PRINTER'S NO. 1988
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
1258
Session of
2018
INTRODUCED BY WHITE, HUTCHINSON, STEFANO, RESCHENTHALER, MENSCH,
FOLMER, BARTOLOTTA, BROWNE, ALLOWAY AND REGAN,
SEPTEMBER 21, 2018
REFERRED TO FINANCE, SEPTEMBER 21, 2018
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," in sales and use tax, further providing for
definitions and for exclusions from tax.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 201 of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971, is amended by
adding definitions to read:
Section 201. Definitions.--The following words, terms and
phrases when used in this Article II shall have the meaning
ascribed to them in this section, except where the context
clearly indicates a different meaning:
* * *
(ddd) "Financial institution." An institution or licensee
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as defined under section 2 of the act of May 15, 1933 (P.L.565,
No.111), known as the Department of Banking and Securities Code,
or a similar institution or licensee doing business in this
Commonwealth subject to supervision by a regulatory authority of
the Federal Government, another state or foreign country.
(eee) "Canned software." Computer software that is
available for sale to the general public, or a substantial and
indefinite class of similarly situated persons, that can be used
as-is without the purchase of professional services, including,
but not limited to, programming, systems design, facilities
management, information retrieval, data preparation or
processing, communication, data or computer processing,
accounting, appraisal, legal, engineering, architectural or
other services from the vendor that supplies the software.
(fff) "Custom software." Computer software that is not
canned software, including modifications made to canned software
to facilitate the software's use by a purchaser if there is a
separately stated purchase price for the modifications.
Section 2. Section 204 of the act is amended by adding
clauses to read:
Section 204. Exclusions from Tax.--The tax imposed by
section 202 shall not be imposed upon any of the following:
* * *
(71) The sale at retail or use of canned software, or the
maintenance, support or updating of canned software, acquired
incident to the purchase at retail of computer programming,
computer integrated systems design, data preparation or
processing, computer facilities management, information
retrieval and other computer or data processing services,
including computer services that are part of electronic fund
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transfers, electronic financial transactions or services,
banking or trust services or management or administrative
services, including transfer agency, shareholder, custodial and
portfolio accounting services, unless the predominant purpose of
a transaction is to purchase or use canned software.
(72) As follows:
(i) The sale at retail or use of systems, devices and
equipment, and their components, installed in a building and
utilized by a financial institution for its protection or
convenience in conducting financial transactions, provided the
systems, devices, equipment or components:
(A) are installed by a contractor or the contractor's
designee;
(B) after installation are repaired, altered or maintained
on-site by a contractor; or
(C) are removed from the installation site by a contractor
for repair or maintenance and returned to the installation site
by the contractor.
(ii) A contractor engaged in the installation, repair or
maintenance of systems, devices, equipment or components that is
subject to the exclusion under this paragraph shall be deemed to
be a construction contractor pursuant to a construction contract
engaged in the use of tangible personal property or services
under section 201(o)(17) regardless of the method, or
permanence, of attachment of the systems, devices, equipment or
components, to real property.
(73) Fees charged by a financial institution for a financial
service, regardless of whether tangible personal property is
provided to a customer incidental to the provision of the
financial service, unless the predominant purpose of a
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transaction is to purchase or use tangible personal property.
Section 3. The addition of section 204(72) of the act shall
be construed and read in pari materia with 61 Pa. Code ยง 46.9.
Section 4. The addition of section 204(71), (72) and (73)
shall apply to transactions that occur on or after the effective
date of this act.
Section 5. This act shall take effect immediately.
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