PRINTER'S NO. 916
No. 120 Session of 2005
INTRODUCED BY ROHRER, SCAVELLO, LEH, WILT, DENLINGER, BENNINGHOFF, YEWCIC, ARMSTRONG, BALDWIN, BASTIAN, BIRMELIN, CALTAGIRONE, CAPPELLI, CLYMER, CREIGHTON, FORCIER, GILLESPIE, GOODMAN, HARRIS, HERSHEY, KAUFFMAN, MACKERETH, MARSICO, McILHATTAN, R. MILLER, S. MILLER, MUSTIO, PICKETT, PYLE, QUIGLEY, RAPP, ROBERTS, SATHER, SAYLOR, SCHRODER, SEMMEL, STEIL, STERN, THOMAS, WATSON AND WRIGHT, MARCH 14, 2005
REFERRED TO COMMITTEE ON FINANCE, MARCH 14, 2005
AN ACT 1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An 2 act relating to tax reform and State taxation by codifying 3 and enumerating certain subjects of taxation and imposing 4 taxes thereon; providing procedures for the payment, 5 collection, administration and enforcement thereof; providing 6 for tax credits in certain cases; conferring powers and 7 imposing duties upon the Department of Revenue, certain 8 employers, fiduciaries, individuals, persons, corporations 9 and other entities; prescribing crimes, offenses and 10 penalties," further providing for the imposition and rate of 11 the sales and use tax and for transfers to the Public 12 Transportation Assistance Fund; designating certain sales and 13 use tax revenue for transfer to the Education Operating Fund; 14 and further providing for the imposition and rate of the 15 State Real Estate Transfer Tax and for the disposition of 16 certain moneys raised by the Local Real Estate Transfer Tax. 17 The General Assembly of the Commonwealth of Pennsylvania 18 hereby enacts as follows: 19 Section 1. Section 201(k)(4) and (o)(4) and (8) of the act 20 of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 21 1971, amended May 7, 1997 (P.L.85, No.7) and April 23, 1998 22 (P.L.239, No.45), are amended to read:
1 Section 201. Definitions.--The following words, terms and 2 phrases when used in this Article II shall have the meaning 3 ascribed to them in this section, except where the context 4 clearly indicates a different meaning: 5 * * * 6 (k) "Sale at retail." 7 * * * 8 (4) The rendition for a consideration of the service of 9 repairing, altering, mending, pressing, fitting, dyeing, 10 laundering, drycleaning or cleaning tangible personal property 11 [other than] including, but not limited to, wearing apparel or 12 shoes, or applying or installing tangible personal property as a 13 repair or replacement part of other tangible personal property 14 [except] including, but not limited to, wearing apparel or shoes 15 for a consideration, whether or not the services are performed 16 directly or by any means other than by coin-operated self- 17 service laundry equipment for wearing apparel or household goods 18 and whether or not any tangible personal property is transferred 19 in conjunction therewith.[, except such services as are rendered 20 in the construction, reconstruction, remodeling, repair or 21 maintenance of real estate: Provided, however, That this 22 subclause shall not be deemed to impose tax upon such services 23 in the preparation for sale of new items which are excluded from 24 the tax under clause (26) of section 204, or upon diaper 25 service.] 26 * * * 27 (o) "Use." 28 * * * 29 (4) The obtaining by a purchaser of the service of 30 repairing, altering, mending, pressing, fitting, dyeing, 20050H0120B0916 - 2 -
1 laundering, drycleaning or cleaning tangible personal property 2 [other than] including, but not limited to, wearing apparel or 3 shoes or applying or installing tangible personal property as a 4 repair or replacement part of other tangible personal property 5 [other than] including, but not limited to, wearing apparel or 6 shoes, whether or not the services are performed directly or by 7 any means other than by means of coin-operated self-service 8 laundry equipment for wearing apparel or household goods, and 9 whether or not any tangible personal property is transferred to 10 the purchaser in conjunction therewith[, except such services as 11 are obtained in the construction, reconstruction, remodeling, 12 repair or maintenance of real estate: Provided, however, That 13 this subclause shall not be deemed to impose tax upon such 14 services in the preparation for sale of new items which are 15 excluded from the tax under clause (26) of section 204, or upon 16 diaper service: And provided further, That the]. The term "use" 17 shall not include-- 18 (A) Any tangible personal property acquired and kept, 19 retained or over which power is exercised within this 20 Commonwealth on which the taxing of the storage, use or other 21 consumption thereof is expressly prohibited by the Constitution 22 of the United States or which is excluded from tax under other 23 provisions of this article. 24 (B) The use or consumption of tangible personal property, 25 including but not limited to machinery and equipment and parts 26 therefor, and supplies or the obtaining of the services 27 described in subclauses (2), (3) and (4) of this clause directly 28 in the operations of-- 29 (i) The manufacture of tangible personal property. 30 (ii) Farming, dairying, agriculture, horticulture or 20050H0120B0916 - 3 -
1 floriculture when engaged in as a business enterprise. The term 2 "farming" shall include the propagation and raising of ranch- 3 raised furbearing animals and the propagation of game birds for 4 commercial purposes by holders of propagation permits issued 5 under 34 Pa.C.S. (relating to game) and the propagation and 6 raising of horses to be used exclusively for commercial racing 7 activities. 8 (iii) The producing, delivering or rendering of a public 9 utility service, or in constructing, reconstructing, remodeling, 10 repairing or maintaining the facilities which are directly used 11 in producing, delivering or rendering such service. 12 (iv) Processing as defined in subclause (d) of this section. 13 The exclusions provided in subparagraphs (i), (ii), (iii) and 14 (iv) shall not apply to any vehicle required to be registered 15 under The Vehicle Code except those vehicles directly used by a 16 public utility engaged in the business as a common carrier; to 17 maintenance facilities; or to materials, supplies or equipment 18 to be used or consumed in the construction, reconstruction, 19 remodeling, repair or maintenance of real estate other than 20 directly used machinery, equipment, parts or foundations 21 therefor that may be affixed to such real estate. The exclusions 22 provided in subparagraphs (i), (ii), (iii) and (iv) shall not 23 apply to tangible personal property or services to be used or 24 consumed in managerial sales or other nonoperational activities, 25 nor to the purchase or use of tangible personal property or 26 services by any person other than the person directly using the 27 same in the operations described in subparagraphs (i), (ii), 28 (iii) and (iv). 29 The exclusion provided in subparagraph (iii) shall not apply 30 to (A) construction materials, supplies or equipment used to 20050H0120B0916 - 4 -
1 construct, reconstruct, remodel, repair or maintain facilities
2 not used directly by the purchaser in the production, delivering
3 or rendition of public utility service or (B) tools and
4 equipment used but not installed in the maintenance of
5 facilities used directly in the production, delivering or
6 rendition of a public utility service.
