The department shall not
6 issue a certificate of title until the tax has been paid, or
7 evidence satisfactory to the department has been given to
8 establish that tax is not due. The department may cancel or
9 suspend any record of certificate of title or registration of a
10 motor vehicle, trailer or semi-trailer when the check received
11 in payment of the tax on such vehicle is not paid upon demand.
12 Such tax shall be considered as a first encumbrance against such
13 vehicle and the vehicle may not be transferred without first
14 payment in full of such tax and any interest additions or
15 penalties which shall accrue thereon in accordance with this
16 article.
17 Section 639-C. Precollection of Tax.--The department may, by
18 regulation, authorize or require particular categories of
19 vendors selling tangible personal property for resale to
20 precollect from the purchaser the tax which such purchaser will
21 collect upon making a sale at retail of such tangible personal
22 property: Provided, however, That the department, pursuant to
23 this section, may not require a vendor to precollect tax from a
24 purchaser who purchases for resale more than one thousand
25 dollars ($1,000) worth of tangible personal property from such
26 vendor per year. In any case in which a vendor has been
27 authorized to prepay the tax to the person from whom he
28 purchased the tangible personal property for resale such vendor
29 so authorized to prepay the tax may, under the regulations of
30 the department, be relieved from his duty to secure a license if
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1 such duty shall arise only by reason of his sale of the tangible
2 personal property with respect to which he is, under
3 authorization of the department, to prepay the tax. The vendor,
4 on making a sale at retail of tangible personal property with
5 respect to which he has prepaid the tax, must separately state
6 at the time of resale the proper amount of tax on the
7 transaction, and reimburse himself on account of the taxes which
8 he has previously prepaid. Should such vendor collect a greater
9 amount of tax in any reporting period than he had previously
10 prepaid upon purchase of the goods with respect to which he
11 prepaid the tax, he must file a return and remit the balance to
12 the Commonwealth at the time at which a return would otherwise
13 be due with respect to such sales.
14 Section 640-C. Bulk and Auction Sales.--A person that sells
15 or causes to be sold at auction, or that sells or transfers in
16 bulk, fifty-one per centum or more of any stock of goods, wares
17 or merchandise of any kind, fixtures, machinery, equipment,
18 buildings or real estate, involved in a business for which the
19 person is licensed or required to be licensed under the
20 provisions of this article, or is liable for filing use tax
21 returns in accordance with the provisions of this article, shall
22 be subject to the provisions of section 1403 of "The Fiscal
23 Code."
24 Section 641-C. Collection upon Failure to Request
25 Reassessment, Review or Appeal.--The department may collect any
26 tax:
27 (1) If an assessment of tax is not paid within ten days or
28 thirty days as the case may be after notice thereof to the
29 taxpayer, and no petition for reassessment has been filed;
30 (2) Within sixty days from the date of reassessment, if no
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1 petition for review has been filed;
2 (3) Within thirty days from the date of the decision of the
3 Board of Finance and Revenue upon a petition for review, or of
4 the expiration of the board's time for acting upon such
5 petition, if no appeal has been made; and
6 (4) In all cases of judicial sales, receiverships,
7 assignments or bankruptcies.
8 In any such case in a proceeding for the collection of such
9 taxes, the person against whom they were assessed shall not be
10 permitted to set up any ground of defense that might have been
11 determined by the department, the Board of Finance and Revenue
12 or the courts: Provided, That the defense of failure of the
13 department to mail notice of assessment or reassessment to the
14 taxpayer and the defense of payment of assessment or
15 reassessment may be raised in proceedings for collection by a
16 motion to stay the proceedings.
17 Section 642-C. Lien for Taxes.--(a) If any person liable to
18 pay any tax neglects or refuses to pay the same after demand,
19 the amount (including any interest, addition or penalty,
20 together with any costs that may accrue in addition thereto)
21 shall be a lien in favor of the Commonwealth upon the property,
22 both real and personal, of such person but only after same has
23 been entered and docketed of record by the prothonotary of the
24 county where such property is situated. The department may, at
25 any time, transmit, to the prothonotaries of the respective
26 counties, certified copies of all liens for taxes imposed by
27 this article or the act of March 4, 1971 (P.L.6, No.2), known as
28 the "Tax Reform Code of 1971," and penalties and interest. It
29 shall be the duty of each prothonotary receiving the lien to
30 enter and docket the same of record in his office, which lien
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1 shall be indexed as judgments are now indexed. No prothonotary
2 shall require, as a condition precedent to the entry of such
3 liens, the payment of the costs incident thereto.
4 (b) The lien imposed hereunder shall have priority from the
5 date of its recording as aforesaid, and shall be fully paid and
6 satisfied out of the proceeds of any judicial sale of property
7 subject thereto before any other obligation, judgment, claim,
8 lien or estate to which said property may subsequently become
9 subject, except costs of the sale and of the writ upon which the
10 sale was made, and real estate taxes and municipal claims
11 against such property, but shall be subordinate to mortgages and
12 other liens existing and duly recorded or entered of record
13 prior to the recording of the tax lien. In the case of a
14 judicial sale of property, subject to a lien imposed hereunder,
15 upon a lien or claim over which the lien imposed hereunder has
16 priority as aforesaid, such sale shall discharge the lien
17 imposed hereunder to the extent only that the proceeds are
18 applied to its payment, and such lien shall continue in full
19 force and effect as to the balance remaining unpaid. There shall
20 be no inquisition or condemnation upon any judicial sale of real
21 estate made by the Commonwealth pursuant to the provisions
22 hereof. The lien of the taxes, interest and penalties, shall
23 continue for five years from the date of entry, and may be
24 revived and continued in the manner now or hereafter provided
25 for renewal of judgments, or as may be provided in "The Fiscal
26 Code," and a writ of execution may directly issue upon such lien
27 without the issuance and prosecution to judgment of a writ of
28 scire facias: Provided, That not less than ten days before
29 issuance of any execution on the lien, notice of the filing and
30 the effect of the lien shall be sent by registered mail to the
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1 taxpayer at his last known post office address: And provided
2 further, That the said lien shall have no effect upon any stock
3 of goods, wares or merchandise regularly sold or leased in the
4 ordinary course of business by the person against whom said lien
5 has been entered, unless and until a writ of execution has been
6 issued and a levy made upon said stock of goods, wares and
7 merchandise.
8 (c) Any wilful failure of any prothonotary to carry out any
9 duty imposed upon him by this section shall be a misdemeanor,
10 and, upon conviction, he shall be sentenced to pay a fine not
11 exceeding one thousand dollars ($1,000) and costs of
12 prosecution, or to undergo imprisonment not exceeding one year,
13 or both.
14 (d) Except as hereinbefore provided in the distribution,
15 voluntary or compulsory, in receivership, bankruptcy or
16 otherwise, of the property or estate of any person, all taxes
17 imposed by this article which are due and unpaid and are not
18 collectible under the provisions of section 625-C, shall be paid
19 from the first money available for distribution in priority to
20 all other claims and liens, except in so far as the laws of the
21 United States may give a prior claim to the Federal Government.
22 Any person charged with the administration or distribution of
23 any such property or estate, who shall violate the provisions of
24 this section, shall be personally liable for any taxes imposed
25 by this article, which are accrued and unpaid and are chargeable
26 against the person whose property or estate is being
27 administered or distributed.
28 (e) Subject to the limitations contained in this article as
29 to the assessment of taxes, nothing contained in this section
30 shall be construed to restrict, prohibit or limit the use by the
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1 department in collecting taxes finally due and payable of any
2 other remedy or procedure available at law or equity for the
3 collection of debts.
4 Section 643-C. Suit for Taxes.--(a) At any time within
5 three years after any tax or any amount of tax shall be finally
6 due and payable, the department may commence an action in the
7 courts of this Commonwealth, of any state or of the United
8 States, in the name of the Commonwealth of Pennsylvania, to
9 collect the amount of tax due together with additions, interest,
10 penalties and costs in the manner provided at law or in equity
11 for the collection of ordinary debts.
12 (b) The Attorney General shall prosecute the action and,
13 except as provided herein, the provisions of the Rules of Civil
14 Procedure and the provisions of the laws of this Commonwealth
15 relating to civil procedures and remedies shall, to the extent
16 that they are applicable, be available in such proceedings.
17 (c) The provisions of this section are in addition to any
18 process, remedy or procedure for the collection of taxes
19 provided by this article or by the laws of this Commonwealth,
20 and this section is neither limited by nor intended to limit any
21 such process, remedy or procedure.
22 Section 644-C. Tax Suit Comity.--The courts of this
23 Commonwealth shall recognize and enforce liabilities for sales
24 and use taxes, lawfully imposed by any other state: Provided,
25 That such other state extends a like comity to this
26 Commonwealth.
27 Section 645-C. Service.--Any person maintaining a place of
28 business within this Commonwealth is deemed to have appointed
29 the Secretary of the Commonwealth his agent for the acceptance
30 of service of process or notice in any proceedings for the
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1 enforcement of the civil provisions of this article, and any
2 service made upon the Secretary of the Commonwealth as such
3 agent shall be of the same legal force and validity as if such
4 service had been personally made upon such person. Where service
5 cannot be made upon such person in the manner provided by other
6 laws of this Commonwealth relating to service of process,
7 service may be made upon the Secretary of the Commonwealth and,
8 in such case, a copy of the process or notice shall also be
9 personally served upon any agent or representative of such
10 person who may be found within this Commonwealth, or where no
11 such agent or representative may be found a copy of the process
12 or notice shall forthwith be sent by registered mail to such
13 person at the last known address of his principal place of
14 business, home office or residence.
15 Section 646-C. Collection and Payment of Tax on Credit
16 Sales.--If any sale subject to tax hereunder is wholly or partly
17 on credit, the vendor shall require the purchaser to pay in cash
18 at the time the sale is made, or within thirty days thereafter,
19 the total amount of tax due upon the entire purchase price. The
20 vendor shall remit the tax to the department, regardless of
21 whether payment was made by the purchaser to the vendor, with
22 the next return required to be filed under section 617-C.
23 Section 647-C. Prepayment of Tax.--Whenever a vendor is
24 forbidden by law or governmental regulation to charge and
25 collect the purchase price in advance of or at the time of
26 delivery, the vendor shall prepay the tax as required by section
27 622-C of this article, but in such case if the purchaser shall
28 fail to pay to the vendor the total amount of the purchase price
29 and the tax, and such amount is written off as uncollectible by
30 the vendor, the vendor shall not be liable for such tax and
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1 shall be entitled to a credit or refund of such tax paid. If the
2 purchase price is thereafter collected, in whole or in part, the
3 amount collected shall be first applied to the payment of the
4 entire tax portion of the bill, and shall be remitted to the
5 department by the vendor with the first return filed after such
6 collection. For any tax prepaid prior to March 4, 1971, credit
7 may be claimed on any returns filed for the periods prior to
8 March 4, 1971. Tax prepaid after March 4, 1971, shall be subject
9 to refund upon petition to the department under the provisions
10 of section 652-C of this article, filed within one hundred five
11 days of the close of the fiscal year in which such accounts are
12 written off.
13 Section 647.1-C. Refund of Sales Tax Attributed to Bad
14 Debt.--(a) A vendor may file a petition for refund of sales tax
15 paid to the department that is attributed to a bad debt if all
16 of the following apply:
17 (1) The purchaser fails to pay the vendor the total purchase
18 price.
19 (2) The purchase price is written off, either in whole or in
20 part, as a bad debt on the vendor's books and records.
21 (3) The bad debt has been deducted for Federal income tax
22 purposes under section 166 of the Internal Revenue Code of 1986
23 (Public Law 99-514, 26 U.S.C. § 166). The petition shall be
24 filed with the department within the time limitations prescribed
25 by section 3003.1 of the act of March 4, 1971 (P.L.6, No.2),
26 known as the "Tax Reform Code of 1971."
27 (b) The refund authorized by this section shall be limited
28 to the sales tax paid to the department that is attributed to
29 the bad debt, less any discount under section 627-C. Partial
30 payments by the purchaser to the vendor shall be prorated
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1 between the original purchase price and the sales tax due on the
2 sale. Payments made to a vendor on any transaction which
3 includes both taxable and nontaxable components shall be
4 allocated proportionally between the taxable and nontaxable
5 components.
6 (c) A vendor may assign its right to petition and receive a
7 refund of sales tax attributed to a bad debt to an affiliated
8 entity. A vendor may not assign its right to petition and
9 receive a refund of sales tax attributed to a bad debt to any
10 other person.
11 (d) No refund shall be granted under this section for any of
12 the following:
13 (i) Interest.
14 (ii) Finance charges.
15 (iii) Expenses incurred in attempting to collect any amount
16 receivable.
17 (e) The documentation, procedures and methods for claiming
18 and calculating the refund allowed under this section shall be
19 in such form as the department may prescribe.
20 (f) If the purchase price that is attributed to a prior bad
21 debt refund is thereafter collected, in whole or in part, the
22 vendor or affiliated entity shall remit the proportional tax to
23 the department with the first return filed after the collection.
24 (g) Notwithstanding the provisions of section 806.1 of the
25 act of April 9, 1929 (P.L.343, No.176), known as "The Fiscal
26 Code," no interest shall be paid by the Commonwealth on refunds
27 of sales tax attributed to bad debt under this section.
28 (h) No refund or credit of sales tax shall be made for any
29 uncollected purchase price or bad debt except as authorized by
30 this section. No deduction or credit for bad debt may be taken
20060H2929B4777 - 103 -
1 on any return filed with the department. This section shall
2 provide the exclusive procedure for claiming a refund or credit
3 of sales tax attributed to uncollected purchase price or bad
4 debt.
5 (i) For purposes of this section, the term "affiliated
6 entity" shall mean any corporation that is part of the same
7 affiliated group as the vendor as defined by section 1504(a)(1)
8 of the Internal Revenue Code of 1986.
9 Section 648-C. Registration of Transient Vendors.--(a)
10 Prior to conducting business or otherwise commencing operations
11 within the Commonwealth, a transient vendor shall register with
12 the department. The application for registration shall be in
13 such form and contain such information as the department, by
14 regulation, shall prescribe and shall set forth truthfully and
15 accurately the information desired by the department. This
16 registration shall be renewed and updated annually.
17 (b) Upon registration and the posting of the bond required
18 by section 648.1-C, the department shall issue to the transient
19 vendor a certificate, valid for one year. Upon renewal of
20 registration, the department shall issue a new certificate,
21 valid for one year, providing the department is satisfied that
22 the transient vendor has complied with the provisions of this
23 article.
24 (c) The transient vendor shall possess the certificate at
25 all times when conducting business within the Commonwealth and
26 shall exhibit the certificate upon demand by authorized employes
27 of the department or any law enforcement officer.
28 (d) The certificate issued by the department shall state
29 that the transient vendor named therein has registered with the
30 department and shall provide notice to the transient vendor
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1 that:
2 (1) The transient vendor must notify the department, in
3 writing, before it enters the Commonwealth to conduct business,
4 of the location or locations where it intends to conduct
5 business and the date or dates on which it intends to conduct
6 business;
7 (2) Failure to notify or giving false information to the
8 department may result in suspension or revocation of the
9 transient vendor's certificate; and
10 (3) Conducting business within the Commonwealth after a
11 certificate has been suspended or revoked may result in criminal
12 conviction and the imposition of fines or other penalties.
13 Section 648.1-C. Bond.--(a) Upon registration with the
14 department, a transient vendor shall also post a bond with the
15 department in the amount of five hundred dollars ($500) as
16 surety for compliance with the provisions of this article. After
17 a period of demonstrated compliance with these provisions, or,
18 if the transient vendor provides the license number of a
19 promoter who has notified the department of a show, in
20 accordance with the provisions of section 648.6-C(a), the
21 department may reduce the amount of bond required of a transient
22 vendor or may eliminate the bond entirely.
23 (b) A transient vendor may file a request for voluntary
24 suspension of certificate with the department. If the department
25 is satisfied that the provisions of this article have been
26 complied with and has possession of the transient vendor's
27 certificate, it shall return the bond posted to the transient
28 vendor.
29 Section 648.2-C. Notification to Department; Inspection of
30 Records.--(a) Prior to entering the Commonwealth to conduct
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1 business, a transient vendor shall notify the department, in
2 writing, of the location or locations where it intends to
3 conduct business and the date or dates on which it intends to
4 conduct business.
5 (b) While conducting business within the Commonwealth, the
6 transient vendor shall permit authorized employes of the
7 department to inspect its sales records, including, but not
8 limited to, sales receipts and inventory or price lists and to
9 permit inspection of the tangible personal property offered for
10 sale at retail.
11 (c) The department may suspend or revoke a certificate
12 issued to a transient vendor if the transient vendor:
13 (1) Fails to notify the department as required by subsection
14 (a);
15 (2) Provides the department with false information regarding
16 the conduct of business within the Commonwealth;
17 (3) Fails to collect sales tax on all tangible personal
18 property or services sold subject to the sales tax; or
19 (4) Fails to file with the department a tax return as
20 required by section 617-C.
21 (d) The department shall promulgate the rules and
22 regulations necessary to implement this section.
23 Section 648.3-C. Seizure of Property.--(a) If a transient
24 vendor conducting business within the Commonwealth fails to
25 exhibit a valid certificate upon demand by authorized employes
26 of the department, those authorized employes shall have the
27 authority to seize, without warrant, the tangible personal
28 property and the automobile, truck or other means of
29 transportation used to transport or carry that property. All
30 property seized shall be deemed contraband and shall be subject
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1 to immediate forfeiture proceedings instituted by the department
2 pursuant to procedures adopted by regulation, except as
3 otherwise provided by this section.
4 (b) Property seized pursuant to subsection (a) shall be
5 released upon:
6 (1) Presentation of a valid certificate to authorized
7 employes of the department; or
8 (2) Registration by the transient vendor with the department
9 and the posting of a bond in the amount of five hundred dollars
10 ($500), either immediately or within fifteen days after the
11 property is seized.
12 Section 648.4-C. Fines.--Any transient vendor conducting
13 business within the Commonwealth while its certificate is
14 suspended or revoked, as provided by sections 648.1-C(b) and
15 648.2-C(c), shall be guilty of a misdemeanor of the third degree
16 and, upon conviction thereof, shall be sentenced to pay a fine
17 not exceeding two thousand five hundred dollars ($2,500) for
18 each offense.
19 Section 648.5-C. Transient Vendors Subject to Article.--
20 Except as otherwise provided, a transient vendor shall be
21 subject to the provisions of this article in the same manner as
22 a vendor who maintains a place of business within the
23 Commonwealth.
24 Section 648.6-C. Promoters.--(a) A promoter of a show or
25 shows within this Commonwealth may annually file with the
26 department an application for a promoter's license stating the
27 location and dates of such show or shows. The application shall
28 be filed at least thirty days prior to the opening of the first
29 show and shall be in such form as the department may prescribe.
30 (b) Except as herein provided, the department shall, within
20060H2929B4777 - 107 -
1 fifteen days after receipt of an application for a license,
2 issue to the promoter without charge a license to operate such
3 shows. If application for a license under this section has been
4 timely filed and if the license has not been received by the
5 promoter prior to the opening of the show, the authorization
6 contained in this section with respect to the obtaining of a
7 promoter's license shall be deemed to have been complied with,
8 unless or until the promoter receives notice from the department
9 denying the application for a promoter's license.
