PRINTER'S NO. 2835
No. 1275 Session of 2007
INTRODUCED BY ROHRER, COX, YEWCIC, ARGALL, QUIGLEY, DENLINGER,
PHILLIPS, STERN, BAKER, BARRAR, BASTIAN, CALTAGIRONE,
CAPPELLI, CREIGHTON, EVERETT, GABIG, GIBBONS, GILLESPIE,
GOODMAN, HARRIS, HENNESSEY, HERSHEY, HESS, KAUFFMAN,
MACKERETH, MAHONEY, MANTZ, McILHATTAN, MENSCH, MOUL, PERRY,
PYLE, READSHAW, ROAE, ROCK, SANTONI, SAYLOR, SCHRODER, STEIL,
SWANGER, MUSTIO AND PICKETT, NOVEMBER 14, 2007
REFERRED TO COMMITTEE ON APPROPRIATIONS, NOVEMBER 14, 2007
AN ACT
1 Providing for tax levies and information related to taxes;
2 authorizing the imposition of a personal income tax or an
3 earned income tax by a school district subject to voter
4 approval; providing for imposition of and exclusions from a
5 sales and use tax for education; establishing the Public
6 Transportation Reserve Fund; providing 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 fiscal 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 the School District Grant and Incentive Programs Fund;
15 providing for disbursements from these funds and for
16 transfers from the Property Tax Relief Fund to the Education
17 Operating Fund; establishing the School Financing Authority
18 and providing for its powers and duties; providing for
19 certain rebates and assistance to senior citizens; adding
20 provisions relating to school district fiscal efficiency;
21 establishing the School Equity Capital Construction Fund and
22 the School Equity Distribution Task Force; and repealing
23 certain provisions of The Local Tax Enabling Act, sales and
24 use tax provisions of the Tax Reform Code of 1971 and
25 provisions relating to senior citizens property tax and rent
26 rebate assistance in the Taxpayer Relief Act.
27 TABLE OF CONTENTS
1 Chapter 1. Preliminary Provisions
2 Section 101. Short title.
3 Section 102. Definitions.
4 Chapter 3. Personal Income Tax
5 Subchapter A. School District Income Tax
6 Section 301. Scope.
7 Section 302. Definitions.
8 Section 303. Preemption.
9 Section 304. Personal income tax authorization.
10 Section 305. Continuity of tax.
11 Section 306. Exemption of low-income persons.
12 Section 307. Collection of personal income tax.
13 Section 308. Limitation on assessment.
14 Section 309. Distress and sale of property of taxpayer.
15 Section 310. Collection of delinquent taxes from employers.
16 Section 311. Collection of delinquent taxes from Commonwealth.
17 Section 312. Notice to taxpayer.
18 Section 313. Collection of taxes by suit.
19 Section 314. Interest and penalties.
20 Section 315. Fines and penalties for violation of resolutions.
21 Section 316. Collection at source.
22 Subchapter B. Education Tax
23 Section 321. Education tax.
24 Chapter 4. State Realty Transfer Tax
25 Section 401. Authorization of State realty transfer tax for
26 public education.
27 Section 402. Deposit of existing Commonwealth realty transfer
28 tax.
29 Chapter 5. Earned Income Tax
30 Section 501. Scope.
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1 Section 502. Definitions.
2 Section 503. Preemption.
3 Section 504. Earned income tax authorization.
4 Section 505. Continuity of tax.
5 Section 506. Exemption of low-income persons.
6 Section 507. Collection of earned income tax.
7 Section 508. Limitation on assessment.
8 Section 509. Distress and sale of property of taxpayer.
9 Section 510. Collection of delinquent taxes from employers.
10 Section 511. Collection of delinquent taxes from Commonwealth.
11 Section 512. Notice to taxpayer.
12 Section 513. Collection of taxes by suit.
13 Section 514. Interest and penalties.
14 Section 515. Fines and penalties for violation of resolutions.
15 Section 516. Collection at source.
16 Chapter 7. Sales and Use Tax for Education
17 Subchapter A. Preliminary Provisions
18 Section 701. Scope.
19 Section 701.1. Definitions.
20 Subchapter B. Sales and Use Tax
21 Section 702. Imposition of tax.
22 Section 703. Computation of tax.
23 Subchapter C. Exclusions from Sales and Use Tax
24 Section 704. Exclusions from tax.
25 Section 705. Alternate imposition of tax.
26 Section 706. Credit against tax.
27 Subchapter D. Licenses
28 Section 708. Licenses.
29 Subchapter E. Hotel Occupancy Tax
30 Section 709. Definitions.
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1 Section 710. Imposition of tax.
2 Section 711. Seasonal tax returns.
3 Subchapter F. Procedure and Administration
4 Section 715. Persons required to make returns.
5 Section 716. Form of returns.
6 Section 717. Time for filing returns.
7 Section 718. Extension of time for filing returns.
8 Section 719. Place for filing returns.
9 Section 720. Timely mailing treated as timely filing and
10 payment.
11 Section 721. Payment of tax.
12 Section 722. Time of payment.
13 Section 723. Other times for payment.
14 Section 724. Place for payment.
15 Section 725. Tax held in trust for Commonwealth.
16 Section 726. Local receivers of use tax.
17 Section 727. Discount.
18 Section 728. (Reserved).
19 Section 729. (Reserved).
20 Section 730. Assessment.
21 Section 731. Mode and time of assessment.
22 Section 732. Reassessment.
23 Section 733. (Reserved).
24 Section 734. Review by Board of Finance and Revenue.
25 Section 735. (Reserved).
26 Section 736. Burden of proof.
27 Section 737. Collection of tax.
28 Section 738. Collection of tax on motor vehicles, trailers
29 and semitrailers.
30 Section 739. Precollection of tax.
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1 Section 740. Bulk and auction sales.
2 Section 741. Collection on failure to request reassessment,
3 review or appeal.
4 Section 742. Lien for taxes.
5 Section 743. Suit for taxes.
6 Section 744. Tax suit comity.
7 Section 745. Service.
8 Section 746. Collection and payment of tax on credit sales.
9 Section 747. Prepayment of tax.
10 Section 747.1. Refund of sales tax attributed to bad debt.
11 Section 748. Registration of transient vendors.
12 Section 748.1. Bond.
13 Section 748.2. Notification to department.
14 Section 748.3. Seizure of property.
15 Section 748.4. Fines.
16 Section 748.5. Transient vendors subject to chapter.
17 Section 748.6. Promoters.
18 Section 749. (Reserved).
19 Section 750. (Reserved).
20 Section 751. (Reserved).
21 Section 752. Refunds.
22 Section 753. Refund petition.
23 Section 754. (Reserved).
24 Section 755. (Reserved).
25 Section 756. Extended time for filing special petition for
26 refund.
27 Section 757. (Reserved).
28 Section 758. Limitation on assessment and collection.
29 Section 759. Failure to file return.
30 Section 760. False or fraudulent return.
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1 Section 761. Extension of limitation period.
2 Section 762. (Reserved).
3 Section 763. (Reserved).
4 Section 764. (Reserved).
5 Section 765. Interest.
6 Section 766. Additions to tax.
7 Section 767. Penalties.
8 Section 768. Criminal offenses.
9 Section 769. Abatement of additions or penalties.
10 Section 770. Rules and regulations.
11 Section 771. Keeping of records.
12 Section 771.1. Reports and records of promoters.
13 Section 772. Examinations.
14 Section 773. Records and examinations of delivery agents.
15 Section 774. Unauthorized disclosure.
16 Section 775. Cooperation with other governments.
17 Section 776. Interstate compacts.
18 Section 777. Bonds.
19 Subchapter G. Funding Provisions
20 Section 780. (Reserved).
21 Section 781. Appropriation for refunds.
22 Section 781.1. Construction.
23 Section 781.2. Transfers to Public Transportation Reserve
24 Fund.
25 Section 782. Transfers to Education Operating Fund.
26 Chapter 9. Senior Citizens Property Tax and Rent Rebate
27 Assistance
28 Section 901. Scope of chapter.
29 Section 902. (Reserved).
30 Section 903. Definitions.
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1 Section 904. Property tax, rent rebate and inflation cost.
2 Section 905. Filing of claim.
3 Section 906. Proof of claim.
4 Section 907. Incorrect claim.
5 Section 908. Funds for payment of claims.
6 Section 909. Claim forms and rules and regulations.
7 Section 910. Fraudulent claims and conveyances to obtain
8 benefits.
9 Section 911. Petition for redetermination.
10 Section 912. Review by Board of Finance and Revenue.
11 Section 913. Appeal.
12 Chapter 11. Limitations on School District Taxation
13 Section 1101. Authority to levy taxes and effect of future
14 Constitutional amendment.
15 Section 1102. Transitional taxes.
16 Section 1103. Consideration of State appropriations or
17 reimbursements.
18 Section 1104. Taxes for cities and school districts of the
19 first class.
20 Chapter 12. Indebtedness
21 Section 1201. Expiration of authority to issue debt.
22 Section 1202. Notices and reporting by school districts
23 of debt outstanding.
24 Section 1203. Assumption of school district debt by
25 Commonwealth.
26 Section 1204. Power to apply for debt and limitations.
27 Section 1205. Referendum requirement.
28 Section 1206. Temporary debt.
29 Section 1207. Limit on temporary debt for current expenses and
30 debt service.
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1 Section 1208. Emergency loans for current expenses and debt
2 service.
3 Section 1209. Limit on temporary debt for permanent
4 improvements and tax levy.
5 Section 1210. Limit on temporary debt in anticipation of
6 proceeds of bond issue.
7 Section 1211. Borrowing in anticipation of current revenue.
8 Chapter 13. Funding Provisions
9 Section 1301. Definitions.
10 Section 1302. Education Operating Fund.
11 Section 1303. Cash flow funding forecasts.
12 Section 1304. Standard disbursements to school districts from
13 Education Operating Fund.
14 Section 1305. Education Trust Reserve Account and distressed
15 district prevention and emergency disbursements.
16 Section 1306. Equity disbursements to school districts from
17 School District Equity Account.
18 Section 1307. Other Disbursements from Education Operating
19 Fund.
20 Section 1307.1. School District Grant and Incentive Programs
21 Fund.
22 Section 1307.2. Other appropriations.
23 Section 1308. Education Operating Fund Board.
24 Section 1309. School Financing Authority.
25 Section 1310. Reduction of sales and use tax for education.
26 Section 1311. School Equity Capital Construction Fund.
27 Section 1312. School Equity Distribution Task Force.
28 Chapter 15. School District Fiscal Efficiency Tools
29 Section 1501. Purpose of chapter.
30 Section 1502. Data-driven decision-making technology
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1 requirements.
2 Section 1503. Certified operations reports.
3 Section 1504. Superintendent report.
4 Section 1505. Annual performance report.
5 Chapter 17. Miscellaneous Provisions
6 Section 1701. Transitional provision.
7 Section 1702. Construction.
8 Section 1703. (Reserved).
9 Section 1704. Repeals.
10 Section 1705. Severability.
11 Section 1706. Effective date.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 CHAPTER 1
15 PRELIMINARY PROVISIONS
16 Section 101. Short title.
17 This act shall be known and may be cited as the School
18 Property Tax Elimination Act.
19 Section 102. Definitions.
20 The following words and phrases when used in this act shall
21 have the meanings given to them in this section unless the
22 context clearly indicates otherwise:
23 "Department." The Department of Revenue of the Commonwealth.
24 "Education Operating Fund." The Education Operating Fund
25 established in section 1302.
26 "Fiscal year." The fiscal year of the Commonwealth beginning
27 on July 1 and ending on June 30 of the immediately following
28 calendar year.
29 "Governing body." The board of school directors of a school
30 district, except that the term shall mean the city council of a
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1 city of the first class for purposes of the levy and collection
2 of any tax in a school district of the first class.
3 "Internal Revenue Code of 1986." The Internal Revenue Code
4 of 1986 (Public Law 99-514, 26 U.S.C. § 166).
5 "Local Tax Enabling Act." The act of December 31, 1965
6 (P.L.1257, No.511), known as The Local Tax Enabling Act,
7 "Public School Code of 1949." The act of March 10, 1949
8 (P.L.30, No.14), known as the Public School Code of 1949.
9 "School district." A school district of the first class,
10 first class A, second class, third class or fourth class,
11 including any independent school district. For purposes of the
12 levy, assessment and collection of any tax in a school district
13 of the first class, the term shall include the City Council.
14 "School per capita tax." The tax authorized pursuant to
15 section 679 of the act of March 10, 1949 (P.L.30, No.14), known
16 as the Public School Code of 1949,
17 "Secretary." The Secretary of Revenue of the Commonwealth.
18 "Tax Reform Code of 1971." The act of March 4, 1971 (P.L.6,
19 No.2), known as the Tax Reform Code of 1971.
20 CHAPTER 3
21 PERSONAL INCOME TAX
22 SUBCHAPTER A
23 SCHOOL DISTRICT INCOME TAX
24 Section 301. Scope.
25 This chapter authorizes school districts to levy, assess and
26 collect a personal income tax as a means of abolishing property
27 taxation by the school district.
28 Section 302. Definitions.
29 The following words and phrases when used in this chapter
30 shall have the meanings given to them in this section unless the
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1 context clearly indicates otherwise:
2 "Association." A partnership, limited partnership or other
3 unincorporated group of two or more persons.
4 "Business." An enterprise, activity, profession or other
5 undertaking of an unincorporated nature conducted for profit or
6 ordinarily conducted for profit whether by a person, association
7 or other entity.
8 "Compensation." The classes of income included within the
9 definition of "compensation" set forth in section 301 of the act
10 of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
11 1971, and upon which are imposed a personal income tax by the
12 Commonwealth.
13 "Corporation." A corporation or joint stock association
14 organized under the laws of the United States or the
15 Commonwealth of Pennsylvania or any other state, territory,
16 foreign country or dependency.
17 "Current year." The calendar year or fiscal year for which a
18 tax is levied.
19 "Domicile."
20 (1) The place where a person lives and has the person's
21 permanent home and to which the person has the intention of
22 returning whenever the person is absent. Actual residence is
23 not necessarily domicile because domicile is the fixed place
24 of abode which, in the intention of the taxpayer, is
25 permanent rather than transitory.
26 (2) Domicile is the voluntarily fixed place of
27 habitation of a person, not for a mere special or limited
28 purpose, but with the present intention of making a permanent
29 home, until some event occurs to induce the person to adopt
30 some other permanent home.
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1 (3) In the case of a business or association, the
2 domicile is any place where the business or association is
3 conducting or engaging in a business for profit within a
4 school district.
5 "Employer." A person, association, corporation, governmental
6 unit or other entity employing one or more persons, other than
7 domestic servants, for compensation.
8 "Nonresident." A person, association or other entity
9 domiciled outside a school district.
10 "Person" or "individual." A natural person.
11 "Personal income." The classes of income enumerated in
12 section 303 of the act of March 4, 1971 (P.L.6, No.2), known as
13 the Tax Reform Code of 1971, and on which is imposed a personal
14 income tax by the Commonwealth.
15 "Political subdivision." A school district.
16 "Preceding year." The calendar year or fiscal year before a
17 current year.
18 "Resident." A person, association, corporation or other
19 entity:
20 (1) living in or maintaining a permanent or fixed place
21 of abode in a school district; or
22 (2) conducting or engaging in a business for profit
23 within a school district.
24 "Succeeding year." The calendar year or fiscal year
25 following a current year.
26 "Tax officer." The person, public employee or private agency
27 designated by a governing body to collect and administer a tax
28 imposed under this chapter, and the treasurer of a school
29 district of the first class A.
30 "Taxpayer." A person, association or other entity required
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1 under this chapter to file a tax return or to pay a tax.
2 Section 303. Preemption.
3 No act of the General Assembly shall vacate or preempt any
4 resolution passed or adopted under the authority of this
5 chapter, or any other act, providing authority for the
6 imposition of a tax by a school district, unless the act of the
7 General Assembly expressly vacates or preempts the authority to
8 pass or adopt the resolutions.
9 Section 304. Personal income tax authorization.
10 (a) School districts.--Except as prohibited under Chapter
11 11, each school district shall have the power and may, by
12 resolution, levy, assess and collect or provide for the levying,
13 assessment and collection of a tax for general revenue purposes
14 at a rate as it shall determine on personal income of the
15 residents of the school district. A school district may only
16 levy or increase the rate of personal income tax when that
17 school district complies with the provisions of subsection (b).
18 (b) Adoption of referendum.--
19 (1) In order to levy a personal income tax under this
20 chapter, a governing body shall use the procedures set forth
21 in paragraphs (2), (3), (4), (5), (6) and (7).
22 (2) (i) Subject to the notice and public hearing
23 requirements of paragraph (7), a governing body may levy
24 the personal income tax under this chapter only by
25 obtaining the approval of the electorate of the affected
26 school district in a public referendum at only the
27 municipal election preceding the fiscal year when the
28 personal income tax will be initially imposed or the rate
29 increased.
30 (ii) The referendum question must state the initial
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1 rate of the proposed personal income tax, the reason for
2 the tax and the amount of proposed budgeted revenue
3 growth, if any, in the first fiscal year following
4 adoption of the referendum.
5 (iii) The question shall be in clear language that
6 is readily understandable by a layperson. For the purpose
7 of illustration, a referendum question may be framed as
8 follows:
9 Do you favor the imposition of a personal income tax
10 of X%?
11 (iv) A nonlegal interpretative statement must
12 accompany the question in accordance with section 201.1
13 of the act of June 3, 1937 (P.L.1333, No.320), known as
14 the Pennsylvania Election Code, that includes the
15 following: the initial rate of the personal income tax
16 imposed under this chapter, the estimated revenues to be
17 derived from the initial rate of the personal income tax
18 imposed under this chapter.
19 (3) In the event a school district is located in more
20 than one county, petitions under this section shall be filed
21 with the election officials of the county in which the
22 administrative offices of the school district are located.
23 (4) The election officials who receive a petition shall
24 perform all administrative functions in reviewing and
25 certifying the validity of the petition and conduct all
26 necessary communications with the school district.
27 (5) (i) If the election officials of the county who
28 receive the petition certify that it is sufficient under
29 this section and determine that a question should be
30 placed on the ballot, the decision shall be communicated
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1 to election officials in any other county in which the
2 school district is also located.
3 (ii) Election officials in the other county or
4 counties shall cooperate with election officials of the
5 county that receives the petition to ensure that an
6 identical question is placed on the ballot at the same
7 election throughout the entire school district.
8 (6) Election officials from each county involved shall
9 independently certify the results from their county to the
10 governing body.
11 (7) (i) In order to levy the tax under this section,
12 the governing body shall adopt a resolution which shall
13 refer to this chapter prior to placing a question on the
14 ballot.
15 (ii) Prior to adopting a resolution imposing the tax
16 authorized by this section, the governing body shall give
17 public notice of its intent to adopt the resolution in
18 the manner provided by section 4 of The Local Tax
19 Enabling Act and shall conduct at least one public
20 hearing regarding the proposed adoption of the
21 resolution.
22 Section 305. Continuity of tax.
23 Every tax levied under this chapter shall continue in force
24 on a calendar or fiscal year basis, as the case may be, without
25 annual reenactment unless the rate of the tax is subsequently
26 changed.
27 Section 306. Exemption of low-income persons.
28 (a) Low-income exemption.--Each school district shall exempt
29 any person who qualifies under the provisions of section 304 of
30 the Tax Reform Code of 1971 from payment of any or all of the
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1 tax imposed under section 304.
2 (b) Procedures.--Each school district shall adopt procedures
3 for the processing of claims for these exemptions.
4 Section 307. Collection of personal income tax.
5 The tax officer shall collect all personal income tax imposed
6 by a school district.
7 Section 308. Limitation on assessment.
8 No assessment may be made of any personal income tax imposed
9 under this chapter more than five years after the date on which
10 the tax should have been paid except where a fraudulent return
11 or no return has been filed.
12 Section 309. Distress and sale of property of taxpayer.
13 (a) General rule.--In case of the neglect or refusal of any
14 person, association or corporation to make payment of the amount
15 of any personal income tax due after two months from the date of
16 the tax notice, the tax officer shall levy the amount of the
17 tax, penalty, interest and costs thereon, not exceeding costs
18 and charges allowed constables for similar services by distress
19 and sale of the goods and chattels of the delinquent taxpayer,
20 wherever located, after giving at least ten days' public notice
21 of the sale by one advertisement in a newspaper of general
22 circulation published in the county.
23 (b) Effect on return.--No failure to demand or collect any
24 taxes by distress and sale of goods and chattels shall
25 invalidate any return made, lien filed for nonpayment of taxes
26 or any tax sale for the collection of taxes.
27 Section 310. Collection of delinquent taxes from employers.
28 (a) General rule.--The tax officer shall demand, receive and
29 collect from all employers employing persons owing delinquent
30 personal income taxes or having in possession unpaid
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1 compensation belonging to any person or persons owing delinquent
2 personal income taxes on the presentation of a written notice
3 and demand certifying that the information contained in the
4 notice and demand is true and correct and containing the name of
5 the taxpayer and the amount of tax due.
6 (b) Response to notice.--On the presentation of the written
7 notice and demand, the employer shall deduct from the
8 compensation of the employees then owing, or thereafter due, a
9 sum sufficient to pay the amount of the delinquent personal
10 income taxes, interest, penalty and costs shown on the written
11 notice or demand, and shall pay the same to the tax officer by
12 which the delinquent tax was levied within 60 days after the
13 notice was given.
14 (c) Limitation on deduction.--No more than 10% of the
15 compensation of the delinquent taxpayer may be deducted at any
16 one time for delinquent personal income taxes, penalty, interest
17 and costs.
18 (d) Deduction for costs.--The employer shall be entitled to
19 deduct from the moneys collected from each employee the costs
20 incurred from the extra bookkeeping necessary to record the
21 transactions, not exceeding 2% of the amount collected and paid
22 over to the tax officer.
23 (e) Forfeiture.--If the employer fails to deduct the amount
24 of such taxes or to pay the same over to the tax officer, less
25 the amount deducted under subsection (d), within the time
26 required by this section, the employer shall forfeit and pay the
27 amount of the tax for those taxpayers whose taxes are not
28 withheld and paid over, or that are withheld and not paid over
29 together with a penalty of 10%, to be recovered by a civil
30 action to be instituted by the tax officer, as debts of like
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1 amount are now by law recoverable, except that the person shall
2 not have the benefit of any exemption law or stay of execution.
3 (f) Collection rights preserved.--Nothing in this section
4 shall be deemed to affect or impair the right of any 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 311. Collection of delinquent taxes from Commonwealth.
9 (a) General rule.--On presentation of a written notice and
10 demand under oath to the State Treasurer or any other fiscal
11 officer of the Commonwealth, or its boards, authorities,
12 agencies or commissions, the treasurer or officer shall deduct
13 from the compensation then owing a sum sufficient to pay the
14 amount of the delinquent personal income taxes, interest,
15 penalty and costs shown on the written notice. The same shall be
16 paid to the tax officer within 60 days after the notice is
17 given.
18 (b) Limitation on deduction.--No more than 10% of the
19 compensation of the delinquent taxpayer may be deducted at any
20 one time for delinquent personal income taxes, interest, penalty
21 and costs.
22 (c) Collection rights preserved.--Nothing in this section
23 shall be deemed to affect or impair the right of a school
24 district or the tax officer to pursue and collect delinquent
25 taxes validly imposed prior to the effective date of this
26 section.
27 Section 312. Notice to taxpayer.
28 The department shall, at least 15 days prior to the
29 presentation of a written notice and demand under section 310 or
30 311, notify the taxpayer owing the delinquent tax by registered
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1 mail that a written notice and demand shall be presented to the
2 taxpayer's employer unless the tax is paid. The return receipt
3 card for registered mail shall be marked delivered to addressee
4 only, and the cost of notification by registered mail shall be
5 included in the costs for collecting taxes.
6 Section 313. Collection of taxes by suit.
7 (a) Power to collect.--
8 (1) Each school district and the tax officer shall have
9 power to collect unpaid taxes from taxpayers and employers
10 owing such taxes by a civil action or other appropriate
11 remedy.
12 (2) On judgment, execution may be issued without any
13 stay or benefit of any exemption law.
14 (3) The power to collect unpaid taxes under the
15 provisions of this section shall not be affected by the fact
16 that such taxes have been entered as liens in the office of
17 the prothonotary or the fact that the property against which
18 they were levied has been returned to the county
19 commissioners for taxes for prior years.
20 (b) Limitation of actions.--A suit brought to recover the
21 taxes under subsection (a) shall be instituted within three
22 years after the tax is due or within three years after a
23 declaration or return has been filed, whichever date is later,
24 except in the following cases:
25 (1) If no declaration or return was filed by any person
26 although a declaration or return was required to be filed
27 under provisions of the ordinance, there shall be no
28 limitation.
29 (2) If an examination of the declaration or return filed
30 by any person, or of other evidence relating to the
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1 declaration or return in the possession of the tax officer,
2 reveals a fraudulent evasion of taxes, there shall be no
3 limitation.
4 (3) If there is a substantial understatement of tax
5 liability of 25% or more and no fraud, suit shall be
6 instituted within six years.
7 (4) If a person has deducted taxes under the provisions
8 of the resolution and has failed to pay the amounts so
9 deducted to the tax officer, or if a person has willfully
10 failed or omitted to make the deductions required by this
11 section, there shall be no limitation.
12 (c) Regulations.--The tax officer, by regulation, shall
13 establish the procedures for collecting the personal income tax
14 and paying the full amount collected over to the school district
15 on a quarterly basis.
16 Section 314. Interest and penalties.
17 (a) General rule.--If for any reason the tax is not paid
18 when due, interest at the annual rate of 6% on the amount of the
19 tax, and an additional penalty of .5% of the amount of the
20 unpaid tax for each month or fraction thereof during which the
21 tax remains unpaid, shall be added and collected. Where suit is
22 brought for the recovery of such tax, the person liable therefor
23 shall, in addition, be liable for the costs of collection and
24 the interest and penalties herein imposed.
25 (b) One-time waiver of interest authorized.--
26 (1) Notwithstanding the provisions of subsection (a),
27 the school district may, by resolution, establish a one-time
28 period during which interest or interest and penalties that
29 would otherwise be imposed for the nonreporting or
30 underreporting of personal income tax liabilities or for the
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1 nonpayment of personal income taxes previously imposed and
2 due shall be waived in total or in part if the taxpayer
3 voluntarily files delinquent returns and pays the taxes in
4 full during the period so established.
5 (2) Each school district may adopt regulations to
6 implement the provisions of this subsection.
7 (c) Proceedings.--The provisions of subsection (b) shall not
8 affect or terminate any petitions, investigations, prosecutions
9 or other proceedings pending on the effective date of this
10 section, or prevent the commencement or further prosecution of
11 any proceedings by the proper authorities for violations of this
12 act. No proceedings shall, however, be commenced on the basis of
13 delinquent returns filed pursuant to subsection (b) if the
14 returns are determined to be substantially true and correct and
15 the taxes are paid in full within the prescribed time.
16 Section 315. Fines and penalties for violation of resolutions.
17 (a) Conduct prohibited.--
18 (1) Any person who fails, neglects or refuses to make
19 any declaration or return required by the resolution, any
20 employer who fails, neglects or refuses to register or to pay
21 the tax deducted from its employees, or fails, neglects or
22 refuses to deduct or withhold the tax from its employees, any
23 person who refuses to permit the officer or any agent
24 designated by that officer to examine the person's books,
25 records and papers, and any person who knowingly makes any
26 incomplete, false or fraudulent return, or attempts to do
27 anything whatsoever to avoid the full disclosure of the
28 amount of the person's personal income in order to avoid the
29 payment of the whole or any part of the tax imposed by the
30 resolution, shall, upon conviction thereof, in any county in
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1 which the school district imposing the tax is located, be
2 sentenced to pay a fine of not more than $500 for each
3 offense and costs and, in default of payment of the fines and
4 costs, to be imprisoned for a period not exceeding 30 days.
5 (2) Any person who divulges any information which is
6 confidential under the provisions of the resolution shall,
7 upon conviction thereof, be sentenced to pay a fine of not
8 more than $500 for each offense and costs and, in default of
9 payment of said fines and costs, to be imprisoned for a
10 period not exceeding 30 days.
11 (b) Cumulative penalties.--The penalties imposed under this
12 section shall be in addition to any other penalty imposed by any
13 other section of the resolution.
14 (c) Defense unavailable.--The failure of any person to
15 receive or procure forms required for making the declaration or
16 returns by the resolution shall not excuse the person from
17 making the declaration or return.
18 Section 316. Collection at source.
19 (a) Duty of employers to register.--Every employer having an
20 office, factory, workshop, branch, warehouse or other place of
21 business within the school district imposing a tax on personal
22 income who employs one or more persons, other than domestic
23 servants, for a salary, wage, commission or other compensation,
24 who has not previously registered shall, within 15 days after
25 becoming an employer, register with the tax officer his name and
26 address and such other information as the tax officer may
27 require.
28 (b) Duty to deduct tax.--
29 (1) Every employer having an office, factory, workshop,
30 branch, warehouse or other place of business within the
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1 school district imposing a tax on personal income who employs
2 one or more persons, other than domestic servants, for a
3 salary, wage, commission or other compensation, shall deduct
4 at the time of payment thereof, the tax imposed pursuant to
5 this chapter due to his employee or employees, and shall, on
6 or before April 30 of the current year, July 31 of the
7 current year, October 31 of the current year and January 31
8 of the succeeding year, file a return and pay to the tax
9 officer the amount of taxes deducted during the preceding
10 three-month periods ending March 31 of the current year, June
11 30 of the current year, September 30 of the current year and
12 December 31 of the current year, respectively.
13 (2) Unless otherwise agreed upon between the tax officer
14 and employer, the return shall show the name and Social
15 Security number of each employee, the compensation of the
16 employee during the preceding three-month period, the tax
17 deducted from the compensation, the school district imposing
18 the tax upon the employee, the total compensation of all
19 employees during the preceding three-month period and the
20 total tax deducted from the compensation and paid with the
21 return.
22 (3) Any employer that for two of the preceding four
23 quarterly periods has failed to deduct the proper tax, or any
24 part thereof, or has failed to pay over the proper amount of
25 tax to the school district, may be required by the officer to
26 file the employer's return and pay the tax monthly. In such
27 cases, payments of tax shall be made to the tax officer on or
28 before the last day of the month succeeding the month for
29 which the tax was withheld.
30 (c) Duty to file annual return.--On or before February 28 of
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1 the succeeding year, every employer shall file with the tax
2 officer:
3 (1) An annual return showing the total amount of
4 compensation paid, the total amount of tax deducted and the
5 total amount of tax paid to the tax officer for the period
6 beginning January 1 of the current year and ending December
7 31 of the current year.
8 (2) A return withholding statement for each employee
9 employed during all or any part of the period beginning
10 January 1 of the current year and ending December 31 of the
11 current year, setting forth the employee's name, address and
12 Social Security number, the amount of earned income paid to
13 the employee during the period, the amount of tax deducted,
14 the school district imposing the tax upon the employees and
15 the amount of tax paid to the tax officer. Every employer
16 shall furnish two copies of the individual return to the
17 employee for whom it is filed.
18 (d) Discontinued businesses.--Every employer who
19 discontinues business prior to December 31 of the current year
20 shall, within 30 days after the discontinuance of business, file
21 the returns and withholding statements required by this section
22 and pay the tax due.
23 (e) Liability of employers.--Every employer who willfully or
24 negligently fails or omits to make the deductions required by
25 this section shall be liable for payment of the taxes which he
26 was required to withhold to the extent that such taxes have not
27 been recovered from the employee.
28 (f) Liability of employees.--The failure or omission of any
29 employer to make the deductions required by this section shall
30 not relieve any employee from the payment of the tax or from
20070H1275B2835 - 24 -
1 complying with the requirements of the ordinance or resolution
2 relating to the filing of declarations and returns.
3 SUBCHAPTER B
4 EDUCATION TAX
5 Section 321. Education tax.
6 (a) Legislative finding.--The General Assembly finds that
7 there is a need for an education tax to offset the loss of
8 revenue caused by the abolition of the school earned income tax
9 and the abolition of other school nuisance taxes and by the need
10 to preserve the tax exemption for food and clothing under the
11 Tax Reform Code of 1971.
12 (b) General rule.--In addition to the tax collected under
13 section 302 of the Tax Reform Code of 1971, the Commonwealth
14 shall impose the tax set forth in subsection (c) in the same
15 manner as the tax under the Tax Reform Code of 1971.
16 (c) Imposition of tax.--
17 (1) Every resident individual, estate or trust shall be
18 subject to, and shall pay for the privilege of receiving each
19 of the classes of income enumerated in section 303 of the Tax
20 Reform Code of 1971, a tax upon each dollar of income
21 received by that resident during that resident's taxable year
22 at the rate of .85%.
23 (2) Every nonresident individual, estate or trust shall
24 be subject to, and shall pay for the privilege of receiving
25 each of the classes of income enumerated in section 303 of
26 the Tax Reform Code of 1971 from sources within this
27 Commonwealth, a tax upon each dollar of income received by
28 that nonresident during that nonresident's taxable year at
29 the rate of .85%.
30 (d) Deposit in Education Operating Fund.--All moneys
20070H1275B2835 - 25 -
1 collected under this section shall be deposited in the Education
2 Operating Fund.
3 (e) Combination of tax forms.--The department shall
4 incorporate the taxpayer reporting requirement for the
5 implementation of this section into the forms utilized by the
6 department under Article III of the Tax Reform Code of 1971.
7 (f) Definitions.--The words and phrases used in this section
8 shall have the same meaning given to them in Article III of the
9 Tax Reform Code of 1971.
10 CHAPTER 4
11 STATE REALTY TRANSFER TAX
12 Section 401. Authorization of State realty transfer tax for
13 public education.
14 (a) General rule.--The Commonwealth shall impose the tax set
15 forth in subsection (b) in the same manner as the tax collected
16 under section 1102-C of the Tax Reform Code of 1971.
17 (b) Imposition of tax.--
18 (1) Every person who makes, executes, delivers, accepts
19 or presents for recording any document or in whose behalf any
20 document is made, executed, delivered, accepted or presented
21 for recording, shall be subject to pay for and in respect to
22 the transaction or any part thereof, or for or in respect of
23 the vellum parchment or paper upon which such document is
24 written or printed, a State tax at the rate of .5% of the
25 value of the real estate represented by such document, which
26 State tax shall be payable at the earlier of the time the
27 document is presented for recording or within 30 days of
28 acceptance of such document or within 30 days of becoming an
29 acquired company.
30 (2) The tax imposed under this section shall apply to
20070H1275B2835 - 26 -
1 transactions that occur on or after January 1, 2009.
2 (c) Deposit into Education Operating Fund.--All moneys
3 collected under this section shall be deposited in the Education
4 Operating Fund and shall be utilized in accordance with the
5 provisions of this act.
6 Section 402. Deposit of existing Commonwealth realty transfer
7 tax.
8 All moneys required to be paid to the Commonwealth in
9 accordance with Article XI-C of the Tax Reform Code of 1971
10 shall be credited to the General Fund.
11 CHAPTER 5
12 EARNED INCOME TAX
13 Section 501. Scope.
14 This chapter authorizes school districts to levy, assess and
15 collect an earned income tax.
16 Section 502. Definitions.
17 The following words and phrases when used in this chapter
18 shall have the meanings given to them in this section unless the
19 context clearly indicates otherwise:
20 "Association." A partnership, limited partnership or other
21 unincorporated group of two or more persons.
22 "Business." An enterprise, activity, profession or other
23 undertaking of an unincorporated nature conducted for profit or
24 ordinarily conducted for profit whether by a person, association
25 or other entity.
26 "Corporation." A corporation or joint stock association
27 organized under the laws of the United States, this Commonwealth
28 or any other state, territory, foreign country or dependency.
29 "Current year." The calendar year or fiscal year for which a
30 tax is levied.
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1 "Department." The Department of Community and Economic
2 Development of the Commonwealth.
3 "Domicile."
4 (1) The place where a person lives and has the person's
5 permanent home and to which the person has the intention of
6 returning whenever the person is absent. Actual residence is
7 not necessarily domicile because domicile is the fixed place
8 of abode which, in the intention of the taxpayer, is
9 permanent rather than transitory.
10 (2) Domicile is the voluntarily fixed place of
11 habitation of a person, not for a mere special or limited
12 purpose, but with the present intention of making a permanent
13 home, until some event occurs to induce the person to adopt
14 some other permanent home.
15 (3) In the case of a business or association, the
16 domicile is any place where the business or association is
17 conducting or engaging in a business for profit within a
18 school district.
19 "Earned income."
20 (1) Compensation as determined under section 303 of the
21 act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform
22 Code of 1971, and regulations in 61 Pa. Code Pt. I Subpt. B
23 Art. V (relating to personal income tax).
24 (2) Employee business expenses are allowable deductions
25 as determined under Article III of the Tax Reform Code of
26 1971.