7 The exclusion provided in subparagraphs (i), (ii), (iii) and
8 (iv) shall not apply to the services enumerated in clauses
9 (o)(9) through (16) and (w) through (kk), except that the
10 exclusion provided in subparagraph (ii) for farming, dairying
11 and agriculture shall apply to the service enumerated in clause
12 (z).
13 * * *
14 [(8) The term "use" shall not include the providing of a
15 motor vehicle to a nonprofit private or public school to be used
16 by such a school for the sole purpose of driver education.]
17 * * *
18 Section 2. Section 202 of the act, amended or added
19 September 9, 1971 (P.L.437, No.105), October 4, 1978 (P.L.987,
20 No.201), April 23, 1998 (P.L.239, No.45), May 24, 2000 (P.L.106,
21 No.23) and June 29, 2002 (P.L.559, No.89), is amended to read:
22 Section 202. Imposition of Tax.--(a) There is hereby
23 imposed upon each separate sale at retail of tangible personal
24 property or services, as defined herein, within this
25 Commonwealth a tax of [six] five per cent of the purchase price,
26 which tax shall be collected by the vendor from the purchaser,
27 and shall be paid over to the Commonwealth as herein provided.
28 (b) There is hereby imposed upon the use[, on and after the
29 effective date of this article,] within this Commonwealth of
30 tangible personal property purchased at retail [on or after the
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1 effective date of this article,] and on those services described 2 herein purchased at retail on and after [the effective date of 3 this article] January 1, 2006, a tax of [six] five per cent of 4 the purchase price, which tax shall be paid to the Commonwealth 5 by the person who makes such use as herein provided, except that 6 such tax shall not be paid to the Commonwealth by such person 7 where he has paid the tax imposed by subsection (a) of this 8 section or has paid the tax imposed by this subsection (b) to 9 the vendor with respect to such use. [The tax at the rate of six 10 per cent imposed by this subsection shall not be deemed 11 applicable where the tax has been incurred under the provisions 12 of the "Tax Act of 1963 for Education."] 13 (c) Notwithstanding any other provisions of this article, 14 the tax with respect to telecommunications service within the 15 meaning of clause (m) of section 201 of this article shall[, 16 except for telegrams paid for in cash at telegraph offices,] be 17 computed at the rate of [six] five per cent upon the total 18 amount charged to customers for such services, irrespective of 19 whether such charge is based upon a flat rate or upon a message 20 unit charge[, but in no event shall charges for telephone calls 21 paid for by inserting money into a telephone accepting direct 22 deposits of money to operate be subject to this tax]. A 23 telecommunications service provider shall have no responsibility 24 or liability to the Commonwealth for billing, collecting or 25 remitting taxes that apply to services, products or other 26 commerce sold over telecommunications lines by third-party 27 vendors. To prevent actual multistate taxation of interstate 28 telecommunications service, any taxpayer, upon proof that the 29 taxpayer has paid a similar tax to another state on the same 30 interstate telecommunications service, shall be allowed a credit 20050H0120B0916 - 6 -
1 against the tax imposed by this section on the same interstate 2 telecommunications service to the extent of the amount of such 3 tax properly due and paid to such other state. 4 (d) Notwithstanding any other provisions of this article, 5 the sale or use of food and beverages dispensed by means of coin 6 operated vending machines shall be taxed at the rate of [six] 7 five per cent of the receipts collected from any such machine 8 which dispenses food and beverages heretofore taxable. 9 (e) (1) Notwithstanding any provisions of this article, the 10 sale or use of prepaid telecommunications evidenced by the 11 transfer of tangible personal property shall be subject to the 12 tax imposed by subsections (a) and (b). 13 (2) The sale or use of prepaid telecommunications not 14 evidenced by the transfer of tangible personal property shall be 15 subject to the tax imposed by subsections (a) and (b) and shall 16 be deemed to occur at the purchaser's billing address. 17 (3) Notwithstanding clause (2), the sale or use of prepaid 18 telecommunications service not evidenced by the transfer of 19 tangible personal property shall be taxed at the rate of [six] 20 five per cent of the receipts collected on each sale if the 21 service provider elects to collect the tax imposed by this 22 article on receipts of each sale. The service provider shall 23 notify the department of its election and shall collect the tax 24 on receipts of each sale until the service provider notifies the 25 department otherwise. 26 (e.1) (1) Notwithstanding any other provision of this 27 article, the sale or use of prepaid mobile telecommunications 28 service evidenced by the transfer of tangible personal property 29 shall be subject to the tax imposed by subsections (a) and (b). 30 (2) The sale or use of prepaid mobile telecommunications 20050H0120B0916 - 7 -
1 service not evidenced by the transfer of tangible personal
2 property shall be subject to the tax imposed by subsections (a)
3 and (b) and shall be deemed to occur at the purchaser's billing
4 address or the location associated with the mobile telephone
5 number or the point of sale, whichever is applicable.
