An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in sales and use tax, further providing for exclusions from tax; and, in gross receipts tax, further providing for imposition of tax; and providing for reporting and for transfers.

PRINTER'S NO. 3160
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2371
Session of
2026
INTRODUCED BY MARCELL, DAVANZO, LABS, STENDER, GAYDOS, PUGH,
MIHALEK, OLSOMMER, KUTZ, SMITH, FLOOD, COOPER, ROWE, HAMM,
WEAKNECHT AND HOGAN, APRIL 9, 2026
REFERRED TO COMMITTEE ON FINANCE, APRIL 9, 2026
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
exclusions from tax; and, in gross receipts tax, further
providing for imposition of tax; and providing for reporting
and for transfers.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 204 of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971, is amended by
adding a clause to read:
Section 204. Exclusions from Tax.--The tax imposed by
section 202 shall not be imposed upon any of the following:
* * *
(77) Notwithstanding section 201(k)(19) or (o)(18), the sale
at retail or use of mobile telecommunications service during the
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exclusion period if the purchase is pursuant to a service
contract between the service provider and a customer and if the
service contract requires the customer to make periodic payments
to maintain the mobile telecommunications service. For the
purposes of this clause, the term "exclusion period" means the
time period beginning with the first day of the first full month
after the effective date of this clause and ending on the first
day after the end of the sixth full month after the effective
date of this clause.
Section 2. Section 1101(a) introductory paragraph and (h) of
the act are amended and the section is amended by adding a
subsection to read:
Section 1101. Imposition of Tax.--(a) General Rule.--
[Every] Except as provided under subsection (a.2), 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
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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:
* * *
(a.2) Holiday.--Beginning with the first day of the first
full month after the effective date of this subsection and
ending on the first day after the end of the sixth full month
after the effective date of this subsection, the rate of tax
under section 1101(a) for gross receipts received from providing
mobile telecommunications services shall be zero mills.
* * *
(h) Benefits to Consumer.--
(1) 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
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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.
(2) For purposes of this article, the entire benefit of the
tax holiday under subsection (a.2) shall derive to the benefit
of the consumer purchasing services from providers of mobile
telecommunications services. Said benefit shall be provided in
the form of the elimination of the State tax surcharge, which
shall be clearly reflected in each consumer's bill. Failure to
pass through the entire benefit of the tax holiday to the
consumer shall subject the provider of the mobile
telecommunications services 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.
* * *
Section 3. For the purposes of implementing the tax holiday
under section 1101(a.2) of the act, a person subject to the tax
under section 1101(a) of the act shall separately report its
monthly gross receipts received from providing mobile
telecommunications services subject to tax under section 1101(a)
of the act to the Department of Revenue and shall not be taxed
upon gross receipts received during said months if the
requirements of section 1101(h)(2) of the act are satisfied.
Section 4. For the 2026-2027 fiscal year, the transfer of
money from the tax under Article XI of the act under section 6
of the act of November 29, 2004 (P.L.1376, No.178), known as the
Alternative Fuels Incentive Act, shall be no less than the
amount transferred under section 6 of the Alternative Fuels
Incentive Act for the 2025-2026 fiscal year.
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Section 5. This act shall take effect July 1, 2026, or
immediately, whichever is later.
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