10 (c) Any promoter who is a vendor under the provisions of
11 section 601-C of this article shall comply with all the
12 provisions of this article applicable to vendors and with the
13 provisions of this section applicable to promoters.
14 (d) No licensed promoter shall permit any person to display
15 for sale or to sell tangible personal property or services
16 subject to tax under section 602-C of this article at a show
17 unless such person is licensed under section 608-C and provides
18 to the promoter the information required under section 671.1-C.
19 (e) Any licensed promoter who permits any person to display
20 for sale or to sell tangible personal property or service
21 without first having been licensed under section 608-C of this
22 article, fails to maintain records of a show under section
23 671.1-C, knowingly maintains false records or fails to comply
24 with any provision contained in this section or any regulation
25 promulgated by the department pertaining to shows shall be
26 subject to denial of a license or the revocation of any existing
27 license issued pursuant to this section. In addition, the
28 department may deny such promoter a license certificate to
29 operate a show for a period of not more than six months from the
30 date of such denial. Such penalty shall be in addition to any
20060H2929B4777 - 108 -
1 other penalty imposed by this article. Within twenty days of
2 notice of denial or revocation of a license by the department,
3 the promoter may petition the department for a hearing, pursuant
4 to Title 2 of the Pennsylvania Consolidated Statutes (relating
5 to administrative law and procedure).
6 CHAPTER V
7 REFUNDS AND CREDITS
8 Section 650-C. Refund or Credit for Overpayment.--With
9 respect to all taxes paid to a vendor or to the Commonwealth
10 prior to April 5, 1957, in the case of any overpayment, the
11 department, within the applicable period of limitations, may
12 credit the amount of such overpayment against any liability in
13 respect of the tax imposed by this article or the act of March
14 4, 1971 (P.L.6, No.2), known as the "Tax Reform Code of 1971,"
15 on the part of the person who made the overpayment, and shall
16 refund any balance to such person.
17 Section 651-C. Restriction on Refunds.--No refund shall be
18 made under section 250 without the approval of the Board of
19 Finance and Revenue.
20 Section 652-C. Refunds.--The department shall, pursuant to
21 the provisions of sections 653-C and 654-C, refund all taxes,
22 interest and penalties paid to the Commonwealth under the
23 provisions of this article and to which the Commonwealth is not
24 rightfully entitled. Such refunds shall be made to the person,
25 his heirs, successors, assigns or other personal
26 representatives, who actually paid the tax: Provided, That no
27 refund shall be made under this section with respect to any
28 payment made by reason of an assessment with respect to which a
29 taxpayer has filed a petition for reassessment pursuant to
30 section 632-C of this article to the extent that said petition
20060H2929B4777 - 109 -
1 has been determined adversely to the taxpayer by a decision
2 which is no longer subject to further review or appeal: Provided
3 further, That nothing contained herein shall be deemed to
4 prohibit a taxpayer who has filed a timely petition for
5 reassessment from amending it to a petition for refund where the
6 petitioner has paid the tax assessed.
7 Section 653-C. Refund Petition.--(a) Except as provided for
8 in section 656-C and in subsection (b) and (d) of this section,
9 the refund or credit of tax, interest or penalty provided for by
10 section 652-C shall be made only where the person who has
11 actually paid the tax files a petition for refund with the
12 department under section 3003.1. Such petition for refund must
13 set forth in reasonable detail the grounds upon which the
14 taxpayer claims that the Commonwealth is not rightfully entitled
15 to such tax, interest or penalty, in whole or in part, and shall
16 be accompanied by an affidavit affirming that the facts
17 contained therein are true and correct. The department may hold
18 such hearings as may be necessary for the purpose at such times
19 and places as it may determine, and each person who has duly
20 filed a refund petition shall be notified by the department of
21 the time when, and the place where, such hearing in his case
22 will be held.
23 (b) A refund or credit of tax, interest or penalty, paid as
24 a result of an assessment made by the department under section
25 631-C, shall be made only where the person who has actually paid
26 the tax files with the department a petition for a refund with
27 the department under section 3003.1(d). The filing of a petition
28 for refund, under the provisions of this subsection, shall not
29 affect the abatement of interest, additions or penalties to
30 which the person may be entitled by reason of his payment of the
20060H2929B4777 - 110 -
1 assessment.
2 (c) It shall be the duty of the department, within six
3 months after receiving a petition for refund, to dispose of the
4 issue raised by such petition, and mail notice of the
5 department's decision to the petitioner: Provided, however, That
6 the taxpayer and the department may, by stipulation, extend such
7 disposal time by not more than six additional months.
8 (d) Notwithstanding any other provision of this section
9 where any tax, interest or penalty has been paid under a
10 provision of this article subsequently held by final judgment of
11 a court of competent jurisdiction to be unconstitutional, or
12 under an interpretation of such provision subsequently held by
13 such court to be erroneous, a petition for refund may be filed
14 either before or subsequent to final judgment, but such petition
15 must be filed under section 3003.1. The department shall have
16 jurisdiction to hear and determine any such petition filed prior
17 to such final judgment only if, at the time of filing of the
18 petition, proceedings are pending in a court of competent
19 jurisdiction wherein the claim of unconstitutionality or of
20 erroneous interpretation, made in the petition for refund may be
21 established, and in such case, the department shall not take
22 final action upon the petition for refund until the judgment
23 determining the question involved in such petition has become
24 final.
25 Section 654-C. Review by Board of Finance and Revenue.--
26 Within ninety days after the date of mailing of notice by the
27 department of the decision upon a petition for refund filed with
28 it, pursuant to section 653-C, the petitioner may further
29 petition the Board of Finance and Revenue to review the decision
30 of the department. The failure of the department to notify the
20060H2929B4777 - 111 -
1 petitioner of its decision within the time provided for by
2 section 653-C shall act as a denial of such petition, and a
3 petition for review may be filed with the Board of Finance and
4 Revenue within one hundred twenty days of the date prior to
5 which the department should have mailed to the petitioner its
6 notice of decision. Every petition for review filed with the
7 Board of Finance and Revenue under the provisions of this
8 section shall incorporate by reference the petition for refund.
9 The petitioner may, in his petition for review, elect to
10 withdraw one or more grounds as set out in the original refund
11 petition. The Board of Finance and Revenue shall act finally in
12 disposing of such petitions filed with it within six months
13 after they have been received. In the event of the failure of
14 the board to dispose of any petition within six months, the
15 action taken by the department upon the petition for refund
16 shall be sustained. The Board of Finance and Revenue may sustain
17 the action taken by the department on a petition for refund, or
18 it may redetermine whether a lesser or greater amount of refund
19 is proper. Under no circumstances may the Board of Finance and
20 Revenue authorize a refund greater than that originally applied
21 for by the petitioner. The board shall give notice of its action
22 to the department and to the petitioner.
23 Section 655-C. Appeal to the Commonwealth Court.--Any person
24 aggrieved by the decision of the Board of Finance and Revenue
25 under section 654-C, or by the board's failure to act upon a
26 petition for review within six months may appeal in the manner
27 now or hereafter provided for by law for appeals in the case of
28 tax settlements.
29 Section 656-C. Extended Time for Filing Special Petition for
30 Refund.--Any party to a transaction who has paid tax by reason
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1 of a transaction with respect to which the department is
2 assessing tax against another person may, within six months
3 after the filing by the department of the assessment against
4 such other person, file a special petition for refund,
5 notwithstanding his failure to file a regular petition within
6 three years of the payment. The provisions of sections 653-C,
7 654-C and 655-C shall be applicable to such special petition for
8 refund, except that the department need not act on such petition
9 until there is a final determination as to the propriety of the
10 assessment filed against the other party to the transaction.
11 Where a petition is filed under this provision in order to take
12 advantage of the extended period of limitations, overpayments by
13 the petitioner shall be refunded but only to the extent of the
14 actual tax (without consideration of interest and penalties)
15 paid by the other party to the transaction. The purpose of this
16 section is to avoid duplicate payment of tax where a
17 determination is made by the department that one party to a
18 transaction is subject to tax, and another party to the
19 transaction has previously paid tax with respect to such
20 transaction and, as such, this section shall be construed as
21 extending right beyond that provided for by section 653-C, and
22 not to limit such other section.
23 CHAPTER VI
24 LIMITATIONS
25 Section 658-C. Limitation on Assessment and Collection.--The
26 amount of the tax imposed by this article or the act of March 4,
27 1971 (P.L.6, No.2), known as the "Tax Reform Code of 1971,"
28 shall be assessed within three years after the date when the
29 return provided for by subsection (a) or (c) of section 617-C is
30 filed or the end of the year in which the tax liability arises
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1 whichever shall last occur. Any such assessment may be made at
2 any time during such period notwithstanding that the department
3 may have made one or more previous assessments against the
4 taxpayer for the year in question, or for any part of such year.
5 In any such case, no credit shall be given for any penalty
6 previously assessed or paid.
7 Section 659-C. Failure to File Return.--Where no return is
8 filed, the amount of the tax due may be assessed and collected
9 at any time as to taxable transactions not reported.
10 Section 660-C. False or Fraudulent Return.--Where the
11 taxpayer wilfully files a false or fraudulent return with intent
12 to evade the tax imposed by this article, the amount of tax due
13 may be assessed and collected at any time.
14 Section 661-C. Extension of Limitation Period.--
15 Notwithstanding any of the foregoing provisions of this part,
16 where, before the expiration of the period prescribed therein
17 for the assessment of a tax, a taxpayer has consented, in
18 writing, that such period be extended, the amount of tax due may
19 be assessed at any time within such extended period. The period
20 so extended may be extended further by subsequent consents, in
21 writing, made before the expiration of the extended period.
22 CHAPTER VII
23 INTEREST, ADDITIONS, PENALTIES AND CRIMES
24 Section 665-C. Interest.--If any amount of tax imposed by
25 this article is not paid to the department on or before the last
26 date prescribed for payment, interest on such amount at the rate
27 of three-fourths of one per cent per month for each month, or
28 fraction thereof, from such date, shall be paid for the period
29 from such last date to the date paid. The last date prescribed
30 for payment shall be determined under subsection (a) or (c) of
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1 section 622-C without regard to any extension of time for
2 payment. In the case of any amount assessed as a deficiency or
3 as an estimated assessment, the date prescribed for payment
4 shall be thirty days after notice of such assessment.
5 Section 666-C. Additions to Tax.--(a) Failure to File
6 Return. In the case of failure to file any return required by
7 section 615-C on the date prescribed therefor (determined with
8 regard to any extension of time for filing), and in the case in
9 which a return filed understates the true amount due by more
10 than fifty per cent, there shall be added to the amount of tax
11 actually due five per cent of the amount of such tax if the
12 failure to file a proper return is for not more than one month,
13 with an additional five per cent for each additional month, or
14 fraction thereof, during which such failure continues, not
15 exceeding twenty-five per cent in the aggregate. In every such
16 case at least two dollars ($2) shall be added.
17 (b) Addition for Understatement. There shall be added to
18 every assessment under subsection (b) of section 631-C an
19 addition equal to five per cent of the amount of the
20 understatement and no addition to the tax shall be paid under
21 subsection (a) of section 631-C.
22 (c) Interest. If the department assesses a tax according to
23 subsection (a), (b) or (c) of section 631-C, there shall be
24 added to the amount of the deficiency interest at the rate of
25 three-fourths of one per cent per month for each month, or
26 fraction thereof, from the date prescribed by subsection (a) or
27 (c) of section 622-C of this article for the payment of the tax
28 to the date of notice of the assessment.
29 Section 667-C. Penalties.--(a) The penalties, additions,
30 interest and liabilities provided by this article shall be paid
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1 upon notice and demand by the department, and shall be assessed
2 and collected in the same manner as taxes. Except as otherwise
3 provided, any reference in this article to "tax" imposed by this
4 article shall be deemed also to refer to the penalties,
5 additions, interest and liabilities provided by this part.
6 (b) Any person who wilfully attempts, in any manner, to
7 evade or defeat the tax imposed by this article, or the payment
8 thereof, or to assist any other person to evade or defeat the
9 tax imposed by this article, or the payment thereof, or to
10 receive a refund improperly, shall, in addition to other
11 penalties provided by law, be liable for a penalty equal to one-
12 half of the total amount of the tax evaded.
13 In any direct proceeding arising out of a petition for
14 reassessment or refund as provided in this article, in which an
15 issue of fact is raised with respect to whether a return is
16 fraudulent or with respect to the propriety of the imposition by
17 the department of the penalty prescribed in this subsection (b),
18 the burden of proof with respect to such issue shall be upon the
19 department.
20 Section 668-C. Crimes.--(a) Any person who with intent to
21 defraud the Commonwealth shall wilfully make, or cause to be
22 made, any return required by this article, which is false, shall
23 be guilty of a misdemeanor, and, upon conviction thereof, shall
24 be sentenced to pay a fine not exceeding two thousand dollars
25 ($2000), or undergo imprisonment not exceeding three years, or
26 both.
27 (b) Except as otherwise provided by subsection (a) of this
28 section, any person who advertises or holds out or states to the
29 public or to any purchaser or user, directly or indirectly, that
30 the tax or any part thereof imposed by this article will be
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1 absorbed by such person, or that it will not be added to the
2 purchase price of the tangible personal property or services
3 described in subclauses (2), (3), (4) and (11) through (18) of
4 clause (k) of section 601-C of this article sold or, if added,
5 that the tax or any part thereof will be refunded, other than
6 when such person refunds the purchase price because of such
7 property being returned to the vendor, and any person selling or
8 leasing tangible personal property or said services the sale or
9 use of which by the purchaser is subject to tax hereunder, who
10 shall wilfully fail to collect the tax from the purchaser and
11 timely remit the same to the department, and any person who
12 shall wilfully fail or neglect to timely file any return or
13 report required by this article or any taxpayer who shall refuse
14 to timely pay any tax, penalty or interest imposed or provided
15 for by this article, or who shall wilfully fail to preserve his
16 books, papers and records as directed by the department, or any
17 person who shall refuse to permit the department or any of its
18 authorized agents to examine his books, records or papers, or
19 who shall knowingly make any incomplete, false or fraudulent
20 return or report, or who shall do, or attempt to do, anything
21 whatever to prevent the full disclosure of the amount or
22 character of taxable sales purchases or use made by himself or
23 any other person, or shall provide any person with a false
24 statement as to the payment of tax with respect to particular
25 tangible personal property or said services, or shall make,
26 utter or issue a false or fraudulent exemption certificate,
27 shall be guilty of a misdemeanor, and, upon conviction thereof,
28 shall be sentenced to pay a fine not exceeding one thousand
29 dollars ($1000) and costs of prosecution, or undergo
30 imprisonment not exceeding one year, or both: Provided, however,
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1 That any person maintaining a place of business outside this
2 Commonwealth may absorb the tax with respect to taxable sales
3 made in the normal course of business to customers present at
4 such place of business without being subject to the above
5 penalty and fines: and Provided further, That advertising tax-
6 included prices shall be permissible, if the prepaid services
7 are sold by the service provider, for prepaid telecommunications
8 services not evidenced by the transfer of tangible personal
9 property or for prepaid mobile telecommunications services.
10 (c) The penalties imposed by this section shall be in
11 addition to any other penalties imposed by any provision of this
12 article.
13 Section 669-C. Abatement of Additions or Penalties.--Upon
14 the filing of a petition for reassessment or a petition for
15 refund as provided under this article by a taxpayer, additions
16 or penalties imposed upon such taxpayer by this article or the
17 act of March 4, 1971 (P.L.6, No.2), known as the "Tax Reform
18 Code of 1971," may be waived or abated, in whole or in part,
19 where the petitioner has established that he has acted in good
20 faith, without negligence and with no intent to defraud.
21 CHAPTER VIII
22 ENFORCEMENT AND EXAMINATIONS
23 Section 670-C. Rules and Regulations.--(a) The department
24 is hereby charged with the enforcement of the provisions of this
25 article, and is hereby authorized and empowered to prescribe,
26 adopt, promulgate and enforce, rules and regulations not
27 inconsistent with the provisions of this article, relating to
28 any matter or thing pertaining to the administration and
29 enforcement of the provisions of this article, and the
30 collection of taxes, penalties and interest imposed by this
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1 article. The department may prescribe the extent, if any, to
2 which any of such rules and regulations shall be applied without
3 retroactive effect.
4 (b) In determining the purchase price of taxable sales
5 where, because of affiliation of interests between the vendor
6 and the purchaser or irrespective of any such affiliation, if
7 for any other reason, the purchase price of such sale is in the
8 opinion of the department not indicative of the true value of
9 the article or the fair price thereof, the department shall,
10 pursuant to uniform and equitable rules, determine the amount of
11 constructive purchase price upon the basis of which the tax
12 shall be computed and levied. Such rules shall provide for a
13 constructive amount of a purchase price for each such sale,
14 which price shall equal a price for such article which would
15 naturally and fairly be charged in an arm's-length transaction
16 in which the element of common interests between vendor and
17 purchaser, or, if no common interest exists, any other element
18 causing a distortion of the price or value is absent. For the
19 purpose of this article where a taxable sale occurs between a
20 parent corporation and a subsidiary affiliate or controlled
21 corporation of such parent, there shall be a rebuttable
22 presumption that because of such common interest such
23 transaction was not at arm's-length.
24 Section 671-C. Keeping of Records.--(a) Every person liable
25 for any tax imposed by this article, or for the collection
26 thereof, shall keep the records, render such statements, make
27 the returns and comply with such rules and regulations as the
28 department may, from time to time, prescribe regarding matters
29 pertinent to his business. Whenever in the judgment of the
30 department it is necessary, it may require any person, by notice
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1 served upon such person, or by regulations, to make such
2 returns, render such statements or keep such records as the
3 department deems sufficient to show whether or not such person
4 is liable to pay or collect tax under this article.
5 (b) Any person liable to collect tax from another person
6 under the provisions of this article shall file reports, keep
7 records, make payments and be subject to interest and penalties
8 as provided for under this article, in the same manner as if he
9 were directly subject to the tax.
10 (c) A nonresident who does business in this Commonwealth as
11 a retail dealer shall keep adequate records of such business or
12 businesses and of the tax due with respect thereto, which
13 records shall at all times be retained within this Commonwealth
14 unless retention outside the Commonwealth is authorized by the
15 department. No taxes collected from purchasers shall be sent
16 outside the Commonwealth without the written consent of, and in
17 accordance with conditions prescribed by the department. The
18 department may require a taxpayer who desires to retain records
19 or tax collections outside the Commonwealth to assume reasonable
20 out-of-state audit expenses.
21 (d) Any person doing business as a retail dealer who at the
22 same time is engaged in another business or businesses which do
23 not involve the making of sales taxable under this article,
24 shall keep separate books and records of his businesses so as to
25 show the sales taxable under this article separately from his
26 sales not taxable hereunder. If any such person fails to keep
27 such separate books and records, he shall be liable for tax at
28 the rate designated in section 602-C of this article upon the
29 entire purchase price of sales from both or all of his
30 businesses.
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1 (e) In those instances where a vendor gives no sales
2 memoranda or uses registers showing only total sales, the vendor
3 must adopt some method of segregating tax from sales receipts
4 and keep records showing such segregation, all in accordance
5 with proper accounting and business practices.