6 (3) Notwithstanding clause (2), the sale or use of prepaid
7 mobile telecommunications service not evidenced by the transfer
8 of tangible personal property shall be taxed at the rate of
9 [six] five per cent of the receipts collected on each sale if
10 the service provider elects to collect the tax imposed by this
11 article on receipts of each sale. The service provider shall
12 notify the department of its election and shall collect the tax
13 on receipts of each sale until the service provider notifies the
14 department otherwise.
15 (f) Notwithstanding any other provision of this article, tax
16 with respect to sales of prebuilt housing shall be imposed on
17 the prebuilt housing builder at the time of the prebuilt housing
18 sale within this Commonwealth and shall be paid and reported by
19 the prebuilt housing builder to the department in the time and
20 manner provided in this article: Provided, however, That a
21 manufacturer of prebuilt housing may, at its option, precollect
22 the tax from the prebuilt housing builder at the time of sale to
23 the prebuilt housing builder. In any case where prebuilt housing
24 is purchased and the tax is not paid by the prebuilt housing
25 builder or precollected by the manufacturer, the prebuilt
26 housing purchaser shall remit tax directly to the department if
27 the prebuilt housing is used in this Commonwealth without regard
28 to whether the prebuilt housing becomes a real estate structure.
29 (g) Notwithstanding any other provisions of this article and
30 in accordance with the Mobile Telecommunications Sourcing Act (4
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1 U.S.C. § 116), the sale or use of mobile telecommunications
2 services which are deemed to be provided to a customer by a home
3 service provider under section 117(a) and (b) of the Mobile
4 Telecommunications Sourcing Act shall be subject to the tax of
5 [six] five per cent of the purchase price, which tax shall be
6 collected by the home service provider from the customer, and
7 shall be paid over to the Commonwealth as herein provided if the
8 customer's place of primary use is located within this
9 Commonwealth, regardless of where the mobile telecommunications
10 services originate, terminate or pass through. For purposes of
11 this subsection, words and phrases used in this subsection shall
12 have the same meanings given to them in the Mobile
13 Telecommunications Sourcing Act.
14 Section 3. Section 203 of the act is amended to read:
15 Section 203. Computation of Tax.--The amount of tax imposed
16 by section 202 of this article shall be computed as follows:
17 [(a) If the purchase price is ten cents (10c/) or less, no
18 tax shall be collected.
19 (b) If the purchase price is eleven cents (11c/) or more
20 but less than eighteen cents (18c/), one cent (1c/) shall be
21 collected.
22 (c) If the purchase price is eighteen cents (18c/) or more
23 but less than thirty-five cents (35c/), two cents (2c/) shall
24 be collected.
25 (d) If the purchase price is thirty-five cents (35c/) or
26 more but less than fifty-one cents (51c/), three cents (3c/)
27 shall be collected.
28 (e) If the purchase price is fifty-one cents (51c/) or more
29 but less than sixty-eight cents (68c/), four cents (4c/) shall
30 be collected.
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1 (f) If the purchase price is sixty-eight cents (68c/) or 2 more but less than eighty-five cents (85c/), five cents (5c/) 3 shall be collected. 4 (g) If the purchase price is eighty-five cents (85c/) or 5 more but less than one dollar and one cent ($1.01), six cents 6 (6c/) shall be collected. 7 (h) If the purchase price is more than one dollar ($1.00), 8 six per centum of each dollar of purchase price plus the above 9 bracket charges upon any fractional part of a dollar in excess 10 of even dollars shall be collected.] 11 (a) If the purchase price is seventeen cents (17¢) or less, 12 no tax shall be collected. 13 (b) If the purchase price is eighteen cents (18¢) or more 14 but less than thirty-three cents (33¢), one cent (1¢) shall be 15 collected. 16 (c) If the purchase price is thirty-three cents (33¢) or 17 more but less than forty-nine cents (49¢), two cents (2¢) shall 18 be collected. 19 (d) If the purchase price is forty-nine cents (49¢) or more 20 but less than sixty-five cents (65¢), three cents (3¢) shall be 21 collected. 22 (e) If the purchase price is sixty-five cents (65¢) or more 23 but less than eighty-one cents (81¢), four cents (4¢) shall be 24 collected. 25 (f) If the purchase price is more than eighty-one cents 26 (81¢) but less than one dollar and one cent ($1.01), five per 27 cent shall be collected. 28 (g) If the purchase price is more than one dollar ($1.00), 29 five per cent of each dollar of purchase price plus the above 30 bracket charges upon any fractional part of a dollar in excess 20050H0120B0916 - 10 -
1 of even dollars shall be collected. 2 (h) The tax collected under section 202 shall be deposited 3 into the Education Operating Fund. 4 Section 4. Section 204 of the act, amended, added or 5 repealed August 31, 1971 (P.L.362, No.93), July 20, 1974 6 (P.L.535, No.183), October 17, 1974 (P.L.756, No.255), December 7 14, 1977 (P.L.322, No.93), October 27, 1979 (P.L.242, No.79), 8 December 8, 1980 (P.L.1117, No.195), December 16, 1980 9 (P.L.1240, No.223), October 22, 1981 (P.L.314, No.109), June 23, 10 1982 (P.L.610, No.172), December 9, 1982 (P.L.1047, No.246), 11 July 21, 1983 (P.L.63, No.29), December 19, 1985 (P.L.354, 12 No.100), July 13, 1987 (P.L.317, No.58), August 4, 1991 (P.L.97, 13 No.22), December 13, 1991 (P.L.373, No.40), June 16, 1994 14 (P.L.279, No.48), June 30, 1995 (P.L.139, No.21), May 7, 1997 15 (P.L.85, No.7), April 23, 1998 (P.L.239, No.45), May 12, 1999 16 (P.L.26, No.4), May 24, 2000 (P.L.106, No.23), December 20, 2000 17 (P.L.841, No.119), June 22, 2001 (P.L.353, No.23), June 29, 2002 18 (P.L.559, No.89) and December 23, 2003 (P.L.250, No.46), is 19 amended to read: 20 Section 204. Exclusions from Tax.--The tax imposed by 21 section 202 shall not be imposed upon any of the following: 22 (1) The sale at retail or use of tangible personal property 23 (other than motor vehicles, trailers, semi-trailers, motor 24 boats, aircraft or other similar tangible personal property 25 required under either Federal law or laws of this Commonwealth 26 to be registered or licensed) or services sold by or purchased 27 from a person not a vendor in an isolated transaction or sold by 28 or purchased from a person who is a vendor but is not a vendor 29 with respect to the tangible personal property or services sold 30 or purchased in such transaction: Provided, That inventory and 20050H0120B0916 - 11 -
