PRINTER'S NO. 1570
No. 1351 Session of 1999
INTRODUCED BY CLYMER, ADOLPH, ARMSTRONG, BARRAR, BELFANTI, BUNT, CALTAGIRONE, CHADWICK, CLARK, COLAFELLA, CORRIGAN, COY, DeLUCA, DEMPSEY, DRUCE, FLICK, FORCIER, FREEMAN, GANNON, GODSHALL, KENNEY, LAUGHLIN, MELIO, METCALFE, S. MILLER, NAILOR, ORIE, PESCI, PETRARCA, ROHRER, RUBLEY, SEYFERT, SOLOBAY, STEELMAN, STERN, STEVENSON, E. Z. TAYLOR, TRELLO, TULLI, WILT, WOGAN AND YOUNGBLOOD, APRIL 20, 1999
REFERRED TO COMMITTEE ON FINANCE, APRIL 20, 1999
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," repealing certain provisions imposing sales and 11 use tax on lobbying services. 12 The General Assembly of the Commonwealth of Pennsylvania 13 hereby enacts as follows: 14 Section 1. Section 201(k), (o) and (w) of the act of March 15 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, 16 amended or added August 4, 1991 (P.L.97, No.22), May 7, 1997 17 (P.L.85, No.7) and April 23, 1998 (P.L.239, No.45), are amended 18 to read: 19 Section 201. Definitions.--The following words, terms and 20 phrases when used in this Article II shall have the meaning
1 ascribed to them in this section, except where the context 2 clearly indicates a different meaning: 3 * * * 4 (k) "Sale at retail." 5 (1) Any transfer, for a consideration, of the ownership, 6 custody or possession of tangible personal property, including 7 the grant of a license to use or consume whether such transfer 8 be absolute or conditional and by whatsoever means the same 9 shall have been effected. 10 (2) The rendition of the service of printing or imprinting 11 of tangible personal property for a consideration for persons 12 who furnish, either directly or indirectly the materials used in 13 the printing or imprinting. 14 (3) The rendition for a consideration of the service of-- 15 (i) Washing, cleaning, waxing, polishing or lubricating of 16 motor vehicles of another, whether or not any tangible personal 17 property is transferred in conjunction therewith; and 18 (ii) Inspecting motor vehicles pursuant to the mandatory 19 requirements of "The Vehicle Code." 20 (4) The rendition for a consideration of the service of 21 repairing, altering, mending, pressing, fitting, dyeing, 22 laundering, drycleaning or cleaning tangible personal property 23 other than wearing apparel or shoes, or applying or installing 24 tangible personal property as a repair or replacement part of 25 other tangible personal property except wearing apparel or shoes 26 for a consideration, whether or not the services are performed 27 directly or by any means other than by coin-operated self- 28 service laundry equipment for wearing apparel or household goods 29 and whether or not any tangible personal property is transferred 30 in conjunction therewith, except such services as are rendered 19990H1351B1570 - 2 -
1 in the construction, reconstruction, remodeling, repair or 2 maintenance of real estate: Provided, however, That this 3 subclause shall not be deemed to impose tax upon such services 4 in the preparation for sale of new items which are excluded from 5 the tax under clause (26) of section 204, or upon diaper 6 service. 7 (8) Any retention of possession, custody or a license to use 8 or consume tangible personal property or any further obtaining 9 of services described in subclauses (2), (3) and (4) of this 10 clause pursuant to a rental or service contract or other 11 arrangement (other than as security). 12 The term "sale at retail" shall not include (i) any such 13 transfer of tangible personal property or rendition of services 14 for the purpose of resale, or (ii) such rendition of services or 15 the transfer of tangible personal property including, but not 16 limited to, machinery and equipment and parts therefor and 17 supplies to be used or consumed by the purchaser directly in the 18 operations of-- 19 (A) The manufacture of tangible personal property. 20 (B) Farming, dairying, agriculture, horticulture or 21 floriculture when engaged in as a business enterprise. The term 22 "farming" shall include the propagation and raising of ranch 23 raised fur-bearing animals and the propagation of game birds for 24 commercial purposes by holders of propagation permits issued 25 under 34 Pa.C.S. (relating to game) and the propagation and 26 raising of horses to be used exclusively for commercial racing 27 activities. 28 (C) The producing, delivering or rendering of a public 29 utility service, or in constructing, reconstructing, remodeling, 30 repairing or maintaining the facilities which are directly used 19990H1351B1570 - 3 -
