HB 1678 — 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.

PRINTER'S NO.   2050

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 1678
                                               Session of
                                                 2025

     INTRODUCED BY FIEDLER, ABNEY, INGLIS, GIRAL, PIELLI, HILL-EVANS,
        KHAN, WAXMAN, BRENNAN, DOUGHERTY, RIVERA, KRAJEWSKI, SANCHEZ,
        HADDOCK, D. WILLIAMS, FLEMING, CIRESI, WEBSTER, CEPEDA-
        FREYTIZ, GREEN, SHUSTERMAN, GUZMAN, HANBIDGE AND HOWARD,
        JUNE 30, 2025

     REFERRED TO COMMITTEE ON FINANCE, JUNE 30, 2025


                                    AN ACT
 1   Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
 2      act relating to tax reform and State taxation by codifying
 3      and enumerating certain subjects of taxation and imposing
 4      taxes thereon; providing procedures for the payment,
 5      collection, administration and enforcement thereof; providing
 6      for tax credits in certain cases; conferring powers and
 7      imposing duties upon the Department of Revenue, certain
 8      employers, fiduciaries, individuals, persons, corporations
 9      and other entities; prescribing crimes, offenses and
10      penalties," in gross receipts tax, further providing for
11      imposition of tax.
12      The General Assembly of the Commonwealth of Pennsylvania
13   hereby enacts as follows:
14      Section 1.    Section 1101(a) of the act of March 4, 1971
15   (P.L.6, No.2), known as the Tax Reform Code of 1971, is amended
16   and the section is amended by adding a subsection to read:
17      Section 1101.    Imposition of Tax.--(a)   General Rule.--Every
18   pipeline company, conduit company, steamboat company, canal
19   company, slack water navigation company, transportation company,
20   and every other company, association, joint-stock association,
21   or limited partnership, now or hereafter incorporated or
 1   organized by or under any law of this Commonwealth, or now or
 2   hereafter organized or incorporated by any other state or by the
 3   United States or any foreign government, and doing business in
 4   this Commonwealth, and every copartnership, person or persons
 5   owing, operating or leasing to or from another corporation,
 6   company, association, joint-stock association, limited
 7   partnership, copartnership, person or persons, any pipeline,
 8   conduit, steamboat, canal, slack water navigation, or other
 9   device for the transportation of freight, passengers, baggage,
10   or oil, except motor vehicles and railroads, and every limited
11   partnership, association, joint-stock association, corporation
12   or company engaged in, or hereinafter engaged in, the
13   transportation of freight or oil within this State, and every
14   telephone company, telegraph company or provider of mobile
15   telecommunications services now or hereafter incorporated or
16   organized by or under any law of this Commonwealth, or now or
17   hereafter organized or incorporated by any other state or by the
18   United States or any foreign government and doing business in
19   this Commonwealth, and every limited partnership, association,
20   joint-stock association, copartnership, person or persons,
21   engaged in telephone or telegraph business or providing mobile
22   telecommunications services in this Commonwealth, and every
23   limited partnership, association, joint-stock association,
24   corporation or company providing digital advertising services in
25   this Commonwealth, shall pay to the State Treasurer, through the
26   Department of Revenue, a tax of forty-five mills with a surtax
27   equal to five mills upon each dollar of the gross receipts of
28   the corporation, company or association, limited partnership,
29   joint-stock association, copartnership, person or persons
30   received from:

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 1      (1)    passengers, baggage, oil and freight transported wholly
 2   within this State;
 3      (2)    telegraph or telephone messages transmitted wholly
 4   within this State and telegraph or telephone messages
 5   transmitted in interstate commerce where such messages originate
 6   or terminate in this State and the charges for such messages are
 7   billed to a service address in this State, except gross receipts
 8   derived from:
 9      (i)    the sales of access to the Internet, as set forth in
10   Article II, made to the ultimate consumer;
11      (ii)    the sales for resale to persons, partnerships,
12   associations, corporations, or political subdivisions subject to
13   the tax imposed by this article upon gross receipts derived from
14   such resale of telecommunications services, including:
15      (A)    telecommunications exchange access to interconnect with
16   a local exchange carrier's network;
17      (B)    network elements on an unbundled basis; and
18      (C)    sales of telecommunications services to interconnect
19   with providers of mobile telecommunications services; and
20      (iii)    the sales of telephones, telephone handsets, modems,
21   tablets and related accessories, including cases, chargers,
22   holsters, clips, hands-free devices, screen protectors and
23   batteries; [and]
24      (3)    mobile telecommunications services messages sourced to
25   this Commonwealth based on the place of primary use standard set
26   forth in the Mobile Telecommunications Sourcing Act (4 U.S.C. §
27   117), except gross receipts derived from:
28      (i)    the sales of access to the Internet, as set forth in
29   Article II, made to the ultimate consumer;
30      (ii)    the sales for resale to persons, partnerships,

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 1   associations, corporations or political subdivisions subject to
 2   the tax imposed by this article upon gross receipts derived from
 3   such resale of mobile telecommunications services, including
 4   sales of mobile telecommunications services to interconnect with
 5   providers of telecommunications services; and
 6      (iii)     the sales of telephones, telephone handsets, modems,
 7   tablets and related accessories, including cases, chargers,
 8   holsters, clips, hands-free devices, screen protectors and
 9   batteries[.]; and
10      (4)   digital advertising services displayed to a user on a
11   digital interface wholly within this Commonwealth, including
12   banner advertising, search engine advertising, interstitial
13   advertising and comparable advertising services that utilize the
14   personal information of the users to whom the advertisements are
15   served. As used in this clause, the following words and phrases
16   shall have the meanings given to them in this clause:
17      "Digital advertising services."      The provision of
18   advertisements displayed on a digital interface.
19      "Digital interface."    Any software, including an Internet
20   website, part of an Internet website or application, accessible
21   to a user.
22      "User."    An individual or other person accessing a digital
23   interface via a device.
24      * * *
25      (g.1)     Exemption for Broadcast and News Media Entities.--The
26   tax imposed under this section on gross receipts derived from
27   digital advertising services shall not however be imposed on
28   gross receipts from advertising services displayed on a digital
29   interface owned or operated by a broadcast entity or news media
30   entity. As used in this subsection, the following words and

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 1   phrases shall have the meanings given to them in this
 2   subsection:
 3      "Broadcast entity."    An entity primarily engaged in operating
 4   a broadcast television or radio station.
 5      "Digital advertising services."     As defined in subsection (a)
 6   (4).
 7      "Digital interface."    As defined in subsection (a)(4).
 8      "News media entity."    An entity primarily engaged in
 9   newsgathering, reporting or publishing articles or commentary on
10   news, current events, culture or other matters of public
11   interest.
12      * * *
13      Section 2.   The amendment of section 1101(a) of the act shall
14   apply to the taxable years beginning after December 31, 2025.
15      Section 3.   This act shall take effect immediately.




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