27 (3) The amount of any housing allowance provided to a
28 member of the clergy shall not be taxable as earned income.
29 "Employer." A person, association, corporation, governmental
30 unit or other entity employing one or more persons, other than
20070H1275B2835 - 28 -
1 domestic servants for compensation.
2 "Nonresident." A person, association or other entity
3 domiciled outside a school district.
4 "Person" or "individual." A natural person.
5 "Political subdivision." A school district.
6 "Preceding year." The calendar year or fiscal year before a
7 current year.
8 "Resident." A person, association, corporation or other
9 entity:
10 (1) living in or maintaining a permanent or fixed place
11 of abode in a school district; or
12 (2) conducting or engaging in a business for profit
13 within a school district.
14 "Succeeding year." The calendar year or fiscal year
15 following a current year.
16 "Tax officer." The person, public employee or private agency
17 designated by a governing body to collect and administer a tax
18 imposed under this chapter, and the treasurer of a school
19 district of the first class A.
20 "Taxpayer." A person, association or other entity required
21 under this chapter to file a tax return or to pay a tax.
22 Section 503. Preemption.
23 No act of the General Assembly shall vacate or preempt any
24 resolution passed or adopted under the authority of this chapter
25 or any other act providing authority for the imposition of a tax
26 by a school district, unless the act of the General Assembly
27 expressly vacates or preempts the authority to pass or adopt
28 such resolutions.
29 Section 504. Earned income tax authorization.
30 (a) School districts.--Except as prohibited under Chapter
20070H1275B2835 - 29 -
1 11, each school district shall have the power and may, by
2 resolution, levy, assess and collect or provide for the levying,
3 assessment and collection of a tax for general revenue purposes
4 at a rate as it shall determine on earned income of the
5 residents of the school district. A school district may only
6 impose and increase the rate of earned income tax when that
7 school district complies with the provisions of subsection (b).
8 (b) Adoption of referendum.--
9 (1) In order to levy an earned income tax under this
10 chapter, a governing body shall use the procedures set forth
11 in paragraphs (2), (3), (4), (5), (6) and (7).
12 (2) (i) Subject to the notice and public hearing
13 requirements of paragraph (7), a governing body may levy
14 the earned income tax under this chapter only by
15 obtaining the approval of the electorate of the affected
16 school district in a public referendum at only the
17 municipal election preceding the fiscal year when the
18 earned income tax will be initially imposed or the rate
19 increased.
20 (ii) The referendum question must state the initial
21 rate of the proposed earned income tax, the reason for
22 the tax and the amount of proposed budgeted revenue
23 growth, if any, in the first fiscal year following
24 adoption of the referendum.
25 (iii) The question shall be in clear language that
26 is readily understandable by a layperson. For the purpose
27 of illustration, a referendum question may be framed as
28 follows:
29 Do you favor the imposition of an earned income and
30 net profits tax of X%?
20070H1275B2835 - 30 -
1 (iv) A nonlegal interpretative statement must
2 accompany the question in accordance with section 201.1
3 of the act of June 3, 1937 (P.L.1333, No.320), known as
4 the Pennsylvania Election Code, that includes the
5 following: the initial rate of the earned income tax
6 imposed under this chapter and the estimated revenues to
7 be derived from the initial rate of the earned income tax
8 imposed under this chapter.
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 in which the
12 administrative offices of the school district are located.
13 (4) The election officials who receive a petition shall
14 perform all administrative functions in reviewing and
15 certifying the validity of the petition and conduct all
16 necessary communications with the school district.
17 (5) (i) If the election officials of the county who
18 receive the petition certify that it is sufficient under
19 this section and determine that a question should be
20 placed on the ballot, the decision shall be communicated
21 to election officials in any other county in which the
22 school district is also located.
23 (ii) Election officials in the other county or
24 counties shall cooperate with election officials of the
25 county receiving the petition to ensure that an identical
26 question is placed on the ballot at the same election
27 throughout the entire school district.
28 (6) Election officials from each county involved shall
29 independently certify the results from their county to the
30 governing body.
20070H1275B2835 - 31 -
1 (7) (i) In order to levy the tax under this section,
2 the governing body shall adopt a resolution which refers
3 to this chapter prior to placing a question on the
4 ballot.
5 (ii) Prior to adopting a resolution imposing the tax
6 authorized by this section, the governing body shall give
7 public notice of its intent to adopt the resolution in
8 the manner provided by section 4 of The Local Tax
9 Enabling Act and shall conduct at least one public
10 hearing regarding the proposed adoption of the
11 resolution.
12 Section 505. Continuity of tax.
13 Every tax levied under this chapter shall continue in force
14 on a calendar or fiscal year basis, as the case may be, without
15 annual reenactment unless the rate of the tax is subsequently
16 changed.
17 Section 506. Exemption of low-income persons.
18 (a) General rule.--Each school district shall exempt any
19 person whose total income from all sources is less than $10,000
20 per year from the earned income tax, or any portion thereof.
21 (b) Procedures.--Each school district shall adopt procedures
22 for the processing of claims for these exemptions.
23 Section 507. Collection of earned income tax.
24 The tax officer shall collect all earned income tax imposed
25 by a school district.
26 Section 508. Limitation on assessment.
27 No assessment may be made of any earned income tax imposed
28 under this chapter more than five years after the date on which
29 the tax should have been paid except where a fraudulent return
30 or no return has been filed.
20070H1275B2835 - 32 -
1 Section 509. Distress and sale of property of taxpayer.
2 (a) General rule.--In case of the neglect or refusal of any
3 person, association or corporation to make payment of the amount
4 of any earned income tax due after two months from the date of
5 the tax notice, the tax officer shall levy the amount of the
6 tax, penalty, interest and costs thereon, not exceeding costs
7 and charges allowed constables for similar services by distress
8 and sale of the goods and chattels of the delinquent taxpayer,
9 wherever located, after giving at least ten days' public notice
10 of such sale by one advertisement in a newspaper of general
11 circulation published in the county.
12 (b) Effect on return.--No failure to demand or collect any
13 taxes by distress and sale of goods and chattels shall
14 invalidate any return made, lien filed for nonpayment of taxes
15 or any tax sale for the collection of taxes.
16 Section 510. Collection of delinquent taxes from employers.
17 (a) General rule.--The tax officer shall demand, receive and
18 collect from all employers employing persons owing delinquent
19 earned income taxes or having in possession unpaid earned income
20 belonging to any person or persons owing delinquent earned
21 income taxes on the presentation of a written notice and demand
22 certifying that the information contained in the notice and
23 demand is true and correct and containing the name of the
24 taxpayer and the amount of tax due.
25 (b) Response to notice.--On the presentation of the written
26 notice and demand, the employer shall deduct from the earned
27 income of the employees then owing, or thereafter due, a sum
28 sufficient to pay the amount of the delinquent earned income
29 taxes, interest, penalty and costs shown on the written notice
30 or demand, and shall pay the same to the tax officer by which
20070H1275B2835 - 33 -
1 the delinquent tax was levied within 60 days after the notice
2 was given.
3 (c) Limitation on deduction.--No more than 10% of the
4 compensation of the delinquent taxpayer may be deducted at any
5 one time for delinquent earned income taxes, penalty, interest
6 and costs.
7 (d) Deduction for costs.--The employer shall be entitled to
8 deduct from the moneys collected from each employee the costs
9 incurred from the extra bookkeeping necessary to record the
10 transactions, not exceeding 2% of the amount collected and paid
11 over to the tax officer.
12 (e) Forfeiture.--If the employer fails to deduct the amount
13 of such taxes or to pay the same over to the tax officer, less
14 the amount deducted under subsection (d), within the time
15 required by this section, the employer shall forfeit and pay the
16 amount of the tax for those taxpayers whose taxes are not
17 withheld and paid over, or that are withheld and not paid over
18 together with a penalty of 10%, to be recovered by a civil
19 action instituted by the tax officer, as debts of like amount
20 are now by law recoverable, except that the person shall not
21 have the benefit of any exemption law or stay of execution.
22 (f) Collection rights preserved.--Nothing in this section
23 shall be deemed to affect or impair the right of any school
24 district or the tax officer to pursue and collect delinquent
25 taxes validly imposed prior to the effective date of this
26 section.
27 Section 511. Collection of delinquent taxes from Commonwealth.
28 (a) General rule.--On presentation of a written notice and
29 demand under oath to the State Treasurer or any other fiscal
30 officer of the Commonwealth, or its boards, authorities,
20070H1275B2835 - 34 -
1 agencies or commissions, the treasurer or officer shall deduct
2 from the compensation then owing a sum sufficient to pay the
3 amount of the delinquent earned income taxes, interest, penalty
4 and costs shown on the written notice. The same shall be paid to
5 the tax officer within 60 days after the notice is given.
6 (b) Limitation on deduction.--No more than 10% of the
7 compensation of the delinquent taxpayer may be deducted at any
8 one time for delinquent earned income taxes, interest, penalty
9 and costs.
10 (c) Collection rights preserved.--Nothing in this section
11 shall be deemed to affect or impair the right of a school
12 district or the tax officer to pursue and collect delinquent
13 taxes validly imposed prior to the effective date of this
14 section.
15 Section 512. Notice to taxpayer.
16 The tax officer shall, at least 15 days prior to the
17 presentation of a written notice and demand under section 510 or
18 511, notify the taxpayer owing the delinquent tax by registered
19 mail that a written notice and demand shall be presented to the
20 taxpayer's employer unless such tax is paid. The return receipt
21 card for registered mail shall be marked delivered to addressee
22 only, and the cost of notification by registered mail shall be
23 included in the costs for collecting taxes.
24 Section 513. Collection of taxes by suit.
25 (a) Power to collect.--
26 (1) Each school district and the tax officer shall have
27 power to collect unpaid taxes from taxpayers and employers
28 owing such taxes by a civil action or other appropriate
29 remedy.
30 (2) On judgment, execution may be issued without any
20070H1275B2835 - 35 -
1 stay or benefit of any exemption law.
2 (3) The power to collect unpaid taxes under the
3 provisions of this section shall not be affected by the fact
4 that such taxes have been entered as liens in the office of
5 the prothonotary or the fact that the property against which
6 they were levied has been returned to the county
7 commissioners for taxes for prior years.
8 (b) Limitation of actions.--A suit brought to recover the
9 taxes under subsection (a) shall be instituted within three
10 years after the tax is due or within three years after a
11 declaration or return has been filed, whichever date is later,
12 except in the following cases:
13 (1) If no declaration or return was filed by any person,
14 although a declaration or return was required to be filed
15 under provisions of the ordinance, there shall be no
16 limitation.
17 (2) If an examination of the declaration or return filed
18 by any person, or of other evidence relating to the
19 declaration or return in the possession of the tax officer,
20 reveals a fraudulent evasion of taxes, there shall be no
21 limitation.
22 (3) If there is a substantial understatement of tax
23 liability of 25% or more and no fraud, suit shall be
24 instituted within six years.
25 (4) If a person has deducted taxes under the provisions
26 of the resolution and has failed to pay the amounts so
27 deducted to the tax officer, or if any person has willfully
28 failed or omitted to make the deductions required by this
29 section, there shall be no limitation.
30 (c) Procedures.--The tax officer shall establish the
20070H1275B2835 - 36 -
1 procedures for collecting the earned income tax and paying the
2 full amount collected over to the school district on a quarterly
3 basis.
4 Section 514. Interest and penalties.
5 (a) General rule.--If for any reason the tax is not paid
6 when due, interest at the annual rate of 6% on the amount of the
7 tax, and an additional penalty of .5% of the amount of the
8 unpaid tax for each month or fraction thereof during which the
9 tax remains unpaid, shall be added and collected. Where suit is
10 brought for the recovery of such tax, the person liable therefor
11 shall, in addition, be liable for the costs of collection and
12 the interest and penalties herein imposed.
13 (b) One-time waiver of interest authorized.--
14 (1) Notwithstanding the provisions of subsection (a),
15 the school district may, by resolution, establish a one-time
16 period during which interest or interest and penalties that
17 would otherwise be imposed for the nonreporting or
18 underreporting of earned income tax liabilities or for the
19 nonpayment of earned income taxes previously imposed and due
20 shall be waived in total or in part if the taxpayer
21 voluntarily files delinquent returns and pays the taxes in
22 full during the period so established.
23 (2) Each school district may adopt regulations to
24 implement the provisions of this subsection.
25 (c) Proceedings.--The provisions of subsection (b) shall not
26 affect or terminate any petitions, investigations, prosecutions
27 or other proceedings pending on the effective date of this
28 section, or prevent the commencement or further prosecution of
29 any proceedings by the proper authorities for violations of this
30 act. No proceedings shall, however, be commenced on the basis of
20070H1275B2835 - 37 -
1 delinquent returns filed pursuant to subsection (b) if the
2 returns are determined to be substantially true and correct and
3 the taxes are paid in full within the prescribed time.
4 Section 515. Fines and penalties for violation of resolutions.
5 (a) Conduct prohibited.--
6 (1) Any person who fails, neglects or refuses to make
7 any declaration or return required by the resolution, any
8 employer who fails, neglects or refuses to register or to pay
9 the tax deducted from its employees, or fails, neglects or
10 refuses to deduct or withhold the tax from its employees, any
11 person who refuses to permit the officer or any agent
12 designated by that officer to examine the person's books,
13 records and papers, and any person who knowingly makes any
14 incomplete, false or fraudulent return, or attempts to do
15 anything whatsoever to avoid the full disclosure of the
16 amount of the person's earned income in order to avoid the
17 payment of the whole or any part of the tax imposed by the
18 resolution, shall, upon conviction thereof, in any county in
19 which the school district imposing the tax is located be
20 sentenced to pay a fine of not more than $500 for each
21 offense and costs and, in default of payment of the fines and
22 costs, to be imprisoned for a period not exceeding 30 days.
23 (2) Any person who divulges any information which is
24 confidential under the provisions of the resolution shall,
25 upon conviction thereof, be sentenced to pay a fine of not
26 more than $500 for each offense and costs and, in default of
27 payment of said fines and costs, to be imprisoned for a
28 period not exceeding 30 days.
29 (b) Cumulative penalties.--The penalties imposed under this
30 section shall be in addition to any other penalty imposed by any
20070H1275B2835 - 38 -
1 other section of the resolution.
2 (c) Defense unavailable.--The failure of any person to
3 receive or procure forms required for making the declaration or
4 returns required by the resolution shall not excuse the person
5 from making the declaration or return.
6 Section 516. Collection at source.
7 (a) Duty of employers to register.--Every employer having an
8 office, factory, workshop, branch, warehouse or other place of
9 business within the school district imposing a tax on earned
10 income within the taxing district who employs one or more
11 persons, other than domestic servants, for a salary, wage,
12 commission or other compensation, who has not previously
13 registered shall, within 15 days after becoming an employer,
14 register with the tax officer his name and address and such
15 other information as the tax officer may require.
16 (b) Duty to deduct tax.--
17 (1) Every employer having an office, factory, workshop,
18 branch, warehouse or other place of business within the
19 school district imposing a tax on earned income who employs
20 one or more persons, other than domestic servants, for a
21 salary, wage, commission or other compensation, shall deduct
22 at the time of payment thereof, the tax imposed pursuant to
23 this chapter on the earned income due to his employee or
24 employees, and shall, on or before April 30 of the current
25 year, July 31 of the current year, October 31 of the current
26 year and January 31 of the succeeding year, file a return and
27 pay to the tax officer the amount of taxes deducted during
28 the preceding three-month periods ending March 31 of the
29 current year, June 30 of the current year, September 30 of
30 the current year and December 31 of the current year,
20070H1275B2835 - 39 -
1 respectively.
2 (2) Unless otherwise agreed upon between the tax officer
3 and employer, the return shall show the name and Social
4 Security number of each employee, the earned income of the
5 employee during the preceding three-month period, the tax
6 deducted from the compensation, the school district imposing
7 the tax upon the employee, the total earned income of all
8 employees during the preceding three-month period and the
9 total tax deducted from the compensation and paid with the
10 return.
11 (3) Any employer that for two of the preceding four
12 quarterly periods has failed to deduct the proper tax, or any
13 part thereof, or has failed to pay over the proper amount of
14 tax to the school district, may be required by the tax
15 officer to file his return and pay the tax monthly. In such
16 cases, payments of tax shall be made to the tax officer on or
17 before the last day of the month succeeding the month for
18 which the tax was withheld.
19 (c) Duty to file annual return.--On or before February 28 of
20 the succeeding year, every employer shall file with the tax
21 officer:
22 (1) An annual return showing the total amount of earned
23 income paid, the total amount of tax deducted and the total
24 amount of tax paid to the tax officer for the period
25 beginning January 1 of the current year and ending December
26 31 of the current year.
27 (2) A return withholding statement for each employee
28 employed during all or any part of the period beginning
29 January 1 of the current year and ending December 31 of the
30 current year, setting forth the employee's name, address and
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1 Social Security number, the amount of earned income paid to
2 the employee during the period, the amount of tax deducted,
3 the school district imposing the tax upon the employees and
4 the amount of tax paid to the tax officer. Every employer
5 shall furnish two copies of the individual return to the
6 employee for whom it is filed.
7 (d) Discontinued businesses.--Every employer who
8 discontinues business prior to December 31 of the current year
9 shall, within 30 days after the discontinuance of business, file
10 the returns and withholding statements required by this section
11 and pay the tax due.
12 (e) Liability of employers.--Every employer who willfully or
13 negligently fails or omits to make the deductions required by
14 this section shall be liable for payment of the taxes which he
15 was required to withhold to the extent that such taxes have not
16 been recovered from the employee.
17 (f) Liability of employees.--The failure or omission of any
18 employer to make the deductions required by this section shall
19 not relieve any employee from the payment of the tax or from
20 complying with the requirements of the ordinance or resolution
21 relating to the filing of declarations and returns.
22 CHAPTER 7
23 SALES AND USE TAX FOR EDUCATION
24 SUBCHAPTER A
25 PRELIMINARY PROVISIONS
26 Section 701. Scope.
27 The tax provided for under this chapter shall be known as the
28 Sales and Use Tax for Education, which shall be a replacement
29 for the sales and use tax authorized under Article II of the Tax
30 Reform Code of 1971 and that is repealed by this act.
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1 Section 701.1. Definitions.
2 The following words and phrases when used in this chapter
3 shall have the meanings given to them in this section unless the
4 context clearly indicates otherwise:
5 (a) "Soft drinks."
6 (1) All nonalcoholic beverages, whether carbonated or
7 not, such as soda water, ginger ale, Coca Cola, lime cola,
8 Pepsi Cola, Dr Pepper, fruit juice when plain or carbonated
9 water, flavoring or syrup is added, carbonated water,
10 orangeade, lemonade, root beer or any and all preparations,
11 commonly referred to as soft drinks, of whatsoever kind, and
12 are further described as including any and all beverages,
13 commonly referred to as soft drinks, which are made with or
14 without the use of any syrup.
15 (2) The term does not include natural fruit or vegetable
16 juices or their concentrates, or noncarbonated fruit juice
17 drinks containing not less than 25% by volume of natural
18 fruit juices or of fruit juice which has been reconstituted
19 to its original state, or natural concentrated fruit or
20 vegetable juices reconstituted to their original state,
21 whether any of the natural juices are frozen or unfrozen,
22 sweetened or unsweetened, seasoned with salt or spice or
23 unseasoned. The term also does not include coffee, coffee
24 substitutes, tea, cocoa, natural fluid milk or noncarbonated
25 drinks made from milk derivatives.
26 (b) "Maintaining a place of business in this Commonwealth."
27 (1) Having, maintaining or using within this
28 Commonwealth, either directly or through a subsidiary,
29 representative or an agent, an office, distribution house,
30 sales house, warehouse, service enterprise or other place of
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1 business; or any agent of general or restricted authority, or
2 representative, irrespective of whether the place of
3 business, representative or agent is located in this
4 Commonwealth, permanently or temporarily, or whether the
5 person or subsidiary maintaining the place of business,
6 representative or agent is authorized to do business within
7 this Commonwealth.
8 (2) Engaging in any activity as a business within this
9 Commonwealth by any person, either directly or through a
10 subsidiary, representative or an agent, in connection with
11 the lease, sale or delivery of tangible personal property or
12 the performance of services thereon for use, storage or
13 consumption or in connection with the sale or delivery for
14 use of the services described in subclauses (11) through (18)
15 of clause (k) of this section, including, but not limited to,
16 having, maintaining or using any office, distribution house,
17 sales house, warehouse or other place of business, any stock
18 of goods or any solicitor, canvasser, salesman,
19 representative or agent under its authority, at its direction
20 or with its permission, regardless of whether the person or
21 subsidiary is authorized to do business in this Commonwealth.
22 (3) Regularly or substantially soliciting orders within
23 this Commonwealth in connection with the lease, sale or
24 delivery of tangible personal property to or the performance
25 thereon of services or in connection with the sale or
26 delivery of the services described in subclauses (11) through
27 (18) of clause (k) of this section for residents of this
28 Commonwealth by means of catalogs or other advertising,
29 whether the orders are accepted within or without this
30 Commonwealth.
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1 (3.1) Entering this Commonwealth by any person to
2 provide assembly, service or repair of tangible personal
3 property, either directly or through a subsidiary,
4 representative or an agent.
5 (3.2) Delivering tangible personal property to locations
6 within this Commonwealth if the delivery includes the
7 unpacking, positioning, placing or assembling of the tangible
8 personal property.
9 (3.3) Having any contact within this Commonwealth which
10 would allow the Commonwealth to require a person to collect
11 and remit tax under the Constitution of the United States.
12 (3.4) Providing a customer's mobile telecommunications
13 service deemed to be provided by the customer's home service
14 provider under the Mobile Telecommunications Sourcing Act (4
15 U.S.C. § 116). For purposes of this clause, words and phrases
16 used in this clause shall have the meanings given to them in
17 the Mobile Telecommunications Sourcing Act.
18 (4) The term does not include:
19 (i) Owning or leasing of tangible or intangible
20 property by a person who has contracted with an
21 unaffiliated commercial printer for printing, provided
22 that:
23 (A) the property is for use by the commercial
24 printer; and
25 (B) the property is located at the Pennsylvania
26 premises of the commercial printer.
27 (ii) Visits by a person's employees or agents to the
28 premises in this Commonwealth of an unaffiliated
29 commercial printer with whom the person has contracted
30 for printing in connection with said contract.
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1 (c) "Manufacture." The performance of manufacturing,
2 fabricating, compounding, processing or other operations,
3 engaged in as a business, which place any tangible personal
4 property in a form, composition or character different from that
5 in which it is acquired whether for sale or use by the
6 manufacturer, and shall include, but not be limited to:
7 (1) Every operation commencing with the first production
8 stage and ending with the completion of tangible personal
9 property having the physical qualities, including packaging,
10 if any, passing to the ultimate consumer, which it has when
11 transferred by the manufacturer to another. For purposes of
12 this definition, "operation" includes clean rooms and their
13 component systems, including: environmental control systems,
14 antistatic vertical walls and manufacturing platforms and
15 floors which are independent of the real estate; process
16 piping systems; specialized lighting systems; deionized water
17 systems; process vacuum and compressed air systems; process
18 and specialty gases; and alarm or warning devices
19 specifically designed to warn of threats to the integrity of
20 the product or people. For purposes of this definition, a
21 "clean room" is a location with a self-contained, sealed
22 environment with a controlled, closed air system independent
23 from the facility's general environmental control system.
24 (2) The publishing of books, newspapers, magazines and
25 other periodicals and printing.
26 (3) Refining, blasting, exploring, mining and quarrying
27 for, or otherwise extracting from the earth or from waste or
28 stock piles or from pits or banks any natural resources,
29 minerals and mineral aggregates including blast furnace slag.
30 (4) Building, rebuilding, repairing and making additions
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1 to, or replacements in or upon vessels designed for
2 commercial use of registered tonnage of 50 tons or more when
3 produced on special order of the purchaser, or when rebuilt,
4 repaired or enlarged, or when replacements are made upon
5 order of or for the account of the owner.
6 (5) Research having as its objective the production of a
7 new or an improved:
8 (i) product or utility service; or
9 (ii) method of producing a product or utility
10 service,
11 but in either case not including market research or research
12 having as its objective the improvement of administrative
13 efficiency.
14 (6) Remanufacture for wholesale distribution by a
15 remanufacturer of motor vehicle parts from used parts
16 acquired in bulk by the remanufacturer using an assembly line
17 process which involves the complete disassembly of such parts
18 and integration of the components of such parts with other
19 used or new components of parts, including the salvaging,
20 recycling or reclaiming of used parts by the remanufacturer.
21 (7) Remanufacture or retrofit by a manufacturer or
22 remanufacturer of aircraft, armored vehicles, other defense-
23 related vehicles having a finished value of at least $50,000.
24 Remanufacture or retrofit involves the disassembly of such
25 aircraft, vehicles, parts or components, including electric
26 or electronic components, the integration of those parts and
27 components with other used or new parts or components,
28 including the salvaging, recycling or reclaiming of the used
29 parts or components and the assembly of the new or used
30 aircraft, vehicles, parts or components. The term does not
20070H1275B2835 - 46 -
1 include constructing, altering, servicing, repairing or
2 improving real estate or repairing, servicing or installing
3 tangible personal property, nor the cooking, freezing or
4 baking of fruits, vegetables, mushrooms, fish, seafood,
5 meats, poultry or bakery products. For purposes of this
6 clause, the following terms or phrases have the following
7 meanings:
8 (i) "aircraft" means fixed-wing aircraft,
9 helicopters, powered aircraft, tilt-rotor or tilt-wing
10 aircraft, unmanned aircraft and gliders;
11 (ii) "armored vehicles" means tanks, armed personnel
12 carriers and all other armed track or semitrack vehicles;
13 and
14 (iii) "other defense-related vehicles" means trucks,
15 truck-tractors, trailers, jeeps and other utility
16 vehicles, including any unmanned vehicles.
17 (c.1) "Blasting." The use of any combustible or explosive
18 composition in the removal of material resources, minerals and
19 mineral aggregates from the earth including the separation of
20 the dirt, waste and refuse in which they are found.
21 (d) "Processing." The performance of the following
22 activities when engaged in as a business enterprise:
23 (1) The filtering or heating of honey, the cooking,
24 baking or freezing of fruits, vegetables, mushrooms, fish,
25 seafood, meats, poultry or bakery products, when the person
26 engaged in the business packages the property in sealed
27 containers for wholesale distribution.
28 (1.1) The processing of fruits or vegetables by
29 cleaning, cutting, coring, peeling or chopping and treating
30 to preserve, sterilize or purify and substantially extend the
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1 useful shelf life of the fruits or vegetables, when the
2 person engaged in the activity packages the property in
3 sealed containers for wholesale distribution.
4 (2) The scouring, carbonizing, cording, combing,
5 throwing, twisting or winding of natural or synthetic fibers,
6 or the spinning, bleaching, dyeing, printing or finishing of
7 yarns or fabrics, when the activities are performed prior to
8 sale to the ultimate consumer.
9 (3) The electroplating, galvanizing, enameling,
10 anodizing, coloring, finishing, impregnating or heat treating
11 of metals or plastics for sale or in the process of
12 manufacturing.
13 (3.1) The blanking, shearing, leveling, slitting or
14 burning of metals for sale to or use by a manufacturer or
15 processor.
16 (4) The rolling, drawing or extruding of ferrous and
17 nonferrous metals.
18 (5) The fabrication for sale of ornamental or structural
19 metal or of metal stairs, staircases, gratings, fire escapes
20 or railings, not including fabrication work done at the
21 construction site.
22 (6) The preparation of animal feed or poultry feed for
23 sale.
24 (7) The production, processing and bottling of
25 nonalcoholic beverages for wholesale distribution.
26 (8) The operation of a saw mill or planing mill for the
27 production of lumber or lumber products for sale. The
28 operation of a saw mill or planing mill begins with the
29 unloading by the operator of the saw mill or planing mill of
30 logs, timber, pulpwood or other forms of wood material to be
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1 used in the saw mill or planing mill.
2 (9) The milling for sale of flour or meal from grains.
3 (9.1) The aging, stripping, conditioning, crushing and
4 blending of tobacco leaves for use as cigar filler or as
5 components of smokeless tobacco products for sale to
6 manufacturers of tobacco products.
7 (10) The slaughtering and dressing of animals for meat
8 to be sold or to be used in preparing meat products for sale,
9 and the preparation of meat products including lard, tallow,
10 grease, cooking and inedible oils for wholesale distribution.
11 (11) The processing of used lubricating oils.
12 (12) The broadcasting of radio and television programs
13 of licensed commercial or educational stations.
14 (13) The cooking or baking of bread, pastries, cakes,
15 cookies, muffins and donuts when the person engaged in the
16 activity sells the items at retail at locations that do not
17 constitute an establishment from which ready-to-eat food and
18 beverages are sold. For purposes of this clause, a bakery, a
19 pastry shop and a donut shop shall not be considered an
20 establishment from which ready-to-eat food and beverages are
21 sold.
22 (14) The cleaning and roasting and the blending,
23 grinding or packaging for sale of coffee from green coffee
24 beans or the production of coffee extract.
25 (15) The preparation of dry or liquid fertilizer for
26 sale.
27 (16) The production, processing and packaging of ice for
28 wholesale distribution.
29 (17) The producing of mobile telecommunications
30 services.
20070H1275B2835 - 49 -
1 (e) "Person." Any natural person, association, fiduciary,
2 partnership, corporation or other entity, including the
3 Commonwealth of Pennsylvania, its political subdivisions and
4 instrumentalities and public authorities. Whenever used in
5 prescribing and imposing a penalty or imposing a fine or
6 imprisonment, or both, the term as applied to an association,
7 includes the members of the association and, as applied to a
8 corporation, the officers of the corporation.
9 (f) "Purchase at retail."
10 (1) The acquisition for a consideration of the
11 ownership, custody or possession of tangible personal
12 property other than for resale by the person acquiring the
13 same when the acquisition is made for the purpose of
14 consumption or use, whether the acquisition is absolute or
15 conditional, and by any means it is effected.
16 (2) The acquisition of a license to use or consume, and
17 the rental or lease of tangible personal property, other than
18 for resale regardless of the period of time the lessee has
19 possession or custody of the property.
20 (3) The obtaining for a consideration of those services
21 described in subclauses (2), (3) and (4) of clause (k) of
22 this section other than for resale.
23 (4) A retention after March 7, 1956, of possession,
24 custody or a license to use or consume pursuant to a rental
25 contract or other lease arrangement (other than as security)
26 other than for resale.
27 (5) The obtaining for a consideration of those services
28 described in subclauses (11) through (18) of clause (k) of
29 this section.
30 The term, with respect to liquor and malt or brewed beverages,
20070H1275B2835 - 50 -
1 includes the purchase of liquor from any Pennsylvania Liquor
2 Store by any person for any purpose, and the purchase of malt or
3 brewed beverages from a manufacturer of malt or brewed
4 beverages, distributor or importing distributor by any person
5 for any purpose, except purchases from a manufacturer of malt or
6 brewed beverages by a distributor or importing distributor or
7 purchases from an importing distributor by a distributor within
8 the meaning of the Liquor Code. The term does not include any
9 purchase of malt or brewed beverages from a retail dispenser or
10 any purchase of liquor or malt or brewed beverages from a person
11 holding a retail liquor license within the meaning of and
12 pursuant to the provisions of the Liquor Code, but includes any
13 purchase or acquisition of liquor or malt or brewed beverages
14 other than pursuant to the provisions of the Liquor Code.
15 (g) "Purchase price."
16 (1) The total value of anything paid or delivered, or
17 promised to be paid or delivered, whether money or otherwise,
18 in complete performance of a sale at retail or purchase at
19 retail, without any deduction on account of the cost or value
20 of the property sold, cost or value of transportation, cost
21 or value of labor or service, interest or discount paid or
22 allowed after the sale is consummated, any other taxes
23 imposed by the Commonwealth or any other expense except that
24 there shall be excluded any gratuity or separately stated
25 deposit charge for returnable containers.
26 (2) The value of any tangible personal property actually
27 taken in trade or exchange in lieu of the whole or any part
28 of the purchase price shall be deducted from the purchase
29 price. For the purpose of this clause, the amount allowed by
30 reason of tangible personal property actually taken in trade
20070H1275B2835 - 51 -
1 or exchange shall be considered the value of such property.
2 (3) (i) In determining the purchase price on the sale
3 or use of taxable tangible personal property or a service
4 where, because of affiliation of interests between the
5 vendor and purchaser, or irrespective of any such
6 affiliation, if for any other reason the purchase price
7 declared by the vendor or taxpayer on the taxable sale or
8 use of such tangible personal property or service is, in
9 the opinion of the department, not indicative of the true
10 value of the article or service or the fair price
11 thereof, the department shall, pursuant to uniform and
12 equitable rules, determine the amount of constructive
13 purchase price on the basis of which the tax shall be
14 computed and levied. The rules shall provide for a
15 constructive amount of purchase price for each sale or
16 use which would naturally and fairly be charged in an
17 arms-length transaction in which the element of common
18 interest between the vendor or purchaser is absent or, if
19 no common interest exists, any other element causing a
20 distortion of the price or value is likewise absent.
21 (ii) For the purpose of this clause where a taxable
22 sale or purchase at retail transaction occurs between a
23 parent and a subsidiary, affiliate or controlled
24 corporation of such parent corporation, there shall be a
25 rebuttable presumption, that because of the common
26 interest, the transaction was not at arms-length.
27 (4) Where there is a transfer or retention of possession
28 or custody, whether it is termed a rental, lease, service or
29 otherwise, of tangible personal property including, but not
30 limited to, linens, aprons, motor vehicles, trailers, tires,
20070H1275B2835 - 52 -
1 industrial office and construction equipment, and business
2 machines the full consideration paid or delivered to the
3 vendor or lessor shall be considered the purchase price, even
4 though the consideration is separately stated and designated
5 as payment for processing, laundering, service, maintenance,
6 insurance, repairs, depreciation or otherwise. Where the
7 vendor or lessor supplies or provides an employee to operate
8 the tangible personal property, the value of the labor
9 supplied may be excluded and shall not be considered as part
10 of the purchase price if separately stated. There shall also
11 be included as part of the purchase price the value of
12 anything paid or delivered, or promised to be paid or
13 delivered by a lessee, whether money or otherwise, to any
14 person other than the vendor or lessor by reason of the
15 maintenance, insurance or repair of the tangible personal
16 property which a lessee has the possession or custody of
17 under a rental contract or lease arrangement.
18 (5) (i) With respect to the tax imposed by section
19 702(a)(2), on any tangible personal property originally
20 purchased by the user of the property six months or
21 longer prior to the first taxable use of the property
22 within this Commonwealth, the user may elect to pay tax
23 on a substituted base determined by considering the
24 purchase price of the property for tax purposes to be
25 equal to the prevailing market price of similar tangible
26 personal property at the time and place of the first use
27 within this Commonwealth.
28 (ii) The election must be made at the time of filing
29 a tax return with the department and reporting the tax
30 liability and paying the proper tax due plus all accrued
20070H1275B2835 - 53 -
1 penalties and interest, if any, within six months of the
2 due date of such report and payment, as provided for by
3 section 717(a) and (c).
4 (6) The purchase price of employment agency services and
5 help supply services shall be the service fee paid by the
6 purchaser to the vendor or supplying entity. The term
7 "service fee," as used in this subclause, means the total
8 charge or fee of the vendor or supplying entity minus the
9 costs of the supplied employee which costs are wages,
10 salaries, bonuses and commissions, employment benefits,
11 expense reimbursements and payroll and withholding taxes, to
12 the extent that these costs are specifically itemized or that
13 these costs in aggregate are stated in billings from the
14 vendor or supplying entity. To the extent that these costs
15 are not itemized or stated on the billings, then the service
16 fee shall be the total charge or fee of the vendor or
17 supplying entity.
18 (7) Unless the vendor separately states that portion of
19 the billing which applies to premium cable service as defined
20 in clause (ll), the total bill for the provision of all cable
21 services shall be the purchase price.
22 (8) The purchase price of prebuilt housing shall be 60%
23 of the manufacturer's selling price, provided that a
24 manufacturer of prebuilt housing who precollects tax from a
25 prebuilt housing builder at the time of the sale to the
26 prebuilt housing builder shall have the option to collect tax
27 on 60% of the selling price or on 100% of the actual cost of
28 the supplies and materials used in the manufacture of the
29 prebuilt housing.
30 (h) "Purchaser." Any person who acquires, for a
20070H1275B2835 - 54 -
1 consideration, the ownership, custody or possession by sale,
2 lease or otherwise of tangible personal property, or who obtains
3 services in exchange for a purchase price but not including an
4 employer who obtains services from his employees in exchange for
5 wages or salaries when such services are rendered in the
6 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
11 the possession of the property is transferred but where the
12 transferor retains title only as security for payment of the
13 selling price whether the transaction is designated as
14 bailment lease, conditional sale or otherwise.
