1Providing for tax levies and information related to taxes;
2authorizing the imposition of a personal income tax or an
3earned income tax by a school district subject to voter
4approval; providing for imposition of and exclusions from a
5sales and use tax for the stabilization of education funding,
6for increase to the personal income tax, for certain
7licenses, for hotel occupancy tax, for procedure and
8administration of the tax, for expiration of authority to
9issue certain debt and for reporting by local government
10units of debt outstanding; establishing the Education
11Stabilization Fund; providing for disbursements from this
12fund; and repealing certain provisions of the Public School
13Code of 1949 and sales and use tax provisions of the Tax
14Reform Code of 1971.

15TABLE OF CONTENTS

16Chapter 1. Preliminary Provisions

17Section 101. Short title.

18Section 102. Definitions.

19Chapter 3. Taxation by School Districts

20Section 301. Scope.

21Section 302. Definitions.

22Section 303. Limitation.

1Section 304. Preemption.

2Section 305. General tax authorization.

3Section 306. Referendum.

4Section 307. Continuity of tax.

5Section 308. Collections.

6Section 309. Credits.

7Section 310. Exemption and special provisions.

8Section 311. Regulations.

9Chapter 4. Education Tax

10Section 401. Education tax.

11Chapter 7. Sales and Use Tax for the Stabilization of Education
12Funding

13Subchapter A. Preliminary Provisions

14Section 701. Scope.

15Section 701.1. Definitions.

16Subchapter B. Sales and Use Tax

17Section 702. Imposition of tax.

18Section 703. Computation of tax.

19Subchapter C. Exclusions from Sales and Use Tax

20Section 704. Exclusions from tax.

21Section 705. Alternate imposition of tax.

22Section 706. Credit against tax.

23Subchapter D. Licenses

24Section 708. Licenses.

25Subchapter E. Hotel Occupancy Tax

26Section 709. Definitions.

27Section 710. Imposition of tax.

28Section 711. Seasonal tax returns.

29Subchapter F. Procedure and Administration

30Section 715. Persons required to make returns.

1Section 716. Form of returns.

2Section 717. Time for filing returns.

3Section 718. Extension of time for filing returns.

4Section 719. Place for filing returns.

5Section 720. Timely mailing treated as timely filing and
6payment.

7Section 721. Payment of tax.

8Section 722. Time of payment.

9Section 723. Other times for payment.

10Section 724. Place for payment.

11Section 725. Tax held in trust for Commonwealth.

12Section 726. <-Local receivers of use tax (Reserved).

13Section 727. Discount.

14Section 728. (Reserved).

15Section 729. (Reserved).

16Section 730. Assessment.

17Section 731. Mode and time of assessment.

18Section 732. Reassessment.

<-19Section 733. (Reserved).

20Section 734. Review by Board of Finance and Revenue.

<-21Section 733. Assessment to recover erroneous refunds.

22Section 734. (Reserved).

23Section 735. (Reserved).

24Section 736. Burden of proof.

25Section 737. Collection of tax.

26Section 738. Collection of tax on motor vehicles, trailers and
27semitrailers.

28Section 739. Precollection of tax.

29Section 740. Bulk and auction sales.

<-30Section 741. Collection on failure to request reassessment,

1review or appeal.

<-2Section 741. (Reserved).

3Section 742. Lien for taxes.

4Section 743. Suit for taxes.

5Section 744. Tax suit comity.

6Section 745. Service.

7Section 746. Collection and payment of tax on credit sales.

8Section 747. Prepayment of tax.

9Section 747.1. Refund of sales tax attributed to bad debt.

10Section 748. Registration of transient vendors.

11Section 748.1. Bond.

12Section 748.2. Notification to department.

13Section 748.3. Seizure of property.

14Section 748.4. Fines.

15Section 748.5. Transient vendors subject to chapter.

16Section 748.6. Promoters.

17Section 749. (Reserved).

18Section 750. (Reserved).

19Section 751. (Reserved).

20Section 752. Refunds.

21Section 753. Refund petition.

22Section 754. (Reserved).

23Section 755. (Reserved).

24Section 756. Extended time for filing special petition for
25refund.

26Section 757. (Reserved).

27Section 758. Limitation on assessment and collection.

28Section 759. Failure to file return.

29Section 760. False or fraudulent return.

30Section 761. Extension of limitation period.

1Section 762. (Reserved).

2Section 763. (Reserved).

3Section 764. (Reserved).

4Section 765. <-Interest (Reserved).

5Section 766. Additions to tax.

6Section 767. Penalties.

7Section 768. Criminal offenses.

8Section 769. Abatement of additions or penalties.

9Section 770. Rules and regulations.

10Section 771. Keeping of records.

11Section 771.1. Reports and records of promoters.

12Section 772. Examinations.

13Section 773. Records and examinations of delivery agents.

14Section 774. Unauthorized disclosure.

15Section 775. Cooperation with other governments.

16Section 776. Interstate compacts.

17Section 777. Bonds.

18Subchapter G. Funding Provisions

19Section 780. (Reserved).

20Section 781. Appropriation for refunds.

21Section 781.1. Construction.

22Section 782. Transfers to Education Stabilization Fund.

23Chapter 9. (Reserved)

24Chapter 11. Limitations on School District Taxation

25Section 1101. Authority to levy taxes and effect of future
26Constitutional amendment.

27Section 1102. Transitional taxes.

28Section 1103. Consideration of State appropriations or
29reimbursements.

30Section 1104. Taxes for cities and school districts of the

1first class.

2Chapter 12. Indebtedness

3Section 1201. <-Expiration of authority to issue debt (Reserved).

4Section 1202. Notices and reporting by school districts of debt
5outstanding.

6Chapter 13. Funding Provisions

7Section 1301. Definitions.

8Section 1302. Education Stabilization Fund.

9Section 1303. Standard disbursements to school districts from
10Education Stabilization Fund.

11Chapter 15. Miscellaneous Provisions

12Section 1501. Transitional provision.

<-13Section 1502. Regulations.

14Section <-1502 1503. Construction.

15Section <-1503 1504. Severability.

16Section <-1504 1505. Repeals.

17Section <-1505 1506. Applicability.

18Section <-1506 1507. Effective date.

19The General Assembly of the Commonwealth of Pennsylvania
20hereby enacts as follows:

21CHAPTER 1

22PRELIMINARY PROVISIONS

23Section 101. Short title.

24This act shall be known and may be cited as the Property Tax
25Independence Act.

26Section 102. Definitions.

27The following words and phrases when used in this act shall
28have the meanings given to them in this section unless the
29context clearly indicates otherwise:

30"Department." The Department of Revenue of the Commonwealth.

1"Education Stabilization Fund." The Education Stabilization
2Fund established in section 1302.

3"Fiscal year." The fiscal year of the Commonwealth beginning
4on July 1 and ending on June 30 of the immediately following
5calendar year.

6"Governing body." The board of school directors of a school
7district, except that the term shall mean the city council of a
8city of the first class for purposes of the levy and collection
9of any tax in a school district of the first class.

10"Internal Revenue Code of 1986." The Internal Revenue Code
11of 1986 (Public Law 99-514, 26 U.S.C. § 166).

12"Local Tax Enabling Act." The act of December 31, 1965 
13(P.L.1257, No.511), known as The Local Tax Enabling Act,

14"Public School Code of 1949." The act of March 10, 1949 
15(P.L.30, No.14), known as the Public School Code of 1949.

16"School district." A school district of the first class,
17first class A, second class, third class or fourth class,
18including any independent school district. For purposes of the
19levy, assessment and collection of any tax in a school district
20of the first class, the term shall include the City Council.

21"School per capita tax." The tax authorized pursuant to
22section 679 of the act of March 10, 1949 (P.L.30, No.14), known
23as the Public School Code of 1949,

24"Secretary." The Secretary of Revenue of the Commonwealth.

25"Tax Reform Code of 1971." The act of March 4, 1971 (P.L.6, 
26No.2), known as the Tax Reform Code of 1971.

27CHAPTER 3

28Taxation by School Districts

29Section 301. Scope.

30This chapter authorizes school districts to levy, assess and

1collect a tax on personal income or a tax on earned income and
2net profits as a means of abolishing property taxation by the
3school district.

4Section 302. Definitions.

5The words and phrases used in this chapter shall have the
6same meanings given to them in the Tax Reform Code of 1971 or
7The Local Tax Enabling Act unless the context clearly indicates
8otherwise.

9Section 303. Limitation.

10Any tax imposed under this chapter shall be subject to the
11limitations set forth in Chapter 11.

12Section 304. Preemption.

13No act of the General Assembly shall vacate or preempt any
14resolution passed or adopted under the authority of this
15chapter, or any other act, providing authority for the
16imposition of a tax by a school district, unless the act of the
17General Assembly expressly vacates or preempts the authority to
18pass or adopt resolutions.

19Section 305. General tax authorization.

20(a) General rule.--A board of school directors may, by
21resolution, levy, assess and collect or provide for the levying,
22assessment and collection of a tax on personal income or a tax
23on earned income and net profits for general revenue purposes.

24(b) Personal income tax.--

25(1) A board of school directors may levy, assess and
26collect a tax on the personal income of resident individuals
27at a rate determined by the board of school directors.

28(2) A school district which seeks to levy the tax
29authorized under paragraph (1) must comply with section 306.

30(3) If a board of school directors seeks to impose a

1personal income tax under this subsection and the referendum
2under section 306 is approved by the electorate, the board of
3school directors shall have no authority to impose an earned
4income and net profits tax under subsection (c) or any other
5act.

6(4) A personal income tax imposed under the authority of
7this section shall be levied by the school district on each
8of the classes of income specified in section 303 of the Tax
9Reform Code of 1971 and regulations under that section,
10provisions of which are incorporated by reference into this
11chapter.

12(i) Notwithstanding the provisions of section 353(f)
13of the Tax Reform Code of 1971, the Department of Revenue
14may permit the proper officer or an authorized agent of a
15school district imposing a personal income tax pursuant
16to this chapter to inspect the tax returns of any
17taxpayer of the school district or may furnish to the
18officer or an authorized agent an abstract of the return
19of income of any current or former resident of the school
20district or supply information concerning any item of
21income contained in any tax return. The officer or
22authorized agent of the school district imposing a tax
23under this chapter shall be furnished the requested
24information upon payment to the Department of Revenue of
25the actual cost of providing the requested information.

26(ii) (A) Except for official purposes or as
27provided by law, it shall be unlawful for any officer
28or authorized agent of a school district to do any of
29the following:

30(I) Disclose to any other individual or

1entity the amount or source of income, profits,
2losses, expenditures or any particular
3information concerning income, profits, losses or
4expenditures contained in any return.

5(II) Permit any other individual or entity
6to view or examine any return or copy of a return
7or any book containing any abstract or
8particulars.

9(III) Print, publish or publicize in any
10manner any return; any particular information
11contained in or concerning the return; any amount
12or source of income, profits, losses or
13expenditures in or concerning the return; or any
14particular information concerning income,
15profits, losses or expenditures contained in or
16relating to any return.

17(B) Any officer or authorized agent of a school
18district that violates clause (A):

19(I) May be fined not more than $1,000 or
20imprisoned for not more than one year, or both.

21(II) May be removed from office or
22discharged from employment.

23(c) Earned income and net profits tax.--

24(1) A board of school directors may levy, assess and
25collect a tax on earned income and net profits of resident
26individuals at a rate determined by the board of school
27directors.

28(2) A school district which seeks to levy the tax
29authorized under paragraph (1) must comply with section 306.

30(3) If a board of school directors seeks to impose a tax

1on earned income and net profits under this subsection and
2the referendum under section 306 is approved by the
3electorate, the board of school directors shall have no
4authority to impose a personal income tax under subsection
5(b) or any other act.

6Section 306. Referendum.

7(a) General rule.--In order to levy a personal income tax or
8an earned income and net profits tax under this chapter, a
9governing body shall use the procedures set forth in subsections
10(b), (c), (d), (e), (f) and (g).

11(b) Approved by electorate.--

12(1) Subject to notice and public hearing requirements of
13subsection (g), a governing body may levy the personal income
14tax or earned income and net profits tax under this chapter
15only by obtaining the approval of the electorate of the
16affected school district in a public referendum at only the
17primary election preceding the fiscal year when the personal
18income tax or earned income and net profits tax will be
19initially imposed or the rate increased.

20(2) The referendum question must state the initial rate
21of the proposed personal income tax or earned income and net
22profits tax, the purpose of the tax, the duration of the tax
23and the amount of revenue to be generated by the
24implementation of the tax.

25(3) The question shall be in clear language that is
26readily understandable by a layperson. For the purpose of
27illustration, a referendum question may be framed as follows:

28Do you favor paying a personal income tax of X% for
29the purpose of X, for X years, which will generate
30$X?

1Do you favor paying an earned income and net profits
2tax of X% for the purpose of X, for X years, which
3will generate $X?

4(4) A nonlegal interpretative statement must accompany
5the question in accordance with section 201.1 of the act of
6June 3, 1937 (P.L.1333, No.320), known as the Pennsylvania
7Election Code, that includes the following:

8(i) the initial rate of the personal income or
9earned income and net profits tax imposed under this
10chapter; and

11(ii) the estimated revenues to be derived from the
12initial rate imposed under this chapter.

13(c) School district located in more than one county.--In the
14event a school district is located in more than one county,
15petitions under this section shall be filed with the election
16officials of the county in which the administrative offices of
17the school district are located.

18(d) Review and certification.--The election officials who
19receive a petition shall perform all administrative functions in
20reviewing and certifying the validity of the petition and
21conduct all necessary communications with the school district.

22(e) Notification.--

23(1) If the election officials of the county who receive
24the petition certify that it is sufficient under this section
25and determine that a question should be placed on the ballot,
26the decision shall be communicated to election officials in
27any other county in which the school district is also
28located.

29(2) Election officials in the other county or counties
30shall cooperate with election officials of the county that

1receives the petition to ensure that an identical question is
2placed on the ballot at the same election throughout the
3entire school district.

4(f) Certification of results.--Election officials from each
5county involved shall independently certify the results from
6their county to the governing body.

7(g) Adoption of resolution.--

8(1) In order to levy the tax under this section, the
9governing body shall adopt a resolution which shall refer to
10this chapter prior to placing a question on the ballot.

11(2) Prior to adopting a resolution imposing the tax
12authorized by this section, the governing body shall give
13public notice of its intent to adopt the resolution in the
14manner provided by The Local Tax Enabling Act and shall
15conduct at least two public hearings regarding the proposed
16adoption of the resolution. One public hearing shall be
17conducted during normal business hours and one public hearing
18shall be conducted during evening hours or on a weekend.

19Section 307. Continuity of tax.

20Every tax levied under this chapter shall continue in force
21on a fiscal year basis without annual reenactment unless the
22rate of the tax is subsequently changed or the duration placed
23on the referendum has expired.

24Section 308. Collections.

25Any income tax imposed under this chapter shall be subject to
26the provisions for collection and delinquency found in The Local
27Tax Enabling Act.

28Section 309. Credits.

29(a) Credit.--Except as set forth in subsection (b), the
30provisions of The Local Tax Enabling Act shall be applied by a

1board of school directors to determine any credits applicable to
2a tax imposed under this chapter.

3(b) Limitation.--Payment of any tax on income to any state
4other than Pennsylvania or to any political subdivision located
5outside the boundaries of this Commonwealth by a resident of a
6school district located in this Commonwealth shall not be
7credited to and allowed as a deduction from the liability of
8such person for any income tax imposed by the school district of
9residence pursuant to this chapter.

10Section 310. Exemption and special provisions.

11(a) Earned income and net profits tax.--A school district
12that imposes an earned income and net profits tax authorized
13under section 305(c) may exempt from the payment of that tax any
14person whose total income from all sources is less than $12,000.

15(b) Applicability to personal income tax.--Section 304 of
16the Tax Reform Code of 1971 shall apply to any personal income
17tax levied by a school district under section 305(b).

18Section 311. Regulations.

19A school district that imposes:

20(1) an earned income and net profits tax authorized
21under section 305(c) shall be subject to the provisions of
22The Local Tax Enabling Act and may adopt procedures for the
23processing of claims for credits and exemptions under section
24309 and 310; or

25(2) a personal income tax under section 305(b) shall be
26subject to all regulations adopted by the Department of
27Revenue in administering the tax due to the Commonwealth
28under Article III of the Tax Reform Code of 1971.

29CHAPTER 4

30EDUCATION TAX

1Section 401. Education tax.

2(a) General rule.--In addition to the tax collected under
3section 302 of the Tax Reform Code of 1971, the Commonwealth
4shall impose and administer the tax set forth in subsection <-(c) 
5(b) in the same manner as the tax under <-Article III of the Tax
6Reform Code of 1971.

7(b) Imposition of tax.--

8(1) Every resident individual, estate or trust shall be
9subject to, and shall pay for the privilege of receiving each
10of the classes of income enumerated in section 303 of the Tax
11Reform Code of 1971, a tax upon each dollar of income
12received by that resident during that resident's taxable year
13at the rate of 1.27%.

14(2) Every nonresident individual, estate or trust shall
15be subject to, and shall pay for the privilege of receiving
16each of the classes of income enumerated in section 303 of
17the Tax Reform Code of 1971 from sources within this
18Commonwealth, a tax upon each dollar of income received by
19that nonresident during that nonresident's taxable year at
20the rate of 1.27%.

<-21(c) Deposit in Education Stabilization Fund.--All moneys

<-22(c) Deposit in Education Stabilization Fund.--

23(1) All moneys collected under this section shall be 
24deposited in the Education Stabilization Fund.

<-25(2) So much of the proceeds of the tax imposed by this
26chapter as shall be necessary for the payment of refunds,
27enforcement or administration under this chapter is hereby
28appropriated to the department for such purposes.

29(d) Combination of tax forms.--The department shall
30incorporate the taxpayer reporting requirement for the

1implementation of this section into the forms utilized by the
2department under Article III of the Tax Reform Code of 1971.

3(e) Definitions.--The words and phrases used in this section
4shall have the same meaning given to them in Article III of the
5Tax Reform Code of 1971.

6CHAPTER 7

7SALES AND USE TAX FOR THE

8STABILIZATION OF EDUCATION FUNDING

9SUBCHAPTER A

10PRELIMINARY PROVISIONS

11Section 701. Scope.

12The tax provided for under this chapter shall be known as the
13Sales and Use Tax for the Stabilization of Education Funding,
14which shall be a replacement for the sales and use tax
15authorized under Article II of the Tax Reform Code of 1971 and
16that is repealed by this act.

17Section 701.1. Definitions.

18The following words and phrases when used in this chapter
19shall have the meanings given to them in this section unless the
20context clearly indicates otherwise:

21(a) "Soft drinks."

22(1) All nonalcoholic beverages, whether carbonated or
23not, such as soda water, ginger ale, Coca Cola, lime cola,
24Pepsi Cola, Dr Pepper, fruit juice when plain or carbonated
25water, flavoring or syrup is added, carbonated water,
26orangeade, lemonade, root beer or any and all preparations,
27commonly referred to as soft drinks, of whatsoever kind, and
28are further described as including any and all beverages,
29commonly referred to as soft drinks, which are made with or
30without the use of any syrup.

1(2) The term does not include natural fruit or vegetable
2juices or their concentrates, or noncarbonated fruit juice
3drinks containing not less than 25% by volume of natural
4fruit juices or of fruit juice which has been reconstituted
5to its original state, or natural concentrated fruit or
6vegetable juices reconstituted to their original state,
7whether any of the natural juices are frozen or unfrozen,
8sweetened or unsweetened, seasoned with salt or spice or
9unseasoned. The term also does not include coffee, coffee
10substitutes, tea, cocoa, natural fluid milk or noncarbonated
11drinks made from milk derivatives.

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

13(1) Having, maintaining or using within this
14Commonwealth, either directly or through a subsidiary,
15representative or an agent, an office, distribution house,
16sales house, warehouse, service enterprise or other place of
17business; or any agent of general or restricted authority, or
18representative, irrespective of whether the place of
19business, representative or agent is located in this
20Commonwealth, permanently or temporarily, or whether the
21person or subsidiary maintaining the place of business,
22representative or agent is authorized to do business within
23this Commonwealth.

<-24(1.1) Providing taxable services.

25(2) Engaging in any activity as a business within this
26Commonwealth by any person, either directly or through a
27subsidiary, representative or an agent, in connection with
28the lease, sale or delivery of tangible personal property or
29the performance of services thereon for use, storage or
30consumption or in connection with the sale or delivery for

1use of the services described in subclauses (11) through (18)
2of clause (k) of this section, including, but not limited to,
3having, maintaining or using any office, distribution house,
4sales house, warehouse or other place of business, any stock
5of goods or any solicitor, canvasser, salesman,
6representative or agent under its authority, at its direction
7or with its permission, regardless of whether the person or
8subsidiary is authorized to do business in this Commonwealth.

9(3) Regularly or substantially soliciting orders within
10this Commonwealth in connection with the lease, sale or
11delivery of tangible personal property to or the performance
12thereon of services or in connection with the sale or
13delivery of the services described in subclauses (11) through
14(18) of clause (k) of this section for residents of this
15Commonwealth by means of catalogs or other advertising,
16whether the orders are accepted within or without this
17Commonwealth.

18(3.1) Entering this Commonwealth by any person to
19provide assembly, service or repair of tangible personal
20property, either directly or through a subsidiary,
21representative or an agent.

22(3.2) Delivering tangible personal property to locations
23within this Commonwealth if the delivery includes the
24unpacking, positioning, placing or assembling of the tangible
25personal property.

26(3.3) Having any contact within this Commonwealth which
27would allow the Commonwealth to require a person to collect
28and remit tax under the Constitution of the United States.

29(3.4) Providing a customer's mobile telecommunications 
30service deemed to be provided by the customer's home service
 

1provider under the Mobile Telecommunications Sourcing Act (4 
2U.S.C. § 116). For purposes of this clause, words and phrases 
3used in this clause shall have the meanings given to them in 
4the Mobile Telecommunications Sourcing Act.

5(4) The term does not include:

6(i) Owning or leasing of tangible or intangible
7property by a person who has contracted with an
8unaffiliated commercial printer for printing, provided
9that:

10(A) the property is for use by the commercial
11printer; and

12(B) the property is located at the Pennsylvania
13premises of the commercial printer.

14(ii) Visits by a person's employees or agents to the
15premises in this Commonwealth of an unaffiliated
16commercial printer with whom the person has contracted
17for printing in connection with said contract.

<-18(b.1) "Service performed in this Commonwealth."

19A service performed:

20(1) completely in this Commonwealth;

21(2) partially in this Commonwealth and partially outside
22this Commonwealth, when the recipient or user of the service
23is located in this Commonwealth; or

24(3) partially in this Commonwealth and partially outside
25this Commonwealth, when the recipient or user of the service
26is not located in this Commonwealth, but only to the extent
27of those services actually performed in this Commonwealth.

28The place of performance need not be determined if the recipient
29or user of the service is located in this Commonwealth.

30A service performed partially in this Commonwealth and partially

1outside this Commonwealth shall be presumed to have been
2performed completely in this Commonwealth unless the taxpayer
3can show the place of performance by clear and convincing
4evidence. With respect to interstate telecommunications
5services, only services for interstate telecommunications which
6originate or are terminated in this Commonwealth and which are
7billed and charged to a service address in this Commonwealth
8shall be presumed to have been performed completely in this
9Commonwealth and shall be subject to tax.

10(c) "Manufacture." The performance of manufacturing,
11fabricating, compounding, processing or other operations,
12engaged in as a business, which place any tangible personal
13property in a form, composition or character different from that
14in which it is acquired whether for sale or use by the
15manufacturer, and shall include, but not be limited to:

16(1) Every operation commencing with the first production
17stage and ending with the completion of tangible personal
18property having the physical qualities, including packaging,
19if any, passing to the ultimate consumer, which it has when
20transferred by the manufacturer to another. For purposes of
21this definition, "operation" includes clean rooms and their
22component systems, including: environmental control systems,
23antistatic vertical walls and manufacturing platforms and
24floors which are independent of the real estate; process
25piping systems; specialized lighting systems; deionized water
26systems; process vacuum and compressed air systems; process
27and specialty gases; and alarm or warning devices
28specifically designed to warn of threats to the integrity of
29the product or people. For purposes of this definition, a
30"clean room" is a location with a self-contained, sealed

1environment with a controlled, closed air system independent
2from the facility's general environmental control system.

3(2) The publishing of books, newspapers, magazines and
4other periodicals and printing.

5(3) Refining, blasting, exploring, mining and quarrying
6for, or otherwise extracting from the earth or from waste or
7stock piles or from pits or banks any natural resources,
8minerals and mineral aggregates including blast furnace slag.