1 in producing, delivering or rendering such service. 2 (D) Processing as defined in clause (d) of this section. 3 The exclusions provided in paragraphs (A), (B), (C) and (D) 4 shall not apply to any vehicle required to be registered under 5 The Vehicle Code, except those vehicles used directly by a 6 public utility engaged in business as a common carrier; to 7 maintenance facilities; or to materials, supplies or equipment 8 to be used or consumed in the construction, reconstruction, 9 remodeling, repair or maintenance of real estate other than 10 directly used machinery, equipment, parts or foundations 11 therefor that may be affixed to such real estate. 12 The exclusions provided in paragraphs (A), (B), (C) and (D) 13 shall not apply to tangible personal property or services to be 14 used or consumed in managerial sales or other nonoperational 15 activities, nor to the purchase or use of tangible personal 16 property or services by any person other than the person 17 directly using the same in the operations described in 18 paragraphs (A), (B), (C) and (D) herein. 19 The exclusion provided in paragraph (C) shall not apply to 20 (i) construction materials, supplies or equipment used to 21 construct, reconstruct, remodel, repair or maintain facilities 22 not used directly by the purchaser in the production, delivering 23 or rendition of public utility service, (ii) construction 24 materials, supplies or equipment used to construct, reconstruct, 25 remodel, repair or maintain a building, road or similar 26 structure, or (iii) tools and equipment used but not installed 27 in the maintenance of facilities used directly in the 28 production, delivering or rendition of a public utility service. 29 The exclusions provided in paragraphs (A), (B), (C) and (D) 30 shall not apply to the services enumerated in clauses (k)(11) 19990H1351B1570 - 4 -
1 through (18) and (w) through (kk), except that the exclusion 2 provided in this subclause for farming, dairying and agriculture 3 shall apply to the service enumerated in clause (z). 4 (9) Where tangible personal property or services are 5 utilized for purposes constituting a "sale at retail" and for 6 purposes excluded from the definition of "sale at retail," it 7 shall be presumed that such tangible personal property or 8 services are utilized for purposes constituting a "sale at 9 retail" and subject to tax unless the user thereof proves to the 10 department that the predominant purposes for which such tangible 11 personal property or services are utilized do not constitute a 12 "sale at retail." 13 (10) The term "sale at retail" with respect to "liquor" and 14 "malt or brewed beverages" shall include the sale of "liquor" by 15 any "Pennsylvania liquor store" to any person for any purpose, 16 and the sale of "malt or brewed beverages" by a "manufacturer of 17 malt or brewed beverages," "distributor" or "importing 18 distributor" to any person for any purpose, except sales by a 19 "manufacturer of malt or brewed beverages" to a "distributor" or 20 "importing distributor" or sales by an "importing distributor" 21 to a "distributor" within the meaning of the "Liquor Code." The 22 term "sale at retail" shall not include any sale of "malt or 23 brewed beverages" by a "retail dispenser" or any sale of 24 "liquor" or "malt or brewed beverages" by a person holding a 25 "retail liquor license" within the meaning of and pursuant to 26 the provisions of the "Liquor Code," but shall include any sale 27 of "liquor" or "malt or brewed beverages" other than pursuant to 28 the provisions of the "Liquor Code." 29 [(11) The rendition for a consideration of lobbying 30 services.] 19990H1351B1570 - 5 -