15 (2) The physical incorporation of tangible personal
16 property as an ingredient or constituent into other tangible
17 personal property, which is to be sold in the regular course
18 of business or the performance of those services described in
19 subclauses (2), (3) and (4) of clause (k) upon tangible
20 personal property which is to be sold in the regular course
21 of business or where the person incorporating the property
22 has undertaken at the time of purchase to cause it to be
23 transported in interstate commerce to a destination outside
24 this Commonwealth. The term includes telecommunications
25 services purchased by a cable operator or video programmer
26 that are used to transport or deliver cable or video
27 programming services which are sold in the regular course of
28 business.
29 (3) The term also includes tangible personal property
30 purchased or having a situs within this Commonwealth solely
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1 for the purpose of being processed, fabricated or
2 manufactured into, attached to or incorporated into tangible
3 personal property and thereafter transported outside this
4 Commonwealth for use exclusively outside this Commonwealth.
5 (4) The term does not include any sale of malt or brewed
6 beverages by a retail dispenser, or any sale of liquor or
7 malt or brewed beverages by a person holding a retail liquor
8 license within the meaning of the act of April 12, 1951
9 (P.L.90, No.21), known as the Liquor Code.
10 (5) The physical incorporation of tangible personal
11 property as an ingredient or constituent in the construction
12 of foundations for machinery or equipment the sale or use of
13 which is excluded from tax under the provisions of paragraphs
14 (A), (B), (C) and (D) of subclause (8) of clause (k) and
15 subparagraphs (i), (ii), (iii) and (iv) of paragraph (B) of
16 subclause (4) of clause (o), whether the foundations at the
17 time of construction or transfer constitute tangible personal
18 property or real estate.
19 (j) "Resident."
20 (1) Any natural person:
21 (i) who is domiciled in this Commonwealth; or
22 (ii) who maintains a permanent place of abode within
23 this Commonwealth and spends in the aggregate more than
24 60 days of the year within this Commonwealth.
25 (2) Any corporation:
26 (i) incorporated under the laws of this
27 Commonwealth;
28 (ii) authorized to do business or doing business
29 within this Commonwealth; or
30 (iii) maintaining a place of business within this
20070H1275B2835 - 56 -
1 Commonwealth.
2 (3) Any association, fiduciary, partnership or other
3 entity:
4 (i) domiciled in this Commonwealth;
5 (ii) authorized to do business or doing business
6 within this Commonwealth; or
7 (iii) maintaining a place of business within this
8 Commonwealth.
9 (k) "Sale at retail."
10 (1) Any transfer, for a consideration, of the ownership,
11 custody or possession of tangible personal property,
12 including the grant of a license to use or consume whether
13 the transfer is absolute or conditional and by any means the
14 transfer is effected.
15 (2) The rendition of the service of printing or
16 imprinting of tangible personal property for a consideration
17 for persons who furnish, either directly or indirectly, the
18 materials used in the printing or imprinting.
19 (3) The rendition for a consideration of the service of:
20 (i) washing, cleaning, waxing, polishing or
21 lubricating of motor vehicles of another, regardless of
22 whether any tangible personal property is transferred in
23 conjunction with the activity; and
24 (ii) inspecting motor vehicles pursuant to the
25 mandatory requirements of 75 Pa.C.S. (relating to
26 vehicles).
27 (4) The rendition for a consideration of the service of
28 repairing, altering, mending, pressing, fitting, dyeing,
29 laundering, drycleaning or cleaning tangible personal
30 property including, but not limited to, wearing apparel or
20070H1275B2835 - 57 -
1 shoes, or applying or installing tangible personal property
2 as a repair or replacement part of other tangible personal
3 property including, but not limited to, wearing apparel or
4 shoes for a consideration, regardless of whether the services
5 are performed directly or by any means other than by coin-
6 operated self-service laundry equipment for wearing apparel
7 or household goods and whether or not any tangible personal
8 property is transferred in conjunction with the activity,
9 including such services as are rendered in the construction,
10 reconstruction, remodeling, repair or maintenance of real
11 estate.
12 (5) (Reserved).
13 (6) (Reserved).
14 (7) (Reserved).
15 (8) Any retention of possession, custody or a license to
16 use or consume tangible personal property or any further
17 obtaining of services described in subclauses (2), (3) and
18 (4) of this clause pursuant to a rental or service contract
19 or other arrangement (other than as security). The term does
20 not include:
21 (i) any transfer of tangible personal property or
22 rendition of services for the purpose of resale; or
23 (ii) the rendition of services or the transfer of
24 tangible personal property, including, but not limited
25 to, machinery and equipment and their parts and supplies
26 to be used or consumed by the purchaser directly in the
27 operations of:
28 (A) The manufacture of tangible personal
29 property.
30 (B) Farming, dairying, agriculture, horticulture
20070H1275B2835 - 58 -
1 or floriculture when engaged in as a business
2 enterprise. The term "farming" includes the
3 propagation and raising of ranch raised fur-bearing
4 animals and the propagation of game birds for
5 commercial purposes by holders of propagation permits
6 issued under 34 Pa.C.S. (relating to game) and the
7 propagation and raising of horses to be used
8 exclusively for commercial racing activities.
9 (C) The producing, delivering or rendering of a
10 public utility service, or in constructing,
11 reconstructing, remodeling, repairing or maintaining
12 the facilities which are directly used in producing,
13 delivering or rendering the service.
14 (D) Processing as defined in clause (d). The
15 exclusions provided in this paragraph or paragraph
16 (A), (B) or (C) do not apply to any vehicle required
17 registered under 75 Pa.C.S. (relating to vehicles),
18 except those vehicles used directly by a public
19 utility engaged in business as a common carrier; to
20 maintenance facilities; or to materials, supplies or
21 equipment to be used or consumed in the construction,
22 reconstruction, remodeling, repair or maintenance of
23 real estate other than directly used machinery,
24 equipment, parts or foundations that may be affixed
25 to such real estate. The exclusions provided in this
26 paragraph or paragraph (A), (B) or (C) do not apply
27 to tangible personal property or services to be used
28 or consumed in managerial sales or other
29 nonoperational activities, nor to the purchase or use
30 of tangible personal property or services by any
20070H1275B2835 - 59 -
1 person other than the person directly using the same
2 in the operations described in this paragraph or
3 paragraph (A), (B) or (C).
4 The exclusion provided in paragraph (C) does not apply to:
5 (i) construction materials, supplies or equipment
6 used to construct, reconstruct, remodel, repair or
7 maintain facilities not used directly by the purchaser in
8 the production, delivering or rendition of public utility
9 service;
10 (ii) construction materials, supplies or equipment
11 used to construct, reconstruct, remodel, repair or
12 maintain a building, road or similar structure; or
13 (iii) tools and equipment used but not installed in
14 the maintenance of facilities used directly in the
15 production, delivering or rendition of a public utility
16 service. The exclusions provided in paragraphs (A), (B),
17 (C) and (D) do not apply to the services enumerated in
18 clauses (k)(11) through (18) and (w) through (kk), except
19 that the exclusion provided in this subclause for
20 farming, dairying and agriculture shall apply to the
21 service enumerated in clause (z).
22 (9) Where tangible personal property or services are
23 utilized for purposes constituting a sale at retail and for
24 purposes excluded from the definition of "sale at retail," it
25 shall be presumed that the tangible personal property or
26 services are utilized for purposes constituting a sale at
27 retail and subject to tax unless the user proves to the
28 department that the predominant purposes for which such
29 tangible personal property or services are utilized do not
30 constitute a sale at retail.
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1 (10) The term, with respect to liquor and malt or brewed
2 beverages, includes the sale of liquor by any Pennsylvania
3 liquor store to any person for any purpose, and the sale of
4 malt or brewed beverages by a manufacturer of malt or brewed
5 beverages, distributor or importing distributor to any person
6 for any purpose, except sales by a manufacturer of malt or
7 brewed beverages to a distributor or importing distributor or
8 sales by an importing distributor to a distributor within the
9 meaning of the act of April 12, 1951 (P.L.90, No.21), known
10 as the Liquor Code. The term does not include any sale of
11 malt or brewed beverages by a retail dispenser or any sale of
12 liquor or malt or brewed beverages by a person holding a
13 retail liquor license within the meaning of and pursuant to
14 the provisions of the Liquor Code, but shall include any sale
15 of liquor or malt or brewed beverages other than pursuant to
16 the provisions of the Liquor Code.
17 (11) The rendition for a consideration of lobbying
18 services.
19 (12) The rendition for a consideration of adjustment
20 services, collection services or credit reporting services.
21 (13) The rendition for a consideration of secretarial or
22 editing services.
23 (14) The rendition for a consideration of disinfecting
24 or pest control services, building maintenance or cleaning
25 services.
26 (15) The rendition for a consideration of employment
27 agency services or help supply services.
28 (16) (Reserved).
29 (17) The rendition for a consideration of lawn care
30 service.
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1 (18) The rendition for a consideration of self-storage
2 service.
3 (19) The rendition for a consideration of a mobile
4 telecommunications service.
5 (20) (i) The rendition for a consideration of any
6 service, other than physician or dental services, when
7 the primary objective of the purchaser is the receipt of
8 any benefit of the service performed, as distinguished
9 from the receipt of property. In determining what is a
10 service, the intended use or stated objective of the
11 contracting parties shall not necessarily be controlling.
12 (ii) Any service performed in this Commonwealth
13 shall be subject to the tax imposed under this chapter
14 unless specifically exempted in this chapter. With
15 respect to services, other than telecommunication
16 services, the services shall be considered to be
17 performed in this Commonwealth if:
18 (A) performed completely in this Commonwealth;
19 (B) performed partially in this Commonwealth and
20 partially outside this Commonwealth when the
21 recipient or user of the service is located in this
22 Commonwealth;
23 (C) performed partially in this Commonwealth and
24 partially outside this Commonwealth if the recipient
25 or user of the service is not located in this
26 Commonwealth, but only to the extent of those
27 services actually performed in this Commonwealth; or
28 (D) the place of performance cannot be
29 determined if the recipient or user of the service is
30 located in this Commonwealth.
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1 (iii) With respect to services, other than
2 telecommunication services, the services performed
3 partially in this Commonwealth and partially outside this
4 Commonwealth shall be presumed to have been performed
5 completely in this Commonwealth unless the taxpayer can
6 show the place of performance by clear and convincing
7 evidence.
8 (iv) With respect to interstate telecommunications
9 services, only those charges for interstate
10 telecommunications which originate or are terminated in
11 this Commonwealth and which are billed and charged to a
12 service address in this Commonwealth shall be subject to
13 tax.
14 (v) With respect to services, other than
15 telecommunication services, that are performed in this
16 Commonwealth for a recipient or user of the services
17 located in another state in which the services, had they
18 been performed in that state, would not be subject to a
19 sales or use tax under the laws of that state, then no
20 tax may be imposed under this chapter.
21 (vi) The tax on the sale or use of services shall
22 become due at the time payment or other consideration is
23 made for the portion of services actually paid.
24 (l) "Storage." Any keeping or retention of tangible
25 personal property within this Commonwealth for any purpose
26 including the interim keeping, retaining or exercising any right
27 or power over such tangible personal property. This term is in
28 no way limited to the provision of self-storage service.
29 (m) "Tangible personal property." Corporeal personal
30 property including, but not limited to, goods, wares,
20070H1275B2835 - 63 -
1 merchandise, steam and natural and manufactured and bottled gas
2 for non-residential use, electricity for non-residential use,
3 prepaid telecommunications, premium cable or premium video
4 programming service, spirituous or vinous liquor and malt or
5 brewed beverages and soft drinks, interstate telecommunications
6 service originating or terminating in this Commonwealth and
7 charged to a service address in this Commonwealth, intrastate
8 telecommunications service with the exception of:
9 (1) Subscriber line charges and basic local telephone
10 service for residential use.
11 (2) Charges for telephone calls paid for by inserting
12 money into a telephone accepting direct deposits of money to
13 operate, provided further, the service address of any
14 intrastate telecommunications service is deemed to be within
15 this Commonwealth or within a political subdivision,
16 regardless of how or where billed or paid.
17 In the case of any interstate or intrastate telecommunications
18 service, any charge paid through a credit or payment mechanism
19 which does not relate to a service address, such as a bank,
20 travel, credit or debit card, but not including prepaid
21 telecommunications, is deemed attributable to the address of
22 origination of the telecommunications service.
23 (n) "Taxpayer." Any person required to pay or collect the
24 tax imposed by this chapter.
25 (o) "Use."
26 (1) The exercise of any right or power incidental to the
27 ownership, custody or possession of tangible personal
28 property and includes, but is not limited to, transportation,
29 storage or consumption.
30 (2) The obtaining by a purchaser of the service of
20070H1275B2835 - 64 -
1 printing or imprinting of tangible personal property when the
2 purchaser furnishes, either directly or indirectly, the
3 articles used in the printing or imprinting.
4 (3) The obtaining by a purchaser of the services of:
5 (i) washing, cleaning, waxing, polishing or
6 lubricating of motor vehicles regardless of whether any
7 tangible personal property is transferred to the
8 purchaser in conjunction with the services; and
9 (ii) inspecting motor vehicles pursuant to the
10 mandatory requirements of 75 Pa.C.S. (relating to
11 vehicles).
12 (4) The obtaining by a purchaser of the service of
13 repairing, altering, mending, pressing, fitting, dyeing,
14 laundering, drycleaning or cleaning tangible personal
15 property, including, but not limited to, wearing apparel or
16 shoes or applying or installing tangible personal property as
17 a repair or replacement part of other tangible personal
18 property, including, but not limited to, wearing apparel or
19 shoes, regardless of whether the services are performed
20 directly or by any means other than by means of coin-operated
21 self-service laundry equipment for wearing apparel or
22 household goods, and regardless of whether any tangible
23 personal property is transferred to the purchaser in
24 conjunction with the activity. The term use does not include:
25 (A) Any tangible personal property acquired and
26 kept, retained or over which power is exercised
27 within this Commonwealth on which the taxing of the
28 storage, use or other consumption thereof is
29 expressly prohibited by the Constitution of the
30 United States or which is excluded from tax under
20070H1275B2835 - 65 -
1 other provisions of this chapter.
2 (B) The use or consumption of tangible personal
3 property, including, but not limited to, machinery
4 and equipment and parts therefor, and supplies or the
5 obtaining of the services described in subclauses
6 (2), (3) and (4) of this clause directly in the
7 operations of:
8 (i) The manufacture of tangible personal property.
9 (ii) Farming, dairying, agriculture, horticulture or
10 floriculture when engaged in as a business enterprise.
11 The term includes the propagation and raising of ranch-
12 raised furbearing animals and the propagation of game
13 birds for commercial purposes by holders of propagation
14 permits issued under 34 Pa.C.S. (relating to game) and
15 the propagation and raising of horses to be used
16 exclusively for commercial racing activities.
17 (iii) The producing, delivering or rendering of a
18 public utility service, or in constructing,
19 reconstructing, remodeling, repairing or maintaining the
20 facilities which are directly used in producing,
21 delivering or rendering such service.
22 (iv) Processing as defined in subclause (d).
23 The exclusions provided in subparagraphs (i), (ii), (iii)
24 and (iv) do not apply to any vehicle required to be
25 registered under 75 Pa.C.S. (relating to vehicles) except
26 those vehicles directly used by a public utility engaged
27 in the business as a common carrier; to maintenance
28 facilities; or to materials, supplies or equipment to be
29 used or consumed in the construction, reconstruction,
30 remodeling, repair or maintenance of real estate other
20070H1275B2835 - 66 -
1 than directly used machinery, equipment, parts or
2 foundations therefor that may be affixed to such real
3 estate. The exclusions provided in subparagraphs (i),
4 (ii), (iii) and this subparagraph do not apply to
5 tangible personal property or services to be used or
6 consumed in managerial sales or other nonoperational
7 activities, nor to the purchase or use of tangible
8 personal property or services by any person other than
9 the person directly using the same in the operations
10 described in subparagraphs (i), (ii), (iii) and this
11 subparagraph. The exclusion provided in subparagraph
12 (iii) does not apply to:
13 (A) construction materials, supplies or
14 equipment used to construct, reconstruct, remodel,
15 repair or maintain facilities not used directly by
16 the purchaser in the production, delivering or
17 rendition of public utility service; or
18 (B) tools and equipment used but not installed
19 in the maintenance of facilities used directly in the
20 production, delivering or rendition of a public
21 utility service.
22 The exclusion provided in subparagraphs (i), (ii), (iii)
23 and this subparagraph does not apply to the services
24 enumerated in clauses (9) through (16) and (w) through
25 (kk), except that the exclusion provided in subparagraph
26 (ii) for farming, dairying and agriculture shall apply to
27 the service enumerated in clause (z).
28 (5) Where tangible personal property or services are
29 utilized for purposes constituting a use, and for purposes
30 excluded from the definition of "use," it shall be presumed
20070H1275B2835 - 67 -
1 that the property or services are utilized for purposes
2 constituting a sale at retail and subject to tax unless the
3 user proves to the department that the predominant purposes
4 for which the property or services are utilized do not
5 constitute a sale at retail.
6 (6) The term, with respect to liquor and malt or brewed
7 beverages, includes the purchase of liquor from any
8 Pennsylvania Liquor Store by any person for any purpose and
9 the purchase of malt or brewed beverages from a manufacturer
10 of malt or brewed beverages, distributor or importing
11 distributor by any person for any purpose, except purchases
12 from a manufacturer of malt or brewed beverages by a
13 distributor or importing distributor, or purchases from an
14 importing distributor by a distributor within the meaning of
15 the act of April 12, 1951 (P.L.90, No.21), known as the
16 Liquor Code. The term does not include any purchase of malt
17 or brewed beverages from a retail dispenser or any purchase
18 of liquor or malt or brewed beverages from a person holding a
19 retail liquor license within the meaning of and pursuant to
20 the provisions of the Liquor Code, but includes the exercise
21 of any right or power incidental to the ownership, custody or
22 possession of liquor or malt or brewed beverages obtained by
23 the person exercising the right or power in any manner other
24 than pursuant to the provisions of the Liquor Code.
25 (7) The use of tangible personal property purchased at
26 retail on which the services described in subclauses (2), (3)
27 and (4) of this clause have been performed shall be deemed to
28 be a use of said services by the person using the property.
29 (8) (Reserved).
30 (9) The obtaining by the purchaser of lobbying services.
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1 (10) The obtaining by the purchaser of adjustment
2 services, collection services or credit reporting services.
3 (11) The obtaining by the purchaser of secretarial or
4 editing services.
5 (12) The obtaining by the purchaser of disinfecting or
6 pest control services, building maintenance or cleaning
7 services.
8 (13) The obtaining by the purchaser of employment agency
9 services or help supply services.
10 (14) (Reserved).
11 (15) The obtaining by the purchaser of lawn care
12 service.
13 (16) The obtaining by the purchaser of self-storage
14 service.
15 (17) The obtaining by a construction contractor of
16 tangible personal property or services provided to tangible
17 personal property which will be used pursuant to a
18 construction contract regardless of whether the tangible
19 personal property or services are transferred.
20 (18) The obtaining of mobile telecommunications service
21 by a customer.
22 (19) (i) The obtaining by the purchaser of any service,
23 not otherwise set forth in this definition, other than
24 physician or dental services, when the primary objective
25 of the purchaser is the receipt of any benefit of the
26 service performed, as distinguished from the receipt of
27 property. In determining what is a service, the intended
28 use or stated objective of the contracting parties shall
29 not necessarily be controlling.
30 (ii) Any service performed in this Commonwealth
20070H1275B2835 - 69 -
1 shall be subject to the tax imposed under this chapter
2 unless specifically exempted in this chapter. With
3 respect to services, other than telecommunication
4 services, such services shall be considered to be
5 performed in this Commonwealth if:
6 (A) performed completely in this Commonwealth;
7 (B) performed partially in this Commonwealth and
8 partially outside this Commonwealth when the
9 recipient or user of the service is located in this
10 Commonwealth;
11 (C) performed partially in this Commonwealth and
12 partially outside this Commonwealth if the recipient
13 or user of the service is not located in this
14 Commonwealth, but only to the extent of those
15 services actually performed in this Commonwealth; or
16 (D) the place of performance cannot be
17 determined if the recipient or user of the service is
18 located in this Commonwealth.
19 (iii) With respect to services, other than
20 telecommunication services, such services performed
21 partially in this Commonwealth and partially outside this
22 Commonwealth shall be presumed to have been performed
23 completely in this Commonwealth unless the taxpayer shows
24 the place of performance by clear and convincing
25 evidence.
26 (iv) With respect to interstate telecommunications
27 services, only those charges for interstate
28 telecommunications which originate or are terminated in
29 this Commonwealth and which are billed and charged to a
30 service address in this Commonwealth shall be subject to
20070H1275B2835 - 70 -
1 tax.
2 (v) With respect to services, other than
3 telecommunication services, that are performed in this
4 Commonwealth for a recipient or user of the services
5 located in another state in which the services, had they
6 been performed in that state, would not be subject to a
7 sales or use tax under the laws of that state, then no
8 tax may be imposed under this chapter.
9 (p) "Vendor." Any person maintaining a place of business in
10 this Commonwealth, selling or leasing tangible personal
11 property, or rendering services, the sale or use of which is
12 subject to the tax imposed by this chapter but not including any
13 employee who in the ordinary scope of employment renders
14 services to his employer in exchange for wages and salaries.
15 (q) (Reserved).
16 (r) "Gratuity." Any amount paid or remitted for services
17 performed in conjunction with any sale of food or beverages, or
18 hotel or motel accommodations which amount is in excess of the
19 charges and the tax for such food, beverages or accommodations
20 regardless of the method of billing or payment.
21 (s) "Commercial aircraft operator." A person, excluding a
22 scheduled airline who engages in any or all of the following:
23 charter of aircraft, leasing of aircraft, aircraft sales,
24 aircraft rental, flight instruction, air freight or any other
25 flight activities for compensation.
26 (t) "Transient vendor."
27 (1) Any person who:
28 (i) brings into this Commonwealth, by automobile,
29 truck or other means of transportation, or purchases in
30 this Commonwealth tangible personal property the sale or
20070H1275B2835 - 71 -
1 use of which is subject to the tax imposed by this
2 chapter or comes into this Commonwealth to perform
3 services the sale or use of which is subject to the tax
4 imposed by this chapter;
5 (ii) offers or intends to offer the tangible
6 personal property or services for sale at retail within
7 this Commonwealth; and
8 (iii) does not maintain an established office,
9 distribution house, saleshouse, warehouse, service
10 enterprise, residence from which business is conducted or
11 other place of business within this Commonwealth.
12 (2) The term does not include a person who delivers
13 tangible personal property within this Commonwealth pursuant
14 to orders for the property which were solicited or placed by
15 mail or other means.
16 (3) The term does not include a person who handcrafts
17 items for sale at special events, including, but not limited
18 to, fairs, carnivals, art and craft shows and other festivals
19 and celebrations within this Commonwealth.
20 (u) "Promoter." A person who either, directly or
21 indirectly, rents, leases or otherwise operates or grants
22 permission to any person to use space at a show for the display
23 for sale or for the sale of tangible personal property or
24 services subject to tax under section 702.
25 (v) "Show." An event, the primary purpose of which involves
26 the display or exhibition of any tangible personal property or
27 services for sale, including, but not limited to, a flea market,
28 antique show, coin show, stamp show, comic book show, hobby
29 show, automobile show, fair or any similar show, whether held
30 regularly or of a temporary nature, at which more than one
20070H1275B2835 - 72 -
1 vendor displays for sale or sells tangible personal property or
2 services subject to tax under section 702.
3 (w) "Lobbying services." Providing the services of a
4 lobbyist, as defined in the definition of "lobbyist" in 65
5 Pa.C.S. Ch. 13 (relating to lobby regulation and disclosures).
6 (x) "Adjustment services, collection services or credit
7 reporting services." Providing collection or adjustments of
8 accounts receivable or mercantile or consumer credit reporting,
9 including, but not limited to, services of the type provided by
10 adjustment bureaus or collection agencies, consumer or
11 mercantile credit reporting bureaus, credit bureaus or agencies,
12 credit clearinghouses or credit investigation services. The term
13 does not include providing credit card service with collection
14 by a central agency, providing debt counseling or adjustment
15 services to individuals or billing or collection services
16 provided by local exchange telephone companies.
17 (y) "Secretarial or editing services." Providing services
18 which include, but are not limited to, editing, letter writing,
19 proofreading, resume writing, typing or word processing. The
20 term does not include court reporting and stenographic services.
21 (z) "Disinfecting or pest control services." Providing
22 disinfecting, termite control, insect control, rodent control or
23 other pest control services. The term includes, but is not
24 limited to, deodorant servicing of rest rooms, washroom
25 sanitation service, rest room cleaning service, extermination
26 service or fumigating service. As used in this clause, the term
27 "fumigating service" does not include the fumigation of
28 agricultural commodities or containers used for agricultural
29 commodities. As used in this clause, the term "insect control"
30 does not include the gypsy moth control spraying of trees which
20070H1275B2835 - 73 -
1 are harvested for commercial purposes.
2 (aa) "Building maintenance or cleaning services." Providing
3 services which include, but are not limited to, janitorial, maid
4 or housekeeping service, office or interior building cleaning or
5 maintenance service, window cleaning service, floor waxing
6 service, lighting maintenance service such as bulb replacement,
7 cleaning, chimney cleaning service, acoustical tile cleaning
8 service, venetian blind cleaning, cleaning and maintenance of
9 telephone booths or cleaning and degreasing of service stations.
10 The term does not include: repairs on buildings and other
11 structures; the maintenance or repair of boilers, furnaces and
12 residential air conditioning equipment or their parts; the
13 painting, wallpapering or applying other like coverings to
14 interior walls, ceilings or floors; or the exterior painting of
15 buildings.
16 (bb) "Employment agency services." Providing employment
17 services to a prospective employer or employee other than
18 employment services provided by theatrical employment agencies
19 and motion picture casting bureaus. The term includes, but is
20 not limited to, services of the type provided by employment
21 agencies, executive placing services and labor contractor
22 employment agencies other than farm labor.
23 (cc) "Help supply services." Providing temporary or
24 continuing help where the help supplied is on the payroll of the
25 supplying person or entity, but is under the supervision of the
26 individual or business to which help is furnished. The term
27 includes, but is not limited to, service of a type provided by
28 labor and manpower pools, employee leasing services, office help
29 supply services, temporary help services, usher services,
30 modeling services or fashion show model supply services. The
20070H1275B2835 - 74 -
1 term does not include: providing farm labor services or human
2 health-related services, including nursing, home health care and
3 personal care. As used in this clause, "personal care" shall
4 include providing at least one of the following types of
5 assistance to persons with limited ability for self-care:
6 (1) dressing, bathing or feeding;
7 (2) supervising self-administered medication;
8 (3) transferring a person to or from a bed or
9 wheelchair; or
10 (4) routine housekeeping chores when provided in
11 conjunction with and supplied by the same provider of the
12 assistance listed in subclause (1), (2) or (3).
13 (dd) (Reserved).
14 (ee) (Reserved).
15 (ff) (Reserved).
16 (gg) (Reserved).
17 (hh) (Reserved).
18 (ii) (Reserved).
19 (jj) "Lawn care service." Providing services for lawn
20 upkeep, including, but not limited to, fertilizing, lawn mowing,
21 shrubbery trimming or other lawn treatment services.
22 (kk) "Self-storage service." Providing a building, a room
23 in a building or a secured area within a building with separate
24 access provided for each purchaser of self-storage service,
25 primarily for the purpose of storing personal property. The term
26 does not include service involving:
27 (1) safe deposit boxes by financial institutions;
28 (2) storage in refrigerator or freezer units;
29 (3) storage in commercial warehouses;
30 (4) facilities for goods distribution; and
20070H1275B2835 - 75 -
1 (5) lockers in airports, bus stations, museums and other
2 public places.
3 (ll) "Premium cable or premium video programming service."
4 That portion of cable television services, video programming
5 services, community antenna television services or any other
6 distribution of television, video, audio or radio services which
7 meets all of the following criteria:
8 (1) is transmitted with or without the use of wires to
9 purchasers;
10 (2) which consists substantially of programming
11 uninterrupted by paid commercial advertising, including, but
12 not limited to, programming primarily composed of
13 uninterrupted full-length motion pictures or sporting events,
14 pay-per-view, paid programming or like audio or radio
15 broadcasting; and
16 (3) does not constitute a component of a basic service
17 tier provided by a cable television system or a cable
18 programming service tier provided by a cable television
19 system. A basic service tier includes all signals of domestic
20 television broadcast stations, any public, educational,
21 governmental or religious programming and any additional
22 video programming signals or service added to the basic
23 service tier by the cable operator. The basic service tier
24 also includes a single additional lower-priced package of
25 broadcast channels and access information channels which is a
26 subset of the basic service tier as set forth above. A cable
27 programming service tier includes any video programming other
28 than:
29 (i) the basic service tier;
30 (ii) video programming offered on a pay-per-channel
20070H1275B2835 - 76 -
1 or pay-per-view basis; or
2 (iii) a combination of multiple channels of pay-per-
3 channel or pay-per-view programming offered as a package.
4 If a purchaser receives or agrees to receive premium cable or
5 premium video programming service, then the following charges
6 are included in the purchase price: charges for installation or
7 repair of any premium cable or premium video programming
8 service, upgrade to include additional premium cable or premium
9 video programming service, downgrade to exclude all or some
10 premium cable or premium video programming service, additional
11 premium cable outlets in excess of ten or any other charge or
12 fee related to premium cable or premium video programming
13 services. The term does not apply to: transmissions by public
14 television, public radio services or official Federal, State or
15 local government cable services; local origination programming
16 which provides a variety of public service programs unique to
17 the community, programming which provides coverage of public
18 affairs issues which are presented without commentary or
19 analysis, including United States Congressional proceedings, or
20 programming which is substantially related to religious
21 subjects; or subscriber charges for access to a video dial tone
22 system or charges by a common carrier to a video programmer for
23 the transport of video programming.
24 (mm) (Reserved).
25 (nn) "Construction contract." A written or oral contract or
26 agreement for the construction, reconstruction, remodeling,
27 renovation or repair of real estate or a real estate structure.
28 The term shall not apply to services which are taxable under
29 clauses (k)(14) and (17) and (o)(12) and (15).
30 (oo) "Construction contractor." A person who performs an
20070H1275B2835 - 77 -
1 activity pursuant to a construction contract, including a
2 subcontractor.
3 (pp) "Building machinery and equipment." Generation
4 equipment, storage equipment, conditioning equipment,
5 distribution equipment and termination equipment, limited to the
6 following:
7 (1) air conditioning limited to heating, cooling,
8 purification, humidification, dehumidification and
9 ventilation;
10 (2) electrical;
11 (3) plumbing;
12 (4) communications limited to voice, video, data, sound,
13 master clock and noise abatement;
14 (5) alarms limited to fire, security and detection;
15 (6) control system limited to energy management, traffic
16 and parking lot and building access;
17 (7) medical system limited to diagnosis and treatment
18 equipment, medical gas, nurse call and doctor paging;
19 (8) laboratory system;
20 (9) cathodic protection system; or
21 (10) furniture, cabinetry and kitchen equipment.
22 The term includes boilers, chillers, air cleaners, humidifiers,
23 fans, switchgear, pumps, telephones, speakers, horns, motion
24 detectors, dampers, actuators, grills, registers, traffic
25 signals, sensors, card access devices, guardrails, medial
26 devices, floor troughs and grates and laundry equipment,
27 together with integral coverings and enclosures, regardless of
28 whether: the item constitutes a fixture or is otherwise affixed
29 to the real estate; damage would be done to the item or its
30 surroundings on removal; or the item is physically located
20070H1275B2835 - 78 -
1 within a real estate structure. The term does not include
2 guardrail posts, pipes, fittings, pipe supports and hangers,
3 valves, underground tanks, wire, conduit, receptacle and
4 junction boxes, insulation, ductwork and coverings.
5 (qq) "Real estate structure." A structure or item purchased
6 by a construction contractor pursuant to a construction contract
7 with:
8 (1) a charitable organization, a volunteer firemen's
9 organization, a nonprofit educational institution or a
10 religious organization for religious purposes and which
11 qualifies as an institution of purely public charity under
12 the act of November 26, 1997 (P.L.508, No.55), known as the
13 Institutions of Purely Public Charity Act;
14 (2) the United States; or
15 (3) the Commonwealth, its instrumentalities or political
16 subdivisions.
17 The term includes building machinery and equipment; developed or
18 undeveloped land; streets; roads; highways; parking lots;
19 stadiums and stadium seating; recreational courts; sidewalks;
20 foundations; structural supports; walls; floors; ceilings;
21 roofs; doors; canopies; millwork; elevators; windows and
22 external window coverings; outdoor advertising boards or signs;
23 airport runways; bridges; dams; dikes; traffic control devices,
24 including traffic signs; satellite dishes; antennas; guardrail
25 posts; pipes; fittings; pipe supports and hangers; valves;
26 underground tanks; wire; conduit; receptacle and junction boxes;
27 insulation; ductwork and coverings; and any structure or item
28 similar to any of the foregoing, regardless of whether the
29 structure or item constitutes a fixture or is affixed to the
30 real estate; or damage would be done to the structure or item or
20070H1275B2835 - 79 -
1 its surroundings on removal.
2 (rr) "Telecommunications service." Any one-way transmission
3 or any two-way, interactive transmission of sounds, signals or
4 other intelligence converted to like form which effects or is
5 intended to effect meaningful communications by electronic or
6 electromagnetic means via wire, cable, satellite, light waves,
7 microwaves, radio waves or other transmission media. The term
8 includes all types of telecommunication transmissions, local,
9 toll, wide-area or any other type of telephone service; private
10 line service; telegraph service; radio repeater service;
11 wireless communication service; personal communications system
12 service; cellular telecommunication service; specialized mobile
13 radio service; stationary two-way radio service; and paging
14 service. The term does not include any of the following:
15 (1) Subscriber charges for access to a video dial tone
16 system.
17 (2) Charges to video programmers for the transport of
18 video programming.
19 (3) Charges for access to the Internet. Access to the
20 Internet does not include any of the following:
21 (i) The transport over the Internet or any
22 proprietary network using the Internet protocol of
23 telephone calls, facsimile transmissions or other
24 telecommunications traffic to or from end users on the
25 public switched telephone network if the signal sent from
26 or received by an end user is not in an Internet
27 protocol.
28 (ii) Telecommunication services purchased by an
29 Internet service provider to deliver access to the
30 Internet to its customers.
20070H1275B2835 - 80 -
1 (4) Mobile telecommunications services.
2 (ss) "Internet." The international nonproprietary computer
3 network of both Federal and non-Federal interoperable packet
4 switched data networks.
5 (tt) "Commercial racing activities." Any of the following:
6 (1) Thoroughbred and harness racing at which pari-mutuel
7 wagering is conducted under the act of December 17, 1981
8 (P.L.435, No.135), known as the Race Horse Industry Reform
9 Act.
10 (2) Fair racing sanctioned by the State Harness Racing
11 Commission.
12 (uu) "Prepaid telecommunications." A tangible item
13 containing a prepaid authorization number that can be used
14 solely to obtain telecommunications service, including any
15 renewal or increases in the prepaid amount.
16 (vv) "Prebuilt housing." Either of the following:
17 (1) Manufactured housing, including mobile homes, which
18 bears a label as required by and referred to in the act of
19 November 17, 1982 (P.L.676, No.192), known as the
20 Manufactured Housing Construction and Safety Standards
21 Authorization Act.
22 (2) Industrialized housing as defined in the act of May
23 11, 1972 (P.L.286, No.70), known as the Industrialized
24 Housing Act.
25 (ww) "Used prebuilt housing." Prebuilt housing that was
26 previously subject to a sale to a prebuilt housing purchaser.
27 (xx) "Prebuilt housing builder." A person who makes a
28 prebuilt housing sale to a prebuilt housing purchaser.
29 (yy) "Prebuilt housing sale." A sale of prebuilt housing to
30 a prebuilt housing purchaser, including a sale to a landlord,
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1 without regard to whether the person making the sale is
2 responsible for installing the prebuilt housing or whether the
3 prebuilt housing becomes a real estate structure upon
4 installation. Temporary installation by a prebuilt housing
5 builder for display purposes of a unit held for resale shall not
6 be considered occupancy for residential purposes.
7 (zz) "Prebuilt housing purchaser." A person who purchases
8 prebuilt housing in a transaction and who intends to occupy the
9 unit for residential purposes in this Commonwealth.
10 (aaa) "Mobile telecommunications service." Mobile
11 telecommunications service as that term is defined in the Mobile
12 Telecommunications Sourcing Act (Public Law 106-252, 4 U.S.C. §
13 116 et seq.).