6 A vendor may apply to the department for permission to use a
7 collection and recording procedure which will show such
8 information as the law requires with reasonable accuracy and
9 simplicity. Such application must contain a detailed description
10 of the procedure to be adopted. Permission to use the proposed
11 procedure is not to be construed as relieving the vendor from
12 remitting the full amount of tax collected. The department may
13 revoke such permission upon thirty days' notice to the vendor.
14 Refusal of the department to grant permission in advance to use
15 such procedure shall not be construed to invalidate a procedure
16 which upon examination shows such information as the law
17 requires.
18 Section 671.1-C. Reports and Records of Promoters.--Every
19 licensed promoter shall keep a record of the date and place of
20 each show and the name, address, sales, use and hotel occupancy
21 license number of every person whom he permits to display for
22 sale or to sell tangible personal property or services subject
23 to tax under section 602-C at such show. Such records shall be
24 open for inspection and examination at any reasonable time by
25 the department or a duly authorized representative, and such
26 records shall, unless the department consents in writing to an
27 earlier destruction, be preserved for three years after the date
28 the report was filed or the date it was due, whichever occurs
29 later, except that the department may by regulation require that
30 they be kept for a longer period of time.
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1 Section 672-C. Examinations.--The department or any of its
2 authorized agents is hereby authorized to examine the books,
3 papers and records of any taxpayer in order to verify the
4 accuracy and completeness of any return made or, if no return
5 was made, to ascertain and assess the tax imposed by this
6 article. The department may require the preservation of all such
7 books, papers and records for any period deemed proper by it but
8 not to exceed three years from the end of the calendar year to
9 which the records relate. Every such taxpayer is hereby required
10 to give to the department, or its agent, the means, facilities
11 and opportunity for such examinations and investigation. The
12 department is further authorized to examine any person, under
13 oath, concerning taxable sales or use by any taxpayer or
14 concerning any other matter relating to the enforcement or
15 administration of this article, and to this end may compel the
16 production of books, papers and records and the attendance of
17 all persons whether as parties or witnesses whom it believes to
18 have knowledge of such matters. The procedure for such hearings
19 or examinations shall be the same as that provided by The Fiscal
20 Code relating to inquisitorial powers of fiscal officers.
21 Section 673-C. Records and Examinations of Delivery
22 Agents.--Every agent for the purpose of delivery of goods
23 shipped into the Commonwealth by a nonresident including, but
24 not limited to, common carriers shall maintain adequate records
25 of such deliveries pursuant to rules and regulations adopted by
26 the department and shall make such records available to the
27 department upon request after due notice.
28 Section 674-C. Unauthorized Disclosure.--Any information
29 gained by the department as a result of any return, examination,
30 investigation, hearing or verification, required or authorized
20060H2929B4777 - 122 -
1 by this article, shall be confidential, except for official
2 purposes and except in accordance with proper judicial order or
3 as otherwise provided by law, and any person unlawfully
4 divulging such information shall be guilty of a misdemeanor,
5 and, upon conviction thereof, shall be sentenced to pay a fine
6 not in excess of one thousand dollars ($1000) and costs of
7 prosecution, or to undergo imprisonment for not more than one
8 year, or both.
9 Section 675-C. Cooperation with Other Governments.--
10 Notwithstanding the provisions of section 674-C, the department
11 may permit the Commissioner of Internal Revenue of the United
12 States, or the proper officer of any state, or the authorized
13 representative of either such officer, to inspect the tax
14 returns of any taxpayer, or may furnish to such officer or to
15 his authorized representative an abstract of the return of any
16 taxpayer, or supply him with information concerning any item
17 contained in any return or disclosed by the report of any
18 examination or investigation of the return of any taxpayer. This
19 permission shall be granted only if the statutes of the United
20 States or of such other state, as the case may be, grant
21 substantially similar privileges to the proper officer of the
22 Commonwealth charged with the administration of this article.
23 Section 676-C. Interstate Compacts.--The Governor, or his
24 authorized representative, is hereby vested with authority to
25 confer with the Governor and the authorized representatives of
26 other states with respect to reciprocal use tax collection
27 between Pennsylvania and such other states.
28 The Governor, or his representative, is authorized to join
29 with such authorities of other states to conduct joint
30 investigations, to exchange information, hold joint hearings and
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1 enter into compacts or interstate agreements with such other
2 states to accomplish uniform reciprocal use tax collections
3 between those states who are parties to any compact or
4 interstate agreement and the Commonwealth of Pennsylvania.
5 Section 677-C. Bonds.--(a) Whenever the department in its
6 discretion, deems it necessary to protect the revenues to be
7 obtained under the provisions of this article, it may require
8 any nonresident natural person or any foreign corporation,
9 association, fiduciary, partnership or other entity, not
10 authorized to do business within this Commonwealth or not having
11 an established place of business therein and subject to the tax
12 imposed by section 602-C of this article, to file a bond issued
13 by a surety company authorized to do business in this
14 Commonwealth and approved by the Insurance Commissioner as to
15 solvency and responsibility, in such amounts as it may fix, to
16 secure the payment of any tax or penalties due, or which may
17 become due, from such natural person or corporation. In order to
18 protect the revenues to be obtained under the provisions of this
19 article, the department shall require any nonresident natural
20 person or any foreign corporation, association, fiduciary,
21 partnership or entity, who or which is a building contractor, or
22 who or which is a supplier delivering building materials for
23 work in this Commonwealth and is not authorized to do business
24 within this Commonwealth or does not have an established place
25 of business therein and is subject to the tax imposed by section
26 602-C of this article, to file a bond issued by a surety company
27 authorized to do business in this Commonwealth and approved by
28 the Insurance Commissioner as to solvency and responsibility, in
29 such amounts as it may fix, to secure the payments of any tax or
30 penalties due, or which may become due, from such natural
20060H2929B4777 - 124 -
1 person, corporation or other entity. The department may also
2 require such a bond of any person petitioning the department for
3 reassessment, in the case of any assessment over five hundred
4 dollars ($500) or where it is of the opinion that the ultimate
5 collection is in jeopardy. The department may, for a period of
6 three years, require such a bond of any person who has on three
7 or more occasions within a twelve month period either filed a
8 return or made payment to the department more than thirty days
9 late. In the event that the department determines that a
10 taxpayer is to file such a bond, it shall give notice to such
11 taxpayer to that effect, specifying the amount of the bond
12 required. The taxpayer shall file such bond within five days
13 after the giving of such notice by the department unless, within
14 such five days, the taxpayer shall request, in writing, a
15 hearing before the Secretary of Revenue or his representative at
16 which hearing the necessity, propriety and amount of the bond
17 shall be determined by the secretary or such representative.
18 Such determination shall be final and shall be complied with
19 within fifteen days after notice thereof is mailed to the
20 taxpayer.
21 (b) In lieu of the bond required by this section, securities
22 approved by the department, or cash in such amount as it may
23 prescribe, may be deposited. Such securities or cash shall be
24 kept in the custody of the department, who may, at any time,
25 without notice to the depositor, apply them to any tax and/or
26 interest or penalties due, and for that purpose the securities
27 may be sold by the department, at public or private sale, upon
28 five days written notice to the depositor.
29 (c) The department may file a lien pursuant to section 642-C
30 against any taxpayer who fails to file a bond when required to
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1 do so under this section. All funds received upon execution of
2 the judgment on such lien shall be refunded to the taxpayer with
3 three per cent interest should a final determination be made
4 that he does not owe any payment to the department.
5 PART VII
6 MISCELLANEOUS PROVISIONS
7 Section 680-C. (Reserved).
8 Section 681-C. Appropriation for Refunds, Etc.--So much of
9 the proceeds of the tax imposed by this article as shall be
10 necessary for the payment of refunds, enforcement, or
11 administration, under this article, is hereby appropriated for
12 such purposes.
13 Section 681.1-C. Construction of Article.--To the extent
14 that the language of this article, is identical to that of
15 equivalent provisions in the Tax Act of 1963 for Education or
16 Article II of the act of March 4, 1971 (P.L.6, No.2), known as
17 the "Tax Reform Code of 1971," the said language shall be deemed
18 a reenactment of such identical provisions.
19 Section 681.2-C. Transfers to Public Transportation
20 Assistance Fund.--(a) All revenues received on or after July 1,
21 1992, from the imposition of the tax on periodicals shall be
22 transferred to the Public Transportation Assistance Fund
23 according to the formula set forth in subsection (b).
24 (b) Within thirty days of the close of any calendar month,
25 .36 per cent (.0036) of the taxes received in the previous month
26 under this article, less any amounts collected in that previous
27 calendar month under former 74 Pa.C.S. § 1314(d) (relating to
28 Public Assistance Transportation Fund), shall be transferred to
29 the Public Transportation Assistance Fund established under
30 Article XXIII.
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1 (c) (Reserved).
2 (d) Within thirty (30) days of the close of any calendar
3 month, .075 per centum (.00075) of the taxes received in the
4 previous month under this article shall be transferred to the
5 Public Transportation Assistance Fund established under Article
6 XXIII.
7 (e) Within thirty (30) days of the close of a calendar
8 month, .347 per centum (.00347) of the taxes received in the
9 previous month under this article shall be transferred to the
10 Public Transportation Assistance Fund established under Article
11 XXIII of the act of March 4, 1971 (P.L.6, No.2), known as the
12 "Tax Reform Code of 1971."
13 (f) Notwithstanding the provisions of 74 Pa.C.S. § 1310.1
14 (relating to supplemental public transportation assistance
15 funding):
16 (1) Beginning January 1, 2007, 1.01 per centum (.0101) of
17 the taxes received under this article, up to a maximum of
18 seventy-five million dollars ($75,000,000), shall be deposited
19 in the Supplemental Public Transportation Account established in
20 the State Treasury under 74 Pa.C.S. § 1310.1.
21 (2) Within thirty (30) days of the close of a calendar
22 month, 1.01 per centum (.0101) of the taxes received in the
23 prior calendar month shall be transferred to the account.
24 (3) No funds in excess of seventy-five million dollars
25 ($75,000,000) may be transferred to the account in any one
26 fiscal year.
27 Section 682-C. Transfers to Education Operating Fund.--(a)
28 It is the intent of the General Assembly to broaden the sales
29 and use tax base and reduce the rate of that tax in order to
30 provide funds for the operating expenses of school districts.
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1 (b) Except as otherwise provided under section 681.2-C, all
2 revenues received on or after January 1, 2007, from the tax
3 imposed by this article shall be transferred to the Education
4 Operating Fund.
5 Section 683-C. Realty transfer tax.--(a) The rate of the
6 State tax under section 1102-C of the act of March 4, 1971
7 (P.L.6, No.2), known as the "Tax Reform Code of 1971," shall be
8 as follows:
9 (1) One per cent on all transactions under this section.
10 (2) On and after January 1, 2007, an additional two per cent
11 on all transactions under this section.
12 (b) (1) Except as provided in paragraph (2), all moneys
13 paid in accordance with Article XI-C of the "Tax Reform Code of
14 1971" shall be credited to the General Fund.
15 (2) All moneys paid in accordance with subsection (a)(2)
16 shall be credited to and deposited into the Education Operating
17 Fund.
18 (c) Notwithstanding any law to the contrary, all moneys paid
19 under Article XI-C of the "Tax Reform Code of 1971" to school
20 districts imposing the Local Real Estate Transfer Tax on or
21 after January 1, 2008, shall be forwarded to the Department of
22 Revenue and shall be credited to and deposited into the
23 Education Operating Fund.
24 Section 684-C. Basic Education Funding for 2005-2006 School
25 Year.--For the 2005-2006 school year, the Commonwealth shall pay
26 to each school district a basic education funding allocation
27 which shall be equal to the payment determined under sections
28 2502.13, 2502.44 and 2504.4 of the Public School Code plus the
29 average annual percentage increase in the Consumer Price Index
30 for All Urban Consumers (CPI-U) for the Pennsylvania, New
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1 Jersey, Delaware and Maryland area for calendar years 2004, 2005
2 and 2006 as reported by the United States Department of Labor,
3 Bureau of Labor Statistics.
4 Section 685-C. Education Operating Fund.--(a) There is
5 hereby established in the State Treasury a fund to be known as
6 the Education Operating Fund.
7 (b) (1) The fund shall consist of:
8 (i) all monies collected by the Department of Revenue under
9 Article II of the act of March 4, 1971 (P.L.6, No.2), known as
10 the "Tax Reform Code of 1971";
11 (ii) all monies collected by the Department of Revenue under
12 Article XI-D of the "Tax Reform Code of 1971" after January 1,
13 2008;
14 (iii) all monies collected by the Department of Revenue
15 under section 621-A;
16 (iv) all monies transferred pursuant to paragraph (2); and
17 (v) any other law that requires monies to be deposited into
18 the fund.
19 (2) On or before July 1, 2006, each school district shall
20 transfer its ending unreserved, undesignated fund balance to the
21 Education Operating Fund. As used in this paragraph, "ending
22 unreserved, undesignated fund balance" shall mean that portion
23 of the fund balance which is appropriable for expenditure or not
24 legally or otherwise segregated for a specific or tentative
25 future use, at the close of the school year for which a school
26 district's budget was adopted and held in the general fund
27 accounts of the school district.
28 (c) The fund shall be separate from all other funds of the
29 Commonwealth and, except for the Education Trust Reserve
30 Account, shall not be subject to borrowing by or transfer to the
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1 General Fund or any other fund in the State Treasury.
2 (d) (1) On or before January 1, 2007, and continuing
3 annually thereafter, each school district shall submit a
4 preliminary annual cash flow funding forecast relating to school
5 district operations that need to be funded from the fund for the
6 following school year for the calendar quarters ending September
7 30, December 31, March 31 and June 30.
8 (2) The cash flow funding forecast shall be referenced to
9 the fiscal year then ending and may only include operating
10 expenditure categories included in the school district's budget
11 for that fiscal year. The budget contained in the forecast:
12 (i) May not exceed actual operating levels expended for the
13 base school year plus estimated debt service on all debt as of
14 December 31, 2006, and, in succeeding years, may not exceed
15 actual operating levels expended for the prior school year plus
16 any expenditure adjustment increases. Any tax revenue
17 collections for the period July 1, 2007, through June 30, 2010,
18 shall be itemized and deducted in the forecasting funding
19 requirements. Education Operating Fund increases shall be
20 factored into these forecasts.
21 (ii) May not include expenditures based on the one-time use
22 of reserves set up in prior years.
23 (iii) Shall report all estimated requirements net of any
24 available school district operating reserves and all other
25 receipts and sources of tax revenue collections of any kind
26 through the fiscal year beginning July 1, 2010, and each fiscal
27 year thereafter, except as authorized by local referendum after
28 June 30, 2010.
29 (iv) Shall apply all non-capital expenditure reserves
30 against the forecasted net funding requirements.
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1 (v) Shall treat debt service for capital expenditures as
2 separate line items and exclude debt service approved by
3 referendum.
4 (3) On or before July 1, 2007, and continuing quarterly
5 thereafter on the last day of each quarter, each school district
6 shall submit a cash flow funding forecast quarterly update
7 relating to school district operations that need to be funded
8 from the fund for the current year.
9 (e) (1) For the fiscal year beginning July 1, 2007, and
10 continuing each fiscal year thereafter, each school district
11 shall submit a draw request to the Education Operating Fund on a
12 quarterly basis, which request shall be filed no later than
13 thirty (30) days prior to the beginning of the next quarter. The
14 Education Operating Fund shall prescribe the form and content of
15 the draw request.
16 (2) The Education Operating Fund shall make quarterly
17 disbursements from the fund to each school district on the last
18 day of each quarter in accordance with the provisions of this
19 subsection.
20 (3) For the fiscal year beginning July 1, 2007, the amount
21 of the quarterly disbursements to a school district shall be
22 based on the amount of real property tax rate reductions imposed
23 by that school district as a result of the application of
24 section 672(b.2)(2) of the Public School Code for that school
25 year, the amount requested in draw requests submitted by other
26 school districts and the balance of the fund.
27 (4) (i) For the fiscal year beginning July 1, 2008, the
28 amount of the quarterly disbursements to a school district shall
29 be based on the amount of real property tax rate reductions
30 imposed by that school district as a result of the application
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1 of section 672(b.2)(3) of the Public School Code for that school
2 year, the amount requested in draw requests submitted by other
3 school districts and the balance of the fund and the elimination
4 of taxes under the act of December 31, 1965 (P.L.1257, No.511),
5 known as "The Local Tax Enabling Act."
6 (ii) School districts shall continue making debt service
7 payments during the 2007-2008, 2008-2009 and 2009-2010 school
8 years.
9 (5) For the fiscal year beginning July 1, 2009, and each
10 fiscal year thereafter, the amount of the quarterly
11 disbursements from the fund to each school district shall occur
12 only after the State Treasurer has made payment, on requisition
13 of the Education Operating Fund Board, of the annual amount due
14 for school district debt authorized under 53 Pa.C.S. § 8001.3
15 (relating to assumption of local government unit debt by
16 Commonwealth). After payment of such assumed debt, the quarterly
17 hold-harmless disbursements from the fund to a school district
18 shall be determined by adding:
19 (i) the base school year disbursement; and
20 (ii) an expenditure adjustment increase.
21 These disbursements are permitted from the fund even if the
22 minimum balance is not yet attained in the Education Trust
23 Reserve Account as set forth under subsection (f).
24 (6) The following words and phrases when used in this
25 subsection shall have the meanings given to them in this
26 paragraph unless the context clearly indicates otherwise:
27 "Base school year." The 2005-2006 school year.
28 "Expenditure adjustment increase." An amount determined from
29 the base school year based on the following factors:
30 (1) changes in school district enrollment;
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1 (2) annual expense inflation rate adjustment; and
2 (3) certain changes in the balance of the Education Trust
3 Reserve Account in excess of floor level amounts and within
4 certain cap amounts determined by the Education Operating Fund
5 Board.
6 "Total operating expenditure school year disbursement." The
7 amount of total operating expenditure for the base school year,
8 less:
9 (1) any one-time, nonrecurring expenses in the 2005-2006
10 school year;
11 (2) disbursements from operating type reserve accumulations
12 which were a source of funding from Federal, State or local
13 sources;
14 (3) school district specific programs initiated and paid for
15 from school district sources of nontax funds;
16 (4) medical costs assumed as if transferred to the
17 Commonwealth;
18 (5) direct school property tax administration and collection
19 costs; and
20 (6) debt service itemized by outstanding obligation.
21 (f) (1) The Education Trust Reserve Account is hereby
22 established as a restricted account within the Education
23 Operating Fund. The account shall be administered by the
24 Education Operating Fund Board in accordance with this
25 subsection.
26 (2) For the calendar year beginning January 1, 2007, and
27 each calendar year thereafter through calendar year beginning
28 January 1, 2009:
29 (i) The account shall be maintained at a targeted amount
30 equal to fifteen (15) per centum of the normalized calculated
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1 balance.
2 (ii) The Education Operating Fund Board may authorize
3 discretionary disbursements from the account in excess of
4 twenty-five (25) per centum of the normalized account balance
5 provided that the discretionary disbursements are made in
6 accordance with paragraph (4) and do not exceed thirty (30) per
7 centum of the normalized calculated balance or five hundred
8 million dollars ($500,000,000), whichever is greater.
