PRINTER'S NO. 1468
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1231
Session of
2019
INTRODUCED BY GILLESPIE, ZIMMERMAN, TOOHIL, HERSHEY, MENTZER AND
HAHN, APRIL 17, 2019
REFERRED TO COMMITTEE ON FINANCE, APRIL 17, 2019
AN ACT
Providing for tax levies and information related to taxes;
authorizing the imposition of a personal income tax or an
earned income tax by a school district subject to voter
approval; providing for education tax and for imposition of
and exclusions from a sales and use tax for the elimination
of residential property taxes; establishing the Public
Transportation Reserve Fund; providing for increase to the
personal income tax, for certain licenses, for hotel
occupancy tax, for procedure and administration of the tax,
for expiration of authority to issue certain debt and for
reporting by local government units of debt outstanding;
establishing the Residential Property Tax Elimination Fund;
providing for disbursements from this fund and for certain
rebates and assistance to senior citizens; and repealing
sales tax provisions of the Tax Reform Code of 1971 and
earned income tax of the Taxpayer Relief Act.
TABLE OF CONTENTS
Chapter 1. Preliminary Provisions
Section 101. Short title.
Section 102. Definitions.
Chapter 3. Taxation by School Districts
Section 301. Scope of chapter.
Section 302. Definitions.
Section 303. Limitation.
Section 304. Preemption.
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Section 305. General tax authorization.
Section 306. Referendum.
Section 307. Continuity of tax.
Section 308. Collections.
Section 309. Credits.
Section 310. Exemption and special provisions.
Section 311. Regulations.
Chapter 5. Education Tax
Section 501. Definitions.
Section 502. Education tax.
Section 503. Imposition of tax.
Section 504. Deposit in Residential Property Tax Elimination
Fund.
Section 505. Combination of tax forms.
Chapter 7. Sales and Use Tax for the Elimination of Residential
Property Taxes
Subchapter A. General Provisions
Section 701. Definitions.
Subchapter B. Imposition of Tax
Section 702. Imposition of tax.
Section 703. Computation of tax.
Subchapter C. Exclusions from Tax
Section 704. Exclusions from tax.
Section 705. Alternate imposition of tax.
Section 706. Credit against tax.
Subchapter D. Licenses
Section 708. Licenses.
Subchapter E. Hotel Occupancy Tax
Section 709. Definitions.
Section 710. Imposition of tax.
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Section 711. Seasonal tax returns.
Subchapter F. Returns
Section 715. Persons required to make returns.
Section 716. Form of returns.
Section 717. Time for filing returns.
Section 718. Extension of time for filing returns.
Section 719. Place for filing returns.
Section 720. Timely mailing treated as timely filing and
payment.
Subchapter G. Payment
Section 721. Payment.
Section 722. Time of payment.
Section 723. Other times for payment.
Section 724. Place for payment.
Section 725. Tax held in trust for Commonwealth.
Section 726. Local receivers of use tax.
Section 727. Discount.
Subchapter H. Assessment and Reassessment
Section 730. Assessment.
Section 731. Mode and time of assessment.
Section 732. Reassessment.
Section 733. Assessment to recover erroneous refunds.
Section 734. (Reserved).
Section 735. (Reserved).
Section 736. Burden of proof.
Subchapter I. Collection
Section 737. Collection of tax.
Section 738. Collection of tax on motor vehicles, trailers and
semitrailers.
Section 739. Precollection of tax.
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Section 740. Bulk and auction sales.
Section 741. Collection upon failure to request reassessment,
review or appeal.
Subchapter J. Nonpayment
Section 742. Lien for taxes.
Section 743. Suit for taxes.
Section 744. Tax suit comity.
Section 745. Service.
Subchapter K. Miscellaneous Provisions
Section 746. Collection and payment of tax on credit sales.
Section 747. Prepayment of tax.
Section 747.1. Refund of sales tax attributed to bad debt.
Section 748. Registration of transient vendors.
Section 748.1. Bond.
Section 748.2. Notification to department; inspection of
records.
Section 748.3. Seizure of property.
Section 748.4. Fines.
Section 748.5. Transient vendors subject to chapter.
Section 748.6. Promoters.
Subchapter L. Refunds and Credits
Section 750. (Reserved).
Section 751. (Reserved).
Section 752. Refunds.
Section 753. Refund petition.
Section 754. (Reserved).
Section 755. (Reserved).
Section 756. Extended time for filing special petition for
refund.
Subchapter M. Limitations
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Section 758. Limitation on assessment and collection.
Section 759. Failure to file return.
Section 760. False or fraudulent return.
Section 761. Extension of limitation period.
Subchapter N. Interest, Additions, Penalties and Crimes
Section 765. Interest.
Section 766. Additions to tax.
Section 767. Penalties.
Section 768. Crimes.
Section 769. Abatement of additions or penalties.
Subchapter O. Enforcement and Examinations
Section 770. Rules and regulations.
Section 771. Keeping of records.
Section 771.1. Reports and records of promoters.
Section 772. Examinations.
Section 773. Records and examinations of delivery agents.
Section 774. Unauthorized disclosure.
Section 775. Cooperation with other governments.
Section 776. Interstate compacts.
Section 777. Bonds.
Subchapter P. Appropriation, Construction, Transfers and
Applicability
Section 781. Appropriation for refunds.
Section 781.1. Construction of chapter.
Section 781.2. Transfers to Public Transportation Assistance
Fund.
Section 782. Transfers to Residential Property Tax Elimination
Fund.
Section 783. Applicability.
Chapter 9. Limitations on School District Taxation
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Section 901. Authority to levy taxes and effect of future
constitutional amendment.
Section 902. Transitional taxes.
Section 903. Consideration of State appropriations or
reimbursements.
Section 904. Taxes for cities and school districts of the first
class.
Chapter 11. Indebtedness
Section 1101. Expiration of authority to issue debt.
Section 1102. Notices and reporting by school districts of debt
outstanding.
Chapter 13. Funding Provisions
Section 1301. Definitions.
Section 1302. Residential Property Tax Elimination Fund.
Section 1303. Standard disbursements to school districts from
Residential Property Tax Elimination Fund.
Chapter 15. Miscellaneous Provisions
Section 1501. Transitional provision.
Section 1502. Construction.
Section 1503. Severability.
Section 1504. Repeals.
Section 1505. Effective date.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
CHAPTER 1
PRELIMINARY PROVISIONS
Section 101. Short title.
This act shall be known and may be cited as the Residential
Property Tax Elimination Act.
Section 102. Definitions.
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The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Department." The Department of Revenue of the Commonwealth.
"Fiscal year." The fiscal year of the Commonwealth beginning
on July 1 and ending on June 30 of the immediately following
calendar year.
"Governing body." The board of school directors of a school
district, except that the term shall mean the city council of a
city of the first class for purposes of the levy and collection
of any tax in a school district of the first class.
"Internal Revenue Code of 1986." The Internal Revenue Code
of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.).
"Local Tax Enabling Act." The act of December 31, 1965
(P.L.1257, No.511), known as The Local Tax Enabling Act.
"Public School Code of 1949." The act of March 10, 1949
(P.L.30, No.14), known as the Public School Code of 1949.
"Residential Property Tax Elimination Fund." The Residential
Property Tax Elimination Fund established in section 1302.
"School district." A school district of the first class,
first class A, second class, third class or fourth class,
including any independent school district. For purposes of the
levy, assessment and collection of any tax in a school district
of the first class, the term shall include the city council.
"School per capita tax." The tax authorized under section
679 of the act of March 10, 1949 (P.L.30, No.14), known as the
Public School Code of 1949.
"Secretary." The Secretary of Revenue of the Commonwealth.
"Tax Reform Code of 1971." The act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971.
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CHAPTER 3
TAXATION BY SCHOOL DISTRICTS
Section 301. Scope of chapter.
This chapter authorizes school districts to levy, assess and
collect a tax on personal income or a tax on earned income and
net profits as a means of abolishing property taxation by the
school districts.
Section 302. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Board of school directors." A board of school directors of
a school district of the first class A, second class, third
class or fourth class.
"Earned income." As defined in section 501 of The Local Tax
Enabling Act.
"Election officials." The board of elections of a county.
"Net profits." As defined in section 501 of The Local Tax
Enabling Act.
"Personal income." Income enumerated in section 303 of the
Tax Reform Code of 1971, as determined by the Department of
Revenue, subject to any correction thereof for fraud, evasion or
error as finally determined by the Commonwealth.
"Resident individual." An individual who is domiciled in a
school district.
"School district." A school district of the first class A,
second class, third class or fourth class.
"Taxpayer." An individual required to pay a tax under this
chapter.
Section 303. Limitation.
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A tax imposed under this chapter is subject to the
limitations set forth in Chapter 9.
Section 304. Preemption.
No act of the General Assembly may vacate or preempt a
resolution passed or adopted under the authority of this chapter
or another act providing authority for the imposition of a tax
by a school district unless the act expressly vacates or
preempts the authority to pass or adopt resolutions.
Section 305. General tax authorization.
(a) General rule.--A board of school directors may, by
resolution, levy, assess and collect or provide for the levying,
assessment and collection of a tax on personal income or a tax
on earned income and net profits for general revenue purposes.
(b) Personal income tax.--
(1) A board of school directors may levy, assess and
collect a tax on the personal income of resident individuals
at a rate determined by the board of school directors.
(2) A school district that seeks to levy the tax
authorized under paragraph (1) must comply with section 306.
(3) If a board of school directors seeks to impose a
personal income tax under this subsection and the referendum
under section 306 is approved by the electorate, the board of
school directors has no authority to impose an earned income
and net profits tax under subsection (c) or another act.
(4) A personal income tax imposed under the authority of
this section must be levied by the school district on each of
the classes of income specified in section 303 of the Tax
Reform Code of 1971 and regulations under that section,
provisions of which are incorporated by reference into this
chapter. The following apply:
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(i) Notwithstanding the provisions of section 353(f)
of the Tax Reform Code of 1971, the department may permit
the proper officer or an authorized agent of a school
district imposing a personal income tax under this
chapter to inspect the tax returns of a taxpayer of the
school district or may furnish to the officer or an
authorized agent an abstract of the return of income of a
current or former resident of the school district or
supply information concerning an item of income contained
in a tax return. The officer or authorized agent of the
school district imposing a tax under this chapter must be
furnished the requested information upon payment to the
department of the actual cost of providing the requested
information.
(ii) (A) Except for official purposes or as
provided by law, it is unlawful for an officer or
authorized agent of a school district to do any of
the following:
(I) Disclose to another individual or entity
the amount or source of income, profits, losses,
expenditures or any particular information
concerning income, profits, losses or
expenditures contained in a return.
(II) Permit another individual or entity to
view or examine a return or copy of a return or a
book containing an abstract or particulars.
(III) Print, publish or publicize in any
manner a return, any particular information
contained in or concerning the return, any amount
or source of income, profits, losses or
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expenditures in or concerning the return or any
particular information concerning income,
profits, losses or expenditures contained in or
relating to a return.
(B) An officer or authorized agent of a school
district that violates clause (A):
(I) may be fined not more than $1,000 or
imprisoned for not more than one year, or both;
and
(II) may be removed from office or
discharged from employment.
(c) Earned income and net profits tax.--
(1) A board of school directors may levy, assess and
collect a tax on earned income and net profits of resident
individuals at a rate determined by the board of school
directors.
(2) A school district that seeks to levy the tax
authorized under paragraph (1) must comply with section 306.
(3) If a board of school directors seeks to impose a tax
on earned income and net profits under this subsection and
the referendum under section 306 is approved by the
electorate, the board of school directors has no authority to
impose a personal income tax under subsection (b) or another
act.
Section 306. Referendum.
(a) Procedures.--In order to levy a personal income tax or
an earned income and net profits tax under this chapter, a
governing body shall use the procedures set forth in subsections
(b), (c), (d), (e), (f) and (g).
(b) Requirements.--
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(1) Subject to the notice and public hearing
requirements of subsection (g), a governing body may levy the
personal income tax or earned income and net profits tax
under this chapter only by obtaining the approval of the
electorate of the affected school district in a public
referendum at only the primary election preceding the fiscal
year when the personal income tax or earned income and net
profits tax will be initially imposed or the rate increased.
(2) The referendum question must state:
(i) the initial rate of the proposed personal income
tax or earned income and net profits tax;
(ii) the purpose of the tax;
(iii) the duration of the tax; and
(iv) the amount of revenue to be generated by the
implementation of the tax.
(3) The question must be in clear language that is
readily understandable by a layperson. For the purpose of
illustration, a referendum question may be framed as either
of the following:
Do you favor paying a personal income tax of X% for the
purpose of X, for X years, which will generate $X?
Do you favor paying an earned income and net profits tax
of X% for the purpose of X, for X years, which will
generate $X?
(4) A nonlegal interpretative statement must accompany
the question in accordance with section 201.1 of the act of
June 3, 1937 (P.L.1333, No.320), known as the Pennsylvania
Election Code, that includes the following:
(i) the initial rate of the personal income or
earned income and net profits tax imposed under this
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chapter; and
(ii) the estimated revenue to be derived from the
initial rate imposed under this chapter.
(c) Multicounty school district.--In the event a school
district is located in more than one county, petitions under
this section shall be filed with the election officials of the
county in which the administrative offices of the school
district are located.
(d) Administrative functions.--The election officials who
receive a petition shall perform all administrative functions in
reviewing and certifying the validity of the petition and
conduct all necessary communications with the school district.
(e) Duties of election officials.--
(1) If the election officials of the county who receive
the petition certify that it is sufficient under this section
and determine that a question should be placed on the ballot,
the decision must be communicated to election officials in
any other county in which the school district is also
located.
(2) Election officials in the other county or counties
shall cooperate with election officials of the county that
receives the petition to ensure that an identical question is
placed on the ballot at the same election throughout the
entire school district.