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, regardless of whether manually or
20 electronically dialed, if the remaining amount of units of the
21 prepaid mobile telecommunications service is known by the
22 service provider of the prepaid mobile telecommunications
23 service on a continuous basis. The term does not include the
24 advance purchase of mobile telecommunications service if the
25 purchase is pursuant to a service contract between the service
26 provider and customer and if the service contract requires the
27 customer to make periodic payments to maintain the mobile
28 telecommunications service.
29 (ddd) "Call center." The physical location in this
30 Commonwealth:
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1 (1) where at least 150 employees are employed to
2 initiate or answer telephone calls;
3 (2) where there are at least 200 telephone lines; and
4 (3) which utilizes an automated call distribution system
5 for customer telephone calls in one or more of the following
6 activities:
7 (i) customer service and support;
8 (ii) technical assistance;
9 (iii) help desk service;
10 (iv) providing information;
11 (v) conducting surveys;
12 (vi) revenue collections; or
13 (vii) 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 (ggg) "Clothing." All vesture, wearing apparel, raiments,
29 garments, footwear and other articles of clothing, including
30 clothing patterns and items that are to be a component part of
20070H1275B2835 - 83 -
1 clothing, worn or carried on or about the human body including,
2 but not limited to, all accessories, ornamental wear, formal day
3 or evening apparel and articles made of fur on the hide or pelt
4 or any material imitative of fur and articles of which such fur,
5 real, imitation or synthetic, is the component material of chief
6 value and sporting goods and clothing not normally used or worn
7 when not engaged in sports.
8 (hhh) "Food and beverages." All food and beverages for
9 human consumption, including, but not limited to:
10 (1) Soft drinks.
11 (2) Malt and brewed beverages and spiritous and vinous
12 liquors.
13 (3) Food or beverages, whether sold for consumption on
14 or off the premises of on a take-out or to go basis or
15 delivered to the purchaser or consumer, when purchased:
16 (i) from persons engaged in the business of
17 catering; or
18 (ii) from persons engaged in the business of
19 operating establishments from which ready-to-eat food and
20 beverages are sold, including, but not limited to,
21 restaurants, cafes, lunch counters, private and social
22 clubs, taverns, dining cars, hotels, night clubs, fast
23 food operations, pizzerias, fairs, carnivals, lunch
24 carts, ice cream stands, snack bars, cafeterias, employee
25 cafeterias, theaters, stadiums, arenas, amusement parks,
26 carryout shops, coffee shops and other establishments
27 whether mobile or immobile.
28 For purposes of this clause, a bakery, a pastry shop, a donut
29 shop, a delicatessen, a grocery store, a supermarket, a farmer's
30 market, a convenience store or a vending machine shall not be
20070H1275B2835 - 84 -
1 considered an establishment from which food or beverages ready
2 to eat are sold except for the sale of meals, sandwiches, food
3 from salad bars, hand-dipped or hand-served ice-based products
4 including ice cream and yogurt, hot soup, hot pizza and other
5 hot food items, brewed coffee and hot beverages. For purposes of
6 this subclause, beverages shall not include malt and brewed
7 beverages and spiritous and vinous liquors but shall include
8 soft drinks.
9 SUBCHAPTER B
10 SALES AND USE TAX
11 Section 702. Imposition of tax.
12 (a) Tax on certain sales at retail and uses of tangible
13 personal property and services.--
14 (1) There is hereby imposed on each separate sale at
15 retail of tangible personal property or services in this
16 Commonwealth a tax of 6% of the purchase price, which tax
17 shall be collected by the vendor from the purchaser, and
18 shall be paid over to the Commonwealth as provided in this
19 chapter.
20 (2) There is hereby imposed on the use in this
21 Commonwealth of tangible personal property purchased at
22 retail and on those services purchased at retail a tax of 6%
23 of the purchase price, which tax shall be paid to the
24 Commonwealth by the person who makes such use as provided
25 under this chapter, except that the tax shall not be paid to
26 the Commonwealth by the person where the person has paid the
27 tax imposed by paragraph (1) or has paid the tax imposed by
28 this subsection to the vendor with respect to the use.
29 (b) (Reserved).
30 (c) Telecommunications service.--
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1 (1) Notwithstanding any other provisions of this
2 chapter, the tax with respect to telecommunications service
3 within the meaning of "tangible personal property" in section
4 701 shall be computed at the rate of 6% on the total amount
5 charged to customers for the services, irrespective of
6 whether such charge is based on a flat rate or on a message
7 unit charge.
8 (2) A telecommunications service provider shall have no
9 responsibility or liability to the Commonwealth for billing,
10 collecting or remitting taxes that apply to services,
11 products or other commerce sold over telecommunications lines
12 by third-party vendors.
13 (3) To prevent actual multistate taxation of interstate
14 telecommunications service, any taxpayer, on proof that the
15 taxpayer has paid a similar tax to another state on the same
16 interstate telecommunications service, shall be allowed a
17 credit against the tax imposed by this section on the same
18 interstate telecommunications service to the extent of the
19 amount of the tax properly due and paid to the other state.
20 (d) Coin-operated vending machines.--Notwithstanding any
21 other provisions of this chapter, the sale or use of food and
22 beverages dispensed by means of coin-operated vending machines
23 shall be taxed at the rate of 6% of the receipts collected from
24 any coin-operated vending machine which dispenses food and
25 beverages that were previously taxable.
26 (e) Prepaid telecommunications.--
27 (1) Notwithstanding any provisions of this chapter, the
28 sale or use of prepaid telecommunications evidenced by the
29 transfer of tangible personal property shall be subject to
30 the tax imposed by subsection (a).
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1 (2) The sale or use of prepaid telecommunications not
2 evidenced by the transfer of tangible personal property shall
3 be subject to the tax imposed by subsection (a) and shall be
4 deemed to occur at the purchaser's billing address.
5 (3) (i) Notwithstanding paragraph (2), the sale or use
6 of prepaid telecommunications service not evidenced by
7 the transfer of tangible personal property shall be taxed
8 at the rate of 6% of the receipts collected on each sale
9 if the service provider elects to collect the tax imposed
10 by this chapter on receipts of each sale.
11 (ii) The service provider shall notify the
12 department of its election and shall collect the tax on
13 receipts of each sale until the service provider notifies
14 the department otherwise.
15 (e.1) Prepaid mobile telecommunications service.--
16 (1) Notwithstanding any other provision of this chapter,
17 the sale or use of prepaid mobile telecommunications service
18 evidenced by the transfer of tangible personal property shall
19 be subject to the tax imposed by subsection (a).
20 (2) The sale or use of prepaid mobile telecommunications
21 service not evidenced by the transfer of tangible personal
22 property shall be subject to the tax imposed by subsection
23 (a) and shall be deemed to occur at the purchaser's billing
24 address or the location associated with the mobile telephone
25 number or the point of sale, whichever is applicable.
26 (3) (i) Notwithstanding paragraph (2), the sale or use
27 of prepaid mobile telecommunications service not
28 evidenced by the transfer of tangible personal property
29 shall be taxed at the rate of 6% of the receipts
30 collected on each sale if the service provider elects to
20070H1275B2835 - 87 -
1 collect the tax imposed by this chapter on receipts of
2 each sale.
3 (ii) The service provider shall notify the
4 department of its election and shall collect the tax on
5 receipts of each sale until the service provider notifies
6 the department otherwise.
7 (f) Prebuilt housing.--
8 (1) Notwithstanding any other provision of this chapter,
9 tax with respect to sales of prebuilt housing shall be
10 imposed on the prebuilt housing builder at the time of the
11 prebuilt housing sale within this Commonwealth and shall be
12 paid and reported by the prebuilt housing builder to the
13 department in the time and manner provided in this chapter.
14 (2) A manufacturer of prebuilt housing may, at its
15 option, precollect the tax from the prebuilt housing builder
16 at the time of sale to the prebuilt housing builder.
17 (3) In any case where prebuilt housing is purchased and
18 the tax is not paid by the prebuilt housing builder or
19 precollected by the manufacturer, the prebuilt housing
20 purchaser shall remit tax directly to the department if the
21 prebuilt housing is used in this Commonwealth without regard
22 to whether the prebuilt housing becomes a real estate
23 structure.
24 (g) Home service providers.--
25 (1) Notwithstanding any other provisions of this chapter
26 and in accordance with the Mobile Telecommunications Sourcing
27 Act (Public Law 106-252, 4 U.S.C. § 116 et seq.), the sale or
28 use of mobile telecommunications services which are deemed to
29 be provided to a customer by a home service provider under 4
30 U.S.C. § 117 (relating to sourcing rules) shall be subject to
20070H1275B2835 - 88 -
1 the tax of 6% of the purchase price, which tax shall be
2 collected by the home service provider from the customer, and
3 shall be paid over to the Commonwealth as provided in this
4 chapter if the customer's place of primary use is located
5 within this Commonwealth, regardless of where the mobile
6 telecommunications services originate, terminate or pass
7 through.
8 (2) For purposes of this subsection, words and phrases
9 used in this subsection shall have the same meanings given to
10 them in the Mobile Telecommunications Sourcing Act.
11 Section 703. Computation of tax.
12 (a) Table to be published.--Within 60 days of the effective
13 date of this section, the department shall prepare and publish
14 as a notice in the Pennsylvania Bulletin a table setting forth
15 the amount of tax imposed under section 702 for purchase prices
16 that are less than $1.
17 (b) Deposit into Education Operating Fund.--The tax
18 collected under section 702 shall be deposited into the
19 Education Operating Fund.
20 SUBCHAPTER C
21 EXCLUSIONS FROM SALES AND USE TAX
22 Section 704. Exclusions from tax.
23 The tax imposed by section 702 shall not be imposed upon any
24 of the following:
25 (1) The sale at retail or use of tangible personal
26 property (other than motor vehicles, trailers, semi-trailers,
27 motor boats, aircraft or other similar tangible personal
28 property required under either Federal law or laws of this
29 Commonwealth to be registered or licensed) or services sold
30 by or purchased from a person not a vendor in an isolated
20070H1275B2835 - 89 -
1 transaction or sold by or purchased from a person who is a
2 vendor but is not a vendor with respect to the tangible
3 personal property or services sold or purchased in such
4 transaction, provided that inventory and stock in trade so
5 sold or purchased shall not be excluded from the tax by the
6 provisions of this subsection.
7 (2) The use of tangible personal property purchased by a
8 nonresident person outside of, and brought into this
9 Commonwealth for use therein for a period not to exceed seven
10 days, or for any period of time when such nonresident is a
11 tourist or vacationer and, in either case not consumed within
12 the Commonwealth.
13 (3) (i) The use of tangible personal property purchased
14 outside this Commonwealth for use outside this
15 Commonwealth by a then nonresident natural person or a
16 business entity not actually doing business within this
17 Commonwealth, who later brings the tangible personal
18 property into this Commonwealth in connection with the
19 person's or entity's establishment of a permanent
20 business or residence in this Commonwealth, provided that
21 the property was purchased more than six months prior to
22 the date it was first brought into this Commonwealth or
23 prior to the establishment of the business or residence,
24 whichever first occurs.
25 (ii) This paragraph shall not apply to tangible
26 personal property temporarily brought into this
27 Commonwealth for the performance of contracts for the
28 construction, reconstruction, remodeling, repairing and
29 maintenance of real estate.
30 (4) The sale at retail or use of disposable diapers;
20070H1275B2835 - 90 -
1 premoistened wipes; incontinence products; colostomy
2 deodorants; toilet paper; sanitary napkins, tampons or
3 similar items used for feminine hygiene; or toothpaste,
4 toothbrushes or dental floss.
5 (5) The sale at retail or use of steam, natural and
6 manufactured and bottled gas, fuel oil, electricity or
7 intrastate subscriber line charges, basic local telephone
8 service or telegraph service when purchased directly by the
9 user solely for the user's own residential use and charges
10 for telephone calls paid for by inserting money into a
11 telephone accepting direct deposits of money to operate.
12 (6) (Reserved).
13 (7) (Reserved).
14 (8) (Reserved).
15 (9) (Reserved).
16 (10) (i) The sale at retail to or use by any charitable
17 organization, volunteer firefighters' organization or
18 nonprofit educational institution or a religious
19 organization for religious purposes of tangible personal
20 property or services other than pursuant to a
21 construction contract.
22 (ii) This paragraph shall not apply with respect to
23 any tangible personal property or services used in any
24 unrelated trade or business carried on by the
25 organization or institution or with respect to any
26 materials, supplies and equipment used and transferred to
27 the organization or institution in the construction,
28 reconstruction, remodeling, renovation, repairs and
29 maintenance of any real estate structure, other than
30 building machinery and equipment, except materials and
20070H1275B2835 - 91 -
1 supplies when purchased by the organization or
2 institution for routine maintenance and repairs.
3 (11) The sale at retail, or use of gasoline and other
4 motor fuels, the sales of which are otherwise subject to
5 excise taxes under 75 Pa.C.S. Ch. 90 (relating to liquid
6 fuels and fuels tax).
7 (12) (i) The sale at retail to, or use by the United
8 States, this Commonwealth or its instrumentalities or
9 political subdivisions, nonpublic schools, charter
10 schools, cyber charter schools or vocational schools of
11 tangible personal property or services.
12 (ii) This paragraph includes the sale at retail to a
13 supervisor of a home education program of tangible
14 personal property or services used exclusively for the
15 home education program.
16 (iii) As used in this paragraph, the terms
17 "nonpublic school," "charter school," "cyber charter
18 school," "vocational school," "supervisor" and "home
19 education program" shall have the meanings given to them
20 in the Public School Code of 1949.
21 (13) (Reserved).
22 (14) (Reserved).
23 (15) (Reserved).
24 (16) (Reserved).
25 (17) The sale at retail or use of prescription
26 medicines, drugs or medical supplies, crutches and
27 wheelchairs for the use of persons with disabilities and
28 invalids, artificial limbs, artificial eyes and artificial
29 hearing devices when designed to be worn on the person of the
30 purchaser or user, false teeth and materials used by a
20070H1275B2835 - 92 -
1 dentist in dental treatment, eyeglasses when especially
2 designed or prescribed by an ophthalmologist, oculist or
3 optometrist for the personal use of the owner or purchaser
4 and artificial braces and supports designed solely for the
5 use of persons with disabilities or any other therapeutic,
6 prosthetic or artificial device designed for the use of a
7 particular individual to correct or alleviate a physical
8 incapacity, including, but not limited to, hospital beds,
9 iron lungs and kidney machines.
10 (18) The sale at retail or use of coal.
11 (19) (Reserved).
12 (20) (Reserved).
13 (21) (Reserved).
14 (22) (Reserved).
15 (23) (Reserved).
16 (24) (Reserved).
17 (25) The sale at retail or use of water.
18 (26) The sale at retail or use of all vesture, wearing
19 apparel, raiments, garments, footwear and other articles of
20 clothing, including clothing patterns and items that are to
21 be a component part of clothing, worn or carried on or about
22 the human body but all accessories, ornamental wear, formal
23 day or evening apparel, and articles made of fur on the hide
24 or pelt or any material imitative of fur and articles of
25 which such fur, real, imitation or synthetic, is the
26 component material of chief value, but only if such value is
27 more than three times the value of the next most valuable
28 component material, and sporting goods and clothing not
29 normally used or worn when not engaged in sports shall not be
30 excluded from the tax.
20070H1275B2835 - 93 -
1 (27) (Reserved).
2 (28) (Reserved).
3 (29) The sale at retail or use of food and beverages for
4 human consumption, except that this exclusion shall not apply
5 with respect to:
6 (i) soft drinks;
7 (ii) malt and brewed beverages and spirituous and
8 vinous liquors;
9 (iii) food or beverages, whether sold for
10 consumption on or off the premises or on a "take-out" or
11 "to go" basis or delivered to the purchaser or consumer,
12 when purchased (A) from persons engaged in the business
13 of catering; or (B) from persons engaged in the business
14 of operating establishments from which ready-to-eat food
15 and beverages are sold, including, but not limited to,
16 restaurants, cafes, lunch counters, private and social
17 clubs, taverns, dining cars, hotels, night clubs, fast
18 food operations, pizzerias, fairs, carnivals, lunch
19 carts, ice cream stands, snack bars, cafeterias, employee
20 cafeterias, theaters, stadiums, arenas, amusement parks,
21 carryout shops, coffee shops and other establishments
22 whether mobile or immobile. For purposes of this
23 paragraph, a bakery, a pastry shop, a donut shop, a
24 delicatessen, a grocery store, a supermarket, a farmer's
25 market, a convenience store or a vending machine shall
26 not be considered an establishment from which food or
27 beverages ready to eat are sold except for the sale of
28 meals, sandwiches, food from salad bars, hand-dipped or
29 hand-served iced based products, including ice cream and
30 yogurt, hot soup, hot pizza and other hot food items,
20070H1275B2835 - 94 -
1 brewed coffee and hot beverages. For purposes of this
2 subparagraph, beverages shall not include malt and brewed
3 beverages and spirituous and vinous liquors but shall
4 include soft drinks. The sale at retail of food and
5 beverages at or from a school or church in the ordinary
6 course of the activities of such organization is not
7 subject to tax. Notwithstanding any other provision of
8 this paragraph or act to the contrary, the sale at retail
9 or use of candy or gum, regardless of the location from
10 which the candy or gum is sold, is subject to tax.
11 (30) (i) The sale at retail or use of any printed or
12 other form of advertising materials regardless of where
13 or by whom the advertising material was produced.
14 (ii) This paragraph shall not include the sale at
15 retail or use of mail order catalogs and direct mail
16 advertising literature or materials, including electoral
17 literature or materials, such as envelopes, address
18 labels and a one-time license to use a list of names and
19 mailing addresses for each delivery of direct mail
20 advertising literature or materials, including electoral
21 literature or materials, through the United States Postal
22 Service.
23 (31) (Reserved).
24 (32) (Reserved).
25 (33) (Reserved).
26 (34) (Reserved).
27 (35) (Reserved).
28 (36) The sale at retail or use of rail transportation
29 equipment used in the movement of personalty.
30 (37) (Reserved).
20070H1275B2835 - 95 -
1 (38) (Reserved).
2 (39) The sale at retail or use of fish feed purchased by
3 or on behalf of sportsmen's clubs, fish cooperatives or
4 nurseries approved by the Pennsylvania Fish Commission.
5 (40) (Reserved).
6 (41) (Reserved).
7 (42) The sale or use of brook trout (salvelinus
8 fontinalis), brown trout (Salmo trutta) or rainbow trout
9 (Salmo gairdneri).
10 (43) The sale at retail or use of buses to be used
11 exclusively for the transportation of children for school
12 purposes.
13 (44) The sale at retail or use of firewood.
14 (45) (Reserved).
15 (46) The sale at retail or use of tangible personal
16 property purchased in accordance with the Food Stamp Act of
17 1977, as amended (Public Law 95-113, 7 U.S.C. §§ 2011-2029).
18 (47) (Reserved).
19 (48) (Reserved).
20 (49) (i) The sale at retail or use of food and
21 beverages by nonprofit associations which support sports
22 programs.
23 (ii) The following words and phrases when used in
24 this paragraph shall have the meanings given to them in
25 this subparagraph unless the context clearly indicates
26 otherwise:
27 "Nonprofit association." An entity which is
28 organized as a nonprofit corporation or nonprofit
29 unincorporated association under the laws of this
30 Commonwealth or the United States or any entity which is
20070H1275B2835 - 96 -
1 authorized to do business in this Commonwealth as a
2 nonprofit corporation or unincorporated association under
3 the laws of this Commonwealth, including, but not limited
4 to, youth or athletic associations, volunteer fire,
5 ambulance, religious, charitable, fraternal, veterans,
6 civic, or any separately chartered auxiliary of the
7 foregoing, if organized and operated on a nonprofit
8 basis.
9 "Sports program." Baseball, softball, football,
10 basketball, soccer and any other competitive sport
11 formally recognized as a sport by the United States
12 Olympic Committee as specified by and under the
13 jurisdiction of the Amateur Sports Act of 1978 (Public
14 Law 95-606, 36 U.S.C. Ch. 2205), the Amateur Athletic
15 Union or the National Collegiate Athletic Association.
16 The term shall be limited to a program or that portion of
17 a program that is organized for recreational purposes and
18 whose activities are substantially for such purposes and
19 which is primarily for participants who are 18 years of
20 age or younger or whose 19th birthday occurs during the
21 year of participation or the competitive season,
22 whichever is longer. There shall, however, be no age
23 limitation for programs operated for persons with
24 physical handicaps or persons with mental retardation.
25 "Support." The funds raised from sales are used to
26 pay the expenses of a sports program or the nonprofit
27 association sells the food and beverages at a location
28 where a sports program is being conducted under this
29 chapter or the Tax Reform Code of 1971.
30 (50) (Reserved).
20070H1275B2835 - 97 -
1 (51) (Reserved).
2 (52) (Reserved).
3 (53) (Reserved).
4 (54) (Reserved).
5 (55) (Reserved).
6 (56) The sale at retail or use of tangible personal
7 property or services used, transferred or consumed in
8 installing or repairing equipment or devices designed to
9 assist persons in ascending or descending a stairway when:
10 (i) The equipment or devices are used by a person
11 who, by virtue of a physical disability, is unable to
12 ascend or descend stairs without the aid of such
13 equipment or device.
14 (ii) The equipment or device is installed or used in
15 the person's place of residence.
16 (iii) A physician has certified the physical
17 disability of the person in whose residence the equipment
18 or device is installed or used.
19 (57) (Reserved).
20 (58) (Reserved).
21 (59) The sale at retail or use of molds and related mold
22 equipment used directly and predominantly in the manufacture
23 of products, regardless of whether the person that holds
24 title to the equipment manufactures a product.
25 (60) (Reserved).
26 (61) (Reserved).
27 (62) The sale at retail or use of tangible personal
28 property or services which are directly used in farming,
29 dairying or agriculture when engaged in as a business
30 enterprise, regardless of whether the sale is made to the
20070H1275B2835 - 98 -
1 person directly engaged in the business enterprise or to a
2 person contracting with the person directly engaged in the
3 business enterprise for the production of food.
4 (63) (Reserved).
5 (64) The sale at retail to or use by a construction
6 contractor, employed by a public school district pursuant to
7 a construction contract, of any materials and building
8 supplies which, during construction or reconstruction, are
9 made part of any public school building utilized for
10 instructional classroom education within this Commonwealth,
11 if the construction or reconstruction:
12 (i) is necessitated by a disaster emergency, as
13 defined in 35 Pa.C.S. § 7102 (relating to definitions);
14 and
15 (ii) takes place during the period when there is a
16 declaration of disaster emergency under 35 Pa.C.S. §
17 7301(c) (relating to general authority of Governor).
18 (65) The sale at retail or use of investment metal
19 bullion and investment coins. "Investment metal bullion"
20 means any elementary precious metal which has been put
21 through a process of smelting or refining, including, but not
22 limited to, gold, silver, platinum and palladium, and which
23 is in such state or condition that its value depends upon its
24 contents and not its form. The term does not include precious
25 metal which has been assembled, fabricated, manufactured or
26 processed in one or more specific and customary industrial,
27 professional, aesthetic or artistic uses. "Investment coins"
28 means numismatic coins or other forms of money or legal
29 tender manufactured of gold, silver, platinum, palladium or
30 other metal and of the United States or any foreign nation
20070H1275B2835 - 99 -
1 with a fair market value greater than any nominal value of
2 such coins. The term does not include jewelry or works of art
3 made of coins, nor does it include commemorative medallions.
4 (66) (Reserved).
5 (67) The sale at retail of medical goods or services by
6 a hospital, as defined in the act of December 20, 1985
7 (P.L.457, No.112), known as the Medical Practice Act of 1985.
8 (68) The sale at retail of medical or dental services,
9 including charges for office visits.
10 (69) The sale at retail or use of goods or services that
11 are part of a Medicare Part B transaction.
12 (70) The sale at retail or use of transportation of
13 persons provided or funded by the Federal, State or local
14 government.
15 (71) The sale at retail of insurance premiums.
16 (72) The sale at retail, between an owner of real
17 property and a financial institution, of a mortgage.
18 (73) An investment or gain on an investment, including,
19 but not limited to, bank deposits, stocks and bonds,
20 including any commissions, maintenance costs and other
21 charges, which commissions, maintenance costs and other
22 charges related to the making of such investment or a gain
23 thereon.
24 (74) The rental of real property.
25 (75) The sale at retail of tuition.
26 (76) The sale at retail to or use by a business of any
27 of the following:
28 (i) Legal services.
29 (ii) Accounting, auditing and bookkeeping services.
30 (iii) Engineering services.
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1 (iv) Research.
2 (v) Computer services and data processing.
3 (77) The sale at retail to or use by a person of legal
4 services rendered by an attorney where the payment is made
5 pursuant to a contingency fee based upon a percentage of the
6 amount recovered with respect to a legal claim or dispute.
7 (78) The sale at retail to or use by a person of the
8 services rendered by or under the supervision of a licensed
9 real estate broker, associate broker or salesperson in
10 connection with any aspect of the sale, lease or acquisition
11 of any interest in real property.
12 (79) The sale at retail, or the use of motion picture
13 film rented or licensed from a distributor for the purpose of
14 commercial exhibition.
15 (80) The sale at retail or use of services performed by
16 minors under 18 years of age.
17 (81) The sale at retail or use of services performed by
18 any person to the extent that the recipient or user of such
19 services receives those services free of charge.
20 (82) The sale at retail or use of services provided by
21 employees to their employers in exchange for wages and
22 salaries when such services are rendered in the ordinary
23 course of employment.
24 (83) The sale at retail or use of services performed for
25 resale in the ordinary course of business of the purchaser or
26 user of such services.
27 (84) The sale at retail or use of services that are
28 otherwise taxable that are an integral, inseparable part of
29 the services that are to be sold or used and that are
30 taxable.
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1 Section 705. Alternate imposition of tax.
2 (a) General rule.--If any person actively and principally
3 engaged in the business of selling new or used motor vehicles,
4 trailers or semitrailers, and registered with the department in
5 the "dealer's class," acquires a motor vehicle, trailer or
6 semitrailer for the purpose of resale, and prior to such resale,
7 uses the motor vehicle, trailer or semitrailer for a taxable use
8 under this chapter or the Tax Reform Code of 1971, the person
9 may pay a tax equal to 6% of the fair rental value of the motor
10 vehicle, trailer or semitrailer during use.
11 (b) Aircraft.--A commercial aircraft operator who acquires
12 an aircraft for the purpose of resale, or lease, or is entitled
13 to claim another valid exemption at the time of purchase, and
14 subsequent to the purchase, periodically uses the same aircraft
15 for a taxable use under this chapter or the Tax Reform Code of
16 1971, may elect to pay a tax equal to 6% of the fair rental
17 value of the aircraft during such use.
18 (c) Applicability.--This section shall not apply to the use
19 of a vehicle as a wrecker, parts truck, delivery truck or
20 courtesy car.
21 Section 706. Credit against tax.
22 (a) Tax paid to another state.--
23 (1) A credit against the tax imposed by section 702
24 shall be granted with respect to tangible personal property
25 or services purchased for use outside the Commonwealth equal
26 to the tax paid to another state by reason of the imposition
27 by the other state of a tax similar to the tax imposed by
28 this chapter.
29 (2) No credit under paragraph (1) shall be granted
30 unless the other state grants substantially similar tax
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1 relief by reason of the payment of tax under this chapter or
2 under the Tax Reform Code of 1971.
3 (b) Telecommunications services.--A credit against the tax
4 imposed by section 702 on telecommunications services shall be
5 granted to a call center for gross receipts tax paid by a
6 telephone company on the receipts derived from the sale of
7 incoming and outgoing interstate telecommunications services to
8 the call center under section 1101(a)(2) of the Tax Reform Code
9 of 1971. The following apply:
10 (1) A telephone company, on request, shall notify a call
11 center of the amount of gross receipts tax paid by the
12 telephone company on the receipts derived from the sale of
13 incoming and outgoing interstate telecommunications services
14 to the call center.
15 (2) A call center that is eligible for the credit in
16 this subsection may apply for a tax credit as set forth in
17 this subsection.
18 (3) By February 15, a taxpayer must submit an
19 application to the department for gross receipts tax paid on
20 the receipts derived from the sale of incoming and outgoing
21 interstate telecommunications services incurred in the prior
22 calendar year.
23 (4) By April 15 of the calendar year following the close
24 of 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
27 department.
28 (5) The total amount of tax credits provided for in this
29 subsection and approved by the department shall not exceed
30 $30,000,000 in any fiscal year. If the total amount of tax
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1 credits applied for by all applicants exceeds the amount
2 allocated for those credits, then the credit to be received
3 by each applicant shall be determined as follows:
4 (i) Divide:
5 (A) the tax credit applied for by the applicant;
6 by
7 (B) the total of all tax credits applied for by
8 all applicants.
9 (ii) Multiply:
10 (A) the quotient under subparagraph (i); by
11 (B) the amount allocated for all tax credits.
12 SUBCHAPTER D
13 LICENSES
14 Section 708. Licenses.
15 (a) Duty to obtain license.--Every person maintaining a
16 place of business in this Commonwealth, selling or leasing
17 services or tangible personal property, the sale or use of which
18 is subject to tax and who has not obtained a license from the
19 department, shall, prior to the beginning of business, make
20 application to the department, on a form prescribed by the
21 department, for a license. If such person maintains more than
22 one place of business in this Commonwealth, the license shall be
23 issued for the principal place of business in this Commonwealth.
24 (b) Criteria for issuance of license.--
25 (1) The department shall, after the receipt of an
26 application, issue the license applied for under subsection
27 (a) if the applicant filed all required State tax reports and
28 paid any State taxes not subject to a timely perfected
29 administrative or judicial appeal or subject to a duly
30 authorized deferred payment plan. The license shall be
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1 nonassignable.
2 (2) All licenses in effect on the effective date of this
3 section under former Article III of the Tax Reform Code of
4 1971 and all licenses issued or renewed on or after the
5 effective date of this section shall be valid for a period of
6 five years.
7 (b.1) Refusal of license.--
8 (1) If an applicant for a license or any person holding
9 a license has not filed all required State tax reports and
10 paid any State taxes not subject to a timely perfected
11 administrative or judicial appeal or subject to a duly
12 authorized deferred payment plan, the department may refuse
13 to issue, may suspend or may revoke said license.
14 (2) The department shall notify the applicant or
15 licensee of any refusal, suspension or revocation. The notice
16 shall contain a statement that the refusal, suspension or
17 revocation may be made public. The notice shall be made by
18 first class mail.
19 (3) An applicant or licensee aggrieved by the
20 determination of the department may file an appeal pursuant
21 to the provisions for administrative appeals in this chapter.
22 In the case of a suspension or revocation which is appealed,
23 the license shall remain valid pending a final outcome of the
24 appeals process.
25 (4) Notwithstanding section 774 or sections 353(f),
26 408(b), 603, 702, 802, 904 and 1102 of the Tax Reform Code of
27 1971, or any other provision of law to the contrary, if no
28 appeal is taken or if an appeal is taken and denied at the
29 conclusion of the appeal process, the department may
30 disclose, by publication or otherwise, the identity of a
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1 person and the fact that the person's license has been
2 refused, suspended or revoked under this subsection.
3 Disclosure may include the basis for refusal, suspension or
4 revocation.
5 (c) Penalties.--
6 (1) A person that maintains a place of business in this
7 Commonwealth for the purpose of selling or leasing services
8 or tangible personal property, the sale or use of which is
9 subject to tax, without having first been licensed by the
10 department shall be guilty of a summary offense and, upon
11 conviction thereof, be sentenced to pay a fine of not less
12 than $300 nor more than $1,500 and, in default thereof, a
13 term of imprisonment of not less than five days nor more than
14 30 days.
15 (2) The penalties imposed by this subsection shall be in
16 addition to any other penalties imposed by this chapter.
17 (3) For purposes of this subsection, the offering for
18 sale or lease of any service or tangible personal property,
19 the sale or use of which is subject to tax, during any
20 calendar day shall constitute a separate violation.
21 (4) The secretary may designate employees of the
22 department to enforce the provisions of this subsection. The
23 employees shall exhibit proof of and be within the scope of
24 the designation when instituting proceedings as provided by
25 the Pennsylvania Rules of Criminal Procedure.
26 (d) Effect of failure to obtain license.--Failure of any
27 person to obtain a license shall not relieve that person of
28 liability to pay the tax imposed by this chapter.
29 SUBCHAPTER E
30 HOTEL OCCUPANCY TAX
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1 Section 709. Definitions.
2 (a) General rule.--The following words and phrases when used
3 in this subchapter shall have the meanings given to them in this
4 section unless the context clearly indicates otherwise:
5 "Hotel." A building or buildings in which the public may,
6 for a consideration, obtain sleeping accommodations. The term
7 does not include any charitable, educational or religious
8 institution summer camp for children, hospital or nursing home.
9 "Occupancy." The use or possession or the right to the use or
10 possession by any person, other than a permanent resident, of
11 any room or rooms in a hotel for any purpose or the right to the
12 use or possession of the furnishings or to the services and
13 accommodations accompanying the use and possession of the room
14 or rooms.
15 "Occupant." A person, other than a permanent resident, who,
16 for a consideration, uses, possesses or has a right to use or
17 possess any room or rooms in a hotel under any lease,
18 concession, permit, right of access, license or agreement.
19 "Operator." Any person who operates a hotel.
20 "Permanent resident." Any occupant who has occupied or has
21 the right to occupancy of any room or rooms in a hotel for at
22 least 30 consecutive days.
23 "Rent." The consideration received for occupancy valued in
24 money, whether received in money or otherwise, including all
25 receipts, cash, credits and property or services of any kind or
26 nature, and also any amount for which the occupant is liable for
27 the occupancy without any deduction. The term "rent" shall not
28 include a gratuity.
29 (b) Other definitions.--The following words and phrases,
30 when used in Subchapters D and F, shall, in addition to the
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1 meaning ascribed to them by section 701, have the meaning
2 ascribed to them in this subsection, except where the context
3 clearly indicates a different meaning:
4 "Maintaining a place of business in this Commonwealth."
5 Being the operator of a hotel in this Commonwealth.
6 "Purchase at retail." Occupancy.
7 "Purchase price." Rent.
8 "Purchaser." Occupant.
9 "Sale at retail." The providing of occupancy to an occupant
10 by an operator.
11 "Services." Occupancy.
12 "Tangible personal property." Occupancy.
13 "Use." Occupancy.
14 "Vendor." Operator.
15 Section 710. Imposition of tax.
16 There is hereby imposed an excise tax of 6% of the rent on
17 every occupancy of a room or rooms in a hotel in this
18 Commonwealth, which tax shall be collected by the operator from
19 the occupant and paid over to the Commonwealth as provided in
20 this chapter and deposited into the Education Operating Fund.
21 Section 711. Seasonal tax returns.
22 Notwithstanding any other provisions in this chapter or the
23 Tax Reform Code of 1971, the department may, by regulation,
24 waive the requirement for the filing of quarterly returns in the
25 case of any operator whose hotel is operated only during certain
26 seasons of the year, and may provide for the filing of returns
27 by such persons at times other than those provided by section
28 721.
29 SUBCHAPTER F
30 PROCEDURE AND ADMINISTRATION
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1 Section 715. Persons required to make returns.
2 Every person required to pay tax to the department or collect
3 and remit tax to the department shall file returns with respect
4 to the tax.
5 Section 716. Form of returns.
6 The returns required by section 715 shall be on forms
7 prescribed by the department and shall show such information
8 with respect to the taxes imposed by this chapter as the
9 department may reasonably require.
10 Section 717. Time for filing returns.
11 (a) Monthly reporting.--A return shall be filed monthly with
12 respect to each month by every licensee whose total tax reported
13 or, in the event no report is filed, the total tax which should
14 have been reported, for the third calendar quarter of the
15 preceding year equals or exceeds $600. The returns shall be
16 filed on or before the 20th day of the next succeeding month
17 with respect to which the return is made. Any licensee required
18 to file monthly returns under this chapter shall be relieved
19 from filing quarterly returns.
20 (b) Annual reporting.--No annual return shall be filed,
21 except as may be required by rules and regulations of the
22 department promulgated and published at least 60 days prior to
23 the end of the year with respect to which the returns are made.
24 Where such annual returns are required, licensees shall not be
25 required to file such returns prior to the 20th day of the year
26 succeeding the year with respect to which the returns are made.
27 (c) Persons other than licensees.--Any person, other than a
28 licensee, liable to pay to the department any tax under this
29 chapter, shall file a return on or before the 20th day of the
30 month succeeding the month in which the person becomes liable
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1 for the tax.
2 (d) Waivers.--The department, by regulation, may waive the
3 requirement for the filing of quarterly return in the case of
4 any licensee whose individual tax collections do not exceed $75
5 per calendar quarter and may provide for reporting on a less
6 frequent basis in such cases.
7 Section 718. Extension of time for filing returns.
8 The department may, on written application and for good cause
9 shown, grant a reasonable extension of time for filing any
10 return required under this subchapter. However, the time for
11 making a return shall not be extended for more than three
12 months.
13 Section 719. Place for filing returns.
14 Returns shall be filed with the department at its main office
15 or at any branch office which it may designate for filing
16 returns.