1 (12) The rendition for a consideration of adjustment 2 services, collection services or credit reporting services. 3 (13) The rendition for a consideration of secretarial or 4 editing services. 5 (14) The rendition for a consideration of disinfecting or 6 pest control services, building maintenance or cleaning 7 services. 8 (15) The rendition for a consideration of employment agency 9 services or help supply services. 10 (17) The rendition for a consideration of lawn care service. 11 (18) The rendition for a consideration of self-storage 12 service. 13 * * * 14 (o) "Use." 15 (1) The exercise of any right or power incidental to the 16 ownership, custody or possession of tangible personal property 17 and shall include, but not be limited to transportation, storage 18 or consumption. 19 (2) The obtaining by a purchaser of the service of printing 20 or imprinting of tangible personal property when such purchaser 21 furnishes, either directly or indirectly, the articles used in 22 the printing or imprinting. 23 (3) The obtaining by a purchaser of the services of (i) 24 washing, cleaning, waxing, polishing or lubricating of motor 25 vehicles whether or not any tangible personal property is 26 transferred to the purchaser in conjunction with such services, 27 and (ii) inspecting motor vehicles pursuant to the mandatory 28 requirements of "The Vehicle Code." 29 (4) The obtaining by a purchaser of the service of 30 repairing, altering, mending, pressing, fitting, dyeing, 19990H1351B1570 - 6 -
1 laundering, drycleaning or cleaning tangible personal property 2 other than wearing apparel or shoes or applying or installing 3 tangible personal property as a repair or replacement part of 4 other tangible personal property other than wearing apparel or 5 shoes, whether or not the services are performed directly or by 6 any means other than by means of coin-operated self-service 7 laundry equipment for wearing apparel or household goods, and 8 whether or not any tangible personal property is transferred to 9 the purchaser in conjunction therewith, except such services as 10 are obtained in the construction, reconstruction, remodeling, 11 repair or maintenance of real estate: Provided, however, That 12 this subclause shall not be deemed to impose tax upon such 13 services in the preparation for sale of new items which are 14 excluded from the tax under clause (26) of section 204, or upon 15 diaper service: And provided further, That the term "use" shall 16 not include-- 17 (A) Any tangible personal property acquired and kept, 18 retained or over which power is exercised within this 19 Commonwealth on which the taxing of the storage, use or other 20 consumption thereof is expressly prohibited by the Constitution 21 of the United States or which is excluded from tax under other 22 provisions of this article. 23 (B) The use or consumption of tangible personal property, 24 including but not limited to machinery and equipment and parts 25 therefor, and supplies or the obtaining of the services 26 described in subclauses (2), (3) and (4) of this clause directly 27 in the operations of-- 28 (i) The manufacture of tangible personal property. 29 (ii) Farming, dairying, agriculture, horticulture or 30 floriculture when engaged in as a business enterprise. The term 19990H1351B1570 - 7 -
1 "farming" shall include the propagation and raising of ranch- 2 raised furbearing animals and the propagation of game birds for 3 commercial purposes by holders of propagation permits issued 4 under 34 Pa.C.S. (relating to game) and the propagation and 5 raising of horses to be used exclusively for commercial racing 6 activities. 7 (iii) The producing, delivering or rendering of a public 8 utility service, or in constructing, reconstructing, remodeling, 9 repairing or maintaining the facilities which are directly used 10 in producing, delivering or rendering such service. 11 (iv) Processing as defined in subclause (d) of this section. 12 The exclusions provided in subparagraphs (i), (ii), (iii) and 13 (iv) shall not apply to any vehicle required to be registered 14 under The Vehicle Code except those vehicles directly used by a 15 public utility engaged in the business as a common carrier; to 16 maintenance facilities; or to materials, supplies or equipment 17 to be used or consumed in the construction, reconstruction, 18 remodeling, repair or maintenance of real estate other than 19 directly used machinery, equipment, parts or foundations 20 therefor that may be affixed to such real estate. The exclusions 21 provided in subparagraphs (i), (ii), (iii) and (iv) shall not 22 apply to tangible personal property or services to be used or 23 consumed in managerial sales or other nonoperational activities, 24 nor to the purchase or use of tangible personal property or 25 services by any person other than the person directly using the 26 same in the operations described in subparagraphs (i), (ii), 27 (iii) and (iv). 28 The exclusion provided in subparagraph (iii) shall not apply 29 to (A) construction materials, supplies or equipment used to 30 construct, reconstruct, remodel, repair or maintain facilities 19990H1351B1570 - 8 -