9(4) Building, rebuilding, repairing and making additions
10to, or replacements in or upon vessels designed for
11commercial use of registered tonnage of 50 tons or more when
12produced on special order of the purchaser, or when rebuilt,
13repaired or enlarged, or when replacements are made upon
14order of or for the account of the owner.

15(5) Research having as its objective the production of a
16new or an improved:

17(i) product or utility service; or

18(ii) method of producing a product or utility
19service,

20but in either case not including market research or research
21having as its objective the improvement of administrative
22efficiency.

23(6) Remanufacture for wholesale distribution by a
24remanufacturer of motor vehicle parts from used parts
25acquired in bulk by the remanufacturer using an assembly line
26process which involves the complete disassembly of such parts
27and integration of the components of such parts with other
28used or new components of parts, including the salvaging,
29recycling or reclaiming of used parts by the remanufacturer.

30(7) Remanufacture or retrofit by a manufacturer or

1remanufacturer of aircraft, armored vehicles, other defense-
2related vehicles having a finished value of at least $50,000.
3Remanufacture or retrofit involves the disassembly of such
4aircraft, vehicles, parts or components, including electric
5or electronic components, the integration of those parts and
6components with other used or new parts or components,
7including the salvaging, recycling or reclaiming of the used
8parts or components and the assembly of the new or used
9aircraft, vehicles, parts or components. <-The term does not 
10include constructing, altering, servicing, repairing or 
11improving real estate or repairing, servicing or installing 
12tangible personal property, nor the cooking, freezing or 
13baking of fruits, vegetables, mushrooms, fish, seafood, 
14meats, poultry or bakery products. For purposes of this
15clause, the following terms or phrases have the following
16meanings:

17(i) "aircraft" means fixed-wing aircraft,
18helicopters, powered aircraft, tilt-rotor or tilt-wing
19aircraft, unmanned aircraft and gliders;

20(ii) "armored vehicles" means tanks, armed personnel
21carriers and all other armed track or semitrack vehicles;
22and

23(iii) "other defense-related vehicles" means trucks,
24truck-tractors, trailers, jeeps and other utility
25vehicles, including any unmanned vehicles.

<-26(8) Remanufacture by a remanufacturer of locomotive
27parts from used parts acquired in bulk by the remanufacturer
28using an assembly line process which involves the complete
29disassembly of such parts and integration of the components
30of such parts with other used or new components of parts,

1including the salvaging, recycling or reclaiming of used
2parts by the remanufacturer.

3The term does not include constructing, altering, servicing,
4repairing or improving real estate or repairing, servicing or
5installing tangible personal property, nor the producing of a
6commercial motion picture, nor the cooking, freezing or baking
7of fruits, vegetables, mushrooms, fish, seafood, meats, poultry
8or bakery products.

9(c.1) "Blasting." The use of any combustible or explosive
10composition in the removal of material resources, minerals and
11mineral aggregates from the earth including the separation of
12the dirt, waste and refuse in which they are found.

13(d) "Processing." The performance of the following
14activities when engaged in as a business enterprise:

15(1) The filtering or heating of honey, the cooking,
16baking or freezing of fruits, vegetables, mushrooms, fish,
17seafood, meats, poultry or bakery products, when the person
18engaged in the business packages the property in sealed
19containers for wholesale distribution.

20(1.1) The processing of fruits or vegetables by
21cleaning, cutting, coring, peeling or chopping and treating
22to preserve, sterilize or purify and substantially extend the
23useful shelf life of the fruits or vegetables, when the
24person engaged in the activity packages the property in
25sealed containers for wholesale distribution.

26(2) The scouring, carbonizing, cording, combing,
27throwing, twisting or winding of natural or synthetic fibers,
28or the spinning, bleaching, dyeing, printing or finishing of
29yarns or fabrics, when the activities are performed prior to
30sale to the ultimate consumer.

1(3) The electroplating, galvanizing, enameling,
2anodizing, coloring, finishing, impregnating or heat treating
3of metals or plastics for sale or in the process of
4manufacturing.

5(3.1) The blanking, shearing, leveling, slitting or
6burning of metals for sale to or use by a manufacturer or
7processor.

8(4) The rolling, drawing or extruding of ferrous and
9nonferrous metals.

10(5) The fabrication for sale of ornamental or structural
11metal or of metal stairs, staircases, gratings, fire escapes
12or railings, not including fabrication work done at the
13construction site.

14(6) The preparation of animal feed or poultry feed for
15sale.

16(7) The production, processing and bottling of
17nonalcoholic beverages for wholesale distribution.

18(8) The operation of a saw mill or planing mill for the
19production of lumber or lumber products for sale. The
20operation of a saw mill or planing mill begins with the
21unloading by the operator of the saw mill or planing mill of
22logs, timber, pulpwood or other forms of wood material to be
23used in the saw mill or planing mill.

24(9) The milling for sale of flour or meal from grains.

25(9.1) The aging, stripping, conditioning, crushing and
26blending of tobacco leaves for use as cigar filler or as
27components of smokeless tobacco products for sale to
28manufacturers of tobacco products.

29(10) The slaughtering and dressing of animals for meat
30to be sold or to be used in preparing meat products for sale,

1and the preparation of meat products including lard, tallow,
2grease, cooking and inedible oils for wholesale distribution.

3(11) The processing of used lubricating oils.

4(12) The broadcasting of radio and television programs
5of licensed commercial or educational stations.

6(13) The cooking or baking of bread, pastries, cakes,
7cookies, muffins and donuts when the person engaged in the
8activity sells the items at retail at locations that do not
9constitute an establishment from which ready-to-eat food and
10beverages are sold. For purposes of this clause, a bakery, a
11pastry shop and a donut shop shall not be considered an
12establishment from which ready-to-eat food and beverages are
13sold.

14(14) The cleaning and roasting and the blending,
15grinding or packaging for sale of coffee from green coffee
16beans or the production of coffee extract.

17(15) The preparation of dry or liquid fertilizer for
18sale.

19(16) The production, processing and packaging of ice for
20wholesale distribution.

21(17) The producing of mobile telecommunications
22services.

<-23(18) The collection, washing, sorting, inspecting and
24packaging of eggs.

25(e) "Person." Any natural person, association, fiduciary,
26partnership, corporation or other entity, including the
27Commonwealth of Pennsylvania, its political subdivisions and
28instrumentalities and public authorities. Whenever used in
29prescribing and imposing a penalty or imposing a fine or
30imprisonment, or both, the term as applied to an association,

1includes the members of the association and, as applied to a
2corporation, the officers of the corporation.

3(f) "Purchase at retail."

4(1) The acquisition for a consideration of the
5ownership, custody or possession of tangible personal
6property other than for resale by the person acquiring the
7same when the acquisition is made for the purpose of
8consumption or use, whether the acquisition is absolute or
9conditional, and by any means it is effected.

10(2) The acquisition of a license to use or consume, and
11the rental or lease of tangible personal property, other than
12for resale regardless of the period of time the lessee has
13possession or custody of the property.

14(3) The obtaining for a consideration of those services
15described in subclauses (2), (3) and (4) of clause (k) of
16this section other than for resale.

17(4) A retention after March 7, 1956, of possession,
18custody or a license to use or consume pursuant to a rental
19contract or other lease arrangement (other than as security)
20other than for resale.

21(5) The obtaining for a consideration of those services
22described in subclauses (11) through (18) of clause (k) of
23this section.

24The term, with respect to liquor and malt or brewed beverages,
25includes the purchase of liquor from any Pennsylvania Liquor
26Store by any person for any purpose, and the purchase of malt or
27brewed beverages from a manufacturer of malt or brewed
28beverages, distributor or importing distributor by any person
29for any purpose, except purchases from a manufacturer of malt or
30brewed beverages by a distributor or importing distributor or

1purchases from an importing distributor by a distributor within
2the meaning of the Liquor Code. The term does not include any
3purchase of malt or brewed beverages from a retail dispenser or
4any purchase of liquor or malt or brewed beverages from a person
5holding a retail liquor license within the meaning of and
6pursuant to the provisions of the Liquor Code, but includes any
7purchase or acquisition of liquor or malt or brewed beverages
8other than pursuant to the provisions of the Liquor Code.

9(g) "Purchase price."

10(1) The total value of anything paid or delivered, or
11promised to be paid or delivered, whether money or otherwise,
12in complete performance of a sale at retail or purchase at
13retail, without any deduction on account of the cost or value
14of the property sold, cost or value of transportation, cost
15or value of labor or service, interest or discount paid or
16allowed after the sale is consummated, any other taxes
17imposed by the Commonwealth or any other expense except that
18there shall be excluded any gratuity or separately stated
19deposit charge for returnable containers.

20(2) The value of any tangible personal property actually
21taken in trade or exchange in lieu of the whole or any part
22of the purchase price shall be deducted from the purchase
23price. For the purpose of this clause, the amount allowed by
24reason of tangible personal property actually taken in trade
25or exchange shall be considered the value of such property.

26(3) (i) In determining the purchase price on the sale
27or use of taxable tangible personal property or a service
28where, because of affiliation of interests between the
29vendor and purchaser, or irrespective of any such
30affiliation, if for any other reason the purchase price

1declared by the vendor or taxpayer on the taxable sale or
2use of such tangible personal property or service is, in
3the opinion of the department, not indicative of the true
4value of the article or service or the fair price
5thereof, the department shall, pursuant to uniform and
6equitable rules, determine the amount of constructive
7purchase price on the basis of which the tax shall be
8computed and levied. The rules shall provide for a
9constructive amount of purchase price for each sale or
10use which would naturally and fairly be charged in an
11arms-length transaction in which the element of common
12interest between the vendor or purchaser is absent or, if
13no common interest exists, any other element causing a
14distortion of the price or value is likewise absent.

15(ii) For the purpose of this clause where a taxable
16sale or purchase at retail transaction occurs between a
17parent and a subsidiary, affiliate or controlled
18corporation of such parent corporation, there shall be a
19rebuttable presumption, that because of the common
20interest, the transaction was not at arms-length.

21(4) Where there is a transfer or retention of possession
22or custody, whether it is termed a rental, lease, service or
23otherwise, of tangible personal property including, but not
24limited to, linens, aprons, motor vehicles, trailers, tires,
25industrial office and construction equipment, and business
26machines the full consideration paid or delivered to the
27vendor or lessor shall be considered the purchase price, even
28though the consideration is separately stated and designated
29as payment for processing, laundering, service, maintenance,
30insurance, repairs, depreciation or otherwise. Where the

1vendor or lessor supplies or provides an employee to operate
2the tangible personal property, the value of the labor
3supplied may be excluded and shall not be considered as part
4of the purchase price if separately stated. There shall also
5be included as part of the purchase price the value of
6anything paid or delivered, or promised to be paid or
7delivered by a lessee, whether money or otherwise, to any
8person other than the vendor or lessor by reason of the
9maintenance, insurance or repair of the tangible personal
10property which a lessee has the possession or custody of
11under a rental contract or lease arrangement.

12(5) (i) With respect to the tax imposed by section
13702(a)(2), on any tangible personal property originally
14purchased by the user of the property six months or
15longer prior to the first taxable use of the property
16within this Commonwealth, the user may elect to pay tax
17on a substituted base determined by considering the
18purchase price of the property for tax purposes to be
19equal to the prevailing market price of similar tangible
20personal property at the time and place of the first use
21within this Commonwealth.

22(ii) The election must be made at the time of filing
23a tax return with the department and reporting the tax
24liability and paying the proper tax due plus all accrued
25penalties and interest, if any, within six months of the
26due date of such report and payment, as provided for by
27section 717(a) and (c).

28(6) The purchase price of employment agency services and
29help supply services shall be the service fee paid by the
30purchaser to the vendor or supplying entity. The term

1"service fee," as used in this subclause, means the total
2charge or fee of the vendor or supplying entity minus the
3costs of the supplied employee which costs are wages,
4salaries, bonuses and commissions, employment benefits,
5expense reimbursements and payroll and withholding taxes, to
6the extent that these costs are specifically itemized or that
7these costs in aggregate are stated in billings from the
8vendor or supplying entity. To the extent that these costs
9are not itemized or stated on the billings, then the service
10fee shall be the total charge or fee of the vendor or
11supplying entity.

12(7) Unless the vendor separately states that portion of
13the billing which applies to premium cable service as defined
14in clause (ll), the total bill for the provision of all cable
15services shall be the purchase price.

16(8) The purchase price of prebuilt housing shall be 60%
17of the manufacturer's selling price, provided that a
18manufacturer of prebuilt housing who precollects tax from a
19prebuilt housing builder at the time of the sale to the
20prebuilt housing builder shall have the option to collect tax
21on 60% of the selling price or on 100% of the actual cost of
22the supplies and materials used in the manufacture of the
23prebuilt housing.

<-24(9) Amounts representing on-the-spot cash discounts,
25employee discounts, volume discounts, store discounts such as
26"buy one, get one free," wholesaler's or trade discounts,
27rebates and store or manufacturer's coupons shall establish a
28new purchase price if both the item and the coupon are
29described on the invoice or cash register tape. An amount
30representing a discount allowed for prompt payment of bills

1which is dependent upon an event occurring after the
2completion of the sale may not be deducted in computing the
3tax. A sale is completed when there is a transfer of
4ownership of the property or services to the purchaser.

5(h) "Purchaser." Any person who acquires, for a
6consideration, the ownership, custody or possession by sale,
7lease or otherwise of tangible personal property, or who obtains
8services in exchange for a purchase price but not including an
9employer who obtains services from his employees in exchange for
10wages or salaries when such services are rendered in the
11ordinary scope of their employment.

12(i) "Resale."

13(1) Any transfer of ownership, custody or possession of
14tangible personal property for a consideration, including the
15grant of a license to use or consume and transactions where
16the possession of the property is transferred but where the
17transferor retains title only as security for payment of the
18selling price whether the transaction is designated as
19bailment lease, conditional sale or otherwise.

20(2) The physical incorporation of tangible personal
21property as an ingredient or constituent into other tangible
22personal property, which is to be sold in the regular course
23of business or the performance of those services described in
24subclauses (2), (3) and (4) of clause (k) upon tangible
25personal property which is to be sold in the regular course
26of business or where the person incorporating the property
27has undertaken at the time of purchase to cause it to be
28transported in interstate commerce to a destination outside
29this Commonwealth. The term includes telecommunications
30services purchased by a cable operator or video programmer

1that are used to transport or deliver cable or video
2programming services which are sold in the regular course of
3business.

4(3) The term also includes tangible personal property
5purchased or having a situs within this Commonwealth solely
6for the purpose of being processed, fabricated or
7manufactured into, attached to or incorporated into tangible
8personal property and thereafter transported outside this
9Commonwealth for use exclusively outside this Commonwealth.

10(4) The term does not include any sale of malt or brewed 
11beverages by a retail dispenser, or any sale of liquor or 
12malt or brewed beverages by a person holding a retail liquor 
13license within the meaning of the act of April 12, 1951 
14(P.L.90, No.21), known as the Liquor Code.

15(5) The physical incorporation of tangible personal
16property as an ingredient or constituent in the construction
17of foundations for machinery or equipment the sale or use of
18which is excluded from tax under the provisions of paragraphs
19(A), (B), (C) and (D) of subclause (8) of clause (k) and
20subparagraphs (i), (ii), (iii) and (iv) of paragraph (B) of
21subclause (4) of clause (o), whether the foundations at the
22time of construction or transfer constitute tangible personal
23property or real estate.

<-24(6) The sale at retail or use of services performed for
25resale in the ordinary course of business of the purchaser or
26user of such services.

27(7) The sale at retail or use of services that are
28otherwise taxable that are an integral, inseparable part of
29the services that are to be sold or used that are taxable.

30(j) "Resident."

1(1) Any natural person:

2(i) who is domiciled in this Commonwealth; or

3(ii) who maintains a permanent place of abode within
4this Commonwealth and spends in the aggregate more than
560 days of the year within this Commonwealth.

6(2) Any corporation:

7(i) incorporated under the laws of this
8Commonwealth;

9(ii) authorized to do business or doing business
10within this Commonwealth; or

11(iii) maintaining a place of business within this
12Commonwealth.

13(3) Any association, fiduciary, partnership or other
14entity:

15(i) domiciled in this Commonwealth;

16(ii) authorized to do business or doing business
17within this Commonwealth; or

18(iii) maintaining a place of business within this
19Commonwealth.

20(k) "Sale at retail."

21(1) Any transfer, for a consideration, of the ownership,
22custody or possession of tangible personal property,
23including the grant of a license to use or consume whether
24the transfer is absolute or conditional and by any means the
25transfer is effected.

26(2) The rendition of the service of printing or
27imprinting of tangible personal property for a consideration
28for persons who furnish, either directly or indirectly, the
29materials used in the printing or imprinting.

30(3) The rendition for a consideration of the service of:

1(i) washing, cleaning, waxing, polishing or
2lubricating of motor vehicles of another, regardless of
3whether any tangible personal property is transferred in
4conjunction with the activity; and

5(ii) inspecting motor vehicles pursuant to the 
6mandatory requirements of 75 Pa.C.S. (relating to 
7vehicles).

8(4) The rendition for a consideration of the service of
9repairing, altering, mending, pressing, fitting, dyeing,
10laundering, drycleaning or cleaning tangible personal
11property other than wearing apparel or shoes, or applying or
12installing tangible personal property as a repair or
13replacement part of other tangible personal property other
14than wearing apparel or shoes for a consideration, regardless
15of whether the services are performed directly or by any
16means other than by coin-operated self-service laundry
17equipment for wearing apparel or household goods and whether
18or not any tangible personal property is transferred in
19conjunction with the activity, except such services as are
20rendered in the construction, reconstruction, remodeling,
21repair or maintenance of real estate.

22(5) (Reserved).

23(6) (Reserved).

24(7) (Reserved).

25(8) Any retention of possession, custody or a license to
26use or consume tangible personal property or any further
27obtaining of services described in subclauses (2), (3) and
28(4) of this clause pursuant to a rental or service contract
29or other arrangement (other than as security). The term does
30not include:

1(i) any transfer of tangible personal property or
2rendition of services for the purpose of resale; or

3(ii) the rendition of services or the transfer of
4tangible personal property, including, but not limited
5to, machinery and equipment and their parts and supplies
6to be used or consumed by the purchaser directly in the
7operations of:

8(A) The manufacture of tangible personal
9property.

10(B) Farming, dairying, agriculture, horticulture 
11or floriculture when engaged in as a business 
12enterprise. The term "farming" includes the 
13propagation and raising of ranch raised fur-bearing 
14animals and the propagation of game birds for 
15commercial purposes by holders of propagation permits 
16issued under 34 Pa.C.S. (relating to game) and the 
17propagation and raising of horses to be used 
18exclusively for commercial racing activities.

19(C) The producing, delivering or rendering of a
20public utility service, or in constructing,
21reconstructing, remodeling, repairing or maintaining
22the facilities which are directly used in producing,
23delivering or rendering the service.

24(D) Processing as defined in clause (d). The 
25exclusions provided in this paragraph or paragraph 
26(A), (B) or (C) do not apply to any vehicle required 
27registered under 75 Pa.C.S. (relating to vehicles), 
28except those vehicles used directly by a public 
29utility engaged in business as a common carrier; to 
30maintenance facilities; or to materials, supplies or
 

1equipment to be used or consumed in the construction, 
2reconstruction, remodeling, repair or maintenance of 
3real estate other than directly used machinery, 
4equipment, parts or foundations that may be affixed 
5to such real estate. The exclusions provided in this 
6paragraph or paragraph (A), (B) or (C) do not apply 
7to tangible personal property or services to be used 
8or consumed in managerial sales or other 
9nonoperational activities, nor to the purchase or use 
10of tangible personal property or services by any 
11person other than the person directly using the same 
12in the operations described in this paragraph or 
13paragraph (A), (B) or (C).

14The exclusion provided in paragraph (C) does not apply to:

15(i) construction materials, supplies or equipment
16used to construct, reconstruct, remodel, repair or
17maintain facilities not used directly by the purchaser in
18the production, delivering or rendition of public utility
19service;

20(ii) construction materials, supplies or equipment
21used to construct, reconstruct, remodel, repair or
22maintain a building, road or similar structure; or

23(iii) tools and equipment used but not installed in
24the maintenance of facilities used directly in the
25production, delivering or rendition of a public utility
<-26service. The exclusions provided in paragraphs (A), (B), 
<-27service.

28The exclusions provided in paragraphs (A), (B), (C) and (D)
29do not apply to the services enumerated in clauses (k)(11)
30through (18) and (w) through (kk), except that the exclusion

1provided in this subclause for farming, dairying and
2agriculture shall apply to the service enumerated in clause
3(z).

4(9) Where tangible personal property or services are
5utilized for purposes constituting a sale at retail and for
6purposes excluded from the definition of "sale at retail," it
7shall be presumed that the tangible personal property or
8services are utilized for purposes constituting a sale at
9retail and subject to tax unless the user proves to the
10department that the predominant purposes for which such
11tangible personal property or services are utilized do not
12constitute a sale at retail.

13(10) The term, with respect to liquor and malt or brewed 
14beverages, includes the sale of liquor by any Pennsylvania 
15liquor store to any person for any purpose, and the sale of 
16malt or brewed beverages by a manufacturer of malt or brewed 
17beverages, distributor or importing distributor to any person 
18for any purpose, except sales by a manufacturer of malt or 
19brewed beverages to a distributor or importing distributor or 
20sales by an importing distributor to a distributor within the 
21meaning of the act of April 12, 1951 (P.L.90, No.21), known 
22as the Liquor Code. The term does not include any sale of 
23malt or brewed beverages by a retail dispenser or any sale of 
24liquor or malt or brewed beverages by a person holding a 
25retail liquor license within the meaning of and pursuant to 
26the provisions of the Liquor Code, but shall include any sale 
27of liquor or malt or brewed beverages other than pursuant to 
28the provisions of the Liquor Code.

29(11) The rendition for a consideration of lobbying
30services.

1(12) The rendition for a consideration of adjustment
2services, collection services or credit reporting services.

3(13) The rendition for a consideration of secretarial or
4editing services.

5(14) The rendition for a consideration of disinfecting
6or pest control services, building maintenance or cleaning
7services.

8(15) The rendition for a consideration of employment
9agency services or help supply services.

10(16) (Reserved).

11(17) The rendition for a consideration of lawn care
12service.

13(18) The rendition for a consideration of self-storage
14service.

15(19) The rendition for a consideration of a mobile
16telecommunications service.

17(20) Except as otherwise provided under section 704, the
18rendition for a consideration of any service <-enumerated in 
19clause (dd) when the primary objective of the purchaser is
20the receipt of any benefit of the service performed, as
21distinguished from the receipt of property. <-The following 
22provisions shall apply:

23(i) In determining what is a service, the intended
24use or stated objective of the contracting parties shall
25not necessarily be controlling.

26(ii) Any service performed in this Commonwealth
27shall be subject to the tax imposed under this chapter
28unless specifically exempted in this chapter.

29(iii) With respect to services performed in this
30Commonwealth for a recipient or user of the services

1located in another state in which the services, had they
2been performed in that state, would not be subject to a
3sales or use tax under the laws of that state, then no
4tax may be imposed under this chapter.

5(iv) The tax on the sale or use of services shall
6become due at the time payment or other consideration is
7made for the portion of services actually paid.

8(l) "Storage." Any keeping or retention of tangible
9personal property within this Commonwealth for any purpose
10including the interim keeping, retaining or exercising any right
11or power over such tangible personal property. This term is in
12no way limited to the provision of self-storage service.

13(m) "Tangible personal property." Corporeal personal
14property including, but not limited to, goods, wares,
15merchandise, steam and natural and manufactured and bottled gas
16for non-residential use, electricity for non-residential use,
17prepaid telecommunications, premium cable or <-premium video
18programming service, spirituous or vinous liquor and malt or
19brewed beverages and soft drinks, interstate telecommunications
20service originating or terminating in this Commonwealth and
21charged to a service address in this Commonwealth, intrastate
22telecommunications service with the exception of:

23(1) Subscriber line charges and basic local telephone
24service for residential use.

25(2) Charges for telephone calls paid for by inserting
26money into a telephone accepting direct deposits of money to
27operate, provided further, the service address of any
28intrastate telecommunications service is deemed to be within
29this Commonwealth or within a political subdivision,
30regardless of how or where billed or paid.

1In the case of any interstate or intrastate telecommunications
2service, any charge paid through a credit or payment mechanism
3which does not relate to a service address, such as a bank,
4travel, credit or debit card, but not including prepaid
5telecommunications, is deemed attributable to the address of
6origination of the telecommunications service.

7(n) "Taxpayer." Any person required to pay or collect the
8tax imposed by this chapter.

9(o) "Use."