9 (3) For the fiscal year beginning July 1, 2010, and each
10 fiscal year thereafter:
11 (i) The account shall be maintained in an amount equal to
12 twenty-five (25) per centum of the normalized calculated
13 balance.
14 (ii) The Education Operating Fund Board may authorize
15 disbursements equal to amounts determined under section 684-C
16 from the account in excess of thirty (30) per centum of the
17 normalized calculated balance provided that the disbursements
18 are made in accordance with paragraph (4) and do not exceed
19 thirty-seven (37) per centum of the normalized calculated
20 balance.
21 (iii) If the account exceeds forty (40) per centum of the
22 normalized calculated balance, the Education Operating Fund
23 Board shall submit a report to the General Assembly regarding
24 the condition of the account, together with a recommendation for
25 an appropriate reduction in the rate of the tax imposed under
26 Article XI-C of the "Tax Reform Code of 1971" in order for the
27 rate to be reduced to not less than two (2) per centum.
28 (4) Discretionary disbursements that may be approved by the
29 Education Operating Fund Board from the Education Trust Reserve
30 Account shall be limited to promoting equity between school
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1 districts, to facilitating remedial action to distressed school
2 districts, if possible, and to providing incentives to school
3 districts.
4 (5) For purposes of this subsection, the "normalized
5 calculated balance" is as defined by the Education Operating
6 Fund Board.
7 Section 686-C. Transfers to Education Operating Fund.--The
8 State Treasurer shall transfer monthly the balance in the
9 Property Tax Relief Fund established under 4 Pa.C.S. § 1409
10 (relating to property tax relief fund) to the Education
11 Operating Fund established under section 685-C.
12 Section 687-C. Education Operating Fund Board.--(a) The
13 Education Operating Fund Board is hereby established. The board
14 shall consist of the following members:
15 (1) The Secretary of Education.
16 (2) The Secretary of Revenue.
17 (3) The executive director of the School Financing
18 Authority.
19 (4) Four legislative appointees.
20 (i) Appointments are as follows:
21 (A) One individual appointed by the President pro tempore of
22 the Senate.
23 (B) One individual appointed by the Minority Leader of the
24 Senate.
25 (C) One individual appointed by the Speaker of the House of
26 Representatives.
27 (D) One individual appointed by the Minority Leader of the
28 House of Representatives.
29 (ii) Legislative appointees shall serve at the pleasure of
30 the appointing authority.
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1 (iii) An individual appointed to the board pursuant to
2 subparagraph (i) may not be a member of the General Assembly or
3 staff of a member of the General Assembly.
4 (b) The members shall select a member of the board to serve
5 as chairperson and shall select from among themselves such
6 officers as they shall determine.
7 (c) The board shall meet at least six (6) times a year at
8 such times and places as it shall determine. Special meetings
9 may be called by the chairman or at the request of a majority of
10 the members of the board.
11 (d) Five (5) members of the board shall constitute a quorum.
12 (e) The members of the board shall be entitled to no
13 compensation for their services as members of the board but
14 shall be entitled to reimbursement for all necessary and
15 reasonable expenses incurred in connection with the performance
16 of their duties as members of the board.
17 (f) The members of the board and the professional personnel
18 of the board shall stand in a fiduciary relationship with the
19 Commonwealth and the authority as to the monies in the accounts
20 of the authority and investments of the authority.
21 (g) The members of the board in performance of their duties
22 under this section shall exercise the standard of care required
23 by 20 Pa.C.S. Ch. 73 (relating to municipalities investments).
24 (h) Appointing authorities shall appoint initial members to
25 the board within thirty (30) days of the effective date of this
26 section. Whenever a vacancy occurs on the board, the appointing
27 authority shall appoint a successor member within thirty (30)
28 days of the vacancy.
29 (i) Each member of the board shall be appointed for a term
30 of six (6) years.
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1 (j) The board shall:
2 (1) approve discretionary distributions from the Education
3 Trust Reserve Account in accordance with section 685-C(f);
4 (2) have perpetual existence as a corporation;
5 (3) sue and be sued, implead and be impleaded, complain and
6 defend, in all courts;
7 (4) adopt, use and alter at will a corporate seal;
8 (5) make bylaws for the management and regulation of its
9 affairs;
10 (6) appoint officers, agents, employes and servants,
11 prescribe their duties and fix their compensation;
12 (7) make contracts of every name and nature, and execute all
13 instruments necessary or convenient for the carrying-on of its
14 business, including, but not limited to, the Commonwealth school
15 districts;
16 (8) without limitation of the foregoing, borrow money and
17 accept grants from and enter into contracts, leases or other
18 transaction with any Federal agency, for carrying out the
19 purposes of the board; and
20 (9) do all acts and things necessary or convenient to carry
21 out the powers granted to it by this act or any other acts.
22 Section 688-C. Data-driven Decision-making Technology
23 Requirements.--(a) No later than July 1, 2010, each school
24 district shall enter into a contract with a data-driven
25 decision-making total systems vendor and submit a copy of the
26 contract to the Department of Education.
27 (b) The contract shall include, but not be limited to, the
28 following elements as components of data-driven decision making:
29 (1) The use of large, integrated databases that connect
30 relevant information from other sources into a single accessible
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1 format. The databases shall allow the school district,
2 intermediate unit and the Department of Education to look at
3 data from multiple operational systems across multiple
4 dimensions, including time. The system contracted shall have the
5 advantage of importing and analyzing data from a variety of
6 other systems that cannot otherwise communicate with each other.
7 (2) Assessment and diagnostic tools that determine students'
8 mastery levels of standards, powerful assessment solutions,
9 which provide instant feedback for diagnostic use by teachers,
10 and robust data warehousing and analysis solutions which provide
11 historical and longitudinal capabilities for using and managing
12 data effectively for student performance improvement.
13 (3) Curriculum management systems to integrate each
14 teacher's curriculum planning, lesson plans and grade reporting
15 into a standards-based system.
16 (4) Instruction and practice systems to align curriculum and
17 instructional resources to State and local standards.
18 (5) Student information systems primarily concerned with
19 issues of day-to-day student administration.
20 (6) Data analysis and reporting systems to allow analysis
21 and student performance over time and across variables like
22 district, school, program or classroom. The systems shall
23 include messaging and collaboration technology.
24 (7) Definitive goals toward increasing the value and return
25 of data-driven decision-making technology investment, project
26 management integrated with State education goals and time lines,
27 requirements specification definitions, the formation of both an
28 implementation team and an evaluation committee and planned
29 verification meetings as a result of contract implementation.
30 (8) Quality instruction integrated with formative assessment
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1 and supported by data-driven action research that informs
2 professional practice and instructional effectiveness.
3 Section 689-C. Certified operations reports.--(a) During
4 the fiscal year beginning July 1, 2009, and each fiscal year
5 thereafter, each school district shall submit certified
6 operations reports to the Department of Education. The report
7 shall consist of independent third-party certification that
8 contracts have been or are being completed in school district
9 operations.
10 (b) The certification reports shall state whether:
11 (1) The data-driven decision-making systems installed will
12 provide a robust data architecture that are optimized based on
13 prescribed district data requirements.
14 (2) The systems installed will provide a powerful and easy
15 to use "user reporting and analysis" interface.
16 (3) The systems installed and implemented will facilitate
17 the school district's ability to improve student achievement and
18 organizational efficiency economy; impact the quality of
19 education; are designed with students in mind; and discriminate
20 as to what changes or decisions can be made to have the best
21 outcomes for students.
22 (4) Compliance with State district integration objectives is
23 being satisfied to the extent that the district superintendent
24 has a basis for expecting to report the evidence required in the
25 July 1, 2011, report.
26 Section 690-C. Superintendent Report.--(a) During the
27 fiscal year beginning July 1, 2010, and each fiscal year
28 thereafter, each superintendent shall submit to the Department
29 of Education a comprehensive report for the district, indicating
30 that the intended purposes and goals, performance and
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1 accountability technology are being realized in practice,
2 whether data-driven decisions are affecting the district
3 allocations of its budget and funding requests from the
4 Education Operating Fund.
5 (b) The superintendent's report shall include, but not be
6 limited to, an administrative and technology assessment of the
7 district's schools' ability to:
8 (1) Generate reports on standards, curriculum, instructional
9 approaches and progress based on the analysis of student and
10 teacher population subgroups which lead to improved instruction
11 approaches.
12 (2) Create a variety of additional reports as needed to
13 analyze information deemed critical to students, teachers and
14 school administration that measure academic progress and meet
15 the requirements of the Department of Education.
16 (3) Provide essential accountability results for district
17 schools and meet prescribed accountability reports for the
18 district as determined by the Department of Education.
19 (4) Evaluate technology progress to drive better decision
20 making for curriculum and other factors affecting student and
21 school achievement and other district goals.
22 (5) Make fiscal budget decisions reallocating the use of
23 moneys from the Education Operating Fund to better prioritize
24 all aspects of each school's and district's educational
25 processes.
26 (6) Analyze factors that impact learning and enable action
27 to help improve student achievement.
28 (7) Document improvement and share information with other
29 schools, districts and State education agencies.
30 Section 691-C. Annual Performance Report.--(a) During the
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1 fiscal year beginning July 1, 2010, and each fiscal year
2 thereafter, each school district shall submit to the Department
3 of Education a comprehensive annual report, indicating how the
4 intended purposes and goals of performance and accountability
5 technology are being realized in the administration of the
6 district, and that includes clear case studies, white papers and
7 other documents which indicate that data-driven decisions are
8 affecting the district allocations of its budget and moneys from
9 the Education Operating Fund to achieve acceptable levels of
10 performance as set by peer benchmark or other evaluations.
11 (b) The annual performance report shall include, but not be
12 limited to, the following:
13 (1) A continuing report of the prior year's subjects
14 addressed by the superintendent report, amended with changes
15 deemed appropriate by the board of the school district.
16 (2) A demonstration of how the district's data-driven
17 analysis is beginning to enable the evaluation of student
18 progress; how daily results are cycled through a data warehouse
19 to map curriculum for assignments and test results.
20 (3) Actions taken to improve learning by improving
21 instructional approaches with data-driven analysis; integrating
22 and building on existing technology; offering access to learning
23 resources and continuing improvement by tracking performance.
24 (4) A demonstration of the factors that are district causing
25 trends; identify root causes of performance and analyze the
26 effectiveness of changes initiated in the learning environment.
27 (5) A demonstration of budget decisions directly affected by
28 changes in the districts' efforts to improve student achievement
29 and increase administrative efficiency by focusing on student
30 improvement in a new era of technology application to education.
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1 (6) An assessment of the future direction to be taken for
2 continuing performance improvement and advances in data-driven
3 decision making to determine economic efficiencies and financial
4 discipline achievable in budget allocations and spending
5 decisions.
6 Section 692-C. Disposition of Revenue Raised by School
7 Districts.--Notwithstanding any law to the contrary, all moneys
8 paid under article XI-D of the "Tax Reform Code" to school
9 districts imposing the Local Real Estate Transfer Tax on or
10 after January 1, 2008, shall be forwarded to the Department of
11 Revenue and shall be credited to and deposited into the
12 Education Operating Fund.
13 Section 693-C. School Financing Authority.--(a) The School
14 Financing Authority is hereby established.
15 (b) The School Financing Authority shall consist of the
16 following members:
17 (1) The Secretary of Education.
18 (2) The State Treasurer.
19 (3) The executive director of the Education Operating Fund
20 Board.
21 (4) Four persons, one of whom shall be appointed by the
22 President pro tempore, one appointed by the Minority Leader of
23 the Senate, one appointed by the Speaker of the House of
24 Representatives and one appointed by the Minority Leader of the
25 House of Representatives. Persons appointed under this paragraph
26 shall serve for four years.
27 (c) (1) The School Financing Authority shall manage and
28 administer all public school district debt, including, but not
29 limited to, consolidating, securitizing, financing, refinancing
30 or recalling debt for public school facilities for use as a part
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1 of the public school system of the Commonwealth. The authority
2 shall be responsible for the management and administration of
3 all district school debt and such other related debt as may be
4 assumed by the Commonwealth.
5 (2) Subject to the provisions in paragraph (3), the School
6 Financing Authority is hereby granted and shall have and may
7 exercise all the powers necessary or convenient for the carrying
8 out of the purposes identified in paragraph (1), including, but
9 not limited to, the following:
10 (i) To have perpetual existence as a corporation.
11 (ii) To sue and be sued, implead and be impleaded, complain
12 and defend in all courts.
13 (iii) To adopt, use and alter at will a corporate seal.
14 (iv) To acquire, purchase, hold, lease as lessee and use any
15 property real, personal or mixed, tangible or intangible, or any
16 interest therein, necessary or desirable, for carrying out the
17 purposes of the authority and to sell, lease as lessor, transfer
18 and dispose of any property or any interest therein at any time
19 acquired by it.
20 (v) To finance projects by making loans to any eligible
21 school district, which loans may be evidenced by and secured as
22 may be provided in loan agreements, which may contain such
23 provisions as the authority shall determine necessary or
24 desirable for the security or protection of the authority or its
25 bondholders. All such provisions shall be a part of the contract
26 with the holders of the bonds of the authority issued with
27 respect to such project.
28 (vi) To acquire by purchase, lease or otherwise, for
29 carrying out the purposes of the authority.
30 (vii) To make bylaws for the management and regulations of
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1 its affairs.
2 (viii) To make contracts of every name and nature and to
3 execute all instruments necessary or convenient for the carrying
4 on of its business, including, but not limited to, school
5 districts.
6 (ix) To enter into contracts with the board of school
7 directors of any school district, for the purpose of acquiring,
8 financing, refinancing, constructing, improving, furnishing and
9 equipping school district facilities as a part of the public
10 school system of this Commonwealth under the provisions approved
11 by a referendum vote by the district electorate on either the
12 newly proposed debt or specific terms and amounts of debt
13 previously approved by the authority.
14 (x) Without limitation of the other provisions of this
15 subsection, to borrow money and accept grants from, and to enter
16 into contracts, leases or other transaction with any Federal
17 agency, for carrying out the purposes of the authority.
18 (xi) To petition the Commonwealth to obtain additional
19 public funding for debt service for school districts unable to
20 raise sufficient funds for essential project debt service.
21 (xii) To underwrite all long-term capital debt for all
22 public school districts after June 30, 2007.
23 (xiii) To take all actions necessary and proper to ensure
24 that the payments made by the Education Operating Fund for
25 school district debt are made at the lowest possible cost of
26 capital funds providing the best return for fund expenditures.
27 (xiv) To pledge, hypothecate or otherwise encumber, all or
28 any of the revenues or receipts of the authority as security for
29 all, or any of, the obligations of the authority.
30 (xv) To do all acts and things necessary or convenient to
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1 carry out the powers granted to it by this section, this act or
2 any other act.
3 (d) (1) The School Financing Authority shall have no power,
4 at any time or in any manner, to pledge the credit or taxing
5 power of the Commonwealth or any of its school districts, nor
6 shall any of its obligations or debts be deemed to be
7 obligations of the Commonwealth or any of its school districts,
8 nor shall the Commonwealth or any of its school districts be
9 liable for the payment of principal or interest on such
10 obligations.
11 (2) All school district debt service payments made by the
12 Education Operating Fund for consolidating, securitizing,
13 financing, refinancing or recalling school district debt shall
14 be obligations of the fund or the school districts and not of
15 the authority.
16 (3) All contracts between the authority and school districts
17 shall be conditioned upon voter approval, in accordance with
18 standards and regulations prescribed by the department. The
19 Department of Education shall review and approve each school
20 district project referendum including all terms, conditions and
21 amount of debt to be voted upon prior to such referendum to
22 determine:
23 (i) The extent to which they conform to general State and
24 county requirements.
25 (ii) The amount of debt.
26 (iii) The adequacy of the proposed project.
27 (iv) The ability of the local school district or districts
28 to amortize the cost of the project and to defray the cost of
29 operation and maintenance.
30 (4) No contract may be executed between the authority and
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1 school districts without the specific written approval of the
2 Education Operating Fund Board.
3 ARTICLE VI-D
4 SENIOR CITIZENS REBATE AND ASSISTANCE
5 Section 601-D. Scope.
6 This article authorizes rebates and assistance to senior
7 citizens.
8 Section 602-D. Declaration of policy.
9 In recognition of the severe economic plight of certain
10 senior citizens, widows, widowers and permanently disabled
11 persons who are real property owners or renters with fixed and
12 limited incomes who are faced with rising living costs and
13 constantly increasing tax and inflation cost burdens which
14 threaten their homesteads and self-sufficiency, the General
15 Assembly, pursuant to the mandates of the Constitutional
16 Convention of 1968, considers it to be a matter of sound public
17 policy to make special provisions for property tax rebates or
18 rent rebates in lieu of property taxes and inflation dividends
19 to that class of senior citizens, widows, widowers and
20 permanently disabled persons who are real property taxpayers or
21 renters who are without adequate means of support to enable them
22 to remain in peaceable possession of their homes and relieving
23 their economic burden and to provide transportation assistance
24 grants and to provide grants to area agencies on aging for
25 services to older persons.
26 Section 603-D. Definitions.
27 The following words and phrases when used in this act shall
28 have the meanings given to them in this section unless the
29 context clearly indicates otherwise:
30 "Claimant." A person who files a claim for property tax
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1 rebate or rent rebate in lieu of property taxes and inflation
2 dividend and was 65 years of age or older, or whose spouse, if a
3 member of the household, was 65 years of age or older, during a
4 calendar year in which real property taxes, rent and inflation
5 costs were due and payable or was a widow or widower and was 50
6 years of age or older during a calendar year or part thereof in
7 which real property taxes, rent and inflation costs were due and
8 payable, or was a permanently disabled person 18 years of age or
9 older during a calendar year or part thereof in which real
10 property taxes, rent and inflation costs were due and payable.
11 "Department." The Department of Revenue of the Commonwealth.
12 "Homestead." A dwelling, whether owned or rented, and so
13 much of the land surrounding it, as is reasonably necessary for
14 use of the dwelling as a home, occupied by a claimant. The term
15 also includes premises occupied by:
16 (1) Reason of ownership or lease in a cooperative
17 housing corporation, mobile homes which are assessed as
18 realty for local property tax purposes and the land, if owned
19 or rented by the claimant, upon which the mobile home is
20 situated, and other similar living accommodations, as well as
21 a part of a multidwelling or multipurpose building and a part
22 of the land upon which it is built.
23 (2) Reason of the claimant's ownership or rental of a
24 dwelling located on land owned by a nonprofit incorporated
25 association, of which the claimant is a member, if the
26 claimant is required to pay a pro rata share of the property
27 taxes levied against the association's land.
28 (3) A claimant if the claimant is required by law to pay
29 a property tax by reason of his ownership or rental,
30 including a possessory interest, in the dwelling, the land,
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1 or both.
2 An owner includes a person in possession under a contract of
3 sale, deed of trust, life estate, joint tenancy or tenancy in
4 common or by reason of statutes of descent and distribution.
5 "Household income." All income received by a claimant and
6 the claimant's spouse while residing in the homestead during the
7 calendar year for which a rebate and dividend are claimed.