1 not used directly by the purchaser in the production, delivering 2 or rendition of public utility service or (B) tools and 3 equipment used but not installed in the maintenance of 4 facilities used directly in the production, delivering or 5 rendition of a public utility service. 6 The exclusion provided in subparagraphs (i), (ii), (iii) and 7 (iv) shall not apply to the services enumerated in clauses 8 (o)(9) through (16) and (w) through (kk), except that the 9 exclusion provided in subparagraph (ii) for farming, dairying 10 and agriculture shall apply to the service enumerated in clause 11 (z). 12 (5) Where tangible personal property or services are 13 utilized for purposes constituting a "use," as herein defined, 14 and for purposes excluded from the definition of "use," it shall 15 be presumed that such property or services are utilized for 16 purposes constituting a "sale at retail" and subject to tax 17 unless the user thereof proves to the department that the 18 predominant purposes for which such property or services are 19 utilized do not constitute a "sale at retail." 20 (6) The term "use" with respect to "liquor" and "malt or 21 brewed beverages" shall include the purchase of "liquor" from 22 any "Pennsylvania liquor store" by any person for any purpose 23 and the purchase of "malt or brewed beverages" from a 24 "manufacturer of malt or brewed beverages," "distributor" or 25 "importing distributor" by any person for any purpose, except 26 purchases from a "manufacturer of malt or brewed beverages" by a 27 "distributor" or "importing distributor," or purchases from an 28 "importing distributor" by a "distributor" within the meaning of 29 the "Liquor Code." The term "use" shall not include any purchase 30 of "malt or brewed beverages" from a "retail dispenser" or any 19990H1351B1570 - 9 -
1 purchase of "liquor" or "malt or brewed beverages" from a person 2 holding a "retail liquor license" within the meaning of and 3 pursuant to the provisions of the "Liquor Code," but shall 4 include the exercise of any right or power incidental to the 5 ownership, custody or possession of "liquor" or "malt or brewed 6 beverages" obtained by the person exercising such right or power 7 in any manner other than pursuant to the provisions of the 8 "Liquor Code." 9 (7) The use of tangible personal property purchased at 10 retail upon which the services described in subclauses (2), (3) 11 and (4) of this clause have been performed shall be deemed to be 12 a use of said services by the person using said property. 13 (8) The term "use" shall not include the providing of a 14 motor vehicle to a nonprofit private or public school to be used 15 by such a school for the sole purpose of driver education. 16 [(9) The obtaining by the purchaser of lobbying services.] 17 (10) The obtaining by the purchaser of adjustment services, 18 collection services or credit reporting services. 19 (11) The obtaining by the purchaser of secretarial or 20 editing services. 21 (12) The obtaining by the purchaser of disinfecting or pest 22 control services, building maintenance or cleaning services. 23 (13) The obtaining by the purchaser of employment agency 24 services or help supply services. 25 (15) The obtaining by the purchaser of lawn care service. 26 (16) The obtaining by the purchaser of self-storage service. 27 (17) The obtaining by a construction contractor of tangible 28 personal property or services provided to tangible personal 29 property which will be used pursuant to a construction contract 30 whether or not the tangible personal property or services are 19990H1351B1570 - 10 -
1 transferred. 2 * * * 3 (w) "Lobbying services." Providing the services of a 4 lobbyist, as defined in [the definition of "lobbyist" in section 5 2 of the act of September 30, 1961 (P.L.1778, No.712), known as 6 the "Lobbying Registration and Regulation Act."] 65 Pa.C.S. § 7 1303 (relating to definitions). 8 * * * 9 Section 2. The amendment of section 201(k), (o) and (w) of 10 the act shall be retroactive to October 1, 1991. 11 Section 3. This act shall take effect immediately. C1L72WMB/19990H1351B1570 - 11 -