1 stock in trade so sold or purchased, shall not be excluded from 2 the tax by the provisions of this subsection. 3 (2) The use of tangible personal property purchased by a 4 nonresident person outside of, and brought into this 5 Commonwealth for use therein for a period not to exceed seven 6 days, or for any period of time when such nonresident is a 7 tourist or vacationer and, in either case not consumed within 8 the Commonwealth. 9 (3) The use of tangible personal property purchased outside 10 this Commonwealth for use outside this Commonwealth by a then 11 nonresident natural person or a business entity not actually 12 doing business within this Commonwealth, who later brings such 13 tangible personal property into this Commonwealth in connection 14 with his establishment of a permanent business or residence in 15 this Commonwealth: Provided, That such property was purchased 16 more than six months prior to the date it was first brought into 17 this Commonwealth or prior to the establishment of such business 18 or residence, whichever first occurs. This exclusion shall not 19 apply to tangible personal property temporarily brought into 20 Pennsylvania for the performance of contracts for the 21 construction, reconstruction, remodeling, repairing and 22 maintenance of real estate. 23 [(4) The sale at retail or use of disposable diapers; pre- 24 moistened wipes; incontinence products; colostomy deodorants; 25 toilet paper; sanitary napkins, tampons or similar items used 26 for feminine hygiene; or toothpaste, toothbrushes or dental 27 floss. 28 (5) The sale at retail or use of steam, natural and 29 manufactured and bottled gas, fuel oil, electricity or 30 intrastate subscriber line charges, basic local telephone 20050H0120B0916 - 12 -
1 service or telegraph service when purchased directly by the user 2 thereof solely for his own residential use and charges for 3 telephone calls paid for by inserting money into a telephone 4 accepting direct deposits of money to operate.] 5 (10) The sale at retail [to or use] by (i) any charitable 6 organization, volunteer firemen's organization or nonprofit 7 educational institution, or (ii) a religious organization for 8 religious purposes of tangible personal property or services 9 other than pursuant to a construction contract: Provided, 10 however, That the exclusion of this clause shall not apply with 11 respect to any tangible personal property or services used in 12 any unrelated trade or business carried on by such organization 13 or institution or with respect to any materials, supplies and 14 equipment used and transferred to such organization or 15 institution in the construction, reconstruction, remodeling, 16 renovation, repairs and maintenance of any real estate 17 structure, other than building machinery and equipment, except 18 materials and supplies when purchased by such organizations or 19 institutions for routine maintenance and repairs. 20 (11) The sale at retail, or use of gasoline and other motor 21 fuels, the sales of which are otherwise subject to excise taxes 22 under [the act of May 21, 1931 (P.L.194), known as the "Liquid 23 Fuels Tax Act," and the act of January 14, 1952 (P.L.1965), 24 known as the "Fuel Use Tax Act."] 75 Pa.C.S. Ch. 90 (relating to 25 Liquid Fuels and Fuels Tax). 26 (12) The sale at retail to, or use by the United States, 27 this Commonwealth or its instrumentalities or political 28 subdivisions or private schools or parochial schools of tangible 29 personal property or services. The clause includes the sale at 30 retail to persons who operate a home education program of 20050H0120B0916 - 13 -
1 tangible personal property or services exclusively for the home 2 education program. 3 [(13) The sale at retail, or use of wrapping paper, wrapping 4 twine, bags, cartons, tape, rope, labels, nonreturnable 5 containers and all other wrapping supplies, when such use is 6 incidental to the delivery of any personal property, except that 7 any charge for wrapping or packaging shall be subject to tax at 8 the rate imposed by section 202. 9 (14) Sale at retail or use of vessels designed for 10 commercial use of registered tonnage of fifty tons or more when 11 produced by the builders thereof upon special order of the 12 purchaser. 13 (15) Sale at retail of tangible personal property or 14 services used or consumed in building, rebuilding, repairing and 15 making additions to or replacements in and upon vessels designed 16 for commercial use of registered tonnage of fifty tons or more 17 upon special order of the purchaser, or when rebuilt, repaired 18 or enlarged, or when replacements are made upon order of or for 19 the account of the owner. 20 (16) The sale at retail or use of tangible personal property 21 or services to be used or consumed for ship cleaning or 22 maintenance or as fuel, supplies, ships' equipment, ships' 23 stores or sea stores on vessels designed for commercial use of 24 registered tonnage of fifty tons or more to be operated 25 principally outside the limits of the Commonwealth.] 26 (17) The sale at retail or use of prescription [or non- 27 prescription] medicines.[, drugs or medical supplies, crutches 28 and wheelchairs for the use of cripples and invalids, artificial 29 limbs, artificial eyes and artificial hearing devices when 30 designed to be worn on the person of the purchaser or user, 20050H0120B0916 - 14 -