10(1) The exercise of any right or power incidental to the
11ownership, custody or possession of tangible personal
12property and includes, but is not limited to, transportation,
13storage or consumption.

14(2) The obtaining by a purchaser of the service of
15printing or imprinting of tangible personal property when the
16purchaser furnishes, either directly or indirectly, the
17articles used in the printing or imprinting.

18(3) The obtaining by a purchaser of the services of:

19(i) washing, cleaning, waxing, polishing or
20lubricating of motor vehicles regardless of whether any
21tangible personal property is transferred to the
22purchaser in conjunction with the services; and

23(ii) inspecting motor vehicles pursuant to the 
24mandatory requirements of 75 Pa.C.S. (relating to 
25vehicles).

26(4) The obtaining by a purchaser of the service of
27repairing, altering, mending, pressing, fitting, dyeing,
28laundering, drycleaning or cleaning tangible personal
29property other than wearing apparel or shoes or applying or
30installing tangible personal property as a repair or

1replacement part of other tangible personal property,
2including, but not limited to, wearing apparel or shoes,
3regardless of whether the services are performed directly or
4by any means other than by means of coin-operated self-
5service laundry equipment for wearing apparel or household
6goods, and regardless of whether any tangible personal
7property is transferred to the purchaser in conjunction with
8the activity<-, therewith, except such services are obtained in 
9the construction, reconstruction, remodeling, repair or 
10maintenance of real estate. The term "use" does not include:

11(A) Any tangible personal property acquired and
12kept, retained or over which power is exercised
13within this Commonwealth on which the taxing of the
14storage, use or other consumption thereof is
15expressly prohibited by the Constitution of the
16United States or which is excluded from tax under
17other provisions of this chapter.

18(B) The use or consumption of tangible personal
19property, including, but not limited to, machinery
20and equipment and parts therefor, and supplies or the
21obtaining of the services described in subclauses
22(2), (3) and (4) of this clause directly in the
23operations of:

24(i) The manufacture of tangible personal property.

25(ii) Farming, dairying, agriculture, horticulture or 
26floriculture when engaged in as a business enterprise. 
27The term includes the propagation and raising of ranch-
28raised furbearing animals and the propagation of game 
29birds for commercial purposes by holders of propagation 
30permits issued under 34 Pa.C.S. (relating to game) and
 

1the propagation and raising of horses to be used 
2exclusively for commercial racing activities.

3(iii) The producing, delivering or rendering of a
4public utility service, or in constructing,
5reconstructing, remodeling, repairing or maintaining the
6facilities which are directly used in producing,
7delivering or rendering such service.

8(iv) Processing as defined in subclause (d).

9The exclusions provided in subparagraphs (i), (ii), (iii) 
10and (iv) do not apply to any vehicle required to be 
11registered under 75 Pa.C.S. (relating to vehicles) except 
12those vehicles directly used by a public utility engaged 
13in the business as a common carrier; to maintenance 
14facilities; or to materials, supplies or equipment to be 
15used or consumed in the construction, reconstruction, 
16remodeling, repair or maintenance of real estate other 
17than directly used machinery, equipment, parts or 
18foundations therefor that may be affixed to such real 
19estate. The exclusions provided in subparagraphs (i), 
20(ii), (iii) and this subparagraph do not apply to 
21tangible personal property or services to be used or 
22consumed in managerial sales or other nonoperational 
23activities, nor to the purchase or use of tangible 
24personal property or services by any person other than 
25the person directly using the same in the operations 
26described in subparagraphs (i), (ii), (iii) and this 
27subparagraph. The exclusion provided in subparagraph 
28(iii) does not apply to:

29(A) construction materials, supplies or
30equipment used to construct, reconstruct, remodel,

1repair or maintain facilities not used directly by
2the purchaser in the production, delivering or
3rendition of public utility service; or

4(B) tools and equipment used but not installed
5in the maintenance of facilities used directly in the
6production, delivering or rendition of a public
7utility service.

8The exclusion provided in subparagraphs (i), (ii), (iii)
9and this subparagraph does not apply to the services
10enumerated in clauses (9) through (16) and (w) through
11(kk), except that the exclusion provided in subparagraph
12(ii) for farming, dairying and agriculture shall apply to
13the service enumerated in clause (z).

14(5) Where tangible personal property or services are
15utilized for purposes constituting a use, and for purposes
16excluded from the definition of "use," it shall be presumed
17that the property or services are utilized for purposes
18constituting a sale at retail and subject to tax unless the
19user proves to the department that the predominant purposes
20for which the property or services are utilized do not
21constitute a sale at retail.

22(6) The term, with respect to liquor and malt or brewed 
23beverages, includes the purchase of liquor from any 
24Pennsylvania Liquor Store by any person for any purpose and 
25the purchase of malt or brewed beverages from a manufacturer 
26of malt or brewed beverages, distributor or importing 
27distributor by any person for any purpose, except purchases 
28from a manufacturer of malt or brewed beverages by a 
29distributor or importing distributor, or purchases from an 
30importing distributor by a distributor within the meaning of
 

1the act of April 12, 1951 (P.L.90, No.21), known as the 
2Liquor Code. The term does not include any purchase of malt 
3or brewed beverages from a retail dispenser or any purchase 
4of liquor or malt or brewed beverages from a person holding a 
5retail liquor license within the meaning of and pursuant to 
6the provisions of the Liquor Code, but includes the exercise 
7of any right or power incidental to the ownership, custody or 
8possession of liquor or malt or brewed beverages obtained by 
9the person exercising the right or power in any manner other 
10than pursuant to the provisions of the Liquor Code.

11(7) The use of tangible personal property purchased at
12retail on which the services described in subclauses (2), (3)
13and (4) of this clause have been performed shall be deemed to
14be a use of said services by the person using the property.

15(8) (Reserved).

16(9) The obtaining by the purchaser of lobbying services.

17(10) The obtaining by the purchaser of adjustment
18services, collection services or credit reporting services.

19(11) The obtaining by the purchaser of secretarial or
20editing services.

21(12) The obtaining by the purchaser of disinfecting or
22pest control services, building maintenance or cleaning
23services.

24(13) The obtaining by the purchaser of employment agency
25services or help supply services.

26(14) (Reserved).

27(15) The obtaining by the purchaser of lawn care
28service.

29(16) The obtaining by the purchaser of self-storage
30service.

1(17) The obtaining by a construction contractor of
2tangible personal property or services provided to tangible
3personal property which will be used pursuant to a
4construction contract regardless of whether the tangible
5personal property or services are transferred.

6(18) The obtaining of mobile telecommunications service
7by a customer.

8(19) Except as otherwise provided under section 704, the
9obtaining by the purchaser of any service<-, not otherwise set 
10forth in this definition, <-enumerated in clause (dd) when the
11primary objective of the purchaser is the receipt of any
12benefit of the service performed, as distinguished from the
13receipt of property. <-The following provisions shall apply:

14(i) In determining what is a service, the intended
15use or stated objective of the contracting parties shall
16not necessarily be controlling.

17(ii) Any service performed in this Commonwealth
18shall be subject to the tax imposed under this chapter
19unless specifically exempted in this chapter.

20(iii) With respect to services performed in this
21Commonwealth for a recipient or user of the services
22located in another state in which the services, had they
23been performed in that state, would not be subject to a
24sales or use tax under the laws of that state, then no
25tax may be imposed under this chapter.

26(iv) The tax on the sale or use of services shall
27become due at the time payment or other consideration is
28made for the portion of services actually paid.

29(p) "Vendor." Any person maintaining a place of business in
30this Commonwealth, selling or leasing tangible personal

1property, or rendering services, the sale or use of which is
2subject to the tax imposed by this chapter but not including any
3employee who in the ordinary scope of employment renders
4services to his employer in exchange for wages and salaries.

5(q) <-(Reserved). "NAICS." The 2012 North American Industry 
6Classification System developed by the Federal Office of 
7Management and Budget and published at 76 Fed. Reg. 159 (Aug. 
817, 2011) or its successor revision.

9(r) "Gratuity." Any amount paid or remitted for services
10performed in conjunction with any sale of food or beverages, or
11hotel or motel accommodations which amount is in excess of the
12charges and the tax for such food, beverages or accommodations
13regardless of the method of billing or payment.

14(s) "Commercial aircraft operator." A person, excluding a
15scheduled airline who engages in any or all of the following:
16charter of aircraft, leasing of aircraft, aircraft sales,
17aircraft rental, flight instruction, air freight or any other
18flight activities for compensation.

19(t) "Transient vendor."

20(1) Any person who:

21(i) brings into this Commonwealth, by automobile,
22truck or other means of transportation, or purchases in
23this Commonwealth tangible personal property the sale or
24use of which is subject to the tax imposed by this
25chapter or comes into this Commonwealth to perform
26services the sale or use of which is subject to the tax
27imposed by this chapter;

28(ii) offers or intends to offer the tangible
29personal property or services for sale at retail within
30this Commonwealth; and

1(iii) does not maintain an established office,
2distribution house, saleshouse, warehouse, service
3enterprise, residence from which business is conducted or
4other place of business within this Commonwealth.

5(2) The term does not include a person who delivers
6tangible personal property within this Commonwealth pursuant
7to orders for the property which were solicited or placed by
8mail or other means.

9(3) The term does not include a person who handcrafts
10items for sale at special events, including, but not limited
11to, fairs, carnivals, art and craft shows and other festivals
12and celebrations within this Commonwealth.

13(u) "Promoter." A person who either, directly or
14indirectly, rents, leases or otherwise operates or grants
15permission to any person to use space at a show for the display
16for sale or for the sale of tangible personal property or
17services subject to tax under section 702.

18(v) "Show." An event, the primary purpose of which involves
19the display or exhibition of any tangible personal property or
20services for sale, including, but not limited to, a flea market,
21antique show, coin show, stamp show, comic book show, hobby
22show, automobile show, fair or any similar show, whether held
23regularly or of a temporary nature, at which more than one
24vendor displays for sale or sells tangible personal property or
25services subject to tax under section 702.

26(w) "Lobbying services." Providing the services of a 
27lobbyist, as defined in the definition of "lobbyist" in 65 
28Pa.C.S. Ch. 13 (relating to lobby regulation and disclosure).

29(x) "Adjustment services, collection services or credit
30reporting services." Providing collection or adjustments of

1accounts receivable or mercantile or consumer credit reporting,
2including, but not limited to, services of the type provided by
3adjustment bureaus or collection agencies, consumer or
4mercantile credit reporting bureaus, credit bureaus or agencies,
5credit clearinghouses or credit investigation services. The term
6does not include providing credit card service with collection
7by a central agency, providing debt counseling or adjustment
8services to individuals or billing or collection services
9provided by local exchange telephone companies.

10(y) "Secretarial or editing services." Providing services
11which include, but are not limited to, editing, letter writing,
12proofreading, resume writing, typing or word processing. The
13term does not include court reporting and stenographic services.

14(z) "Disinfecting or pest control services." Providing
15disinfecting, termite control, insect control, rodent control or
16other pest control services. The term includes, but is not
17limited to, deodorant servicing of rest rooms, washroom
18sanitation service, rest room cleaning service, extermination
19service or fumigating service. As used in this clause, the term
20"fumigating service" does not include the fumigation of
21agricultural commodities or containers used for agricultural
22commodities. As used in this clause, the term "insect control"
23does not include the gypsy moth control spraying of trees which
24are harvested for commercial purposes.

25(aa) "Building maintenance or cleaning services." Providing
26services which include, but are not limited to, janitorial, maid
27or housekeeping service, office or interior building cleaning or
28maintenance service, window cleaning service, floor waxing
29service, lighting maintenance service such as bulb replacement,
30cleaning, chimney cleaning service, acoustical tile cleaning

1service, venetian blind cleaning, cleaning and maintenance of
2telephone booths or cleaning and degreasing of service stations.
3The term does not include: repairs on buildings and other
4structures; the maintenance or repair of boilers, furnaces and
5residential air conditioning equipment or their parts; the
6painting, wallpapering or applying other like coverings to
7interior walls, ceilings or floors; or the exterior painting of
8buildings.

9(bb) "Employment agency services." Providing employment
10services to a prospective employer or employee other than
11employment services provided by theatrical employment agencies
12and motion picture casting bureaus. The term includes, but is
13not limited to, services of the type provided by employment
14agencies, executive placing services and labor contractor
15employment agencies other than farm labor.

16(cc) "Help supply services." Providing temporary or
17continuing help where the help supplied is on the payroll of the
18supplying person or entity, but is under the supervision of the
19individual or business to which help is furnished. The term
20includes, but is not limited to, service of a type provided by
21labor and manpower pools, employee leasing services, office help
22supply services, temporary help services, usher services,
23modeling services or fashion show model supply services. The
24term does not include: providing farm labor services or human
25health-related services, including nursing, home health care and
26personal care. As used in this clause, "personal care" shall
27include providing at least one of the following types of
28assistance to persons with limited ability for self-care:

29(1) dressing, bathing or feeding;

30(2) supervising self-administered medication;

1(3) transferring a person to or from a bed or
2wheelchair; or

3(4) routine housekeeping chores when provided in
4conjunction with and supplied by the same provider of the
5assistance listed in subclause (1), (2) or (3).

6(dd) <-(Reserved). "NAICS taxable services." Any service 
7performed in this Commonwealth as defined in the following 
8subsectors and industries of the revised 2012 NAICS developed by 
9the Federal Office of Management and Budget and published at 76 
10Fed. Reg. 159 (Aug. 17, 2011) or its successor revision:

11481, for intrastate transport of persons

12482, for intrastate transport of persons

13483, for intrastate transport of persons

144851, for intrastate transport of persons

154852, for intrastate transport of persons

164853, for intrastate transport of persons

174855, for intrastate transport of persons

184859, for intrastate transport of persons

19487

2048841

215111

225112

235121

24512131

25512132

26523930

27541

285611

295612

305613

15614

25615

35619

45621

5Nontuition and non-housing-related charges imposed by the
6following industries: 6112, 6113, 6114, 6115 and 6116

76216, 6219, 6231, 6232, 6233, 6239, 6241, 6242, 6243,
8unless provided by a nonprofit organization

96244

107111, unless imposed by industry 611110 or a nonprofit
11corporation or nonprofit incorporated association under the
12laws of this Commonwealth or the United States or any entity
13that is authorized to do business in this Commonwealth as a
14nonprofit corporation or unincorporated association under the
15laws of this Commonwealth, including a youth or athletic,
16volunteer fire, ambulance, religious, charitable, fraternal,
17veterans or civic association or any separately chartered
18auxiliary of the foregoing and operated on a nonprofit basis

197112, unless imposed by industry 611110 or a nonprofit
20corporation or nonprofit incorporated association under the
21laws of this Commonwealth or the United States or any entity
22that is authorized to do business in this Commonwealth as a
23nonprofit corporation or unincorporated association under the
24laws of this Commonwealth, including a youth or athletic,
25volunteer fire, ambulance, religious, charitable, fraternal,
26veterans or civic association or any separately chartered
27auxiliary of the foregoing and operated on a nonprofit basis

287113

297114

30712

17131

27139

37212

47224

58121

68122

78123

88129

9(ee) (Reserved).

10(ff) (Reserved).

11(gg) (Reserved).

12(hh) (Reserved).

13(ii) (Reserved).

14(jj) "Lawn care service." Providing services for lawn
15upkeep, including, but not limited to, fertilizing, lawn mowing,
16shrubbery trimming or other lawn treatment services.

17(kk) "Self-storage service." Providing a building, a room
18in a building or a secured area within a building with separate
19access provided for each purchaser of self-storage service,
20primarily for the purpose of storing personal property. The term
21does not include service involving:

22(1) safe deposit boxes by financial institutions;

23(2) storage in refrigerator or freezer units;

24(3) storage in commercial warehouses;

25(4) facilities for goods distribution; and

26(5) lockers in airports, bus stations, museums and other
27public places.

28(ll) "Cable or video programming service." Cable television
29services, video programming services, community antenna
30television services or any other distribution of television,

1video, audio or radio services which is transmitted with or
2without the use of wires to purchasers.

3If a purchaser receives or agrees to receive cable or video
4programming service, then the following charges are included in
5the purchase price: charges for installation or repair of any
6cable or video programming service, upgrade to include
7additional premium cable or premium video programming service,
8downgrade to exclude all or some premium cable or premium video
9programming service, additional cable outlets in excess of ten
10or any other charge or fee related to cable or video programming
11services. The term does not apply to: transmissions by public
12television, public radio services or official Federal, State or
13local government cable services; local origination programming
14which provides a variety of public service programs unique to
15the community, programming which provides coverage of public
16affairs issues which are presented without commentary or
17analysis, including United States Congressional proceedings, or
18programming which is substantially related to religious
19subjects; or subscriber charges for access to a video dial tone
20system or charges by a common carrier to a video programmer for
21the transport of video programming.

22(mm) (Reserved).

23(nn) "Construction contract." A written or oral contract or
24agreement for the construction, reconstruction, remodeling,
25renovation or repair of real estate or a real estate structure.
26The term shall not apply to services which are taxable under
27clauses (k)(14) and (17) and (o)(12) and (15).

28(oo) "Construction contractor." A person who performs an
29activity pursuant to a construction contract, including a
30subcontractor.

1(pp) "Building machinery and equipment." Generation
2equipment, storage equipment, conditioning equipment,
3distribution equipment and termination equipment, limited to the
4following:

5(1) air conditioning limited to heating, cooling,
6purification, humidification, dehumidification and
7ventilation;

8(2) electrical;

9(3) plumbing;

10(4) communications limited to voice, video, data, sound,
11master clock and noise abatement;

12(5) alarms limited to fire, security and detection;

13(6) control system limited to energy management, traffic
14and parking lot and building access;

15(7) medical system limited to diagnosis and treatment
16equipment, medical gas, nurse call and doctor paging;

17(8) laboratory system;

18(9) cathodic protection system; or

19(10) furniture, cabinetry and kitchen equipment.

20The term includes boilers, chillers, air cleaners, humidifiers,
21fans, switchgear, pumps, telephones, speakers, horns, motion
22detectors, dampers, actuators, grills, registers, traffic
23signals, sensors, card access devices, guardrails, medial
24devices, floor troughs and grates and laundry equipment,
25together with integral coverings and enclosures, regardless of
26whether: the item constitutes a fixture or is otherwise affixed
27to the real estate; damage would be done to the item or its
28surroundings on removal; or the item is physically located
29within a real estate structure. The term does not include
30guardrail posts, pipes, fittings, pipe supports and hangers,

1valves, underground tanks, wire, conduit, receptacle and
2junction boxes, insulation, ductwork and coverings.

3(qq) "Real estate structure." A structure or item purchased
4by a construction contractor pursuant to a construction contract
5with:

6(1) a charitable organization, a volunteer firemen's 
7organization, a nonprofit educational institution or a 
8religious organization for religious purposes and which 
9qualifies as an institution of purely public charity under 
10the act of November 26, 1997 (P.L.508, No.55), known as the 
11Institutions of Purely Public Charity Act;

12(2) the United States; or

13(3) the Commonwealth, its instrumentalities or political
14subdivisions.

15The term includes building machinery and equipment; developed or
16undeveloped land; streets; roads; highways; parking lots;
17stadiums and stadium seating; recreational courts; sidewalks;
18foundations; structural supports; walls; floors; ceilings;
19roofs; doors; canopies; millwork; elevators; windows and
20external window coverings; outdoor advertising boards or signs;
21airport runways; bridges; dams; dikes; traffic control devices,
22including traffic signs; satellite dishes; antennas; guardrail
23posts; pipes; fittings; pipe supports and hangers; valves;
24underground tanks; wire; conduit; receptacle and junction boxes;
25insulation; ductwork and coverings; and any structure or item
26similar to any of the foregoing, regardless of whether the
27structure or item constitutes a fixture or is affixed to the
28real estate; or damage would be done to the structure or item or
29its surroundings on removal.

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

1or any two-way, interactive transmission of sounds, signals or
2other intelligence converted to like form which effects or is
3intended to effect meaningful communications by electronic or
4electromagnetic means via wire, cable, satellite, light waves,
5microwaves, radio waves or other transmission media. The term
6includes all types of telecommunication transmissions, local,
7toll, wide-area or any other type of telephone service; private
8line service; telegraph service; radio repeater service;
9wireless communication service; personal communications system
10service; cellular telecommunication service; specialized mobile
11radio service; stationary two-way radio service; and paging
12service. The term does not include any of the following:

13(1) Subscriber charges for access to a video dial tone
14system.

15(2) Charges to video programmers for the transport of
16video programming.

17(3) Charges for access to the Internet. Access to the
18Internet does not include any of the following:

19(i) The transport over the Internet or any
20proprietary network using the Internet protocol of
21telephone calls, facsimile transmissions or other
22telecommunications traffic to or from end users on the
23public switched telephone network if the signal sent from
24or received by an end user is not in an Internet
25protocol.

26(ii) Telecommunication services purchased by an
27Internet service provider to deliver access to the
28Internet to its customers.

29(4) Mobile telecommunications services.

30(ss) "Internet." The international nonproprietary computer

1network of both Federal and non-Federal interoperable packet
2switched data networks.

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

4(1) Thoroughbred and harness racing at which pari-mutuel 
5wagering is conducted under the act of December 17, 1981 
6(P.L.435, No.135), known as the Race Horse Industry Reform 
7Act.

8(2) Fair racing sanctioned by the State Harness Racing
9Commission.

10(uu) "Prepaid telecommunications." A tangible item
11containing a prepaid authorization number that can be used
12solely to obtain telecommunications service, including any
13renewal or increases in the prepaid amount.

14(vv) "Prebuilt housing." Either of the following:

15(1) Manufactured housing, including mobile homes, which 
16bears a label as required by and referred to in the act of 
17November 17, 1982 (P.L.676, No.192), known as the 
18Manufactured Housing Construction and Safety Standards 
19Authorization Act.

20(2) Industrialized housing as defined in the act of May 
2111, 1972 (P.L.286, No.70), known as the Industrialized 
22Housing Act.

23(ww) "Used prebuilt housing." Prebuilt housing that was
24previously subject to a sale to a prebuilt housing purchaser.

25(xx) "Prebuilt housing builder." A person who makes a
26prebuilt housing sale to a prebuilt housing purchaser.

27(yy) "Prebuilt housing sale." A sale of prebuilt housing to
28a prebuilt housing purchaser, including a sale to a landlord,
29without regard to whether the person making the sale is
30responsible for installing the prebuilt housing or whether the

1prebuilt housing becomes a real estate structure upon
2installation. Temporary installation by a prebuilt housing
3builder for display purposes of a unit held for resale shall not
4be considered occupancy for residential purposes.

5(zz) "Prebuilt housing purchaser." A person who purchases
6prebuilt housing in a transaction and who intends to occupy the
7unit for residential purposes in this Commonwealth.

8(aaa) "Mobile telecommunications service." Mobile 
9telecommunications service as that term is defined in the Mobile 
10Telecommunications Sourcing Act (Public Law 106-252, 4 U.S.C. § 
11116 et seq.).

12(bbb) "Fiscal Code." The act of April 9, 1929 (P.L.343, 
13No.176), known as The Fiscal Code.

14(ccc) "Prepaid mobile telecommunications service." Mobile
15telecommunications service which is paid for in advance and
16which enables the origination of calls using an access number,
17authorization code or both, regardless of whether manually or
18electronically dialed, if the remaining amount of units of the
19prepaid mobile telecommunications service is known by the
20service provider of the prepaid mobile telecommunications
21service on a continuous basis. The term does not include the
22advance purchase of mobile telecommunications service if the
23purchase is pursuant to a service contract between the service
24provider and customer and if the service contract requires the
25customer to make periodic payments to maintain the mobile
26telecommunications service.

27(ddd) <-"Call center." The physical location in this 
28Commonwealth:

29(1) where at least 150 employees are employed to
30initiate or answer telephone calls;

1(2) where there are at least 200 telephone lines; and

2(3) which utilizes an automated call distribution system
3for customer telephone calls in one or more of the following
4activities:

5(i) customer service and support;

6(ii) technical assistance;

7(iii) help desk service;

8(iv) providing information;

9(v) conducting surveys;

10(vi) revenue collections; or

11(vii) receiving orders or reservations.

12For purposes of this clause, a physical location may include 
13multiple buildings utilized by a taxpayer located within this 
14Commonwealth <-(Reserved).

15(eee) "Dental services." The general and usual services 
16rendered and care administered by doctors of dental medicine or 
17doctors of dental surgery, as defined in the act of May 1, 1933 
18(P.L.216, No.76), known as The Dental Law.

19(fff) "Physician services." The general and usual services 
20rendered and care administered by medical doctors, as defined in 
21the act of December 20, 1985 (P.L.457, No.112), known as the 
22Medical Practice Act of 1985, or doctors of osteopathy, as 
23defined in the act of October 5, 1978 (P.L.1109, No.261), known 
24as the Osteopathic Medical Practice Act.