8 "Income." All income from whatever source derived,
9 including, but not limited to, salaries, wages, bonuses,
10 commissions, income from self-employment, alimony, support
11 money, cash public assistance and relief, the gross amount of
12 any pensions or annuities including 50% of railroad retirement
13 benefits for calendar years 1999 and thereafter, and 50% of all
14 benefits received under the Social Security Act (49 Stat. 620,
15 42 U.S.C. § 301 et seq.) (except Medicare benefits), all
16 benefits received under State unemployment insurance laws and
17 veterans' disability payments, all interest received from the
18 Federal Government or any state government, or any
19 instrumentality or political subdivision thereof, realized
20 capital gains, rentals, workers' compensation and the gross
21 amount of loss of time insurance benefits, life insurance
22 benefits and proceeds, except the first $5,000 of the total of
23 death benefit payments, and gifts of cash or property, other
24 than transfers by gift between members of a household, in excess
25 of a total value of $300, but shall not include surplus food or
26 other relief in kind supplied by a governmental agency or
27 property tax or rent rebate or inflation dividend.
28 "Inflation dividend." An additional amount calculated by the
29 department in accordance with section 604-D(a.2).
30 "Inflation expenses." The additional costs of those
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1 essential consumer needs of senior citizens in this
2 Commonwealth. The term includes, but is not limited to, the
3 additional cost of medical prescriptions, energy needs,
4 transportation and food and clothing essentials.
5 "Permanently disabled person." A person who is unable to
6 engage in any substantial gainful activity by reason of any
7 medically determinable physical or mental impairment which can
8 be expected to continue indefinitely, except as provided in
9 section 604-D(c) and (d).
10 "Real property taxes." All taxes on a homestead, exclusive
11 of municipal assessments, delinquent charges, and interest, due
12 and payable during a calendar year.
13 "Rent rebate in lieu of property taxes." Twenty per cent of
14 the gross amount actually paid in cash or its equivalent in any
15 calendar year to a landlord in connection with the occupancy of
16 a homestead by a claimant, irrespective of whether such amount
17 constitutes payment solely for the right of occupancy or
18 otherwise.
19 "Widow" or "widower." The surviving wife or the surviving
20 husband, as the case may be, of a deceased individual and who
21 has not remarried except as provided in section 604-D(c) and
22 (d).
23 Section 604-D. Property tax and rent rebate and inflation cost.
24 (a) (Reserved).
25 (a.1) Schedules.--
26 (1) (Reserved).
27 (2) The amount of any claim for property tax rebate or
28 rent rebate in lieu of property taxes for real property taxes
29 or rent due and payable during calendar year 1985 through
30 calendar year 2008 shall be determined in accordance with the
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1 following schedule:
2 Percentage of Real Property Taxes or
3 Rent Rebate in Lieu of
4 Household Income Property Taxes Allowed as Rebate
5 $ 0 - $4,999 100%
6 5,000 - 5,499 100
7 5,500 - 5,999 90
8 6,000 - 6,499 80
9 6,500 - 6,999 70
10 7,000 - 7,499 60
11 7,500 - 7,999 50
12 8,000 - 8,499 40
13 8,500 - 8,999 35
14 9,000 - 9,999 25
15 10,000 - 11,999 20
16 12,000 - 12,999 15
17 13,000 - 15,000 10
18 (3) The amount of any claim for rent rebate in lieu of
19 property taxes for rent due and payable during calendar year
20 2009 and thereafter shall be determined in accordance with
21 the following schedule:
22 Percentage of Rent Rebate in Lieu of
23 Household Income Property Taxes Allowed as Rebate
24 $ 0 - $10,000 100%
25 10,001 - 11,499 90
26 11,500 - 12,999 80
27 13,000 - 13,999 70
28 14,000 - 14,999 60
29 15,000 - 15,999 50
30 16,000 - 16,999 40
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1 17,000 - 17,999 30
2 18,000 - 18,999 20
3 19,000 - 20,000 10
4 (a.2) (1) (Reserved).
5 (2) To all claimants eligible for a property tax or rent
6 rebate pursuant to subsection (a.1)(2) there shall be paid an
7 inflation dividend determined in accordance with the
8 following schedule:
9 Household Income Dividend
10 $ 0 - 4,999 $125
11 5,000 - 5,499 100
12 5,500 - 5,999 100
13 6,000 - 6,499 75
14 6,500 - 6,999 75
15 7,000 - 7,499 60
16 7,500 - 7,999 60
17 8,000 - 8,499 45
18 8,500 - 8,999 45
19 9,000 - 9,999 30
20 10,000 - 11,999 30
21 12,000 - 12,999 30
22 13,000 - 15,000 20
23 (b) Limitations.--
24 (1) No claim shall be allowed if the amount of property
25 tax or rent rebate computed in accordance with this section
26 is less than $10, and the maximum amount of property tax or
27 rent rebate payable shall not exceed $500.
28 (2) For calendar years 2009 and thereafter the maximum
29 amount of rent rebate payable shall not exceed $750.
30 (3) No claimant shall be eligible for a property tax
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1 rebate for real property taxes due and payable during
2 calendar year 2009 and thereafter.
3 (c) Tenants of exempt property.--No claim shall be allowed
4 if the claimant is a tenant of an owner of real property exempt
5 from real property taxes.
6 (d) Apportionment.--If a homestead is owned or rented and
7 occupied for only a portion of a year or is owned or rented in
8 part by a person who does not meet the qualifications for a
9 claimant, exclusive of any interest owned or leased by a
10 claimant's spouse, or if the claimant is a widow or widower who
11 remarries, or if the claimant was a permanently disabled person
12 who is no longer disabled, the department shall apportion the
13 real property taxes or rent in accordance with the period or
14 degree of ownership or leasehold or eligibility of the claimant
15 in determining the amount of rebate for which a claimant is
16 eligible. A claimant who receives public assistance from the
17 Department of Public Welfare shall not be eligible for rent
18 rebate in lieu of property taxes, or an inflation dividend
19 during those months within which he receives public assistance.
20 (e) Subsidies.--Rent shall not include subsidies provided by
21 or through a governmental agency.
22 Section 605-D. Filing of claim.
23 A claim for property tax or rent rebate and inflation
24 dividend shall be filed with the department on or before the
25 30th day of June of the year next succeeding the end of the
26 calendar year in which real property taxes or rent were due and
27 payable, provided that claims filed after the June 30 deadline
28 until December 31 of such calendar year shall be accepted by the
29 Secretary of Revenue as long as funds are available to pay the
30 benefits to the late filing claimants. No reimbursement on a
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1 claim shall be made from the State Lottery Fund earlier than the
2 day following the 30th day of June provided in this article on
3 which that claim may be filed with the department. Only one
4 claimant from a homestead each year shall be entitled to the
5 property tax or rent rebate and inflation dividend. If two or
6 more persons are able to meet the qualifications for a claimant,
7 they may determine who the claimant shall be. If they are unable
8 to agree, the department shall determine to whom the rebate and
9 dividend are to be paid.
10 Section 606-D. Proof of claim.
11 Each claim shall include reasonable proof of household
12 income, the size and nature of the property claimed as a
13 homestead and the rent or tax receipt, or other proof that the
14 real property taxes on the homestead have been paid, or rent in
15 connection with the occupancy of a homestead has been paid. If
16 the claimant is a widow or widower, a declaration of such status
17 in such manner as prescribed by the Secretary of Revenue shall
18 be included. Proof that a claimant is eligible to receive
19 disability benefits under the Social Security Act (49 Stat. 620,
20 42 U.S.C. § 301 et seq.) shall constitute proof of disability
21 under this article. No person who has been found not to be
22 disabled by the Social Security Administration shall be granted
23 a rebate or dividend under this article. A claimant not covered
24 under the Social Security Act shall be examined by a physician
25 designated by the department and such status shall be determined
26 using the same standards used by the Social Security
27 Administration. It shall not be necessary that such taxes or
28 rent were paid directly by the claimant, provided that the rent
29 or taxes have been paid when the claim is filed. The first claim
30 filed shall include proof that the claimant or his spouse was 65
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1 years of age or older or 50 years of age or older in the case of
2 a widow, or widower, during the calendar year in which real
3 property taxes or rent was due and payable.
4 Section 607-D. Incorrect claim.
5 Whenever on audit of any claim, the department finds the
6 claim to have been incorrectly determined, it shall redetermine
7 the correct amount of the claim and notify the claimant of the
8 reason of the redetermination and the amount of the corrected
9 claim.
10 Section 608-D. Funds for payment of claims.
11 Approved claims shall be paid from the State Lottery Fund
12 established by the act of August 26, 1971 (P.L.351, No.91),
13 known as the State Lottery Law.
14 Section 609-D. Claim forms and rules and regulations.
15 Necessary rules and regulations shall be prescribed by a
16 committee consisting of the Secretary of Aging, the Secretary of
17 Revenue and the Secretary of Community and Economic Development.
18 The Secretary of Aging shall serve as the chairman of the
19 committee. The Department of Revenue shall receive all
20 applications, determine the eligibility of claimants, hear
21 appeals, disburse payments and make available suitable forms for
22 the filing of claims.
23 Section 610-D. Fraudulent claim and conveyance to obtain
24 benefits.
25 In any case in which a claim is excessive and was filed with
26 fraudulent intent, the claim shall be disallowed in full and a
27 penalty of 25% of the amount claimed shall be imposed. The
28 penalty and the amount of the disallowed claim, if the claim has
29 been paid, shall bear interest at the rate of 0.50% per month
30 from the date of the claim until repaid. The claimant and any
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1 person who assisted in the preparation or filing of a fraudulent
2 claim commits a misdemeanor, and, upon conviction thereof, shall
3 be sentenced to pay a fine not exceeding $1,000 or to
4 imprisonment not exceeding one year, or both. A claim shall be
5 disallowed if the claimant received title to the homestead
6 primarily for the purpose of receiving property tax rebate.
7 Section 611-D. Petition for redetermination.
8 Any claimant whose claim is either denied, corrected or
9 otherwise adversely affected by the department may file with the
10 department a petition for redetermination on forms supplied by
11 the department within 90 days after the date of mailing of
12 written notice by the department of such action. The petition
13 shall set forth the grounds upon which the claimant alleges that
14 such departmental action is erroneous or unlawful, in whole or
15 in part, and shall contain an affidavit or affirmation that the
16 facts contained therein are true and correct. An extension of
17 time for filing the petition may be allowed for cause but not to
18 exceed 120 days. The department shall hold such hearings as may
19 be necessary for the purpose of redetermination, and each
20 claimant who has duly filed such petition for redetermination
21 shall be notified by the department of the time when, and the
22 place where, such hearing in the claimant's case will be held.
23 The department shall, within six months after receiving a filed
24 petition for redetermination, dispose of the matters raised by
25 such petition and mail notice of the department's decision to
26 the claimant.
27 Section 612-D. Review by Board of Finance and Revenue.
28 Within 90 days after the date of official receipt by the
29 claimant of notice mailed by the department of its decision on
30 any petition for redetermination filed with it, the claimant who
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1 is adversely affected by such decision may by petition request
2 the Board of Finance and Revenue to review such action. The
3 failure of the department to officially notify the claimant of a
4 decision within the six-month period provided for by section
5 611-D shall act as a denial of such petition, and a petition for
6 review may be filed with the Board of Finance and Revenue within
7 120 days after written notice is officially received by the
8 claimant that the department has failed to dispose of the
9 petition within the six-month period prescribed by section 611-
10 D. Every petition for redetermination shall state the reasons
11 upon which the claimant relies, or shall incorporate by
12 reference the petition for redetermination in which such reasons
13 shall have been stated. The petition shall be supported by
14 affidavit that the facts set forth therein are correct and true.
15 The Board of Finance and Revenue shall act in disposition of
16 such petitions filed with it within six months after they have
17 been received, and in the event of failure of the Board of
18 Finance and Revenue to dispose of any such petition within six
19 months, the action taken by the department upon the petition for
20 redetermination shall be deemed sustained. The Board of Finance
21 and Revenue may sustain the action taken by the department on
22 the petition for redetermination or it may take such other
23 action as it shall deem is necessary and consistent with
24 provisions of this article. Notice of the action of the Board of
25 Finance and Revenue shall be given by mail to the department and
26 to the claimant.
27 Section 613-D. Appeal.
28 Any claimant aggrieved by the decision of the Board of
29 Finance and Revenue may appeal from the decision of the Board of
30 Finance and Revenue, in the manner now or hereafter provided by
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1 law for appeals from decisions of the Board of Finance and
2 Revenue in tax cases.
3 ARTICLE XVI-E
4 SCHOOL DISTRICT TAXATION
5 TITLE I
6 PRELIMINARY PROVISIONS
7 Section 1601-E. Definitions.
8 The following words and phrases when used in this article
9 shall have the meanings given to them in this section unless the
10 context clearly indicates otherwise:
11 "Department." The Department of Education of the
12 Commonwealth.
13 "Public School Code." The act of March 10, 1949 (P.L.30,
14 No.14), known as the Public School Code of 1949.
15 Section 1602-E. General powers and taxation.
16 In order to establish, enlarge, equip, furnish, operate and
17 maintain any schools or departments herein provided, or to
18 enable any school district to carry out any provisions of the
19 Public School Code, the board of school directors in each school
20 district is hereby vested with all the necessary authority and
21 power annually to levy and collect, in the manner provided in
22 the Public School Code, the necessary personal income or earned
23 income taxes required, in addition to the annual State
24 appropriation, and shall have, and be vested with, all necessary
25 power and authority to comply with and carry out any or all of
26 the provisions of the Public School Code. In the case of a
27 school district of the first class, the duties imposed by this
28 section shall apply to a city of the first class that is
29 coterminous with a school district of the first class.
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1 Section 1603-E. Only one annual tax levy.
2 There shall be but one levy of school taxes made in each
3 school district in each year, which shall be assessed, levied,
4 and collected for all the purposes provided in the Public School
5 Code, and shall be uniform throughout the territorial limit of
6 each school district.
7 TITLE II
8 INDEBTEDNESS
9 Section 1611-E. Restriction on authority to levy taxes.
10 (a) General rule.--Except as provided in subsections (b) and
11 (c), the authority of any school district of the second, third
12 and fourth class including any independent school district to
13 levy, assess and collect any tax under the act of December 31,
14 1965 (P.L. 1257, No.511), known as The Local Tax Enabling Act,
15 shall expire at midnight on December 31, 2007.
16 (b) Limit on realty transfer tax.--Each school district of
17 the second class, each school district of the third class and
18 each school district of the fourth class shall continue to have
19 the power to levy a realty transfer tax under this act or The
20 Local Tax Enabling Act at a rate equal to or less than the rate
21 in effect as of July 1, 2005. Any division of the proceeds of
22 the tax with any municipality which decreases the percentage
23 payable to the school district after July 1, 2005, shall be void
24 and unenforceable. The tax, or portion of the proceeds thereof
25 payable to the school district, shall be transmitted to the
26 Department of Revenue for deposit into the Education Operating
27 Fund beginning January 1, 2008.
28 (c) Collection of taxes unaffected.--The provisions of
29 subsection (a) shall not prevent or interfere with any action of
30 any school district of the second, third and fourth class
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1 including any independent school district to collect any tax
2 imposed under the authority of this act that is levied and
3 assessed prior to January 1, 2008.
4 Section 611.1-E. Expiration of authority to issue debt.
5 Notwithstanding any other provision of 53 Pa.C.S. Pt. VII,
6 Subpt. B (relating to indebtedness and borrowing) or any other
7 law to the contrary, no local government unit that is a school
8 district, including a school district of the first class, shall
9 incur any electoral debt, lease rental debt or nonelectoral debt
10 under 53 Pa.C.S. Pt. VII, Subpt. B after July 1, 2006.
11 Section 1611.2-E. Notices and reporting by local government
12 units of debt outstanding.
13 (a) Duties.--
14 (1) (i) On or before September 30, 2006, a local
15 government that is a school district, including a school
16 district of the first class, shall identify the
17 outstanding amount of all electoral debt, lease rental
18 debt or nonelectoral debt incurred as of December 31,
19 2006, and shall notify on or before September 30, 2006,
20 each holder of the bonds or notes of such debt of the
21 amount owed to each holder as of December 31, 2006. The
22 notice shall inform the holders of the provisions of this
23 section and section 1611.3-E.
24 (ii) A holder of a bond or note of such debt shall
25 have the right to dispute the amount stated as owed to
26 the holder in the notice, provided that the holder
27 notifies the local government unit in writing prior to
28 October 15, 2006. A holder that fails to file a dispute
29 under this subparagraph shall waive the right to dispute
30 the amount owed to the holder after the Commonwealth
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1 assumes the debt of the local government unit under
2 section 1611.3-E.
3 (iii) A local government unit that receives a
4 written dispute from a holder under subparagraph (ii)
5 shall attempt to resolve the dispute by November 1, 2006.
6 (2) On or before December 1, 2006, each local government
7 unit that is a school district, including a school district
8 of the first class, shall certify and report to the
9 Department of Revenue the outstanding amount of all electoral
10 debt, lease rental debt or nonelectoral debt incurred as of
11 December 31, 2006, together with any information requested by
12 the Department of Revenue in order for the Commonwealth to
13 comply with the requirements of this section and section
14 1611.3-E.
15 (b) Audit by Department of Revenue.--
16 (1) The Department of Revenue shall audit each report
17 submitted under subsection (a) and shall certify the amount
18 of each report and the total aggregate amount of all reports
19 to the State Treasurer on or before December 31, 2006.
20 (2) If the Department of Revenue disputes all or any
21 portion of a report submitted under subsection (a), the
22 Department of Revenue shall not include such amount in the
23 certification to the State Treasurer and shall notify the
24 local government unit in writing of the exclusion from the
25 certification.
26 Section 1611.3-E. Assumption of local government unit debt by
27 Commonwealth.
28 (a) General rule.--Except as otherwise provided in
29 subsection (b), the Commonwealth shall assume on January 1,
30 2007, the outstanding amount of all electoral debt, lease debt
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1 or nonelectoral debt certified in the report submitted by the
2 Department of Revenue to the State Treasurer. Such debt shall be
3 managed and administered by the School Financing Authority
4 established under the act of March 10, 1949 (P.L.30, No.14),
5 known as the Public School Code of 1949, and repaid from the
6 Education Operating Fund as provided by law.
7 (b) Exceptions.--The Commonwealth may not assume:
8 (1) Any of the outstanding debt of a local government
9 unit that fails to certify and file a report with the
10 Department of Revenue as required by section 1611.2-E.
11 (2) That portion of the outstanding debt included in a
12 report filed by a local government unit, but which the
13 Department of Revenue does not include in its certification
14 to the State Treasurer under section 1611.2_E(b)(2).
15 Section 1612-E. Power to apply for debt and limitations.
16 The board of school directors in any school district may, in
17 any year after June 30, 2007, apply for an indebtedness in the
18 form of bonds and notes to secure the same, payable as provided
19 by 53 Pa.C.S. Pt. VII, Subpt. B (relating to indebtedness and
20 borrowing) or any amendment or re-enactment thereof, for any or
21 all of the following purposes:
22 (1) To purchase or acquire proper sites, buildings or
23 grounds for school use, or any lands additional to any
24 existing school sites or grounds.
25 (2) To erect, enlarge, equip or furnish any building for
26 school use.