17 Section 720. Timely mailing treated as timely filing and
18 payment.
19 (a) General rule.--Notwithstanding the provisions of any
20 State tax law to the contrary, whenever a report or payment of
21 all or any portion of a State tax is required by law to be
22 received by the department or other agency of the Commonwealth
23 on or before a day certain, the taxpayer shall be deemed to have
24 complied with the law if the letter transmitting the report or
25 payment of the tax which has been received by the department is
26 postmarked by the United States Postal Service on or prior to
27 the final day on which the payment is to be received.
28 (b) Presentation of receipt.--For the purposes of this
29 chapter, presentation of a receipt indicating that the report or
30 payment was mailed by registered or certified mail on or before
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1 the due date shall be evidence of timely filing and payment.
2 Section 721. Payment of tax.
3 When a return of tax is required under this subchapter, the
4 person required to make the return shall pay the tax to the
5 department.
6 Section 722. Time of payment.
7 (a) General rule.--The tax imposed by this chapter and
8 incurred or collected by a licensee shall be due and payable by
9 the licensee on the day the return is required to be filed under
10 the provisions of section 717 and the payment must accompany the
11 return for the preceding period.
12 (b) Other payments.--If the amount of tax due for the
13 preceding year as shown by the annual return of a taxpayer is
14 greater than the amount already paid by the taxpayer in
15 connection with the taxpayer's monthly or quarterly returns, the
16 taxpayer shall send with the annual return a remittance for the
17 unpaid amount of tax for the year.
18 (c) Persons other than licensees.--Any person other than a
19 licensee liable to pay any tax under this chapter shall remit
20 the tax at the time of filing the return required by this
21 chapter.
22 Section 723. Other times for payment.
23 In the event that the department authorizes a taxpayer to
24 file a return at other times than those specified in section
25 717, the tax due shall be paid at the time the return is filed.
26 Section 724. Place for payment.
27 The tax imposed by this chapter shall be paid to the
28 department at the place fixed for filing the return.
29 Section 725. Tax held in trust for Commonwealth.
30 (a) General rule.--All taxes collected by any person from
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1 purchasers in accordance with this chapter and all taxes
2 collected by any person from purchasers under color of this
3 chapter which have not been properly refunded by the person to
4 the purchaser shall constitute a trust fund for the
5 Commonwealth, and such trust shall be enforceable against such
6 person, the person's representatives and any person, other than
7 a purchaser to whom a refund has been made properly, receiving
8 any part of the fund without consideration, or knowing that the
9 taxpayer is committing a breach of trust.
10 (b) Presumption.--Any person receiving payment of a lawful
11 obligation of the taxpayer from the fund identified under
12 subsection (a) shall be presumed to have received the same in
13 good faith and without any knowledge of the breach of trust.
14 (c) Right to petition and appeal.--Any person, other than a
15 taxpayer, against whom the department makes any claim under this
16 section shall have the same right to petition and appeal as is
17 given taxpayers by any provisions of this subchapter.
18 Section 726. Local receivers of use tax.
19 (a) General rule.--In every county, except counties of the
20 first class, the county treasurer shall receive use tax due and
21 payable under this chapter from any person other than a
22 licensee. The receiving of the taxes shall be pursuant to rules
23 and regulations promulgated by the department and on forms
24 furnished by the department.
25 (b) Deduction for administrative costs.--Each county
26 treasurer shall remit to the department all use taxes received
27 under the authority of this section minus the costs of
28 administering this section not to exceed 1% of the amount of use
29 taxes received, which amount shall be retained in lieu of any
30 commission otherwise allowable by law for the collection of the
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1 tax.
2 Section 727. Discount.
3 If a return is filed by a licensee and the tax shown to be
4 due thereon less any discount is paid all within the time
5 prescribed, the licensee shall be entitled to credit and apply
6 against the tax payable by the licensee a discount of 1% of the
7 amount of the tax collected by the licensee, as compensation for
8 the expense of collecting and remitting the same and as
9 consideration of the prompt payment.
10 Section 728. (Reserved).
11 Section 729. (Reserved).
12 Section 730. Assessment.
13 The department shall make the inquiries, determinations and
14 assessments of the tax, including interest, additions and
15 penalties, imposed by this chapter. A notice of assessment and
16 demand for payment shall be mailed by certified mail to the
17 taxpayer. The notice shall set forth the basis of the
18 assessment.
19 Section 731. Mode and time of assessment.
20 (a) Duty to examine.--
21 (1) Within a reasonable time after any return is filed,
22 the department shall examine it and, if the return shows a
23 greater tax due or collected than the amount of tax remitted
24 with the return, the department shall issue an assessment for
25 the difference, together with an addition of 3% of the
26 difference, which shall be paid to the department within ten
27 days after a notice of the assessment has been mailed to the
28 taxpayer.
29 (2) If such assessment is not paid within ten days,
30 there shall be added and paid to the department an additional
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1 3% of the difference for each month during which the
2 assessment remains unpaid. The total of all additions shall
3 not exceed 18% of the difference shown on the assessment.
4 (b) Underestimated tax on returns.--
5 (1) If the department determines that any return or
6 returns of any taxpayer understates the amount of tax due, it
7 shall determine the proper amount and shall ascertain the
8 difference between the amount of tax shown in the return and
9 the amount determined. The difference may be referred to as
10 the deficiency.
11 (2) The department shall send a notice of assessment for
12 the deficiency and the reasons to the taxpayer.
13 (3) The taxpayer shall pay the deficiency to the
14 department within 30 days after a notice of the assessment
15 has been mailed to the taxpayer.
16 (c) Estimated assessments.--
17 (1) In the event that any taxpayer fails to file a
18 return required by this chapter, the department may make an
19 estimated assessment, based on information available, of the
20 proper amount of tax owed by the taxpayer and shall send a
21 notice of assessment in the estimated amount to the taxpayer.
22 (2) The taxpayer shall pay the tax within 30 days after
23 a notice of the estimated assessment has been mailed to the
24 taxpayer.
25 (d) Studies.--
26 (1) The department may conduct the studies necessary to
27 compute effective rates by business classification, based
28 upon the ratio between the tax required to be collected and
29 taxable sales and to use such rates in arriving at the
30 apparent tax liability of a taxpayer.
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1 (2) Any assessment based on such rates shall be prima
2 facie correct, except that the rate shall not be considered
3 where a taxpayer establishes the rate is based on a sample
4 inapplicable to the taxpayer.
5 Section 732. Reassessment.
6 Any taxpayer against whom an assessment is made may petition
7 the department for a reassessment under Article XXVII of the Tax
8 Reform Code of 1971.
9 Section 733. (Reserved).
10 Section 734. Review by Board of Finance and Revenue.
11 (a) Procedure.--
12 (1) Within 60 days after the date of mailing of notice
13 by the department of the decision on any petition for
14 reassessment filed with it, the person against whom the
15 assessment was made may, by petition, request the Board of
16 Finance and Revenue to review the decision.
17 (2) The failure of the department to notify the
18 petitioner of a decision within the time provided by section
19 732 shall act as a denial of such petition, and a petition
20 for review may be filed with the Board of Finance and Revenue
21 within 120 days of the date prior to which the department
22 should have mailed to the petitioner its notice of decision.
23 (b) Contents of petition for review.--Each petition for
24 review filed under this section shall state specifically the
25 reasons on which the petitioner relies, or shall incorporate by
26 reference the petition for reassessment in which the reasons are
27 stated. The petition shall be supported by affidavit that it is
28 not made for the purpose of delay and that the facts set forth
29 in the petition are true.
30 (c) Action by board.--
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1 (1) The Board of Finance and Revenue shall act finally
2 in disposing of petitions filed with it within six months
3 after they have been received.
4 (2) In the event of the failure of the board to dispose
5 of any petition within six months, the action taken by the
6 department, upon the petition for reassessment, shall be
7 sustained.
8 (3) The Board of Finance and Revenue may sustain the
9 action taken by the department on the petition for
10 reassessment, or it may reassess the tax due on such basis as
11 it deems according to law.
12 (4) The board shall give notice of its action to the
13 department and to the petitioner.
14 Section 735. (Reserved).
15 Section 736. Burden of proof.
16 In all cases of petitions for reassessment, review or appeal,
17 the burden of proof shall be on the petitioner or appellant, as
18 applicable.
19 Section 737. Collection of tax.
20 (a) General rule.--The department shall collect the tax in
21 the manner provided by law for the collection of taxes imposed
22 by the laws of this Commonwealth.
23 (b) Collection by persons maintaining a place of business in
24 the Commonwealth.--
25 (1) Every person maintaining a place of business in this
26 Commonwealth and selling or leasing tangible personal
27 property or services, the sale or use of which is subject to
28 tax shall collect the tax from the purchaser or lessee at the
29 time of making the sale or lease, and shall remit the tax to
30 the department, unless the collection and remittance is
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1 otherwise provided for in this chapter.
2 (2) (i) Every person not otherwise required to collect
3 tax that delivers tangible personal property to a
4 location within this Commonwealth and that unpacks,
5 positions, places or assembles the tangible personal
6 property shall collect the tax from the purchaser at the
7 time of delivery and shall remit the tax to the
8 department if the person delivering the tangible personal
9 property is responsible for collecting any portion of the
10 purchase price of the tangible personal property
11 delivered and the purchaser has not provided the person
12 with proof that the tax imposed by this chapter has been
13 or will be collected by the seller or that the purchaser
14 provided the seller with a valid exemption certificate.
15 (ii) Every person required to collect tax under this
16 paragraph shall be deemed to be selling or leasing
17 tangible personal property or services, the sale or use
18 of which is subject to the tax imposed under section 702.
19 (3) Any person required under this chapter to collect
20 tax from another person, who shall fail to collect the proper
21 amount of the tax, shall be liable for the full amount of the
22 tax which the person should have collected.
23 (c) Certificate for tax-exempt sales or leases.--
24 (1) If the tax does not apply to the sale or lease of
25 tangible personal property or services, the purchaser or
26 lessee shall furnish to the vendor a certificate indicating
27 that the sale is not legally subject to the tax. The
28 certificate shall be in substantially such form as the
29 department may, by regulation, prescribe.
30 (2) Where the tangible personal property or service is
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1 of a type which is never subject to the tax imposed or where
2 the sale or lease is in interstate commerce, the certificate
3 need not be furnished.
4 (3) Where a series of transactions are not subject to
5 tax, a purchaser or user may furnish the vendor with a single
6 exemption certificate in substantially such form and valid
7 for such period of time as the department may, by regulation,
8 prescribe.
9 (4) The department shall provide all school districts
10 and intermediate units with a permanent tax exemption number.
11 (5) An exemption certificate, which is complete and
12 regular and on its face discloses a valid basis of exemption
13 if taken in good faith, shall relieve the vendor from the
14 liability imposed by this section.
15 (6) An exemption certificate:
16 (i) accepted by a vendor from a natural person
17 domiciled within this Commonwealth or any association,
18 fiduciary, partnership, corporation or other entity,
19 either authorized to do business within this Commonwealth
20 or having an established place of business within this
21 Commonwealth, in the ordinary course of the vendor's
22 business;
23 (ii) which on its face discloses a valid basis of
24 exemption consistent with the activity of the purchaser
25 and character of the property or service being purchased
26 or which is provided to the vendor by a charitable,
27 religious, educational or volunteer firefighters'
28 organization;
29 (iii) contains the organization's charitable
30 exemption number; and
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1 (iv) which, in the case of any purchase costing $200
2 or more, is accompanied by a sworn declaration on a form
3 to be provided by the department of an intended usage of
4 the property or service which would render it nontaxable,
5 shall be presumed to be taken in good faith and the burden of
6 proving otherwise shall be on the department.
7 (d) Waivers.--
8 (1) The department may authorize a purchaser or lessee
9 who acquires tangible personal property or services under
10 circumstances which make it impossible at the time of
11 acquisition to determine the manner in which the tangible
12 personal property or service will be used, to pay the tax
13 directly to the department, and waive the collection of the
14 tax by the vendor.
15 (2) No such authority shall be granted or exercised,
16 except on application to the department, and the issuance by
17 the department, in its discretion, of a direct payment
18 permit.
19 (3) If a direct payment permit is granted, its use shall
20 be subject to conditions specified by the department, and the
21 payment of tax on all acquisitions pursuant to the permit
22 shall be made directly to the department by the permit
23 holder.
24 Section 738. Collection of tax on motor vehicles, trailers and
25 semitrailers.
26 (a) General rule.--Notwithstanding the provisions of section
27 737(b)(1), tax due on the sale at retail or use of a motor
28 vehicle, trailer or semitrailer, except mobile homes as defined
29 in 75 Pa.C.S (relating to vehicles), required by law to be
30 registered with the department under the provisions of 75
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1 Pa.C.S. shall be paid by the purchaser or user directly to the
2 department on application to the department for an issuance of a
3 certificate of title on the motor vehicle, trailer or
4 semitrailer.
5 (b) No issuance of certificate of title without payment of
6 tax.--
7 (1) The department shall not issue a certificate of
8 title until the tax has been paid, or evidence satisfactory
9 to the department has been given to establish that tax is not
10 due.
11 (2) The department may cancel or suspend any record of
12 certificate of title or registration of a motor vehicle,
13 trailer or semitrailer when the check received in payment of
14 the tax on the vehicle is not paid on demand.
15 (c) First encumbrance.--The tax shall be considered as a
16 first encumbrance against the vehicle and the vehicle may not be
17 transferred without first payment in full of the tax and any
18 interest additions or penalties which shall accrue in accordance
19 with this chapter.
20 Section 739. Precollection of tax.
21 (a) Authorization.--
22 (1) Except as otherwise provided under paragraph (2),
23 the department may, by regulation, authorize or require
24 particular categories of vendors selling tangible personal
25 property for resale to precollect from the purchaser the tax
26 which the purchaser will collect on making a sale at retail
27 of the tangible personal property.
28 (2) The department, pursuant to this section, may not
29 require a vendor to precollect tax from a purchaser who
30 purchases for resale more than $1,000 worth of tangible
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1 personal property from the vendor per year.
2 (b) No license required.--In any case in which a vendor has
3 been authorized to prepay the tax to the person from whom the
4 vendor purchased the tangible personal property for resale, the
5 vendor authorized to prepay the tax may, under the regulations
6 of the department, be relieved from the duty to secure a license
7 if the duty arises only by reason of the vendor's sale of the
8 tangible personal property with respect to which the vendor is,
9 under authorization of the department, to prepay the tax.
10 (c) Reimbursement.--
11 (1) The vendor, on making a sale at retail of tangible
12 personal property with respect to which the vendor has
13 prepaid the tax, must separately state at the time of resale
14 the proper amount of tax on the transaction, and reimburse
15 itself on account of the taxes which the vendor has
16 previously prepaid.
17 (2) If the vendor collects a greater amount of tax in
18 any reporting period than the vendor previously prepaid on
19 purchase of the goods with respect to which the vendor
20 prepaid the tax, the vendor must file a return and remit the
21 balance to the Commonwealth at the time at which a return
22 would otherwise be due with respect to the sales.
23 Section 740. Bulk and auction sales.
24 A person who sells or causes to be sold at auction, or who
25 sells or transfers in bulk, 51% or more of any stock, of goods,
26 wares or merchandise of any kind, fixtures, machinery,
27 equipment, buildings or real estate, involved in a business for
28 which the person is licensed or required to be licensed under
29 this chapter, or is liable for filing use tax returns in
30 accordance with this chapter, shall be subject to the provisions
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1 of section 1403 of The Fiscal Code.
2 Section 741. Collection on failure to request reassessment,
3 review or appeal.
4 (a) General rule.--The department may collect any tax:
5 (1) If an assessment of tax is not paid within ten days
6 or 30 days, as the case may be, after notice of the
7 assessment to the taxpayer and no petition for reassessment
8 has been filed.
9 (2) Within 60 days from the date of reassessment, if no
10 petition for review has been filed.
11 (3) Within 30 days from the date of the decision of the
12 Board of Finance and Revenue on a petition for review, or of
13 the expiration of the board's time for acting on the
14 petition, if no appeal has been made.
15 (4) In all cases of judicial sales, receiverships,
16 assignments or bankruptcies.
17 (b) Limitation on defenses.--
18 (1) Subject to the provisions of paragraph (2), in any
19 such case in a proceeding for the collection of the taxes,
20 the person against whom the taxes were assessed shall not be
21 permitted to set up any ground of defense that might have
22 been determined by the department, the Board of Finance and
23 Revenue or the courts.
24 (2) The defense of failure of the department to mail
25 notice of assessment or reassessment to the taxpayer and the
26 defense of payment of assessment or reassessment may be
27 raised in proceedings for collection by a motion to stay the
28 proceedings.
29 Section 742. Lien for taxes.
30 (a) Nature and effect of lien.--
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1 (1) If any person liable to pay any tax neglects or
2 refuses to pay the same after demand, the amount, including
3 any interest, addition or penalty, together with any costs
4 that may accrue in addition, shall be a lien in favor of the
5 Commonwealth on the property, both real and personal, of the
6 person but only after same has been entered and docketed of
7 record by the prothonotary of the county where the property
8 is situated.
9 (2) The department may, at any time, transmit to the
10 prothonotaries of the respective counties certified copies of
11 all liens for taxes imposed by this chapter or the Tax Reform
12 Code of 1971 and penalties and interest.
13 (3) Each prothonotary receiving the lien shall enter and
14 docket the lien of record in the prothonotary's office, which
15 lien shall be indexed as judgments are now indexed.
16 (4) No prothonotary shall require, as a condition
17 precedent to the entry of the liens, the payment of the costs
18 incident thereto.
19 (b) Priority status.--
20 (1) The lien imposed under this section shall have
21 priority from the date of its recording, and shall be fully
22 paid and satisfied out of the proceeds of any judicial sale
23 of property before any other obligation, judgment, claim,
24 lien or estate to which the property may subsequently become
25 subject, except costs of the sale and of the writ on which
26 the sale was made, and real estate taxes and municipal claims
27 against such property, but shall be subordinate to mortgages
28 and other liens existing and duly recorded or entered of
29 record prior to the recording of the tax lien.
30 (2) In the case of a judicial sale of property, subject
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1 to a lien imposed under this section, on a lien or claim over
2 which the lien imposed under this section has priority, the
3 sale shall discharge the lien imposed under this section to
4 the extent only that the proceeds are applied to its payment,
5 and the lien shall continue in full force and effect as to
6 the balance remaining unpaid.
7 (3) There shall be no inquisition or condemnation upon
8 any judicial sale of real estate made by the Commonwealth
9 pursuant to the provisions of this section.
10 (4) (i) The lien of the taxes, interest and penalties,
11 shall continue for five years from the date of entry, and
12 may be revived and continued in the manner now or
13 hereafter provided for renewal of judgments, or as may be
14 provided in The Fiscal Code, and a writ of execution may
15 directly issue upon the lien without the issuance and
16 prosecution to judgment of a writ of scire facias.
17 (ii) Not less than ten days before issuance of any
18 execution on the lien, notice of the filing and the
19 effect of the lien shall be sent by registered mail to
20 the taxpayer at the taxpayer's last known post office
21 address.
22 (iii) The lien shall have no effect on any stock of
23 goods, wares or merchandise regularly sold or leased in
24 the ordinary course of business by the person against
25 whom the lien has been entered, unless and until a writ
26 of execution has been issued and a levy made on the stock
27 of goods, wares and merchandise.
28 (c) Penalty.--Any willful failure of any prothonotary to
29 carry out any duty imposed on the prothonotary under this
30 section shall be a misdemeanor, and, upon conviction, the
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1 prothonotary shall be sentenced to pay a fine not more than
2 $1,000 and costs of prosecution or to a term of imprisonment not
3 exceeding one year, or both.
4 (d) Priority payment from distribution.--
5 (1) Except as otherwise provided under the law, in the
6 distribution, voluntary or compulsory, in receivership,
7 bankruptcy or otherwise, of the property or estate of any
8 person, all taxes imposed by this chapter which are due and
9 unpaid and are not collectible under section 725 shall be
10 paid from the first money available for distribution in
11 priority to all other claims and liens, except insofar as the
12 laws of the United States may give a prior claim to the
13 Federal Government.
14 (2) Any person charged with the administration or
15 distribution of the property or estate, who violates the
16 provisions of this section, shall be personally liable for
17 any taxes imposed by this chapter, which are accrued and
18 unpaid and are chargeable against the person whose property
19 or estate is being administered or distributed.
20 (e) Construction.--Subject to the limitations contained in
21 this chapter as to the assessment of taxes, nothing contained in
22 this section shall be construed to restrict, prohibit or limit
23 the use by the department in collecting taxes finally due and
24 payable of any other remedy or procedure available at law or
25 equity for the collection of debts.
26 Section 743. Suit for taxes.
27 (a) General rule.--At any time within three years after any
28 tax or any amount of tax shall be finally due and payable, the
29 department may commence an action in the courts of this
30 Commonwealth, of any state or of the United States, in the name
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1 of the Commonwealth, to collect the amount of tax due together
2 with additions, interest, penalties and costs in the manner
3 provided at law or in equity for the collection of ordinary
4 debts.
5 (b) Prosecution by Attorney General.--The Attorney General
6 shall prosecute the action and, except as provided in this
7 chapter, the provisions of the Rules of Civil Procedure and the
8 provisions of the laws of this Commonwealth relating to civil
9 procedures and remedies shall, to the extent that they are
10 applicable, be available in such proceedings.
11 (c) Construction.--The provisions of this section are in
12 addition to any process, remedy or procedure for the collection
13 of taxes provided by this chapter or by the laws of this
14 Commonwealth, and this section is neither limited by nor
15 intended to limit any such process, remedy or procedure.
16 Section 744. Tax suit comity.
17 The courts of this Commonwealth shall recognize and enforce
18 liabilities for sales and use taxes, lawfully imposed by any
19 other state if the other state extends a like comity to this
20 Commonwealth.
21 Section 745. Service.
22 (a) General rule.--Any person who maintains a place of
23 business in this Commonwealth is deemed to have appointed the
24 Secretary of the Commonwealth as the person's agent for the
25 acceptance of service of process or notice in any proceedings
26 for the enforcement of the civil provisions of this chapter, and
27 any service made upon the Secretary of the Commonwealth as agent
28 shall be of the same legal force and validity as if the service
29 had been personally made on the person.
30 (b) Substitute service.--Where service cannot be made on the
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1 person in the manner provided by other laws of this Commonwealth
2 relating to service of process, service may be made on the
3 Secretary of the Commonwealth and, in such case, a copy of the
4 process or notice shall also be personally served on any agent
5 or representative of the person who may be found within this
6 Commonwealth, or where no such agent or representative may be
7 found a copy of the process or notice shall be sent by
8 registered mail to the person at the last known address of the
9 person's principal place of business, home office or residence.
10 Section 746. Collection and payment of tax on credit sales.
11 If any sale subject to tax under this chapter is wholly or
12 partly on credit, the vendor shall require the purchaser to pay
13 in cash at the time the sale is made, or within 30 days
14 thereafter, the total amount of tax due upon the entire purchase
15 price. The vendor shall remit the tax to the department,
16 regardless of whether payment was made by the purchaser to the
17 vendor, with the next return required to be filed under section
18 717.
19 Section 747. Prepayment of tax.
20 (a) General rule.--Whenever a vendor is prohibited by law or
21 governmental regulation to charge and collect the purchase price
22 in advance of or at the time of delivery, the vendor shall
23 prepay the tax as required by section 722, but in that case, if
24 the purchaser fails to pay to the vendor the total amount of the
25 purchase price and the tax and the amount is written off as
26 uncollectible by the vendor, the vendor shall not be liable for
27 the tax and shall be entitled to a credit or refund of the tax
28 paid.
29 (b) Subsequent collection of tax.--If the purchase price is
30 thereafter collected, in whole or in part, the amount collected
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1 shall be first applied to the payment of the entire tax portion
2 of the bill, and shall be remitted to the department by the
3 vendor with the first return filed after such collection.
4 (c) Time period for refund.--Tax prepaid shall be subject to
5 refund on petition to the department under the provisions of
6 section 752, filed within 105 days of the close of the fiscal
7 year in which the accounts are written off.
8 Section 747.1. Refund of sales tax attributed to bad debt.
9 (a) General rule.--A vendor may file a petition for refund
10 of sales tax paid to the department that is attributed to a bad
11 debt if all of the following apply:
12 (1) The purchaser fails to pay the vendor the total
13 purchase price.
14 (2) The purchase price is written off, either in whole
15 or in part, as a bad debt on the vendor's books and records.
16 (3) The bad debt has been deducted for Federal income
17 tax purposes under section 166 of the Internal Revenue Code
18 of 1986 (Public Law 99-514, 26 U.S.C. § 166).
19 The petition must be filed with the department under Article
20 XXVII of the Tax Reform Code of 1971 within the time limitations
21 prescribed by section 3003.1 of the Tax Reform Code of 1971.
22 (b) Limitation.--
23 (1) The refund authorized by this section shall be
24 limited to the sales tax paid to the department that is
25 attributed to the bad debt, less any discount under section
26 727.
27 (2) Partial payments by the purchaser to the vendor
28 shall be prorated between the original purchase price and the
29 sales tax due on the sale.
30 (3) Payments made to a vendor on any transaction which
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1 includes both taxable and nontaxable components shall be
2 allocated proportionally between the taxable and nontaxable
3 components.
4 (c) Assignment.--A vendor may assign its right to petition
5 and receive a refund of sales tax attributed to a bad debt to an
6 affiliated entity. A vendor may not assign its right to petition
7 and receive a refund of sales tax attributed to a bad debt to
8 any other person.
9 (d) Items not refundable.--No refund shall be granted under
10 this section for interest, finance charges or expenses incurred
11 in attempting to collect any amount receivable.
12 (e) Contents of petition for refund.--The documentation,
13 procedures and methods for claiming and calculating the refund
14 allowed under this section shall be in such form as the
15 department may prescribe.
16 (f) Subsequent collection.--If the purchase price that is
17 attributed to a prior bad debt refund is collected in whole or
18 in part, the vendor or affiliated entity shall remit the
19 proportional tax to the department with the first return filed
20 after the collection.
21 (g) Interest prohibited.--Notwithstanding the provisions of
22 section 806.1 of the act of April 9, 1929 (P.L.343, No.176),
23 known as The Fiscal Code, no interest shall be paid by the
24 Commonwealth on refunds of sales tax attributed to bad debt
25 under this section.
26 (h) Administration.--
27 (1) No refund or credit of sales tax shall be made for
28 any uncollected purchase price or bad debt except as
29 authorized by this section.
30 (2) No deduction or credit for bad debt may be taken on
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1 any return filed with the department.
2 (3) This section shall provide the exclusive procedure
3 for claiming a refund or credit of sales tax attributed to
4 uncollected purchase price or bad debt.
5 (i) Definition.--For purposes of this section, the term
6 "affiliated entity" means any corporation that is part of the
7 same affiliated group as the vendor as defined by section
8 1504(a)(1) of the Internal Revenue Code of 1986.
9 Section 748. Registration of transient vendors.
10 (a) General rule.--Prior to conducting business or otherwise
11 commencing operations in this Commonwealth, a transient vendor
12 shall register with the department. The application for
13 registration shall be in such form and contain such information
14 as the department, by regulation, shall prescribe and shall set
15 forth truthfully and accurately the information desired by the
16 department. This registration shall be renewed and updated
17 annually.
18 (b) Certificate to be issued.--After registration and the
19 posting of the bond required by section 748.1, the department
20 shall issue to the transient vendor a certificate valid for one
21 year. On renewal of registration, the department shall issue a
22 new certificate valid for one year, if the department is
23 satisfied that the transient vendor has complied with the
24 provisions of this chapter.
25 (c) Possession and exhibition of certificate.--The transient
26 vendor shall possess the certificate at all times when
27 conducting business within this Commonwealth and shall exhibit
28 the certificate upon demand by authorized employees of the
29 department or any law enforcement officer.
30 (d) Contents of certificate.--The certificate issued by the
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1 department shall state that the transient vendor named in the
2 certificate has registered with the department and shall provide
3 notice to the transient vendor that:
4 (1) The transient vendor must notify the department in
5 writing before it enters this Commonwealth to conduct
6 business, of the location or locations where it intends to
7 conduct business and the date or dates on which it intends to
8 conduct business.
9 (2) Failure to notify or giving false information to the
10 department may result in suspension or revocation of the
11 transient vendor's certificate.
12 (3) Conducting business in this Commonwealth after a
13 certificate has been suspended or revoked may result in
14 criminal conviction and the imposition of fines or other
15 penalties.
16 Section 748.1. Bond.
17 (a) General rule.--Upon registration with the department, a
18 transient vendor shall also post a bond with the department in
19 the amount of $500 as surety for compliance with the provisions
20 of this chapter. After a period of demonstrated compliance with
21 these provisions or, if the transient vendor provides the
22 license number of a promoter who has notified the department of
23 a show, in accordance with the provisions of section 748.6(a),
24 the department may reduce the amount of bond required of a
25 transient vendor or may eliminate the bond entirely.
26 (b) Voluntary suspension of certificate.--A transient vendor
27 may file a request for voluntary suspension of certificate with
28 the department. If the department is satisfied that the
29 provisions of this chapter have been complied with and has
30 possession of the transient vendor's certificate, it shall
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1 return the bond posted to the transient vendor.
2 Section 748.2. Notification to department.
3 (a) General rule.--Prior to entering this Commonwealth to
4 conduct business, a transient vendor shall notify the department
5 in writing of the location or locations where it intends to
6 conduct business and the date or dates on which it intends to
7 conduct business.
8 (b) Inspection of records.--While conducting business in
9 this Commonwealth, the transient vendor shall permit authorized
10 employees of the department to inspect its sales records,
11 including, but not limited to, sales receipts and inventory or
12 price lists and to permit inspection of the tangible personal
13 property offered for sale at retail.
14 (c) Conditions for suspension or revocation of
15 certificate.--The department may suspend or revoke a certificate
16 issued to a transient vendor if the transient vendor:
17 (1) fails to notify the department as required by
18 subsection (a);
19 (2) provides the department with false information
20 regarding the conduct of business in this Commonwealth;
21 (3) fails to collect sales tax on all tangible personal
22 property or services sold subject to the sales tax; or
23 (4) fails to file with the department a tax return as
24 required by section 717.
25 (d) Regulations.--The department shall promulgate the rules
26 and regulations necessary to implement this section.
27 Section 748.3. Seizure of property.
28 (a) General rule.--If a transient vendor conducting business
29 in this Commonwealth fails to exhibit a valid certificate on
30 demand by authorized employees of the department, those
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1 authorized employees shall seize, without warrant, the tangible
2 personal property and the automobile, truck or other means of
3 transportation used to transport or carry that property. All
4 property seized shall be deemed contraband and shall be subject
5 to immediate forfeiture proceedings instituted by the department
6 pursuant to procedures adopted by regulation, except as
7 otherwise provided by this section.
8 (b) Release of seized property.--Property seized pursuant to
9 subsection (a) shall be released on:
10 (1) presentation of a valid certificate to authorized
11 employees of the department; or
12 (2) registration by the transient vendor with the
13 department and the posting of a bond in the amount of $500,
14 either immediately or within 15 days after the property is
15 seized.
16 Section 748.4. Fines.
17 Any transient vendor conducting business in this Commonwealth
18 while its certificate is suspended or revoked, as provided by
19 sections 748.1(b) and 748.2(c), commits a misdemeanor of the
20 third degree and, upon conviction, shall be sentenced to pay a
21 fine of not more than $2,500 for each offense.
22 Section 748.5. Transient vendors subject to chapter.
23 Except as otherwise provided, a transient vendor shall be
24 subject to the provisions of this chapter in the same manner as
25 a vendor who maintains a place of business in this Commonwealth.
26 Section 748.6. Promoters.
27 (a) General rule.--A promoter of a show or shows in this
28 Commonwealth may annually file with the department an
29 application for a promoter's license stating the location and
30 dates of such show or shows. The application shall be filed at
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1 least 30 days prior to the opening of the first show and shall
2 be in such form as the department may prescribe.
3 (b) License.--
4 (1) Except as otherwise provided in this chapter, the
5 department shall, within 15 days after receipt of an
6 application for a license, issue to the promoter without
7 charge a license to operate such shows.
8 (2) If application for a license under this section has
9 been timely filed and if the license has not been received by
10 the promoter prior to the opening of the show, the
11 authorization contained in this section with respect to the
12 obtaining of a promoter's license shall be deemed to have
13 been complied with, unless or until the promoter receives
14 notice from the department denying the application for a
15 promoter's license.
16 (c) Compliance.--Any promoter who is a vendor under the
17 provisions of section 701 shall comply with all the provisions
18 of this chapter applicable to vendors and with the provisions of
19 this section applicable to promoters.
20 (d) Prohibited conduct.--No licensed promoter shall permit
21 any person to display for sale or to sell tangible personal
22 property or services subject to tax under section 702 at a show
23 unless the person is licensed under section 708 and provides to
24 the promoter the information required under law.
25 (e) Penalties.--
26 (1) Any licensed promoter who:
27 (i) permits any person to display for sale or to
28 sell tangible personal property or service without first
29 having been licensed under section 708;
30 (ii) fails to maintain records of a show as required
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1 by law; or
2 (iii) knowingly maintains false records or fails to
3 comply with any provision contained in this section or
4 any regulation promulgated by the department pertaining
5 to shows,
6 shall be subject to denial of a license or the revocation of
7 any existing license issued pursuant to this section.
8 (2) The department may deny the promoter a license
9 certificate to operate a show for a period of not more than
10 six months from the date of such denial. The penalty shall be
11 in addition to any other penalty imposed by this chapter.
12 (3) Within 20 days of notice of denial or revocation of
13 a license by the department, the promoter may petition the
14 department for a hearing pursuant to 2 Pa.C.S. (relating to
15 administrative law and procedure).
16 Section 749. (Reserved).
17 Section 750. (Reserved).
18 Section 751. (Reserved).
19 Section 752. Refunds.
20 (a) General rule.--Subject to the provisions of subsection
21 (b), the department shall, pursuant to the provisions of Article
22 XXVII of the Tax Reform Code of 1971, refund all taxes, interest
23 and penalties paid to the Commonwealth under the provisions of
24 this chapter and to which the Commonwealth is not rightfully
25 entitled. The refunds shall be made to the person, the person's
26 heirs, successors, assigns or other personal representatives,
27 who actually paid the tax.
28 (b) Exception.--No refund shall be made under this section
29 with respect to any payment made by reason of an assessment with
30 respect to which a taxpayer has filed a petition for
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1 reassessment pursuant to section 2702 of the Tax Reform Code of
2 1971 to the extent that the petition has been determined
3 adversely to the taxpayer by a decision which is no longer
4 subject to further review or appeal.
5 (c) Construction.--Nothing contained in this section shall
6 be deemed to prohibit a taxpayer who has filed a timely petition
7 for reassessment from amending it to a petition for refund where
8 the petitioner has paid the tax assessed.
9 Section 753. Refund petition.
10 (a) General rule.--Except as provided for in subsection (b)
11 and section 756, the refund or credit of tax, interest or
12 penalty provided for by section 752 shall be made only where the
13 person who has actually paid the tax files a petition for refund
14 with the department under Article XXVII of the Tax Reform Code
15 of 1971, within the limits of section 3003.1 of the Tax Reform
16 Code of 1971.
17 (b) Assessments.--A refund or credit of tax, interest or
18 penalty paid as a result of an assessment made by the department
19 under section 731 shall be made only where the person who has
20 actually paid the tax files with the department a petition for a
21 refund with the department under Article XXVII of the Tax Reform
22 Code of 1971 within the time limits of section 3003.1 of the Tax
23 Reform Code of 1971. The filing of a petition for refund under
24 the provisions of this subsection shall not affect the abatement
25 of interest, additions or penalties to which the person may be
26 entitled by reason of the person's payment of the assessment.
27 Section 754. (Reserved).
28 Section 755. (Reserved).
29 Section 756. Extended time for filing special petition for
30 refund.
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1 (a) General rule.--Any party to a transaction who has paid
2 tax by reason of a transaction with respect to which the
3 department is assessing tax against another person may, within
4 six months after the filing by the department of the assessment
5 against the other person, file a special petition for refund,
6 notwithstanding the person's failure to timely file a petition
7 pursuant to section 3003.1 of the Tax Reform Code of 1971. The
8 provisions of Article XXVII of the Tax Reform Code of 1971 shall
9 be applicable to the special petition for refund, except that
10 the department need not act on the petition until there is a
11 final determination as to the propriety of the assessment filed
12 against the other party to the transaction. Where a petition is
13 filed under this provision in order to take advantage of the
14 extended period of limitations, overpayments by the petitioner
15 shall be refunded but only to the extent of the actual tax,
16 without consideration of interest and penalties, paid by the
17 other party to the transaction.