25(ggg) "Clothing." All vesture, wearing apparel, raiments,
26garments, footwear and other articles of clothing, including
27clothing patterns and items that are to be a component part of
28clothing, worn or carried on or about the human body including,
29but not limited to, all accessories, ornamental wear, formal day
30or evening apparel and articles made of fur on the hide or pelt

1or any material imitative of fur and articles of which such fur,
2real, imitation or synthetic, is the component material of chief
3value<-, but only if such value is more than three times the value 
4of the next most valuable component material, and sporting goods
5and clothing not normally used or worn when not engaged in
6sports.

7(hhh) "Food and beverages." All food and beverages for
8human consumption.<-, including, but not limited to:

9(1) Soft drinks.

10(2) Malt and brewed beverages and spiritous and vinous
11liquors.

12(3) Food or beverages, whether sold for consumption on
13or off the premises of on a take-out or to go basis or
14delivered to the purchaser or consumer, when purchased:

15(i) from persons engaged in the business of
16catering; or

17(ii) from persons engaged in the business of
18operating establishments from which ready-to-eat food and
19beverages are sold, including, but not limited to,
20restaurants, cafes, lunch counters, private and social
21clubs, taverns, dining cars, hotels, night clubs, fast
22food operations, pizzerias, fairs, carnivals, lunch
23carts, ice cream stands, snack bars, cafeterias, employee
24cafeterias, theaters, stadiums, arenas, amusement parks,
25carryout shops, coffee shops and other establishments
26whether mobile or immobile.

27For purposes of this clause, a bakery, a pastry shop, a donut
28shop, a delicatessen, a grocery store, a supermarket, a farmer's
29market, a convenience store or a vending machine shall not be
30considered an establishment from which food or beverages ready

1to eat are sold except for the sale of meals, sandwiches, food
2from salad bars, hand-dipped or hand-served ice-based products
3including ice cream and yogurt, hot soup, hot pizza and other
4hot food items, brewed coffee and hot beverages. For purposes of
5this subclause, beverages shall not include malt and brewed
6beverages and spiritous and vinous liquors but shall include
7soft drinks.

8SUBCHAPTER B

9SALES AND USE TAX

10Section 702. Imposition of tax.

11(a) Tax on certain sales at retail and uses of tangible
12personal property and services.--

13(1) There is hereby imposed on each separate sale at
14retail of tangible personal property or services in this
15Commonwealth a tax of 7% of the purchase price, which tax
16shall be collected by the vendor from the purchaser, and
17shall be paid over to the Commonwealth as provided in this
18chapter.

19(2) There is hereby imposed on the use in this
20Commonwealth of tangible personal property purchased at
21retail and on those services purchased at retail a tax of 7%
22of the purchase price, which tax shall be paid to the
23Commonwealth by the person who makes such use as provided
24under this chapter, except that the tax shall not be paid to
25the Commonwealth by the person where the person has paid the
26tax imposed by paragraph (1) or has paid the tax imposed by
27this subsection to the vendor with respect to the use.

28(b) <-(Reserved). General sourcing rules.--

29(1) All sales of products shall be sourced according to
30this subsection by sellers obligated to collect sales and use

1tax under this chapter. The sourcing rules described in this
2subsection apply to sales of tangible personal property,
3digital goods and all services other than telecommunications
4services. This subsection only applies to determine a
5seller's obligation to pay or collect and remit a sales or
6use tax with respect to the seller's sale of a product. This
7subsection does not affect the obligation of a purchaser or
8lessee to remit tax on the use of the product to the taxing
9jurisdictions in which the use occurs. A seller's obligation
10to collect sales tax or use tax under this chapter only
11occurs if the sale is sourced to this State. Whether sales
12tax to a sale source to the Commonwealth shall be determined
13based on the location at which the sale is consummated by
14delivery or, in the case of a service, where the first use of
15the service occurs.

16(2) Sales, excluding leases or rental, of products shall
17be sourced as follows:

18(i) When the product is received by the purchaser at
19a business location of the seller, the sale is sourced to
20that business location.

21(ii) When the product is not received by the
22purchaser at a business location of the seller, the sale
23is sourced to the location where receipt by the purchaser
24or the purchaser's donee, designated such by the
25purchaser, occurs, including the location indicated by
26instructions for delivery to the purchaser or donee,
27known to the seller.

28(iii) When subparagraphs (i) and (ii) do not apply,
29the sale is sourced to the location indicated by an
30address for the purchaser that is available from the

1business records of the seller that are maintained in the
2ordinary course of the seller's business when use of this
3address does not constitute bad faith.

4(iv) When subparagraphs (i), (ii) and (iii) do not
5apply, the sale is sourced to the location indicated by
6an address for the purchaser obtained during the
7consummation of the sale, including the address of a
8purchaser's payment instrument, if no other address is
9available, when use of this address does not constitute
10bad faith.

11(v) When subparagraphs (i), (ii), (iii) and (iv) do
12not apply, including the circumstance where the seller is
13without sufficient information to apply the previous
14rules, when the location will be determined by the
15address from which tangible personal property was
16shipped, from which the digital good or the computer
17software delivered electronically was first available for
18transmission by the seller or from which the service was
19provided disregarding for these purposes any location
20that merely provided the digital transfer of the product
21sold.

22(c) Telecommunications service.--

23(1) Notwithstanding any other provisions of this
24chapter, the tax with respect to telecommunications service
25within the meaning of "tangible personal property" in section
26701 shall be computed at the rate of 7% on the total amount
27charged to customers for the services, irrespective of
28whether such charge is based on a flat rate or on a message
29unit charge.

30(2) A telecommunications service provider shall have no

1responsibility or liability to the Commonwealth for billing,
2collecting or remitting taxes that apply to services,
3products or other commerce sold over telecommunications lines
4by third-party vendors.

5(3) To prevent actual multistate taxation of interstate
6telecommunications service, any taxpayer, on proof that the
7taxpayer has paid a similar tax to another state on the same
8interstate telecommunications service, shall be allowed a
9credit against the tax imposed by this section on the same
10interstate telecommunications service to the extent of the
11amount of the tax properly due and paid to the other state.

<-12(4) With respect to interstate telecommunications
13services, only services for interstate telecommunications
14which originate or are terminated in this Commonwealth and
15which are billed and charged to a service address in this
16Commonwealth shall be presumed to have been performed
17completely in this Commonwealth and shall be subject to tax
18under this chapter.

19(d) Coin-operated vending machines.--Notwithstanding any
20other provisions of this chapter, the sale or use of food and
21beverages dispensed by means of coin-operated vending machines
22shall be taxed at the rate of 7% of the receipts collected from
23any coin-operated vending machine which dispenses food and
24beverages <-that were previously taxable.

25(e) Prepaid telecommunications.--

26(1) Notwithstanding any provisions of this chapter, the
27sale or use of prepaid telecommunications evidenced by the
28transfer of tangible personal property shall be subject to
29the tax imposed by subsection (a).

30(2) The sale or use of prepaid telecommunications not

1evidenced by the transfer of tangible personal property shall
2be subject to the tax imposed by subsection (a) and shall be
3deemed to occur at the purchaser's billing address.

4(3) (i) Notwithstanding paragraph (2), the sale or use
5of prepaid telecommunications service not evidenced by
6the transfer of tangible personal property shall be taxed
7at the rate of 7% of the receipts collected on each sale
8if the service provider elects to collect the tax imposed
9by this chapter on receipts of each sale.

10(ii) The service provider shall notify the
11department of its election and shall collect the tax on
12receipts of each sale until the service provider notifies
13the department otherwise.

14(e.1) Prepaid mobile telecommunications service.--

15(1) Notwithstanding any other provision of this chapter,
16the sale or use of prepaid mobile telecommunications service
17evidenced by the transfer of tangible personal property shall
18be subject to the tax imposed by subsection (a).

19(2) The sale or use of prepaid mobile telecommunications
20service not evidenced by the transfer of tangible personal
21property shall be subject to the tax imposed by subsection
22(a) and shall be deemed to occur at the purchaser's billing
23address or the location associated with the mobile telephone
24number or the point of sale, whichever is applicable.

25(3) (i) Notwithstanding paragraph (2), the sale or use
26of prepaid mobile telecommunications service not
27evidenced by the transfer of tangible personal property
28shall be taxed at the rate of 7% of the receipts
29collected on each sale if the service provider elects to
30collect the tax imposed by this chapter on receipts of

1each sale.

2(ii) The service provider shall notify the
3department of its election and shall collect the tax on
4receipts of each sale until the service provider notifies
5the department otherwise.

6(f) Prebuilt housing.--

7(1) Notwithstanding any other provision of this chapter,
8tax with respect to sales of prebuilt housing shall be
9imposed on the prebuilt housing builder at the time of the
10prebuilt housing sale within this Commonwealth and shall be
11paid and reported by the prebuilt housing builder to the
12department in the time and manner provided in this chapter.

13(2) A manufacturer of prebuilt housing may, at its
14option, precollect the tax from the prebuilt housing builder
15at the time of sale to the prebuilt housing builder.

16(3) In any case where prebuilt housing is purchased and
17the tax is not paid by the prebuilt housing builder or
18precollected by the manufacturer, the prebuilt housing
19purchaser shall remit tax directly to the department if the
20prebuilt housing is used in this Commonwealth without regard
21to whether the prebuilt housing becomes a real estate
22structure.

23(g) Home service providers.--

24(1) Notwithstanding any other provisions of this chapter 
25and in accordance with the Mobile Telecommunications Sourcing 
26Act (Public Law 106-252, 4 U.S.C. § 116 et seq.), the sale or 
27use of mobile telecommunications services which are deemed to 
28be provided to a customer by a home service provider under 4 
29U.S.C. § 117 (relating to sourcing rules) shall be subject to 
30the tax of 7% of the purchase price, which tax shall be
 

1collected by the home service provider from the customer, and 
2shall be paid over to the Commonwealth as provided in this 
3chapter if the customer's place of primary use is located 
4within this Commonwealth, regardless of where the mobile 
5telecommunications services originate, terminate or pass 
6through.

7(2) For purposes of this subsection, words and phrases
8used in this subsection shall have the same meanings given to
9them in the Mobile Telecommunications Sourcing Act.

10Section 703. Computation of tax.

<-11(a) Table to be published.--Within 60 days of the effective
12date of this section, the department shall prepare and publish
13as a notice in the Pennsylvania Bulletin a table setting forth
14the amount of tax imposed under section 702 for purchase prices
15that are less than $1.

<-16(a) General rule.--The amount of tax imposed by section 702
17shall be computed as follows:

18(1) If the purchase price is 7¢ or less, no tax shall be
19collected.

20(2) If the purchase price is 8¢ or more but less than
2122¢, 1¢ shall be collected.

22(3) If the purchase price is 22¢ or more but less than
2336¢, 2¢ shall be collected.

24(4) If the purchase price is 36¢ or more but less than
2550¢, 3¢ shall be collected.

26(5) If the purchase price is 50¢ or more but less than
2765¢, 4¢ shall be collected.

28(6) If the purchase price is 65¢ or more but less than
2979¢, 5¢ shall be collected.

30(7) If the purchase price is 79¢ or more but less than

193¢, 6¢ shall be collected.

2(8) If the purchase price is 93¢ or more but less than
3$1.07, seven percent of each dollar of purchase price plus
4the above tax bracket charges upon any fractional part of a
5dollar in excess of even dollars shall be collected.

6(b) Deposit into Education Stabilization Fund.--The tax
7collected under section 702 shall be deposited into the
8Education Stabilization Fund.

9SUBCHAPTER C

10EXCLUSIONS FROM SALES AND USE TAX

11Section 704. Exclusions from tax.

12The tax imposed by section 702 shall not be imposed upon any
13of the following:

14(1) The sale at retail or use of tangible personal
15property (other than motor vehicles, trailers, semi-trailers,
16motor boats, aircraft or other similar tangible personal
17property required under either Federal law or laws of this
18Commonwealth to be registered or licensed) or services sold
19by or purchased from a person not a vendor in an isolated
20transaction or sold by or purchased from a person who is a
21vendor but is not a vendor with respect to the tangible
22personal property or services sold or purchased in such
23transaction, provided that inventory and stock in trade so
24sold or purchased shall not be excluded from the tax by the
25provisions of this subsection.

26(2) The use of tangible personal property purchased by a
27nonresident person outside of, and brought into this
28Commonwealth for use therein for a period not to exceed seven
29days, or for any period of time when such nonresident is a
30tourist or vacationer and, in either case not consumed within

1the Commonwealth.

2(3) (i) The use of tangible personal property purchased
3outside this Commonwealth for use outside this
4Commonwealth by a then nonresident natural person or a
5business entity not actually doing business within this
6Commonwealth, who later brings the tangible personal
7property into this Commonwealth in connection with the
8person's or entity's establishment of a permanent
9business or residence in this Commonwealth, provided that
10the property was purchased more than six months prior to
11the date it was first brought into this Commonwealth or
12prior to the establishment of the business or residence,
13whichever first occurs.

14(ii) This paragraph shall not apply to tangible
15personal property temporarily brought into this
16Commonwealth for the performance of contracts for the
17construction, reconstruction, remodeling, repairing and
18maintenance of real estate.

19(4) (Reserved).

20(5) The sale at retail or use of steam, natural and
21manufactured and bottled gas, fuel oil or electricity when
22purchased directly by the user solely for the user's own
23residential use.

24(6) (Reserved).

25(7) (Reserved).

26(8) (Reserved).

27(9) (Reserved).

28(10) (i) The sale at retail to or use by any charitable
29organization, volunteer firefighters' organization or
30nonprofit educational institution or a religious

1organization for religious purposes of tangible personal
2property or services other than pursuant to a
3construction contract.

4(ii) This paragraph shall not apply with respect to
5any tangible personal property or services used in any
6unrelated trade or business carried on by the
7organization or institution or with respect to any
8materials, supplies and equipment used and transferred to
9the organization or institution in the construction,
10reconstruction, remodeling, renovation, repairs and
11maintenance of any real estate structure, other than
12building machinery and equipment, except materials and
13supplies when purchased by the organization or
14institution for routine maintenance and repairs.

15(11) The sale at retail, or use of gasoline and other 
16motor fuels, the sales of which are otherwise subject to 
17excise taxes under 75 Pa.C.S. Ch. 90 (relating to liquid 
18fuels and fuels tax).

19(12) (i) The sale at retail to, or use by the United
20States, this Commonwealth or its instrumentalities or
21political subdivisions, nonpublic schools, charter
22schools, cyber charter schools or vocational schools of
23tangible personal property or services.

24(ii) This paragraph includes the sale at retail to a
25supervisor of a home education program of tangible
26personal property or services used exclusively for the
27home education program.

28(iii) As used in this paragraph, the terms
29"nonpublic school," "charter school," "cyber charter
30school," "vocational school," "supervisor" and "home

1education program" shall have the meanings given to them
2in the Public School Code of 1949.

3(13) The sale at retail, or use of wrapping paper,
4wrapping twine, bags, cartons, tape, rope, labels,
5nonreturnable containers and all other wrapping supplies,
6when such use is incidental to the delivery of any personal
7property, except that any charge for wrapping or packaging
8shall be subject to tax at the rate imposed by section 702.

9(14) Sale at retail or use of vessels designed for
10commercial use of registered tonnage of 50 tons or more when
11produced by the builders thereof upon special order of the
12purchaser.

13(15) Sale at retail of tangible personal property or
14services used or consumed in building, rebuilding, repairing
15and making additions to or replacements in and upon vessels
16designed for commercial use of registered tonnage of 50 tons
17or more upon special order of the purchaser, or when rebuilt,
18repaired or enlarged, or when replacements are made upon
19order of or for the account of the owner.

20(16) The sale at retail or use of tangible personal
21property or services to be used or consumed for ship cleaning
22or maintenance or as fuel, supplies, ships' equipment, ships'
23stores or sea stores on vessels designed for commercial use
24of registered tonnage of 50 tons or more to be operated
25principally outside the limits of this Commonwealth.

26(17) The sale at retail or use of prescription
27medicines, drugs or medical supplies, crutches and
28wheelchairs for the use of persons with disabilities and
29invalids, artificial limbs, artificial eyes and artificial
30hearing devices when designed to be worn on the person of the

1purchaser or user, false teeth and materials used by a
2dentist in dental treatment, eyeglasses when especially
3designed or prescribed by an ophthalmologist, oculist or
4optometrist for the personal use of the owner or purchaser
5and artificial braces and supports designed solely for the
6use of persons with disabilities or any other therapeutic,
7prosthetic or artificial device designed for the use of a
8particular individual to correct or alleviate a physical
9incapacity, including, but not limited to, hospital beds,
10iron lungs and kidney machines.

11(18) The sale at retail or use of coal.

12(19) (Reserved).

13(20) (Reserved).

14(21) (Reserved).

15(22) (Reserved).

16(23) (Reserved).

17(24) The sale at retail or use of motor vehicles,
18trailers and semitrailers, or bodies attached to the chassis
19thereof, sold to a nonresident of this Commonwealth to be
20used outside this Commonwealth and which are registered in a
21state other than this Commonwealth within 20 days after
22delivery to the vendee.

23(25) The sale at retail or use of water.

<-24(26) The sale at retail or use of all vesture, wearing
25apparel, raiments, garments, footwear and other articles of
26clothing with a purchase price of less than $50, including
27clothing patterns and items that are to be a component part
28of clothing, worn or carried on or about the human body but
29all accessories, ornamental wear, formal day or evening
30apparel and articles made of fur on the hide or pelt or any

1material imitative of fur and articles of which such fur,
2real, imitation or synthetic, is the component material of
3chief value, but only if such value is more than three times
4the value of the next most valuable component material, and
5sporting goods and clothing not normally used or worn when
6not engaged in sports shall not be excluded from the tax.

<-7(26) The sale at retail or use of clothing as defined in
8section 701.1(ggg) with a purchase price of less than $50.

9(27) (Reserved).

10(28) (Reserved).

11(29) The sale at retail or use of food and beverages
<-12that are federally approved items authorized for the Women,
13Infants and Children Program under section 17 of the Child
14Nutrition Act of 1966 (Public Law 89-642, 42 U.S.C. § 1786) 
<-15as administered by the Department of Health.

<-16(30) (i) The sale at retail or use of any printed or
17other form of advertising materials regardless of where
18or by whom the advertising material was produced.

19(ii) This paragraph shall not include the sale at
20retail or use of mail order catalogs and direct mail
21advertising literature or materials, including electoral
22literature or materials, such as envelopes, address
23labels and a one-time license to use a list of names and
24mailing addresses for each delivery of direct mail
25advertising literature or materials, including electoral
26literature or materials, through the United States Postal
27Service.

<-28(30) Meals and student fees imposed by educational
29institutions as described in NAICS industry 611110.

30(31) (Reserved).

1(32) (Reserved).

2(33) (Reserved).

3(34) (Reserved).

4(35) (Reserved).

5(36) The sale at retail or use of rail transportation
6equipment used in the movement of personalty.

7(37) (Reserved).

8(38) (Reserved).

9(39) The sale at retail or use of fish feed purchased by
10or on behalf of sportsmen's clubs, fish cooperatives or
11nurseries approved by the Pennsylvania Fish Commission.

12(40) The sale at retail of supplies and materials to
13tourist promotion agencies, which receive grants from the
14Commonwealth, for distribution to the public as promotional
15material or the use of such supplies and materials by said
16agencies for said purposes.

17(41) (Reserved).

18(42) The sale or use of brook trout (salvelinus
19fontinalis), brown trout (Salmo trutta) or rainbow trout
20(Salmo gairdneri).

21(43) The sale at retail or use of buses to be used
22exclusively for the transportation of children for school
23purposes.

24(44) The sale at retail or use of firewood. <-For the 
25purpose of this paragraph, firewood shall mean the product of 
26trees when severed from the land and cut into proper lengths 
27for burning and pellets made from pure wood sawdust if used 
28for fuel for cooking, hot water production or to heat 
29residential dwellings.

30(45) (Reserved).

1(46) The sale at retail or use of tangible personal 
2property purchased in accordance with the Food Stamp Act of 
31977, as amended (Public Law 95-113, 7 U.S.C. §§ 2011-2029).

4(47) (Reserved).

5(48) (Reserved).

6(49) (i) The sale at retail or use of food and
7beverages by nonprofit associations which support sports
8programs.

9(ii) The following words and phrases when used in
10this paragraph shall have the meanings given to them in
11this subparagraph unless the context clearly indicates
12otherwise:

13"Nonprofit association." An entity which is
14organized as a nonprofit corporation or nonprofit
15unincorporated association under the laws of this
16Commonwealth or the United States or any entity which is
17authorized to do business in this Commonwealth as a
18nonprofit corporation or unincorporated association under
19the laws of this Commonwealth, including, but not limited
20to, youth or athletic associations, volunteer fire,
21ambulance, religious, charitable, fraternal, veterans,
22civic, or any separately chartered auxiliary of the
23foregoing, if organized and operated on a nonprofit
24basis.

25"Sports program." Baseball, softball, football, 
26basketball, soccer and any other competitive sport 
27formally recognized as a sport by the United States 
28Olympic Committee as specified by and under the 
29jurisdiction of the Amateur Sports Act of 1978 (Public 
30Law 95-606, 36 U.S.C. Ch. 2205), the Amateur Athletic
 

1Union or the National Collegiate Athletic Association. 
2The term shall be limited to a program or that portion of 
3a program that is organized for recreational purposes and 
4whose activities are substantially for such purposes and 
5which is primarily for participants who are 18 years of 
6age or younger or whose 19th birthday occurs during the 
7year of participation or the competitive season, 
8whichever is longer. There shall, however, be no age 
9limitation for programs operated for persons with 
10physical handicaps or persons with mental retardation.

11"Support." The funds raised from sales are used to
12pay the expenses of a sports program or the nonprofit
13association sells the food and beverages at a location
14where a sports program is being conducted under this
15chapter or the Tax Reform Code of 1971.

16(50) (Reserved).

17(51) The sale at retail or use of interior office
18building cleaning services but only as relates to the costs
19of the supplied employee, which costs are wages, salaries,
20bonuses and commissions, employment benefits, expense
21reimbursements and payroll and withholding taxes, to the
22extent that these costs are specifically itemized or that
23these costs in aggregate are stated in billings from the
24vendor or supplying entity.

25(52) (Reserved).

26(53) (Reserved).

27(54) (Reserved).

28(55) (Reserved).

29(56) The sale at retail or use of tangible personal
30property or services used, transferred or consumed in

1installing or repairing equipment or devices designed to
2assist persons in ascending or descending a stairway when:

3(i) The equipment or devices are used by a person
4who, by virtue of a physical disability, is unable to
5ascend or descend stairs without the aid of such
6equipment or device.

7(ii) The equipment or device is installed or used in
8the person's place of residence.

9(iii) A physician has certified the physical
10disability of the person in whose residence the equipment
11or device is installed or used.

12(57) The sale at retail to or use by a construction
13contractor of building machinery and equipment and services
14thereto that are:

15(i) transferred pursuant to a construction contract
16for any charitable organization, volunteer firemen's
17organization, nonprofit educational institution or
18religious organization for religious purposes, provided
19that the building machinery and equipment and services
20thereto are not used in any unrelated trade or business;
21or

22(ii) transferred to the United States or the
23Commonwealth or its instrumentalities or political
24subdivisions.

25(58) (Reserved).

26(59) The sale at retail or use of molds and related mold
27equipment used directly and predominantly in the manufacture
28of products, regardless of whether the person that holds
29title to the equipment manufactures a product.

30(60) (Reserved).

1(61) (Reserved).

2(62) The sale at retail or use of tangible personal
3property or services which are directly used in farming,
4dairying or agriculture when engaged in as a business
5enterprise, regardless of whether the sale is made to the
6person directly engaged in the business enterprise or to a
7person contracting with the person directly engaged in the
8business enterprise for the production of food.

9(63) (Reserved).

10(64) The sale at retail to or use by a construction
11contractor, employed by a public school district pursuant to
12a construction contract, of any materials and building
13supplies which, during construction or reconstruction, are
14made part of any public school building utilized for
15instructional classroom education within this Commonwealth,
16if the construction or reconstruction:

17(i) is necessitated by a disaster emergency, as 
18defined in 35 Pa.C.S. § 7102 (relating to definitions); 
19and

20(ii) takes place during the period when there is a 
21declaration of disaster emergency under 35 Pa.C.S. § 
227301(c) (relating to general authority of Governor).

23(65) (Reserved).