27 (3) To repair, remodel or rebuild any building of the
28 school district.
29 (4) To lease for an extended period building facilities
30 or portions of buildings constructed for school use and/or
20060H2929B4777 - 161 -
1 existing building facilities or portions of existing building
2 facilities altered for school use.
3 (5) To refund certain bonds, as hereinafter provided.
4 (6) To fund temporary indebtedness incurred for
5 permanent improvements, or in anticipation of proceeds from a
6 bond issue.
7 Section 1613-E. Reports to secretary.
8 (a) Listing of indebtedness.--The secretary shall require,
9 as part of the annual financial reports of all of the school
10 districts and charter schools, a list of the amount of bonds or
11 other indebtedness that becomes due during the fiscal year,
12 together with the amount paid on each item of indebtedness.
13 (b) Withholding of State appropriations.--
14 (1) In case of failure on the part of any school
15 district or charter school to furnish such report at the
16 required time after the close of the fiscal year, the
17 secretary may withhold any State appropriation that may
18 become due to any such school district or charter school
19 until such report covering information regarding the
20 maturities of indebtedness and payments on same during the
21 preceding fiscal year, as required under this section, and
22 any other information which the secretary may require of a
23 school district or charter school, has been received.
24 (2) In all cases where the board of directors of any
25 school district fails to pay or to provide for the payment of
26 any indebtedness at date of maturity or date of mandatory
27 redemption or on any sinking fund deposit date, or any
28 interest due on such indebtedness on any interest payment
29 date, or on any sinking fund deposit date in accordance with
30 the schedule under which the bonds were issued, the secretary
20060H2929B4777 - 162 -
1 shall notify such board of school directors of its obligation
2 and shall withhold out of any State appropriation due such
3 school district an amount equal to the sum of the principal
4 amount maturing or subject to mandatory redemption and
5 interest owing by such school district, or sinking fund
6 deposit due by the school district, and shall pay over the
7 amount so withheld to the bank or other person acting as
8 sinking fund depositary for such bond issue.
9 Section 1614-E. Temporary debt.
10 (a) Authorization.--Any school district having no
11 indebtedness, or whose indebtedness, incurred or created without
12 the assent of the electors thereof, is less than 5% of the total
13 valuation of property taxable for school purposes therein, may,
14 at any time, for the purpose of providing funds in any fiscal
15 year for current expenses and debt service, for permanent
16 improvements, the acquiring of school buses, or in anticipation
17 of proceeds from a bond issue already officially authorized and,
18 except in school districts of the first class; approved by the
19 Department of Community and Economic Development, with such
20 limitations and for such length of term as provided in this
21 article, by or through its board of school directors, incur, in
22 addition to any bonds therein authorized, a temporary debt, or
23 borrow money, and issue an obligation or obligations therefor,
24 under the seal of the district, if any, properly executed by the
25 president and attested by the secretary thereof, and bearing
26 interest not exceeding the legal rate, but no such obligation
27 shall be sold for less than par. The incurring of any such
28 temporary debt, or borrowing money upon such obligation, shall
29 receive the affirmative vote of not less than two-thirds of the
30 members of the board of school directors.
20060H2929B4777 - 163 -
1 (b) Permanent improvements.--In addition thereto, any school
2 district may, as provided in this section, incur a temporary
3 debt or borrow money for permanent improvements, where no bond
4 issue has been previously officially authorized, and refund such
5 temporary indebtedness by the issue of bonds, in the manner
6 provided by law, when the exact amount required for such
7 permanent improvement becomes known.
8 Section 1615-E. Limit on temporary debt for current expenses
9 and debt service.
10 The total amount of temporary indebtedness incurred for
11 current expenses and debt service shall, at no time, exceed an
12 amount equal to the State appropriations not received but
13 payable during the fiscal year, and the tax levied upon property
14 taxable for school purposes within such school district, and
15 remaining uncollected and unpledged for the current fiscal year.
16 All such loans shall be paid out of the receipts available, or
17 pledged for the repayment thereof when and as the funds are
18 received. The total amount of the temporary indebtedness for
19 such purpose remaining unpaid at the close of the fiscal year
20 shall become an obligation upon the following year's budget, and
21 be included therein.
22 Section 1616-E. Emergency loans for current expenses and debt
23 service.
24 (a) General rule.--In case of an emergency, any school
25 district in any fiscal year, after borrowing money in
26 anticipation of current revenues to the full extent permitted by
27 the provisions of section 2420 and finding the receipts from
28 said loans, together with all other receipts, to be inadequate
29 to meet the expenditures of the official fiscal year's budget,
30 may appeal to the secretary for permission to incur a temporary
20060H2929B4777 - 164 -
1 debt for the purpose of providing funds for current expenses and
2 debt service and shall present to the secretary, or his agent,
3 such financial statements or reports as he may require to give
4 him adequate facts relative to the necessity of such increase in
5 indebtedness. The secretary may, after due examination of the
6 need of such school district, either to refuse or grant
7 permission to such school district to borrow additional funds
8 for current expenses and debt service beyond the amount
9 permitted by the provisions of section 2420. In case of
10 approval, he shall designate the maximum length of the term and
11 shall set a maximum limit of the total amount of such temporary
12 indebtedness that the school district may incur during the
13 fiscal year in addition to all temporary indebtedness for other
14 purposes outstanding at the time of the approval.
15 (b) Limitations.--All temporary indebtedness, for the
16 purpose of current expenses and debt service in school districts
17 of the first class, shall not exceed 0.4%, and in school
18 districts of the second class, shall not exceed 0.75%, and in
19 school districts of the third and fourth class, shall not exceed
20 1% of the total amount of property taxable for school purposes
21 in such district, and the total indebtedness for such purposes,
22 together with all other indebtedness incurred without
23 authorization by vote of the electors of the district shall, at
24 no time, exceed 5% of the last total assessed valuation of the
25 property taxable for school purposes therein.
26 Section 1617-E. Approval of unfunded debt in certain distressed
27 school districts.
28 (a) General rule.--Notwithstanding any other provision of
29 law, the governing body of a distressed school district may
30 approve the issuance of bonds or notes to fund unfunded debt of
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1 the school district if the governing body finds all of the
2 following:
3 (1) The unfunded debt is a lawful obligation or is a
4 lawfully budgeted obligation of the school district.
5 (2) Paying the unfunded debt by reducing school district
6 services will endanger student health or safety and public
7 education.
8 (3) It is not feasible or in the public interest to levy
9 sufficient additional taxes to fund the unfunded debt in the
10 current fiscal year or ensuing fiscal years.
11 (b) Certified copies to be provided.--In addition to the
12 requirements of 53 Pa.C.S. § 8111 (relating to submission to
13 department), a governing body authorizing bonds or notes under
14 subsection (a) shall include certified copies of the findings of
15 the governing body made pursuant to subsection (a) with the copy
16 of the proceedings certified to the Department of Community and
17 Economic Development under 53 Pa.C.S. § 8201 (relating to
18 certification to department of bond or note transcript or lease,
19 guaranty, subsidy contract or other agreement).
20 (c) Limitation on term for majority.--Bonds or notes
21 authorized in accordance with subsection (a) shall be stated to
22 mature or be subject to mandatory redemption in the principal
23 amounts and over the number of years, not to exceed 30 years, as
24 the governing body finds will allow for the payment of the bonds
25 or notes without endangering student health or safety and public
26 education or requiring the levying of excessive taxes.
27 (d) Procedure for issuance and sale.--Except as provided in
28 this section, bonds or notes authorized in accordance with
29 subsection (a) shall be issued and sold by a distressed school
30 district in accordance with provisions of 53 Pa.C.S. Pt. VII
20060H2929B4777 - 166 -
1 Subpt. B (relating to indebtedness and borrowing).
2 (e) Cities of the first class.--The amount by which payments
3 appropriated and paid by a city of the first class to a
4 distressed school district in the fiscal year in which the
5 declaration of distress was issued exceed the payments
6 appropriated and paid by the city to the distressed school
7 district in the immediately preceding fiscal year shall be
8 excluded in determining the obligations of the city to make
9 payments to the distressed school district under section 696(h)
10 of the Public School Code.
11 (f) Nonapplicability.--Subsections (a) and (b) of 53 Pa.C.S.
12 § 8022 (relating to limitations on incurring of other debt)
13 shall not apply to bonds or notes authorized in accordance with
14 subsection (a).
15 (g) Exclusive method.--This section shall provide the
16 exclusive method for the issuance of bonds and notes to fund
17 unfunded debt of a distressed school district.
18 (h) Exclusive jurisdiction.--The Pennsylvania Supreme Court
19 shall have exclusive jurisdiction to hear any challenge to or to
20 render a declaratory judgment concerning this section. The
21 Supreme Court is authorized to take any action it deems
22 appropriate, consistent with the Supreme Court retaining
23 jurisdiction over the matter, to find facts or to expedite a
24 final judgment in connection with a challenge or request for
25 declaratory relief.
26 (i) Applicability.--Subsections (a) and (g) shall apply to
27 debt issued prior to July 1, 2003.
28 (j) Definitions.--The following words and phrases when used
29 in this section shall have the meanings given to them in this
30 subsection unless the context clearly indicates otherwise:
20060H2929B4777 - 167 -
1 "Distressed school district." A school district of the first
2 class which has been declared to be distressed by the Secretary
3 of Education under section 691 of the Public School Code.
4 "Governing body." A school reform commission established in
5 accordance with section 696(a) of the Public School Code or the
6 commission's successor.
7 "Unfunded debt." Obligations, including tax anticipation
8 notes, of a distressed school district incurred for current
9 expenses; obligations of a distressed school district for
10 expenses included in a budget adopted on or before June 30,
11 2003, which are to become due and owing; or judgments against a
12 distressed school district entered by a court after adversary
13 proceedings; if the taxes and other revenues remaining to be
14 collected in the current fiscal year or to be collected in the
15 ensuing fiscal years and the funds on hand will not be
16 sufficient for payment of the obligations or judgments without
17 endangering student health or safety and public education and
18 the distressed school district either may not legally levy a
19 sufficient tax for the balance of the fiscal year or a
20 sufficient tax, if legally leviable, would not be in the public
21 interest. The term excludes debt incurred under or obligations
22 in respect of a project or part of a project as incurred in
23 respect of the cost of a project as defined in 53 Pa.C.S. Pt.
24 VII Subpt. B.
25 Section 1618-E. Limit on temporary debt for permanent
26 improvements and tax levy.
27 The total amount of temporary indebtedness incurred in any
28 school district for the purpose of permanent improvements and
29 the acquiring of school buses except obligations incurred under
30 the provisions of section 2420, shall never exceed 5% of the
20060H2929B4777 - 168 -
1 last assessed valuation of property taxable for school purposes
2 therein. Except where such temporary indebtedness is to be
3 refunded by the issue of bonds, as hereinbefore authorized, at
4 or before the time of incurring such indebtedness for such
5 purpose, provision shall be made for the collection of an annual
6 tax, sufficient to pay the interest and also the principal
7 thereof within the term of such indebtedness, as provided by
8 law.
9 Section 1619-E. Limit on temporary debt in anticipation of
10 proceeds of bond issue.
11 (a) General rule.--The total amount of temporary
12 indebtedness incurred in anticipation of proceeds from a bond
13 issue already officially authorized and approved by the former
14 Department of Internal Affairs as provided by law shall not
15 exceed 75% of the full amount of bonds authorized by such bond
16 issue.
17 (b) Payment.--All obligations, other than bonds, issued by
18 any school district in anticipation of proceeds from a bond
19 issue already officially authorized and approved by the
20 Department of Internal Affairs, shall be paid in full, together
21 with interest, out of the proceeds of such bond issue within one
22 year and six months from the date of authorization of such bond
23 issue.
24 Section 1620-E. Borrowing in anticipation of current revenue.
25 School districts may borrow money in anticipation of current
26 revenues, to an amount not exceeding such anticipated current
27 revenues, which shall be pledged for the payment of such loan or
28 loans, and issue notes or other form of obligation, executed by
29 the president of the board of school directors and attested by
30 the secretary of the board under the seal of the school
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1 district, securing such loans. Such notes, or other form of
2 obligation, shall mature and be payable during the current
3 fiscal year in which such money is borrowed. No such borrowing
4 shall constitute an increase of indebtedness within the meaning
5 of section 8 of Article IX of the Constitution of Pennsylvania,
6 or of the former act of June 25, 1941 (P.L.159, No.87), known as
7 the Municipal Borrowing Law, or of any of the provisions of the
8 Public School Code. Such notes shall bear interest at a rate not
9 exceeding 6% per annum, payable at maturity or in advance, and
10 may be sold at either public or private sale for not less than
11 par. If such loans are not repaid in whole or in part during the
12 fiscal year in which they are made, they, or such amounts as
13 remain unpaid, shall become an obligation upon the following
14 year's budget and shall be included therein and paid not later
15 than the first day of July of such following year, in school
16 districts of the first class, and not later than the first day
17 of November of such following year, in school districts of the
18 second, third, and fourth class. The incurring of such
19 obligations shall receive the affirmative vote of not less than
20 two-thirds of the members of the board of school directors.
21 TITLE III
22 FIRST CLASS SCHOOL DISTRICT
23 Section 1631-E. Fiscal year.
24 In all school districts of the first class and first class A,
25 the fiscal year shall begin on the first day of January in each
26 year: Provided, That the Board of Education of any district of
27 the first class or first class A may, by resolution adopted by
28 two-thirds vote of the members thereof at a meeting of the board
29 after not less than ten days' notice of the fact that such
30 resolution would be presented for action at such meeting, fix
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1 the fiscal year of such school district so as to begin on the
2 first day of July in each year instead of on the first day of
3 January as provided in this section.
4 Section 1632-E. Tax levy.
5 (a) General rule.--In all school districts of the first
6 class the school taxes for the following fiscal year shall be
7 levied annually on or after the second Monday of November and
8 before the first Monday of December following. In all school
9 districts of the first class A the school taxes for the
10 following fiscal year shall be levied annually by the board of
11 public education on or after the first Monday of December and
12 before the end of the current fiscal year.
13 (b) Real property taxes.--Real property taxes imposed for a
14 school district of the first class by the city council shall be
15 as provided in section 1652-E.
16 Section 1633-E. Taxing Power of elected board of public
17 education of school districts of the first
18 class A.
19 (a) General rule.--The elected Board of Public Education in
20 any school district of the first class A shall have authority to
21 impose real property taxes, realty transfer taxes and personal
22 income or earned income taxes for the purposes of such school
23 district as provided in section 1652-E.
24 (b) Restriction.--No tax of any kind may be imposed on
25 admission to places of amusement, athletic events, motion
26 picture theaters, occupations or occupational privilege, gross
27 receipts of businesses, including institutions and nonprofit
28 services, and parking, but this subsection shall not apply to
29 taxes imposed on the whole volume of business transacted by
30 retail and wholesale dealers in goods, wares and merchandise.
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1 Section 1634-E. Appeals by taxpayers.
2 (a) General rule.--Within 30 days after a tax has been
3 levied for the first time by an elected Board of Public
4 Education in any school district of the first class A, taxpayers
5 representing 25% or more of the total valuation of real estate
6 in the school district as assessed for taxation purposes or
7 taxpayers of the school district not less than 25 in number
8 aggrieved by the ordinance or resolution shall have the right to
9 appeal therefrom to the court of common pleas of the county upon
10 giving bond with sufficient security in the amount of $500,
11 approved by the court, to prosecute the appeal with effect and
12 for the payment of costs. The petition shall set forth the
13 objections to the tax and the facts in support of such
14 objections and shall be accompanied by the affidavit of at least
15 five of the petitioners that the averments of the petition are
16 true and the petition is not filed for the purpose of delay.
17 (b) No supersedeas.--No such appeal shall act as a
18 supersedeas unless specifically allowed by the court to which
19 the appeal is taken or a judge thereof.
20 (c) Service of petition.--Immediately upon the filing of any
21 such petition, the petitioners shall serve a copy of the
22 petition and any rule granted by the court upon the president or
23 secretary of the legislative body levying the tax.
24 (d) Hearing date and notice.--The court shall fix a day for
25 a hearing not less than 15 days nor more than 30 days after the
26 filing of the petition. Notice of the time of such hearing shall
27 be given to all interested parties as the court shall direct.
28 The court shall promptly hear and dispose of the appeal.
29 (e) Permissible judicial review.--The court shall declare
30 the ordinance and the tax imposed thereby to be valid unless it
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1 concludes that the ordinance is unlawful; but the court shall
2 not interfere with the reasonable discretion of the legislative
3 body in selecting the subjects or fixing the rates of the tax.
4 The court may declare invalid all or any portion of the
5 ordinance or of the tax imposed or may reduce the rates of tax.
6 (f) Right to appeal.--Any party to the proceeding shall have
7 the right to appeal from the decision of the court of common
8 pleas to the Commonwealth Court as in other cases, but such
9 appeal shall be taken within 30 days from the time the decree of
10 the court was entered and not thereafter. Any two or more
11 parties may join in such appeal.
12 Section 1635-E. Tax levy for indebtedness of prior districts.
13 Any school district of the first class assuming any bonded
14 indebtedness of any former school district, sub-school district,
15 or ward school district within its limits, may levy and collect
16 a school tax, not to exceed eight and one half mills on the
17 dollar of the total assessment of all property assessed and
18 certified for taxation therein, until such assumed bonded
19 indebtedness has been paid, after which such school tax levy
20 shall not exceed the limitations fixed by section 2434.
21 Section 1635.1-E. Tax rates to be expressed in dollars and
22 cents.
23 Whenever the board of public education of any school district
24 of the first class shall, by resolution, fix the rate of
25 taxation for any year at a mill rate, such resolution shall also
26 include a statement expressing the rate of taxation in dollars
27 and cents on each $100 of assessed valuation of taxable
28 property.
29 Section 1636-E. Property taxable.
30 In all school districts of the first class or first class A,
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1 the school taxes shall be levied and assessed upon the same real
2 estate and property as that upon which the municipal taxes of
3 the municipality or municipalities comprising such school
4 district of the first class or first class A are levied and
5 assessed. All of such real estate and property is taxable for
6 school purposes in each school district of the first class or
7 first class A.
8 Section 1637-E. Certification of assessments.
9 In order to enable the board of public education to levy the
10 necessary school taxes for each school year, there shall be
11 certified to the board, annually, before the first day of
12 November of each year, by the board or bureau of assessors,
13 board of revision of taxes, or other proper authorities in the
14 municipality or municipalities comprising school districts of
15 the first class or first class A, an estimated statement of the
16 total assessment of all real estate and property taxable for
17 municipal purposes in such municipality or municipalities
18 comprising a school district of the first class or first class
19 A, for the ensuing year. In school districts of the first class
20 or first class A that are coterminous with a municipality or
21 municipalities, the taxes of which are levied and assessed on
22 real estate and personal property as contained in the
23 assessments made for county tax purposes, the proper county
24 assessing authorities shall furnish to the board of public
25 education, annually, on or before the first day of November, a
26 properly certified duplicate of the then existing adjusted
27 valuation of all property taxable for county purposes and for
28 municipal purposes within the territorial limits of such
29 municipality or municipalities comprising such school district
30 of the first class or first class A, excepting only such
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1 assessments of intangible personal property as is not subject to
2 the payment of school taxes.