1 false teeth and materials used by a dentist in dental treatment, 2 eyeglasses when especially designed or prescribed by an 3 ophthalmologist, oculist or optometrist for the personal use of 4 the owner or purchaser and artificial braces and supports 5 designed solely for the use of crippled persons or any other 6 therapeutic, prosthetic or artificial device designed for the 7 use of a particular individual to correct or alleviate a 8 physical incapacity, including but not limited to hospital beds, 9 iron lungs, and kidney machines. 10 (18) The sale at retail or use of coal. 11 (24) The sale at retail or use of motor vehicles, trailers 12 and semi-trailers, or bodies attached to the chassis thereof, 13 sold to a nonresident of Pennsylvania to be used outside of 14 Pennsylvania and which are registered in a state other than 15 Pennsylvania within twenty days after delivery to the vendee. 16 (25) The sale at retail or use of water. 17 (26) The sale at retail or use of all vesture, wearing 18 apparel, raiments, garments, footwear and other articles of 19 clothing, including clothing patterns and items that are to be a 20 component part of clothing, worn or carried on or about the 21 human body but all accessories, ornamental wear, formal day or 22 evening apparel, and articles made of fur on the hide or pelt or 23 any material imitative of fur and articles of which such fur, 24 real, imitation or synthetic, is the component material of chief 25 value, but only if such value is more than three times the value 26 of the next most valuable component material, and sporting goods 27 and clothing not normally used or worn when not engaged in 28 sports shall not be excluded from the tax. 29 (28) The sale at retail or use of religious publications 30 sold by religious groups and Bibles and religious articles. 20050H0120B0916 - 15 -
1 (29) The sale at retail or use of food and beverages for
2 human consumption, except that this exclusion shall not apply
3 with respect to--
4 (i) Soft drinks;
5 (ii) Malt and brewed beverages and spirituous and vinous
6 liquors;
7 (iii) Food or beverages, whether sold for consumption on or
8 off the premises or on a "take-out" or "to go" basis or
9 delivered to the purchaser or consumer, when purchased (A) from
10 persons engaged in the business of catering; or (B) from persons
11 engaged in the business of operating establishments from which
12 ready-to-eat food and beverages are sold, including, but not
13 limited to, restaurants, cafes, lunch counters, private and
14 social clubs, taverns, dining cars, hotels, night clubs, fast
15 food operations, pizzerias, fairs, carnivals, lunch carts, ice
16 cream stands, snack bars, cafeterias, employe cafeterias,
17 theaters, stadiums, arenas, amusement parks, carryout shops,
18 coffee shops and other establishments whether mobile or
19 immobile. For purposes of this clause, a bakery, a pastry shop,
20 a donut shop, a delicatessen, a grocery store, a supermarket, a
21 farmer's market, a convenience store or a vending machine shall
22 not be considered an establishment from which food or beverages
23 ready to eat are sold except for the sale of meals, sandwiches,
24 food from salad bars, hand-dipped or hand-served iced based
25 products including ice cream and yogurt, hot soup, hot pizza and
26 other hot food items, brewed coffee and hot beverages. For
27 purposes of this subclause, beverages shall not include malt and
28 brewed beverages and spirituous and vinous liquors but shall
29 include soft drinks.]
30 (29) The sale at retail of food and beverages at or from a
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1 school, whether public or private, or church in the ordinary 2 course of the activities of such organization is not subject to 3 tax. 4 (30) The sale at retail or use of [newspapers. For purposes 5 of this section, the term "newspaper" shall mean a "legal 6 newspaper" or a publication containing matters of general 7 interest and reports of current events which qualifies as a 8 "newspaper of general circulation" qualified to carry a "legal 9 advertisement" as those terms are defined in 45 Pa.C.S. § 101 10 (relating to definitions), not including magazines. This 11 exclusion shall also include] any printed or other form of 12 advertising materials [circulated with such newspaper] 13 regardless of where or by whom such [printed] advertising 14 material was produced. 15 [(31) The sale at retail or use of caskets and burial vaults 16 for human remains and markers and tombstones for human graves. 17 (32) The sale at retail or use of flags of the United States 18 of America and the Commonwealth of Pennsylvania. 19 (33) The sale at retail or use of textbooks for use in 20 schools, colleges and universities, either public or private 21 when purchased in behalf of or through such schools, colleges or 22 universities provided such institutions of learning are 23 recognized by the Department of Education. 24 (34) The sale at retail, or use of motion picture film 25 rented or licensed from a distributor for the purpose of 26 commercial exhibition. 27 (35) The sale at retail or use of mail order catalogs and 28 direct mail advertising literature or materials, including 29 electoral literature or materials, such as envelopes, address 30 labels and a one-time license to use a list of names and mailing 20050H0120B0916 - 17 -
1 addresses for each delivery of direct mail advertising 2 literature or materials, including electoral literature or 3 materials, through the United States Postal Service.] 4 (36) The sale at retail or use of rail transportation 5 equipment used in the movement of personalty. 6 [(37) The sale at retail of buses to be used under contract 7 with school districts that are replacements for buses destroyed 8 or lost in the flood of 1977 for a period ending December 31, 9 1977 in the counties of Armstrong, Bedford, Cambria, Indiana, 10 Jefferson, Somerset and Westmoreland, or the use of such buses. 11 (38) The sale at retail of horses, if at the time of 12 purchase, the seller is directed to ship or deliver the horse to 13 an out-of-State location, whether or not the charges for 14 shipment are paid for by the seller or the purchaser; the seller 15 shall obtain a bill of lading, either from the carrier or from 16 the purchaser, who, in turn has obtained the bill of lading from 17 the carrier, reflecting delivery to the out-of-State address to 18 which the horse has been shipped. The seller shall execute a 19 "Certificate of Delivery to Destination Outside of the 20 Commonwealth" for each bill of lading reflecting out-of-State 21 delivery. The seller shall be required to retain the certificate 22 of delivery form to justify the noncollection of sales tax with 23 respect to the transaction to which the form relates. 24 In transactions where a horse is sold by the seller and 25 delivered to a domiciled person, agent or corporation prior to 26 its being delivered to an out-of-State location, the 27 "Certificate of Delivery to Destination Outside of the 28 Commonwealth" form must have attached to it bills of lading both 29 for the transfer to the domiciled person, agent or corporation 30 and from the aforementioned to the out-of-State location. 20050H0120B0916 - 18 -
