THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY DeLUCA, LEVDANSKY, BELFANTI, BEYER, CALTAGIRONE, CARROLL, D. COSTA, GIBBONS, GINGRICH, GOODMAN, GRUCELA, HARKINS, HESS, HORNAMAN, KOTIK, MANDERINO, MELIO, MILLER, QUINN, READSHAW, SANTONI, SIPTROTH, SOLOBAY, STURLA, WATERS AND FRANKEL, OCTOBER 29, 2009

REFERRED TO COMMITTEE ON FINANCE, OCTOBER 29, 2009  

AN ACT

Establishing the Sales and Use Tax Commission; and providing for

study and report on sales and use tax.

WHEREAS, Since the enactment of this Commonwealth's first

sales and use tax, significant changes in the structure of the

State's economy have occurred; and

WHEREAS, These changes have had both salutary and detrimental

effects on business and consumers in this Commonwealth; and

WHEREAS, The sales and use tax has become checkered with more

than 50 exclusions and exemptions; and

WHEREAS, The addition of certain exclusions and exemptions

has caused confusion for consumers and vendors in the payment

and collection of the sales and use tax; and

WHEREAS, Many of the existing exclusions and exemptions have

become antiquated and obsolete; and

WHEREAS, Ensuring greater fairness in the sales and use tax

will create a fair and more competitive climate leading to

greater economic growth and stability in this Commonwealth; and

WHEREAS, Viable opportunities to broaden the sales and use

tax base should be comprehensively explored to enable this

Commonwealth to lower the overall tax burden on the citizens of

this State while also protecting the stability of the State

budget.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

This act shall be known and may be cited as the Sales and Use

Tax Study Act.

Section 2.  Purpose.

The purpose of this act is to establish the Pennsylvania

Sales and Use Tax Commission to study and analyze the existing

sales and use tax law, and to propose recommendations to the

Governor and the General Assembly for amending the tax to:

(1)  eliminate obsolete and unnecessary provisions;

(2)  expand the tax base as necessary;

(3)  ensure a competitive economic market in this State;

and

(4)  protect the stability of the Commonwealth's budget.

Section 3.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Commission."  The Sales and Use Tax Study Commission

established under this act.

"Department."  The Department of Revenue of the  

Commonwealth.

Section 4.  Pennsylvania Sales and Use Tax Commission.

(a)  Establishment.--There is hereby established the

Pennsylvania Sales and Use Tax Commission.

(b)  Purpose.--The purpose of the commission shall be to

evaluate the current sales and use tax structure in the

Commonwealth and recommend changes to the sales and use tax

structure that will eliminate obsolete provisions and broaden

the tax base, as necessary, thereby allowing the overall tax

burden to be reduced and creating a better tax climate in this

Commonwealth.

Section 5.  Tasks.

(a)  Study.--The commission shall study viable options for

increasing fairness and competitiveness in the sales and use tax

structure of the Commonwealth. The commission shall develop

solutions to ensure that the portion of State general funds

derived from the sales and use tax is not diminished.

(b)  Report.--The commission shall provide a comprehensive

report of the study conducted under subsection (a). The report

shall thoroughly discuss options and viable recommendations

considered and express clear rationales for options not

recommended. Specific changes to the sales and use tax

recommended by the commission shall be included in the report.

The commission shall present the report to the Governor, the

chairman and minority chairman of the Finance Committee of the

Senate and the chairman and minority chairman of the Finance

Committee of the House of Representatives on or before July 1,

2010.

Section 6.  Composition of the commission.

(a)  Members.--The commission shall consist of the following

members:

(1)  Seven members appointed by the Governor. The

appointees shall be members of various constituencies

affected by or knowledgeable about the sales and use tax and

its impact on this Commonwealth's economy. These

constituencies include, but are not limited to, corporations,

tax policy experts and tax practitioners. Four of the

Governor's seven appointees, one from each organization,

shall be members of the Pennsylvania Bar Association, the

Pennsylvania Chamber of Business and Industry, the

Pennsylvania Institute of Certified Public Accountants and

the Pennsylvania Retailers Association.

(2)  Each of the four caucuses of the General Assembly

shall select one private sector citizen representative from

constituencies affected by or knowledgeable about the

Commonwealth's business taxes.

Staff from organizations representing business organizations are

not eligible for membership on the commission.

(b)  Chairperson.--The Secretary of Revenue shall chair the

commission and shall serve as a member.

(c)  Staffing.--The Commonwealth shall, through the

department, provide reasonable and necessary clerical, research

and administrative support and may contract for research,

analysis and editorial work in support of the commission as

necessary.

Section 7.  Public meetings.

All meetings, except for organizational meetings and planning

sessions shall be conducted as open meetings under 65 Pa.C.S.

Ch. 7 (relating to open meetings).

Section 8.  Cooperation by State agencies.

The department shall serve as the administrative support

agency of the commission and shall provide facilities, personnel

assistance, information and services necessary to fulfill the

mission of the commission. All other Commonwealth agencies are

directed to cooperate with and assist the commission in

fulfilling its duties and responsibilities.

Section 9.  Expiration.

This act shall expire 180 days after the submission of the

report provided for under section 5.

Section 10.  Effective date.

This act shall take effect immediately.