24(66) The sale at retail or use of copies of an official
25document sold by a government agency or a court. For the
26purposes of this paragraph, the following terms or phrases
27shall have the following meanings:

28(i) "court" includes:

29(A) an appellate court as defined in 42 Pa.C.S.
30§ 102 (relating to definitions);

1(B) A court of common pleas as defined in 42
2Pa.C.S. § 102; or

3(C) the minor judiciary as defined in 42 Pa.C.S.
4§ 102;

5(ii) "government agency" means an agency as defined
6in section 102 of the act of February 14, 2008 (P.L.6,
7No.3), known as the Right-to-Know Law; and

8(iii) "official document" means a record as defined
9in section 102 of the Right-to-Know Law. The term shall
10include notes of court testimony, deposition transcripts,
11driving records, accident reports, birth and death
12certificates, deeds, divorce decrees and other similar
13documents.

14(67) The sale at retail or use of repair or replacement
15parts, including the installation of those parts, exclusively
16for use in helicopters and similar rotorcraft or in
17overhauling or rebuilding of helicopters and similar
18rotorcraft or helicopters and similar rotorcraft components.

19(68) The sale at retail or use of helicopters and
20similar rotorcraft.

21(69) The sale at retail or use of <-goods or services that 
22are part of a Medicare Part B transaction. <-aircraft parts, 
23services to aircraft and aircraft components. For purposes of 
24this paragraph, the term "aircraft" shall include a fixed-
25wing aircraft, powered aircraft, powered aircraft, tilt-rotor 
26or tilt-wing aircraft, glider or unmanned aircraft.

27(70) <-The sale at retail or use of transportation of 
28persons provided or funded by the Federal, State or local 
29government (<-Reserved).

30(71) The sale at retail <-of insurance premiums or use of
 

1tuition.

<-2(72) The sale at retail, between an owner of real
3property and a financial institution, of a mortgage.

4(73) An investment or gain on an investment, including,
5but not limited to, bank deposits, stocks and bonds,
6including any commissions, maintenance costs and other
7charges, which commissions, maintenance costs and other
8charges related to the making of such investment or a gain
9thereon.

10(74) The rental of real property.

11(75) The sale at retail of tuition.

12(76) The sale at retail of any of the following

<-13(72) But for the services as defined in section 
14701.1(w), (x), (y), (z), (aa), (bb), (cc), (jj) and (kk), the 
15sale at retail or use of any of the following business,
16professional or technical services performed by a business
17and rendered to another business:

18(i) Legal services <-as defined by NAICS industry 
195411.

20(ii) Architectural, engineering and related services 
21as define<-d by NAICS industry 5413.

22(iii) Accounting, auditing and bookkeeping services 
<-23as defined by NAICS industry 5412.

24(iv) Specialized design services <-as defined by NAICS 
25industry 5414.

26(v) Advertising, public relations and related
27services <-as defined by NAICS industry 5418.

28(vi) Services to <-building and dwellings buildings 
29and dwellings as defined by NAICS industry 5617.

30(vii) Scientific, environmental and technical

1consulting services <-as defined by NAICS industry 5416.

2(viii) Scientific research and development services 
<-3as defined by NAICS industries 5417 and 5419.

4(ix) Information services <-as defined by NAICS 
5subsector 519.

6(x) Administrative services <-as defined by NAICS 
7industries 5611, 5612, 5613, 5614, 5615 and 5619.

8(xi) Custom programming, design and data processing
9services <-as defined by NAICS industry 5415.

10(xii) Parking lot and garage services <-as defined by 
11NAICS industry 8129.

<-12(77) The sale at retail of legal services relating to
13domestic relations matters or criminal matters.

14(78) The sale at retail of services rendered as part of
15a transfer of an interest in real property.

16(79) The sale at retail to or use by a person of legal
17services rendered by an attorney where the payment is made
18pursuant to a contingency fee based upon a percentage of the
19amount recovered with respect to a legal claim or dispute.

20(80) The sale at retail to or use by a person of the
21services rendered by or under the supervision of a licensed
22real estate broker, associate broker or salesperson in
23connection with any aspect of the sale, lease or acquisition
24of any interest in real property.

<-25(73) The sale at retail or use of legal services
26relating to family law or criminal law.

<-27(81) (74) The sale at retail, or the use of motion
28picture film rented or licensed from a distributor for the
29purpose of commercial exhibition.

<-30(82) (75) The sale at retail or use of services

1performed by minors under 18 years of age and not on behalf
2of another person.

<-3(83) The sale at retail or use of services performed by
4any person to the extent that the recipient or user of such
5services receives those services free of charge.

6(84)(<-76) The sale at retail or use of services provided
7by employees to their employers in exchange for wages and
8salaries when such services are rendered in the ordinary
9course of employment.

<-10(85) The sale at retail or use of services performed for
11resale in the ordinary course of business of the purchaser or
12user of such services.

13(86) The sale at retail or use of services that are
14otherwise taxable that are an integral, inseparable part of
15the services that are to be sold or used and that are
16taxable.

17(87) (Reserved).

18(88) The sale at retail of medical goods or services by 
19a hospital, as defined in the act of December 20, 1985 
20(P.L.457, No.112), known as the Medical Practice Act of 1985.

21(89) The sale at retail of medical or dental services,
22including charges for office visits.

<-23(77) The sale at retail or use of goods or services that
24are part of a Medicare Part B transaction.

25Section 705. Alternate imposition of tax.

26(a) General rule.--If any person actively and principally
27engaged in the business of selling new or used motor vehicles,
28trailers or semitrailers, and registered with the department in
29the "dealer's class," acquires a motor vehicle, trailer or
30semitrailer for the purpose of resale, and prior to such resale,

1uses the motor vehicle, trailer or semitrailer for a taxable use
2under this chapter or the Tax Reform Code of 1971, the person
3may pay a tax equal to 7% of the fair rental value of the motor
4vehicle, trailer or semitrailer during use.

5(b) Aircraft.--A commercial aircraft operator who acquires
6an aircraft for the purpose of resale, or lease, or is entitled
7to claim another valid exemption at the time of purchase, and
8subsequent to the purchase, periodically uses the same aircraft
9for a taxable use under this chapter or the Tax Reform Code of
101971, may elect to pay a tax equal to 7% of the fair rental
11value of the aircraft during such use.

12(c) Applicability.--This section shall not apply to the use
13of a vehicle as a wrecker, parts truck, delivery truck or
14courtesy car.

15Section 706. Credit against tax.

16(a) Tax paid to another state.--

17(1) A credit against the tax imposed by section 702
18shall be granted with respect to tangible personal property
19or services purchased for use outside the Commonwealth equal
20to the tax paid to another state by reason of the imposition
21by <-the such other state of a tax similar to the tax imposed
22by this chapter.

23(2) No credit under paragraph (1) shall be granted
24unless the other state grants substantially similar tax
25relief by reason of the payment of tax under this chapter or
26under the Tax Reform Code of 1971.

<-27(b) Telecommunications services.--A credit against the tax
28imposed by section 702 on telecommunications services shall be
29granted to a call center for gross receipts tax paid by a
30telephone company on the receipts derived from the sale of

1incoming and outgoing interstate telecommunications services to
2the call center under section 1101(a)(2) of the Tax Reform Code
3of 1971. The following apply:

4(1) A telephone company, on request, shall notify a call
5center of the amount of gross receipts tax paid by the
6telephone company on the receipts derived from the sale of
7incoming and outgoing interstate telecommunications services
8to the call center.

9(2) A call center that is eligible for the credit in
10this subsection may apply for a tax credit as set forth in
11this subsection.

12(3) By February 15, a taxpayer must submit an
13application to the department for gross receipts tax paid on
14the receipts derived from the sale of incoming and outgoing
15interstate telecommunications services incurred in the prior
16calendar year.

17(4) By April 15 of the calendar year following the close
18of the calendar year during which the gross receipts tax was
19incurred, the department shall notify the applicant of the
20amount of the applicant's tax credit approved by the
21department.

22(5) The total amount of tax credits provided for in this
23subsection and approved by the department shall not exceed
24$30,000,000 in any fiscal year. If the total amount of tax
25credits applied for by all applicants exceeds the amount
26allocated for those credits, then the credit to be received
27by each applicant shall be determined as follows:

28(i) Divide:

29(A) the tax credit applied for by the applicant;
30by

1(B) the total of all tax credits applied for by
2all applicants.

3(ii) Multiply:

4(A) the quotient under subparagraph (i); by

5(B) the amount allocated for all tax credits.

<-6(b) (Reserved).

7SUBCHAPTER D

8LICENSES

9Section 708. Licenses.

10(a) Duty to obtain license.--Every person maintaining a
11place of business in this Commonwealth, selling or leasing
12services or tangible personal property, the sale or use of which
13is subject to tax and who has not obtained a license from the
14department, shall, prior to the beginning of business, make
15application to the department, on a form prescribed by the
16department, for a license. If such person maintains more than
17one place of business in this Commonwealth, the license shall be
18issued for the principal place of business in this Commonwealth.

19(b) Criteria for issuance of license.--

20(1) The department shall, after the receipt of an
21application, issue the license applied for under subsection
22(a) if the applicant filed all required State tax reports and
23paid any State taxes not subject to a timely perfected
24administrative or judicial appeal or subject to a duly
25authorized deferred payment plan. The license shall be
26nonassignable.

27(2) All licenses in effect on the effective date of this
28section under former Article III of the Tax Reform Code of
291971 and all licenses issued or renewed on or after the
30effective date of this section shall be valid for a period of

1five years.

2(b.1) Refusal of license.--

3(1) If an applicant for a license or any person holding
4a license has not filed all required State tax reports and
5paid any State taxes not subject to a timely perfected
6administrative or judicial appeal or subject to a duly
7authorized deferred payment plan, the department may refuse
8to issue, may suspend or may revoke said license.

9(2) The department shall notify the applicant or
10licensee of any refusal, suspension or revocation. The notice
11shall contain a statement that the refusal, suspension or
12revocation may be made public. The notice shall be made by
13first class mail.

14(3) An applicant or licensee aggrieved by the
15determination of the department may file an appeal pursuant
16to the provisions for administrative appeals in this chapter<-, 
17except that the appeal must be filed within 30 days of the 
18date of the notice. In the case of a suspension or revocation
19which is appealed, the license shall remain valid pending a
20final outcome of the appeals process.

21(4) Notwithstanding section 774 or sections 353(f),
22408(b), 603, 702, 802, 904 and 1102 of the Tax Reform Code of
231971, or any other provision of law to the contrary, if no
24appeal is taken or if an appeal is taken and denied at the
25conclusion of the appeal process, the department may
26disclose, by publication or otherwise, the identity of a
27person and the fact that the person's license has been
28refused, suspended or revoked under this subsection.
29Disclosure may include the basis for refusal, suspension or
30revocation.

1(c) Penalties.--

2(1) A person that maintains a place of business in this
3Commonwealth for the purpose of selling or leasing services
4or tangible personal property, the sale or use of which is
5subject to tax, without having <-first been licensed by the 
6department <-a valid license at the time of the sale or lease
7shall be guilty of a summary offense and, upon conviction
8thereof, be sentenced to pay a fine of not less than $300 nor
9more than $1,500 and, in default thereof, a term of
10imprisonment of not less than five days nor more than 30
11days.

12(2) The penalties imposed by this subsection shall be in
13addition to any other penalties imposed by this chapter.

14(3) For purposes of this subsection, the offering for
15sale or lease of any service or tangible personal property,
16the sale or use of which is subject to tax, during any
17calendar day shall constitute a separate violation.

18(4) The secretary may designate employees of the
19department to enforce the provisions of this subsection. The
20employees shall exhibit proof of and be within the scope of
21the designation when instituting proceedings as provided by
22the Pennsylvania Rules of Criminal Procedure.

23(d) Effect of failure to obtain license.--Failure of any
24person to obtain a license shall not relieve that person of
25liability to pay the tax imposed by this chapter.

26SUBCHAPTER E

27HOTEL OCCUPANCY TAX

28Section 709. Definitions.

29(a) General rule.--The following words and phrases when used
30in this subchapter shall have the meanings given to them in this

1section unless the context clearly indicates otherwise:

2"Hotel." A building or buildings in which the public may,
3for a consideration, obtain sleeping accommodations. The term
4does not include any charitable, educational or religious
5institution summer camp for children, hospital or nursing home.

6"Occupancy." The use or possession or the right to the use or
7possession by any person, other than a permanent resident, of
8any room or rooms in a hotel for any purpose or the right to the
9use or possession of the furnishings or to the services and
10accommodations accompanying the use and possession of the room
11or rooms.

12"Occupant." A person, other than a permanent resident, who,
13for a consideration, uses, possesses or has a right to use or
14possess any room or rooms in a hotel under any lease,
15concession, permit, right of access, license or agreement.

16"Operator." Any person who operates a hotel.

17"Permanent resident." Any occupant who has occupied or has
18the right to occupancy of any room or rooms in a hotel for at
19least 30 consecutive days.

20"Rent." The consideration received for occupancy valued in
21money, whether received in money or otherwise, including all
22receipts, cash, credits and property or services of any kind or
23nature, and also any amount for which the occupant is liable for
24the occupancy without any deduction. The term "rent" shall not
25include a gratuity.

26(b) Other definitions.--The following words and phrases,
27when used in Subchapters D and F, shall, in addition to the
28meaning ascribed to them by section 701, have the meaning
29ascribed to them in this subsection, except where the context
30clearly indicates a different meaning:

1"Maintaining a place of business in this Commonwealth."
2Being the operator of a hotel in this Commonwealth.

3"Purchase at retail." Occupancy.

4"Purchase price." Rent.

5"Purchaser." Occupant.

6"Sale at retail." The providing of occupancy to an occupant
7by an operator.

8"Services." Occupancy.

9"Tangible personal property." Occupancy.

10"Use." Occupancy.

11"Vendor." Operator.

12Section 710. Imposition of tax.

13There is hereby imposed an excise tax of 7% of the rent on
14every occupancy of a room or rooms in a hotel in this
15Commonwealth, which tax shall be collected by the operator from
16the occupant and paid over to the Commonwealth as provided in
17this <-chapter and deposited into the Education Stabilization Fund 
18ac<-t.

19Section 711. Seasonal tax returns.

20Notwithstanding any other provisions in this chapter or the
21Tax Reform Code of 1971, the department may, by regulation,
22waive the requirement for the filing of quarterly returns in the
23case of any operator whose hotel is operated only during certain
24seasons of the year, and may provide for the filing of returns
25by such persons at times other than those provided by section
26721.

27SUBCHAPTER F

28PROCEDURE AND ADMINISTRATION

29Section 715. Persons required to make returns.

30Every person required to pay tax to the department or collect

1and remit tax to the department shall file returns with respect
2to the tax.

3Section 716. Form of returns.

4The returns required by section 715 shall be on forms
5prescribed by the department and shall show such information
6with respect to the taxes imposed by this chapter as the
7department may reasonably require.

8Section 717. Time for filing returns.

<-9(a) Monthly reporting.--A return shall be filed monthly with
10respect to each month by every licensee whose total tax reported
11or, in the event no report is filed, the total tax which should
12have been reported, for the third calendar quarter of the
13preceding year equals or exceeds $600. The returns shall be
14filed on or before the 20th day of the next succeeding month
15with respect to which the return is made. Any licensee required
16to file monthly returns under this chapter shall be relieved
17from filing quarterly returns.

<-18(a) Quarterly and monthly returns.--

19(1) For the year in which this chapter becomes
20effective, and in each year thereafter, a return shall be
21filed quarterly by every licensee on or before the 20th day
22of April, July, October and January for the three months
23ending the last day of March, June, September and December.

24(2) For the year in which this chapter becomes
25effective, and in each year thereafter, a return shall be
26filed monthly with respect to each month by every licensee
27whose actual tax liability for the third calendar quarter of
28the preceding year equals or exceeds $600 and is less than
29$25,000. Such returns shall be filed on or before the 20th
30day of the next succeeding month with respect to which the

1return is made. Any licensee required to file monthly returns
2under this act shall be relieved from filing quarterly
3returns.

4(3) With respect to every licensee whose actual tax
5liability for the third calendar quarter of the preceding
6year equals or exceeds $25,000 and is less than $100,000, the
7licensee shall, on or before the 20th day of each month, file
8a single return consisting of all of the following:

9(i) Either of the following:

10(A) An amount equal to 50% of the licensee's
11actual tax liability for the same month in the
12preceding calendar year if the licensee was a monthly
13filer or, if the licensee was a quarterly or
14semiannual filer, 50% of the licensee's average
15actual tax liability for that tax period in the
16preceding calendar year. The average actual tax
17liability shall be the actual tax liability for the
18tax period divided by the number of months in that
19tax period. For licensees that were not in business
20during the same month in the preceding calendar year
21or were in business for only a portion of that month,
22the amount shall be 50% of the average actual tax
23liability for each tax period the licensee has been
24in business. If the licensee is filing a tax
25liability for the first time with no preceding tax
26periods, the amount shall be zero.

27(B) An amount equal to or greater than 50% of
28the licensee's actual tax liability for the same
29month.

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

1preceding month, less any amounts paid in the preceding
2month as required by subparagraph (i).

3(4) With respect to each month by every licensee whose
4actual tax liability for the third calendar quarter of the
5preceding year equals or exceeds $100,000, the licensee
6shall, on or before the 20th day of each month, file a single
7return consisting of the amounts under paragraph (3)(i)(A)
8and (ii).

9(5) The amount due under paragraph (3)(i) or (4) shall
10be due the same day as the remainder of the preceding month's
11tax.

12(6) The department shall determine whether the amounts
13reported under paragraph (3) or (4) shall be remitted as one
14combined payment or as two separate payments.

15(7) The department may require the filing of the returns
16and the payments for these types of filers by electronic
17means approved by the department.

18(8) Any licensee filing returns under paragraph (3) or
19(4) shall be relieved of filing quarterly returns.

20(9) If a licensee required to remit payments under
21paragraph (3) or (4) fails to make a timely payment or makes
22a payment which is less than the required amount, the
23department may, in addition to any applicable penalties,
24impose an additional penalty equal to 5% of the amount due
25under paragraph (3) or (4) which was not timely paid. The
26penalty under this paragraph shall be determined when the tax
27return is filed for the tax period.

28(b) Annual <-reporting returns.--No annual return shall be
29filed, except as may be required by rules and regulations of the
30department promulgated and published at least 60 days prior to

1the end of the year with respect to which the returns are made.
2Where such annual returns are required, licensees shall not be
3required to file such returns prior to the 20th day of the year
4succeeding the year with respect to which the returns are made.

5(c) <-Persons other than licensees Other returns.--Any person,
6other than a licensee, liable to pay to the department any tax
7under this chapter, shall file a return on or before the 20th
8day of the month succeeding the month in which the person
9becomes liable for the tax.

10(d) <-Waivers Small taxpayers.--The department, by regulation,
11may waive the requirement for the filing of quarterly return in
12the case of any licensee whose individual tax collections do not
13exceed $75 per calendar quarter and may provide for reporting on
14a less frequent basis in such cases.

15Section 718. Extension of time for filing returns.

16The department may, on written application and for good cause
17shown, grant a reasonable extension of time for filing any
18return required under this subchapter. However, the time for
19making a return shall not be extended for more than three
20months.

21Section 719. Place for filing returns.

22Returns shall be filed with the department at its main office
23or at any branch office which it may designate for filing
24returns.

25Section 720. Timely mailing treated as timely filing and
26payment.

27(a) General rule.--Notwithstanding the provisions of any
28State tax law to the contrary, whenever a report or payment of
29all or any portion of a State tax is required by law to be
30received by the department or other agency of the Commonwealth

1on or before a day certain, the taxpayer shall be deemed to have
2complied with the law if the letter transmitting the report or
3payment of the tax which has been received by the department is
4postmarked by the United States Postal Service on or prior to
5the final day on which the payment is to be received.

6(b) Presentation of receipt.--For the purposes of this
7chapter, presentation of a receipt indicating that the report or
8payment was mailed by registered or certified mail on or before
9the due date shall be evidence of timely filing and payment.

10Section 721. Payment of tax.

11When a return of tax is required under this subchapter, the
12person required to make the return shall pay the tax to the
13department.

14Section 722. Time of payment.

15(a) General rule.--The tax imposed by this chapter and
16incurred or collected by a licensee shall be due and payable by
17the licensee on the day the return is required to be filed under
18the provisions of section 717 and the payment must accompany the
19return for the preceding period.

20(b) <-Other Annual payments.--If the amount of tax due for the
21preceding year as shown by the annual return of a taxpayer is
22greater than the amount already paid by the taxpayer in
23connection with the taxpayer's monthly or quarterly returns, the
24taxpayer shall send with the annual return a remittance for the
25unpaid amount of tax for the year.

26(c) <-Persons other than licensees Other payments.--Any person
27other than a licensee liable to pay any tax under this chapter
28shall remit the tax at the time of filing the return required by
29this chapter.

30Section 723. Other times for payment.

1In the event that the department authorizes a taxpayer to
2file a return at other times than those specified in section
3717, the tax due shall be paid at the time the return is filed.

4Section 724. Place for payment.

5The tax imposed by this chapter shall be paid to the
6department at the place fixed for filing the return.

7Section 725. Tax held in trust for Commonwealth.

8(a) General rule.--All taxes collected by any person from
9purchasers in accordance with this chapter and all taxes
10collected by any person from purchasers under color of this
11chapter which have not been properly refunded by the person to
12the purchaser shall constitute a trust fund for the
13Commonwealth, and such trust shall be enforceable against such
14person, the person's representatives and any person, other than
15a purchaser to whom a refund has been made properly, receiving
16any part of the fund without consideration, or knowing that the
17taxpayer is committing a breach of trust.

18(b) Presumption.--Any person receiving payment of a lawful
19obligation of the taxpayer from the fund identified under
20subsection (a) shall be presumed to have received the same in
21good faith and without any knowledge of the breach of trust.

22(c) Right to petition and appeal.--Any person, other than a
23taxpayer, against whom the department makes any claim under this
24section shall have the same right to petition and appeal as is
25given taxpayers by any provisions of this subchapter.

<-26Section 726. Local receivers of use tax.

27(a) General rule.--In every county, except counties of the
28first class, the county treasurer shall receive use tax due and
29payable under this chapter from any person other than a
30licensee. The receiving of the taxes shall be pursuant to rules

1and regulations promulgated by the department and on forms
2furnished by the department.

3(b) Deduction for administrative costs.--Each county
4treasurer shall remit to the department all use taxes received
5under the authority of this section minus the costs of
6administering this section not to exceed 1% of the amount of use
7taxes received, which amount shall be retained in lieu of any
8commission otherwise allowable by law for the collection of the
9tax.

<-10Section 726. (Reserved).

11Section 727. Discount.

12(a) General rule.--Subject to the provisions of subsection
13(b), if a return is filed by a licensee and the tax shown to be
14due thereon less any discount is paid all within the time
15prescribed, the licensee shall be entitled to credit and apply
16against the tax payable by the licensee a discount of 1% of the
17amount of the tax collected by the licensee, as compensation for
18the expense of collecting and remitting the tax due by the
19licensee and as consideration of the prompt payment.

20(b) Types of periodic filers.--For returns filed on or after
21the effective date of this section, the discount under
22subsection (a) shall be limited to the following:

23(1) For a monthly filer, $25 per return.

24(2) For a quarterly filer, $75 per return.

25(3) For a semiannual filer, $150 per return.

26Section 728. (Reserved).

27Section 729. (Reserved).

28Section 730. Assessment.

29The department shall make the inquiries, determinations and
30assessments of the tax, including interest, additions and

1penalties, imposed by this chapter. A notice of assessment and
2demand for payment shall be mailed <-by certified mail to the
3taxpayer. The notice shall set forth the basis of the
4assessment.

5Section 731. Mode and time of assessment.

6(a) Duty to examine.--

7(1) Within a reasonable time after any return is filed,
8the department shall examine it and, if the return shows a
9greater tax due or collected than the amount of tax remitted
10with the return, the department shall issue an assessment for
11the difference, together with an addition of 3% of the
12difference, which shall be paid to the department within ten
13days after a notice of the assessment has been mailed to the
14taxpayer.

15(2) If such assessment is not paid within ten days,
16there shall be added and paid to the department an additional
173% of the difference for each month during which the
18assessment remains unpaid. The total of all additions shall
19not exceed 18% of the difference shown on the assessment.

20(b) <-Underestimated Understated tax on returns.--

21(1) If the department determines that any return or
22returns of any taxpayer understates the amount of tax due, it
23shall determine the proper amount and shall ascertain the
24difference between the amount of tax shown in the return and
25the amount determined. The difference may be referred to as
26the deficiency.

27(2) The department shall send a notice of assessment for
28the deficiency and the reasons to the taxpayer.

29(3) The taxpayer shall pay the deficiency to the
30department within 30 days after a notice of the assessment

1has been mailed to the taxpayer.