(f) Certification of results.--Election officials from each
county involved shall independently certify the results from
their county to the governing body.
(g) Notice and public hearing.--
(1) In order to levy the tax under this section, the
governing body shall adopt a resolution which must refer to
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this chapter prior to placing a question on the ballot.
(2) Prior to adopting a resolution imposing the tax
authorized by this section, the governing body shall give
public notice of its intent to adopt the resolution in the
manner provided by the Local Tax Enabling Act and shall
conduct at least two public hearings regarding the proposed
adoption of the resolution. One public hearing must be
conducted during normal business hours and one public hearing
must be conducted during evening hours or on a weekend.
Section 307. Continuity of tax.
Every tax levied under this chapter shall continue in force
on a fiscal year basis without annual reenactment unless the
rate of the tax is subsequently changed or the duration placed
on the referendum has expired.
Section 308. Collections.
An income tax imposed under this chapter is subject to the
provisions for collection and delinquency found in the Local Tax
Enabling Act.
Section 309. Credits.
(a) Credit.--Except as set forth in subsection (b), the
provisions of the Local Tax Enabling Act must be applied by a
board of school directors to determine any credits applicable to
a tax imposed under this chapter.
(b) Limitation.--Payment of a tax on income to a state other
than this Commonwealth or to a political subdivision located
outside the boundaries of this Commonwealth by a resident of a
school district located in this Commonwealth may not be credited
to and allowed as a deduction from the person's liability for an
income tax imposed by the school district of residence under
this chapter.
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Section 310. Exemption and special provisions.
(a) Earned income and net profits tax.--A school district
that imposes an earned income and net profits tax authorized
under section 305(c) may exempt a person whose total income from
all sources is less than $12,000 from paying the tax.
(b) Applicability to personal income tax.--Section 304 of
the Tax Reform Code of 1971 shall apply to a personal income tax
levied by a school district under section 305(b).
Section 311. Regulations.
A school district that imposes:
(1) an earned income and net profits tax authorized
under section 305(c) is subject to the provisions of the
Local Tax Enabling Act and may adopt procedures for the
processing of claims for credits and exemptions under
sections 309 and 310; or
(2) a personal income tax under section 305(b) is
subject to the regulations adopted by the department in
administering the tax due to the Commonwealth under Article
III of the Tax Reform Code of 1971.
CHAPTER 5
EDUCATION TAX
Section 501. Definitions.
The words and phrases used in this chapter shall have the
same meaning given to them in Article III of the Tax Reform Code
of 1971.
Section 502. Education tax.
In addition to the tax collected under section 302 of the Tax
Reform Code of 1971, the Commonwealth shall impose the tax set
forth in section 503 in the same manner as the tax under the Tax
Reform Code of 1971.
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Section 503. Imposition of tax.
(a) Residents.--Every resident individual, estate or trust
is subject to, and shall pay for the privilege of receiving each
of the classes of income enumerated in section 303 of the Tax
Reform Code of 1971, a tax upon each dollar of income received
by that resident during that resident's taxable year at the rate
of 1.43%.
(b) Nonresidents.--Every nonresident individual, estate or
trust is subject to, and shall pay for the privilege of
receiving each of the classes of income enumerated in section
303 of the Tax Reform Code of 1971 from sources within this
Commonwealth, a tax upon each dollar of income received by that
nonresident during that nonresident's taxable year at the rate
of 1.43%.
Section 504. Deposit in Residential Property Tax Elimination
Fund.
All money collected under this chapter shall be deposited in
the Residential Property Tax Elimination Fund.
Section 505. Combination of tax forms.
The department shall incorporate the taxpayer reporting
requirement for the implementation of this section into the
forms utilized by the department under Article III of the Tax
Reform Code of 1971.
CHAPTER 7
SALES AND USE TAX FOR THE
ELIMINATION OF RESIDENTIAL PROPERTY TAXES
SUBCHAPTER A
GENERAL PROVISIONS
Section 701. Definitions.
The following words and phrases when used in this chapter
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shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Adjustment services, collection services or credit reporting
services." Providing collection or adjustments of accounts
receivable or mercantile or consumer credit reporting,
including, but not limited to, services of the type provided by
adjustment bureaus or collection agencies, consumer or
mercantile credit reporting bureaus, credit bureaus or agencies,
credit clearinghouses or credit investigation services. The term
does not include providing credit card service with collection
by a central agency, providing debt counseling or adjustment
services to individuals or billing or collection services
provided by local exchange telephone companies.
"Blasting." The use of any combustible or explosive
composition in the removal of material resources, minerals and
mineral aggregates from the earth and the separation of the
dirt, waste and refuse in which the resources, minerals and
mineral aggregates are found.
"Building machinery and equipment." As follows:
(1) The term includes, but is not limited to, boilers,
chillers, air cleaners, humidifiers, fans, switchgear, pumps,
telephones, speakers, horns, motion detectors, dampers,
actuators, grills, registers, traffic signals, sensors, card
access devices, guardrails, medial devices, floor troughs and
grates and laundry equipment, together with integral
coverings and enclosures, whether or not the item constitutes
a fixture or is otherwise affixed to the real estate, whether
or not damage would be done to the item or its surroundings
upon removal or whether or not the item is physically located
within a real estate structure. The term also includes
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generation equipment, storage equipment, conditioning
equipment, distribution equipment and termination equipment,
which shall be limited to the following:
(i) air conditioning, limited to heating, cooling,
purification, humidification, dehumidification and
ventilation;
(ii) electrical;
(iii) plumbing;
(iv) communications limited to voice, video, data,
sound, master clock and noise abatement;
(v) alarms limited to fire, security and detection;
(vi) control systems limited to energy management,
traffic and parking lot and building access;
(vii) medical systems limited to diagnosis and
treatment equipment, medical gas, nurse call and doctor
paging;
(viii) laboratory systems;
(ix) cathodic protection systems; or
(x) furniture, cabinetry and kitchen equipment.
(2) The term shall not include guardrail posts, pipes,
fittings, pipe supports and hangers, valves, underground
tanks, wire, conduit, receptacle and junction boxes,
insulation, ductwork and coverings thereof.
"Building maintenance or cleaning services." Providing
services which include, but are not limited to, janitorial, maid
or housekeeping service, office or interior building cleaning or
maintenance service, window cleaning service, floor waxing
service, lighting maintenance service such as bulb replacement,
cleaning, chimney cleaning service, acoustical tile cleaning
service, venetian blind cleaning, cleaning and maintenance of
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telephone booths or cleaning and degreasing of service stations.
The term shall not include any of the following:
(1) Repairs on buildings and other structures.
(2) The maintenance or repair of boilers, furnaces and
residential air conditioning equipment or parts thereof.
(3) The painting, wallpapering or applying other like
coverings to interior walls, ceilings or floors.
(4) The exterior painting of buildings.
"Call center." As follows:
(1) The physical location in this Commonwealth:
(i) where at least 150 employees are employed to
initiate or answer telephone calls;
(ii) where there are at least 200 telephone lines;
and
(iii) which utilizes an automated call distribution
system for customer telephone calls in one or more of the
following activities:
(A) customer service and support;
(B) technical assistance;
(C) help desk service;
(D) providing information;
(E) conducting surveys;
(F) revenue collections; or
(G) receiving orders or reservations.
(2) For purposes of this definition, a physical location
may include multiple buildings utilized by a taxpayer located
within this Commonwealth.
"Commercial aircraft operator." A person, excluding
scheduled airlines, that engages in any or all of the following:
(1) charter of aircraft;
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(2) leasing of aircraft;
(3) aircraft sales;
(4) aircraft rental;
(5) flight instruction;
(6) air freight; or
(7) any other flight activities for compensation.
"Commercial racing activities." Any of the following:
(1) Thoroughbred and harness racing at which pari-mutuel
wagering is conducted under 3 Pa.C.S. Ch.93 (relating to race
horse industry reform).
(2) Fair racing sanctioned by the State Harness Racing
Commission.
"Construction contract." A written or oral contract or
agreement for the construction, reconstruction, remodeling,
renovation or repair of real estate or a real estate structure.
The term shall not apply to services which are taxable under
paragraphs (14) and (17) of the definition of "sale at retail"
and paragraphs (12) and (15) of the definition of "use."
"Construction contractor." A person who performs an activity
pursuant to a construction contract, including a subcontractor.
"Disinfecting or pest control services." Providing
disinfecting, termite control, insect control, rodent control or
other pest control services, including, but not limited to,
deodorant servicing of restrooms, washroom sanitation service,
restroom cleaning service, extermination service or fumigating
service. The term "fumigating service" shall not include the
fumigation of agricultural commodities or containers used for
agricultural commodities, and the term "insect control" shall
not include the spraying of trees which are harvested for
commercial purposes for gypsy moth control.
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"Employment agency services." Providing employment services
to a prospective employer or employee other than employment
services provided by theatrical employment agencies and motion
picture casting bureaus. These services shall include, but not
be limited to, services of the type provided by employment
agencies, executive placing services and labor contractor
employment agencies other than farm labor.
"Fiscal Code." The act of April 9, 1929 (P.L.343, No.176),
known as The Fiscal Code.
"Gratuity." Any amount paid or remitted for services
performed in conjunction with any sale of food or beverages or
hotel or motel accommodations which amount is in excess of the
charges and the tax thereon for the food, beverages or
accommodations regardless of the method of billing or payment.
"Help supply services." Providing temporary or continuing
help where the help supplied is on the payroll of the supplying
person or entity but is under the supervision of the individual
or business to which help is furnished. These services shall
include, but not be limited to, service of a type provided by
labor and manpower pools, employee leasing services, office help
supply services, temporary help services, usher services,
modeling services or fashion show model supply services. The
services shall not include providing farm labor services. The
term shall not include nursing, home health care and personal
care services and other human health-related services. As used
in this definition, "personal care" shall include providing at
least one of the following types of assistance to persons with
limited ability for self-care:
(1) dressing, bathing or feeding;
(2) supervising self-administered medication;
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(3) transferring a person to or from a bed or
wheelchair; or
(4) routine housekeeping chores when provided in
conjunction with and supplied by the same provider of the
assistance listed in paragraph (1), (2) or (3).
"Internet." The international nonproprietary computer
network of both Federal and non-Federal interoperable packet
switched data networks.
"Lawn care service." Providing services for lawn upkeep,
including, but not limited to, fertilizing, lawn mowing,
shrubbery trimming and other lawn treatment services.
"Lobbying services." Providing the services of a lobbyist,
as defined in the definition of "lobbyist" in 65 Pa.C.S. § 13A03
(relating to definitions).
"Maintaining a place of business in this Commonwealth." As
follows:
(1) Having, maintaining or using within this
Commonwealth, either directly or through a subsidiary,
representative or an agent, an office, distribution house,
sales house, warehouse, service enterprise or other place of
business, any agent of general or restricted authority or
representative, irrespective of whether the place of
business, representative or agent is located in this
Commonwealth permanently or temporarily or whether the person
or subsidiary maintaining the place of business,
representative or agent is authorized to do business within
this Commonwealth.
(2) Engagement in any activity as a business within this
Commonwealth by any person, either directly or through a
subsidiary, representative or an agent, in connection with
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the lease, sale or delivery of tangible personal property or
the performance of services thereon for use, storage or
consumption or in connection with the sale or delivery for
use of the services described in paragraphs (11), (12), (13),
(14), (15), (16), (17) and (18) of the definition of "sale at
retail," including, but not limited to, having, maintaining
or using any office, distribution house, sales house,
warehouse or other place of business, any stock of goods or
any solicitor, canvasser, salesman, representative or agent
under its authority, at its direction or with its permission,
regardless of whether the person or subsidiary is authorized
to do business in this Commonwealth.
(3) Regularly or substantially soliciting orders within
this Commonwealth in connection with the lease, sale or
delivery of tangible personal property to or the performance
thereon of services or in connection with the sale or
delivery of the services described in paragraphs (11), (12),
(13), (14), (15), (16), (17) and (18) of the definition of
"sale at retail" for residents of this Commonwealth by means
of catalogs or other advertising, whether the orders are
accepted within or without this Commonwealth.
(3.1) The entering of this Commonwealth by any person to
provide assembly, service or repair of tangible personal
property, either directly or through a subsidiary,
representative or agent.
(3.2) Delivering tangible personal property to locations
within this Commonwealth if the delivery includes the
unpacking, positioning, placing or assembling of the tangible
personal property.
(3.3) Having any contact within this Commonwealth which
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would allow the Commonwealth to require a person to collect
and remit tax under the Constitution of the United States.
(3.4) Providing a customer's mobile telecommunications
service deemed to be provided by the customer's home service
provider under the Mobile Telecommunications Sourcing Act
(Public Law 106-252, 4 U.S.C. §§ 116-126). For purposes of
this paragraph, words and phrases used in this paragraph
shall have the meanings given to them in the Mobile
Telecommunications Sourcing Act.
(4) The term shall not include:
(i) Owning or leasing of tangible or intangible
property by a person who has contracted with an
unaffiliated commercial printer for printing, provided
that:
(A) the property is for use by the commercial
printer; and
(B) the property is located at the premises
within this Commonwealth of the commercial printer.
(ii) Visits by a person's employees or agents to the
premises within this Commonwealth of an unaffiliated
commercial printer with whom the person has contracted
for printing in connection with the contract.
"Manufacture." As follows:
(1) The performance of manufacturing, fabricating,
compounding, processing or other operations, engaged in as a
business, which place any tangible personal property in a
form, composition or character different from that in which
it is acquired whether for sale or use by the manufacturer,
and shall include, but not be limited to:
(i) Every operation commencing with the first
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production stage and ending with the completion of
tangible personal property having the physical qualities,
including packaging, if any, passing to the ultimate
consumer, which it has when transferred by the
manufacturer to another. For purposes of this paragraph,
"operation" shall include clean rooms and their component
systems, including:
(A) environmental control systems, antistatic
vertical walls and manufacturing platforms and
floors, which are independent of the real estate;
(B) process piping systems;
(C) specialized lighting systems;
(D) deionized water systems;
(E) process vacuum and compressed air systems;
(F) process and specialty gases; and
(G) alarm or warning devices specifically
designed to warn of threats to the integrity of the
product or people. For purposes of this paragraph, a
"clean room" is a location with a self-contained,
sealed environment with a controlled, closed air
system independent from the facility's general
environmental control system.