1 (39) The sale at retail or use of fish feed purchased by or 2 on behalf of sportsmen's clubs, fish cooperatives or nurseries 3 approved by the Pennsylvania Fish Commission. 4 (40) The sale at retail of supplies and materials to tourist 5 promotion agencies, which receive grants from the Commonwealth, 6 for distribution to the public as promotional material or the 7 use of such supplies and materials by said agencies for said 8 purposes. 9 (41) The sale at retail of supplies and materials to tourist 10 promotion agencies, which receive grants from the Commonwealth, 11 for distribution to the public as promotional material or the 12 use of such supplies and materials by said agencies for said 13 purposes. 14 (42) The sale or use of brook trout (salvelinus fontinalis), 15 brown trout (Salmo trutta) or rainbow trout (Salmo gairdneri). 16 (43) The sale at retail or use of buses to be used 17 exclusively for the transportation of children for school 18 purposes. 19 (44) The sale at retail or use of firewood. For the purpose 20 of this clause, firewood shall mean the product of trees when 21 severed from the land and cut into proper lengths for burning 22 and pellets made from pure wood sawdust if used for fuel for 23 cooking, hot water production or to heat residential dwellings. 24 (45) The sale at retail or use of materials used in the 25 construction and erection of objects purchased by not-for-profit 26 organizations for purposes of commemoration and memorialization 27 of historical events, provided that the object is erected upon 28 publicly owned property or property to be conveyed to a public 29 entity upon the commemoration or memorialization of the 30 historical event.] 20050H0120B0916 - 19 -
1 (46) The sale at retail or use of tangible personal property 2 purchased in accordance with the Food Stamp Act of 1977, as 3 amended (Public Law 95-113, 7 U.S.C. §§ 2011-2029). 4 [(47) The net purchase price of the sale at retail or use of 5 electric vehicles, hybrid electric vehicles and zero emission 6 vehicles as defined in 75 Pa.C.S. § 102 (relating to 7 definitions). "Net purchase price" shall mean the difference 8 between the purchase price of an electric vehicle, hybrid 9 electric vehicle or zero emission vehicle and the average retail 10 list price of a comparable vehicle. "Comparable vehicle" shall 11 mean, in the case of a passenger car, the overall average list 12 price of a passenger car in the United States; in the case of a 13 passenger truck, the overall average list price of a passenger 14 truck in the United States; and, in the case of a van, the 15 overall average retail list price of a van in the United States. 16 The Department of Revenue shall promulgate rules and regulations 17 to enforce this exemption and determine the average retail list 18 price as defined under "comparable vehicle" on an annual basis. 19 In the event that a qualified motor vehicle is something other 20 than a passenger car, passenger truck or van, the Department of 21 Revenue shall determine the average list price of a comparable 22 vehicle classification. This clause shall expire December 31, 23 1999. 24 (48) The sale at retail or use of power units for vehicles 25 that are exempt under clause (47). This clause shall expire 26 December 31, 1999.] 27 (49) The sale at retail or use of food and beverages by 28 nonprofit associations which support sports programs. For 29 purposes of this clause, the phrases: 30 (i) "nonprofit association" means an entity which is 20050H0120B0916 - 20 -
1 organized as a nonprofit corporation or nonprofit unincorporated 2 association under the laws of this Commonwealth or the United 3 States or any entity which is authorized to do business in this 4 Commonwealth as a nonprofit corporation or unincorporated 5 association under the laws of this Commonwealth, including, but 6 not limited to, youth or athletic associations, volunteer fire, 7 ambulance, religious, charitable, fraternal, veterans, civic, or 8 any separately chartered auxiliary of the foregoing, if 9 organized and operated on a nonprofit basis; 10 (iv) "sports program" means baseball (including softball), 11 football, basketball, soccer and any other competitive sport 12 formally recognized as a sport by the United States Olympic 13 Committee as specified by and under the jurisdiction of the 14 Amateur Sports Act of 1978 (Public Law 95-606, 36 U.S.C. § 371 15 et seq.), the Amateur Athletic Union or the National Collegiate 16 Athletic Association. The term shall be limited to a program or 17 that portion of a program that is organized for recreational 18 purposes and whose activities are substantially for such 19 purposes and which is primarily for participants who are 18 20 years of age or younger or whose 19th birthday occurs during the 21 year of participation or the competitive season, whichever is 22 longer. There shall, however, be no age limitation for programs 23 operated for persons with physical handicaps or persons with 24 mental retardation; 25 (v) "support" means the funds raised from sales are used to 26 pay the expenses of a sports program or the nonprofit 27 association sells the food and beverages at a location where a 28 sports program is being conducted under this act. 29 [(50) The sale at retail or use of subscriptions for 30 magazines. The term "magazine" refers to a periodical published 20050H0120B0916 - 21 -