2(c) Estimated assessments.--

3(1) In the event that any taxpayer fails to file a
4return required by this chapter, the department may make an
5estimated assessment, based on information available, of the
6proper amount of tax owed by the taxpayer and shall send a
7notice of assessment in the estimated amount to the taxpayer.

8(2) The taxpayer shall pay the tax within 30 days after
9a notice of the estimated assessment has been mailed to the
10taxpayer.

11(d) Studies.--

12(1) The department may conduct the studies necessary to
13compute effective rates by business classification, based
14upon the ratio between the tax required to be collected and
15taxable sales and to use such rates in arriving at the
16apparent tax liability of a taxpayer.

17(2) Any assessment based on such rates shall be prima
18facie correct, except that the rate shall not be considered
19where a taxpayer establishes the rate is based on a sample
20inapplicable to the taxpayer.

21Section 732. Reassessment.

22Any taxpayer against whom an assessment is made may petition
23the department for a reassessment under Article XXVII of the Tax
24Reform Code of 1971.

<-25Section 733. (Reserved).

26Section 734. Review by Board of Finance and Revenue.

27(a) Procedure.--

28(1) Within 60 days after the date of mailing of notice
29by the department of the decision on any petition for
30reassessment filed with it, the person against whom the

1assessment was made may, by petition, request the Board of
2Finance and Revenue to review the decision.

3(2) The failure of the department to notify the
4petitioner of a decision within the time provided by section
5732 shall act as a denial of such petition, and a petition
6for review may be filed with the Board of Finance and Revenue
7within 120 days of the date prior to which the department
8should have mailed to the petitioner its notice of decision.

9(b) Contents of petition for review.--Each petition for
10review filed under this section shall state specifically the
11reasons on which the petitioner relies, or shall incorporate by
12reference the petition for reassessment in which the reasons are
13stated. The petition shall be supported by affidavit that it is
14not made for the purpose of delay and that the facts set forth
15in the petition are true.

16(c) Action by board.--

17(1) The Board of Finance and Revenue shall act finally
18in disposing of petitions filed with it within six months
19after they have been received.

20(2) In the event of the failure of the board to dispose
21of any petition within six months, the action taken by the
22department, upon the petition for reassessment, shall be
23sustained.

24(3) The Board of Finance and Revenue may sustain the
25action taken by the department on the petition for
26reassessment, or it may reassess the tax due on such basis as
27it deems according to law.

28(4) The board shall give notice of its action to the
29department and to the petitioner.

<-30Section 733. Assessment to recover erroneous refunds.

1The department may, within two years of the granting of any
2refund or credit, or within the period in which an assessment
3could have been filed by the department with respect to the
4transaction pertaining to which the refund was granted,
5whichever period shall last occur, file an assessment to recover
6any refund or part thereof or credit or part thereof which was
7erroneously made or allowed.

8Section 734. (Reserved).

9Section 735. (Reserved).

10Section 736. Burden of proof.

11In all cases of petitions for reassessment, review or appeal,
12the burden of proof shall be on the petitioner or appellant, as
13applicable.

14Section 737. Collection of tax.

15(a) General rule.--The department shall collect the tax in
16the manner provided by law for the collection of taxes imposed
17by the laws of this Commonwealth.

18(b) Collection by persons maintaining a place of business in
19the Commonwealth.--

20(1) Every person maintaining a place of business in this
21Commonwealth and selling or leasing tangible personal
22property or services, the sale or use of which is subject to
23tax shall collect the tax from the purchaser or lessee at the
24time of making the sale or lease, and shall remit the tax to
25the department, unless the collection and remittance is
26otherwise provided for in this chapter.

27(2) (i) Every person not otherwise required to collect
28tax that delivers tangible personal property to a
29location within this Commonwealth and that unpacks,
30positions, places or assembles the tangible personal

1property shall collect the tax from the purchaser at the
2time of delivery and shall remit the tax to the
3department if the person delivering the tangible personal
4property is responsible for collecting any portion of the
5purchase price of the tangible personal property
6delivered and the purchaser has not provided the person
7with proof that the tax imposed by this chapter has been
8or will be collected by the seller or that the purchaser
9provided the seller with a valid exemption certificate.

10(ii) Every person required to collect tax under this
11paragraph shall be deemed to be selling or leasing
12tangible personal property or services, the sale or use
13of which is subject to the tax imposed under section 702.

14(3) Any person required under this chapter to collect
15tax from another person, who shall fail to collect the proper
16amount of the tax, shall be liable for the full amount of the
17tax which the person should have collected.

18(c) Certificate for tax-exempt sales or leases.--

19(1) If the tax does not apply to the sale or lease of
20tangible personal property or services, the purchaser or
21lessee shall furnish to the vendor a certificate indicating
22that the sale is not legally subject to the tax. The
23certificate shall be in substantially such form as the
24department may, by regulation, prescribe.

25(2) Where the tangible personal property or service is
26of a type which is never subject to the tax imposed or where
27the sale or lease <-of tangible personal property is in
28interstate commerce, the certificate need not be furnished.

29(3) Where a series of transactions are not subject to
30tax, a purchaser or user may furnish the vendor with a single

1exemption certificate in substantially such form and valid
2for such period of time as the department may, by regulation,
3prescribe.

4(4) The department shall provide all school districts
5and intermediate units with a permanent tax exemption number.

6(5) An exemption certificate, which is complete and
7regular and on its face discloses a valid basis of exemption
8if taken in good faith, shall relieve the vendor from the
9liability imposed by this section.

10(6) An exemption certificate:

11(i) accepted by a vendor from a natural person
12domiciled within this Commonwealth or any association,
13fiduciary, partnership, corporation or other entity,
14either authorized to do business within this Commonwealth
15or having an established place of business within this
16Commonwealth, in the ordinary course of the vendor's
17business;

18(ii) which on its face discloses a valid basis of
19exemption consistent with the activity of the purchaser
20and character of the property or service being purchased
21or which is provided to the vendor by a charitable,
22religious, educational or volunteer firefighters'
23organization;

24(iii) contains the organization's charitable
25exemption number; and

26(iv) which, in the case of any purchase costing $200
27or more, is accompanied by a sworn declaration on a form
28to be provided by the department of an intended usage of
29the property or service which would render it nontaxable,

30shall be presumed to be taken in good faith and the burden of

1proving otherwise shall be on the department.

2(d) <-Waivers Direct payment permits.--

3(1) The department may authorize a purchaser or lessee
4who acquires tangible personal property or services under
5circumstances which make it impossible at the time of
6acquisition to determine the manner in which the tangible
7personal property or service will be used, to pay the tax
8directly to the department, and waive the collection of the
9tax by the vendor.

10(2) No such authority shall be granted or exercised,
11except on application to the department, and the issuance by
12the department, in its discretion, of a direct payment
13permit.

14(3) If a direct payment permit is granted, its use shall
15be subject to conditions specified by the department, and the
16payment of tax on all acquisitions pursuant to the permit
17shall be made directly to the department by the permit
18holder.

19Section 738. Collection of tax on motor vehicles, trailers and
20semitrailers.

21(a) General rule.--Notwithstanding the provisions of section 
22737(b)(1), tax due on the sale at retail or use of a motor 
23vehicle, trailer or semitrailer, except mobile homes as defined 
24in 75 Pa.C.S. (relating to vehicles), required by law to be 
25registered with the department under the provisions of 75 
26Pa.C.S. shall be paid by the purchaser or user directly to the 
27department on application to the department for an issuance of a 
28certificate of title on the motor vehicle, trailer or 
29semitrailer.

30(b) No issuance of certificate of title without payment of

1tax.--

2(1) The department shall not issue a certificate of
3title until the tax has been paid, or evidence satisfactory
4to the department has been given to establish that tax is not
5due.

6(2) The department may cancel or suspend any record of
7certificate of title or registration of a motor vehicle,
8trailer or semitrailer when the check received in payment of
9the tax on the vehicle is not paid on demand.

10(c) First encumbrance.--The tax shall be considered as a
11first encumbrance against the vehicle and the vehicle may not be
12transferred without first payment in full of the tax and any
13interest additions or penalties which shall accrue in accordance
14with this chapter.

15Section 739. Precollection of tax.

16(a) Authorization.--

17(1) Except as otherwise provided under paragraph (2),
18the department may, by regulation, authorize or require
19particular categories of vendors selling tangible personal
20property for resale to precollect from the purchaser the tax
21which the purchaser will collect on making a sale at retail
22of the tangible personal property.

23(2) The department, pursuant to this section, may not
24require a vendor to precollect tax from a purchaser who
25purchases for resale more than $1,000 worth of tangible
26personal property from the vendor per year.

27(b) No license required.--In any case in which a vendor has
28been authorized to prepay the tax to the person from whom the
29vendor purchased the tangible personal property for resale, the
30vendor authorized to prepay the tax may, under the regulations

1of the department, be relieved from the duty to secure a license
2if the duty arises only by reason of the vendor's sale of the
3tangible personal property with respect to which the vendor is,
4under authorization of the department, to prepay the tax.

5(c) Reimbursement.--

6(1) The vendor, on making a sale at retail of tangible
7personal property with respect to which the vendor has
8prepaid the tax, must separately state at the time of resale
9the proper amount of tax on the transaction, and reimburse
10itself on account of the taxes which the vendor has
11previously prepaid.

12(2) If the vendor collects a greater amount of tax in
13any reporting period than the vendor previously prepaid on
14purchase of the goods with respect to which the vendor
15prepaid the tax, the vendor must file a return and remit the
16balance to the Commonwealth at the time at which a return
17would otherwise be due with respect to the sales.

18Section 740. Bulk and auction sales.

19A person who sells or causes to be sold at auction, or who
20sells or transfers in bulk, 51% or more of any stock, of goods,
21wares or merchandise of any kind, fixtures, machinery,
22equipment, buildings or real estate, involved in a business for
23which the person is licensed or required to be licensed under
24this chapter, or is liable for filing use tax returns in
25accordance with this chapter, shall be subject to the provisions
26of section 1403 of The Fiscal Code.

<-27Section 741. Collection on failure to request reassessment,
28review or appeal.

29(a) General rule.--The department may collect any tax:

30(1) If an assessment of tax is not paid within ten days

1or 30 days, as the case may be, after notice of the
2assessment to the taxpayer and no petition for reassessment
3has been filed.

4(2) Within 60 days from the date of reassessment, if no
5petition for review has been filed.

6(3) Within 30 days from the date of the decision of the
7Board of Finance and Revenue on a petition for review, or of
8the expiration of the board's time for acting on the
9petition, if no appeal has been made.

10(4) In all cases of judicial sales, receiverships,
11assignments or bankruptcies.

12(b) Limitation on defenses.--

13(1) Subject to the provisions of paragraph (2), in any
14such case in a proceeding for the collection of the taxes,
15the person against whom the taxes were assessed shall not be
16permitted to set up any ground of defense that might have
17been determined by the department, the Board of Finance and
18Revenue or the courts.

19(2) The defense of failure of the department to mail
20notice of assessment or reassessment to the taxpayer and the
21defense of payment of assessment or reassessment may be
22raised in proceedings for collection by a motion to stay the
23proceedings.

<-24Section 741. (Reserved).

25Section 742. Lien for taxes.

26(a) Nature and effect of lien.--

27(1) If any person liable to pay any tax neglects or
28refuses to pay the same after demand, the amount, including
29any interest, addition or penalty, together with any costs
30that may accrue in addition, shall be a lien in favor of the

1Commonwealth on the property, both real and personal, of the
2person but only after same has been entered and docketed of
3record by the prothonotary of the county where the property
4is situated.

5(2) The department may, at any time, transmit to the
6prothonotaries of the respective counties certified copies of
7all liens for taxes imposed by this chapter or the Tax Reform
8Code of 1971 and penalties and interest.

9(3) Each prothonotary receiving the lien shall enter and
10docket the lien of record in the prothonotary's office, which
11lien shall be indexed as judgments are now indexed.

12(4) No prothonotary shall require, as a condition
13precedent to the entry of the liens, the payment of the costs
14incident thereto.

15(b) Priority status.--

16(1) The lien imposed under this section shall have
17priority from the date of its recording, and shall be fully
18paid and satisfied out of the proceeds of any judicial sale
19of property before any other obligation, judgment, claim,
20lien or estate to which the property may subsequently become
21subject, except costs of the sale and of the writ on which
22the sale was made, and real estate taxes and municipal claims
23against such property, but shall be subordinate to mortgages
24and other liens existing and duly recorded or entered of
25record prior to the recording of the tax lien.

26(2) In the case of a judicial sale of property, subject
27to a lien imposed under this section, on a lien or claim over
28which the lien imposed under this section has priority, the
29sale shall discharge the lien imposed under this section to
30the extent only that the proceeds are applied to its payment,

1and the lien shall continue in full force and effect as to
2the balance remaining unpaid.

3(3) There shall be no inquisition or condemnation upon
4any judicial sale of real estate made by the Commonwealth
5pursuant to the provisions of this section.

6(4) (i) The lien of the taxes, interest and penalties,
7shall continue for five years from the date of entry, and
8may be revived and continued in the manner now or
9hereafter provided for renewal of judgments, or as may be
10provided in The Fiscal Code, and a writ of execution may
11directly issue upon the lien without the issuance and
12prosecution to judgment of a writ of scire facias.

13(ii) Not less than ten days before issuance of any
14execution on the lien, notice of the filing and the
15effect of the lien shall be sent by registered mail to
16the taxpayer at the taxpayer's last known post office
17address.

18(iii) The lien shall have no effect on any stock of
19goods, wares or merchandise regularly sold or leased in
20the ordinary course of business by the person against
21whom the lien has been entered, unless and until a writ
22of execution has been issued and a levy made on the stock
23of goods, wares and merchandise.

24(c) Penalty.--Any willful failure of any prothonotary to
25carry out any duty imposed on the prothonotary under this
26section shall be a misdemeanor, and, upon conviction, the
27prothonotary shall be sentenced to pay a fine not more than
28$1,000 and costs of prosecution or to a term of imprisonment not
29exceeding one year, or both.

30(d) Priority payment from distribution.--

1(1) Except as otherwise provided under the law, in the
2distribution, voluntary or compulsory, in receivership,
3bankruptcy or otherwise, of the property or estate of any
4person, all taxes imposed by this chapter which are due and
5unpaid and are not collectible under section 725 shall be
6paid from the first money available for distribution in
7priority to all other claims and liens, except insofar as the
8laws of the United States may give a prior claim to the
9Federal Government.

10(2) Any person charged with the administration or
11distribution of the property or estate, who violates the
12provisions of this section, shall be personally liable for
13any taxes imposed by this chapter, which are accrued and
14unpaid and are chargeable against the person whose property
15or estate is being administered or distributed.

16(e) Construction.--Subject to the limitations contained in
17this chapter as to the assessment of taxes, nothing contained in
18this section shall be construed to restrict, prohibit or limit
19the use by the department in collecting taxes finally due and
20payable of any other remedy or procedure available at law or
21equity for the collection of debts.

22Section 743. Suit for taxes.

23(a) General rule.--At any time within three years after any
24tax or any amount of tax shall be finally due and payable, the
25department may commence an action in the courts of this
26Commonwealth, of any state or of the United States, in the name
27of the Commonwealth, to collect the amount of tax due together
28with additions, interest, penalties and costs in the manner
29provided at law or in equity for the collection of ordinary
30debts.

1(b) Prosecution by Attorney General.--The Attorney General
2shall prosecute the action and, except as provided in this
3chapter, the provisions of the Rules of Civil Procedure and the
4provisions of the laws of this Commonwealth relating to civil
5procedures and remedies shall, to the extent that they are
6applicable, be available in such proceedings.

7(c) Construction.--The provisions of this section are in
8addition to any process, remedy or procedure for the collection
9of taxes provided by this chapter or by the laws of this
10Commonwealth, and this section is neither limited by nor
11intended to limit any such process, remedy or procedure.

12Section 744. Tax suit comity.

13The courts of this Commonwealth shall recognize and enforce
14liabilities for sales and use taxes, lawfully imposed by any
15other state if the other state extends a like comity to this
16Commonwealth.

17Section 745. Service.

18(a) General rule.--Any person who maintains a place of
19business in this Commonwealth is deemed to have appointed the
20Secretary of the Commonwealth as the person's agent for the
21acceptance of service of process or notice in any proceedings
22for the enforcement of the civil provisions of this chapter, and
23any service made upon the Secretary of the Commonwealth as agent
24shall be of the same legal force and validity as if the service
25had been personally made on the person.

26(b) Substitute service.--Where service cannot be made on the
27person in the manner provided by other laws of this Commonwealth
28relating to service of process, service may be made on the
29Secretary of the Commonwealth and, in such case, a copy of the
30process or notice shall also be personally served on any agent

1or representative of the person who may be found within this
2Commonwealth, or where no such agent or representative may be
3found a copy of the process or notice shall be sent by
4registered mail to the person at the last known address of the
5person's principal place of business, home office or residence.

6Section 746. Collection and payment of tax on credit sales.

7If any sale subject to tax under this chapter is wholly or
8partly on credit, the vendor shall require the purchaser to pay
9in cash at the time the sale is made, or within 30 days
10thereafter, the total amount of tax due upon the entire purchase
11price. The vendor shall remit the tax to the department,
12regardless of whether payment was made by the purchaser to the
13vendor, with the next return required to be filed under section
14717.

15Section 747. Prepayment of tax.

16(a) General rule.--Whenever a vendor is prohibited by law or
17governmental regulation to charge and collect the purchase price
18in advance of or at the time of delivery, the vendor shall
19prepay the tax as required by section 722, but in that case, if
20the purchaser fails to pay to the vendor the total amount of the
21purchase price and the tax and the amount is written off as
22uncollectible by the vendor, the vendor shall not be liable for
23the tax and shall be entitled to a credit or refund of the tax
24paid.

25(b) Subsequent collection of tax.--If the purchase price is
26thereafter collected, in whole or in part, the amount collected
27shall be first applied to the payment of the entire tax portion
28of the bill, and shall be remitted to the department by the
29vendor with the first return filed after such collection.

30(c) Time period for refund.--Tax prepaid shall be subject to

1refund on petition to the department under the provisions of
2section 752, filed within 105 days of the close of the fiscal
3year in which the accounts are written off.

4Section 747.1. Refund of sales tax attributed to bad debt.

5(a) General rule.--A vendor may file a petition for refund
6of sales tax paid to the department that is attributed to a bad
7debt if all of the following apply:

8(1) The purchaser fails to pay <-the vendor the total
9purchase price.

10(2) The purchase price is written off, either in whole
11or in part, as a bad debt on the <-vendor's books and records 
<-12of the vendor or an affiliate of the vendor.

13(3) The bad debt has been deducted for Federal income
14tax purposes under section 166 of the Internal Revenue Code
15of 1986.

<-16The petition must be filed with the department under Article
17XXVII of the Tax Reform Code of 1971 within the time limitations
18prescribed by section 3003.1 of the Tax Reform Code of 1971.

<-19(a.1) Time for filing petition.--A petition for refund,
20which is authorized by this section, must be filed with the
21department within the time limitations under section 3003.1(a).

22(a.2) Private-label credit cards.--In the case of private-
23label credit card accounts not qualifying under subsection (a),
24a vendor or lender that makes an election pursuant to subsection
25(a.3) shall be entitled to file a petition for refund of sales
26tax that the vendor has previously reported and paid to the
27department, if all of the following conditions are met:

28(1) No refund was previously allowed with respect to the
29portion of the account written off as a bad debt.

30(2) The account has been found worthless and written

1off, either in whole or in part, as bad debt on the books and
2records of the lender or an affiliate of the lender.

3(3) The account has been deducted for Federal income tax
4purposes under section 166 of the Internal Revenue Code of
51986 (Public Law 99-514, 26 U.S.C. § 166) by the lender or an
6affiliate of the lender.

7(a.3) Joint election.--In order to be eligible for a refund
8under subsection (a.2), the lender and the vendor must execute
9and file with the department a joint election, signed by both
10parties, designating which party is entitled to claim the
11refund. This election may not be revoked unless a written notice
12is signed by the party that signed the election being revoked
13and is filed with the department.

14(b) Limitation.--

15(1) The refund authorized by this section shall be
16limited to the sales tax paid to the department that is
17attributed to the bad debt, less any discount under section
18727.

19(2) Partial payments by the purchaser <-to the vendor
20shall be prorated between the original purchase price and the
21sales tax due on the sale.

22(3) Payments made <-to a vendor on any transaction which
23includes both taxable and nontaxable components shall be
24allocated proportionally between the taxable and nontaxable
25components.

26(c) Assignment.--A vendor <-or lender may assign its right to
27petition and receive a refund of sales tax attributed to a bad
28debt to an <-affiliated entity. A vendor may not assign its right 
29to petition and receive a refund of sales tax attributed to a 
30bad debt to any other person <-affiliate.

1(d) Items not refundable.--No refund shall be granted under
2this section for interest, finance charges or expenses incurred
3in attempting to collect any amount receivable.

<-4(e) Contents of petition for refund.--The documentation,
5procedures and methods for claiming and calculating the refund
6allowed under this section shall be in such form as the
7department may prescribe.

8(f) Subsequent collection.--If the purchase price that is
9attributed to a prior bad debt refund is collected in whole or
10in part, the vendor or affiliated entity shall remit the
11proportional tax to the department with the first return filed
12after the collection.

<-13(e) Documentation.--Documentation requirements are as
14follows:

15(1) Any person claiming a refund under this section
16shall, on request, make available adequate books, records or
17other documentation supporting the claimed refund, including:

18(i) Date of original sale, name and Pennsylvania
19sales tax license number of the retailer.

20(ii) Name and address of purchaser.

21(iii) Amount that the purchaser paid or agreed to
22pay.

23(iv) Taxable and nontaxable charges.

24(v) Amount on which the retailer reported and paid
25sales tax.

26(vi) All payments or other credits applied to the
27account of the purchaser.

28(vii) Evidence that the uncollected amount has been
29designated as a bad debt in the books and records of the
30vendor or lender, as appropriate, and that the amount has

1been claimed as a bad debt deduction for Federal income
2tax purposes.

3(viii) The county in which any local sales tax was
4incurred.

5(ix) The unpaid portion of the sales price.

6(x) A certification, under penalty of perjury, that
7no person has collected money on the bad debt for which
8the refund is claimed.

9(xi) Any other information required by the
10department.

11(2) A person claiming a refund under this section may
12provide alternative forms of documentation acceptable to the
13department if appropriate in light of the volume and
14character of uncollectible accounts. This includes the
15following:

16(i) If a vendor remits sales or use tax to the
17Commonwealth and to another state, the entity claiming a
18refund under this section may use an apportionment method
19to substantiate the amount of Pennsylvania tax included
20in the bad debts to which the refund applies.

21(ii) The apportionment method must use the vendor's
22Pennsylvania and non-Pennsylvania sales, the vendor's
23taxable and nontaxable sales and the amount of tax the
24vendor remitted to Pennsylvania.

25(f) Subsequent collection.--

26(1) If the purchase price that is attributed to a prior
27bad debt refund is collected in whole or in part by the
28vendor or lender, or an affiliate of the vendor or lender,
29the entity claiming the refund shall remit the proportional
30tax to the department with the first return filed after the

1collection. If the entity is not required to file periodic 
2returns, the entity shall remit the proportional tax to the 
3department with another return pursuant to section 717(c).

4(2) Any consideration received for the assignment, sale
5or other transfer of a bad debt with respect to which a
6refund has been granted shall be deemed to be a collection of
7a prior bad debt. This paragraph shall not apply to a
8transfer to an entity that is part of the same affiliated
9group, as defined by section 1504 of the Internal Revenue
10Code of 1986 (Public Law 99-514, 26 U.S.C. § 1504).

11(3) A person that collects, in whole or in part, the
12purchase price attributed to a prior bad debt refund is
13required to maintain adequate books, records or other
14documentation to allow the department to determine whether
15the purchase price attributed to a prior bad debt refund has
16been collected. Information under this paragraph includes the
17pertinent facts required by subsection (e).

18(4) If it is determined by the department that a prior
19bad debt has been collected, in whole or in part, and the
20proportional tax has not been properly reported and paid to
21the department, the person that claimed the refund on the
22transaction shall report and pay the proportional tax to the
23department plus applicable interest and penalty under this
24chapter.

25(g) Interest prohibited.--Notwithstanding the provisions of
26section 806.1 of The Fiscal Code, no interest shall be paid by
27the Commonwealth on refunds of sales tax attributed to bad debt
28under this section.

29(h) Administration.--

30(1) No refund or credit of sales tax shall be made for

1any uncollected purchase price or bad debt except as
2authorized by this section.

3(2) No deduction or credit for bad debt may be taken on
4any return filed with the department.