(ii) The publishing of books, newspapers, magazines
and other periodicals and printing.
(iii) Refining, blasting, exploring, mining and
quarrying for or otherwise extracting from the earth,
waste, stockpiles, pits or banks any natural resources,
minerals and mineral aggregates, including blast furnace
slag.
(iv) Building, rebuilding, repairing and making
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additions to or replacements in or upon vessels designed
for commercial use of registered tonnage of 50 tons or
more when produced upon special order of the purchaser,
or when rebuilt, repaired or enlarged, or when
replacements are made upon order of, or for the account
of the owner.
(v) As follows:
(A) Research having as its objective the
production of a new or an improved:
(I) product or utility service; or
(II) method of producing a product or
utility service.
(B) The term does not include market research or
research having as its objective the improvement of
administrative efficiency.
(vi) Remanufacture for wholesale distribution by a
remanufacturer of motor vehicle parts from used parts
acquired in bulk by the remanufacturer using an assembly
line process which involves the complete disassembly of
those parts and integration of the components of those
parts with other used or new components of parts,
including the salvaging, recycling or reclaiming of used
parts by the remanufacturer.
(vii) Remanufacture or retrofit by a manufacturer or
remanufacturer of aircraft, armored vehicles and other
defense-related vehicles having a finished value of at
least $50,000. Remanufacture or retrofit involves the
disassembly of those aircraft, vehicles, parts or
components, including electronic components, the
integration of those parts and components with other used
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or new parts or components, including the salvaging,
recycling or reclaiming of the used parts or components,
and the assembly of the new or used aircraft, vehicles,
parts or components. For purposes of this subparagraph,
the following terms or phrases have the following
meanings:
(A) "Aircraft" means fixed-wing aircraft,
helicopters, powered aircraft, tilt-rotor or tilt-
wing aircraft, unmanned aircraft and gliders.
(B) "Armored vehicles" means tanks, armed
personnel carriers and all other armed track or
semitrack vehicles.
(C) "Other defense-related vehicles" means
trucks, truck-tractors, trailers, jeeps and other
utility vehicles, including any unmanned vehicles.
(viii) Remanufacture by a remanufacturer of
locomotive parts from used parts acquired in bulk by the
remanufacturer using an assembly line process which
involves the complete disassembly of the parts and
integration of the components of the parts with other
used or new components of parts, including the salvaging,
recycling or reclaiming of used parts by the
remanufacturer.
(2) The term does not include:
(i) Constructing, altering, servicing, repairing or
improving real estate or repairing, servicing or
installing tangible personal property.
(ii) Producing a commercial motion picture.
(iii) Cooking, freezing or baking fruits,
vegetables, mushrooms, fish, seafood, meats, poultry or
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bakery products.
"Mobile telecommunications service." Mobile
telecommunications service as that term is defined in the Mobile
Telecommunications Sourcing Act.
"Person." A natural person, association, fiduciary,
partnership, corporation or other entity, including the
Commonwealth of Pennsylvania, its political subdivisions and
instrumentalities and public authorities. Whenever used in any
provision prescribing and imposing a penalty or imposing a fine
or imprisonment, or both, the term, as applied to an
association, shall include the members of these listed classes
and, as applied to a corporation, the officers of the
corporation.
"Prebuilt housing." Either of the following:
(1) Manufactured housing, including mobile homes, which
bears a label as required by and referred to in the act of
November 17, 1982 (P.L.676, No.192), known as the
Manufactured Housing Construction and Safety Standards
Authorization Act.
(2) Industrialized housing as defined in the act of May
11, 1972 (P.L.286, No.70), known as the Industrialized
Housing Act.
"Prebuilt housing builder." A person who makes a prebuilt
housing sale to a prebuilt housing purchaser.
"Prebuilt housing purchaser." A person who purchases
prebuilt housing in a transaction and who intends to occupy the
unit for residential purposes in this Commonwealth.
"Prebuilt housing sale." A sale of prebuilt housing to a
prebuilt housing purchaser, including a sale to a landlord,
without regard to whether the person making the sale is
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responsible for installing the prebuilt housing or whether the
prebuilt housing becomes a real estate structure upon
installation. Temporary installation by a prebuilt housing
builder for display purposes of a unit held for resale shall not
be considered occupancy for residential purposes.
"Premium cable or premium video programming service."
(1) That portion of cable television services, video
programming services, community antenna television services
or any other distribution of television, video, audio or
radio services which meets all of the following criteria:
(i) Is transmitted with or without the use of wires
to purchasers.
(ii) Consists substantially of programming
uninterrupted by paid commercial advertising which
includes programming primarily composed of uninterrupted
full-length motion pictures or sporting events, pay-per-
view, paid programming or like audio or radio
broadcasting.
(iii) Does not constitute a component of a basic
service tier provided by a cable television system or a
cable programming service tier provided by a cable
television system. The following shall apply:
(A) A basic service tier shall include:
(I) all signals of domestic television
broadcast stations;
(II) any public, educational, governmental
or religious programming; and
(III) any additional video programming
signals or service added to the basic service
tier by the cable operator.
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(B) The basic service tier shall include a
single additional lower-priced package of broadcast
channels and access information channels which is a
subset of the basic service tier as set forth in this
paragraph.
(C) A cable programming service tier includes
any video programming other than:
(I) the basic service tier;
(II) video programming offered on a pay-per-
channel or pay-per-view basis; or
(III) a combination of multiple channels of
pay-per-channel or pay-per-view programming
offered as a package.
(2) If a purchaser receives or agrees to receive premium
cable or premium video programming service, then the
following charges are included in the purchase price:
(i) Charges for installation or repair of any
premium cable or premium video programming service.
(ii) Upgrade to include additional premium cable or
premium video programming service.
(iii) Downgrade to exclude all or some premium cable
or premium video programming service.
(iv) Additional premium cable outlets in excess of
10.
(v) Any other charge or fee related to premium cable
or premium video programming services.
(3) The term shall not apply to any of the following:
(i) Transmissions by public television.
(ii) Public radio services.
(iii) Official Federal, State or local government
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cable services.
(iv) Local origination programming which provides a
variety of public service programs unique to the
community.
(v) Programming which provides coverage of public
affairs issues which are presented without commentary or
analysis. This subparagraph includes United States
Congressional proceedings.
(vi) Programming which is substantially related to
religious subjects.
(vii) Subscriber charges for access to a video dial
tone system or charges by a common carrier to a video
programmer for the transport of video programming.
"Prepaid mobile telecommunications service." Mobile
telecommunications service which is paid for in advance and
which enables the origination of calls using an access number,
authorization code or both, whether manually or electronically
dialed, if the remaining amount of units of the prepaid mobile
telecommunications service is known by the service provider of
the prepaid mobile telecommunications service on a continuous
basis. The term does not include the advance purchase of mobile
telecommunications service if the purchase is pursuant to a
service contract between the service provider and customer and
if the service contract requires the customer to make periodic
payments to maintain the mobile telecommunications service.
"Prepaid telecommunications." A tangible item containing a
prepaid authorization number that can be used solely to obtain
telecommunications service, including any renewal or increases
in the prepaid amount.
"Processing." The performance of the following activities
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when engaged in as a business enterprise:
(1) The filtering or heating of honey or the cooking,
baking or freezing of fruits, vegetables, mushrooms, fish,
seafood, meats, poultry or bakery products when the person
engaged in the business packages the property in sealed
containers for wholesale distribution.
(1.1) The processing of fruits or vegetables by
cleaning, cutting, coring, peeling or chopping and treating
to preserve, sterilize or purify and substantially extend the
useful shelf life of the fruits or vegetables when the person
engaged in the activity packages the property in sealed
containers for wholesale distribution.
(2) The scouring, carbonizing, cording, combing,
throwing, twisting or winding of natural or synthetic fibers,
or the spinning, bleaching, dyeing, printing or finishing of
yarns or fabrics, when the activities are performed prior to
sale to the ultimate consumer.
(3) The electroplating, galvanizing, enameling,
anodizing, coloring, finishing, impregnating or heat treating
of metals or plastics for sale or in the process of
manufacturing.
(3.1) The blanking, shearing, leveling, slitting or
burning of metals for sale to or use by a manufacturer or
processor.
(4) The rolling, drawing or extruding of ferrous and
nonferrous metals.
(5) The fabrication for sale of ornamental or structural
metal or of metal stairs, staircases, gratings, fire escapes
or railings, not including fabrication work done at the
construction site.
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(6) The preparation of animal feed or poultry feed for
sale.
(7) The production, processing and bottling of
nonalcoholic beverages for wholesale distribution.
(8) The operation of a saw mill or planing mill for the
production of lumber or lumber products for sale. The
operation of a saw mill or planing mill begins with the
unloading by the operator of the saw mill or planing mill of
logs, timber, pulpwood or other forms of wood material to be
used in the saw mill or planing mill.
(9) The milling for sale of flour or meal from grains.
(9.1) The aging, stripping, conditioning, crushing and
blending of tobacco leaves for use as cigar filler or as
components of smokeless tobacco products for sale to
manufacturers of tobacco products.
(10) The slaughtering and dressing of animals for meat
to be sold or to be used in preparing meat products for sale
and the preparation of meat products, including lard, tallow,
grease, cooking and inedible oils for wholesale distribution.
(11) The processing of used lubricating oils.
(12) The broadcasting of radio and television programs
of licensed commercial or educational stations.
(13) The cooking or baking of bread, pastries, cakes,
cookies, muffins and donuts when the person engaged in the
activity sells the items at retail at locations that do not
constitute an establishment from which ready-to-eat food and
beverages are sold. For purposes of this paragraph, a bakery,
a pastry shop and a donut shop shall not be considered an
establishment from which ready-to-eat food and beverages are
sold.
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(14) The cleaning and roasting and the blending,
grinding or packaging for sale of coffee from green coffee
beans or the production of coffee extract.
(15) The preparation of dry or liquid fertilizer for
sale.
(16) The production, processing and packaging of ice for
wholesale distribution.
(17) The producing of mobile telecommunications
services.
(18) The collection, washing, sorting, inspecting and
packaging of eggs.
"Promoter." A person who either, directly or indirectly,
rents, leases or otherwise operates or grants permission to any
person to use space at a show for the display for sale or for
the sale of tangible personal property or services subject to
tax under section 702.
"Purchase at retail." Any of the following:
(1) The acquisition for a consideration of the
ownership, custody or possession of tangible personal
property other than for resale by the person acquiring the
same when the acquisition is made for the purpose of
consumption or use, whether the acquisition shall be absolute
or conditional, and by whatsoever means the same shall have
been effected.
(2) The acquisition of a license to use or consume and
the rental or lease of tangible personal property, other than
for resale, regardless of the period of time the lessee has
possession or custody of the property.
(3) The obtaining for a consideration any of those
services set forth under paragraphs (2), (3) and (4) of the
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definition of "sale at retail" other than for resale.
(4) A retention after March 7, 1956, of possession,
custody or a license to use or consume pursuant to a rental
contract or other lease arrangement, other than as security,
other than for resale.
(5) The obtaining for a consideration any of those
services set forth under paragraphs (11), (12), (13), (14),
(15), (16), (17) and (18) of the definition of "sale at
retail."
(6) With respect to liquor and malt or brewed beverages,
the term includes purchase of liquor from a Pennsylvania
Liquor Store by a person for any purpose, and purchase of
malt or brewed beverages from a manufacturer of malt or
brewed beverages, distributor or importing distributor by a
person for any purpose, except purchases from a manufacturer
of malt or brewed beverages by a distributor or importing
distributor or purchases from an importing distributor by a
distributor within the meaning of the act of April 12, 1951
(P.L.90, No.21), known as the Liquor Code. The term does not
include purchase of malt or brewed beverages from a retail
dispenser or purchase of liquor or malt or brewed beverages
from a person holding a retail liquor license within the
meaning of and pursuant to the provisions of the Liquor Code,
but shall include purchase or acquisition of liquor or malt
or brewed beverages other than pursuant to the provisions of
the Liquor Code.
"Purchase price." As follows:
(1) The total value of anything paid or delivered, or
promised to be paid or delivered, whether it be money or
otherwise, in complete performance of a sale at retail or
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purchase at retail, without any deduction on account of the
cost or value of the property sold, cost or value of
transportation, cost or value of labor or service, interest
or discount paid or allowed after the sale is consummated,
any other taxes imposed by the Commonwealth or any other
expense except that there shall be excluded any gratuity or
separately stated deposit charge for returnable containers.
(2) There shall be deducted from the purchase price the
value of tangible personal property actually taken in trade
or exchange in lieu of the whole or part of the purchase
price. For the purpose of this paragraph, the amount allowed
by reason of tangible personal property actually taken in
trade or exchange shall be considered the value of the
property.
(3) In determining the purchase price on the sale or use
of taxable tangible personal property or a service where,
because of affiliation of interests between the vendor and
purchaser, or irrespective of any the affiliation, if for any
other reason the purchase price declared by the vendor or
taxpayer on the taxable sale or use of the tangible personal
property or service is, in the opinion of the department, not
indicative of the true value of the article or service or the
fair price thereof, the department shall, pursuant to uniform
and equitable rules, determine the amount of constructive
purchase price upon the basis of which the tax shall be
computed and levied. The rules shall provide for a
constructive amount of purchase price for each sale or use
which would naturally and fairly be charged in an arms-length
transaction in which the element of common interest between
the vendor or purchaser is absent or, if no common interest
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exists, any other element causing a distortion of the price
or value is likewise absent. For the purpose of this
paragraph where a taxable sale or purchase at retail
transaction occurs between a parent and a subsidiary,
affiliate or controlled corporation of the parent
corporation, there shall be a rebuttable presumption that
because of the common interest the transaction was not at
arms-length.