18 (b) Purpose.--The purpose of this section is to avoid
19 duplicate payment of tax where a determination is made by the
20 department that one party to a transaction is subject to tax,
21 and another party to the transaction has previously paid tax
22 with respect to the transaction and, as such, this section shall
23 be construed as extending right beyond that provided for by
24 section 753, and not to limit the other section.
25 Section 757. (Reserved).
26 Section 758. Limitation on assessment and collection.
27 The amount of the tax imposed by this chapter or the Tax
28 Reform Code of 1971 shall be assessed within three years after
29 the date when the return provided for by section 717(a) or (c)
30 is filed or the end of the year in which the tax liability
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1 arises, whichever occurs later. Any assessment may be made at
2 any time during the 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 the year.
5 In any case, no credit shall be given for any penalty previously
6 assessed or paid.
7 Section 759. Failure to file return.
8 Where no return is filed, the amount of the tax due may be
9 assessed and collected at any time as to taxable transactions
10 not reported.
11 Section 760. False or fraudulent return.
12 Where the taxpayer willfully files a false or fraudulent
13 return with intent to evade the tax imposed by this chapter, the
14 amount of tax due may be assessed and collected at any time.
15 Section 761. Extension of limitation period.
16 Notwithstanding any other provisions of this subchapter
17 where, before the expiration of the period prescribed in that
18 other provision for the assessment of a tax, a taxpayer has
19 consented in writing that the period be extended, the amount of
20 tax due may be assessed at any time within the extended period.
21 The period so extended may be extended further by subsequent
22 consents in writing made before the expiration of the extended
23 period.
24 Section 762. (Reserved).
25 Section 763. (Reserved).
26 Section 764. (Reserved).
27 Section 765. Interest.
28 If any amount of tax imposed by this chapter is not paid to
29 the department on or before the last date prescribed for
30 payment, interest on the amount at the rate of .75% per month
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1 for each month, or fraction thereof, from the date, shall be
2 paid for the period from the last date to the date paid. The
3 last date prescribed for payment shall be determined under
4 section 722(a) or (c) without regard to any extension of time
5 for payment. In the case of any amount assessed as a deficiency
6 or as an estimated assessment, the date prescribed for payment
7 shall be 30 days after notice of the assessment.
8 Section 766. Additions to tax.
9 (a) Failure to file return.--In the case of failure to file
10 any return required by section 715 on the date prescribed for
11 the return, determined with regard to any extension of time for
12 filing, and, in the case in which a return filed understates the
13 true amount due by more than 50%, there shall be added to the
14 amount of tax actually due 5% of the amount of the tax if the
15 failure to file a proper return is for not more than one month,
16 with an additional 5% for each additional month, or fraction
17 thereof, during which such failure continues, not exceeding 25%
18 in the aggregate. In every case at least $2 shall be added.
19 (b) Addition for understatement.--There shall be added to
20 every assessment under section 731(b) an addition equal to 5% of
21 the amount of the understatement and no addition to the tax
22 shall be paid under section 731(a).
23 (c) Interest.--If the department assesses a tax according to
24 section 731(a), (b) or (c), there shall be added to the amount
25 of the deficiency interest at the rate of .75% per month for
26 each month, or fraction thereof, from the date prescribed by
27 subsection (a) or section 722(c) for the payment of the tax to
28 the date of notice of the assessment.
29 Section 767. Penalties.
30 (a) General rule.--The penalties, additions, interest and
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1 liabilities provided by this chapter shall be paid on notice and
2 demand by the department, and shall be assessed and collected in
3 the same manner as taxes. Except as otherwise provided, any
4 reference in this chapter to tax imposed by this chapter shall
5 be deemed also to refer to the penalties, additions, interest
6 and liabilities provided by this chapter.
7 (b) Monetary penalty.--Any person who willfully attempts, in
8 any manner, to evade or defeat the tax imposed by this chapter,
9 or the payment thereof, or to assist any other person to evade
10 or defeat the tax imposed by this chapter, or the payment
11 thereof, or to receive a refund improperly shall, in addition to
12 other penalties provided by law, be liable for a penalty equal
13 to one-half of the total amount of the tax evaded.
14 (c) Burden of proof.--In any direct proceeding arising out
15 of a petition for reassessment or refund as provided in this
16 chapter, in which an issue of fact is raised with respect to
17 whether a return is fraudulent or with respect to the propriety
18 of the imposition by the department of the penalty prescribed in
19 subsection (b), the burden of proof with respect to the issue
20 shall be on the department.
21 Section 768. Criminal offenses.
22 (a) False returns.--Any person who with intent to defraud
23 the Commonwealth willfully makes, or causes to be made, any
24 return required by this chapter which is false commits a
25 misdemeanor and, upon conviction, shall be sentenced to pay a
26 fine of not more than $2,000 or to imprisonment not exceeding
27 three years, or both.
28 (b) Other offenses.--Except as otherwise provided by
29 subsection (a) and subject to the provisions of subsection (c),
30 any person who:
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1 (1) advertises or holds out or states to the public or
2 to any purchaser or user, directly or indirectly, that the
3 tax or any part imposed by this chapter will be absorbed by
4 the person, or that it will not be added to the purchase
5 price of the tangible personal property or services described
6 in section 701(k)(2), (3), (4) and (11) through (18) sold or,
7 if added, that the tax or any part will be refunded, other
8 than when the person refunds the purchase price because of
9 the property being returned to the vendor;
10 (2) sells or leases tangible personal property or the
11 services, the sale or use of which by the purchaser is
12 subject to tax under this chapter, and willfully fails to
13 collect the tax from the purchaser and timely remit the same
14 to the department;
15 (3) willfully fails or neglects to timely file any
16 return or report required by this chapter or, as a taxpayer,
17 refuses to timely pay any tax, penalty or interest imposed or
18 provided for by this chapter, or willfully fails to preserve
19 the person's books, papers and records as directed by the
20 department;
21 (4) refuses to permit the department or any of its
22 authorized agents to examine the person's books, records or
23 papers, or who knowingly makes any incomplete, false or
24 fraudulent return or report;
25 (5) does or attempts to do anything to prevent the full
26 disclosure of the amount or character of taxable sales
27 purchases or use made by himself or any other person;
28 (6) provides any person with a false statement as to the
29 payment of tax with respect to particular tangible personal
30 property or services; or
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1 (7) makes, utters or issues a false or fraudulent
2 exemption certificate;
3 commits a misdemeanor and, upon conviction shall be sentenced to
4 pay a fine of not more than $1,000 and costs of prosecution or
5 to imprisonment for not more than one year, or both.
6 (c) Exceptions.--
7 (1) Any person who maintains a place of business outside
8 this Commonwealth may absorb the tax with respect to taxable
9 sales made in the normal course of business to customers
10 present at that place of business without being subject to
11 the penalty and fines.
12 (2) Advertising tax-included prices shall be
13 permissible, if the prepaid services are sold by the service
14 provider, for prepaid telecommunications services not
15 evidenced by the transfer of tangible personal property or
16 for prepaid mobile telecommunications services.
17 (d) Penalties are cumulative.--The penalties imposed by this
18 section shall be in addition to any other penalties imposed by
19 any provision of this chapter.
20 Section 769. Abatement of additions or penalties.
21 On the filing of a petition for reassessment or a petition
22 for refund as provided under this chapter by a taxpayer,
23 additions or penalties imposed on the taxpayer by this chapter
24 or the Tax Reform Code of 1971 may be waived or abated, in whole
25 or in part, where the petitioner has established that the
26 petitioner has acted in good faith, without negligence and with
27 no intent to defraud.
28 Section 770. Rules and regulations.
29 (a) General rule.--The department shall enforce the
30 provisions of this chapter and shall prescribe, adopt,
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1 promulgate and enforce rules and regulations not inconsistent
2 with the provisions of this chapter, relating to any matter or
3 thing pertaining to the administration and enforcement of the
4 provisions of this chapter, and the collection of taxes,
5 penalties and interest imposed by this chapter. The department
6 may prescribe the extent, if any, to which any of the rules and
7 regulations shall be applied without retroactive effect.
8 (b) Determination of purchase price.--
9 (1) In determining the purchase price of taxable sales
10 where, because of affiliation of interests between the vendor
11 and the purchaser or irrespective of any such affiliation, if
12 for any other reason, the purchase price of the sale is in
13 the opinion of the department not indicative of the true
14 value of the article or the fair price of the article, the
15 department shall, pursuant to uniform and equitable rules,
16 determine the amount of constructive purchase price on the
17 basis of which the tax shall be computed and levied.
18 (2) The rules shall provide for a constructive amount of
19 a purchase price for each sale, which price shall equal a
20 price for the article which would naturally and fairly be
21 charged in an arm's-length transaction in which the element
22 of common interests between vendor and purchaser or, if no
23 common interest exists, any other element causing a
24 distortion of the price or value is absent.
25 (3) For the purpose of this chapter where a taxable sale
26 occurs between a parent corporation and a subsidiary
27 affiliate or controlled corporation of such parent, there
28 shall be a rebuttable presumption that because of such common
29 interest the transaction was not at arm's-length.
30 Section 771. Keeping of records.
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1 (a) Persons liable for taxes.--Every person liable for any
2 tax imposed by this chapter, or for the collection of the tax,
3 shall keep the records, render such statements, make the returns
4 and comply with the rules and regulations as the department may,
5 from time to time, prescribe regarding matters pertinent to the
6 person's business. Whenever in the judgment of the department it
7 is necessary, it may require any person, by notice served on the
8 person, or by regulations, to make the returns, render the
9 statements or keep the records as the department deems
10 sufficient to show whether the person is liable to pay or
11 collect tax under this chapter.
12 (b) Persons collecting taxes.--Any person liable to collect
13 tax from another person under the provisions of this chapter
14 shall file reports, keep records, make payments and be subject
15 to interest and penalties as provided for under this chapter, in
16 the same manner as if the person were directly subject to the
17 tax.
18 (c) Nonresidents.--
19 (1) A nonresident who does business in this Commonwealth
20 as a retail dealer shall keep adequate records of the
21 business and of the tax due with respect to the business,
22 which records shall at all times be retained within this
23 Commonwealth unless retention outside this Commonwealth is
24 authorized by the department.
25 (2) No taxes collected from purchasers shall be sent
26 outside this Commonwealth without the written consent of and
27 in accordance with conditions prescribed by the department.
28 (3) The department may require a taxpayer who desires to
29 retain records or tax collections outside this Commonwealth
30 to assume reasonable out-of-State audit expenses.
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1 (d) Retail dealers.--
2 (1) Any person doing business as a retail dealer who at
3 the same time is engaged in another business which does not
4 involve the making of sales taxable under this chapter shall
5 keep separate books and records of the person's businesses so
6 as to show the sales taxable under this chapter separately
7 from the sales not taxable under this chapter.
8 (2) If the person fails to keep such separate books and
9 records, the person shall be liable for tax at the rate
10 designated in section 702 on the entire purchase price of
11 sales from both or all of the person's businesses.
12 (e) Segregation of taxes required.--
13 (1) In those instances where a vendor gives no sales
14 memoranda or uses registers showing only total sales, the
15 vendor shall adopt some method of segregating tax from sales
16 receipts and keep records showing the segregation, all in
17 accordance with proper accounting and business practices.
18 (2) A vendor may apply to the department for permission
19 to use a collection and recording procedure which will show
20 the information as the law requires with reasonable accuracy
21 and simplicity. The application must contain a detailed
22 description of the procedure to be adopted.
23 (3) Permission to use the proposed procedure is not to
24 be construed as relieving the vendor from remitting the full
25 amount of tax collected.
26 (4) The department may revoke the permission on 30 days'
27 notice to the vendor.
28 (5) Refusal of the department to grant permission in
29 advance to use the procedure shall not be construed to
30 invalidate a procedure which on examination shows the
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1 information as the law requires.
2 Section 771.1. Reports and records of promoters.
3 Every licensed promoter shall keep a record of the date and
4 place of each show and the name, address, sales, use and hotel
5 occupancy license number of every person whom the licensed
6 promoter permits to display for sale or to sell tangible
7 personal property or services subject to tax under section 702
8 at the show. The records shall be open for inspection and
9 examination at any reasonable time by the department or a duly
10 authorized representative, and the records shall, unless the
11 department consents in writing to an earlier destruction, be
12 preserved for three years after the date the report was filed or
13 the date it was due, whichever occurs later, except that the
14 department may by regulation require that they be kept for a
15 longer period of time.
16 Section 772. Examinations.
17 (a) Power of department.--The department or any of its
18 authorized agents may examine the books, papers and records of
19 any taxpayer in order to verify the accuracy and completeness of
20 any return made or if no return was made, to ascertain and
21 assess the tax imposed by this chapter. The department may
22 require the preservation of all such books, papers and records
23 for any period deemed proper by it but not to exceed three years
24 from the end of the calendar year to which the records relate.
25 (b) Duty of taxpayers.--Every taxpayer shall give to the
26 department, or its agent, the means, facilities and opportunity
27 for the examinations and investigation.
28 (c) Other powers of department.--
29 (1) The department is further authorized to examine any
30 person, under oath, concerning taxable sales or use by any
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1 taxpayer or concerning any other matter relating to the
2 enforcement or administration of this chapter, and to this
3 end may compel the production of books, papers and records
4 and the attendance of all persons whether as parties or
5 witnesses whom it believes to have knowledge of such matters.
6 (2) The procedure for such hearings or examinations
7 shall be the same as that provided by the act of April 9,
8 1929 (P.L.343, No.176), known as The Fiscal Code, relating to
9 inquisitorial powers of fiscal officers.
10 Section 773. Records and examinations of delivery agents.
11 Every agent for the purpose of delivery of goods shipped into
12 this Commonwealth by a nonresident, including, but not limited
13 to, a common carrier, shall maintain adequate records of such
14 deliveries pursuant to rules and regulations adopted by the
15 department and shall make the records available to the
16 department upon request after due notice.
17 Section 774. Unauthorized disclosure.
18 Any information gained by the department as a result of any
19 return, examination, investigation, hearing or verification
20 required or authorized by this chapter shall be confidential,
21 except for official purposes and except in accordance with
22 proper judicial order or as otherwise provided by law, and any
23 person unlawfully divulging such information commits a
24 misdemeanor and, upon conviction, shall be sentenced to pay a
25 fine of not more than $1,000 and costs of prosecution or to
26 imprisonment for not more than one year, or both.
27 Section 775. Cooperation with other governments.
28 Notwithstanding the provisions of section 774, the department
29 may permit the Commissioner of Internal Revenue of the United
30 States, or the proper officer of any state, or the authorized
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1 representative of either such officer, to inspect the tax
2 returns of any taxpayer, or may furnish to the officer or to the
3 officer's authorized representative an abstract of the return of
4 any taxpayer, or supply the officer or the authorized
5 representative with information concerning any item contained in
6 any return or disclosed by the report of any examination or
7 investigation of the return of any taxpayer. This permission
8 shall be granted only if the statutes of the United States or of
9 such other state, as the case may be, grant substantially
10 similar privileges to the proper officer of the Commonwealth
11 charged with the administration of this chapter.
12 Section 776. Interstate compacts.
13 (a) General rule.--The Governor, or the Governor's
14 authorized representative, may confer with the Governor and the
15 authorized representatives of other states with respect to
16 reciprocal use tax collection between the Commonwealth and such
17 other states.
18 (b) Other powers.--The Governor, or the Governor's
19 authorized representative, may join with the authorities of
20 other states to conduct joint investigations, to exchange
21 information, hold joint hearings and enter into compacts or
22 interstate agreements with such other states to accomplish
23 uniform reciprocal use tax collections between those states who
24 are parties to any compact or interstate agreement and the
25 Commonwealth.
26 Section 777. Bonds.
27 (a) Procedure.--
28 (1) Whenever the department, in its discretion, deems it
29 necessary to protect the revenues to be obtained under the
30 provisions of this chapter, it may require any nonresident
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1 natural person or any foreign corporation, association,
2 fiduciary, partnership or other entity, not authorized to do
3 in this Commonwealth or not having an established place of
4 business in this Commonwealth and subject to the tax imposed
5 by section 702, to file a bond issued by a surety company
6 authorized to do business in this Commonwealth and approved
7 by the Insurance Commissioner as to solvency and
8 responsibility, in such amounts as it may fix, to secure the
9 payment of any tax or penalties due, or which may become due,
10 from a natural person or corporation.
11 (2) In order to protect the revenues to be obtained
12 under the provisions of this chapter, the department shall
13 require any nonresident natural person or any foreign
14 corporation, association, fiduciary, partnership or entity,
15 who or which is a building contractor, or who or which is a
16 supplier delivering building materials for work in this
17 Commonwealth and is not authorized to do business in this
18 Commonwealth or does not have an established place of
19 business in this Commonwealth and is subject to the tax
20 imposed by section 702, to file a bond issued by a surety
21 company authorized to do business in this Commonwealth and
22 approved by the Insurance Commissioner as to solvency and
23 responsibility, in the amounts as it may fix, to secure the
24 payments of any tax or penalties due, or which may become
25 due, from a natural person, corporation or other entity.
26 (3) The department may also require a bond of any person
27 petitioning the department for reassessment, in the case of
28 any assessment over $500 or where it is of the opinion that
29 the ultimate collection is in jeopardy.
30 (4) (i) The department may, for a period of three
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1 years, require a bond of any person who has on three or
2 more occasions within a 12-month period either filed a
3 return or made payment to the department more than 30
4 days late.
5 (ii) If the department determines that a taxpayer is
6 to file a bond, the department shall give notice to the
7 taxpayer to that effect, specifying the amount of the
8 bond required.
9 (iii) The taxpayer shall file a bond within five
10 days after the giving of the notice by the department
11 unless, within the five-day period, the taxpayer requests
12 in writing a hearing before the secretary or the
13 secretary's representative at which hearing the
14 necessity, propriety and amount of the bond shall be
15 determined by the secretary or a representative. The
16 determination shall be final and shall be complied within
17 15 days after notice is mailed to the taxpayer.
18 (b) Alternative security.--
19 (1) In lieu of the bond required by this section,
20 securities approved by the department, or cash in the amount
21 as it may prescribe, may be deposited.
22 (2) Such securities or cash shall be kept in the custody
23 of the department, who may, at any time, without notice to
24 the depositor, apply them to any tax and/or interest or
25 penalties due, and for that purpose the securities may be
26 sold by the department, at public or private sale, on five
27 days' written notice to the depositor.
28 (c) Lien may be filed.--
29 (1) The department may file a lien pursuant to section
30 742 against any taxpayer who fails to file a bond when
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1 required to do so under this section.
2 (2) All funds received on execution of the judgment on
3 the lien shall be refunded to the taxpayer with 3% interest
4 should a final determination be made that the taxpayer does
5 not owe any payment to the department.
6 SUBCHAPTER G
7 FUNDING PROVISIONS
8 Section 780. (Reserved).
9 Section 781. Appropriation for refunds.
10 So much of the proceeds of the tax imposed by this chapter as
11 shall be necessary for the payment of refunds, enforcement or
12 administration under this chapter is hereby appropriated for
13 those purposes.
14 Section 781.1. Construction.
15 To the extent that the language of this chapter is identical
16 to that of equivalent provisions in the former act of March 6,
17 1956 (P.L.1228, No.381), known as the Tax Act of 1963 for
18 Education, or Article II of the Tax Reform Code of 1971, that
19 language shall be deemed a reenactment of such identical
20 provisions.
21 Section 781.2. Transfers to Public Transportation Reserve Fund.
22 (a) Establishment of fund.--Beginning January 1, 2008, 1.01%
23 up to a maximum of $75,000,000 of the taxes received under this
24 chapter, and such additional revenues not to exceed 4.4% of such
25 additional revenues that are generated by taxes received under
26 this chapter that are necessary to replace the revenues
27 earmarked for public transportation under 74 Pa.C.S. § 1506(c)
28 (relating to fund), shall be deposited in the Public
29 Transportation Reserve Fund which is hereby established in the
30 State Treasury and shall be disbursed as provided under an act
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1 of the General Assembly enacted after the effective date of this
2 section.
3 (b) Time period for transfers.--Within 30 days of the close
4 of a calendar month, 1.01% of the taxes and other sums specified
5 in subsection (a) received in the prior calendar month shall be
6 transferred to the Public Transportation Reserve Fund.
7 Section 782. Transfers to Education Operating Fund.
8 (a) Legislative intent.--It is the intent of the General
9 Assembly to broaden the sales and use tax base in order to
10 provide funds for the operating expenses of school districts and
11 as a means to abolish the school property tax.
12 (b) Source of funding for transfers.--Except as otherwise
13 provided under section 781.2, all revenues received on or after
14 January 1, 2008, from the tax imposed by this chapter shall be
15 transferred to the Education Operating Fund.
16 CHAPTER 9
17 SENIOR CITIZENS PROPERTY TAX AND
18 RENT REBATE ASSISTANCE
19 Section 901. Scope of chapter.
20 This chapter provides senior citizens with assistance in the
21 form of property tax and rent rebates.
22 Section 902. (Reserved).
23 Section 903. Definitions.
24 The following words and phrases when used in this chapter
25 shall have the meanings given to them in this section unless the
26 context clearly indicates otherwise:
27 "Board." The Board of Finance and Revenue of the
28 Commonwealth.
29 "Claimant." A person who files a claim for property tax
30 rebate or rent rebate in lieu of property taxes and:
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1 (1) was at least 65 years of age or whose spouse, if a
2 member of the household, was at least 65 years of age during
3 a calendar year in which real property taxes, rent and
4 inflation costs were due and payable;
5 (2) was a widow or widower and was at least 50 years of
6 age during a calendar year or part thereof in which real
7 property taxes, rent and inflation costs were due and
8 payable; or
9 (3) was a permanently disabled person 18 years of age or
10 older during a calendar year or part thereof in which the
11 real property taxes, rent and inflation costs were due and
12 payable.
13 "Homestead." A dwelling, whether owned or rented, and so
14 much of the land surrounding it, as is reasonably necessary for
15 the use of the dwelling as a home, occupied by a claimant. The
16 term includes, but is not limited to:
17 (1) Premises occupied by reason of ownership or lease in
18 a cooperative housing corporation.
19 (2) A mobile home which is assessed as realty for local
20 property tax purposes and the land, if owned or rented by the
21 claimant, upon which the mobile home is situated, and any
22 other similar living accommodation.
23 (3) A part of a multidwelling or multipurpose building
24 and a part of the land upon which it is built.
25 (4) Premises occupied by reason of the claimant's
26 ownership or rental of a dwelling located on land owned by a
27 nonprofit incorporated association, of which the claimant is
28 a member, if the claimant is required to pay a pro rata share
29 of the property taxes levied against the association's land.
30 (5) Premises occupied by a claimant if the claimant is
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1 required by law to pay a property tax by reason of the
2 claimant's ownership or rental, including a possessory
3 interest, in the dwelling, the land or both. An owner
4 includes a person in possession under a contract of sale,
5 deed of trust, life estate, joint tenancy or tenancy in
6 common or by reason of statutes of descent and distribution.
7 "Household income." All income received by a claimant and
8 the claimant's spouse while residing in their homestead during
9 the calendar year for which a rebate is claimed.
10 "Income." All income from whatever source derived,
11 including, but not limited to:
12 (1) Salaries, wages, bonuses, commissions, income from
13 self-employment, alimony, support money, cash public
14 assistance and relief.
15 (2) The gross amount of any pensions or annuities,
16 including railroad retirement benefits for calendar years
17 prior to 1999 and 50% of railroad retirement benefits for
18 calendar years 1999 and thereafter.
19 (3) All benefits received under the Social Security Act
20 (49 Stat. 620, 42 U.S.C. § 301 et seq.), except Medicare
21 benefits, for calendar years prior to 1999, and 50% of all
22 benefits received under the Social Security Act, except
23 Medicare benefits, for calendar years 1999 and thereafter.
24 (4) All benefits received under State unemployment
25 insurance laws and veterans' disability payments.
26 (5) All interest received from the Federal or any state
27 government or any instrumentality or political subdivision
28 thereof.
29 (6) Realized capital gains and rentals.
30 (7) Workers' compensation.
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1 (8) The gross amount of loss of time insurance benefits,
2 life insurance benefits and proceeds, except the first $5,000
3 of the total of death benefit payments.
4 (9) Gifts of cash or property, other than transfers by
5 gift between members of a household, in excess of a total
6 value of $300.
7 The term does not include surplus food or other relief in kind
8 supplied by a governmental agency, property tax or rent rebate
9 or inflation dividend.
10 "Inflation expenses." The additional costs of those
11 essential consumer needs of senior citizens in this
12 Commonwealth. The term includes, but is not limited to, the
13 additional cost of medical prescriptions, energy needs,
14 transportation and food and clothing essentials.
15 "Permanently disabled person." A person who is unable to
16 engage in any substantial gainful activity by reason of any
17 medically determinable physical or mental impairment which can
18 be expected to continue indefinitely, except as provided in
19 section 904(b)(3) and (c).
20 "Real property taxes." All taxes on a homestead, exclusive
21 of municipal assessments, delinquent charges and interest, due
22 and payable during a calendar year.
23 "Rent rebate in lieu of property taxes." Twenty percent of
24 the gross amount actually paid in cash or its equivalent in any
25 calendar year to a landlord in connection with the occupancy of
26 a homestead by a claimant, irrespective of whether such amount
27 constitutes payment solely for the right of occupancy or
28 otherwise.
29 "Widow" or "widower." The surviving wife or the surviving
30 husband, as the case may be, of a deceased individual and who
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1 has not remarried except as provided in section 904(b)(3) and
2 (c).
3 Section 904. Property tax, rent rebate and inflation cost.
4 (a) Schedule of rebates.--
5 (1) The amount of any claim for property tax rebate or
6 rent rebate in lieu of property taxes for real property taxes
7 or rent due and payable during calendar years 1985 and
8 thereafter shall be determined in accordance with the
9 following schedule:
10 Percentage of Real Property Taxes
11 or Rent Rebate in Lieu of
12 Household Income Property Taxes Allowed as Rebate
13 $ 0 - $4,999 100%
14 5,000 - 5,499 100
15 5,500 - 5,999 90
16 6,000 - 6,499 80
17 6,500 - 6,999 70
18 7,000 - 7,499 60
19 7,500 - 7,999 50
20 8,000 - 8,499 40
21 8,500 - 8,999 35
22 9,000 - 9,999 25
23 10,000 - 11,999 20
24 12,000 - 12,999 15
25 13,000 - 15,000 10
26 (2) To all claimants eligible for a property tax or rent
27 rebate pursuant to paragraph (1), there shall be paid an
28 inflation dividend determined in accordance with the
29 following schedule:
30 Household Income Dividend
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1 $ 0 - $4,999 $125
2 5,000 - 5,499 100
3 5,500 - 5,999 100
4 6,000 - 6,499 75
5 6,500 - 6,999 75
6 7,000 - 7,499 60
7 7,500 - 7,999 60
8 8,000 - 8,499 45
9 8,500 - 8,999 45
10 9,000 - 9,999 30
11 10,000 - 11,999 30
12 12,000 - 12,999 30
13 13,000 - 15,000 20
14 (b) Limitations on claims.--
15 (1) No claim shall be allowed if the amount of property
16 tax or rent rebate computed in accordance with this section
17 is less than $10, and the maximum amount of property tax or
18 rent rebate payable shall not exceed $500.
19 (2) No claim shall be allowed if the claimant is a
20 tenant of an owner of real property exempt from real property
21 taxes.
22 (c) Apportionment and public assistance.--
23 (1) If any of the following exist relating to a claim:
24 (i) a homestead is owned or rented and occupied for
25 only a portion of a year or is owned or rented in part by
26 a person who does not meet the qualifications for a
27 claimant, exclusive of any interest owned or leased by a
28 claimant's spouse;
29 (ii) the claimant is a widow or widower who
30 remarries; or
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1 (iii) the claimant is a formerly disabled person who
2 is no longer disabled,
3 the department shall apportion the real property taxes or
4 rent in accordance with the period or degree of ownership or
5 leasehold or eligibility of the claimant in determining the
6 amount of rebate for which a claimant is eligible.
7 (2) A claimant who receives public assistance from the
8 Department of Public Welfare shall not be eligible for rent
9 rebate in lieu of property taxes or an inflation dividend
10 during those months within which the claimant receives public
11 assistance.
12 (d) Government subsidies.--Rent shall not include subsidies
13 provided by or through a governmental agency.
14 Section 905. Filing of claim.
15 (a) General rule.--Except as otherwise provided in
16 subsection (b), a claim for property tax or rent rebate shall be
17 filed with the department on or before the 30th day of June of
18 the year next succeeding the end of the calendar year in which
19 real property taxes or rent was due and payable.
20 (b) Exception.--A claim filed after the June 30 deadline
21 until December 31 of such calendar year shall be accepted by the
22 secretary as long as funds are available to pay the benefits to
23 the late filing claimant.
24 (c) Payments from State Lottery Fund.--No reimbursement on a
25 claim shall be made from the State Lottery Fund earlier than the
26 day following the 30th day of June provided in this chapter on
27 which that claim may be filed with the department.
28 (d) Eligibility of claimants.--
29 (1) Only one claimant from a homestead each year shall
30 be entitled to the property tax or rent rebate.
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1 (2) If two or more persons are able to meet the
2 qualifications for a claimant, they may determine who the
3 claimant shall be.
4 (3) If they are unable to agree, the department shall
5 determine to whom the rebate is to be paid.
6 Section 906. Proof of claim.
7 (a) Contents.--Each claim shall include:
8 (1) Reasonable proof of household income.
9 (2) The size and nature of the property claimed as a
10 homestead.
11 (3) The rent, tax receipt or other proof that the real
12 property taxes on the homestead have been paid or rent in
13 connection with the occupancy of a homestead has been paid.
14 (4) If the claimant is a widow or widower, a declaration
15 of such status in such manner as prescribed by the secretary.
16 (b) Proof of disability.--
17 (1) Proof that a claimant is eligible to receive
18 disability benefits under the Social Security Act (49 Stat.
19 620, 42 U.S.C. § 301 et seq.) shall constitute proof of
20 disability under this chapter.
21 (2) No person who has been found not to be disabled by
22 the Social Security Administration shall be granted a rebate
23 under this chapter.
24 (3) A claimant not covered under the Social Security Act
25 shall be examined by a physician designated by the department
26 and such status determined using the same standards used by
27 the Social Security Administration.
28 (c) Direct payment of taxes or rent not required.--It shall
29 not be necessary that such taxes or rent were paid directly by
30 the claimant if the rent or taxes have been paid when the claim
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1 is filed.
2 (d) Proof of age on first claim.--The first claim filed
3 shall include proof that the claimant or the claimant's spouse
4 was at least 65 years of age, or at least 50 years of age in the
5 case of a widow or widower during the calendar year in which
6 real property taxes or rent were due and payable.
7 Section 907. Incorrect claim.
8 Whenever on audit of a claim the department finds the claim
9 to have been incorrectly determined, it shall redetermine the
10 correct amount of the claim and notify the claimant of the
11 reason for the redetermination and the amount of the corrected
12 claim.
13 Section 908. Funds for payment of claims.
14 (a) Payment.--Approved claims shall be paid from the State
15 Lottery Fund established by the act of August 26, 1971 (P.L.351,
16 No.91), known as the State Lottery Law.
17 (b) Minimum funding level.--Not less than the percentage of
18 the State Lottery Fund expended in the fiscal year beginning
19 July 1, 2007, for the provision of property tax relief and rent
20 rebate in lieu of property taxes shall be transferred from the
21 State Lottery Fund each year into a restricted account within
22 the State Lottery Fund, which account is hereby established and
23 shall be known as the Property Tax and Rent Rebate Restricted
24 Account. The moneys of the account shall be expended for the
25 sole purpose of providing property tax relief and rent rebates
26 in lieu of property taxes as provided by law.
27 (c) Restrictions on use of Gaming Fund.--No moneys in the
28 Gaming Fund shall be transferred to the State Lottery Fund or
29 otherwise used for the purposes of this chapter.
30 Section 909. Claim forms and rules and regulations.
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1 Necessary rules and regulations shall be prescribed by a
2 committee consisting of the Secretary of Aging, the Secretary of
3 Revenue and the Secretary of Community and Economic Development.
4 The Secretary of Aging shall serve as the chairman of the
5 committee. The department shall receive all applications,
6 determine the eligibility of claimants, hear appeals, disburse
7 payments and make available suitable forms for the filing of
8 claims.
9 Section 910. Fraudulent claims and conveyances to obtain
10 benefits.
11 (a) Civil penalty.--In any case in which a claim is
12 excessive and was filed with fraudulent intent, the claim shall
13 be disallowed in full, and a penalty of 25% of the amount
14 claimed shall be imposed. The penalty and the amount of the
15 disallowed claim, if the claim has been paid, shall bear
16 interest at the rate of 1.5% per month from the date of the
17 claim until repaid.
18 (b) Criminal penalty.--The claimant and any person who
19 assisted in the preparation or filing of a fraudulent claim
20 commits a misdemeanor of the third degree and, upon conviction
21 thereof, shall be sentenced to pay a fine not exceeding $1,000
22 or to imprisonment not exceeding one year, or both.
23 (c) Disallowance for receipt of title.--A claim shall be
24 disallowed if the claimant received title to the homestead
25 primarily for the purpose of receiving property tax rebate.
26 Section 911. Petition for redetermination.
27 (a) Right to file.--A claimant whose claim is either denied,
28 corrected or otherwise adversely affected by the department may
29 file with the department a petition for redetermination on forms
30 supplied by the department within 90 days after the date of
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1 mailing of written notice by the department of such action.
2 (b) Contents.--The petition shall set forth the grounds upon
3 which the claimant alleges that such departmental action is
4 erroneous or unlawful, in whole or part, and shall contain an
5 affidavit or affirmation that the facts contained in the
6 petition are true and correct.
7 (c) Extension of time for filing.--
8 (1) An extension of time for filing the petition may be
9 allowed for cause but may not exceed 120 days.
10 (2) The department shall hold such hearings as may be
11 necessary for the purpose of redetermination, and each
12 claimant who has duly filed such petition for redetermination
13 shall be notified by the department of the time when and the
14 place where such hearing in the claimant's case will be held.
15 (d) Time period for decision.--The department shall, within
16 six months after receiving a filed petition for redetermination,
17 dispose of the matters raised by such petition and shall mail
18 notice of the department's decision to the claimant.
19 Section 912. Review by Board of Finance and Revenue.
20 (a) Right to review.--Within 90 days after the date of
21 official receipt by the claimant of notice mailed by the
22 department of its decision on a petition for redetermination
23 filed with it, the claimant who is adversely affected by the
24 decision may by petition request the board to review such
25 action.
26 (b) Effect of no decision from department.--The failure of
27 the department to officially notify the claimant of a decision
28 within the six-month period provided for by section 911 shall
29 act as a denial of the petition, and a petition for review may
30 be filed with the board within 120 days after written notice is
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1 officially received by the claimant that the department has
2 failed to dispose of the petition within the six-month period.
3 (c) Contents of petition for redetermination.--A petition
4 for redetermination filed under this section shall state the
5 reasons upon which the claimant relies or shall incorporate by
6 reference the petition for redetermination in which such reasons
7 were stated. The petition shall be supported by affidavit that
8 the facts set forth therein are correct and true.
9 (d) Time period for decision.--The board shall act in
10 disposition of petitions filed with it within six months after
11 they have been received, and, in the event of failure of the
12 board to dispose of any petition within six months, the action
13 taken by the department upon the petition for redetermination
14 shall be deemed sustained.
15 (e) Relief authorized by board.--The board may sustain the
16 action taken by the department on the petition for
17 redetermination or it may take such other action as it shall
18 deem necessary and consistent with provisions of this chapter.
19 (f) Form of notice.--Notice of the action of the board shall
20 be given by mail to the department and to the claimant.
21 Section 913. Appeal.
22 A claimant aggrieved by a decision of the board may appeal
23 from the decision of the board in the manner provided by law for
24 appeals from decisions of the board in tax cases.
25 CHAPTER 11
26 LIMITATIONS ON SCHOOL DISTRICT TAXATION
27 Section 1101. Authority to levy taxes and effect of future
28 Constitutional amendment.
29 (a) Abrogating authority to impose certain taxes.--
30 (1) The authority of any school district to levy, assess
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1 and collect any real property tax under the Public School
2 Code of 1949, or any other act shall expire in accordance
3 with the schedule set forth under section 1152(c), at
4 midnight December 31, 2007.
5 (2) Except as otherwise provided in section 401, the
6 authority of a school district to impose or continue any tax
7 adopted pursuant to the Local Tax Enabling Act or a school
8 per capita tax pursuant to the Public School Code of 1949 or
9 to impose or continue any other tax not authorized under this
10 act shall expire at midnight on December 31, 2008.
11 (3) The authority of a city of the first class to impose
12 or continue to provide for the imposition or continuation of
13 any tax, including, but not limited to, the real property
14 tax, for the use of a school district of the first class that
15 is not specifically authorized under this act shall expire in
16 accordance with the schedule set forth under section 1102(b).
