An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in gross receipts tax, further providing for imposition of tax and for establishment of revenue-neutral reconciliation; and providing for reporting and for transfers.

PRINTER'S NO. 3162
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2373
Session of
2026
INTRODUCED BY DAVANZO, MARCELL, LABS, STENDER, PUGH, MIHALEK,
OLSOMMER, SMITH, 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 gross receipts tax, further providing for
imposition of tax and for establishment of revenue-neutral
reconciliation; and providing for reporting and for
transfers.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Sections 1101(b) and (h) and 1101.2 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 1101. Imposition of Tax.--* * *
(b) Electric Light, Waterpower and Hydro-electric
Utilities.--[Every]
(1) Except as provided under clause (2), every electric
light company, waterpower company and hydro-electric company now
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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)] (i) 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)] (ii) 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)] subclause (i), 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
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producer's total operating and maintenance expenses and
depreciation.
(2) 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, the rate of tax under clause (1) and
section 1101.2 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
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 (b)(2) and section 1101.2(b) shall
derive to the benefit of the consumer purchasing services from
said utilities. 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 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.
* * *
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Section 1101.2. Establishment of Revenue-Neutral
Reconciliation.--[Notwithstanding] (a) Except as provided under
subsection (b), notwithstanding the provisions of 66 Pa.C.S. §
2810(c)(1) (relating to revenue-neutral reconciliation), the
rate of tax established under 66 Pa.C.S. § 2810(c)(2) for the
period beginning January 1, 2002, shall continue in force
without further adjustment for periods beginning January 1,
2003, and thereafter, and the Secretary of Revenue shall not
deliver any further reports under 66 Pa.C.S. § 2810(c)(3).
(b) 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 established
under 66 Pa.C.S. § 2810(c)(2) shall be zero mills.
Section 2. For the purposes of implementing the tax holiday
under sections 1101(b)(2) and 1101.2(b) of the act, an electric
light company, waterpower company and hydro-electric company
shall separately report its monthly gross receipts subject to
tax under sections 1101(b) and 1101.2(b) 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 3. 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.
Section 4. This act shall take effect July 1, 2026, or
immediately, whichever is later.
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