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,
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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
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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
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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
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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
20050H0120B0916 - 8 -
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.
20050H0120B0916 - 9 -
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
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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
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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.
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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.
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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.]
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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
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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 -