PRINTER'S NO. 1543

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

1036

Session of

2020

INTRODUCED BY MASTRIANO, SCARNATI, MENSCH, PHILLIPS-HILL, VOGEL

AND J. WARD, FEBRUARY 19, 2020

REFERRED TO FINANCE, FEBRUARY 19, 2020

for tax credits in certain cases; conferring powers and

imposing duties upon the Department of Revenue, certain

employers, fiduciaries, individuals, persons, corporations

and other entities; prescribing crimes, offenses and

penalties," in sales and use tax, further providing for

definitions.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 201(k)(8) and (o)(4)(B) of the act of

March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of

(k) "Sale at retail."

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(8) Any retention of possession, custody or a license to use

or consume tangible personal property or any further obtaining

of services described in subclauses (2), (3) and (4) of this

clause pursuant to a rental or service contract or other

arrangement (other than as security).

The term "sale at retail" shall not include (i) any such

transfer of tangible personal property or rendition of services

for the purpose of resale, or (ii) such rendition of services or

the transfer of tangible personal property including, but not

term "farming" shall include the propagation and raising of

ranch raised fur-bearing animals, swine and exotic 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 "farming"

shall further include (i) the commercial propagation and raising

of cervids by a cervidae livestock operation, as defined in 3

Pa.C.S. § 2380.1 (relating to definitions), regardless of

whether the cervids are marketed for use as game, other

controlled hunting enterprise for use in that enterprise.

The term "timbering" shall include:

(1) 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.

(2) 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,

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 in constructing, reconstructing, remodeling,

repairing or maintaining the facilities which are directly used

in producing, delivering or rendering such service.

(D) Processing as defined in clause (d) of this section.

The exclusions provided in paragraphs (A), (B), (C) and (D)

shall not apply to any vehicle required to be registered under

The Vehicle Code, except those vehicles used directly by a

directly used machinery, equipment, parts or foundations

therefor that may be affixed to such real estate.

The exclusions provided in paragraphs (A), (B), (C) and (D)

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

paragraphs (A), (B), (C) and (D) herein.

The exclusion provided in paragraph (C) shall not apply to

structure, or (iii) 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.

The exclusions provided in paragraphs (A), (B), (C) and (D)

shall not apply to the services enumerated in clauses (k)(11)

through (18) and (w) through (kk), except that the exclusion

provided in this subclause for farming, dairying and agriculture

shall apply to the service enumerated in clause (z).

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(o) "Use."

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 means of 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 such services as

are obtained in the construction, reconstruction, remodeling,

repair or maintenance of real estate: Provided, however, That

(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 subclauses (2), (3) and (4) of this clause 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, swine and exotic animals and

shall further include (i) the commercial propagation and raising

of cervids by a cervidae livestock operation, as defined in 3

Pa.C.S. § 2380.1, regardless of whether the cervids are marketed

for use as game, other recreational purposes, animal parts or

products or human consumption, and (ii) the propagation and

raising in captivity of cervids, game animals, game birds and

other nondomesticated animals by a person engaged commercially

in the operation of a controlled hunting enterprise for use in

that enterprise.

The term "timbering" shall include:

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.

(iv) Processing as defined in subclause (d) of this section.

The exclusions provided in subparagraphs (i), (ii), (iii) and

(iv) shall not apply to any vehicle required to be registered

under The Vehicle Code 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 such real estate. The exclusions

(iii) and (iv).

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.

The exclusion provided in subparagraphs (i), (ii), (iii) and

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