17 (4) The authority of any school district to impose or to
18 continue a tax on the transfer of real property pursuant to
19 the Tax Reform Code of 1971, the Local Tax Enabling Act or
20 any other law shall expire at midnight on December 31, 2008.
21 (5) No political subdivision that may impose a tax on
22 the transfer of real property shall have the authority to
23 increase the rate of its realty transfer tax pursuant to
24 Article XI-D of the Tax Reform Code of 1971, the Local Tax
25 Enabling Act or any other law above the rate in effect for
26 that political subdivision as of June 30, 2007, or the rate
27 of .5%, whichever rate is greater.
28 (b) Collection of certain taxes unaffected.--The provisions
29 of this section or any other provision of this act shall not
30 prevent or interfere with any action of any school district to
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1 collect any tax owed by any taxpayer prior to the repeal of any
2 law authorizing such tax after such law is repealed pursuant to
3 this act.
4 (c) Limitations on adoption of personal income taxes
5 authorized under Chapter 3 and earned income taxes authorized
6 under Chapter 5.--A school district that adopts a personal
7 income tax pursuant to Chapter 3 may not adopt an earned income
8 tax under Chapter 5. A school district that adopts an earned
9 income tax under Chapter 5 may not adopt a personal income tax
10 under Chapter 3.
11 Section 1102. Transitional taxes.
12 (a) Transitional taxes for school districts other than
13 school districts of the first class.--Notwithstanding any other
14 provision of the Public School Code of 1949 or any other law to
15 the contrary:
16 (1) Any school district, other than a school district of
17 the first class, may continue to levy, assess and collect a
18 real property tax for the fiscal years 2008-2009, 2009-2010
19 and 2010-2011, subject to the limitations set forth in
20 paragraphs (2), (3), (4) and (5), and may continue to levy,
21 assess and collect taxes, other than realty transfer taxes,
22 pursuant to the Local Tax Enabling Act and the school per
23 capita tax until midnight on December 31, 2008.
24 (2) For fiscal year 2008-2009, the rate of real property
25 tax shall be calculated to generate 75% of the revenue
26 generated by the real property tax for the 2006-2007 fiscal
27 year.
28 (3) For fiscal year 2009-2010, the rate of the real
29 property tax shall be calculated to generate 50% of the
30 revenue generated by the real property tax for the 2006-2007
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1 fiscal year.
2 (4) For fiscal year 2010-2011, the rate of the real
3 property tax shall be calculated to generate 25% of the
4 revenue generated by the real property tax for the 2006-2007
5 fiscal year.
6 (5) For all fiscal years beginning after June 30, 2011,
7 no school district shall have any power or authority to levy,
8 assess and collect any real property tax.
9 (b) Transitional taxes for school districts of the first
10 class.--Notwithstanding any other provision of the Public School
11 Code of 1949 or any other law to the contrary:
12 (1) Subject to the provisions set forth in paragraphs
13 (2), (3) and (4), any school district of the first class and
14 city of the first class may continue to levy, assess and
15 collect a real property tax and all other taxes in existence
16 on July 31, 2007, at the rates in effect on that date as
17 reduced in accordance with this subsection, for the use of a
18 coterminous school district of the first class for fiscal
19 years 2008-2009, 2009-2010 and 2010-2011. The authority to
20 levy, assess and collect such taxes for the use of
21 coterminous school districts shall expire at midnight on
22 December 31, 2011.
23 (2) For fiscal year 2008-2009, all taxes identified
24 under paragraph (1) shall be calculated to generate 75% of
25 the revenue generated by all such taxes for the 2006-2007
26 fiscal year.
27 (3) For fiscal year 2009-2010, all taxes identified
28 under paragraph (1) shall be calculated to generate 50% of
29 the revenue generated by those taxes for the 2006-2007 fiscal
30 year.
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1 (4) For fiscal year 2010-2011, all taxes identified
2 under paragraph (1) shall be calculated to generate 25% of
3 the revenue generated by those taxes for the 2006-2007 fiscal
4 year.
5 (5) For all fiscal years beginning after June 30, 2011,
6 no city of the first class shall have any power or authority
7 to levy, assess and collect any of the taxes identified under
8 paragraph (1) for school purposes.
9 Section 1103. Consideration of State appropriations or
10 reimbursements.
11 The personal income or earned income tax levied shall not be
12 invalidated by reason of the fact that in determining the amount
13 to be raised by such tax no deduction was made for
14 appropriations or reimbursements paid or payable by the
15 Commonwealth to the school district.
16 Section 1104. Taxes for cities and school districts of the
17 first class.
18 Notwithstanding any other provision of the Public School Code
19 of 1949 or any other law to the contrary:
20 (1) Nothing in this act shall be construed to limit or
21 impair a city of the first class from levying, assessing or
22 collecting any tax for municipal purposes or from increasing
23 the millage for real estate taxes or revenues if the revenues
24 derived from the real property tax are used solely for
25 municipal purposes.
26 (2) The reduction in real property tax millage in cities
27 of the first class shall be made in four equal installments
28 beginning with the 2008-2009 fiscal year and shall reduce the
29 millage by not less than 60% from the millage in effect on
30 July 30, 2007.
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1 CHAPTER 12
2 INDEBTEDNESS
3 Section 1201. Expiration of authority to issue debt.
4 Notwithstanding any other provision of 53 Pa.C.S. Pt. VII,
5 Subpt. B (relating to indebtedness and borrowing) or any other
6 law to the contrary, no school district, including a school
7 district of the first class, shall incur any electoral debt,
8 lease rental debt or nonelectoral debt under 53 Pa.C.S. Pt. VII,
9 Subpt. B after the effective date of this section.
10 Section 1202. Notices and reporting by school districts of debt
11 outstanding.
12 (a) Duties.--
13 (1) (i) On or before March 31, 2008, each school
14 district, including a school district of the first class,
15 shall identify the outstanding amount of all electoral
16 debt, lease rental debt or nonelectoral debt incurred as
17 of June 30, 2008, and shall notify on or before March 31,
18 2008, each holder of the bonds or notes of such debt of
19 the amount owed to each holder as of December 31, 2007.
20 The notice shall inform the holders of the provisions of
21 this section and section 1203.
22 (ii) A holder of a bond or note of such debt shall
23 have the right to dispute the amount stated as owed to
24 the holder in the notice, provided that the holder
25 notifies the local government unit in writing prior to
26 April 15, 2008. A holder that fails to file a dispute
27 under this subparagraph shall waive the right to dispute
28 the amount owed to the holder after the Commonwealth
29 assumes the debt of the school district under section
30 1203.
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1 (iii) A school district that receives a written
2 dispute from a holder under subparagraph (ii) shall
3 attempt to resolve the dispute by May 1, 2008.
4 (2) On or before June 30, 2008, each school district,
5 including a school district of the first class, shall certify
6 and report to the Department of Revenue the outstanding
7 amount of all electoral debt, lease rental debt or
8 nonelectoral debt incurred as of December 31, 2007, together
9 with any information requested by the department in order for
10 the Commonwealth to comply with the requirements of this
11 section and section 1203.
12 (b) Audit by Department of Revenue.--
13 (1) The Department of Revenue shall audit each report
14 submitted under subsection (a) and shall certify the amount
15 of each report and the total aggregate amount of all reports
16 to the State Treasurer and the Education Operating Fund Board
17 on or before June 30, 2008.
18 (2) If the Department of Revenue disputes all or any
19 portion of a report submitted under subsection (a), the
20 department shall not include such amount in the certification
21 to the State Treasurer and the Education Operating Fund Board
22 and shall notify the school district in writing of the
23 exclusion from the certification.
24 Section 1203. Assumption of school district debt by
25 Commonwealth.
26 (a) General rule.--Except as otherwise provided in
27 subsection (b), the Commonwealth shall assume on June 30, 2008,
28 the outstanding amount of all electoral debt, lease debt or
29 nonelectoral debt certified in the report submitted by the
30 Department of Revenue to the State Treasurer and the Education
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1 Operating Fund Board. Such debt shall be managed and
2 administered by the School Financing Authority established under
3 section 1309, and repaid from the Education Operating Fund as
4 provided by law.
5 (b) Exceptions.--The Commonwealth may not assume:
6 (1) Any of the outstanding debt of a school district
7 that fails to certify and file a report with the Department
8 of Revenue as required by section 1202.
9 (2) That portion of the outstanding debt included in a
10 report filed by a school district, but which the Department
11 of Revenue does not include in its certification to the State
12 Treasurer and the Education Operating Fund Board under
13 section 1202(b)(2).
14 Section 1204. Power to apply for debt and limitations.
15 The board of school directors in any school district may, in
16 any year after December 31, 2009, apply for an indebtedness in
17 the form of bonds and notes to secure the same, payable as
18 provided by 53 Pa.C.S. Pt. VII, Subpt. B (relating to
19 indebtedness and borrowing) or any amendment or re-enactment
20 thereof, for any or all of the following purposes:
21 (1) To purchase or acquire proper sites, buildings or
22 grounds for school use, or any lands additional to any
23 existing school sites or grounds.
24 (2) To erect, enlarge, equip or furnish any building for
25 school use.
26 (3) To repair, remodel or rebuild any building of the
27 school district.
28 (4) To lease for an extended period building facilities
29 or portions of buildings constructed for school use and/or
30 existing building facilities or portions of existing building
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1 facilities altered for school use.
2 (5) To refund certain bonds, as provided in this
3 chapter.
4 (6) To fund temporary indebtedness incurred for
5 permanent improvements, or in anticipation of proceeds from a
6 bond issue.
7 Section 1205. Referendum requirement.
8 (a) General rule.--No debt shall be incurred pursuant to
9 section 1204 unless the requirements of subsection (b) are
10 satisfied.
11 (b) Adoption of referendum.--
12 (1) In order to incur debt specified in subsection (a),
13 the governing body shall use the procedures set forth in this
14 subsection.
15 (2) (i) Subject to the notice and public hearing
16 requirements of this subsection, a governing body may
17 incur debt specified in subsection (a) only by obtaining
18 the approval of the electorate of the affected school
19 district in a public referendum at only the municipal
20 election preceding the fiscal year when the debt will be
21 initially incurred.
22 (ii) The question shall be in clear language that is
23 readily understandable by a layperson. For the purpose of
24 illustration, a referendum question may be framed as
25 follows:
26 Do you favor the creation of debt in the amount of X
27 for school district purposes?
28 (iii) A nonlegal interpretative statement must
29 accompany the question in accordance with section 201.1
30 of the act of June 3, 1937 (P.L.1333, No.320), known as
20070H1275B2835 - 171 -
1 the Pennsylvania Election Code.
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 in which the
5 administrative offices of the school district are located.
6 (4) The election officials who receive a petition shall
7 perform all administrative functions in reviewing and
8 certifying the validity of the petition and conduct all
9 necessary communications with the school district.
10 (5) (i) If the election officials of the county who
11 receive the petition certify that it is sufficient under
12 this section and determine that a question should be
13 placed on the ballot, the decision shall be communicated
14 to election officials in any other county in which the
15 school district is also located.
16 (ii) Election officials in the other county or
17 counties shall cooperate with election officials of the
18 county receiving the petition to ensure that an identical
19 question is placed on the ballot at the same election
20 throughout the entire school district.
21 (6) Election officials from each county involved shall
22 independently certify the results from their county to the
23 governing body.
24 (7) (i) In order to incur debt under this section, the
25 governing body shall adopt a resolution which refers to
26 this chapter prior to placing a question on the ballot.
27 (ii) Prior to adopting a resolution incurring debt
28 authorized by this section, the governing body shall give
29 public notice of its intent to adopt the resolution and
30 shall conduct at least one public hearing regarding the
20070H1275B2835 - 172 -
1 proposed adoption of the resolution.
2 Section 1206. Temporary debt.
3 (a) Authorization.--Any school district having no
4 indebtedness or whose indebtedness, incurred or created without
5 the assent of the electors thereof, is less than an amount equal
6 to the standard disbursement for that school district made
7 pursuant to section 1304 for the immediately preceding fiscal
8 year may, at any time, for the purpose of providing funds in any
9 fiscal year for current expenses and debt service, for permanent
10 improvements, the acquiring of school buses, or in anticipation
11 of proceeds from a bond issue already officially authorized and,
12 except in school districts of the first class, approved by the
13 Department of Community and Economic Development, with such
14 limitations and for such length of term as provided in this
15 chapter, by or through its board of school directors, incur, in
16 addition to any bonds therein authorized, a temporary debt or
17 borrow money, and issue an obligation or obligations therefor,
18 under the seal of the district, if any, properly executed by the
19 president and attested by the secretary thereof, and bearing
20 interest not exceeding the legal rate, but no such obligation
21 shall be sold for less than par. The incurring of any such
22 temporary debt, or borrowing money upon such obligation, shall
23 receive the affirmative vote of not less than two-thirds of the
24 members of the board of school directors.
25 (b) Permanent improvements.--In addition, any school
26 district may, as provided in this section, incur a temporary
27 debt or borrow money for permanent improvements, where no bond
28 issue has been previously officially authorized, and refund such
29 temporary indebtedness by the issue of bonds, in the manner
30 provided by law, when the exact amount required for such
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1 permanent improvement becomes known.
2 Section 1207. Limit on temporary debt for current expenses and
3 debt service.
4 The total amount of temporary indebtedness incurred for
5 current expenses and debt service shall at no time exceed an
6 amount equal to the standard disbursement for that school
7 district made pursuant to section 1304 for the immediately
8 preceding fiscal year. All loans shall be paid out of the
9 receipts available, or pledged for repayment when the funds are
10 received. The total amount of the temporary indebtedness for
11 such purpose remaining unpaid at the close of the fiscal year
12 shall become an obligation on the following year's budget and
13 shall be included in the following year's budget.
14 Section 1208. Emergency loans for current expenses and debt
15 service.
16 (a) General rule.--In case of an emergency, any school
17 district in any fiscal year, after borrowing money in
18 anticipation of current revenues to the full extent permitted by
19 law and finding the receipts from the loans, together with all
20 other receipts, to be inadequate to meet the expenditures of the
21 official fiscal year's budget, may appeal to the Education
22 Operating Fund Board for permission to incur a temporary debt
23 for the purpose of providing funds for current expenses and debt
24 service and shall present to the Education Operating Fund Board
25 the financial statements or reports as the Education Operating
26 Fund Board may require to give adequate facts relative to the
27 necessity of the increase in indebtedness. The Education
28 Operating Fund Board may, after due examination of the need of
29 the school district, grant or refuse permission to the school
30 district to borrow additional funds for current expenses and
20070H1275B2835 - 174 -
1 debt service beyond the amount permitted by law. In case of
2 approval, the Education Operating Fund Board shall designate the
3 maximum length of the term and shall set a maximum limit of the
4 total amount of the temporary indebtedness that the school
5 district may incur during the fiscal year in addition to all
6 temporary indebtedness for other purposes outstanding at the
7 time of the approval.
8 (b) Limitations.--All temporary indebtedness, for the
9 purpose of current expenses and debt service by a school
10 district shall not exceed the standard disbursement for that
11 school district made pursuant to section 1304 for the
12 immediately preceding fiscal year.
13 Section 1209. Limit on temporary debt for permanent
14 improvements and tax levy.
15 The total amount of temporary indebtedness incurred in any
16 school district for the purpose of permanent improvements and
17 the acquiring of school buses, except obligations incurred under
18 law, shall never exceed an amount equal to the standard
19 disbursement for that school district made pursuant to section
20 1304 for the immediately preceding fiscal year. Except where
21 such temporary indebtedness is to be refunded by the issue of
22 bonds, as authorized, at or before the time of incurring
23 indebtedness for such purpose, provision shall be made for the
24 collection of an annual tax sufficient to pay the interest and
25 also the principal thereof within the term of such indebtedness,
26 as provided by law.
27 Section 1210. Limit on temporary debt in anticipation of
28 proceeds of bond issue.
29 (a) General rule.--The total amount of temporary
30 indebtedness incurred in anticipation of proceeds from a bond
20070H1275B2835 - 175 -
1 issue shall not exceed 75% of the full amount of bonds
2 authorized by the bond issue.
3 (b) Payment.--All obligations, other than bonds, issued by
4 any school district in anticipation of proceeds from a bond
5 issue shall be paid in full, together with interest, out of the
6 proceeds of the bond issue within one year and six months from
7 the date of authorization of the bond issue.
8 Section 1211. Borrowing in anticipation of current revenue.
9 School districts may borrow money in anticipation of current
10 revenues to an amount not exceeding the anticipated current
11 revenues, which amount shall be pledged for the payment of the
12 loan or loans, and issue notes or other form of obligation,
13 executed by the president of the board of school directors and
14 attested by the secretary of the board under the seal of the
15 school district securing the loans. The notes, or other form of
16 obligation, shall mature and be payable during the current
17 fiscal year in which the money is borrowed. No borrowing shall
18 constitute an increase of indebtedness within the meaning of
19 section 8 of Article IX of the Constitution of Pennsylvania, or
20 any of the provisions of any other law. The notes shall bear
21 interest at a rate not exceeding 6% per annum, payable at
22 maturity or in advance, and may be sold at either public or
23 private sale for not less than par. If the loans are not repaid
24 in whole or in part during the fiscal year in which they are
25 made, they, or such amounts as remain unpaid, shall become an
26 obligation upon the following year's budget and shall be
27 included and paid not later than the first day of July of such
28 following year, in school districts of the first class, and not
29 later than the first day of November of the following year, in
30 school districts of the second, third, and fourth class. The
20070H1275B2835 - 176 -
1 incurring of the obligations shall receive the affirmative vote
2 of not less than two-thirds of the members of the board of
3 school directors.
4 CHAPTER 13
5 FUNDING PROVISIONS
6 Section 1301. Definitions.
7 The following words and phrases when used in this chapter
8 shall have the meanings given to them in this section unless the
9 context clearly indicates otherwise:
10 "Authority." The School Financing Authority established
11 under section 1309.
12 "Average per pupil expenditure." An amount equal to a school
13 district's current expenditures for a school year to include
14 General Fund expenditures in the functional classifications of
15 instruction, support services and operation of noninstructional
16 services, as designated in the Manual of Accounting and Related
17 Financial Procedures for Pennsylvania School Systems, divided by
18 the average daily membership of the school district for the same
19 school year.
20 "Average per pupil expenditure for each public school student
21 in the Commonwealth." An amount equal to the current
22 expenditures for all school districts for a school year to
23 include General Fund expenditures in the functional
24 classifications of instruction, support services and operation
25 of noninstructional services, as designated in the Manual of
26 Accounting and Related Financial Procedures for Pennsylvania
27 School Systems, divided by the total number of public school
28 students constituting average daily membership for all school
29 districts in this Commonwealth for the same school year.
30 "Board." The Education Operating Fund Board established
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1 under section 1308.
2 "Consumer Price Index" or "CPR." The lesser of:
3 (1) the average annual percentage increase in the
4 Consumer Price Index for All Urban Consumers (CPI-U) for the
5 Pennsylvania, New Jersey and Maryland area for the preceding
6 calendar year, as reported by the United States Department of
7 Labor, Bureau of Labor Statistics; or
8 (2) the percentage increase in sales and use tax
9 collected under section 702 from the previous calendar year.
10 "Distressed district prevention and emergency disbursements."
11 Disbursements authorized from the Education Trust Reserve
12 Account under section 1305(b).
13 "Education Operating Fund" or "EOF." The Education Operating
14 Fund established under section 1302.
15 "Education Trust Reserve Account" or "ETR account." The
16 Education Trust Reserve Account established under section 1305.
17 "Equity disbursements." Disbursements authorized from the
18 School Equity Account under section 1306(c).
19 "Nonqualified operating expenses." The total dollar amount
20 of the following from the preceding fiscal year:
21 (1) any one-time, nonrecurring expense;
22 (2) disbursements from operating-type reserve
23 accumulations which were a source of funding from Federal,
24 State or local sources;
25 (3) school district-specific programs initiated and paid
26 for from school district sources of nontax funds;
27 (4) school district costs, including, but not limited
28 to, health care benefit costs that are assumed by the
29 Commonwealth, including the Education Operating Fund, after
30 the effective date of this section;
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1 (5) direct school property tax administration and
2 collection costs; and
3 (6) debt service payments that the school district would
4 have made for the applicable fiscal year if the Commonwealth
5 had not assumed the school district's debt obligation
6 pursuant to Chapter 12.
7 "Qualifying line items." The following line items or
8 substantially identical line items in any general appropriations
9 act that authorize payments or reimbursements to a school
10 district:
11 (1) Payment of basic education funding to school
12 districts.
13 (2) Payments on account of special education of
14 exceptional children.
15 (3) Payments on account of pupil transportation.
16 (4) Payments on account of annual rental or sinking fund
17 charges on school buildings, including charter schools.
18 (5) Payments for early intervention services.
19 (6) Reimbursements to school districts for their charter
20 school payments.
21 (7) Special education-approved private schools.
22 (8) Payments on account of nonpublic and charter school
23 pupil transportation.
24 (9) Payment for tuition to school districts providing
25 education to nonresident orphaned children placed in private
26 homes by the court and nonresident inmates of children's
27 institutions.
28 (10) Grants to school districts to assist in meeting
29 Federal matching requirements for grants received under the
30 Child Nutrition Act of 1966 (Public Law 89-642, 42 U.S.C. §
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1 1771 et seq.) and to aid in providing a food program for
2 needy children.
3 (11) Programs of education and training at youth
4 development centers and the monitoring of programs of
5 education and training provided to incarcerated juveniles.
6 (12) Payment on account of homebound instruction.
7 (13) Payments of annual fixed charges to school
8 districts in lieu of taxes for land acquired by the
9 Commonwealth for water conservation or flood prevention.
10 (14) Education of indigent children at charitable
11 hospitals.
12 "School District Equity Account." The School District Equity
13 Account established under section 1306(a).
14 "School Equity Capital Construction Fund" or "SECCF." The
15 School Equity Capital Construction Fund established under
16 section 1311.
17 "Standard disbursements." Disbursements made on a quarterly
18 basis from the Education Operating Fund as authorized under
19 section 1304.
20 "Student enrollment adjustment." A dollar amount determined
21 from the preceding fiscal year based on the net increase or
22 decrease in the total average daily membership of students
23 enrolled in that school district between the opening and the
24 closing of the school term that occurs within that preceding
25 fiscal year converted to a dollar amount as determined by the
26 Education Operating Fund Board. The transfer of a public school
27 student to a cyber school, charter school, facility for
28 receiving special education or other alternative school shall
29 not be deemed to decrease the number of students enrolled in a
30 school district for purposes of reducing the standard
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1 distribution to a school district for any fiscal year in which
2 the school district pays at least $2,000 toward the education of
3 any such student.
4 Section 1302. Education Operating Fund.
5 (a) Establishment.--The Education Operating Fund is
6 established in the State Treasury.
7 (b) Contents.--
8 (1) The fund shall consist of:
9 (i) All moneys collected by the department under
10 section 321, Chapter 7 and section 1307.
11 (ii) Any other moneys required by this act or other
12 law to be deposited into the fund.
13 (2) (i) On or before July 1, 2008, each school district
14 shall transfer a sum of money equal to its ending
15 unreserved, undesignated fund balance as of July 1, 2007
16 to the Education Operating Fund.
17 (ii) As used in this paragraph, "ending unreserved,
18 undesignated fund balance" means that portion of the
19 school district's general fund balance which is
20 appropriable for expenditure or not legally or otherwise
21 segregated for a specific or tentative future use, at the
22 close of the fiscal year for which a school district's
23 budget was adopted and held in the general fund accounts
24 of the school district.
25 (c) Separate fund.--The fund and all accounts of the fund
26 shall be separate from all other funds of the Commonwealth and
27 shall not be subject to borrowing by or transfer to the General
28 Fund or any other fund in the State Treasury.
29 (d) Continuing appropriation.--All money placed in the fund
30 and in the ETR Account and the School District Equity Account
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1 and the interest they accrue are hereby appropriated to the
2 board on a continuing basis and may be expended by the board
3 only for the purposes authorized under this act.
4 Section 1303. Cash flow funding forecasts.
5 (a) Scope and purpose.--
6 (1) This section imposes a duty on school districts to
7 provide the board with certain cash flow funding forecasts.
8 (2) The purpose of the cash flow funding forecasts is to
9 assist the board to make distressed district prevention and
10 emergency disbursements to school districts under section
11 1306 and to improve the ability of school districts to
12 monitor and plan their expenditures in a more fiscally
13 effective manner.
14 (b) Annual submission of funding forecasts.--On or before
15 July 1, 2009, and continuing annually thereafter, each school
16 district shall submit to the board a preliminary annual cash
17 flow funding forecast relating to school district operations
18 that need to be funded from the fund for the following fiscal
19 year for the calendar quarters ending September 30, December 31,
20 March 31 and June 30.
21 (c) Contents.--The cash flow funding forecast shall be
22 referenced to the fiscal year then ending and may only include
23 operating expenditure categories included in the school
24 district's budget for that fiscal year. The budget contained in
25 the forecast:
26 (1) May not exceed actual operating expenditures for the
27 2007-2008 fiscal year plus estimated debt service on all debt
28 as of December 31, 2006, and, in succeeding years, may not
29 exceed actual operating expenditures for the prior fiscal
30 year as modified by the student enrollment adjustment. Any
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1 tax revenue collections for the period July 1, 2007, through
2 June 30, 2010, shall be itemized and deducted in the
3 forecasting funding requirements. Fund increases shall be
4 factored into these forecasts.
5 (2) May not include expenditures based on the one-time
6 use of reserves set up in prior years.
7 (3) Shall report all estimated requirements net of any
8 available school district operating reserves and all other
9 receipts and sources of tax revenue collections of any kind
10 through the fiscal year beginning July 1, 2011, and each
11 fiscal year thereafter, except as authorized by local
12 referendum after July 1, 2011.
13 (4) Shall apply all noncapital expenditure reserves
14 against the forecasted net funding requirements.
15 (5) Shall treat debt service for capital expenditures as
16 separate line items and exclude debt service approved by
17 referendum.
18 (d) Quarterly updates.--On or before July 1, 2008, and
19 continuing quarterly thereafter on the last day of each quarter,
20 each school district shall submit to the board a cash flow
21 funding forecast quarterly update relating to school district
22 operations that need to be funded from the fund for the current
23 year.
24 Section 1304. Standard disbursements to school districts from
25 Education Operating Fund.
26 (a) Standard draw requests by school districts.--For the
27 fiscal year beginning July 1, 2008, and continuing each fiscal
28 year thereafter, each school district shall submit on a
29 quarterly basis to the board a draw request for a standard
30 disbursement, which draw request shall be filed no later than 30
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1 days prior to the beginning of the next quarter. The board shall
2 prescribe the form and content of the draw request for a
3 standard disbursement.
4 (b) Standard disbursement formula.--After receipt and review
5 of the quarterly draw requests submitted by school districts
6 under subsection (a), the board shall make standard
7 disbursements from the fund to each school district, other than
8 a school district of the first class, on or before the last day
9 of each quarter as follows:
10 (1) For the fiscal year beginning July 1, 2008, the
11 amount of each quarterly standard disbursement for each
12 school district, as adjusted by subtracting nonqualified
13 operating expenses, in accordance with paragraph (6), shall
14 be equal to 25% of the following:
15 (i) a dollar amount which shall be equal to all
16 payments and reimbursements received by the school
17 district for the 2007-2008 fiscal year from qualifying
18 line items in a general appropriations act that
19 authorizes payments and reimbursements to the school
20 district for that fiscal year as adjusted by the
21 percentage increase in the CPI for calendar year 2007 and
22 by the student enrollment adjustment;
23 (ii) the dollar amount equal to the 25% reduction in
24 real property tax revenues resulting from the application
25 of section 1102(a)(2) for that fiscal year;
26 (iii) fifty percent of the dollar amount collected
27 from school per capita tax during calendar year 2008; and
28 (iv) fifty percent of the dollar amount collected
29 from the Local Tax Enabling Act during calendar year
30 2008.
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1 (2) For the fiscal year beginning July 1, 2009, the
2 amount of each quarterly standard disbursement to the school
3 district, as adjusted by subtracting nonqualified operating
4 expenses, in accordance with paragraph (6), shall be equal to
5 25% of the following:
6 (i) a dollar amount equal to the sum calculated
7 pursuant to paragraph (1)(i) as adjusted by the
8 percentage increase in the CPI for calendar year 2008 in
9 accordance with paragraph (6);
10 (ii) the dollar amount equal to the 50% reduction in
11 real property tax revenues resulting from the application
12 of section 1102(a)(3) for that fiscal year as adjusted by
13 the percentage increase in the CPI for calendar year 2008
14 and by the student enrollment adjustment;
15 (iii) the dollar amount collected from the school
16 per capita tax and the Local Tax Enabling Act during
17 calendar year 2008; and
18 (iv) a dollar amount equal to the equity
19 disbursement received by the school district for the
20 2008-2009 fiscal year pursuant to section 1306(c)(2).
21 (3) For the fiscal year beginning July 1, 2010, the
22 amount of each quarterly standard disbursement to a school
23 district as adjusted by subtracting nonqualified operating
24 expenses, in accordance with paragraph (6), shall be equal to
25 25% of the following:
26 (i) a dollar amount equal to the sum calculated
27 pursuant to paragraph (2)(i) and (iv) as adjusted by the
28 percentage increase in the CPI for calendar year 2009 and
29 by the student enrollment adjustment;
30 (ii) the dollar amount equal to the 75% reduction in
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1 real property tax revenues resulting from the application
2 of section 1102(a)(4) as adjusted by the percentage
3 increase in the CPI for 2009 and by the student
4 enrollment adjustment;
5 (iii) the dollar amount calculated pursuant to
6 paragraph (2)(iii) as adjusted by the percentage increase
7 in the CPI for 2009; and
8 (iv) a dollar amount equal to the equity
9 disbursement received by the school district for the
10 2009-2010 fiscal year pursuant to section 1306(c)(3).
11 (4) For the fiscal year beginning July 1, 2011, the
12 amount of each quarterly standard disbursement to a school
13 district as adjusted by subtracting nonqualified operating
14 expenses, in accordance with paragraph (6), shall be equal to
15 25% of the following:
16 (i) a dollar amount equal to the sum calculated
17 pursuant to paragraph (3)(i) and (iv) as adjusted by the
18 percentage increase in the CPI for calendar year 2010 and
19 by the student enrollment adjustment;
20 (ii) a dollar amount equal to loss of revenues
21 resulting from the complete elimination of the real
22 property tax as adjusted by the percentage increase in
23 the CPI for 2010;
24 (iii) the dollar amount calculated pursuant to
25 paragraph (3)(iii) as adjusted by the percentage increase
26 in the CPI for 2010; and
27 (iv) a dollar amount equal to the equity
28 disbursement received by the school district for the
29 2010-2011 fiscal year pursuant to section 1306(c)(3).
30 (5) For the fiscal year beginning 2012 and for each
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1 fiscal year thereafter, the amount of each quarterly
2 disbursement shall be equal to 25% of the standard
3 disbursement made in the preceding fiscal year, which shall
4 include the equity disbursement made pursuant to section
5 1306(c)(3), as adjusted by the percentage increase in the CPI
6 for the preceding calendar year and the student enrollment
7 adjustment and by subtracting nonqualified operating expenses
8 in accordance with paragraph (6).
9 (6) Any subtraction from the standard disbursement for
10 nonqualified operating expenses shall only modify the
11 standard disbursement for the applicable fiscal year and such
12 subtractions shall not be factored into the standard
13 disbursements for any subsequent fiscal year.
14 (c) Standard disbursement formula for school districts of
15 the first class.--After receipt and review of the quarterly draw
16 requests submitted by school districts under subsection (a), the
17 board shall make standard disbursements from the fund to each
18 school district of the first class on or before the last day of
19 each quarter as follows:
20 (1) For the fiscal year beginning July 1, 2008, the
21 amount of each quarterly standard disbursement for each
22 school district of the first class, as adjusted by
23 subtracting nonqualified operating expenses, in accordance
24 with paragraph (7), shall be equal to 25% of the following:
25 (i) a sum which shall be equal to all payments and
26 reimbursements received by the school district for the
27 2007-2008 fiscal year from qualifying line items in a
28 general appropriations act that authorizes payments and
29 reimbursements to the school district for the fiscal year
30 as adjusted by the percentage increase in the CPI for
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1 calendar year 2007 and by the student enrollment
2 adjustment; and
3 (ii) the dollar amount equal to the 25% reduction in
4 real property tax and other tax revenues resulting from
5 the application of section 1102(b)(2) for that fiscal
6 year.
7 (2) For the fiscal year beginning July 1, 2009, the
8 amount of each quarterly standard disbursement to a school
9 district of the first class, as adjusted by subtracting
10 nonqualified operating expenses, in accordance with paragraph
11 (7), shall be equal to 25% of the following:
12 (i) a dollar amount equal to the sum calculated
13 pursuant to paragraph (1)(i) as adjusted by the
14 percentage increase in the CPI for calendar year 2008 and
15 by the student enrollment adjustment;
16 (ii) the dollar amount equal to the 50% reduction in
17 real property tax and other tax revenues resulting from
18 the application of section 1102(b)(3) for that fiscal
19 year as adjusted by the percentage increase in the CPI
20 for 2008; and
21 (iii) a dollar amount equal to the equity
22 disbursement received by the school district for the
23 2008-2009 fiscal year pursuant to section 1306(c)(2).
24 (3) For the fiscal year beginning July 1, 2010, the
25 amount of each quarterly standard disbursement to a school
26 district of the first class as adjusted by subtracting
27 nonqualified operating expenses, in accordance with paragraph
28 (7), shall be equal to 25% of the following:
29 (i) a dollar amount equal to the sum calculated
30 pursuant to paragraph (2)(i) and (iii) as adjusted by the
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1 percentage increase in the CPI for calendar year 2009 and
2 by the student enrollment adjustment;
3 (ii) the dollar amount equal to the 75% reduction in
4 real property tax and other tax revenue resulting from
5 the application of section 1102(b)(4) as adjusted by the
6 percentage increase in the CPI for 2009; and
7 (iii) a dollar amount equal to the equity
8 disbursement received by the school district for the
9 2009-2010 fiscal year pursuant to section 1306(c)(3).
10 (4) For the fiscal year beginning July 1, 2011, the
11 amount of each quarterly standard disbursement to a school
12 district of the first class, as adjusted by subtracting
13 nonqualified operating expenses, in accordance with paragraph
14 (7), shall be equal to 25% of the following:
15 (i) a dollar amount equal to the sum calculated
16 pursuant to paragraph (3)(i) and (iii) as adjusted by the
17 percentage increase in the CPI for calendar year 2010 and
18 by the student enrollment adjustment;
19 (ii) a dollar amount equal to loss of real property
20 and other tax revenues resulting from the complete
21 implementation of section 1102(b) as adjusted by the
22 percentage increase in the CPI for 2010; and
23 (iii) a dollar amount equal to the equity
24 disbursement received by the school district for the
25 2010-2011 fiscal year pursuant to section 1306(c)(3).
26 (5) For the fiscal year beginning 2012 and for each
27 fiscal year thereafter, the amount of each quarterly
28 disbursement to each school district of the first class shall
29 be equal to 25% of the standard disbursement made in the
30 immediately preceding fiscal year, which shall include the
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1 equity disbursement made pursuant to section 1306(c)(3), as
2 adjusted by the percentage increase in the CPI for the
3 preceding calendar year and the student enrollment adjustment
4 and by subtracting nonqualified operating expenses in
5 accordance with paragraph (7).
6 (6) Any financial assistance provided by a city of the
7 first class to a school district of the first class for the
8 fiscal year beginning on July 1, 2008, and each succeeding
9 fiscal year, shall be deemed a nonqualified operating expense
10 for purposes of this section.
11 (7) Any subtraction from the standard disbursement for
12 nonqualified operating expenses shall only modify the
13 standard disbursement for the applicable fiscal year and such
14 subtractions shall not be factored into the standard
15 disbursement for any subsequent fiscal year.
16 (d) Mandatory duty to pay.--The standard disbursements under
17 this section shall be paid from the EOF regardless of whether
18 the minimum balance has been attained in the ETR Account as set
19 forth under this chapter.
20 (e) Construction.--Distressed school district and emergency
21 disbursements and Federal funds appropriated by the Commonwealth
22 shall not be incorporated into the standard disbursements
23 authorized by this section and shall not be deemed to be
24 nonqualified expenses.
25 (f) Limitation on funding reduction for decline in student
26 enrollment.--Notwithstanding anything in this act to the
27 contrary, a reduction in the standard disbursement for a decline
28 in student enrollment shall only be made to the extent that a
29 decline in student enrollment reduces the student enrollment by
30 more than 10% from the student enrollment in that school
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1 district at the beginning of the 2008-2009 fiscal year.
2 Section 1305. Education Trust Reserve Account and distressed
3 district prevention and emergency disbursements.