1 at regular intervals not exceeding three months and which are 2 circulated among the general public, containing matters of 3 general interest and reports of current events published for the 4 purpose of disseminating information of a public character or 5 devoted to literature, the sciences, art or some special 6 industry. This exclusion shall also include any printed 7 advertising material circulated with the periodical or 8 publication regardless of where or by whom the printed 9 advertising material was produced. 10 (51) The sale at retail or use of interior office building 11 cleaning services but only as relates to the costs of the 12 supplied employe, which costs are wages, salaries, bonuses and 13 commissions, employment benefits, expense reimbursements, and 14 payroll and withholding taxes, to the extent that these costs 15 are specifically itemized or that these costs in aggregate are 16 stated in billings from the vender or supplying entity. 17 (53) The sale at retail or use of candy or gum regardless of 18 the location from which the candy or gum is sold. 19 (54) The sale at retail to or use by a producer of 20 commercial motion pictures of any tangible personal property 21 directly used in the production of a feature-length commercial 22 motion picture distributed to a national audience: Provided, 23 however, That the production of any motion picture for which the 24 property will be used does not violate any Federal or State law; 25 and Provided further That the purchaser shall furnish to the 26 vendor a certificate substantially in the form as the Department 27 of Community and Economic Development may, by regulation, 28 prescribe, stating that the sale is exempt from tax pursuant to 29 this clause. 30 (55) The sale at retail or use of horses to be used 20050H0120B0916 - 22 -
1 exclusively for commercial racing activities and the sale at 2 retail and use of feed, bedding, grooming supplies, riding tack, 3 farrier services, portable stalls and sulkies for horses used 4 exclusively for commercial racing activities. 5 (56) The sale at retail or use of tangible personal property 6 or services used, transferred or consumed in installing or 7 repairing equipment or devices designed to assist persons in 8 ascending or descending a stairway when: 9 (i) The equipment or devices are used by a person who, by 10 virtue of a physical disability, is unable to ascend or descend 11 stairs without the aid of such equipment or device. 12 (ii) The equipment or device is installed or used in such 13 person's place of residence. 14 (iii) A physician has certified the physical disability of 15 the person in whose residence the equipment or device is 16 installed or used. 17 (57) The sale at retail to or use by a construction 18 contractor of building machinery and equipment and services 19 thereto that are: 20 (i) transferred pursuant to a construction contract for any 21 charitable organization, volunteer firemen's organization, 22 nonprofit educational institution or religious organization for 23 religious purposes, provided that the building machinery and 24 equipment and services thereto are not used in any unrelated 25 trade or business; 26 (ii) transferred to the United States or the Commonwealth or 27 its instrumentalities or political subdivisions; or 28 (58) The sale at retail or use of a personal computer, a 29 peripheral device or an Internet access device, or a service 30 contract or single-user licensed software purchased in 20050H0120B0916 - 23 -
1 conjunction with a personal computer, peripheral device or 2 Internet access device, during the exclusion period by an 3 individual purchaser for nonbusiness use. The exclusion does not 4 include a sale at retail or use of, leasing, rental or repair of 5 a personal computer, peripheral device or Internet access 6 device; mainframe computers; network servers; local area network 7 hubs; routers and network cabling; network operating systems; 8 multiple-user licensed software; minicomputers; hand-held 9 computers; personal digital assistants without Internet access; 10 hardware word processors; graphical calculators; video game 11 consoles; telephones; digital cameras; pagers; compact discs 12 encoded with music or movies; and digital versatile discs 13 encoded with music or movies. For purposes of this clause, the 14 phrase "exclusion period" means the period of time from August 15 5, 2001, to and including August 12, 2001, and from February 17, 16 2002, to and including February 24, 2002. For purposes of this 17 clause, "purchaser" means an individual who places an order and 18 pays the purchase price by cash or credit during the exclusion 19 period even if delivery takes place after the exclusion period.] 20 (59) The sale at retail or use of molds and related mold 21 equipment used directly and predominantly in the manufacture of 22 products, regardless of whether the person that holds title to 23 the equipment manufactures a product. 24 [(60) The sale or use of used prebuilt housing. 25 (61) The sale at retail to or use of food and nonalcoholic 26 beverages by an airline which will transfer the food or 27 nonalcoholic beverages to passengers in connection with the 28 rendering of the airline service.] 29 (62) The sale at retail or use of tangible personal property 30 or services which are directly used in farming, dairying or 20050H0120B0916 - 24 -
1 agriculture when engaged in as a business enterprise whether or 2 not the sale is made to the person directly engaged in the 3 business enterprise or to a person contracting with the person 4 directly engaged in the business enterprise for the production 5 of food. 6 [(63) The sale at retail or use of separately stated fees 7 paid pursuant to 13 Pa.C.S. § 9525 (relating to fees).] 8 (64) The sale at retail to or use by a construction 9 contractor, employed by a public school district pursuant to a 10 construction contract, of any materials and building supplies 11 which, during construction or reconstruction, are made part of 12 any public school building utilized for instructional classroom 13 education within this Commonwealth, if the construction or 14 reconstruction: 15 (i) is necessitated by a disaster emergency, as defined in 16 35 Pa.C.S. § 7102 (relating to definitions); and 17 (ii) takes place during the period when there is a 18 declaration of disaster emergency under 35 Pa.C.S. § 7301(c) 19 (relating to general authority of Governor). 20 (65) The sale at retail of medical goods or services by a 21 hospital. 22 (66) The sale at retail of medical or dental services, 23 including charges for office visits. 24 (67) The sale at retail or use of goods or services 25 involving Medicare Part B transactions. 26 (68) The sale at retail or use of transportation provided or 27 funded by the Federal, State or local government. 28 (69) The sale at retail or use of cigarettes. 29 (70) The sale at retail of insurance premiums. 30 Section 5. Section 205 of the act, amended June 9, 1978 20050H0120B0916 - 25 -