5(3) This section shall provide the exclusive procedure
6for claiming a refund or credit of sales tax attributed to
7uncollected purchase price or bad debt.

<-8(i) Definition.--For purposes of this section, the term
9"affiliated entity" means any corporation that is part of the
10same affiliated group as the vendor as defined by section
111504(a)(1) of the Internal Revenue Code of 1986.

<-12(i) Definitions.--As used in this section, the following
13words and phrases shall have the meanings given to them in this
14subsection unless the context clearly indicates otherwise:

15"Affiliate." A person that is:

16(1) An affiliated entity under section 1504(a)(1) of the
17Internal Revenue Code of 1986.

18(2) A person described in paragraph (1) or (2) of the
19definition of "lender" that would be an affiliated entity,
20under section 1504 of the Internal Revenue Code of 1986, of a
21vendor but for the fact the person is not a corporation, an
22assignee or another transferee of a person described in
23paragraph (1) or (2) of the definition of "lender".

24"Lender." Any of the following:

25(1) A person that owns or has owned a private-label
26credit card account purchased directly from a vendor that
27reported the tax under this chapter.

28(2) A person that owns or has owned a private-label
29credit card account pursuant to a contract directly with the
30vendor that reported the tax under this chapter.

1(3) A person that is:

2(i) an affiliate of a person described in paragraph
3(1) or (2); or

4(ii) an assignee or other transferee of a person
5described in paragraph (1) or (2).

6"Private-label credit card." Any charge card, credit card or
7other instrument serving similar purpose which carries, refers
8to or is branded with the name or logo of a vendor and which can
9be used for purchases from the vendor. The term does not include
10a card or instrument which may also be used to make purchases
11from persons other than the vendor whose name or logo appears on
12the card or instrument or that vendor's affiliates. Nothing in
13this definition shall be construed to authorize a refund with
14respect to bad debts attributable to sales by unrelated persons
15referred to in this definition.

16Section 748. Registration of transient vendors.

17(a) General rule.--Prior to conducting business or otherwise
18commencing operations in this Commonwealth, a transient vendor
19shall register with the department. The application for
20registration shall be in such form and contain such information
21as the department, by regulation, shall prescribe and shall set
22forth truthfully and accurately the information desired by the
23department. This registration shall be renewed and updated
24annually.

25(b) Certificate to be issued.--After registration and the
26posting of the bond required by section 748.1, the department
27shall issue to the transient vendor a certificate valid for one
28year. On renewal of registration, the department shall issue a
29new certificate valid for one year, if the department is
30satisfied that the transient vendor has complied with the

1provisions of this chapter.

2(c) Possession and exhibition of certificate.--The transient
3vendor shall possess the certificate at all times when
4conducting business within this Commonwealth and shall exhibit
5the certificate upon demand by authorized employees of the
6department or any law enforcement officer.

7(d) Contents of certificate.--The certificate issued by the
8department shall state that the transient vendor named in the
9certificate has registered with the department and shall provide
10notice to the transient vendor that:

11(1) The transient vendor must notify the department in
12writing before it enters this Commonwealth to conduct
13business, of the location or locations where it intends to
14conduct business and the date or dates on which it intends to
15conduct business.

16(2) Failure to notify or giving false information to the
17department may result in suspension or revocation of the
18transient vendor's certificate.

19(3) Conducting business in this Commonwealth after a
20certificate has been suspended or revoked may result in
21criminal conviction and the imposition of fines or other
22penalties.

23Section 748.1. Bond.

24(a) General rule.--Upon registration with the department, a
25transient vendor shall also post a bond with the department in
26the amount of $500 as surety for compliance with the provisions
27of this chapter. After a period of demonstrated compliance with
28these provisions or, if the transient vendor provides the
29license number of a promoter who has notified the department of
30a show, in accordance with the provisions of section 748.6(a),

1the department may reduce the amount of bond required of a
2transient vendor or may eliminate the bond entirely.

3(b) Voluntary suspension of certificate.--A transient vendor
4may file a request for voluntary suspension of certificate with
5the department. If the department is satisfied that the
6provisions of this chapter have been complied with and has
7possession of the transient vendor's certificate, it shall
8return the bond posted to the transient vendor.

9Section 748.2. Notification to department.

10(a) General rule.--Prior to entering this Commonwealth to
11conduct business, a transient vendor shall notify the department
12in writing of the location or locations where it intends to
13conduct business and the date or dates on which it intends to
14conduct business.

15(b) Inspection of records.--While conducting business in
16this Commonwealth, the transient vendor shall permit authorized
17employees of the department to inspect its sales records,
18including, but not limited to, sales receipts and inventory or
19price lists and to permit inspection of the tangible personal
20property offered for sale at retail.

21(c) Conditions for suspension or revocation of
22certificate.--The department may suspend or revoke a certificate
23issued to a transient vendor if the transient vendor:

24(1) fails to notify the department as required by
25subsection (a);

26(2) provides the department with false information
27regarding the conduct of business in this Commonwealth;

28(3) fails to collect sales tax on all tangible personal
29property or services sold subject to the sales tax; or

30(4) fails to file with the department a tax return as

1required by section 717.

2(d) Regulations.--The department shall promulgate the rules
3and regulations necessary to implement this section.

4Section 748.3. Seizure of property.

5(a) General rule.--If a transient vendor conducting business
6in this Commonwealth fails to exhibit a valid certificate on
7demand by authorized employees of the department, those
8authorized employees shall seize, without warrant, the tangible
9personal property and the automobile, truck or other means of
10transportation used to transport or carry that property. All
11property seized shall be deemed contraband and shall be subject
12to immediate forfeiture proceedings instituted by the department
13pursuant to procedures adopted by regulation, except as
14otherwise provided by this section.

15(b) Release of seized property.--Property seized pursuant to
16subsection (a) shall be released on:

17(1) presentation of a valid certificate to authorized
18employees of the department; or

19(2) registration by the transient vendor with the
20department and the posting of a bond in the amount of $500,
21either immediately or within 15 days after the property is
22seized.

23Section 748.4. Fines.

24Any transient vendor conducting business in this Commonwealth
25while its certificate is suspended or revoked, as provided by
26sections 748.1(b) and 748.2(c), commits a misdemeanor of the
27third degree and, upon conviction, shall be sentenced to pay a
28fine of not more than $2,500 for each offense.

29Section 748.5. Transient vendors subject to chapter.

30Except as otherwise provided, a transient vendor shall be

1subject to the provisions of this chapter in the same manner as
2a vendor who maintains a place of business in this Commonwealth.

3Section 748.6. Promoters.

4(a) General rule.--A promoter of a show or shows in this
5Commonwealth may annually file with the department an
6application for a promoter's license stating the location and
7dates of such show or shows. The application shall be filed at
8least 30 days prior to the opening of the first show and shall
9be in such form as the department may prescribe.

10(b) License.--

11(1) Except as otherwise provided in this chapter, the
12department shall, within 15 days after receipt of an
13application for a license, issue to the promoter without
14charge a license to operate such shows.

15(2) If application for a license under this section has
16been timely filed and if the license has not been received by
17the promoter prior to the opening of the show, the
18authorization contained in this section with respect to the
19obtaining of a promoter's license shall be deemed to have
20been complied with, unless or until the promoter receives
21notice from the department denying the application for a
22promoter's license.

23(c) Compliance.--Any promoter who is a vendor under the
24provisions of section 701 shall comply with all the provisions
25of this chapter applicable to vendors and with the provisions of
26this section applicable to promoters.

27(d) Prohibited conduct.--No licensed promoter shall permit
28any person to display for sale or to sell tangible personal
29property or services subject to tax under section 702 at a show
30unless the person is licensed under section 708 and provides to

1the promoter the information required under law.

2(e) Penalties.--

3(1) Any licensed promoter who:

4(i) permits any person to display for sale or to
5sell tangible personal property or service without first
6having been licensed under section 708;

7(ii) fails to maintain records of a show as required
8by law; or

9(iii) knowingly maintains false records or fails to
10comply with any provision contained in this section or
11any regulation promulgated by the department pertaining
12to shows,

13shall be subject to denial of a license or the revocation of
14any existing license issued pursuant to this section.

15(2) The department may deny the promoter a license
16certificate to operate a show for a period of not more than
17six months from the date of such denial. The penalty shall be
18in addition to any other penalty imposed by this chapter.

19(3) Within 20 days of notice of denial or revocation of 
20a license by the department, the promoter may petition the 
21department for a hearing pursuant to 2 Pa.C.S. (relating to 
22administrative law and procedure).

23Section 749. (Reserved).

24Section 750. (Reserved).

25Section 751. (Reserved).

26Section 752. Refunds.

27(a) General rule.--Subject to the provisions of subsection
28(b), the department shall, pursuant to the provisions of Article
29XXVII of the Tax Reform Code of 1971, refund all taxes, interest
30and penalties paid to the Commonwealth under the provisions of

1this chapter and to which the Commonwealth is not rightfully
2entitled. The refunds shall be made to the person, the person's
3heirs, successors, assigns or other personal representatives,
4who actually paid the tax.

5(b) Exception.--No refund shall be made under this section
6with respect to any payment made by reason of an assessment with
7respect to which a taxpayer has filed a petition for
8reassessment pursuant to section 2702 of the Tax Reform Code of
91971 to the extent that the petition has been determined
10adversely to the taxpayer by a decision which is no longer
11subject to further review or appeal.

12(c) Construction.--Nothing contained in this section shall
13be deemed to prohibit a taxpayer who has filed a timely petition
14for reassessment from amending it to a petition for refund where
15the petitioner has paid the tax assessed.

16Section 753. Refund petition.

17(a) General rule.--Except as provided for in subsection (b)
18and section 756, the refund or credit of tax, interest or
19penalty provided for by section 752 shall be made only where the
20person who has actually paid the tax files a petition for refund
21with the department under Article XXVII of the Tax Reform Code
22of 1971, within the limits of section 3003.1 of the Tax Reform
23Code of 1971.

24(b) Assessments.--A refund or credit of tax, interest or
25penalty paid as a result of an assessment made by the department
26under section 731 shall be made only where the person who has
27actually paid the tax files with the department a petition for a
28refund with the department under Article XXVII of the Tax Reform
29Code of 1971 within the time limits of section 3003.1 of the Tax
30Reform Code of 1971. The filing of a petition for refund under

1the provisions of this subsection shall not affect the abatement
2of interest, additions or penalties to which the person may be
3entitled by reason of the person's payment of the assessment.

4Section 754. (Reserved).

5Section 755. (Reserved).

6Section 756. Extended time for filing special petition for
7refund.

8(a) General rule.--Any party to a transaction who has paid
9tax by reason of a transaction with respect to which the
10department is assessing tax against another person may, within
11six months after the filing by the department of the assessment
12against the other person, file a special petition for refund,
13notwithstanding the person's failure to timely file a petition
14pursuant to section 3003.1 of the Tax Reform Code of 1971. The
15provisions of Article XXVII of the Tax Reform Code of 1971 shall
16be applicable to the special petition for refund, except that
17the department need not act on the petition until there is a
18final determination as to the propriety of the assessment filed
19against the other party to the transaction. Where a petition is
20filed under this provision in order to take advantage of the
21extended period of limitations, overpayments by the petitioner
22shall be refunded but only to the extent of the actual tax,
23without consideration of interest and penalties, paid by the
24other party to the transaction.

25(b) Purpose.--The purpose of this section is to avoid
26duplicate payment of tax where a determination is made by the
27department that one party to a transaction is subject to tax,
28and another party to the transaction has previously paid tax
29with respect to the transaction and, as such, this section shall
30be construed as extending right beyond that provided for by

1section 753, and not to limit the other section.

2Section 757. (Reserved).

3Section 758. Limitation on assessment and collection.

4The amount of the tax imposed by this chapter <-or the Tax 
5Reform Code of 1971 shall be assessed within three years after
6the date when the return provided for by section 717(a) or (c)
7is filed or the end of the year in which the tax liability
8arises, whichever occurs later. Any assessment may be made at
9any time during the period notwithstanding that the department
10may have made one or more previous assessments against the
11taxpayer for the year in question, or for any part of the year.
12In any case, no credit shall be given for any penalty previously
13assessed or paid.

14Section 759. Failure to file return.

15Where no return is filed, the amount of the tax due may be
16assessed and collected at any time as to taxable transactions
17not reported.

18Section 760. False or fraudulent return.

19Where the taxpayer willfully files a false or fraudulent
20return with intent to evade the tax imposed by this chapter, the
21amount of tax due may be assessed and collected at any time.

22Section 761. Extension of limitation period.

23Notwithstanding any other provisions of this subchapter
24where, before the expiration of the period prescribed in that
25other provision for the assessment of a tax, a taxpayer has
26consented in writing that the period be extended, the amount of
27tax due may be assessed at any time within the extended period.
28The period so extended may be extended further by subsequent
29consents in writing made before the expiration of the extended
30period.

1Section 762. (Reserved).

2Section 763. (Reserved).

3Section 764. (Reserved).

4Section 765. <-Interest.

5If any amount of tax imposed by this chapter is not paid to
6the department on or before the last date prescribed for
7payment, interest on the amount at the rate of .75% per month
8for each month, or fraction thereof, from the date, shall be
9paid for the period from the last date to the date paid. The
10last date prescribed for payment shall be determined under
11section 722(a) or (c) without regard to any extension of time
12for payment. In the case of any amount assessed as a deficiency
13or as an estimated assessment, the date prescribed for payment
14shall be 30 days after notice of the assessment. <-(Reserved).

15Section 766. Additions to tax.

16(a) Failure to file return.--In the case of failure to file
17any return required by section 715 on the date prescribed for
18the return, determined with regard to any extension of time for
19filing, and, in the case in which a return filed understates the
20true amount due by more than 50%, there shall be added to the
21amount of tax actually due 5% of the amount of the tax if the
22failure to file a proper return is for not more than one month,
23with an additional 5% for each additional month, or fraction
24thereof, during which such failure continues, not exceeding 25%
25in the aggregate. In every case at least $2 shall be added.

26(b) Addition for understatement.--There shall be added to
27every assessment under section 731(b) an addition equal to 5% of
28the amount of the understatement and no addition to the tax
29shall be paid under section 731(a).

<-30(c) Interest.--If the department assesses a tax according to

1section 731(a), (b) or (c), there shall be added to the amount
2of the deficiency interest at the rate of .75% per month for
3each month, or fraction thereof, from the date prescribed by
4subsection (a) or section 722(c) for the payment of the tax to
5the date of notice of the assessment.

6Section 767. Penalties.

7(a) General rule.--The penalties, additions, interest and
8liabilities provided by this chapter shall be paid on notice and
9demand by the department, and shall be assessed and collected in
10the same manner as taxes. Except as otherwise provided, any
11reference in this chapter to tax imposed by this chapter shall
12be deemed also to refer to the penalties, additions, interest
13and liabilities provided by this chapter.

14(b) Monetary penalty.--Any person who willfully attempts, in
15any manner, to evade or defeat the tax imposed by this chapter,
16or the payment thereof, or to assist any other person to evade
17or defeat the tax imposed by this chapter, or the payment
18thereof, or to receive a refund improperly shall, in addition to
19other penalties provided by law, be liable for a penalty equal
20to one-half of the total amount of the tax evaded.

21(c) Burden of proof.--In any direct proceeding arising out
22of a petition for reassessment or refund as provided in this
23chapter, in which an issue of fact is raised with respect to
24whether a return is fraudulent or with respect to the propriety
25of the imposition by the department of the penalty prescribed in
26subsection (b), the burden of proof with respect to the issue
27shall be on the department.

28Section 768. Criminal offenses.

29(a) False returns.--Any person who with intent to defraud
30the Commonwealth willfully makes, or causes to be made, any

1return required by this chapter which is false commits a
2misdemeanor and, upon conviction, shall be sentenced to pay a
3fine of not more than $2,000 or to imprisonment not exceeding
4three years, or both.

5(b) Other offenses.--Except as otherwise provided by
6subsection (a) and subject to the provisions of subsection (c),
7any person who:

8(1) advertises or holds out or states to the public or
9to any purchaser or user, directly or indirectly, that the
10tax or any part imposed by this chapter will be absorbed by
11the person, or that it will not be added to the purchase
12price of the tangible personal property or services described
13in section 701(k)(2), (3), (4)<- and (11) through (18), (11), 
14(12), (13), (14), (15), (16), (17), (18) and (20) sold or, if
15added, that the tax or any part will be refunded, other than
16when the person refunds the purchase price because of the
17property being returned to the vendor;

18(2) sells or leases tangible personal property or the
19services, the sale or use of which by the purchaser is
20subject to tax under this chapter, and willfully fails to
21collect the tax from the purchaser and timely remit the same
22to the department;

23(3) willfully fails or neglects to timely file any
24return or report required by this chapter or, as a taxpayer,
25refuses to timely pay any tax, penalty or interest imposed or
26provided for by this chapter, or willfully fails to preserve
27the person's books, papers and records as directed by the
28department;

29(4) refuses to permit the department or any of its
30authorized agents to examine the person's books, records or

1papers, or who knowingly makes any incomplete, false or
2fraudulent return or report;

3(5) does or attempts to do anything to prevent the full
4disclosure of the amount or character of taxable sales
5purchases or use made by himself or any other person;

6(6) provides any person with a false statement as to the
7payment of tax with respect to particular tangible personal
8property or services; or

9(7) makes, utters or issues a false or fraudulent
10exemption certificate;

11commits a misdemeanor and, upon conviction shall be sentenced to
12pay a fine of not more than $1,000 and costs of prosecution or
13to imprisonment for not more than one year, or both.

14(c) Exceptions.--

15(1) Any person who maintains a place of business outside
16this Commonwealth may absorb the tax with respect to taxable
17sales made in the normal course of business to customers
18present at that place of business without being subject to
19the penalty and fines.

20(2) Advertising tax-included prices shall be
21permissible, if the prepaid services are sold by the service
22provider, for prepaid telecommunications services not
23evidenced by the transfer of tangible personal property or
24for prepaid mobile telecommunications services.

25(d) Penalties are cumulative.--The penalties imposed by this
26section shall be in addition to any other penalties imposed by
27any provision of this chapter.

28Section 769. Abatement of additions or penalties.

29On the filing of a petition for reassessment or a petition
30for refund as provided under this chapter by a taxpayer,

1additions or penalties imposed on the taxpayer by this chapter
<-2or the Tax Reform Code of 1971 may be waived or abated, in whole
3or in part, where the petitioner has established that the
4petitioner has acted in good faith, without negligence and with
5no intent to defraud.

6Section 770. Rules and regulations.

7(a) General rule.--The department shall enforce the
8provisions of this chapter and shall prescribe, adopt,
9promulgate and enforce rules and regulations not inconsistent
10with the provisions of this chapter, relating to any matter or
11thing pertaining to the administration and enforcement of the
12provisions of this chapter, and the collection of taxes,
13penalties and interest imposed by this chapter. The department
14may prescribe the extent, if any, to which any of the rules and
15regulations shall be applied without retroactive effect.

16(b) Determination of purchase price.--

17(1) In determining the purchase price of taxable sales
18where, because of affiliation of interests between the vendor
19and the purchaser or irrespective of any such affiliation, if
20for any other reason, the purchase price of the sale is in
21the opinion of the department not indicative of the true
22value of the article or the fair price of the article, the
23department shall, pursuant to uniform and equitable rules,
24determine the amount of constructive purchase price on the
25basis of which the tax shall be computed and levied.

26(2) The rules shall provide for a constructive amount of
27a purchase price for each sale, which price shall equal a
28price for the article which would naturally and fairly be
29charged in an arm's-length transaction in which the element
30of common interests between vendor and purchaser or, if no

1common interest exists, any other element causing a
2distortion of the price or value is absent.

3(3) For the purpose of this chapter where a taxable sale
4occurs between a parent corporation and a subsidiary
5affiliate or controlled corporation of such parent, there
6shall be a rebuttable presumption that because of such common
7interest the transaction was not at arm's-length.

8Section 771. Keeping of records.

9(a) Persons liable for taxes.--Every person liable for any
10tax imposed by this chapter, or for the collection of the tax,
11shall keep the records, render such statements, make the returns
12and comply with the rules and regulations as the department may,
13from time to time, prescribe regarding matters pertinent to the
14person's business. Whenever in the judgment of the department it
15is necessary, it may require any person, by notice served on the
16person, or by regulations, to make the returns, render the
17statements or keep the records as the department deems
18sufficient to show whether the person is liable to pay or
19collect tax under this chapter.

20(b) Persons collecting taxes.--Any person liable to collect
21tax from another person under the provisions of this chapter
22shall file reports, keep records, make payments and be subject
23to interest and penalties as provided for under this chapter, in
24the same manner as if the person were directly subject to the
25tax.

26(c) Nonresidents.--

27(1) A nonresident who does business in this Commonwealth
28as a retail dealer shall keep adequate records of the
29business and of the tax due with respect to the business,
30which records shall at all times be retained within this

1Commonwealth unless retention outside this Commonwealth is
2authorized by the department.

3(2) No taxes collected from purchasers shall be sent
4outside this Commonwealth without the written consent of and
5in accordance with conditions prescribed by the department.

6(3) The department may require a taxpayer who desires to
7retain records or tax collections outside this Commonwealth
8to assume reasonable out-of-State audit expenses.

9(d) Retail dealers.--

10(1) Any person doing business as a retail dealer who at
11the same time is engaged in another business which does not
12involve the making of sales taxable under this chapter shall
13keep separate books and records of the person's businesses so
14as to show the sales taxable under this chapter separately
15from the sales not taxable under this chapter.

16(2) If the person fails to keep such separate books and
17records, the person shall be liable for tax at the rate
18designated in section 702 on the entire purchase price of
19sales from both or all of the person's businesses.

20(e) Segregation of taxes required.--

21(1) In those instances where a vendor gives no sales
22memoranda or uses registers showing only total sales, the
23vendor shall adopt some method of segregating tax from sales
24receipts and keep records showing the segregation, all in
25accordance with proper accounting and business practices.

26(2) A vendor may apply to the department for permission
27to use a collection and recording procedure which will show
28the information as the law requires with reasonable accuracy
29and simplicity. The application must contain a detailed
30description of the procedure to be adopted.

1(3) Permission to use the proposed procedure is not to
2be construed as relieving the vendor from remitting the full
3amount of tax collected.

4(4) The department may revoke the permission on 30 days'
5notice to the vendor.

6(5) Refusal of the department to grant permission in
7advance to use the procedure shall not be construed to
8invalidate a procedure which on examination shows the
9information as the law requires.

10Section 771.1. Reports and records of promoters.

11Every licensed promoter shall keep a record of the date and
12place of each show and the name, address, sales, use and hotel
13occupancy license number of every person whom the licensed
14promoter permits to display for sale or to sell tangible
15personal property or services subject to tax under section 702
16at the show. The records shall be open for inspection and
17examination at any reasonable time by the department or a duly
18authorized representative, and the records shall, unless the
19department consents in writing to an earlier destruction, be
20preserved for three years after the date the report was filed or
21the date it was due, whichever occurs later, except that the
22department may by regulation require that they be kept for a
23longer period of time.

24Section 772. Examinations.

25(a) Power of department.--The department or any of its
26authorized agents may examine the books, papers and records of
27any taxpayer in order to verify the accuracy and completeness of
28any return made or if no return was made, to ascertain and
29assess the tax imposed by this chapter. The department may
30require the preservation of all such books, papers and records

1for any period deemed proper by it but not to exceed three years
2from the end of the calendar year to which the records relate.

3(b) Duty of taxpayers.--Every taxpayer shall give to the
4department, or its agent, the means, facilities and opportunity
5for the examinations and investigation.

6(c) Other powers of department.--

7(1) The department is further authorized to examine any
8person, under oath, concerning taxable sales or use by any
9taxpayer or concerning any other matter relating to the
10enforcement or administration of this chapter, and to this
11end may compel the production of books, papers and records
12and the attendance of all persons whether as parties or
13witnesses whom it believes to have knowledge of such matters.

14(2) The procedure for such hearings or examinations
15shall be the same as that provided by The Fiscal Code
16relating to inquisitorial powers of fiscal officers.

17Section 773. Records and examinations of delivery agents.

18Every agent for the purpose of delivery of goods shipped into
19this Commonwealth by a nonresident, including, but not limited
20to, a common carrier, shall maintain adequate records of such
21deliveries pursuant to rules and regulations adopted by the
22department and shall make the records available to the
23department upon request after due notice.

24Section 774. Unauthorized disclosure.

25Any information gained by the department as a result of any
26return, examination, investigation, hearing or verification
27required or authorized by this chapter shall be confidential,
28except for official purposes and except in accordance with
29proper judicial order or as otherwise provided by law, and any
30person unlawfully divulging such information commits a

1misdemeanor and, upon conviction, shall be sentenced to pay a
2fine of not more than $1,000 and costs of prosecution or to
3imprisonment for not more than one year, or both.