4 (a) Establishment of Education Trust Reserve Account.--The
5 Education Trust Reserve Account is hereby established as a
6 restricted account within the fund. The account shall be
7 administered by the board in accordance with this section.
8 (b) Distressed district prevention and emergency
9 disbursements.--
10 (1) (i) As a precondition for making any distressed
11 district prevention and emergency disbursements during
12 the 2008-2009 fiscal year, the ETR Account must have a
13 balance, on June 30, 2008, which is not less than 15% of
14 the amount specified under section 1304(b)(1)(i) and
15 (c)(1)(i) for all school districts for the 2007-2008
16 fiscal year, as adjusted by the change in the consumer
17 price index and as adjusted by the collective student
18 enrollment adjustments and the nonqualified operating
19 expenses determined for all the school districts.
20 (ii) As a precondition for making such disbursements
21 during the 2009-2010 fiscal year and each succeeding
22 fiscal year, the ETR Account must have a balance on June
23 30 immediately preceding the disbursement fiscal year
24 which is not less than 15% of the revenues allocated by
25 law for all school districts for the fiscal year
26 preceding the disbursement fiscal year, as adjusted by
27 the change in the consumer price index and as adjusted by
28 the student enrollment adjustments and the nonqualified
29 operating expenses determined for all school districts
30 for the immediately preceding 12-month period.
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1 (iii) The determination of the amount specified
2 under section 1304(b)(1)(i) and (c)(1)(i) revenues
3 allocated for all school districts for purposes of this
4 paragraph shall be calculated by aggregating the sum
5 determined for each school district pursuant to section
6 1304(b)(1)(i) and (c)(1)(i).
7 (2) (i) After disbursements are made pursuant to
8 sections 1304 and 1307 and after any necessary moneys are
9 expended to maintain the mandatory minimum 15% ETR
10 Account balance as provided in paragraph (1),
11 disbursements authorized by this subsection shall be made
12 as provided in this paragraph.
13 (ii) An amount equal to not more than 1 1/4% of the
14 remaining moneys in the EOF and the School District
15 Equity Account or up to $125,000,000, whichever is
16 greater, may be disbursed by the board each quarter
17 during the 2008-2009, 2009-2010 and 2010-2011 fiscal
18 years for distressed district prevention and emergency
19 disbursements.
20 (iii) An amount which shall not exceed .75% of the
21 remaining moneys in the EOF and the School District
22 Equity Account may be disbursed by the board for each
23 quarter during the 2011-2012 fiscal year and each
24 succeeding fiscal year for each quarter for the sole
25 purpose of assisting school districts that are facing
26 major and unanticipated fiscal emergencies.
27 (c) Scope of distressed district prevention and emergency
28 disbursements.--Distressed district prevention and emergency
29 disbursements may only be expended for the purpose of preventing
30 school districts that are experiencing severe financial
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1 difficulties from beginning distressed school districts pursuant
2 to Article VI of the Public School Code of 1949 and for the
3 purpose of assisting school districts that are facing major and
4 unanticipated fiscal emergencies.
5 (d) Transfers to Education Trust Reserve Account.--Except
6 for the moneys necessary to make the disbursements required by
7 sections 1304 and 1307, the board shall immediately transfer all
8 moneys deposited in the EOF and the School District Equity
9 Account, between the effective date of this section and June 30,
10 2008, into the ETR Account until the ETR Account attains a
11 balance of $3,000,000,000 and after June 30, 2008, the board
12 shall continue to transfer sufficient moneys from the EOF and
13 the School District Equity Account into the ETR Account to
14 assure the account achieves and maintains a balance of
15 $3,000,000,000 or the mandatory minimum 15% balance mandated
16 under subsection (b), whichever is greater. The balance in the
17 ETR Account shall not exceed 25% of the revenues allocated in
18 accordance with subsection (b)(1).
19 (e) Applicability.--This section shall not apply to moneys
20 received by the board pursuant to section 1306(b).
21 (f) Definition.--As used in this section, the term
22 "normalized calculated balance" shall have the meaning given to
23 it by the board.
24 Section 1306. Equity disbursements to school districts from
25 School District Equity Account.
26 (a) Establishment of School District Equity Account.--The
27 School District Equity Account is hereby established as a
28 restricted account within the fund. The account shall be
29 administered by the board in accordance with this section.
30 (b) Funding.--The account shall be funded by quarterly
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1 transfers of all moneys deposited into the Property Tax Relief
2 Fund established under 4 Pa.C.S. § 1409 (relating to property
3 tax relief fund) which quarterly transfers are hereby
4 authorized.
5 (c) Equity disbursements.--
6 (1) In addition to any standard disbursement or
7 distressed district prevention and emergency disbursement
8 made by the board under this chapter, the board, for the
9 2008-2009 fiscal year and for each fiscal year thereafter,
10 shall make equity disbursements to qualified school districts
11 on a quarterly basis in accordance with this section and
12 section 1304.
13 (2) The board shall distribute 100% of the moneys
14 transferred into the School District Equity Account pursuant
15 to subsection (b) during the 2008-2009 fiscal year in equal
16 quarterly amounts, to all school districts as equity
17 disbursements for the 2008-2009 fiscal year in accordance
18 with the formula prescribed in subsection (e). All equity
19 disbursements distributed pursuant to this paragraph shall be
20 incorporated into each school district's standard
21 disbursement for the 2009-2010 fiscal year.
22 (3) The board shall distribute 50% of the moneys
23 transferred into the School District Equity Account pursuant
24 to subsection (b) in each succeeding fiscal year in equal
25 quarterly amounts to all school districts for the applicable
26 fiscal year in accordance with the formula prescribed in
27 subsection (e). Fifty percent of all equity disbursements
28 distributed pursuant to this paragraph shall be incorporated
29 into each school district's standard disbursement in the
30 fiscal year immediately following the fiscal year for which
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1 the school district receives such equity disbursement
2 pursuant to this paragraph. The remaining 50% of the moneys
3 that are not distributed in accordance with this paragraph
4 shall be utilized in accordance with subsection (f).
5 (4) (i) Before any equity disbursements may be made for
6 any quarter pursuant to this section, the moneys in the
7 School District Equity Account shall first be expended to
8 make the standard disbursements to the extent that there
9 are insufficient funds in the EOF to pay such standard
10 disbursements and then to assure that the mandatory 15%
11 minimum balance required under section 1305(b) is
12 maintained.
13 (ii) All moneys remaining in he account shall be
14 disbursed to qualified school districts as equity
15 disbursements and distressed district prevention and
16 emergency disbursements to the extent permitted under
17 this section and section 1305.
18 (d) Mandated per pupil expenditure levied through equity
19 disbursements.--The board shall continue making equity
20 disbursements pursuant to subsection (c)(2) and (3) until the
21 average per pupil expenditure for each public school student in
22 this Commonwealth equals $10,000 or such higher average per
23 pupil expenditure for each public school student in this
24 Commonwealth as may be established pursuant to a subsequently
25 enacted law that prescribes a higher average per pupil
26 expenditure for each public school student in this Commonwealth.
27 (e) Distribution formula.--The board shall make the equity
28 disbursements provided for under subsection (d) in the following
29 manner:
30 (1) The board shall first distribute equity
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1 disbursements in a manner that assures that the average per
2 pupil expenditure for each school district equals the average
3 per pupil expenditure for each public school student in this
4 Commonwealth for the preceding fiscal year.
5 (2) Any remaining funds available for distribution as
6 equity disbursements in the applicable fiscal year shall be
7 distributed in a manner that increases the average per pupil
8 expenditure for each school district by the same percentage
9 until the per pupil expenditure prescribed in subsection (d)
10 is attained in each school district with an average per pupil
11 expenditure below the average per pupil expenditure
12 prescribed in subsection (d).
13 (f) Remaining funds.--Fifty-percent of the moneys provided
14 for in subsection (b) that are not expended in accordance with
15 subsection (c)(2) and (3) shall be utilized in the following
16 order of priority:
17 (1) For standard disbursements in accordance with
18 section 1304, to the extent there are insufficient available
19 funds in the EOF to make a full standard disbursement in any
20 fiscal year.
21 (2) For transfers to the ETR Account, insofar as such
22 transfer may be necessary to maintain the reserves in that
23 account required under this chapter.
24 Section 1307. Other disbursements from Education Operating
25 Fund.
26 (a) Retirement and pension payments.--For the fiscal year
27 beginning July 1, 2008, and for each fiscal year thereafter, the
28 amount of each quarterly disbursement to school districts shall
29 occur only after the State Treasurer has made payment from the
30 EOF on requisition from the board of the annual amount due for
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1 payment of the Commonwealth's share of Federal Social Security
2 taxes for public school employees and for payment of the
3 required retirement contribution for public school employees.
4 (b) Debt payments.--For the fiscal year beginning July 1,
5 2008, and for each fiscal year thereafter, the amount of each
6 quarterly payment to school districts shall occur only after the
7 State Treasurer has made payment from the EOF on requisition
8 from the board of the annual amount due for school district debt
9 assumed by the Commonwealth pursuant to law.
10 Section 1307.1. School District Grant and Incentive Programs
11 Fund.
12 (a) Establishment.--The School District Grant and Incentive
13 Programs Fund is established in the State Treasury and shall be
14 administered by the board.
15 (b) Transfers.--
16 (1) For each quarter that the board approves payments
17 under sections 1304 and 1307, the board shall determine the
18 balance in the EOF after making such payments and shall
19 transfer the amount of the balance to the School District
20 Grant and Incentive Programs Fund.
21 (2) This subsection shall not apply to any moneys
22 received by the board pursuant to section 1306(b).
23 (c) Appropriations.--The General Assembly may appropriate
24 money from the School District Grant and Incentive Payment
25 Programs Fund to the Department of Education for the
26 administration of programs that offer grants or incentives to
27 school districts in order to achieve academic and other
28 education-related goals and standards.
29 (d) Proportionate reductions in disbursements.--In the event
30 that moneys in the School District Grant and Incentive Payment
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1 Programs Fund are insufficient to fund the appropriations from
2 this fund, the Department of Education shall reduce
3 disbursements from this fund each appropriation by the same
4 percentage.
5 Section 1307.2. Other appropriations.
6 Nothing in this act shall preclude the General Assembly from
7 making appropriations out of the General Fund and other
8 Commonwealth funds for the maintenance and support of public
9 education.
10 Section 1308. Education Operating Fund Board.
11 (a) Establishment.--The Education Operating Fund Board is
12 hereby established. The board shall consist of the following
13 members:
14 (1) The Secretary of Education, while serving in this
15 capacity.
16 (2) The Secretary of Revenue, while serving in this
17 capacity.
18 (3) The executive director of the School Financing
19 Authority, while serving in this capacity.
20 (4) Four legislative appointees.
21 (i) Appointments are as follows:
22 (A) One individual appointed by the President
23 pro tempore of the Senate.
24 (B) One individual appointed by the Minority
25 Leader of the Senate.
26 (C) One individual appointed by the Speaker of
27 the House of Representatives.
28 (D) One individual appointed by the Minority
29 Leader of the House of Representatives.
30 (ii) A legislative appointee shall be removed from
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1 office by the appointing authority:
2 (A) for misconduct in office, willful neglect of
3 duty or conduct evidencing unfitness for office or
4 incompetence; or
5 (B) upon conviction of an offense graded as a
6 felony, an infamous crime or an equivalent offense
7 under Federal law or the law of another jurisdiction.
8 (iii) An individual appointed to the board pursuant
9 to subparagraph (i) may not be a member of the General
10 Assembly or staff of a member of the General Assembly.
11 (b) Chairperson to be selected.--The members shall select a
12 member of the board to serve as chairperson and shall select
13 from among themselves such officers as they shall determine.
14 (c) Meetings.--The board shall meet at least six times a
15 year at such times and places as it shall determine. Special
16 meetings may be called by the chairman or at the request of a
17 majority of the members of the board.
18 (d) Quorum.--Five members of the board shall constitute a
19 quorum.
20 (e) Reimbursement of expenses.--The members of the board
21 shall be entitled to no compensation for their services as
22 members of the board but shall be entitled to reimbursement for
23 all necessary and reasonable expenses incurred in connection
24 with the performance of their duties as members of the board.
25 (f) Fiduciary status.--The members of the board and the
26 professional personnel of the board shall stand in a fiduciary
27 relationship with the Commonwealth and the authority as to the
28 moneys in the accounts of the authority and investments of the
29 authority.
30 (g) Standard of care.--The members of the board in
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1 performance of their duties under this section shall exercise
2 the standard of care required by 20 Pa.C.S. Ch. 73 (relating to
3 municipalities investments).
4 (h) Appointments.--Appointing authorities shall appoint
5 initial members to the board within 30 days of the effective
6 date of this section. Whenever a vacancy occurs on the board,
7 the appointing authority shall appoint a successor member within
8 30 days of the vacancy.
9 (i) Powers.--The board shall:
10 (1) approve standard disbursements from the fund,
11 distressed district prevention and emergency distributions
12 and equity distributions;
13 (2) have perpetual existence as a corporation;
14 (3) sue and be sued, implead and be impleaded, complain
15 and defend, in all courts;
16 (4) adopt, use and alter at will a corporate seal;
17 (5) make bylaws for the management and regulation of its
18 affairs;
19 (6) appoint officers, agents, employees and servants,
20 prescribe their duties and fix their compensation;
21 (7) make contracts of every name and nature, and execute
22 all instruments necessary or convenient for the carrying-on
23 of its business, including, but not limited to, the
24 Commonwealth school districts;
25 (8) without limitation of the foregoing, borrow money
26 and accept grants from and enter into contracts, leases or
27 other transaction with any Federal agency, for carrying out
28 the purposes of the board; and
29 (9) do all acts and things necessary or convenient to
30 carry out the powers granted to it by this act or any other
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1 acts.
2 Section 1309. School Financing Authority.
3 (a) Establishment.--The School Financing Authority is hereby
4 established.
5 (b) Membership.--The authority shall consist of the
6 following members:
7 (1) The Secretary of Education, while serving in this
8 capacity.
9 (2) The State Treasurer, while serving in this capacity.
10 (3) The executive director of the Education Operating
11 Fund Board, while serving in this capacity.
12 (4) Four persons, one of whom shall be appointed by the
13 President pro tempore, one appointed by the Minority Leader
14 of the Senate, one appointed by the Speaker of the House of
15 Representatives. None of these appointees may be a member of
16 the General Assembly or a staff member of the General
17 Assembly. A legislative appointee shall be removed from
18 office by the appointing authority:
19 (i) for misconduct in office, willful neglect of
20 duty or conduct evidencing unfitness for office or
21 incompetence; or
22 (ii) upon conviction of an offense graded as a
23 felony, an infamous crime, an offense under this act or
24 an equivalent offense under Federal law or the law of
25 another jurisdiction.
26 (c) Powers and duties.--
27 (1) The authority shall manage and administer all public
28 school district debt, including, but not limited to,
29 consolidating, securitizing, financing, refinancing or
30 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
2 authority shall be responsible for the management and
3 administration of all school district debt and such other
4 related debt as may be assumed by the Commonwealth.
5 (2) Subject to the provisions in paragraph (3), the
6 authority is hereby granted and shall have and may exercise
7 all the powers necessary or convenient for the carrying out
8 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,
12 complain and defend in all courts.
13 (iii) To adopt, use and alter at will a corporate
14 seal.
15 (iv) To acquire, purchase, hold, lease as lessee and
16 use any property real, personal or mixed, tangible or
17 intangible, or any interest therein, necessary or
18 desirable, for carrying out the purposes of the authority
19 and to sell, lease as lessor, transfer and dispose of any
20 property or any interest therein at any time acquired by
21 it.
22 (v) To finance projects by making loans to any
23 eligible school district, which loans may be evidenced by
24 and secured as may be provided in loan agreements, which
25 may contain such provisions as the authority shall
26 determine necessary or desirable for the security or
27 protection of the authority or its bondholders. All such
28 provisions shall be a part of the contract with the
29 holders of the bonds of the authority issued with respect
30 to such project.
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1 (vi) To acquire by purchase, lease or otherwise, for
2 carrying out the purposes of the authority.
3 (vii) To make bylaws for the management and
4 regulations of its affairs.
5 (viii) To make contracts of every name and nature
6 and to execute all instruments necessary or convenient
7 for the carrying on of its business, including, but not
8 limited to, school districts.
9 (ix) To enter into contracts with the board of
10 school directors of any school district, for the purpose
11 of acquiring, financing, refinancing, constructing,
12 improving, furnishing and equipping school district
13 facilities as a part of the public school system of this
14 Commonwealth under the provisions approved by a
15 referendum vote by the district electorate on either the
16 newly proposed debt or specific terms and amounts of debt
17 previously approved by the authority.
18 (x) Without limitation of the other provisions of
19 this subsection, to borrow money and accept grants from,
20 and to enter into contracts, leases or other transaction
21 with any Federal agency, for carrying out the purposes of
22 the authority.
23 (xi) To petition the Commonwealth to obtain
24 additional public funding for debt service for school
25 districts unable to raise sufficient funds for essential
26 project debt service.
27 (xii) To underwrite all long-term capital debt for
28 all public school districts after June 30, 2008.
29 (xiii) To take all actions necessary and proper to
30 ensure that the payments made by the Education Operating
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1 Fund for school district debt are made at the lowest
2 possible cost of capital funds providing the best return
3 for fund expenditures.
4 (xiv) To pledge, hypothecate or otherwise encumber,
5 all or any of the revenues or receipts of the authority
6 as security for all, or any of, the obligations of the
7 authority.
8 (xv) To do all acts and things necessary or
9 convenient to carry out the powers granted to it by this
10 section, this act or any other act.
11 (d) Prohibition.--
12 (1) The authority shall have no power, at any time or in
13 any manner, to pledge the credit or taxing power of the
14 Commonwealth or any of its school districts, nor shall any of
15 its obligations or debts be deemed to be obligations of the
16 Commonwealth or any of its school districts, nor shall the
17 Commonwealth or any of its school districts be liable for the
18 payment of principal or interest on such obligations.
19 (2) All school district debt service payments made by
20 the fund for consolidating, securitizing, financing,
21 refinancing or recalling school district debt shall be
22 obligations of the fund or the school districts and not of
23 the authority.
24 (3) All contracts between the authority and school
25 districts shall be conditioned upon voter approval, in
26 accordance with standards and regulations prescribed by the
27 department. The Department of Education shall review and
28 approve each school district project referendum including all
29 terms, conditions and amount of debt to be voted upon prior
30 to such referendum to determine:
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1 (i) The extent to which they conform to general
2 State and county requirements.
3 (ii) The amount of debt.
4 (iii) The adequacy of the proposed project.
5 (iv) The ability of the local school district or
6 districts to amortize the cost of the project and to
7 defray the cost of operation and maintenance.
8 (4) No contract may be executed between the authority
9 and school districts without the specific written approval of
10 the board.
11 Section 1310. Reduction of sales and use tax for education.
12 (a) General rule.--The tax reduction provided for in this
13 section shall not occur until school equity disbursements for
14 all public school students in this Commonwealth attain the level
15 prescribed in section 1306(d) and until the criteria set forth
16 in subsections (b) and (c), whichever subsection is applicable,
17 are met.
18 (b) Initial reduction.--
19 (1) When the board determines that the EOF, the ETR
20 Account and the School District Equity Account have
21 maintained a normalized calculated balance that collectively
22 exceeds the annual standard disbursement to all school
23 districts for the immediately preceding fiscal year by at
24 least 40% for a period of eight consecutive quarters, the
25 board, in consultation with the Department of Revenue, shall
26 publish this determination as a notice in the Pennsylvania
27 Bulletin. The notice shall specify:
28 (i) the amount of money in the EOF and other
29 accounts in excess of 40% of the standard disbursement to
30 all school districts on the last day of the fiscal year
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1 immediately preceding this determination; and
2 (ii) the percentage by which the normalized
3 calculated balance exceeds such standardized disbursement
4 for the fiscal year preceding the board's determination.
5 (2) Beginning with the first quarter occurring 30 days
6 after such publication, the Department of Revenue shall
7 reduce the rate of the tax imposed under Subchapter B of
8 Chapter 7 by the amount in excess of 40% of the standard
9 disbursement as published in the Pennsylvania Bulletin
10 pursuant to this subsection.
11 (c) Subsequent tax reduction.--
12 (1) Whenever the EOF, the ETR Account and the School
13 District Equity Account attain a normalized calculated
14 balance that collectively exceeds the standard disbursement
15 to school districts in the immediately preceding fiscal year
16 by a percentage that exceeds the percentage last published
17 pursuant to subsection (b) or this subsection for a period of
18 eight consecutive quarters, the board, in consultation with
19 the Department of Revenue, shall publish this determination
20 as a notice in the Pennsylvania Bulletin. The notice shall
21 specify:
22 (i) the collective amount of money in the EOF and
23 other accounts in excess of the standard disbursement to
24 all school districts on the last day of the fiscal year
25 immediately preceding this determination; and
26 (ii) the percentage published in connection with the
27 last tax reduction effectuated under this section.
28 (2) Following such publication, the Department of
29 Revenue shall further reduce the rate of such tax by the
30 amount that equals the difference between the amount of money
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1 in the EOF and its accounts on the last day of the fiscal
2 year published in accordance with this subsection and the
3 amount published in connection with the immediately preceding
4 tax reduction effectuated pursuant to this section.
5 (d) Restriction on tax increases.--Once the tax rate for a
6 tax imposed under Subchapter B of Chapter 7 is reduced pursuant
7 to this subsection, that rate of tax may only be increased by a
8 law enacted by the General Assembly.
9 (e) Increments.--Any tax reduction implemented in accordance
10 with this section shall be made in increments of not less than
11 .10%.
12 (f) Definition.--As used in this section, the term
13 "normalized calculated balance" shall mean the rolling 12-month
14 average of the collective balance in the EOF, the ETR Account
15 and the School District Equity Account, as determined each
16 quarter by the board for the eight quarters immediately
17 preceding each quarter.
18 Section 1311. School Equity Capital Construction Fund.
19 (a) Establishment.--The School Equity Capital Construction
20 Fund is established in the State Treasury.
21 (b) Contents.--
22 (1) The School Equity Capital Construction Fund shall
23 consist of:
24 (i) All moneys received pursuant to subsection (f).
25 (ii) All payments received from school districts in
26 connection with any financing provided to such school
27 districts by the authority.
28 (iii) All other moneys received pursuant to this act
29 or any other law or from any other source.
30 (c) Separate fund.--The SECCF shall be separate from all
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1 other funds of the Commonwealth and shall not be subject to
2 borrowing by or transfer to the General Fund or any other fund
3 in the State Treasury.
4 (d) Continuing appropriations.--All moneys placed in the
5 SECCF and the interest it accrues are hereby appropriated to the
6 authority on a continuing basis and may be utilized by the
7 authority only for the purposes authorized under this act.
8 (e) Loans to school district.--The authority may utilize
9 moneys in the SECCF to make loans, including interest-free
10 loans, to school districts for projects authorized under section
11 1204.
12 (f) Distribution of funds to SECCF.--
13 (1) Except as otherwise provided in subsection (g), the
14 board, in each fiscal year, may transfer from the Education
15 Operating Fund to the SECCF a sum that shall not be less than
16 25% nor more than 100% of the incremental savings resulting
17 from the Commonwealth assumption of debt pursuant to section
18 1203 as applied to the applicable fiscal year.
19 (2) As used in this section, the term "incremental
20 savings" means the difference between the Commonwealth's debt
21 assumption payments in the first full fiscal year in which
22 such payments are made and the Commonwealth debt assumption
23 payments scheduled for the applicable fiscal year for which
24 the board makes a transfer of funds to the SECCF pursuant to
25 this subsection.
26 (g) Cap on transfers to SECCF.--No payments shall be made to
27 the SECCF pursuant to subsection (f) to the extent that such
28 payments will cause the total amount of money in the SECCF to
29 exceed $10,000,000,000.
30 (h) Use of SECCF for equity remediation.--The authority may
20070H1275B2835 - 208 -
1 only utilize moneys transferred to the SECCF pursuant to this
2 section to assist school districts that require equity
3 remediation assistance as determined by the authority for the
4 construction of projects authorized under this section and
5 section 1204 and which are approved by voter referendum pursuant
6 to section 1205.
7 (i) Limitation.--No funds shall be transferred from the
8 Education Operating Fund to the SECCF for any fiscal year to the
9 extent that it is necessary to utilize such funds for the
10 purpose of making standard disbursements pursuant to section
11 1304 and for making payments required under section 1307.
12 Section 1312. School Equity Distribution Task Force.
13 (a) Establishment.--A School Equity Distribution Task Force
14 shall be constituted every ten years beginning in 2017 for the
15 purpose of conducting a comprehensive study on the adequacy and
16 equity of existing funding for public education in this
17 Commonwealth or selecting and supervising the conduct of such a
18 study by a qualified person or entity. The task force shall
19 prepare a report, together with recommendations for the General
20 Assembly. Each report shall be completed by November 30 of the
21 immediately following calendar year and shall be a public
22 record.
23 (b) Composition of task force and selection of chairman.--
24 The task force shall consist of five members. The Governor, the
25 President pro tempore of the Senate, the Speaker of the House of
26 Representatives and the Minority Leader of the Senate and the
27 Minority Leader of the House of Representatives shall each
28 appoint one member to the task force. The task force shall
29 select a chairman from its membership.
30 (c) Term of task force.--The task force shall hold its
20070H1275B2835 - 209 -
1 organizing meeting on the date scheduled by the Governor in
2 April of the applicable year and shall complete its report by
3 November 30 of the immediately following calendar year.
4 (d) Notice.--The Governor shall notify the President pro
5 tempore of the Senate, the Speaker of the House of
6 Representatives, the Minority Leader of the Senate and the
7 Minority Leader of the House of Representatives of the
8 organizing meeting for the task force on the date specified in
9 subsection (c) of the applicable year and advise the leaders of
10 the need to make their respective appointments before that date.
11 CHAPTER 15
12 SCHOOL DISTRICT FISCAL EFFICIENCY TOOLS
13 Section 1501. Purpose of chapter.
14 The purpose of this chapter is to provide school districts
15 with the tools necessary to achieve maximum fiscal effectiveness
16 in the performance of their powers and duties and to provide a
17 thorough and efficient system of public education at the lowest
18 possible cost to the citizens of this Commonwealth.
19 Section 1502. Data-driven decision-making technology
20 requirements.
21 (a) General rule.--No later than July 1, 2010, each school
22 district shall enter into a contract with a data-driven
23 decision-making total systems vendor and submit a copy of the
24 contract to the Department of Education.
25 (b) Required elements.--The contract shall include, but not
26 be limited to, the following elements as components of data-
27 driven decision making:
28 (1) The use of large, integrated databases that connect
29 relevant information from other sources into a single
30 accessible format. The databases shall allow the school
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1 district, intermediate unit and the Department of Education
2 to look at data from multiple operational systems across
3 multiple dimensions, including time. The system contracted
4 shall have the advantage of importing and analyzing data from
5 a variety of other systems that cannot otherwise communicate
6 with each other.
7 (2) Assessment and diagnostic tools that determine
8 students' mastery levels of standards, powerful assessment
9 solutions, which provide instant feedback for diagnostic use
10 by teachers, and robust data warehousing and analysis
11 solutions which provide historical and longitudinal
12 capabilities for using and managing data effectively for
13 student performance improvement.
14 (3) Curriculum management systems to integrate each
15 teacher's curriculum planning, lesson plans and grade
16 reporting into a standards-based system.
17 (4) Instruction and practice systems to align curriculum
18 and instructional resources to State and local standards.
19 (5) Student information systems primarily concerned with
20 issues of day-to-day student administration.
21 (6) Data analysis and reporting systems to allow
22 analysis and student performance over time and across
23 variables like district, school, program or classroom. The
24 systems shall include messaging and collaboration technology.
25 (7) Definitive goals toward increasing the value and
26 return of data-driven decision-making technology investment,
27 project management integrated with State education goals and
28 time lines, requirements specification definitions, the
29 formation of both an implementation team and an evaluation
30 committee and planned verification meetings as a result of
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1 contract implementation.
2 (8) Quality instruction integrated with formative
3 assessment and supported by data-driven action research that
4 informs professional practice and instructional
5 effectiveness.
6 Section 1503. Certified operations reports.
7 (a) Duty of school districts to file.--During the fiscal
8 year beginning July 1, 2009, and each fiscal year thereafter,
9 each school district shall submit certified operations reports
10 to the Department of Education. The report shall consist of
11 independent third-party certification that contracts have been
12 or are being completed in school district operations.
13 (b) Contents.--The certification reports shall state
14 whether:
15 (1) The data-driven decision-making systems installed
16 will provide a robust data architecture that are optimized
17 based on prescribed district data requirements.
18 (2) The systems installed will provide a powerful and
19 easy to use "user reporting and analysis" interface.
20 (3) The systems installed and implemented will
21 facilitate the school district's ability to improve student
22 achievement and organizational efficiency economy; impact the
23 quality of education; are designed with students in mind; and
24 discriminate as to what changes or decisions can be made to
25 have the best outcomes for students.
26 (4) Compliance with State district integration
27 objectives is being satisfied to the extent that the district
28 superintendent has a basis for expecting to report the
29 evidence required in the July 1, 2011, report.
30 Section 1504. Superintendent report.
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1 (a) Duty of superintendents to file.--During the fiscal year
2 beginning July 1, 2010, and each fiscal year thereafter, each
3 superintendent shall submit to the Department of Education a
4 comprehensive report for the district, indicating that the
5 intended purposes and goals, performance and accountability
6 technology are being realized in practice, whether data-driven
7 decisions are affecting the district allocations of its budget
8 and funding requests from the Education Operating Fund.
9 (b) Contents.--The superintendent's report shall include,
10 but not be limited to, an administrative and technology
11 assessment of the district's schools' ability to:
12 (1) Generate reports on standards, curriculum,
13 instructional approaches and progress based on the analysis
14 of student and teacher population subgroups which lead to
15 improved instruction approaches.
16 (2) Create a variety of additional reports as needed to
17 analyze information deemed critical to students, teachers and
18 school administration that measure academic progress and meet
19 the requirements of the Department of Education.
20 (3) Provide essential accountability results for
21 district schools and meet prescribed accountability reports
22 for the district as determined by the Department of
23 Education.
24 (4) Evaluate technology progress to drive better
25 decision making for curriculum and other factors affecting
26 student and school achievement and other district goals.
27 (5) Make fiscal budget decisions reallocating the use of
28 moneys from the Education Operating Fund to better prioritize
29 all aspects of each school's and district's educational
30 processes.
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1 (6) Analyze factors that impact learning and enable
2 action to help improve student achievement.
3 (7) Document improvement and share information with
4 other schools, districts and State education agencies.
5 Section 1505. Annual performance report.
6 (a) Duty of school district to file.--During the fiscal year
7 beginning July 1, 2010, and each fiscal year thereafter, each
8 school district shall submit to the Department of Education a
9 comprehensive annual report, indicating how the intended
10 purposes and goals of performance and accountability technology
11 are being realized in the administration of the district, and
12 that includes clear case studies, white papers and other
13 documents which indicate that data-driven decisions are
14 affecting the district allocations of its budget and moneys from
15 the Education Operating Fund to achieve acceptable levels of
16 performance as set by peer benchmark or other evaluations.
17 (b) Contents.--The annual performance report shall include,
18 but not be limited to, the following:
19 (1) A continuing report of the prior year's subjects
20 addressed by the superintendent report, amended with changes
21 deemed appropriate by the board of the school district.
22 (2) A demonstration of ways in which the district's
23 data-driven analysis is beginning to enable the evaluation of
24 student progress, ways in which daily results are cycled
25 through a data warehouse to map curriculum for assignments
26 and test results.
27 (3) Actions taken to improve learning by improving
28 instructional approaches with data-driven analysis,
29 integrating and building on existing technology, offering
30 access to learning resources and continuing improvement by
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1 tracking performance.
2 (4) A demonstration of the factors that are district-
3 causing trends, identify root causes of performance and
4 analyze the effectiveness of changes initiated in the
5 learning environment.
6 (5) A demonstration of budget decisions directly
7 affected by changes in the districts' efforts to improve
8 student achievement and increase administrative efficiency by
9 focusing on student improvement in a new era of technology
10 application to education.
11 (6) An assessment of the future direction to be taken
12 for continuing performance improvement and advances in data-
13 driven decision making to determine economic efficiencies and
14 financial discipline achievable in budget allocations and
15 spending decisions.
16 CHAPTER 17
17 MISCELLANEOUS PROVISIONS
18 Section 1701. Transitional provision.
19 (a) Sales and use tax.--Notwithstanding the repeal of
20 Article II of the Tax Reform Code of 1971, under section 1704,
21 the department shall have the authority to enforce the
22 collection of taxes imposed for transactions that occur prior to
23 the effective date of this section under former Article II of
24 the Tax Reform Code of 1971. The taxes collected after January
25 1, 2008, regardless of the transaction date, shall be deposited
26 into the Education Operating Fund.
27 (b) Other taxes.--Notwithstanding the repeal of any
28 provision of the Public School Code of 1949, the Local Tax
29 Enabling Act, as applied to school districts or of any other law
30 authorizing school districts to impose taxes, a governing body
20070H1275B2835 - 215 -
1 shall have the authority to enforce, after the effective date of
2 the repeal, the collection of taxes levied and assessed under
3 those former provisions prior to the effective date of the
4 repeal under section 1704(2).
5 Section 1702. Construction.
6 Any and all references in any other act to Article II or any
7 provision in Article II of the act of March 4, 1971 (P.L.6,
8 No.2), known as the Tax Reform Code of 1971, shall be deemed a
9 reference to Chapter 7 or the corresponding provisions in
10 Chapter 7 of this act.
11 Section 1703. (Reserved).
12 Section 1704. Repeals.
13 (a) Intent.--The General Assembly declares that the repeals
14 under subsection (b) are necessary to effectuate this act.
15 (b) Provisions.--The following acts and parts of acts are
16 repealed:
17 (1) Section 631 of the act of March 10, 1949 (P.L.30,
18 No.14), known as the Public School Code of 1949, is repealed.
19 (2) The school per capita tax, which tax is authorized
20 pursuant to section 679 of the Public School Code of 1949, is
21 repealed.
22 (3) Article XXV of the Public School Code of 1949 is
23 repealed insofar as Article XXV authorized Commonwealth
24 payments and reimbursements to school districts that have
25 been incorporated into the standard disbursements formula as
26 provided in section 1304 of this act.
27 (4) Any provision of the Public School Code of 1949 and
28 of any other law relating to the authority of any school
29 district to levy, assess and collect any tax on real property
30 and the power of any city of the first class to levy, assess
20070H1275B2835 - 216 -
1 and collect any tax real property for school purposes is
2 repealed upon the expiration of the respective schedule
3 prescribed in sections 1101 and 1102.
4 (5) Any provision of the act of the Public School Code
5 of 1949 and any other law relating to debt is repealed to the
6 extent that it is inconsistent with this act.
7 (6) Any provision of the Public School Code of 1949 and
8 any home rule charter adopted pursuant thereto is repealed
9 insofar as it is inconsistent with this act.
10 (7) Any provision of the act of August 9, 1963 (P.L.643,
11 No.341), known as the First Class City Public Education Home
12 Rule Act, and any home rule school district charter adopted
13 pursuant thereto is repealed insofar as it is inconsistent
14 with this act.
15 (8) The act of December 31, 1965 (P.L.1257, No.511),
16 known as The Local Tax Enabling Act, is repealed insofar as
17 it authorizes the levy, assessment and collection by school
18 districts of any tax as of midnight on December 31, 2008.
19 (9) Article II of the act of March 4, 1971 (P.L.6,
20 No.2), known as the Tax Reform Code of 1971, is repealed.
21 (10) Chapter 13 of the act of June 27, 2006 (1st
22 Sp.Sess., P.L.1873, No.1), known as the Taxpayer Relief Act,
23 is repealed.
24 (11) All acts and parts of acts that are inconsistent
25 with this act are repealed to the extent of such
26 inconsistency.
27 Section 1705. Severability.
28 The provisions of this act are severable as follows:
29 (1) If any provision of this act is held invalid, the
30 invalidity shall not affect other provisions or applications
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1 of this act which can be given effect without the invalid
2 provision or application.
3 (2) Under no circumstances shall the invalidity of any
4 provision or application of this act affect the validity of
5 any provision in this act that abolishes the power of the
6 governing body and any school district and city of the first
7 class or any other political subdivision to levy, assess or
8 collect a tax on any interest in real property for school
9 purposes.
10 Section 1706. Effective date.
11 This act shall take effect as follows:
12 (1) Section 1704(9) shall take effect at midnight on
13 December 31, 2007.
14 (2) Chapter 7 shall take effect January 1, 2008.
15 (3) Section 1704(2) and (8) shall take effect at
16 midnight on December 31, 2008.
17 (4) Chapters 3, 4 and 5 shall take effect January 1,
18 2009.
19 (5) The remainder of this act shall take effect
20 immediately.
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