(4) Where there is a transfer or retention of possession
or custody, whether it be termed a rental, lease, service or
otherwise, of tangible personal property, including, but not
limited to, linens, aprons, motor vehicles, trailers, tires,
industrial office and construction equipment and business
machines, the full consideration paid or delivered to the
vendor or lessor shall be considered the purchase price, even
if the consideration be separately stated and is designated
as payment for processing, laundering, service, maintenance,
insurance, repairs, depreciation or otherwise. Where the
vendor or lessor supplies or provides an employee to operate
the tangible personal property, the value of the labor that
is supplied may be excluded and shall not be considered as
part of the purchase price if separately stated. There shall
also be included as part of the purchase price the value of
anything paid or delivered, or promised to be paid or
delivered, by a lessee, whether it be money or otherwise, to
any person other than the vendor or lessor by reason of the
maintenance, insurance or repair of the tangible personal
property which a lessee has the possession or custody of
under a rental contract or lease arrangement.
(5) With respect to the tax imposed by section 702(b)
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upon any tangible personal property originally purchased by
the user of the property six months or longer prior to the
first taxable use of the property within this Commonwealth.
The user may elect to pay tax on a substituted base
determined by considering the purchase price of the property
for tax purposes to be equal to the prevailing market price
of similar tangible personal property at the time and place
of the first use within this Commonwealth. The election must
be made at the time of filing a tax return with the
department and reporting the tax liability and paying the tax
due plus accrued penalties and interest within six months of
the due date of the report and payment under section 717(a)
and (c).
(6) The purchase price of employment agency services and
help supply services shall be the service fee paid by the
purchaser to the vendor or supplying entity. The term
"service fee," as used in this paragraph, shall be the total
charge or fee of the vendor or supplying entity minus the
costs of the supplied employee which costs are wages,
salaries, bonuses and commissions, employment benefits,
expense reimbursements and payroll and withholding taxes, to
the extent that these costs are specifically itemized or that
these costs in aggregate are stated in billings from the
vendor or supplying entity. To the extent that these costs
are not itemized or stated on the billings, the service fee
shall be the total charge or fee of the vendor or supplying
entity.
(7) Unless the vendor separately states which portion of
the billing applies to premium cable services, the total bill
for the provision of all cable services shall be the purchase
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price.
(8) The purchase price of prebuilt housing shall be 60%
of the manufacturer's selling price, but a manufacturer of
prebuilt housing who precollects tax from a prebuilt housing
builder at the time of the sale to the prebuilt housing
builder shall have the option to collect tax on 60% of the
selling price or on 100% of the actual cost of the supplies
and materials used in the manufacture of the prebuilt
housing.
"Purchaser." A person who acquires, for a consideration, the
ownership, custody or possession by sale, lease or otherwise, of
tangible personal property, or who obtains services in exchange
for a purchase price, but not including an employer who obtains
services from employees of the employer in exchange for wages or
salaries when the services are rendered in the ordinary scope of
their employment.
"Real estate structure." As follows:
(1) A structure or item purchased by a construction
contractor pursuant to a construction contract with:
(i) a charitable organization, a volunteer firemen's
organization, a nonprofit educational institution or a
religious organization for religious purposes and which
qualifies as an institution of purely public charity
under the act of November 26, 1997 (P.L.508, No.55),
known as the Institutions of Purely Public Charity Act;
(ii) the United States; or
(iii) the Commonwealth, its instrumentalities or
political subdivisions.
(2) The term includes building machinery and equipment,
developed or undeveloped land, streets, roads, highways,
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parking lots, stadiums and stadium seating, recreational
courts, sidewalks, foundations, structural supports, walls,
floors, ceilings, roofs, doors, canopies, millwork,
elevators, windows and external window coverings, outdoor
advertising boards or signs, airport runways, bridges, dams,
dikes, traffic control devices including traffic signs,
satellite dishes, antennas, guardrail posts, pipes, fittings,
pipe supports and hangers, valves, underground tanks, wire,
conduit, receptacle and junction boxes, insulation, ductwork
and coverings thereof and any structure or item similar to
any of the foregoing, whether or not the structure or item
constitutes a fixture or is affixed to the real estate or
whether or not damage would be done to the structure or item
or its surroundings upon removal.
"Resale." As follows:
(1) Any transfer of ownership, custody or possession of
tangible personal property for a consideration, including the
grant of a license to use or consume and transactions where
the possession of the property is transferred but where the
transferor retains title only as security for payment of the
selling price whether the transaction be designated as
bailment lease, conditional sale or otherwise.
(2) The physical incorporation of tangible personal
property as an ingredient or constituent into other tangible
personal property, which is to be sold in the regular course
of business or the performance of those services described in
paragraphs (2), (3) and (4) of the definition of "sale at
retail" upon tangible personal property which is to be sold
in the regular course of business or where the person
incorporating the property has undertaken at the time of
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purchase to cause it to be transported in interstate commerce
to a destination outside this Commonwealth. The term shall
include telecommunications services purchased by a cable
operator or video programmer that are used to transport or
deliver cable or video programming services which are sold in
the regular course of business.
(3) The term shall also include tangible personal
property purchased or having a situs within this Commonwealth
solely for the purpose of being processed, fabricated or
manufactured into, attached to or incorporated into tangible
personal property and thereafter transported outside this
Commonwealth for use exclusively outside this Commonwealth.
(4) The term does not include a sale of malt or brewed
beverages by a retail dispenser or a sale of liquor or malt
or brewed beverages by a person holding a retail liquor
license within the meaning of the Liquor Code.
(5) The physical incorporation of tangible personal
property as an ingredient or constituent in the construction
of foundations for machinery or equipment the sale or use of
which is excluded from tax under the provisions of paragraph
(8)(ii) of the definition of "sale at retail" and paragraph
(4)(ii)(B) of the definition of "use," whether the
foundations at the time of construction or transfer
constitute tangible personal property or real estate.
"Resident." As follows:
(1) Any natural person:
(i) who is domiciled in this Commonwealth; or
(ii) who maintains a permanent place of abode within
this Commonwealth and spends in the aggregate more than
60 days of the year within this Commonwealth.
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(2) Any corporation:
(i) incorporated under the laws of this
Commonwealth;
(ii) authorized to do business or doing business
within this Commonwealth; or
(iii) maintaining a place of business within this
Commonwealth.
(3) Any association, fiduciary, partnership or other
entity:
(i) domiciled in this Commonwealth;
(ii) authorized to do business or doing business
within this Commonwealth; or
(iii) maintaining a place of business within this
Commonwealth.
"Sale at retail." As follows:
(1) Any transfer, for a consideration, of the ownership,
custody or possession of tangible personal property,
including the grant of a license to use or consume whether
the transfer be absolute or conditional and by whatsoever
means the same shall have been effected.
(2) The rendition of the service of printing or
imprinting of tangible personal property for a consideration
for persons who furnish, either directly or indirectly, the
materials used in the printing or imprinting.
(3) The rendition for a consideration of the service of:
(i) Washing, cleaning, waxing, polishing or
lubricating of motor vehicles of another, whether or not
any tangible personal property is transferred in
conjunction therewith.
(ii) Inspecting motor vehicles pursuant to the
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mandatory requirements of 75 Pa.C.S. (relating to
vehicles).
(4) The rendition for a consideration of the service of
repairing, altering, mending, pressing, fitting, dyeing,
laundering, drycleaning or cleaning tangible personal
property, including wearing apparel or shoes, or applying or
installing tangible personal property as a repair or
replacement part of other tangible personal property except
wearing apparel or shoes for a consideration, whether or not
the services are performed directly or by any means other
than by coin-operated self-service laundry equipment for
wearing apparel or household goods and whether or not any
tangible personal property is transferred in conjunction
therewith, except services as are rendered in the
construction, reconstruction, remodeling, repair or
maintenance of real estate, except that this paragraph shall
not be deemed to impose a tax on diaper service.
(5) (Reserved).
(6) (Reserved).
(7) (Reserved).
(8) (i) Any retention of possession, custody or a
license to use or consume tangible personal property or
any further obtaining of services described in paragraphs
(2), (3) and (4) pursuant to a rental or service contract
or other arrangement, other than as security.
(ii) The term does not include any transfer of
tangible personal property or rendition of services for
the purpose of resale or rendition of services or the
transfer of tangible personal property, including, but
not limited to, machinery and equipment and parts
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therefor and supplies to be used or consumed by the
purchaser directly in the operations of:
(A) The manufacture of tangible personal
property.
(B) Farming, dairying, agriculture, timbering,
horticulture or floriculture when engaged in as a
business enterprise. The term "farming" shall include
the propagation and raising of ranch-raised
furbearing animals and the propagation of game birds
for commercial purposes by holders of propagation
permits issued under 34 Pa.C.S. (relating to game)
and the propagation and raising of horses to be used
exclusively for commercial racing activities. The
term "timbering" shall include:
(I) The business of producing or harvesting
trees from forests, woodlots or tree farms for
the purpose of the commercial production of wood,
paper or energy products derived from wood by a
company primarily engaged in the business of
harvesting trees.
(II) All operations prior to the transport
of the harvested product necessary for the
removal of timber or forest products from the
site, in-field processing of trees into logs or
chips, complying with environmental protection
and safety requirements applicable to the
harvesting of forest products, loading of forest
products onto highway vehicles for transport to
storage or processing facilities and
postharvesting site reclamation, including those
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activities necessary to improve timber growth or
ensure natural or direct reforestation of the
site. The term shall not include the harvesting
of trees for clearing land for access roads.
(C) The producing, delivering or rendering of a
public utility service or constructing,
reconstructing, remodeling, repairing or maintaining
the facilities which are directly used in producing,
delivering or rendering the public utility service.
(D) Processing as defined in this section.
(iii) The exclusions provided in subparagraph (ii)
shall not apply to any vehicle required to be registered
under 75 Pa.C.S., except those vehicles used directly by
a public utility engaged in business as a common carrier,
to maintenance facilities or to materials, supplies or
equipment to be used or consumed in the construction,
reconstruction, remodeling, repair or maintenance of real
estate other than directly used machinery, equipment,
parts or foundations therefor that may be fixed to the
real estate.
(iv) The exclusions provided in subparagraph (ii)
shall not apply to tangible personal property or services
to be used or consumed in managerial sales or other
nonoperational activities nor to the purchase or use of
tangible personal property or services by any person
other than the person directly using the same in the
operations described in subparagraph (ii).
(v) The exclusion provided in subparagraph (ii)(C)
shall not apply to:
(A) construction materials, supplies or
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equipment used to construct, reconstruct, remodel,
repair or maintain facilities not used directly by
the purchaser in the production, delivering or
rendition of public utility service;
(B) construction materials, supplies or
equipment used to construct, reconstruct, remodel,
repair or maintain a building, road or similar
structure; or
(C) tools and equipment used but not installed
in the maintenance of facilities used directly in the
production, delivering or rendition of a public
utility service.
(vi) The exclusions provided in subparagraph (ii)
shall not apply to the services enumerated in paragraphs
(11), (12), (13), (14), (15), (16), (17) and (18) nor to
lobbying services, adjustment services, collection
services or credit reporting services, secretarial or
editing services, disinfecting or pest control services,
building maintenance or cleaning services, employment
agency services, help supply services, lawn care service
or self-storage service, except that the exclusion
provided in subparagraph (ii)(B) for farming, dairying
and agriculture shall apply to the service enumerated in
the definition of disinfecting or pest control services.
(9) Where tangible personal property or services are
utilized for purposes constituting a sale at retail and for
purposes excluded from this definition, it shall be presumed
that the tangible personal property or services are utilized
for purposes constituting a sale at retail and subject to tax
unless the user thereof proves to the department that the
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predominant purposes for which the tangible personal property
or services are utilized do not constitute a sale at retail.
(10) With respect to liquor and malt or brewed
beverages, the term includes sale of liquor by a Pennsylvania
Liquor Store to a person for any purpose, and sale of malt or
brewed beverages by a manufacturer of malt or brewed
beverages, distributor or importing distributor to a person
for any purpose, except sales by a manufacturer of malt or
brewed beverages to a distributor or importing distributor or
sales by an importing distributor to a distributor within the
meaning of the Liquor Code. The term does not include sale of
malt or brewed beverages by a retail dispenser or sale of
liquor or malt or brewed beverages by a person holding a
retail liquor license within the meaning of and pursuant to
the provisions of the Liquor Code but shall include sale of
liquor or malt or brewed beverages other than pursuant to the
provisions of the Liquor Code.
(11) The rendition for a consideration of lobbying
services.
(12) The rendition for a consideration of adjustment
services, collection services or credit reporting services.
(13) The rendition for a consideration of secretarial or
editing services.
(14) The rendition for a consideration of disinfecting
or pest control services, building maintenance or cleaning
services.
(15) The rendition for a consideration of employment
agency services or help supply services.
(16) (Reserved).
(17) The rendition for a consideration of lawn care
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service.
(18) The rendition for a consideration of self-storage
service.
(19) The rendition for a consideration of a mobile
telecommunications service.
"Secretarial or editing services." Providing services which
include, but are not limited to, editing, letter writing,
proofreading, resume writing, typing or word processing. The
term shall not include court reporting and stenographic
services.
"Self-storage service." Providing a building, a room in a
building or a secured area within a building with separate
access provided for each purchaser of self-storage service,
primarily for the purpose of storing personal property. The term
shall not include the provision of the following:
(1) Safe deposit boxes by financial institutions.
(2) Storage in refrigerator or freezer units.
