61 Pa. Code § 33.2 - Scope
(a)
Taxable
portion of purchase price. Amounts included in the taxable portion of
the purchase price include:
(1)
Property or service. The charge for the property or
service.
(2)
Delivery
costs. The charge for handling, delivery or other transportation
services, including mailing costs.
(3)
Labor and installation
services. The charge for labor, service or alteration.
(4)
Taxes. The charge for
taxes imposed by the Commonwealth.
(5)
Restocking. The charges
for restocking in connection with the return of merchandise.
(6)
Amounts representing costs to
vendor. Charges, whether or not separately stated, representing
reimbursement to the vendor for expenses paid by the vendor, such as
manufacturer's excise tax, gross receipts tax, fuel adjustment charges,
mercantile tax, insurance, meals, lodging, mileage or similar
expenses.
(7)
Miscellaneous. Other charges which are not exempt from
tax.
(b)
Exclusions. Amounts which are excluded from the taxable
portion of purchase price, if separately stated and identified, include:
(1)
Returnable containers.
Deposit charges for returnable containers.
(2)
Discounts. Amounts
representing on-the-spot cash discounts, employe discounts, volume discounts,
store discounts such as "buy one, get one free," wholesaler's or trade
discounts, rebates and store or manufacturer's coupons shall establish a new
purchase price if both the item and the coupon are described on the invoice or
cash register tape. An amount representing a discount allowed for prompt
payment of bills which is dependent upon an event occurring after the
completion of the sale may not be deducted in computing the tax. A sale is
completed when there is a transfer of ownership of the property or services to
the purchaser.
EXAMPLES:
(i)
"A" purchases two hamburgers from "R" restaurant with a "buy one, get one free"
coupon. The price of one hamburger is $1. "R" rings up $2 on the cash register.
"R" enters a credit in the cash register for the amount of $1 resulting in an
adjusted price of $1. The acceptance of the coupon by "R" establishes a new
purchase price of $1 which is subject to 6¢ tax.
(ii) "A" purchases 15 grocery items from "B"
grocery. All of the items are exempt from tax except a bottle of soft drink.
The price of the soft drink is $1. "A" gives "B" a manufacturer's coupon having
a face value of 50¢ for the soft drink. "B" totals the 15 items on the
cash register including $1 for the bottle of soft drink. None of the items are
described or identified on the cash register tape. "B" reduces the total sale
by $1-double the amount of the coupon. The coupon is not described or
identified on the register tape. Therefore, the acceptance of the coupon by "B"
does not establish a new purchase price. The $1 purchase price of the soft
drink is subject to 6¢ tax. The redemption of the coupon represents a
refund which does not affect the purchase price of the soft drink.
(iii) "A" purchases a coffee pot from "C"
department store. The price of the coffee pot is $30. "A" pays sales tax upon
the purchase of the coffee pot in the amount of $1.80. The sale includes a $10
manufacturer's mail-in-rebate form. "A" completes the form, mails it to the
manufacturer and receives a $10 check from the manufacturer. The receipt of the
rebate check by "A" does not establish a new purchase price of the coffee pot.
"C" properly collected sales tax in the amount of $1.80.
(iv) "A" purchases and accepts delivery of a
load of lumber from "D" lumber company. "D" sends "A" a billing invoice which
states "lumber-$1,000, sales tax-$60." The invoice also states "if invoice paid
within 30 days, customer entitled to a 1% discount." "A" pays the invoice
within 5 days. "A" is entitled to a discount of 1% of $1,000, but is required
to pay the sales tax in the amount of $60 as a new purchase price has not been
established.
(3)
Trade-in or exchange. The amount allowed by the vendor for the
acceptance of tangible personal property taken in exchange at the time of
sale.
(4)
Finance
charges. Reasonable interest or finance amounts charged to the
purchaser.
(5)
Gratuity. A voluntary payment by the purchaser or a reasonable
mandatory charge by the vendor in lieu of the voluntary payment, which is
billed to the purchaser for services rendered in connection with the purchase
of food or beverages or hotel or motel accommodations.
(c)
Constructive purchase
price. If a sale at retail or purchase at retail is not at arm's
length, the tax shall be computed upon a constructive purchase price. For the
purpose of determining whether a transaction is not at arm's length, the
Department will consider the affiliation of interests between the vendor and
the purchaser or whether the purchase price is indicative of the true value of
the article sold. The constructive purchase price shall be the prevailing
market price of the property sold, that is, the price at which similar property
in similar quantity and of similar quality would be sold upon the open market
at the time and place of the taxable sale or use of the property.
(d)
Optional methods of tax
payment. The following optional methods of tax payment are available:
(1)
Registered motor vehicle
dealers. A registered motor vehicle dealer (See definition of
registered dealer in §
31.41 (relating to definitions)),
may elect to report tax on the taxable use of certain vehicles using an
alternate basis of tax.
(2)
Commercial aircraft operators. A person engaged in the charter
of aircraft, leasing of aircraft, aircraft sales, aircraft rentals, flight
instruction, air freight or other flight activities for compensation may pay
tax on the taxable use of aircraft using an alternate method. Refer to §
58.8 (relating to commercial
aircraft operators).
(3)
Nonresidents establishing a residency or business in this
Commonwealth. A nonresident of this Commonwealth, not actually doing
business within this Commonwealth, is not required to pay tax on the value of
property originally purchased outside this Commonwealth and brought into this
Commonwealth for the purpose of establishing a permanent residency or business
if the property was purchased 6 months or more prior to either its first use in
this Commonwealth or the date on which the permanent residence or business was
established, whichever occurs first. Property which has been purchased within 6
months of its first use in this Commonwealth shall be subject to tax on its
original purchase price and the amount of tax paid to another state may be
applied as a tax credit against the Pennsylvania tax if the amount of credit
applied was legally due and paid to the other state and that state has tax
credit reciprocity with the Commonwealth.
(4)
The purchase of property outside
of this Commonwealth by a resident or the purchase of property which was exempt
from tax at the time of purchase. Property purchased outside of this
Commonwealth by a resident within 6 months of its first taxable use within this
Commonwealth is subject to tax upon the purchase price. If the property was
purchased more than 6 months prior to its first taxable use in this
Commonwealth, a resident may elect to pay tax on the fair market value of the
property. This election may be made by filing a tax return and paying the
applicable tax, interest and penalties to the Department within 6 months of the
return due date following the first use in this Commonwealth. The amount of tax
paid to another state may be applied as a tax credit against the Pennsylvania
tax if the amount of credit applied was legally due and paid in the other state
and that state has tax credit reciprocity with the Commonwealth.
Notes
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