4Section 775. Cooperation with other governments.

5Notwithstanding the provisions of section 774, the department
6may permit the Commissioner of Internal Revenue of the United
7States, or the proper officer of any state, or the authorized
8representative of either such officer, to inspect the tax
9returns of any taxpayer, or may furnish to the officer or to the
10officer's authorized representative an abstract of the return of
11any taxpayer, or supply the officer or the authorized
12representative with information concerning any item contained in
13any return or disclosed by the report of any examination or
14investigation of the return of any taxpayer. This permission
15shall be granted only if the statutes of the United States or of
16such other state, as the case may be, grant substantially
17similar privileges to the proper officer of the Commonwealth
18charged with the administration of this chapter.

19Section 776. Interstate compacts.

20(a) General rule.--The Governor, or the Governor's
21authorized representative, may confer with the Governor and the
22authorized representatives of other states with respect to
23reciprocal use tax collection between the Commonwealth and such
24other states.

25(b) Other powers.--The Governor, or the Governor's
26authorized representative, may join with the authorities of
27other states to conduct joint investigations, to exchange
28information, hold joint hearings and enter into compacts or
29interstate agreements with such other states to accomplish
30uniform reciprocal use tax collections between those states who

1are parties to any compact or interstate agreement and the
2Commonwealth.

3Section 777. Bonds.

4(a) Procedure.--

5(1) Whenever the department, in its discretion, deems it
6necessary to protect the revenues to be obtained under the
7provisions of this chapter, it may require any nonresident
8natural person or any foreign corporation, association,
9fiduciary, partnership or other entity, not authorized to do
10in this Commonwealth or not having an established place of
11business in this Commonwealth and subject to the tax imposed
12by section 702, to file a bond issued by a surety company
13authorized to do business in this Commonwealth and approved
14by the Insurance Commissioner as to solvency and
15responsibility, in such amounts as it may fix, to secure the
16payment of any tax or penalties due, or which may become due,
17from a natural person or corporation.

18(2) In order to protect the revenues to be obtained
19under the provisions of this chapter, the department shall
20require any nonresident natural person or any foreign
21corporation, association, fiduciary, partnership or entity,
22who or which is a building contractor, or who or which is a
23supplier delivering building materials for work in this
24Commonwealth and is not authorized to do business in this
25Commonwealth or does not have an established place of
26business in this Commonwealth and is subject to the tax
27imposed by section 702, to file a bond issued by a surety
28company authorized to do business in this Commonwealth and
29approved by the Insurance Commissioner as to solvency and
30responsibility, in the amounts as it may fix, to secure the

1payments of any tax or penalties due, or which may become
2due, from a natural person, corporation or other entity.

3(3) The department may also require a bond of any person
4petitioning the department for reassessment, in the case of
5any assessment over $500 or where it is of the opinion that
6the ultimate collection is in jeopardy.

7(4) (i) The department may, for a period of three
8years, require a bond of any person who has on three or
9more occasions within a 12-month period either filed a
10return or made payment to the department more than 30
11days late.

12(ii) If the department determines that a taxpayer is
13to file a bond, the department shall give notice to the
14taxpayer to that effect, specifying the amount of the
15bond required.

16(iii) The taxpayer shall file a bond within five
17days after the giving of the notice by the department
18unless, within the five-day period, the taxpayer requests
19in writing a hearing before the secretary or the
20secretary's representative at which hearing the
21necessity, propriety and amount of the bond shall be
22determined by the secretary or a representative. The
23determination shall be final and shall be complied within
2415 days after notice is mailed to the taxpayer.

25(b) Alternative security.--

26(1) In lieu of the bond required by this section,
27securities approved by the department, or cash in the amount
28as it may prescribe, may be deposited.

29(2) Such securities or cash shall be kept in the custody
30of the department, who may, at any time, without notice to

1the depositor, apply them to any tax and/or interest or
2penalties due, and for that purpose the securities may be
3sold by the department, at public or private sale, on five
4days' written notice to the depositor.

5(c) Lien may be filed.--

6(1) The department may file a lien pursuant to section
7742 against any taxpayer who fails to file a bond when
8required to do so under this section.

9(2) All funds received on execution of the judgment on
10the lien shall be refunded to the taxpayer with 3% interest
11should a final determination be made that the taxpayer does
12not owe any payment to the department.

<-13Section 778. Remote sales reports.

14(a) Duty to submit.--Within 90 days of the publication of
15the notice under subsection (b), the Independent Fiscal Office,
16in conjunction with the department, shall submit a detailed
17report to the chairman and minority chairman of the
18Appropriations Committee of the Senate, the chairman and
19minority chairman of the Finance Committee of the Senate, the
20chairman and minority chairman of the Appropriations Committee
21of the House of Representatives and the chairman and minority
22chairman of the Finance Committee of the House of
23Representatives outlining the plans concerning the
24implementation of the legislation referenced in subsection (b)
25or other substantially similar Federal legislation, which would
26grant the Commonwealth the authority to impose and collect the
27tax under this chapter due on sales from remote sellers. The
28report shall include all of the following:

29(1) The amount of State funds necessary to implement the
30legislation referenced in subsection (b) or other

1substantially similar legislation. The amount needed shall be
2itemized and all costs, including personnel, office expenses
3and other related costs, shall be included.

4(2) The amount of State tax revenue expected to result
5from the implementation of the legislation referenced in
6subsection (b) or other substantially similar legislation for
7the fiscal year and for five fiscal years thereafter.

8(3) The source of funds which will be utilized to pay
9for the legislation referenced in subsection (b) or other
10substantially similar legislation implementation program.

11(4) The legal and practical issues concerning the
12propriety of collecting and enforcing the tax imposed under
13this chapter from remote sellers.

14(5) The number of other states which have a similar law
15in effect and the success or deficiencies of the law.

16(6) Proposed draft legislation concerning the
17implementation of the legislation referenced in subsection
18(b) or other substantially similar legislation.

19(7) A detailed timetable on when separate tasks must be
20completed for full implementation on an estimated start date.

21(b) Notice in the Pennsylvania Bulletin.--The secretary
22shall publish notice in the Pennsylvania Bulletin that Federal
23legislation relating to remote sellers has been enacted.

24SUBCHAPTER G

25FUNDING PROVISIONS

26Section 780. (Reserved).

27Section 781. Appropriation for refunds.

28So much of the proceeds of the tax imposed by this chapter as
29shall be necessary for the payment of refunds, enforcement or
30administration under this chapter is hereby appropriated for

1those purposes.

2Section 781.1. Construction.

3To the extent that the language of this chapter is identical 
4to that of equivalent provisions in the former act of March 6, 
51956 (P.L.1228, No.381), known as the Tax Act of 1963 for 
6Education, or Article II of the Tax Reform Code of 1971, that 
7language shall be deemed a reenactment of such identical 
8provisions.

9Section 782. Transfers to Education Stabilization Fund.

<-10(a) Legislative intent.--It is the intent of the General
11Assembly to increase the rate of the current sales and use tax
12and broaden the sales and use tax base in order to provide funds
13for the operating expenses of school districts and as a means to
14abolish the school property tax.

15(b) (a) Deposit of sales and use tax <-and hotel occupancy tax
16collected.--The secretary shall deposit into the Education
17Stabilization Fund revenues received on or after January 1, <-2014 
<-182015, regardless of the transaction date, that equal the portion
19of the tax imposed by this chapter as follows:

20(1) Except as otherwise provided in <-paragraphs (2) and 
21(3), 1% <-section 2301 of the Tax Reform Code of 1971 providing 
22for the establishment of the Public Transportation Assistance 
23Fund, 39.6% of the tax collected on the sales at retail and
24use of tangible personal property and services as provided in
<-25section 702 Subchapter B.

<-26(2) All of the tax collected on the sale at retail of
27services under section 702, including those services subject
28to the tax as provided under sections 701(k)(4) and (o)(4)
29and 704(51).

30(3) All of the tax collected on expanded sales and uses.

1(c) Definition.--For purposes of this section, "expanded
2sales and uses" means:

3(1) The sale at retail or use of disposable diapers;
4premoistened wipes; incontinence products; colostomy
5deodorants; toilet paper; sanitary napkins, tampons or
6similar items used for feminine hygiene; or toothpaste,
7toothbrushes or dental floss.

8(2) The sale at retail or use of nonprescription
9medicines.

10(3) The sale at retail or use of all vesture, wearing
11apparel, raiments, garments, footwear and other articles of
12clothing, except as excluded from the tax under section
13704(26).

14(4) The sale at retail or use of food and beverages for
15human consumption, except as excluded from the tax under
16section 704(29).

17(5) The sale at retail or use of newspapers. For
18purposes of this section, the term "newspaper" shall mean a
19"legal newspaper" or a publication containing matters of
20general interest and reports of current events which
21qualifies as a "newspaper of general circulation" qualified
22to carry a "legal advertisement" as those terms are defined
23in 45 Pa.C.S. § 101 (relating to definitions), not including
24magazines. The term "newspaper" also includes any printed
25advertising materials circulated with such newspaper
26regardless of where or by whom such printed advertising
27material was produced.

28(6) The sale at retail or use of caskets and burial
29vaults for human remains and markers and tombstones for human
30graves.

1(7) The sale at retail or use of flags of the United
2States and the Commonwealth of Pennsylvania.

3(8) The sale at retail or use of textbooks for use in
4schools, colleges and universities, either public or private,
5when purchased in behalf of or through such schools, colleges
6or universities provided such institutions of learning are
7recognized by the Department of Education.

8(9) The sale at retail or use of motion picture film
9rented or licensed from a distributor for the purpose of
10commercial exhibition.

11(10) The sale at retail or use of mail order catalogs
12and direct mail advertising literature or materials,
13including electoral literature or materials, such as
14envelopes, address labels and a one-time license to use a
15list of names and mailing addresses for each delivery of
16direct mail advertising literature or materials, including
17electoral literature or materials, through the United States
18Postal Service.

19(11) The sale at retail of horses, if at the time of
20purchase, the seller is directed to ship or deliver the horse
21to an out-of-State location, whether or not the charges for
22shipment are paid for by the seller or the purchaser.

23(12) The sale at retail of supplies and materials to
24tourist promotion agencies, which receive grants from the
25Commonwealth, for distribution to the public as promotional
26material or the use of such supplies and materials by said
27agencies for said purposes.

28(13) The sale at retail or use of materials used in the
29construction and erection of objects purchased by not-for-
30profit organizations for purposes of commemoration and

1memorialization of historical events, provided that the
2object is erected upon publicly owned property or property to
3be conveyed to a public entity upon the commemoration or
4memorialization of the historical event.

5(14) The sale at retail or use of candy or gum
6regardless of the location from which the candy or gum is
7sold.

8(15) The sale at retail or use of horses to be used
9exclusively for commercial racing activities and the sale at
10retail and use of feed, bedding, grooming supplies, riding
11tack, farrier services, portable stalls and sulkies for
12horses used exclusively for commercial racing activities.

13(16) The sale at retail to or use by a construction
14contractor of building machinery and equipment and services
15thereto that are:

16(i) transferred pursuant to a construction contract
17for any charitable organization, volunteer firemen's
18organization, volunteer firefighters' relief association,
19nonprofit educational institution or religious
20organization for religious purposes, provided that the
21building machinery and equipment and services thereto are
22not used in any unrelated trade or business; or

23(ii) transferred to the United States or the
24Commonwealth or its instrumentalities or political
25subdivisions.

26(17) The sale or use of used prebuilt housing.

27(18) The sale at retail to or use of food and
28nonalcoholic beverages by an airline which will transfer the
29food or nonalcoholic beverages to passengers in connection
30with the rendering of the airline service.

1(19) The sale at retail or use of separately stated fees
2paid pursuant to 13 Pa.C.S. § 9525 (relating to fees).

3(20) The sale at retail or use of investment metal
4bullion and investment coins. "Investment metal bullion"
5means any elementary precious metal which has been put
6through a process of smelting or refining, including, but not
7limited to, gold, silver, platinum and palladium, and which
8is in such state or condition that its value depends upon its
9content and not its form. "Investment metal bullion" does not
10include precious metal which has been assembled, fabricated,
11manufactured or processed in one or more specific and
12customary industrial, professional, aesthetic or artistic
13uses. "Investment coins" means numismatic coins or other
14forms of money and legal tender manufactured of gold, silver,
15platinum, palladium or other metal and of the United States
16or any foreign nation with a fair market value greater than
17any nominal value of such coins. "Investment coins" does not
18include jewelry or works of art made of coins, nor does it
19include commemorative medallions.

<-20(2) One-seventh of the hotel occupancy tax collected
21under Subchapter E.

22CHAPTER 9

23(RESERVED)

24CHAPTER 11

25LIMITATIONS ON

26SCHOOL DISTRICT TAXATION

27Section 1101. Authority to levy taxes and effect of future
28Constitutional amendment.

29(a) Abrogating authority to impose certain taxes.--

30(1) The authority of any school district to levy, assess

1and collect any real property tax under the Public School
2Code of 1949, or any other act shall expire, subject to the
3provisions of section 1102, January 1, <-2014 2015.

4(2) The authority of a city of the first class to impose
5or continue to provide for the imposition or continuation of
<-6any tax, including, but not limited to, the real property
7tax, for the use of a school district of the first class
8shall expire in accordance with section 1102(b).

9(b) Collection of certain taxes unaffected.--The provisions
10of this section or any other provision of this act shall not
11prevent or interfere with any action of any school district to
12collect any tax owed by any taxpayer prior to the repeal of any
13law authorizing such tax after such law is repealed pursuant to
14this act.

15(c) Limitations on adoption of personal income taxes and
16earned income taxes authorized under Chapter 3.--A school
17district that adopts a personal income tax pursuant to Chapter 3
18may not adopt an earned income tax. A school district that
19adopts an earned income tax under Chapter 3 may not adopt a
20personal income tax.

21Section 1102. Transitional taxes.

22(a) Transitional taxes for school districts other than
23school districts of the first class.--Notwithstanding any other
24provision of the Public School Code of 1949 or any other law to
25the contrary:

26(1) Any school district, other than a school district of
27the first class, may continue to levy, assess and collect a
28real property tax <-for fiscal year 2013-2014. in existence on 
29June 30, 2014, at the rates in effect on that date for the 
30use of a school district for fiscal year 2014-2015.

1(2) <-For Except as provided in section 1101(b), for all
2fiscal years beginning after June 30, 2014 <-2015, no school
3district shall have any power or authority to levy, assess
4and collect any real property tax, except as necessary to
5fund the annual debt service payments for its outstanding
6debt in existence on December 31, <-2012 2013.

7(b) Transitional taxes for school districts of the first
8class.--Notwithstanding any other provision of the Public School
9Code of 1949 or any other law to the contrary:

10(1) Any school district of the first class and city of
11the first class may continue to levy, assess and collect a
12real property tax <-and all other taxes in existence on July
1331, <-2013 2014 at the rates in effect on that date for the use
14of a coterminous school district of the first class for
15fiscal year <-2013-2014. The authority to levy, assess and 
16collect such taxes for the use of coterminous school 
17districts shall expire at midnight on December 31, 2013. 
<-182014-2015.

19(2) <-For Except as provided in section 1101(b), for all
20fiscal years beginning after June 30, 2013, no city of the
21first class shall have any power or authority to levy, assess
22and collect any of the taxes identified under paragraph (1) <-a 
23real property tax for school purposes, except as necessary to
24fund the annual debt service payments for its outstanding
25debt in existence on December 31, <-2012 2013.

26Section 1103. Consideration of State appropriations or
27reimbursements.

28The personal income or earned income tax levied shall not be
29invalidated by reason of the fact that in determining the amount
30to be raised by such tax no deduction was made for

1appropriations or reimbursements paid or payable by the
2Commonwealth to the school district.

3Section 1104. Taxes for cities and school districts of the
4first class.

5Notwithstanding any other provision of the Public School Code
6of 1949 or any other law to the contrary, nothing in this act
7shall be construed to limit or impair a city of the first class
8from levying, assessing or collecting any tax for municipal
9purposes or from increasing the millage for real estate taxes or
10revenues if the revenues derived from the real property tax are
11used solely for municipal purposes.

12CHAPTER 12

13INDEBTEDNESS

14Section 1201. <-Expiration of authority to issue debt.

15No school district, including a school district of the first
16class, shall incur any electoral debt, lease rental debt or
17nonelectoral debt under 53 Pa.C.S. Pt. VII Subpt. B after the
18effective date of this section unless such debt is authorized
19under Chapter 3 or any other law. <-(Reserved).

20Section 1202. Notices and reporting by school districts of debt
21outstanding.

22(a) Duties.--

23(1) Each school district, including a school district of
24the first class, shall identify the outstanding amount of all
25electoral debt, lease rental debt or nonelectoral debt
26incurred as of <-December 31, 2012 September 15, 2014.

27(2) On or before <-September 30, 2013 December 31, 2014,
28each school district, including a school district of the
29first class, shall certify and report to the Department of
30Revenue the outstanding amount of all electoral debt, lease

1rental debt or nonelectoral debt<- incurred as of December 31, 
22012,  S<-eptember 15, 2014,together with any information
3requested by the department in order for the Commonwealth to
4comply with requirements of this section.

5(b) Audit by Department of Revenue.--

6(1) The Department of Revenue shall audit each report
7submitted under subsection (a) and shall certify the amount
8of each report and the total aggregate amount of all reports
9to the State Treasurer on or before March 31, <-2014 2015.

10(2) If the Department of Revenue disputes all or any
11portion of a report submitted under subsection (a), the
12department shall not include such amount in the certification
13to the State Treasurer and shall notify the school district
14in writing of the exclusion from the certification.

15CHAPTER 13

16FUNDING PROVISIONS

17Section 1301. Definitions.

18The following words and phrases when used in this chapter
19shall have the meanings given to them in this section unless the
20context clearly indicates otherwise:

21"Base revenue." The money a school district receives from
22school property taxes during fiscal year <-2013-2014 2014-2015
23less the amount necessary to fund the annual debt service
24payments for its outstanding debt in existence on December 31,
<-252012 2013.

26"Cost of living factor." The lesser of:

27(1) the <-average annual percentage increase in the
<-28Consumer Price Index for All Urban Consumers (CPI-U) for the 
29Pennsylvania, New Jersey and Maryland area for the preceding 
<-30Statewide average weekly wage, as defined in 53 Pa.C.S. §
 

18401 (relating to definitions), from the previous calendar
2year; or

3(2) the <-average of the percentage increase in sales and
4use tax collected under section 702 <-and the tax upon each 
5dollar income collected under section 401(b)(1) and the 
6percentage increase of the hotel occupancy tax collected 
7under section 710 from the previous calendar year.

8"Department." The Department of Education of the
9Commonwealth.

10"Fund." The Education Stabilization Fund established in
11section 1302.

12Section 1302. Education Stabilization Fund.

13(a) Establishment.--The Education Stabilization Fund is
14established as a separate fund in the State Treasury.

15(b) Sources.--The following are the sources of the fund:

16(1) Money collected by the department under:

17(i) section 401; or

18(ii) Chapter 7.

19(2) All revenue transferred to or received by the
<-20property tax relief fund under: Property Tax Relief Fund, 
21except for amounts needed to provide tax relief in cities of 
22the first class and property tax and rent rebate assistance 
23to senior citizens as provided in Chapters 5, 7 and 13 of the 
24act of June 27, 2006 (1st Sp.Sess., P.L.1873, No.1), known as 
25the Taxpayer Relief Act:

26(i) 4 Pa.C.S. § 1408(e) (relating to transfers from
27State Gaming Fund); and

28(ii) 4 Pa.C.S. § 1409 (relating to Property Tax
29Relief Fund).

30(3) Appropriations.

1(4) Return on money in the fund.

2(c) Use.--The department shall use the fund to make
3disbursements under section 1303.

4(d) Continuing appropriation.--The money of the fund is
5hereby continuously appropriated to the department as provided
6in this act. This appropriation shall not lapse at the end of
7any fiscal year.

8Section 1303. Standard disbursements to school districts from
9Education Stabilization Fund.

10(a) General rule.--In fiscal year <-2014-2015 2015-2016, the
11department shall make disbursements to each school district as
12follows:

13(1) Ascertain base revenue.

14(2) Multiply:

15(i) the amount ascertained under paragraph (1); by

16(ii) the cost of living factor.

17(3) Divide:

18(i) the product under paragraph (2); by

19(ii) four.

20(4) Each quarter, disburse the quotient under paragraph
21(3).

22(b) Annual adjustment.--In fiscal year <-2015-2016 2016-2017
23and each fiscal year thereafter, the department shall make
24disbursements to each school district as follows:

25(1) Take the amount received in the prior fiscal year
26under this section.

27(2) Multiply:

28(i) the amount ascertained under paragraph (1); by

29(ii) the cost of living factor.

30(3) Divide:

1(i) the product under paragraph (2); by

2(ii) four.

3(4) Each quarter, disburse the quotient under paragraph
4(3).

5CHAPTER 15

6MISCELLANEOUS PROVISIONS

7Section 1501. Transitional provision.

8(a) Sales and use tax.--Notwithstanding the repeal of
9Article II of the Tax Reform Code of 1971, under section <-1504 
<-101505, the department shall have the authority to enforce the
11collection of taxes imposed for transactions that occur prior to
12the effective date of this section under former Article II of
13the Tax Reform Code of 1971. The taxes collected <-on or after
14January 1, <-2014 2015, regardless of the transaction date, shall
15be deposited as provided in section 782.

16(b) Other taxes.--Notwithstanding the repeal of any
17provision of the Public School Code of 1949 or of any other law
18authorizing school districts to impose taxes, a governing body
19shall have the authority to enforce, after the effective date of
20the repeal, the collection of taxes levied and assessed under
21those former provisions prior to the effective date of the
22repeal under section <-1504 1505.

<-23Section 1502. Regulations.

24The department shall have jurisdiction over and shall
25promulgate regulations as necessary for the proper
26administration of this act.

27Section <-1502 1503. Construction.

28Any and all references in any other act to Article II or any
29provision in Article II of the Tax Reform Code of 1971 shall be
30deemed a reference to Chapter 7 of this act or the corresponding

1provisions in Chapter 7 of this act.

2Section <-1503 1504. Severability.

3The provisions of this act are severable as follows:

4(1) If any provision of this act is held invalid, the
5invalidity shall not affect other provisions or applications
6of this act which can be given effect without the invalid
7provision or application.

8(2) Under no circumstances shall the invalidity of any
9provision or application of this act affect the validity of
10any provision in this act that abolishes the power of the
11governing body and any school district and city of the first
12class or any other political subdivision to levy, assess or
13collect a tax on any interest in real property for school
14purposes.

15Section <-1504 1505. Repeals.

16(a) Intent.--The General Assembly declares that the repeals
17under subsection (b) are necessary to effectuate this act.

18(b) Provisions.--The following acts and parts of acts are
19repealed:

20(1) Section 631 of the act of March 10, 1949 (P.L.30, 
21No.14), known as the Public School Code of 1949, is repealed.

22(2) Any provision of the Public School Code of 1949 and
23of any other law relating to the authority of any school
24district to levy, assess and collect any tax on real property
25and the power of any city of the first class to levy, assess
26and collect any tax real property for school purposes is
27repealed upon the expiration of the respective schedule
28prescribed in sections 1101 and 1102.

29(3) Any provision of the act of the Public School Code
30of 1949 and any other law relating to debt is repealed to the

1extent that it is inconsistent with this act.

2(4) Any provision of the Public School Code of 1949 and
3any home rule charter adopted pursuant thereto is repealed
4insofar as it is inconsistent with this act.

5(5) Any provision of the act of August 9, 1963 (P.L.643, 
6No.341), known as the First Class City Public Education Home 
7Rule Act, and any home rule school district charter adopted 
8pursuant thereto is repealed insofar as it is inconsistent 
9with this act.

10(6) Article II of the act of March 4, 1971 (P.L.6, 
11No.2), known as the Tax Reform Code of 1971, is repealed.

12(7) All acts and parts of acts that are inconsistent
13with this act are repealed to the extent of such
14inconsistency.

15Section <-1505 1506. Applicability.

16Section 1504(b)(6) and Chapter 7 <-and section 1505(b)(6) shall
17apply January 1, 2014 <-2015.

18Section <-1506 1507. Effective date.

19This act shall take effect as follows:

<-20(1) Section 1504(b)(2) and (7) and Chapters 3 and 4
21shall take effect January 1, 2014.

<-22(1) Chapters 3 and 4 and section 1505(b)(2) shall take
23effect January 1, 2015.

24(2) The remainder of this act shall take effect
25immediately.