(3) Storage in commercial warehouses.
(4) Facilities for goods distribution.
(5) Lockers in airports, bus stations, museums and other
public places.
"Show." An event, the primary purpose of which involves the
display or exhibition of any tangible personal property or
services for sale, including, but not limited to, a flea market,
antique show, coin show, stamp show, comic book show, hobby
show, automobile show, fair or any similar show, whether held
regularly or of a temporary nature, at which more than one
vendor displays for sale or sells tangible personal property or
services subject to tax under section 702.
"Soft drinks." All nonalcoholic beverages, whether
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carbonated or not, such as soda water, ginger ale, Coca-Cola,
lime cola, Pepsi-Cola, Dr Pepper, fruit juice when plain or
carbonated water, flavoring or syrup is added, carbonated water,
orangeade, lemonade, root beer or any and all preparations,
commonly referred to as soft drinks, of whatsoever kind, and are
further described as including any and all beverages, commonly
referred to as soft drinks, which are made with or without the
use of any syrup. The term shall not include natural fruit or
vegetable juices or their concentrates, or noncarbonated fruit
juice drinks containing not less than 25% by volume of natural
fruit juices or of fruit juice which has been reconstituted to
its original state, or natural concentrated fruit or vegetable
juices reconstituted to their original state, whether any of the
foregoing natural juices are frozen or unfrozen, sweetened or
unsweetened, seasoned with salt or spice or unseasoned, nor
shall the term include coffee, coffee substitutes, tea, cocoa,
natural fluid milk or noncarbonated drinks made from milk
derivatives.
"Storage." Any keeping or retention of tangible personal
property within this Commonwealth for any purpose, including the
interim keeping, retaining or exercising any right or power over
the tangible personal property. This term is in no way limited
to the provision of self-storage service.
"Tangible personal property."
(1) Corporeal personal property, including, but not
limited to, goods, wares, merchandise, steam and natural and
manufactured and bottled gas for nonresidential use,
electricity for nonresidential use, prepaid
telecommunications, premium cable or premium video
programming service, spirituous or vinous liquor and malt or
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brewed beverages and soft drinks, interstate
telecommunications service originating or terminating in this
Commonwealth and charged to a service address in this
Commonwealth, intrastate telecommunications service with the
exception of subscriber line charges and basic local
telephone service for residential use and charges for
telephone calls paid for by inserting money into a telephone
accepting direct deposits of money to operate. The service
address of any intrastate telecommunications service is
deemed to be within this Commonwealth or within a political
subdivision, regardless of how or where billed or paid. In
the case of any interstate or intrastate telecommunications
service, any charge paid through a credit or payment
mechanism which does not relate to a service address, such as
a bank, travel, credit or debit card, but not including
prepaid telecommunications, is deemed attributable to the
address of origination of the telecommunications service.
(2) The term shall include the following, whether
electronically or digitally delivered, streamed or accessed
and whether purchased singly, by subscription or in any other
manner, including maintenance, updates and support:
(i) video;
(ii) photographs;
(iii) books;
(iv) any other otherwise taxable printed matter;
(v) applications, commonly known as apps;
(vi) games;
(vii) music;
(viii) any other audio, including satellite radio
service;
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(ix) canned software, notwithstanding the function
performed; or
(x) any other otherwise taxable tangible personal
property electronically or digitally delivered, streamed
or accessed.
"Taxpayer." Any person required to pay or collect the tax
imposed by this chapter.
"Telecommunications service." Any one-way transmission or
any two-way, interactive transmission of sounds, signals or
other intelligence converted to like form which effects or is
intended to effect meaningful communications by electronic or
electromagnetic means via wire, cable, satellite, light waves,
microwaves, radio waves or other transmission media. The term
includes all types of telecommunication transmissions, such as
local, toll, wide-area or any other type of telephone service,
private line service, telegraph service, radio repeater service,
wireless communication service, personal communications system
service, cellular telecommunications service, specialized mobile
radio service, stationary two-way radio service and paging
service. The term does not include any of the following:
(1) Subscriber charges for access to a video dial tone
system.
(2) Charges to video programmers for the transport of
video programming.
(3) Charges for access to the Internet. Access to the
Internet does not include any of the following:
(i) The transport over the Internet or any
proprietary network using the Internet protocol of
telephone calls, facsimile transmissions or other
telecommunications traffic to or from end users on the
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public switched telephone network if the signal sent from
or received by an end user is not in an Internet
protocol.
(ii) Telecommunications services purchased by an
Internet service provider to deliver access to the
Internet to its customers.
(4) Mobile telecommunications services.
"Transient vendor." As follows:
(1) Any person who:
(i) brings into this Commonwealth, by automobile,
truck or other means of transportation, or purchases in
this Commonwealth tangible personal property the sale or
use of which is subject to the tax imposed by this
chapter or comes into this Commonwealth to perform
services the sale or use of which is subject to the tax
imposed by this chapter;
(ii) offers or intends to offer the tangible
personal property or services for sale at retail within
this Commonwealth; and
(iii) does not maintain an established office,
distribution house, sales house, warehouse, service
enterprise, residence from which business is conducted or
other place of business within this Commonwealth.
(2) The term shall not include a person who delivers
tangible personal property within this Commonwealth pursuant
to orders for the property which were solicited or placed by
mail or other means.
(3) The term shall not include a person who handcrafts
items for sale at special events, including, but not limited
to, fairs, carnivals, art and craft shows and other festivals
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and celebrations within this Commonwealth.
"Use." As follows:
(1) The exercise of any right or power incidental to the
ownership, custody or possession of tangible personal
property and shall include, but not be limited to,
transportation, storage or consumption.
(2) The obtaining by a purchaser of the service of
printing or imprinting of tangible personal property when the
purchaser furnishes, either directly or indirectly, the
articles used in the printing or imprinting.
(3) The obtaining by a purchaser of the services of:
(i) Washing, cleaning, waxing, polishing or
lubricating of motor vehicles whether or not any tangible
personal property is transferred to the purchaser in
conjunction with the services.
(ii) Inspecting motor vehicles pursuant to the
mandatory requirements of 75 Pa.C.S. (relating to
vehicles).
(4) (i) The obtaining by a purchaser of the service of
repairing, altering, mending, pressing, fitting, dyeing,
laundering, drycleaning or cleaning tangible personal
property other than wearing apparel or shoes or applying
or installing tangible personal property as a repair or
replacement part of other tangible personal property
other than wearing apparel or shoes, whether or not the
services are performed directly or by any means other
than by coin-operated self-service laundry equipment for
wearing apparel or household goods, and whether or not
any tangible personal property is transferred to the
purchaser in conjunction therewith, except the services
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as are obtained in the construction, reconstruction,
remodeling, repair or maintenance of real estate, except
that this paragraph shall not be deemed to impose a tax
on diaper service.
(ii) The term shall not include:
(A) Any tangible personal property acquired and
kept, retained or over which power is exercised
within this Commonwealth on which the taxing of the
storage, use or other consumption thereof is
expressly prohibited by the Constitution of the
United States or which is excluded from tax under
other provisions of this chapter.
(B) The use or consumption of tangible personal
property, including, but not limited to, machinery
and equipment and parts therefor, and supplies or the
obtaining of the services described in this paragraph
and paragraphs (2) and (3) directly in the operations
of:
(I) The manufacture of tangible personal
property.
(II) Farming, dairying, agriculture,
timbering, horticulture or floriculture when
engaged in as a business enterprise. The term
"farming" shall include the propagation and
raising of ranch-raised furbearing animals and
the propagation of game birds for commercial
purposes by holders of propagation permits issued
under 34 Pa.C.S. (relating to game) and the
propagation and raising of horses to be used
exclusively for commercial racing activities. The
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term "timbering" shall include:
(a) The business of producing or
harvesting trees from forests, woodlots or
tree farms for the purpose of the commercial
production of wood, paper or energy products
derived from wood by a company primarily
engaged in the business of harvesting trees.
(b) All operations prior to the
transport of the harvested product necessary
for the removal of timber or forest products
from the site, in-field processing of trees
into logs or chips, complying with
environmental protection and safety
requirements applicable to the harvesting of
forest products, loading of forest products
onto highway vehicles for transport to
storage or processing facilities and
postharvesting site reclamation, including
those activities necessary to improve timber
growth or ensure natural or direct
reforestation of the site. The term shall not
include the harvesting of trees for clearing
land for access roads.
(III) The producing, delivering or rendering
of a public utility service, or the constructing,
reconstructing, remodeling, repairing or
maintaining the facilities which are directly
used in producing, delivering or rendering a
public utility service.
(IV) Processing as defined in this section.
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(iii) The exclusions provided in subparagraph (ii)
(B) shall not apply to any vehicle required to be
registered under 75 Pa.C.S. except those vehicles
directly used by a public utility engaged in the business
as a common carrier, to maintenance facilities or to
materials, supplies or equipment to be used or consumed
in the construction, reconstruction, remodeling, repair
or maintenance of real estate other than directly used
machinery, equipment, parts or foundations therefor that
may be affixed to the real estate.
(iv) The exclusions provided in subparagraph (ii)(B)
shall not apply to tangible personal property or services
to be used or consumed in managerial sales or other
nonoperational activities nor to the purchase or use of
tangible personal property or services by any person
other than the person directly using the same in the
operations described in subparagraph (ii)(B).
(v) The exclusion provided in subparagraph (iii)
shall not apply to:
(A) construction materials, supplies or
equipment used to construct, reconstruct, remodel,
repair or maintain facilities not used directly by
the purchaser in the production, delivering or
rendition of public utility service; or
(B) tools and equipment used but not installed
in the maintenance of facilities used directly in the
production, delivering or rendition of a public
utility service.
(vi) The exclusion provided in subparagraph (ii)(B)
shall not apply to the services enumerated in paragraphs
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(9), (10), (11), (12), (13), (14), (15) and (16) nor to
lobbying services, adjustment services, collection
services or credit reporting services, secretarial or
editing services, disinfecting or pest control services,
building maintenance or cleaning services, employment
agency services, help supply services, lawn care service
or self-storage service, except that the exclusion
provided in subparagraph (ii)(B)(II) for farming,
dairying and agriculture shall apply to the service
enumerated in the definition of "disinfecting or pest
control services."
(5) Where tangible personal property or services are
utilized for purposes constituting a use, and for purposes
excluded from this definition, it shall be presumed that the
property or services are utilized for purposes constituting a
sale at retail and subject to tax unless the user thereof
proves to the department that the predominant purposes for
which the property or services are utilized do not constitute
a sale at retail.
(6) The term with respect to liquor and malt or brewed
beverages shall include the purchase of liquor from any
Pennsylvania Liquor Store by any person for any purpose and
the purchase of malt or brewed beverages from a manufacturer
of malt or brewed beverages, distributor or importing
distributor by any person for any purpose, except purchases
from a manufacturer of malt or brewed beverages by a
distributor or importing distributor, or purchases from an
importing distributor by a distributor within the meaning of
the Liquor Code. The term shall not include any purchase of
malt or brewed beverages from a retail dispenser or any
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purchase of liquor or malt or brewed beverages from a person
holding a retail liquor license within the meaning of and
pursuant to the provisions of the Liquor Code, but shall
include the exercise of any right or power incidental to the
ownership, custody or possession of liquor or malt or brewed
beverages obtained by the person exercising the right or
power in any manner other than pursuant to the provisions of
the Liquor Code.
(7) The use of tangible personal property purchased at
retail upon which the services described in paragraphs (2),
(3) and (4) have been performed shall be deemed to be a use
of the services by the person using the property.
(8) The term shall not include the providing of a motor
vehicle to a nonprofit private or public school to be used by
the school for the sole purpose of driver education.
(9) The obtaining by the purchaser of lobbying services.
(10) The obtaining by the purchaser of adjustment
services, collection services or credit reporting services.
(11) The obtaining by the purchaser of secretarial or
editing services.
(12) The obtaining by the purchaser of disinfecting or
pest control services, building maintenance or cleaning
services.
(13) The obtaining by the purchaser of employment agency
services or help supply services.
(14) (Reserved).
(15) The obtaining by the purchaser of lawn care
service.
(16) The obtaining by the purchaser of self-storage
service.
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(17) The obtaining by a construction contractor of
tangible personal property or services provided to tangible
personal property which will be used pursuant to a
construction contract whether or not the tangible personal
property or services are transferred.
(18) The obtaining of mobile telecommunications service
by a customer.
"Used prebuilt housing." Prebuilt housing that was
previously subject to a sale to a prebuilt housing purchaser.
"Vendor." Any person maintaining a place of business in this
Commonwealth, selling or leasing tangible personal property or
rendering services the sale or use of which is subject to the
tax imposed by this chapter but not including any employee who
in the ordinary scope of employment renders services to the
employer of the employee in exchange for wages and salaries.
SUBCHAPTER B
IMPOSITION OF TAX
Section 702. Imposition of tax.
(a) Sales tax.--There is imposed upon each separate sale at
retail of tangible personal property or services within this
Commonwealth a tax of 7% of the purchase price. The tax shall be
collected by the vendor from the purchaser and shall be paid
over to this Commonwealth as provided in this chapter.
(b) Use tax.--There is imposed upon the use within this
Commonwealth of tangible personal property purchased at retail
and on those services purchased at retail a tax of 7% of the
purchase price. The tax shall be paid to the Commonwealth by the
person who makes that use, except that the tax shall not be paid
to the Commonwealth by that person where that person has paid
the tax imposed by subsection (a) or has paid the tax imposed by
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this subsection to the vendor with respect to the use.
(c) Telecommunications services.--
(1) Notwithstanding any other provision of this chapter,
the tax with respect to telecommunications service shall,
except for telegrams paid for in cash at telegraph offices,
be computed at the rate of 7% upon the total amount charged
to customers for the services, irrespective of whether that
charge is based upon a flat rate or upon a message unit
charge, but charges for telephone calls paid for by inserting
money into a telephone accepting direct deposits of money to
operate shall not be subject to this tax.