3 Section 1638-E. Certification of levy and collection.
4 Upon any school taxes being levied by the board of public
5 education in any school district of the first class, the amount
6 of such levy shall be properly certified, under the seal of the
7 district, attested by the president and secretary of the board,
8 to the board or bureau of assessors, board of revision of taxes,
9 or other proper authority, authorized to prepare tax duplicates,
10 to be entered thereon, and by the authority properly certified
11 to the receiver of taxes, city treasurer, or other proper
12 authority collecting the municipal taxes in said district, which
13 school taxes shall then be collected as provided by law, at the
14 same time, in the same manner, and with like authority, and
15 subject to the same discounts and penalties as other taxes
16 collected in the municipalities.
17 Section 1639-E. Bond of collector.
18 (a) General rule.--Every receiver of taxes, city treasurer,
19 or other authority in a school district of the first class, who
20 is by the provisions of the Public School Code authorized to
21 collect or receive the school taxes therein, shall, before
22 entering upon the duties of his office as collector or receiver
23 of school taxes, furnish to the school district a bond, in such
24 amount and with such surety or sureties as the board of public
25 education may approve, conditioned upon the faithful performance
26 of his duty in the office of such collector or receiver. The
27 cost of such bond shall be paid by the school district.
28 (b) Collateral bonds permissible.--In lieu of furnishing
29 such a bond, each such receiver of taxes, city treasurer, or
30 other authority, may file his own collateral bond, in such
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1 amount as may be required by the board of public education,
2 secured by an actual deposit with the board of public education,
3 or with any bank or trust company within the Commonwealth which
4 may be agreed upon, of any of the securities which depositories
5 may use to secure the deposit of school funds as herein
6 provided. The total market value of the securities, thus
7 deposited, shall equal the amount of the collateral bond. Such
8 collateral bond shall be conditioned upon the faithful
9 performance of his duties as receiver or collector of taxes. The
10 securities, thus deposited, shall constitute a trust fund to be
11 available for the satisfaction of any liability accruing upon
12 the collateral bond. The securities shall be accompanied by a
13 proper assignment or power of attorney for their transfer. The
14 trust deposit, in the event of any depreciation in its value,
15 shall be maintained, upon request in writing of the board of
16 public education, at the amount provided herein. The board of
17 public education may permit the receiver or collector of taxes
18 to substitute for any one or more bonds or obligations included
19 in any such securities, other bonds or obligations that meet the
20 requirements of the Public School Code.
21 (c) Effect of failure to furnish bond.--In case any receiver
22 of taxes, or city treasurer elected as receiver of taxes or as
23 school treasurer in a school district of the first class, shall
24 refuse or neglect to furnish a proper bond with the proper
25 sureties or securities, after his election, then, in that case,
26 the board of public education may elect any other proper person
27 as receiver of school taxes or school treasurer.
28 Section 1640-E. Compensation, stationery, books and clerks.
29 Every such treasurer or receiver of school taxes shall be
30 paid such compensation as the board of public education in the
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1 district may determine, and, in addition to his salary, be
2 furnished by the school district with the necessary stationery
3 and books required by him in the performance of his duties as
4 treasurer or receiver of school taxes. The board of public
5 education may also appoint, annually, such clerks as it may deem
6 necessary to assist the receiver of taxes.
7 Section 1641-E. Monthly reports and payment of taxes collected.
8 In every school district of the first class the receiver of
9 taxes, city treasurer, or other proper authority collecting or
10 receiving the school taxes as provided in this part shall, at
11 the end of each month, report to the board of public education,
12 and to the school controller, the total amount of school taxes
13 collected during the month, setting forth the years for which
14 collected. He shall pay the same when and as collected to the
15 school treasurer, and shall file with the school controller a
16 duplicate receipt therefor, and shall, at the end of each month,
17 also report the total amount collected during the current fiscal
18 year, and the unexonerated balance remaining uncollected on the
19 tax duplicate for each year in the district.
20 Section 1642-E. Annual reports.
21 The receiver of taxes, city treasurer, or other proper
22 authority collecting or receiving school taxes in any school
23 district of the first class, shall, annually, on the first
24 Monday of April of each year, settle his accounts for the school
25 taxes for the preceding fiscal year, and shall, at the same
26 time, furnish the board of public education with a statement of
27 the total amount of school taxes standing unpaid upon the tax
28 duplicates.
29 Section 1643-E. Liens of unpaid taxes.
30 In all school districts of the first class, all unpaid school
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1 taxes assessed upon any real property shall be liens thereon, in
2 like way and manner, and subject to like provisions and
3 restrictions, as exist and shall exist in the cases of all other
4 taxes assessed in this Commonwealth. Such taxes and liens shall
5 be filed, enforced, and collected by the receiver of taxes,
6 treasurer, or other proper authority, in the manner and under
7 and in accordance with the provisions which are and shall be
8 applicable in the cases of other taxes assessed in this
9 Commonwealth.
10 Section 1643.1-E. Annual budget, advertising and public
11 hearing.
12 (a) General rule.--The board of public education of each
13 school district of the first class shall, annually, at or before
14 the time of levying the annual school taxes, prepare an
15 approximate estimate of the amount of funds that will be
16 required by the school district in its several departments for
17 the following fiscal year. Such annual estimate shall be
18 apportioned to the several classes of expenditures of the
19 districts as the board of public education thereof may
20 determine. The total amount of such estimate shall not exceed
21 the amount of funds, including the proposed annual tax levy and
22 State appropriation, available for school purposes in the
23 district. The annual estimates shall be properly certified to
24 the school controller of the district by the secretary of the
25 board.
26 (b) Advertisement.--The board of public education shall, at
27 least 15 days prior to the time final action is taken on any
28 budget, publish, by advertisement at least once in two
29 newspapers of general circulation printed in the municipality in
30 which such school district is located, notice that such proposed
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1 budget has been prepared and is open to public inspection at the
2 office of the board of public education. Such advertisement
3 shall include a notice of public hearing on the proposed budget,
4 scheduled for at least ten days before final action is taken
5 upon any budget.
6 Section 1644-E. Emergency appropriations.
7 (a) General rule.--The board of public education in school
8 districts of the first class may, during any fiscal year, make
9 additional appropriations, or increase the existing
10 appropriations, to meet emergencies such as epidemics, floods,
11 fire or other catastrophies, and to increase the salaries of the
12 employes of the board, the funds therefor to be provided from
13 unexpended balances in existing appropriations, from
14 unappropriated revenues, if any, or from temporary loans. Such
15 additional appropriations, and such temporary loans, shall be
16 authorized by the affirmative vote of two-thirds of all the
17 members of the board.
18 (b) Transfer of unencumbered balances.--The board of public
19 education shall have the power to transfer any unencumbered
20 balance, or any portion thereof, from one appropriation to
21 another, or from one spending agency to another, by the
22 affirmative vote of two-thirds of all the members of the board.
23 TITLE IV
24 SECOND, THIRD AND FOURTH CLASS
25 SCHOOL DISTRICTS
26 Section 1651-E. Fiscal year.
27 (a) General rule.--In all school districts of the second,
28 third, and fourth class, the fiscal year shall begin on the
29 first day of July in each year: Provided, That the board of
30 school directors of any district of the second class may, by
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1 resolution adopted by two-thirds vote of the members thereof at
2 a meeting of the board after not less than ten days' notice of
3 the fact that such resolution would be presented for action at
4 such meeting, fix the fiscal year of such school district so as
5 to begin on the first day of January in each year instead of on
6 the first day of July as hereinabove provided.
7 (b) Exception.--
8 (1) For fiscal years beginning after June 30, 2004, a
9 school district of the second, third or fourth class may
10 delay the adoption of its annual budget beyond the last day
11 in June where legislation providing the appropriation for
12 basic education funding to be paid as a reimbursement for the
13 preceding school year is not enacted by June 15.
14 (2) A school district that delays the adoption of its
15 annual budget under paragraph (1) shall adopt an annual
16 budget no later than 15 days subsequent to the enactment of
17 legislation providing the appropriation for basic education
18 funding to be paid as a reimbursement for the preceding year.
19 (3) The provisions of section 2468 requiring ten days'
20 public notice prior to final action shall apply in cases when
21 the adoption of a school district's budget is delayed under
22 this subsection.
23 Section 1652-E. Tax levy.
24 (a) General rule.--In all school districts of the second,
25 third, and fourth class, all school taxes shall be levied and
26 assessed by the board of school directors therein, during the
27 month of February or March or April or May or June each year, or
28 no later than 20 days following the enactment of legislation
29 providing the appropriation for basic education funding to be
30 paid as a reimbursement for the preceding school year, for the
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1 ensuing fiscal year, except in districts of the second class
2 where the fiscal year begins on the first day of January, in
3 which the school taxes shall be levied and assessed during the
4 month of October or November of each year.
5 (b) Types of taxes authorized.--Boards of school directors
6 of districts of the second, third and fourth classes are hereby
7 authorized to levy annually:
8 (1) a personal income tax under Part V; or
9 (2) an earned income tax under Part VI; and a realty
10 transfer tax under this act.
11 (c) Transitional taxes.--
12 (1) Subject to the requirements of paragraphs (2), (3)
13 and (4), any school district of the first class, first class
14 A, second, third or fourth classes may continue to levy,
15 assess and collect a real property tax for the school years
16 2007-2008 and 2008-2009 at the rates in effect and on the
17 assessments in effect on July 1, 2006, plus the percentage
18 increase in the Consumer Price Index for All Urban Consumers
19 (CPI-U) for the Pennsylvania, New Jersey, Delaware, and
20 Maryland area for the most recent 36-month period for which
21 figures have been officially reported by the United States
22 Department of Labor, Bureau of Labor Statistics.
23 (2) For the school year 2007-2008, the rate of the tax
24 shall be 75% of the rate identified under paragraph (1).
25 (3) For the school year 2008-2009, the rate of the tax
26 shall be 50% of the rate identified under paragraph (1).
27 (4) For all school years beginning after June 30, 2009,
28 no school district shall have any power or authority to levy,
29 assess and collect any real property tax.
30 (d) Consideration of State appropriations or
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1 reimbursements.--The personal income or earned income tax levied
2 shall not be invalidated by reason of the fact that in
3 determining the amount to be raised by such tax no deduction was
4 made for appropriations or reimbursements paid or payable by the
5 Commonwealth to the school district.
6 Section 1653-E. School districts lying in more than one county
7 or in more than one municipality.
8 (a) General rule.--Whenever a school district lies in more
9 than one county, the total taxes levied on real estate within
10 the school district in each county shall be subject to:
11 (1) the limitation that the ratio which such total taxes
12 bears to the most recent valuation of the same properties by
13 the State Tax Equalization Board shall be uniform in all of
14 the counties, and the school district shall adjust its rate
15 of taxation applicable to the portion of the district in each
16 county to the extent necessary to achieve such uniformity; or
17 (2) as an alternative to the method provided in
18 paragraph (1) or (3), whenever a school district lies in more
19 than one county the board of assessment and revision of taxes
20 in any of the counties or all of the counties in which the
21 school district is located shall, at the request of the
22 school directors of the district, furnish the market value of
23 each parcel of property on the tax roll required to be
24 furnished to the school directors under any assessment law of
25 the Commonwealth. The market value of each parcel shall be:
26 (i) the quotient of the assessed value divided by
27 the latest ratio of assessed value to market value in the
28 municipality as determined by the State Tax Equalization
29 Board;
30 (ii) at the option of the school district, the
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1 market value of each parcel shall be the quotient of the
2 assessed value divided by the latest ratio of assessed
3 value to market value as determined by the State Tax
4 Equalization Board in the aggregate of all municipalities
5 of the school district within the county;
6 (iii) at the option of the school district where
7 there are two or more ratios of assessed value to market
8 value, the school directors of that school district shall
9 select the lowest of the ratios for a uniform assessed
10 value to market value throughout the school district; or
11 (iv) at the option of the school district where such
12 school district is located in a home rule county, the
13 school directors of that school district may use the
14 county assessments.
15 Under this paragraph, the school directors shall set a tax
16 rate based upon a percentage not exceeding 75% of such market
17 values which shall be uniform throughout the district; or
18 (3) as an alternative to the methods provided in
19 paragraphs (1) and (2), whenever a school district lies in
20 more than one county, the school directors of the district
21 may set the millage at a uniform rate for the entire district
22 if the counties are assessed at 100% of the market value and
23 the counties are using the same base year for assessed value
24 and market value.
25 (b) Special circumstances.--In the event a school district
26 or part thereof located within one county is composed of two or
27 more municipal governments at least one of which levies property
28 taxes upon assessments made for county tax purposes and at least
29 one of which utilizes separate assessments made for municipal
30 tax purposes, the property tax levy for school district purposes
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1 shall be equalized by either of the methods prescribed in
2 subsection (a)(1) or (2). If the former method is adopted, the
3 ratio which the total taxes levied in each part of the school
4 district bears to the most recent valuation of the same
5 properties by the State Tax Equalization Board shall be uniform;
6 if the latter method is adopted, the market value of each parcel
7 of property on the tax roll shall be:
8 (i) in the case of the assessment made for county
9 tax purposes, the quotient of the assessed value divided
10 by the latest ratio of assessed value to market value for
11 that portion of the school district as determined by the
12 State Tax Equalization Board; and
13 (ii) in the case of the separate assessment for
14 municipal tax purposes, the quotient of the assessed
15 value divided by the product of the latest ratio of
16 assessed value to market value in the municipality as
17 determined by the State Tax Equalization Board and the
18 ratio of the total assessed valuation of the same
19 properties for municipal tax purposes to the total
20 assessed valuation of said properties for county tax
21 purposes: Provided, however, that the taxpayers of no
22 municipality or political subdivision within a school
23 district shall pay an aggregate amount in school property
24 taxes which, as a percentage of total school property
25 taxes, shall exceed the ratio of its market value to the
26 total market value of the school district as determined
27 by the State Tax Equalization Board.
28 (c) Revised assessments.--Whenever a revision of assessment
29 is completed in any portion of a school district and the revised
30 assessments are to be used for school tax purposes the method
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1 prescribed in subsection (a)(2) to equalize school property tax
2 levies shall not be used until the latest ratio of assessed
3 value to market value as determined by the State Tax
4 Equalization Board for that portion of the school district is
5 based upon the revised assessments.
6 Section 1654-E. School districts lying in more than one county.
7 (a) General rule.--Any school district which lies in more
8 than one county and which levies an occupation tax, shall levy
9 such tax uniformly upon each occupational category existing in
10 all counties in which the district lies, at the lowest assessed
11 valuation for each equivalent occupational category as certified
12 to the school district by the counties in which the district
13 lies.
14 (b) Nonapplicability.--This section shall not apply to any
15 school district which levies an occupational assessment tax on
16 the effective date of this section unless the school district by
17 resolution elected to be subject thereto.
18 Section 1655-E. Tax rates to be expressed in dollars and cents.
19 Whenever the board of school directors of any school district
20 of the second, third, or fourth class shall, by resolution, fix
21 the rate of taxation for any year at a mill rate, such
22 resolution shall also include a statement expressing the rate of
23 taxation in dollars and cents on each $100 of assessed valuation
24 of taxable property.
25 Section 1656-E. Property subject to tax in school districts of
26 the second class.
27 In school districts of the second class, the school taxes
28 shall be levied and assessed on the real estate and personal
29 property therein, as contained in the assessment used for tax
30 purposes in the city, borough, incorporated town or township in
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1 which the school district is located or as contained in the
2 assessment made for county tax purposes.
3 Section 1657-E. Certification of assessments in school
4 districts of the second class.
5 In order to enable the board of school directors in school
6 districts of the second class to levy and assess the necessary
7 school taxes required by such school district each year, the
8 city clerk or other proper official required by law so to do
9 shall, annually, on or before the first day of April in each
10 year, at the expense of the city, furnish to each school
11 district of the second class for its use, to be retained by it,
12 a properly certified duplicate of the last adjusted valuation of
13 all real estate, personal property, and a list of all residents
14 or inhabitants made taxable in such school district of the
15 second class, stating the name of each taxable, the valuation,
16 and kind of property assessed. All of such real estate, personal
17 property, and residents or inhabitants are hereby made taxable
18 for school purposes in each such school district of the second
19 class. The properly certified duplicate, required to be
20 furnished each school district of the second class at the
21 expense of the city, shall consist of a bound book printed and
22 indexed according to the form to be submitted by the secretary
23 of the board of school directors of each such school district to
24 the city clerk or other proper official on or before the first
25 day of January of each year: Provided, That in all cases where a
26 school district of the second class is not located wholly within
27 the boundary lines of a city, the county commissioners or other
28 proper officials in the county shall, at the expense of the
29 county, furnish to the school district a properly certified
30 duplicate of the last adjusted valuation of all real estate,
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1 personal property, and residents or inhabitants made taxable for
2 county purposes in such school district.
3 Section 1658-E. Property subject to tax in school districts of
4 the third and fourth class.
5 (a) General rule.--In all school districts of the third
6 class, excepting school districts of that class which are
7 located wholly within the boundary lines of cities of the third
8 class and where such third class school districts comprise the
9 same territory as such city of the third class in which the same
10 is so located, and in all school districts of the fourth class,
11 the school taxes shall be levied and assessed upon all the
12 property upon which the county taxes are levied and assessed.
13 (b) Special circumstances.--In all school districts of the
14 third class which are located wholly within the boundary lines
15 of any city of the third class, and where such third class
16 school district comprises the same territory as such city of the
17 third class in which the same is so located, the school taxes
18 shall be levied and assessed on the real estate and personal
19 property therein as contained in the assessment made for city
20 tax purposes: Provided, That in any such school district of the
21 third class which is situated within a county of the fourth to
22 the eighth class, the board of school directors may, by
23 resolution, accept the provisions of act of May 21, 1943
24 (P.L.571, No.254), known as The Fourth to Eighth Class County
25 Assessment Law, irrespective of whether or not the city has
26 accepted the provisions of that act, and in such case the school
27 taxes shall be levied and assessed upon all the property upon
28 which the county taxes are levied and assessed.
29 Section 1659-E. Certification of assessments in school
30 districts of the third and fourth class.
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1 (a) General rule.--In order to enable the board of school
2 directors in each district of the third class, other than school
3 districts of that class which are located wholly within the
4 boundary lines of cities of the third class, and where such
5 third class school districts comprise the same territory as such
6 city of the third class in which the same is so located, and in
7 each district of the fourth class, to assess and levy the
8 necessary school taxes required by such district each year, the
9 county commissioners or other proper officials in each county
10 shall, on or before the first day of April in each year, at the
11 expense of the county, furnish to each school district of the
12 third class, other than school districts of that class which are
13 located wholly within the boundary lines of cities of the third
14 class, and where such third class school districts comprise the
15 same territory as such city of the third class in which the same
16 is so located, and to each district of the fourth class therein,
17 for its use, to be retained by it, a properly certified
18 duplicate of the last adjusted valuation of all real estate,
19 personal property, and residents or inhabitants made taxable for
20 county purposes in such school districts, stating the name of
21 each taxable, and the valuation, description, and kind of
22 property, and a list of the residents or inhabitants assessed.
23 All of such real estate, personal property, and residents or
24 inhabitants are hereby made taxable for school purposes in each
25 school district of the third and fourth class.
