Section 1101. Imposition of Tax.--(a) General Rule.--Every 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, 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, 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
((2) amended June 28, 2018, P.L.369, No.52)
(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 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.
((3) amended June 28, 2018, P.L.369, No.52)
((a) amended Dec. 23, 2003, P.L.250, No.46)
(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. ((a.1) added Dec. 23, 2003, P.L.250, No.46)
(b) Electric Light, Waterpower and Hydro-electric Utilities.--Every electric light company, waterpower company and hydro-electric company 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 electric light and power business, waterpower business and hydro-electric business in this Commonwealth, shall pay to the State Treasurer, through the Department of Revenue, a tax of forty-four mills upon each dollar of the gross receipts of the corporation, company or association, limited partnership, joint-stock association, copartnership, person or persons, received from:
(1) the sales of electric energy within this State, except gross receipts derived from the sales for resale of electric energy to persons, partnerships, associations, corporations or political subdivisions subject to the tax imposed by this subsection upon gross receipts derived from such resale; and
(2) the sales of electric energy produced in Pennsylvania and made outside of Pennsylvania in a state that has taken action since December 21, 1977 which results in higher costs for electric energy produced in that state and sold in Pennsylvania unless the action that was taken after December 21, 1977 is rescinded according to the following apportionment formula: except for gross receipts derived from sales under clause (1), the gross receipts from all sales of electricity of the producer shall be apportioned to the Commonwealth of Pennsylvania by the ratio of the producer's operating and maintenance expenses in Pennsylvania and depreciation attributable to property in Pennsylvania to the producer's total operating and maintenance expenses and depreciation.
((b) amended July 13, 1987, P.L.317, No.58)
(b.1) Managed Care Organizations.--((b.1) deleted by amendment July 13, 2016, P.L.526, No.84)
(c) Payment of Tax; Reports.--The said taxes imposed under subsections (a) and (b) shall be paid within the time prescribed by law, and for the purpose of ascertaining the amount of the same, it shall be the duty of the treasurer or other proper officer of the said company, copartnership, limited partnership, association, joint-stock association or corporation, or person or persons, to transmit to the Department of Revenue on or before March 15 of each year an annual report, and under oath or affirmation, of the amount of gross receipts of the said companies, copartnerships, corporations, associations, joint-stock associations, limited partnerships, person or persons, derived from all sources, and of gross receipts from business done wholly within this State and in the case of electric energy producers that transmit energy to other states referred to in clause (2) of subsection (b), a compilation of the relevant information regarding operating and maintenance expenses and depreciation, during the period of twelve months immediately preceding January 1 of each year. ((c) amended July 13, 2016, P.L.526, No.84)
(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. ((c.1) amended July 13, 2016, P.L.526, No.84)
(d) Tax Computation.--((d) repealed June 29, 2002, P.L.559, No.89)
(e) Time to File Reports.--The time for filing annual reports may be extended, estimated assessments may be made by the Department of Revenue if reports are not filed, and the penalties for failing to file reports and pay the taxes imposed under subsection (a) and (b) shall be as prescribed by the laws defining the powers and duties of the Department of Revenue. In any case where the works of any corporation, company, copartnership, association, joint-stock association, limited partnership, person or persons are operated by another corporation, company, copartnership, association, joint-stock association, limited partnership, person or persons, the taxes imposed under subsections (a) and (b) shall be apportioned between the corporations, companies, copartnerships, associations, joint-stock associations, limited partnerships, person or persons in accordance with the terms of their respective leases or agreements, but for the payment of the said taxes the Commonwealth shall first look to the corporation, company, copartnership, association, joint-stock association, limited partnership, person or persons operating the works, and upon payment by the said company, corporation, copartnership, association, joint-stock association, limited partnership, person or persons of a tax upon the receipts, as herein provided, derived from the operation thereof, no other corporation, company, copartnership, association, joint-stock association, limited partnership, person or persons shall be held liable for any tax imposed under subsections (a) and (b) upon the proportion of said receipts received by said corporation, company, copartnership, association, joint-stock association, limited partnership, person or persons for the use of said works. ((e) amended July 13, 2016, P.L.526, No.84)
(f) Application to Municipalities.--This article shall be construed to apply to municipalities, and to impose a tax upon the gross receipts derived from any municipality owned or operated public utility or from any public utility service furnished by any municipality, except that gross receipts shall be exempt from the tax, to the extent that such gross receipts are derived from business done inside the limits of the municipality, owning or operating the public utility or furnishing the public utility service.
(g) Certain Gross Receipts not Taxed.--The tax otherwise imposed pursuant to this section upon gross receipts derived from the sale of electricity shall not however be imposed upon those portions of the gross receipts of an electric light company attributable to the following sources:
(1) the net increase in its gross receipts resulting from recovery from its customers of the costs of purchases of additional energy necessitated by the physical or legal inability to operate a nuclear generating facility as a result of an accident or natural disaster causing material damage to that facility or to a similar associated facility located immediately adjacent, whereupon either the damaged facility, another located immediately adjacent, or both, have been removed from the company's rate base for a period exceeding twenty-five months. The Department of Revenue shall request the Public Utility Commission to determine, for each such facility, the net increase in the gross receipts of its electric company owner for the immediate prior twelve-month period. This determination shall reflect the difference between the increased gross receipts of the company attributable to recovery of costs for purchase of replacement energy which otherwise would have been normally generated by the inoperative facility in such twelve-month period less the reduction in the company's gross receipts attributable to removal of the capital costs of the facility from the company's rate base and less the reduction in the company's gross receipts attributable to reduction in operating expenses that would have otherwise been incurred by normal operation of the facility in such twelve-month period. The Public Utility Commission shall, immediately after supplying the requested data, proceed to make the appropriate revision in the State tax adjustment charge of the electric company;
(2) recovery from its customers of costs incurred in connection with the clean-up and decontamination of a nuclear generating facility which has experienced a major accident or natural disaster and had been removed from the electric light company's rate base; and
(3) recovery from its customers of costs for the amortization of investments in a nuclear generating facility whose removal from the rate base of an electric light company has been approved by the Public Utility Commission on account of a major accident or natural disaster.