(2) A telecommunications service provider shall have no
responsibility or liability to the Commonwealth for billing,
collecting or remitting taxes that apply to services,
products or other commerce sold over telecommunications lines
by third-party vendors.
(3) To prevent actual multistate taxation of interstate
telecommunications service, a taxpayer, upon proof that the
taxpayer has paid a similar tax to another state on the same
interstate telecommunications service, shall be allowed a
credit against the tax imposed by this section on the same
interstate telecommunications service to the extent of the
amount of the tax properly due and paid to the other state.
(d) (Reserved).
(e) Prepaid telecommunications.--
(1) Notwithstanding any provisions of this chapter, the
sale or use of prepaid telecommunications evidenced by the
transfer of tangible personal property shall be subject to
the tax imposed by subsections (a) and (b).
(2) The sale or use of prepaid telecommunications not
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evidenced by the transfer of tangible personal property shall
be subject to the tax imposed by subsections (a) and (b) and
shall be deemed to occur at the purchaser's billing address.
(3) (i) Notwithstanding paragraph (2), the sale or use
of prepaid telecommunications service not evidenced by
the transfer of tangible personal property shall be taxed
at the rate of 7% of the receipts collected on each sale
if the service provider elects to collect the tax imposed
by this chapter on receipts of each sale.
(ii) The service provider shall notify the
department of its election and shall collect the tax on
receipts of each sale until the service provider notifies
the department otherwise.
(e.1) Prepaid mobile telecommunications services.--
(1) Notwithstanding any other provision of this chapter,
the sale or use of prepaid mobile telecommunications service
evidenced by the transfer of tangible personal property shall
be subject to the tax imposed by subsections (a) and (b).
(2) The sale or use of prepaid mobile telecommunications
service not evidenced by the transfer of tangible personal
property shall be subject to the tax imposed by subsections
(a) and (b) and shall be deemed to occur at the purchaser's
billing address or the location associated with the mobile
telephone number or the point of sale, whichever is
applicable.
(3) (i) Notwithstanding paragraph (2), the sale or use
of prepaid mobile telecommunications service not
evidenced by the transfer of tangible personal property
shall be taxed at the rate of 7% of the receipts
collected on each sale if the service provider elects to
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collect the tax imposed by this chapter on receipts of
each sale.
(ii) The service provider shall notify the
department of its election and shall collect the tax on
receipts of each sale until the service provider notifies
the department otherwise.
(f) Prebuilt housing.--
(1) Notwithstanding any other provision of this chapter,
tax with respect to sales of prebuilt housing shall be
imposed, subject to the provisions of paragraph (2), on the
prebuilt housing builder at the time of the prebuilt housing
sale within this Commonwealth and shall be paid and reported
by the prebuilt housing builder to the department in the time
and manner provided in this chapter.
(2) A manufacturer of prebuilt housing may, at its
option, precollect the tax from the prebuilt housing builder
at the time of sale to the prebuilt housing builder.
(3) In any case where prebuilt housing is purchased and
the tax is not paid by the prebuilt housing builder or
precollected by the manufacturer, the prebuilt housing
purchaser shall remit tax directly to the department if the
prebuilt housing is used in this Commonwealth without regard
to whether the prebuilt housing becomes a real estate
structure.
(g) Mobile telecommunications services provided by home
service provider.--Notwithstanding any other provisions of this
chapter and in accordance with the Mobile Telecommunications
Sourcing Act (Public Law 106-252, 4 U.S.C. §§ 116-126), the sale
or use of mobile telecommunications services which are deemed to
be provided to a customer by a home service provider under 4
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U.S.C. § 117(a) and (b) (relating to sourcing rules) shall be
subject to the tax of 7% of the purchase price. The tax shall be
collected by the home service provider from the customer and
shall be paid over to the Commonwealth as provided in this
chapter if the customer's place of primary use is located within
this Commonwealth, regardless of where the mobile
telecommunications services originate, terminate or pass
through. The words and phrases used in this subsection shall
have the same meanings given to them in the Mobile
Telecommunications Sourcing Act.
Section 703. Computation of tax.
(a) Computation.--The amount of tax imposed by section 702
shall be computed as follows:
(1) If the purchase price is 10¢ or less, no tax shall
be collected.
(2) If the purchase price is 11¢ or more, but less than
18¢, 1¢ shall be collected.
(3) If the purchase price is 18¢ or more, but less than
35¢, 2¢ shall be collected.
(4) If the purchase price is 35¢ or more, but less than
51¢, 3¢ shall be collected.
(5) If the purchase price is 51¢ or more, but less than
68¢, 4¢ shall be collected.
(6) If the purchase price is 68¢ or more, but less than
85¢, 5¢ shall be collected.
(7) If the purchase price is 85¢ or more, but less than
$1.01, 6¢ shall be collected.
(8) If the purchase price is more than $1.00, 7% of each
dollar of purchase price plus the charges set forth in this
section upon any fractional part of a dollar in excess of
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even dollars shall be collected.
(b) Deposit into Residential Property Tax Elimination
Fund.--The tax collected under section 702 shall be deposited
into the Residential Property Tax Elimination Fund.
SUBCHAPTER C
EXCLUSIONS FROM TAX
Section 704. Exclusions from tax.
The tax imposed by section 702 shall not be imposed upon any
of the following:
(1) The sale at retail or use of tangible personal
property, other than motor vehicles, trailers, semitrailers,
motor boats, aircraft or other similar tangible personal
property required under Federal or State law to be registered
or licensed, or services sold by or purchased from a person
that is not a vendor in an isolated transaction or sold by or
purchased from a person that is a vendor but is not a vendor
with respect to the tangible personal property or services
sold or purchased in the transaction. Inventory and stock in
trade sold at retail or used shall not be excluded from the
tax by this paragraph.
(2) The use of tangible personal property purchased by a
nonresident person outside of, and brought into, this
Commonwealth for use in this Commonwealth for a period not
exceeding seven days or for a period of time when the
nonresident is a tourist or vacationer, as long as the
tangible personal property is not consumed within this
Commonwealth.
(3) The use of tangible personal property in accordance
with the following:
(i) The property is purchased outside this
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Commonwealth for use outside this Commonwealth by an
individual or business entity that, at the time of
purchase, is not:
(A) a resident of this Commonwealth; nor
(B) actually doing business within this
Commonwealth.
(ii) The purchaser later brings the tangible
personal property into this Commonwealth in connection
with the establishment of a permanent business or
residence in this Commonwealth.
(iii) The property has been purchased more than six
months prior to the earlier of:
(A) the date it was first brought into this
Commonwealth; or
(B) the establishment of a business or residence
under subparagraph (ii).
(iv) This paragraph does not apply to tangible
personal property temporarily brought into this
Commonwealth for the performance of contracts for the
construction, reconstruction, remodeling, repairing and
maintenance of real estate.
(4) The sale at retail or use of:
(i) disposable diapers;
(ii) premoistened wipes;
(iii) incontinence products;
(iv) colostomy deodorants;
(v) toilet paper;
(vi) sanitary napkins, tampons or similar items used
for feminine hygiene; or
(vii) toothpaste, toothbrushes or dental floss.
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(5) The sale at retail or use of steam, natural and
manufactured and bottled gas, fuel oil, electricity or
intrastate subscriber line charges, basic local telephone
service or telegraph service when purchased directly by the
user thereof solely for his own residential use and charges
for telephone calls paid for by inserting money into a
telephone accepting direct deposits of money to operate.
(6) (Reserved).
(7) (Reserved).
(8) (Reserved).
(9) (Reserved).
(10) (i) The sale at retail to or use by:
(A) any charitable organization, volunteer
firemen's organization, volunteer firefighters'
relief association as defined in 35 Pa.C.S. § 7412
(relating to definitions) or nonprofit educational
institution; or
(B) a religious organization for religious
purposes of tangible personal property or services
other than pursuant to a construction contract.
(ii) The exclusion under this paragraph shall not
apply with respect to any tangible personal property or
services used in any unrelated trade or business carried
on by the organization or institution or with respect to
any materials, supplies and equipment used and
transferred to the organization or institution in the
construction, reconstruction, remodeling, renovation,
repairs and maintenance of any real estate structure,
other than building machinery and equipment, except
materials and supplies when purchased by the organization
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or institution for routine maintenance and repairs.
(iii) If the department has issued sales-tax-exempt
status to a volunteer firefighters' organization or a
volunteer firefighters' relief association, the sales-
tax-exempt status may not expire unless the activities of
the organization or association change so that the
organization or association does not qualify as an
institution of purely public charity, in which case the
organization or association shall immediately notify the
department of the change. If the department ascertains
that an organization or association no longer qualifies
as an institution of purely public charity, the
department may revoke the sales-tax-exempt status of the
organization or association.
(11) The sale at retail or use of gasoline and other
motor fuels, the sales of which are otherwise subject to
excise taxes under 75 Pa.C.S. Ch. 90 (relating to liquid
fuels and fuels tax).
(12) The sale at retail to or use by the United States,
this Commonwealth or its instrumentalities or political
subdivisions of tangible personal property or services.
(13) The sale at retail or use of wrapping paper,
wrapping twine, bags, cartons, tape, rope, labels,
nonreturnable containers and all other wrapping supplies, if
the use is incidental to the delivery of tangible personal
property. Unless the property wrapped or packaged will be
resold by the purchaser of the wrapping or packaging service,
this paragraph does not apply to a charge for wrapping or
packaging. As used in this paragraph, the term "cartons"
includes corrugated boxes used by a person engaged in the
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manufacture of snack food products to deliver the
manufactured product, whether or not the boxes are returnable
for potential reuse.
(14) The sale at retail or use of vessels designed for
commercial use of registered tonnage of 50 tons or more when
produced by the builders thereof upon special order of the
purchaser.
(15) The sale at retail of tangible personal property or
services used or consumed in building, rebuilding, repairing
and making additions to or replacements in and upon vessels
designed for commercial use of registered tonnage of 50 tons
or more upon special order of the purchaser, or when rebuilt,
repaired or enlarged, or when replacements are made upon
order of or for the account of the owner.
(16) The sale at retail or use of tangible personal
property or services to be used or consumed for ship cleaning
or maintenance or as fuel, supplies, ships' equipment, ships'
stores or sea stores on vessels designed for commercial use
of registered tonnage of 50 tons or more to be operated
principally outside the limits of this Commonwealth.
(17) The sale at retail or use of any of the following:
(i) Prescription or nonprescription medicines, drugs
or medical supplies.
(ii) Crutches and wheelchairs for the use of persons
who are walking-impaired.
(iii) Artificial limbs, artificial eyes and
artificial hearing devices when designed to be worn on
the person of the purchaser or user.
(iv) False teeth and materials used by a dentist in
dental treatment.
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(v) Eyeglasses when especially designed or
prescribed by an ophthalmologist, oculist or optometrist
for the personal use of the owner or purchaser.
(vi) Artificial braces and supports designed solely
for the use of persons who are walking-impaired or any
other therapeutic, prosthetic or artificial device
designed for the use of a particular individual to
correct or alleviate a physical incapacity, including,
but not limited to, hospital beds, iron lungs and kidney
machines.
(18) The sale at retail or use of coal.
(19) (Reserved).
(20) (Reserved).
(21) (Reserved).
(22) (Reserved).
(23) (Reserved).
(24) The sale at retail or use of motor vehicles,
trailers and semitrailers, or bodies attached to the chassis
of motor vehicles, trailers or semitrailers, which are:
(i) sold to a nonresident;
(ii) to be used outside of this Commonwealth; and
(iii) registered in another state within 20 days
after delivery to the vendee.
(25) The sale at retail or use of water.
(26) (Reserved).
(27) (Reserved).
(28) The sale at retail or use of religious publications
sold by religious groups and Bibles and religious articles.
(29) The sale at retail of malt and brewed beverages and
spirituous and vinous liquors.
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(29.1) The sale at retail of food and beverages at or
from a school or church in the ordinary course of the
activities of the organization.
(30) (i) The sale at retail or use of newspapers.
(ii) For purposes of this paragraph, the term
"newspaper" shall mean a "legal newspaper" or publication
containing matters of general interest and reports of
current events which qualifies as a "newspaper of general
circulation" qualified to carry a "legal advertisement"
as those terms are defined in 45 Pa.C.S. § 101 (relating
to definitions), not including magazines.
(iii) This paragraph includes any printed
advertising materials circulated with the newspaper
regardless of where or by whom the advertising material
was produced.
(31) The sale at retail or use of caskets and burial
vaults for human remains and markers and tombstones for human
graves.
(32) The sale at retail or use of flags of the United
States of America and the Commonwealth.
(33) The sale at retail or use of textbooks for use in
schools, colleges and universities, either public or private,
that are recognized by the Department of Education, when the
textbooks are purchased on behalf of or through the schools,
colleges or universities.
(34) The sale at retail or use of motion picture film
rented or licensed from a distributor for the purpose of
commercial exhibition.
(35) (Reserved).
(36) The sale at retail or use of rail transportation
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equipment used in the movement of personalty.
(37) The sale at retail of buses to be used under
contract with school districts that are replacements for
buses destroyed or lost in the flood of 1977 for a period
ending December 31, 1977, in the counties of Armstrong,
Bedford, Cambria, Indiana, Jefferson, Somerset and
Westmoreland, or the use of the buses.
