PRINTER'S NO. 970
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
164
Session of
2023
INTRODUCED BY R. MACKENZIE, HOGAN, KAUFER, FLOOD, GILLEN, ADAMS,
GUENST, KAUFFMAN, M. MACKENZIE, MARCELL, OWLETT AND PICKETT,
APRIL 24, 2023
REFERRED TO COMMITTEE ON FINANCE, APRIL 24, 2023
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," in sales and use tax, further providing for
definitions, for imposition of tax and for exclusions from
tax; and, in gross receipts tax, further providing for
imposition of tax.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Sections 201(k)(19) and (o)(18) and 202(e.1) and
(g) of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
Reform Code of 1971, are amended to read:
Section 201. Definitions.--The following words, terms and
phrases when used in this Article II shall have the meaning
ascribed to them in this section, except where the context
clearly indicates a different meaning:
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(k) "Sale at retail."
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[(19) The rendition for a consideration of a mobile
telecommunications service.]
* * *
(o) "Use."
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[(18) The obtaining of mobile telecommunications service by
a customer.]
* * *
Section 202. Imposition of Tax.--* * *
[(e.1) (1) Notwithstanding any other provision of this
article, the sale or use of prepaid mobile telecommunications
service evidenced by the transfer of tangible personal property
shall be subject to the tax imposed by subsections (a) and (b).
(2) The sale or use of prepaid mobile telecommunications
service not evidenced by the transfer of tangible personal
property shall be subject to the tax imposed by subsections (a)
and (b) and shall be deemed to occur at the purchaser's billing
address or the location associated with the mobile telephone
number or the point of sale, whichever is applicable.
(3) Notwithstanding clause (2), the sale or use of prepaid
mobile telecommunications service not evidenced by the transfer
of tangible personal property shall be taxed at the rate of six
per cent of the receipts collected on each sale if the service
provider elects to collect the tax imposed by this article on
receipts of each sale. The service provider shall notify the
department of its election and shall collect the tax on receipts
of each sale until the service provider notifies the department
otherwise.]
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* * *
[(g) Notwithstanding any other provisions of this article
and in accordance with the Mobile Telecommunications Sourcing
Act (4 U.S.C. § 116), the sale or use of mobile
telecommunications services which are deemed to be provided to a
customer by a home service provider under section 117(a) and (b)
of the Mobile Telecommunications Sourcing Act shall be subject
to the tax of six per cent of the purchase price, which tax
shall be collected by the home service provider from the
customer, and shall be paid over to the Commonwealth as herein
provided if the customer's place of primary use is located
within this Commonwealth, regardless of where the mobile
telecommunications services originate, terminate or pass
through. For purposes of this subsection, words and phrases used
in this subsection shall have the same meanings given to them in
the Mobile Telecommunications Sourcing Act.]
* * *
Section 2. Section 204 of the act is amended by adding a
paragraph to read:
Section 204. Exclusions from Tax.--The tax imposed by
section 202 shall not be imposed upon any of the following:
* * *
(76) The sale at retail or use of mobile telecommunications
service, if the purchase is pursuant to a service contract
between the service provider and customer and if the service
contract requires the customer to make periodic payments to
maintain the mobile telecommunications service.
Section 3. Section 1101(a), (a.1) and (c.1) of the act are
amended to read:
Section 1101. Imposition of Tax.--(a) General Rule.--Every
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pipeline company, conduit company, steamboat company, canal
company, slack water navigation company, transportation company,
and every other company, association, joint-stock association,
or limited partnership, now or hereafter incorporated or
organized by or under any law of this Commonwealth, or now or
hereafter organized or incorporated by any other state or by the
United States or any foreign government, and doing business in
this Commonwealth, and every copartnership, person or persons
owing, operating or leasing to or from another corporation,
company, association, joint-stock association, limited
partnership, copartnership, person or persons, any pipeline,
conduit, steamboat, canal, slack water navigation, or other
device for the transportation of freight, passengers, baggage,
or oil, except motor vehicles and railroads, and every limited
partnership, association, joint-stock association, corporation
or company engaged in, or hereinafter engaged in, the
transportation of freight or oil within this State, and every
telephone company[,] and telegraph company [or provider of
mobile telecommunications services] now or hereafter
incorporated or organized by or under any law of this
Commonwealth, or now or hereafter organized or incorporated by
any other state or by the United States or any foreign
government and doing business in this Commonwealth, and every
limited partnership, association, joint-stock association,
copartnership, person or persons, engaged in telephone or
telegraph business [or providing mobile telecommunications
services] in this Commonwealth, shall pay to the State
Treasurer, through the Department of Revenue, a tax of forty-
five mills with a surtax equal to five mills upon each dollar of
the gross receipts of the corporation, company or association,
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limited partnership, joint-stock association, copartnership,
person or persons received from:
(1) passengers, baggage, oil and freight transported wholly
within this State;
(2) telegraph or telephone messages transmitted wholly
within this State and telegraph or telephone messages
transmitted in interstate commerce where such messages originate
or terminate in this State and the charges for such messages are
billed to a service address in this State, except gross receipts
derived from:
(i) the sales of access to the Internet, as set forth in
Article II, made to the ultimate consumer;
(ii) the sales for resale to persons, partnerships,
associations, corporations, or political subdivisions subject to
the tax imposed by this article upon gross receipts derived from
such resale of telecommunications services, including:
(A) telecommunications exchange access to interconnect with
a local exchange carrier's network;
(B) network elements on an unbundled basis; and
(C) sales of telecommunications services to interconnect
with providers of mobile telecommunications services; and
(iii) the sales of telephones, telephone handsets, modems,
tablets and related accessories, including cases, chargers,
holsters, clips, hands-free devices, screen protectors and
batteries; and
[(3) mobile telecommunications services messages sourced to
this Commonwealth based on the place of primary use standard set
forth in the Mobile Telecommunications Sourcing Act (4 U.S.C. §
117), except gross receipts derived from:
(i) the sales of access to the Internet, as set forth in
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Article II, made to the ultimate consumer;
(ii) the sales for resale to persons, partnerships,
associations, corporations or political subdivisions subject to
the tax imposed by this article upon gross receipts derived from
such resale of mobile telecommunications services, including
sales of mobile telecommunications services to interconnect with
providers of telecommunications services; and
(iii) the sales of telephones, telephone handsets, modems,
tablets and related accessories, including cases, chargers,
holsters, clips, hands-free devices, screen protectors and
batteries.]
(a.1) Credit.--Telegraph or telephone companies [or
providers of mobile telecommunications services] that pay a
gross receipts tax to another state on messages or services
which are taxable under this article are entitled to a credit
against the tax due under this article. The credit allowed with
respect to the messages or services shall not exceed the tax
under this article with respect to the messages or services.
* * *
[(c.1) Safe Harbor Base year.--For purposes of the estimated
tax requirements under sections 3003.2 and 3003.3, the "safe
harbor base year" tax amount for providers of mobile
telecommunications services shall be the amount that would have
been required to be paid by the taxpayer if the taxpayer had
been subject to this article.]
* * *
Section 4. This act shall take effect in 60 days.
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