((g) added June 23, 1982, P.L.610, No.172)
(h) Benefits to Consumer.--For purposes of this article, the reduction in the taxes imposed under subsections (a) and (b) shall derive to the benefit of the consumer purchasing services from said utilities. Said benefit shall be provided in the form of a reduction in the State tax surcharge. Failure to pass through the reduction to the consumer shall subject the public utility to a civil penalty of at least one thousand dollars ($1,000), but not more than five thousand dollars ($5,000), and such additional relief as the court may deem appropriate. ((h) added July 13, 1987, P.L.317, No.58)
(i) Itemization of Gross Receipts Tax.--
(1) Interexchange telecommunications carriers may surcharge and disclose as a separate line item on a customer's bill all gross receipts taxes imposed on interexchange telecommunications carriers services performed wholly within this Commonwealth.
(2) For four monthly billing cycles from the effective date of this act, all interexchange telecommunications carriers shall provide the customer with information in the carriers' monthly billing that the gross receipts line item surcharge is not a tax increase, but merely a disclosure of taxes presently and previously paid by the customer.
(3) As used in this subsection, the term "interexchange telecommunications carrier" has the meaning as defined in 66 Pa.C.S. § 3002 (relating to definitions).
((i) added June 16, 1994, P.L.279, No.48)
(j) Schedule for Estimated Payments.--
(1) For calendar year 2004, the following schedule applies to the payment of the tax under subsection (a)(3):
(i) Forty per cent of the estimated tax shall be due on March 15, 2004.
(ii) Forty per cent of the estimated tax shall be due on June 15, 2004.
(iii) Twenty per cent of the estimated tax shall be due on September 15, 2004.
(2) For calendar years after 2004, the payment of the estimated tax under subsection (a)(3) shall be due in accordance with section 3003.2.
(3) ((3) deleted by amendment).
(4) ((4) deleted by amendment).
((j) amended July 13, 2016, P.L.526, No.84)
(k) Penalty for Substantial Underpayment of Initial Estimated Gross Receipts Tax.--
(1) If the amount of the estimated gross receipts tax on account of a taxpayer's first applicable taxable year under subsection (a)(3) paid by a due date in subsection (j) is underpaid, a penalty shall be imposed in the amount of five per cent of the underpayment per month for the period of the underpayment, up to a maximum of twenty-five per cent of the underpayment.
(2) The penalty imposed by this subsection is in addition to any interest imposed on underpayments by section 3003.3.
((k) added Dec. 23, 2003, P.L.250, No.46)
(1101 amended Dec. 11, 1979, P.L.499, No.107)
Compiler's Note: Section 2 of Act 52 of 2018, which amended subsection (a)(2) and (3), provided that the amendment of subsection (a)(2) and (3) shall apply retroactively to gross receipts from transactions occurring on or after January 1, 2004, except no claim for refund or credit for a tax paid prior to the effective date of the amendment of subsection (a)(3) shall be based on Act 52.
Compiler's Note: Section 51(9) of Act 84 of 2016, which amended subsections (c), (c.1), (e) and (j) and deleted subsection (b.1), provided that the amendment or deletion of subsections (b.1), (c), (c.1), (e) and (j) shall apply to gross receipts received after December 31, 2016.
Compiler's Note: The Department of Public Welfare, referred to in this section, was redesignated as the Department of Human Services by Act 132 of 2014.
Compiler's Note: Section 14(4) of Act 48 of 2009, which added subsection (b.1), provided that subsection (b.1) shall apply to calendar years beginning after December 31, 2008, and to gross receipts received after September 30, 2009.
Compiler's Note: See section 33 of Act 119 of 2006, which amended subsection (e), in the appendix to this act for special provisions relating to determinations and assessments of tax liability by the Department of Revenue after December 31, 2007, and applicability of Act 119 on proceedings, prosecutions, actions, suits or appeals involving assessments, determinations or settlements of tax liability by the Department of Revenue prior to January 1, 2008.
Compiler's Note: Section 33(12) of Act 46 of 2003, which amended section 1101, provided that the amendment shall apply to gross receipts derived from transactions occurring after December 31, 2003.
Compiler's Note: Section 19(3)(v) of Act 23 of 2000, which amended subsection (a), provided that the amendment shall apply to taxable years beginning after December 31, 1999.
Compiler's Note: Section 33(3) of Act 4 of 1999, which amended subsection (a), provided that the amendment shall take effect on January 1 of the first taxable year following enactment of legislation to restructure and deregulate the natural gas utility industry in the Commonwealth and to allow customers to purchase natural gas supply services from their choice of supplier. Section 7 of Act 21 of 1999 provided that Act 21 constitutes the legislation referred to in section 33(3) of Act 4. The Secretary of Revenue shall publish notice of the enactment of Act 21 in the Pennsylvania Bulletin.