(38) The sale at retail of horses, if, at the time of
purchase, the seller is directed to ship or deliver the horse
to an out-of-State location, whether or not the charges for
shipment are paid for by the seller or the purchaser. The
seller must obtain a bill of lading, either from the carrier
or from the purchaser, who, in turn, has obtained the bill of
lading from the carrier, reflecting delivery to the out-of-
State address to which the horse has been shipped. The seller
must execute a "Certificate of Delivery to Destination
Outside of the Commonwealth" for each bill of lading
reflecting out-of-State delivery. The seller shall retain the
certificate of delivery form to justify the noncollection of
sales tax with respect to the transaction to which the form
relates. In transactions where a horse is sold by the seller
and delivered to a domiciled person, agent or corporation
prior to its being delivered to an out-of-State location, the
"Certificate of Delivery to Destination Outside of the
Commonwealth" form must have attached to it bills of lading
both for the transfer to the domiciled person, agent or
corporation and from the aforementioned to the out-of-State
location.
(39) The sale at retail or use of fish feed purchased by
or on behalf of sportsmen's clubs, fish cooperatives or
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nurseries approved by the Pennsylvania Fish and Boat
Commission.
(40) (Reserved).
(41) The sale at retail of supplies and materials to
tourist promotion agencies which receive grants from the
Commonwealth for distribution to the public as promotional
material and the use of supplies and materials by the
agencies for the purposes set forth in this paragraph.
(42) The sale or use of brook trout (Salvelinus
fontinalis), brown trout (Salmo trutta) or rainbow trout
(Salmo gairdneri).
(43) The sale at retail or use of buses to be used
exclusively for the transportation of children for school
purposes.
(44) The sale at retail or use of firewood. For the
purpose of this paragraph, "firewood" means the product of
trees when severed from the land and cut into proper lengths
for burning and pellets made from pure wood sawdust if used
for fuel for cooking, hot water production or to heat
residential dwellings.
(45) The sale at retail or use of materials used in the
construction and erection of objects purchased by not-for-
profit organizations for purposes of commemoration and
memorialization of historical events, provided that the
object is erected upon publicly owned property or property to
be conveyed to a public entity upon the commemoration or
memorialization of the historical event.
(46) The sale at retail or use of tangible personal
property purchased in accordance with the Food and Nutrition
Act of 2008 (Public Law 88-525, 7 U.S.C. § 2011 et seq.).
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(47) (Reserved).
(48) (Reserved).
(49) The sale at retail or use of food and beverages by
nonprofit associations which support sports programs. The
following words and phrases when used in this paragraph shall
have the following meanings:
"Nonprofit association." An entity which is
organized as a nonprofit corporation or nonprofit
unincorporated association under the laws of the United
States or this Commonwealth or any entity which is
authorized to do business in this Commonwealth as a
nonprofit corporation or unincorporated association under
the laws of this Commonwealth, including youth or
athletic, volunteer fire, ambulance, religious,
charitable, fraternal, veterans or civic, or any
separately chartered auxiliary of the association, if
organized and operated on a nonprofit basis.
"Sports program." Baseball, including softball,
football, basketball, soccer and any other competitive
sport formally recognized as a sport by the United States
Olympic Committee as specified by and under the
jurisdiction of the Ted Stevens Olympic and Amateur
Sports Act (Public Law 105-277, 36 U.S.C. § 220501 et
seq.), the Amateur Athletic Union or the National
Collegiate Athletic Association. The term shall be
limited to a program or that portion of a program that is
organized for recreational purposes. The term shall be
limited to a program or that portion of a program which
is organized for recreational purposes and the activities
of which are substantially for those purposes and which
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is primarily for participants who are 18 years of age or
younger or whose 19th birthdays occur during the year of
participation or the competitive season, whichever is
longer. There shall, however, be no age limitation for
programs operated for persons with physical disabilities
or persons with mental retardation.
"Support." The funds raised from sales are used to
pay the expenses of a sports program or the nonprofit
association sells the food and beverages at a location
where a sports program is being conducted under this act.
(50) The sale at retail or use of subscriptions for
magazines. The term "magazine" refers to a periodical
published at regular intervals not exceeding three months and
which are circulated among the general public, containing
matters of general interest and reports of current events
published for the purpose of disseminating information of a
public character or devoted to literature, the sciences, art
or some special industry. This paragraph includes any printed
advertising material circulated with the periodical or
publication, regardless of where or by whom the printed
advertising material was produced.
(51) The sale at retail or use of interior office
building cleaning services but only as relates to the costs
of the supplied employee, which costs are wages, salaries,
bonuses and commissions, employment benefits, expense
reimbursements and payroll and withholding taxes, to the
extent that these costs are specifically itemized or that
these costs in aggregate are stated in billings from the
vendor or supplying entity.
(52) (Reserved).
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(53) The sale at retail or use of candy or gum
regardless of the location from which the candy or gum is
sold.
(54) (Reserved).
(55) The sale at retail or use of horses to be used
exclusively for commercial racing activities and the sale at
retail and use of feed, bedding, grooming supplies, riding
tack, farrier services, portable stalls and sulkies for
horses used exclusively for commercial racing activities.
(56) The sale at retail or use of tangible personal
property or services used, transferred or consumed in
installing or repairing equipment or devices designed to
assist persons in ascending or descending a stairway when:
(i) The equipment or devices are used by a person
who, by virtue of a physical disability, is unable to
ascend or descend stairs without the aid of the equipment
or device.
(ii) The equipment or device is installed or used in
the person's place of residence.
(iii) A physician has certified the physical
disability of the person in whose residence the equipment
or device is installed or used.
(57) The sale at retail to or use by a construction
contractor of building machinery and equipment and services
thereto that are:
(i) transferred pursuant to a construction contract
for any charitable organization, volunteer firemen's
organization, volunteer firefighters' relief association,
nonprofit educational institution or religious
organization for religious purposes, if the building
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machinery and equipment and services thereto are not used
in any unrelated trade or business; or
(ii) transferred to the United States or the
Commonwealth or its instrumentalities or political
subdivisions.
(58) As follows:
(i) The sale at retail or use of a personal
computer, a peripheral device or an Internet access
device, or a service contract or single-user licensed
software purchased in conjunction with a personal
computer, peripheral device or Internet access device,
during the exclusion period by an individual purchaser
for nonbusiness use.
(ii) The exclusion does not include a sale at retail
or use, leasing, rental or repair of:
(A) a personal computer, peripheral device or
Internet access device;
(B) mainframe computers;
(C) network servers;
(D) local area network hubs;
(E) routers and network cabling;
(F) network operating systems;
(G) multiple-user licensed software;
(H) minicomputers;
(I) hand-held computers;
(J) personal digital assistants without Internet
access;
(K) hardware word processors;
(L) graphical calculators;
(M) video game consoles;
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(O) telephones or digital cameras;
(P) pagers;
(Q) compact discs encoded with music or movies;
and
(R) digital versatile discs encoded with music
or movies.
(iii) The following words and phrases when used in
this paragraph shall have the meanings given to them in
this subparagraph unless the context clearly indicates
otherwise:
"Exclusion period." The period of time from August
5, 2001, to and including August 12, 2001, and from
February 17, 2002, to and including February 24, 2002.
"Purchaser." An individual who places an order and
pays the purchase price by cash or credit during the
exclusion period even if delivery takes place after the
exclusion period.
(59) The sale at retail or use of molds and related mold
equipment used directly and predominantly in the manufacture
of products, regardless of whether the person that holds
title to the equipment manufactures a product.
(60) The sale or use of used prebuilt housing.
(61) The sale at retail to or use of food and
nonalcoholic beverages by an airline which will transfer the
food or nonalcoholic beverages to passengers in connection
with the rendering of the airline service.
(62) The sale at retail or use of tangible personal
property or services which are directly used in farming,
dairying or agriculture when engaged in as a business
enterprise whether or not the sale is made to the person
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directly engaged in the business enterprise or to a person
contracting with the person directly engaged in the business
enterprise for the production of food.
(63) The sale at retail or use of separately stated fees
paid under 13 Pa.C.S. § 9525 (relating to fees).
(64) The sale at retail to or use by a construction
contractor, employed by a public school district pursuant to
a construction contract, of any materials and building
supplies which, during construction or reconstruction, are
made part of any public school building utilized for
instructional classroom education within this Commonwealth,
if the construction or reconstruction:
(i) is necessitated by a disaster emergency, as
defined in 35 Pa.C.S. § 7102 (relating to definitions);
and
(ii) takes place during the period when there is a
declaration of disaster emergency under 35 Pa.C.S. §
7301(c) (relating to general authority of Governor).
(65) The sale at retail or use of investment metal
bullion and investment coins. "Investment metal bullion"
means any elementary precious metal which has been put
through a process of smelting or refining, including, but not
limited to, gold, silver, platinum and palladium, and which
is in the state or condition that its value depends upon its
content and not its form. "Investment metal bullion" does not
include precious metal which has been assembled, fabricated,
manufactured or processed in one or more specific and
customary industrial, professional, aesthetic or artistic
uses. "Investment coins" means numismatic coins or other
forms of money and legal tender manufactured of gold, silver,
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platinum, palladium or other metal and of the United States
or any foreign nation with a fair market value greater than
any nominal value of the coins. "Investment coins" does not
include jewelry or works of art made of coins, nor does it
include commemorative medallions.
(66) The sale at retail or use of copies of an official
document sold by a government agency or a court. The
following words and phrases when used in this paragraph shall
have the following meanings:
(i) "Court." Includes:
(A) an appellate court as defined in 42 Pa.C.S.
§ 102 (relating to definitions);
(B) a court of common pleas as defined in 42
Pa.C.S. § 102; and
(C) the minor judiciary as defined in 42 Pa.C.S.
§ 102.
(ii) "Government agency." An agency as defined in
section 102 of the act of February 14, 2008 (P.L.6,
No.3), known as the Right-to-Know Law.
(iii) "Official document." A record as defined in
section 102 of the Right-to-Know Law. The term shall
include notes of court testimony, deposition transcripts,
driving records, accident reports, birth and death
certificates, deeds, divorce decrees and other similar
documents.
(67) The sale at retail or use of repair or replacement
parts, including the installation of those parts, exclusively
for use in helicopters and similar rotorcraft or in
overhauling or rebuilding of helicopters and similar
rotorcraft or helicopters and similar rotorcraft components.
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(68) The sale at retail or use of helicopters and
similar rotorcraft.
(69) The sale at retail of food and beverages that are
federally approved items for the Women, Infants and Children
Program under section 17 of the Child Nutrition Act of 1966
(Public Law 89-642, 42 U.S.C. § 1786).
(70) The sale of food and beverages dispensed by means
of a coin-operated vending machine.
(71) The sale at retail or use of services related to
the set up, tear down or maintenance of tangible personal
property rented by an authority to exhibitors at a convention
center or a public auditorium, established under 64 Pa.C.S.
Ch. 60 (relating to Pennsylvania Convention Center
Authority), the act of July 28, 1953 (P.L.723, No.230), known
as the Second Class County Code, or the act of August 9, 1955
(P.L.323, No.130), known as The County Code.
Section 705. Alternate imposition of tax.
(a) Dealers of motor vehicles.--
(1) This subsection applies to a person actively and
principally engaged in the business of selling new or used
motor vehicles, trailers or semitrailers and registered with
the department in the dealer's class who:
(i) acquires a motor vehicle, trailer or semitrailer
for the purpose of resale; and
(ii) prior to the resale, uses the motor vehicle,
trailer or semitrailer for a taxable use under this
chapter.
(2) A person under paragraph (1) may elect to pay a tax
equal to 6% of the fair rental value of the motor vehicle,
trailer or semitrailer during that use.
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(b) Commercial aircraft operators.--
(1) This subsection applies to a commercial aircraft
operator who:
(i) acquires an aircraft for the purpose of resale
or lease, or is entitled to claim another valid exemption
at the time of purchase; and
(ii) subsequent to the purchase, periodically uses
the same aircraft for a taxable use under this chapter.
(2) A commercial aircraft operator under paragraph (1)
may elect to pay a tax equal to 6% of the fair rental value
of the aircraft during that use.
(c) Nonapplicability.--This section shall not apply to the
use of a vehicle as a wrecker, parts truck, delivery truck or
courtesy car.
Section 706. Credit against tax.
(a) Prerequisites.--
(1) Subject to the provisions of paragraph (2), a credit
against the tax imposed by section 702 shall be granted with
respect to tangible personal property or services purchased
for use outside this Commonwealth equal to the tax paid to
another state by reason of the imposition by the other state
of a tax similar to the tax imposed by this chapter.
(2) No credit shall be granted under this section unless
the other state grants substantially similar tax relief by
reason of the payment of tax under this chapter.
(b) Call center credit.--A credit against the tax imposed by
section 702 on telecommunications services shall be granted to a
call center for gross receipts tax paid by a telephone company
on the receipts derived from the sale of incoming and outgoing
interstate telecommunications services to the call center under
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section 1101(a)(2) of the Tax Reform Code of 1971. The following
apply:
(1) A telephone company, upon request, shall notify a
call center of the amount of gross receipts tax paid by the
telephone company on the receipts derived from the sale of
incoming and outgoing interstate telecommunications services
to the call center.
(2) A call center that is eligible for the credit in
this subsection may apply for a tax credit as set forth in
this subsection.
(3) By February 15, a taxpayer must submit an
application to the department for gross receipts tax paid on
the receipts derived from the sale of incoming and outgoing
interstate telecommunications services incurred in the prior
calendar year.
(4) By April 15 of the calendar year following the close
of the calendar year during which the gross receipts tax was
incurred, the department shall notify the applicant of the
amount of the applicant's tax credit approved by the
department.
(5) The total amount of tax credits provided for in this
subsection and approved by the department shall not exceed
$30,000,000 in any fiscal year. If the total amount of tax
credits applied for by all applicants exceeds the amount
allocated for those credits, then the credit to be received
by each applicant shall be determined as follows:
(i) Divide:
(A) the tax credit applied for by the applicant;
by
(B) the total of all tax credits applied for by
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all applicants.
(ii) Multiply:
(A) the quotient under subparagraph (i); by
(B) the amount allocated for all tax credits.
SUBCHAPTER D
LICENSES
Section 708. Licenses.