1 (P.L.463, No.62) and August 4, 1991 (P.L.97, No.22), is amended 2 to read: 3 Section 205. Alternate Imposition of Tax; Credits.--(a) If 4 any person actively and principally engaged in the business of 5 selling new or used motor vehicles, trailers or semi-trailers, 6 and registered with the department in the "dealer's class," 7 acquires a motor vehicle, trailer or semi-trailer for the 8 purpose of resale, and prior to such resale, uses the motor 9 vehicle, trailer or semi-trailer for a taxable use under this 10 act during a period not exceeding one year from the date of 11 acquisition to the date of resale, such person may within ten 12 days of the commencement of such use, elect to pay a tax equal 13 to [six] five per cent of the fair rental value of the motor 14 vehicle, trailer or semi-trailer during such use. Should such 15 motor vehicle, trailer or semi-trailer be used for a taxable use 16 after a period of one year, the taxpayer shall be liable for a 17 tax on the fair market value of such motor vehicle, trailer or 18 semi-trailer at the time of acquisition, but shall be allowed a 19 credit equal to the tax paid pursuant to the election provided 20 for in this section. This section shall not apply to the use of 21 a vehicle as a wrecker, parts truck, delivery truck or courtesy 22 car. 23 (b) A commercial aircraft operator who acquires an aircraft 24 for the purpose of resale, or lease, or is entitled to claim 25 another valid exemption at the time of purchase, and subsequent 26 to such purchase, periodically uses the same aircraft for a 27 taxable use under this act, may elect to pay a tax equal to 28 [six] five per cent of the fair rental value of the aircraft 29 during such use. 30 Section 6. Section 281.2 of the act, amended or added 20050H0120B0916 - 26 -
1 December 13, 1991 (P.L.373, No.40) and June 16, 1994 (P.L.279, 2 No.48), is amended to read: 3 Section 281.2. Transfers to Public Transportation Assistance 4 Fund.--(a) All revenues received on or after July 1, 1992, from 5 the imposition of the tax on periodicals shall be transferred to 6 the Public Transportation Assistance Fund according to the 7 formula set forth in subsection (b). 8 (b) Within 30 days of the close of any calendar month, [.44 9 per cent (.0044)] .36 per cent (.0036) of the taxes received in 10 the previous month under this article, less any amounts 11 collected in that previous calendar month under former 74 12 Pa.C.S. § 1314(d) (relating to Public Assistance Transportation 13 Fund), shall be transferred to the Public Transportation 14 Assistance Fund established under Article XXIII. 15 [(c) In fiscal year 1991-1992, the Secretary of Revenue will 16 ensure that ten million dollars ($10,000,000) is deposited in 17 the Public Assistance Transportation Fund from the combination 18 of revenues received under former 74 Pa.C.S. § 1314(d) and 19 transfers of periodical taxes received under this article.] 20 (d) Within 30 days of the close of any calendar month, [.09 21 per cent (.0009)] .075 per cent (.00075) of the taxes received 22 in the previous month under this article shall be transferred to 23 the Public Transportation Assistance Fund established under 24 Article XXIII. 25 Section 7. The act is amended by adding a section to read: 26 Section 281.3. Transfers to Education Operating Fund.--(a) 27 It is the intent of the General Assembly to broaden the sales 28 and use tax base and reduce the rate of that tax in order to 29 provide funds for the operating expenses of school districts. 30 (b) All revenues received on or after January 1, 2006, from 20050H0120B0916 - 27 -
1 the tax imposed by this article shall be transferred to the 2 Education Operating Fund. 3 Section 8. Section 1102-C of the act, amended July 2, 1986 4 (P.L.318, No.77), is amended to read: 5 Section 1102-C. Imposition of Tax.--Every person who makes, 6 executes, delivers, accepts or presents for recording any 7 document or in whose behalf any document is made, executed, 8 delivered, accepted or presented for recording, shall be subject 9 to pay for and in respect to the transaction or any part 10 thereof, or for or in respect of the vellum parchment or paper 11 upon which such document is written or printed, a State tax [at 12 the rate of one per cent of] based on the value of the real 13 estate represented by such document, which State tax shall be 14 payable at the earlier of the time the document is presented for 15 recording or within thirty days of acceptance of such document 16 or within thirty days of becoming an acquired company. The rate 17 of the State tax shall be as follows: 18 (1) One per cent on all transactions under this section. 19 (2) After December 31, 2005, an additional two per cent on 20 all transactions under this section. 21 Section 9. Section 1106-C(c) of the act, amended June 29, 22 2002 (P.L.559, No.89), is amended to read: 23 Section 1106-C. Stamps, Commissions, Payments and 24 Transfers.--* * * 25 (c) [All] (1) Except as provided in clause (2), all moneys 26 paid in accordance with this article shall be credited to the 27 General Fund. 28 (2) All moneys paid in accordance with section 1102-C(2) 29 shall be credited to and deposited into the Education Operating 30 Fund. 20050H0120B0916 - 28 -
1 * * * 2 Section 10. The act is amended by adding a section to read: 3 Section 1103-D. Disposition of Revenue Raised by School 4 Districts.--Notwithstanding any law to the contrary, all moneys 5 paid under this article to school districts imposing the Local 6 Real Estate Transfer Tax after December 31, 2005, shall be 7 forwarded to the Department of Revenue and shall be credited to 8 and deposited into the Education Operating Fund. 9 Section 11. This act shall take effect July 1, 2005, or 10 immediately, whichever is later. C2L72DMS/20050H0120B0916 - 29 -