26 (b) Special circumstances.--In order to enable the board of
27 school directors in all school districts of the third class
28 which are located wholly within the boundary lines of any city
29 of the third class, and where such third class school district
30 comprises the same territory as such city of the third class in
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1 which the same is so located, to levy and assess the necessary
2 school taxes required by such school district each year, the
3 city clerk or other proper officials shall, annually, on or
4 before the first day of April in each year, at the expense of
5 the city, furnish to each school district of the third class
6 mentioned in this subsection, for its use, to be retained by it,
7 a properly certified duplicate of the last adjusted valuation of
8 all real estate, personal property, and a list of all residents
9 or inhabitants made taxable in such school district of the third
10 class mentioned in this subsection, stating the name of each
11 taxable, the valuation, and kind of property assessed. All of
12 such real estate, personal property, and residents or
13 inhabitants are hereby made taxable for school purposes in each
14 such school district of the third class. The properly certified
15 duplicate, herein required to be furnished each of such school
16 districts of the third class at the expense of the city, shall
17 consist of a bound book or books printed and indexed according
18 to the form to be submitted by the secretary of the board of
19 school directors of each school district to the city clerk or
20 other proper official on or before the first day of March of
21 each year.
22 Section 1660-E. Additions and revisions to duplicates.
23 Whenever in second, third and fourth class school districts
24 there is any construction of a building or buildings not
25 otherwise exempt as a dwelling and such building is not included
26 in the tax duplicate of the school district, the authority
27 responsible for assessments in the city, borough, township or
28 county shall, upon the request of the board of school directors,
29 direct the assessor in the district to inspect and assess,
30 subject to the right of appeal and adjustment provided by the
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1 act of the General Assembly under which assessments are made,
2 all taxable property in the district to which major improvements
3 have been made and to give notice of such change in the assessed
4 valuation within ten days to the authority responsible for
5 assessments, the school district and the property owner. Such
6 property shall then be added to the duplicate, and shall be
7 taxable for school purposes at the assessed valuation for that
8 proportionate part of the fiscal year of the school district
9 remaining after the property was improved. Any improvement made
10 during the month shall be computed as having been made on the
11 first of the next succeeding month. A certified copy of the
12 additions or revisions to the duplicate shall be furnished
13 monthly by the board of school directors to the tax collector
14 for the district, and within ten days thereafter the tax
15 collector shall notify the owner of the property of the taxes
16 due the school district.
17 Section 1661-E. Duplicates to include certain territory.
18 The tax duplicate to be certified by the county
19 commissioners, the city clerk, or other proper official, to
20 every school district of the second, third, or fourth class
21 shall, in each proper district, include such territory as was
22 attached to another district.
23 Section 1662-E. Certification of levy.
24 In all school districts of the second, third and fourth
25 class, as soon as the school tax is assessed and levied by the
26 board of school directors, the secretary shall compute and enter
27 the same, stating the amount of school tax to be collected on
28 the duplicate herein required to be furnished to the district. A
29 certified copy of such duplicate shall be furnished by the board
30 of school directors to the tax collector in each district. In
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1 any school district where the collector of school taxes is also
2 the collector of county taxes the secretary of the board of
3 school directors may compute and add the amount of the school
4 taxes to the duplicate furnished by the county commissioners to
5 such tax collector for county purposes. In all school districts
6 of the second, third, or fourth class, all tax duplicates shall
7 be furnished, as herein provided, to the tax collectors on or
8 before the first day of July in each year.
9 Section 1663-E. Tax duplicates and warrants.
10 Each collector of school taxes in every school district of
11 the second, third, or fourth class, shall, on or before the
12 first day of July in each year, be furnished with his tax
13 duplicate.
14 Section 1664-E. Appointment of tax collector in certain cases.
15 The board of school directors in each school district of the
16 second, third, or fourth class, where a tax collector is not
17 elected to collect school taxes, or where there is a vacancy, or
18 where any tax collector elected refuses to qualify or furnish a
19 bond as herein provided, shall, annually, on or before the first
20 day of June in each year, appoint one or more suitable persons
21 as tax collectors in those school districts. The board of school
22 directors in any school district, appointing any tax collector
23 or tax collectors, may authorize and direct any one tax
24 collector to collect the school taxes in any one or more wards
25 or other proper divisions in such school district.
26 Section 1665-E. Bond of appointed collectors.
27 (a) General rule.--Every person appointed collector of
28 school taxes in any school district of the second, third, or
29 fourth class, before receiving his tax duplicate, shall furnish
30 to the school district a proper bond, in an amount to be fixed
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1 by the board of school directors, with such surety or sureties
2 as it may approve, conditioned upon the faithful performance of
3 his duties as such tax collector.
4 (b) Collateral bonds.--In lieu of furnishing such a bond,
5 the tax collector may file his own collateral bond, in such
6 amount as may be required by the board of school directors,
7 secured by an actual deposit with the board of school directors,
8 or with any bank or trust company within this Commonwealth which
9 may be agreed upon, of any of the securities which depositories
10 may use to secure the deposit of school funds. The total market
11 value of the securities, thus deposited, shall equal the amount
12 of the collateral bond. Such collateral bond shall be
13 conditioned upon the faithful performance of his duties as tax
14 collector. The securities, thus deposited, shall constitute a
15 trust fund to be available for the satisfaction of any liability
16 accruing upon the collateral bond. The securities shall be
17 accompanied by a proper assignment or power of attorney for
18 their transfer. The trust deposit, in the event of any
19 depreciation in its value, shall be maintained, upon request in
20 writing of the board of school directors, at the amount provided
21 herein. The board of school directors may permit the tax
22 collector to substitute for any one or more bonds or obligations
23 included in any such securities other bonds or obligations, that
24 meet the requirements of the Public School Code.
25 (c) Fidelity bonds.--In school districts of the second
26 class, the board of school directors may in lieu of a surety
27 bond accept a fidelity bond, conditioned upon the accounting for
28 and payment over of all moneys received by him as taxes and the
29 accounting for all tax items contained in his duplicate which
30 remain uncollected. The tax collector and his sureties shall be
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1 discharged from further liability on any bond as soon as all tax
2 items contained in the duplicate are either:
3 (1) collected and paid over;
4 (2) certified to the board of school directors for entry
5 as liens in the office of the prothonotary;
6 (3) returned to the county commissioners for sale; or
7 (4) the tax collector is exonerated from the collection
8 thereof.
9 (d) Failure to furnish.--In case any person appointed tax
10 collector shall fail to furnish a proper bond, with the proper
11 sureties or securities, within 15 days after his appointment, or
12 notice so to do, then, in any such case, the board of school
13 directors shall appoint another suitable person as collector of
14 the school taxes in the district in his place and stead, who,
15 upon giving the proper bond, with the proper sureties or
16 securities, shall be the duly authorized person to collect the
17 school taxes in the district for the ensuing school year.
18 Section 1666-E. Disqualification for reappointment.
19 In all school districts of the second, third and fourth
20 class, no tax collector shall be reappointed, or be authorized
21 to collect any school taxes in any school year, unless he shall
22 have first settled his duplicate in full with the board of
23 school directors for the preceding year, in the manner provided
24 in this article.
25 Section 1667-E. Delinquent taxes.
26 (a) General rule.--In all school districts of the second,
27 third and fourth class, all unpaid school taxes assessed and
28 levied upon real property upon which there is no personal
29 property out of which the same can be collected, shall be
30 certified by the tax collector to the secretary of the board of
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1 school directors, together with a proper description of the
2 property upon which the same is levied, on or before the first
3 day of June in each year. All delinquent school taxes so
4 certified to the board of school directors in any school
5 district of the second, third or fourth class, by any school tax
6 collector, shall be collected by the board as provided by law.
7 (b) Appointment of delinquent tax collectors.--The board of
8 school directors in such district may annually, on or before the
9 first day of July in each year, appoint one or more suitable
10 persons, as delinquent tax collectors in the school district, to
11 collect any and all school taxes from the collection of which
12 the original tax collector has been exonerated, in accordance
13 with the laws of this Commonwealth, and which taxes still remain
14 unpaid upon any of the school tax duplicates, other than such
15 unpaid school taxes as shall have been filed as liens in the
16 office of the prothonotary, or have been returned to the county
17 commissioners for sale. The delinquent tax collector or
18 collectors shall, upon the certification over to him or them of
19 such taxes so remaining unpaid, proceed to collect the same from
20 the persons respectively charged therewith, for which purpose he
21 or they shall have all the authority and power now vested by law
22 in any collector of school taxes for the collection of such
23 taxes. The board of school directors issuing the original
24 warrants shall issue an additional warrant to the collector or
25 collectors of such delinquent taxes so appointed.
26 (c) Bonds required for delinquent tax collectors.--
27 Collectors of delinquent school taxes so appointed shall give
28 bond in the same manner as required of the original tax
29 collector, and shall be paid such commissions or compensation as
30 is paid the regular collector. Such commissions or compensation
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1 shall be paid by proper orders drawn on the school treasurer as
2 other accounts are paid by the school district. Every such
3 collector of delinquent school taxes shall be responsible and
4 account to the board of school directors for all such taxes
5 collected by him in like manner and in accordance with existing
6 laws pertaining to school tax collections.
7 (d) Assignment of claims.--
8 (1) Each school district may assign some or all of its
9 claims for delinquent school taxes, either absolutely or as
10 collateral security, for an amount to be determined by the
11 school district and under such terms and conditions upon
12 which the school district and the assignee may agree in
13 writing. Upon such an assignment, the following shall apply:
14 (i) The school district or the assignee shall direct
15 the tax claim bureau to record notice of the assignment
16 on the docket.
17 (ii) Assignment shall not be deemed a discharge or
18 satisfaction of the claim or the taxes giving rise to the
19 claim, and the lien of the assigned claim and taxes
20 giving rise to the claim shall continue in favor of the
21 assignee.
22 (iii) The assignee shall have and enjoy the same
23 rights, privileges and remedies as were held by the
24 school district with respect to the assigned claim and
25 the tax giving rise to the claim.
26 (iv) An owner of property shall have the same rights
27 and defenses under all laws applicable to the collection
28 and enforcement of tax claims that the owner held against
29 the assignor.
30 (2) A claim assigned pursuant to this subsection may be
20060H2929B4777 - 195 -
1 further assigned, with the subsequent assignee having and
2 enjoying the same rights, privileges and remedies as its
3 assignor had, provided that notice of any subsequent
4 assignment is recorded pursuant to paragraph (1).
5 Section 1668-E. Annual budget.
6 (a) General rule.--
7 (1) The board of school directors of each school
8 district of the second, third or fourth class shall,
9 annually, at least 30 days prior to the adoption of the
10 annual budget, prepare a proposed budget of the amount of
11 funds that will be required by the school district in its
12 several departments for the following fiscal year. Such
13 proposed budget shall be prepared on a uniform form, prepared
14 and furnished by the department. The uniform form shall
15 require identification of specific function, subfunction and
16 major object of expenditure. On the date of adoption of the
17 proposed budget required under this section, the president of
18 the board of school directors shall certify to the department
19 that the proposed budget has been prepared, presented and
20 will be made available for public inspection using the
21 uniform form prepared and furnished by the department. The
22 certification shall be in a form and manner as required by
23 the department. Final action shall not be taken on any
24 proposed budget that has not been prepared, presented and
25 made available for public inspection using the uniform form
26 prepared and furnished by the department. Final action shall
27 not be taken on any proposed budget in which the estimated
28 expenditures exceed $2,000 until after ten days' public
29 notice. Nothing in this article or the Public School Code
30 shall be construed to prevent any school district whose total
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1 estimated expenditures do not exceed $2,000 from holding a
2 public hearing.
3 (2) (i) The proposed budget, on the uniform form
4 required by the department, shall be printed or otherwise
5 made available for public inspection to all persons and
6 shall be made available for duplication to any person, on
7 request, at least 20 days prior to the date set for the
8 adoption of the budget.
9 (ii) Fees for duplication under this paragraph by
10 photocopying, printing from electronic media or
11 microfilm, copying onto electronic media, transmission by
12 facsimile or other electronic means and other means of
13 duplication must be reasonable and based on prevailing
14 fees for comparable duplication services provided by
15 local business entities.
16 (b) Adoption of budget.--The board of school directors,
17 after making such revisions and changes therein as appear
18 advisable, shall adopt the budget and the necessary
19 appropriation measures required to put it into effect. The total
20 amount of such budget shall not exceed the amount of funds,
21 including the proposed annual tax levy and State appropriation,
22 available for school purposes in that district. Within 15 days
23 after the adoption of the budget, the board of school directors
24 shall file a copy of the budget with the department.
25 (c) Additional appropriations.--The board of school
26 directors may, during any fiscal year, make additional
27 appropriations or increase existing appropriations to meet
28 emergencies, such as epidemics, floods, fires, or other
29 catastrophies, or to provide for the payment for rental under
30 leases or contracts to lease from the State Public School
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1 Building Authority or any municipality authority entered into
2 subsequent to the date of the adoption of the budget. The funds
3 therefor shall be provided from unexpended balances in existing
4 appropriations, from unappropriated revenue, if any, or from
5 temporary loans. Such temporary loans, when made, shall be
6 approved by a two-thirds vote of the board of school directors.
7 (d) Transfer of unencumbered balances.--The board of school
8 directors shall have power to authorize the transfer of any
9 unencumbered balance, or any portion thereof, from one class of
10 expenditure or item to another, but such action shall be taken
11 only during the last nine months of the fiscal year.
12 (e) Copy of budget to General Assembly.--On or before
13 September 15 of each fiscal year, each school district shall
14 furnish to the Education Committee of the Senate and the
15 Education Committee of the House of Representatives a copy of
16 the school district's final adopted annual budget to include the
17 amount of district revenues being held in excess of its total
18 budgeted expenditures. Such documentation shall include an
19 explanation of the district's need to maintain the revenues in
20 this fund balance.
21 (f) Special provisions for 2002-2003 budget.--
22 (1) Notwithstanding any other provisions of this article
23 or the Public School Code, the board of school directors of
24 each school district is required to and shall reopen its
25 2002-2003 budget during the month of July 2002 to reflect the
26 increased State allocations under sections 2502.13, 2502.40,
27 2509.3 and 2591.1 of the Public School Code for fiscal year
28 2002-2003 provided by the General Assembly through the act of
29 June 29, 2002 (P.L.2106, No.7A), known as the General
30 Appropriation Act of 2002.
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1 (2) In those school districts which levy taxes and where
2 the increased State allocations exceed the State revenue
3 figures utilized by the school district at the time of
4 adoption of its original fiscal year 2002-2003 budget, the
5 board of school directors shall use the increases in State
6 allocations to do any of the following:
7 (i) abate any local taxes which were levied at the
8 time of original budget adoption. Such tax abatements
9 shall occur within 60 days of the reopening of the school
10 district's budget and may take the form of tax
11 reductions, rebates or credits;
12 (ii) reduce or retire any outstanding indebtedness
13 of the school district; or
14 (iii) restore funding to any educational programs
15 which were reduced or eliminated for the 2002-2003 school
16 year.
17 (3) Under no circumstances shall any increased State
18 allocations be used to increase a school district's reserved
19 or unreserved fund balance.
20 (g) Special provisions for certain budget years.--
21 Notwithstanding any other provisions of this article or the
22 Public School Code, the board of school directors of each school
23 district may reopen its 2003-2004 budget, its 2004-2005 budget
24 or its 2005-2006 budget to reflect any State allocations for
25 fiscal year 2003-2004, fiscal year 2004-2005 or fiscal year
26 2005-2006 provided by the General Assembly through this act.
27 Section 1669-E. Limitations on certain unreserved fund
28 balances.
29 (a) General rule.--For the 2005-2006 school year and each
30 school year thereafter, no school district shall approve an
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1 increase in real property taxes unless it has adopted a budget
2 that includes an estimated ending unreserved, undesignated fund
3 balance less than the percentages set forth as follows:
4 School District Estimated Ending Unreserved, Undesignated
5 Total Budgeted Fund Balance as Percentage of
6 Expenditures Total Budgeted Expenditures
7 Less Than or Equal to $11,999,999 12%
8 Between $12,000,000 and $12,999,999 11.5%
9 Between $13,000,000 and $13,999,999 11%
10 Between $14,000,000 and $14,999,999 10.5%
11 Between $15,000,000 and $15,999,999 10%
12 Between $16,000,000 and $16,999,999 9.5%
13 Between $17,000,000 and $17,999,999 9%
14 Between $18,000,000 and $18,999,999 8.5%
15 Greater Than or Equal to $19,000,000 8%
16 (b) Certificate of compliance required.--By August 15, 2005,
17 and August 15 of each year thereafter, each school district that
18 approves an increase in real property taxes shall provide the
19 department with information certifying compliance with this
20 section. Such information shall be provided in a form and manner
21 prescribed by the department and shall include information on
22 the school district's estimated ending unreserved, undesignated
23 fund balance expressed as a dollar amount and as a percentage of
24 the school district's total budgeted expenditures for that
25 school year.
26 (c) Definition.--As used in this section, "estimated ending
27 unreserved, undesignated fund balance" shall mean that portion
28 of the fund balance which is appropriable for expenditure or not
29 legally or otherwise segregated for a specific or tentative
30 future use, projected for the close of the school year for which
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1 a school district's budget was adopted and held in the General
2 Fund accounts of the school district.
3 Section 2. Any and all references in any other act to
4 Article II or any provision in Article II of the act of March 4,
5 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, shall
6 be deemed a reference to Article VI-C or the corresponding
7 provisions in Article VI-C of the act of April 9, 1929 (P.L.343,
8 No.176), known as The Fiscal Code.
9 Section 3. The tax imposed on the transfer of real property
10 under the act of December 31, 1965 (P.L.1257, No.511), known as
11 The Local Tax Enabling Act, is saved from repeal.
12 Section 4. Repeals are as follows:
13 (1) The General Assembly declares that the repeals under
14 paragraphs (2), (3) and (4) are necessary to effectuate this
15 act.
16 (2) Sections 507, 603, 631, 632, 633, 634, 635, 636,
17 636.1, 637, 638, 639 and 640 and Subarticles (d) and (e) of
18 Article VI of the act of March 10, 1949 (P.L.30, No.14),
19 known as the Public School Code of 1949, are repealed.
20 (3) The act of December 31, 1965 (P.L.1257, No.511),
21 known as The Local Tax Enabling Act, is repealed insofar as
22 it authorizes the levy, assessment and collection of any tax,
23 other than the tax imposed on the transfer of real property.
24 (4) Article II of the act of March 4, 1971 (P.L.6,
25 No.2), known as the Tax Reform Code of 1971, is repealed.
26 (5) The act of March 11, 1971 (P.L.104, No.3), known as
27 the Senior Citizens Rebate and Assistance Act, is repealed.
28 (6) The act of July 5, 2004 (P.L.654, No.72), known as
29 the Homeowner Tax Relief Act, is repealed.
30 Section 5. This act shall take effect as follows:
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1 (1) The additions of Article VI-C of the act shall take
2 effect January 1, 2007.
3 (2) The addition of Articles VI-A and VI-B of the act
4 shall take effect January 1, 2008.
5 (3) The remainder of this act shall take effect
6 immediately.
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