(a) General rule.--Every person maintaining a place of
business in this Commonwealth, selling or leasing services or
tangible personal property, the sale or use of which is subject
to tax and who has not obtained a license from the department,
shall, prior to the beginning of business, make application to
the department, on a form prescribed by the department, for a
license. If the person maintains more than one place of business
in this Commonwealth, the license shall be issued for the
principal place of business in this Commonwealth.
(b) Conditions of licensure.--The department shall, after
the receipt of an application, issue the license applied for
under subsection (a), if the applicant has filed all required
State tax reports and paid any State taxes not subject to a
timely perfected administrative or judicial appeal or subject to
a duly authorized deferred payment plan. The license shall be
nonassignable and valid for a period of five years.
(b.1) Grounds for refusal to issue license.--
(1) If an applicant for a license or any person holding
a license has not filed all required State tax reports and
paid any State taxes not subject to a timely perfected
administrative or judicial appeal or subject to a duly
authorized deferred payment plan, the department may refuse
to issue, may suspend or may revoke said license.
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(2) The department shall notify the applicant or
licensee of any refusal, suspension or revocation. The notice
shall contain a statement that the refusal, suspension or
revocation may be made public and shall be sent by first
class mail.
(3) An applicant or licensee aggrieved by the
determination of the department may file an appeal pursuant
to the provisions for administrative appeals in this chapter.
(4) In the case of a suspension or revocation which is
appealed, the license shall remain valid pending a final
outcome of the appeals process. Notwithstanding sections 274,
353(f), 408(b), 603, 702, 802, 904 and 1102 of the Tax Reform
Code of 1971 or any other provision of law to the contrary,
if no appeal is taken or if an appeal is taken and denied at
the conclusion of the appeal process, the department may
disclose, by publication or otherwise, the identity of a
person and the fact that the person's license has been
refused, suspended or revoked under this subsection. The
department may include the basis for refusal, suspension or
revocation in the disclosure.
(c) Penalties.--
(1) A person who maintains a place of business in this
Commonwealth for the purpose of selling or leasing services
or tangible personal property, the sale or use of which is
subject to tax, without having first been licensed by the
department shall be guilty of a summary offense and, upon
conviction thereof, be sentenced to pay a fine of not less
than $300 nor more than $1,500 and, in default thereof, to
imprisonment of not less than five days nor more than 30
days.
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(2) The penalties imposed under this subsection shall be
in addition to any other penalties imposed by this chapter.
(3) For purposes of this subsection, the offering for
sale or lease of any service or tangible personal property,
the sale or use of which is subject to tax, during any
calendar day shall constitute a separate violation.
(4) The Secretary of Revenue may designate employees of
the department to enforce the provisions of this subsection.
Those employees shall exhibit proof of and be within the
scope of the designation when instituting proceedings as
provided by the Pennsylvania Rules of Criminal Procedure.
(d) Liability to pay tax remains.--The failure of any person
to obtain a license shall not relieve that person of liability
to pay the tax imposed by this chapter.
SUBCHAPTER E
HOTEL OCCUPANCY TAX
Section 709. Definitions.
(a) General rule.--The following words and phrases when used
in this subchapter shall have the meanings given to them in this
section unless the context clearly indicates otherwise:
"Hotel." A building or buildings in which the public may,
for a consideration, obtain sleeping accommodations. The term
shall not include any charitable, educational or religious
institution summer camp for children, hospital or nursing home.
"Occupancy." The use or possession or the right to the use
or possession by any person other than a permanent resident of
any room or rooms in a hotel for any purpose or the right to the
use or possession of the furnishings or to the services and
accommodations accompanying the use and possession of the room
or rooms.
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"Occupant." A person other than a permanent resident who for
a consideration uses, possesses or has a right to use or possess
any room or rooms in a hotel under any lease, concession,
permit, right of access, license or agreement.
"Operator." A person who operates a hotel.
"Permanent resident." An occupant who has occupied or has
the right to occupancy of a room or rooms in a hotel for at
least 30 consecutive days.
"Rent." The consideration received for occupancy valued in
money, whether received in money or otherwise, including all
receipts, cash, credits and property or services of any kind or
nature, and also any amount for which the occupant is liable for
the occupancy without any deduction therefrom whatsoever. The
term shall not include a gratuity.
(b) Special definitions.--The following words and phrases,
when used in Subchapters D and F, for the purposes of those
subchapters only, shall, in addition to the meaning ascribed to
them in section 701, have the meanings ascribed to them in this
subsection, except where the context clearly indicates a
different meanings:
"Maintaining a place of business in this Commonwealth."
Being the operator of a hotel in this Commonwealth.
"Purchase at retail." Occupancy.
"Purchase price." Rent.
"Purchaser." An occupant.
"Sale at retail." The providing of occupancy to an occupant
by an operator.
"Services." Occupancy.
"Tangible personal property." Occupancy.
"Use." Occupancy.
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"Vendor." Operator.
Section 710. Imposition of tax.
There is hereby imposed an excise tax of 7% of the rent upon
every occupancy of a room or rooms in a hotel in this
Commonwealth, which tax shall be collected by the operator from
the occupant and paid to the Commonwealth as provided by this
chapter and deposited into the Residential Property Tax
Elimination Fund.
Section 711. Seasonal tax returns.
Notwithstanding any other provision of this chapter or the
Tax Reform Code of 1971, the department may, by regulation,
waive the requirement for the filing of quarterly returns in the
case of an operator whose hotel is operated only during certain
seasons of the year and may provide for the filing of returns by
those persons at times other than those provided by former
section 221 of the Tax Reform Code of 1971.
SUBCHAPTER F
RETURNS
Section 715. Persons required to make returns.
A person required to pay tax to the department or collect and
remit tax to the department shall file returns with respect to
the tax.
Section 716. Form of returns.
The returns required by section 715 shall be on forms
prescribed by the department and shall show information with
respect to the taxes imposed by this chapter as the department
may reasonably require.
Section 717. Time for filing returns.
(a) Quarterly and monthly returns.--
(1) A return shall be filed quarterly by every licensee
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on or before the 20th day of April, July, October and January
for the three months ending the last day of March, June,
September and December.
(2) A return shall be filed monthly with respect to each
month by every licensee whose actual tax liability for the
third calendar quarter of the preceding year equals or
exceeds $600 and is less than $25,000. The returns shall be
filed on or before the 20th day of the next succeeding month
with respect to which the return is made. Any licensee
required to file monthly returns under this section shall be
relieved from filing quarterly returns.
(3) With respect to every licensee whose actual tax
liability for the third calendar quarter of the preceding
year equals or exceeds $25,000 and is less than $100,000, the
licensee shall, on or before the 20th day of each month, file
a single return consisting of all of the following:
(i) Either of the following:
(A) An amount equal to 50% of the licensee's
actual tax liability for the same month in the
preceding calendar year if the licensee was a monthly
filer or, if the licensee was a quarterly or
semiannual filer, 50% of the licensee's average
actual tax liability for that tax period in the
preceding calendar year. The average actual tax
liability shall be the actual tax liability for the
tax period divided by the number of months in that
tax period. For licensees that were not in business
during the same month in the preceding calendar year
or were in business for only a portion of that month,
50% of the average actual tax liability for each tax
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period the licensee has been in business. If the
licensee is filing a tax liability for the first time
with no preceding tax periods, the amount shall be
zero.
(B) An amount equal to or greater than 50% of
the licensee's actual tax liability for the same
month.
(ii) An amount equal to the taxes due for the
preceding month, less any amounts paid in the preceding
month as required under subparagraph (i).
(4) With respect to each month by every licensee whose
actual tax liability for the third calendar quarter of the
preceding year equals or exceeds $100,000, the licensee
shall, on or before the 20th day of each month, file a single
return consisting of the amounts under paragraph (3)(i)(A)
and (ii).
(5) The amount due under paragraph (3)(i) or (4) shall
be due the same day as the remainder of the preceding month's
tax.
(6) The department shall determine whether the amounts
reported under paragraph (3) or (4) shall be remitted as one
combined payment or as two separate payments.
(7) The department may require the filing of the returns
and the payments for these types of filers by electronic
means approved by the department.
(8) Any licensee filing returns under paragraph (3) or
(4) shall be relieved of filing quarterly returns.
(9) If a licensee required to remit payments under
paragraph (3) or (4) fails to make a timely payment or makes
a payment which is less than the required amount, the
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department may, in addition to any applicable penalties,
impose an additional penalty equal to 5% of the amount due
under paragraph (3) or (4) which was not timely paid. The
penalty under this paragraph shall be determined when the tax
return is filed for the tax period.
(b) Annual returns.--For the calendar year 1971 and for each
year thereafter no annual return shall be filed except as may be
required by rules and regulations of the department promulgated
and published at least 60 days prior to the end of the year with
respect to which the returns are made. Where annual returns are
required, licensees shall not be required to file the returns
prior to the 20th day of the year succeeding the year with
respect to which the returns are made.
(c) Other returns.--A person, other than a licensee, who is
liable to pay to the department any tax under this chapter shall
file a return on or before the 20th day of the month succeeding
the month in which the person becomes liable for the tax.
(d) Small taxpayers.--The department, by regulation, may
waive the requirement for the filing of a quarterly return in
the case of any licensee whose individual tax collections do not
exceed $75 per calendar quarter and may provide for reporting on
a less frequent basis in the cases.
Section 718. Extension of time for filing returns.
The department may on written application and for good cause
shown grant a reasonable extension of time for filing any return
required under this chapter. The time for making a return shall
not be extended for more than three months.
Section 719. Place for filing returns.
Returns shall be filed with the department at its main office
or at any branch office which it may designate for filing
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returns.
Section 720. Timely mailing treated as timely filing and
payment.
(a) General rule.--Notwithstanding the provisions of any
State tax law to the contrary, when a report or payment of all
or any portion of a State tax is required by law to be received
by the department or another agency of this Commonwealth on or
before a day certain, the taxpayer shall be deemed to have
complied with that law if the letter transmitting the report or
payment of the tax which has been received by the department is
postmarked by the United States Postal Service on or prior to
the final day on which the payment is to be received.
(b) Presentation of receipt.--For the purposes of this
chapter, presentation of a receipt indicating that the report or
payment was mailed by registered or certified mail on or before
the due date shall be evidence of timely filing and payment.
SUBCHAPTER G
PAYMENT
Section 721. Payment.
When a return of tax is required under this subchapter, the
person required to make the return shall pay the tax to the
department.
Section 722. Time of payment.
(a) Monthly and quarterly payments.--The tax imposed by this
chapter and incurred or collected by a licensee shall be due and
payable by the licensee on the day the return is required to be
filed under the provisions of section 717 and the payment must
accompany the return.
(b) Annual payments.--If the amount of tax due for the
preceding year as shown by the annual return of any taxpayer is
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greater than the amount already paid by the taxpayer in
connection with the taxpayer's monthly or quarterly returns, the
taxpayer shall send with the annual return a remittance for the
unpaid amount of tax for the year.
(c) Other payments.--A person other than a licensee liable
to pay any tax under this chapter shall remit the tax at the
time of filing the return required by this chapter.
Section 723. Other times for payment.
In the event that the department authorizes a taxpayer to
file a return at other times than those specified in section
717, the tax due shall be paid at the time the return is filed.
Section 724. Place for payment.
The tax imposed by this chapter shall be paid to the
department at the place fixed for filing the return.
Section 725. Tax held in trust for Commonwealth.
(a) General rule.--All taxes collected by any person from
purchasers in accordance with this chapter and all taxes
collected by any person from purchasers under color of this
chapter which have not been properly refunded by the person to
the purchaser shall constitute a trust fund for the
Commonwealth. The trust shall be enforceable against that
person, his representatives and any person, other than a
purchaser to whom a refund has been made properly, receiving any
part of the fund without consideration, or knowing that the
taxpayer is committing a breach of trust.
(b) Presumption.--A person who receives payment of a lawful
obligation of the taxpayer from the fund shall be presumed to
have received the same in good faith and without any knowledge
of the breach of trust.
(c) Appeal.--A person, other than a taxpayer, against whom
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the department makes any claim under this section shall have the
same right to petition and appeal as is given taxpayers by any
provisions of this subchapter.
Section 726. Local receivers of use tax.
(a) County treasurers.--
(1) A county treasurer may receive use tax due and
payable under the provisions of this chapter from any person
other than a licensee. The receiving of the taxes shall be
pursuant to rules and regulations promulgated by the
department and upon forms furnished by the department.
(2) Each county treasurer shall remit to the department
all use taxes received under the authority of this section
minus the costs of administering this provision not exceeding
1% of the amount of use taxes received, which amount shall be
retained in lieu of any commission otherwise allowable by law
for the collection of the tax.
(b) Nonapplicability.--This section shall not apply to
counties of the first class.
Section 727. Discount.
If a return is filed by a licensee and the tax shown to be
due thereon less any discount is paid all within the time
prescribed, the licensee shall be entitled, as compensation for
the expense of collecting and remitting the tax and as a
consideration of the prompt payment of the tax, to credit and
apply against the tax payable by the licensee a discount of the
lesser of:
(1) one percent of the amount of the tax collected; or
(2) as follows:
(i) twenty-five dollars per return for a monthly
filer;
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(ii) seventy-five dollars per return for a quarterly
filer; or
(iii) one hundred fifty dollars per return for a
semiannual filer.
SUBCHAPTER H
ASSESSMENT AND REASSESSMENT
Section 730. Assessment.
(a) Investigation.--The department is authorized and
required to make the inquiries, determinations and assessments
of the tax, including interest, additions and penalties, imposed
by this chapter. A notice of assessment and demand for payment
shall be mailed to the taxpayer. The notice shall set forth the
basis of the assessment.
(b) (Reserved).
Section 731. Mode and time of assessment.
(a) Underpayment of tax.--Within a reasonable time after any
return is filed, the department shall examine the return and, if
the return shows a greater tax due or collected than the amount