HB 2371 — 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
 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 sales and use tax, further providing for
11      exclusions from tax; and, in gross receipts tax, further
12      providing for imposition of tax; and providing for reporting
13      and for transfers.
14      The General Assembly of the Commonwealth of Pennsylvania
15   hereby enacts as follows:
16      Section 1.    Section 204 of the act of March 4, 1971 (P.L.6,
17   No.2), known as the Tax Reform Code of 1971, is amended by
18   adding a clause to read:
19      Section 204.    Exclusions from Tax.--The tax imposed by
20   section 202 shall not be imposed upon any of the following:
21      * * *
22      (77)    Notwithstanding section 201(k)(19) or (o)(18), the sale
23   at retail or use of mobile telecommunications service during the
 1   exclusion period if the purchase is pursuant to a service
 2   contract between the service provider and a customer and if the
 3   service contract requires the customer to make periodic payments
 4   to maintain the mobile telecommunications service. For the
 5   purposes of this clause, the term "exclusion period" means the
 6   time period beginning with the first day of the first full month
 7   after the effective date of this clause and ending on the first
 8   day after the end of the sixth full month after the effective
 9   date of this clause.
10      Section 2.   Section 1101(a) introductory paragraph and (h) of
11   the act are amended and the section is amended by adding a
12   subsection to read:
13      Section 1101.   Imposition of Tax.--(a)   General Rule.--
14   [Every] Except as provided under subsection (a.2), every
15   pipeline company, conduit company, steamboat company, canal
16   company, slack water navigation company, transportation company,
17   and every other company, association, joint-stock association,
18   or limited partnership, now or hereafter incorporated or
19   organized by or under any law of this Commonwealth, or now or
20   hereafter organized or incorporated by any other state or by the
21   United States or any foreign government, and doing business in
22   this Commonwealth, and every copartnership, person or persons
23   owing, operating or leasing to or from another corporation,
24   company, association, joint-stock association, limited
25   partnership, copartnership, person or persons, any pipeline,
26   conduit, steamboat, canal, slack water navigation, or other
27   device for the transportation of freight, passengers, baggage,
28   or oil, except motor vehicles and railroads, and every limited
29   partnership, association, joint-stock association, corporation
30   or company engaged in, or hereinafter engaged in, the

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 1   transportation of freight or oil within this State, and every
 2   telephone company, telegraph company or provider of mobile
 3   telecommunications services now or hereafter incorporated or
 4   organized by or under any law of this Commonwealth, or now or
 5   hereafter organized or incorporated by any other state or by the
 6   United States or any foreign government and doing business in
 7   this Commonwealth, and every limited partnership, association,
 8   joint-stock association, copartnership, person or persons,
 9   engaged in telephone or telegraph business or providing mobile
10   telecommunications services in this Commonwealth, shall pay to
11   the State Treasurer, through the Department of Revenue, a tax of
12   forty-five mills with a surtax equal to five mills upon each
13   dollar of the gross receipts of the corporation, company or
14   association, limited partnership, joint-stock association,
15   copartnership, person or persons received from:
16      * * *
17      (a.2)   Holiday.--Beginning with the first day of the first
18   full month after the effective date of this subsection and
19   ending on the first day after the end of the sixth full month
20   after the effective date of this subsection, the rate of tax
21   under section 1101(a) for gross receipts received from providing
22   mobile telecommunications services shall be zero mills.
23      * * *
24      (h)   Benefits to Consumer.--
25      (1)   For purposes of this article, the reduction in the taxes
26   imposed under subsections (a) and (b) shall derive to the
27   benefit of the consumer purchasing services from said utilities.
28   Said benefit shall be provided in the form of a reduction in the
29   State tax surcharge. Failure to pass through the reduction to
30   the consumer shall subject the public utility to a civil penalty

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 1   of at least one thousand dollars ($1,000), but not more than
 2   five thousand dollars ($5,000), and such additional relief as
 3   the court may deem appropriate.
 4      (2)   For purposes of this article, the entire benefit of the
 5   tax holiday under subsection (a.2) shall derive to the benefit
 6   of the consumer purchasing services from providers of mobile
 7   telecommunications services. Said benefit shall be provided in
 8   the form of the elimination of the State tax surcharge, which
 9   shall be clearly reflected in each consumer's bill. Failure to
10   pass through the entire benefit of the tax holiday to the
11   consumer shall subject the provider of the mobile
12   telecommunications services to a civil penalty of at least one
13   thousand dollars ($1,000), but not more than five thousand
14   dollars ($5,000), and such additional relief as the court may
15   deem appropriate.
16      * * *
17      Section 3.   For the purposes of implementing the tax holiday
18   under section 1101(a.2) of the act, a person subject to the tax
19   under section 1101(a) of the act shall separately report its
20   monthly gross receipts received from providing mobile
21   telecommunications services subject to tax under section 1101(a)
22   of the act to the Department of Revenue and shall not be taxed
23   upon gross receipts received during said months if the
24   requirements of section 1101(h)(2) of the act are satisfied.
25      Section 4.   For the 2026-2027 fiscal year, the transfer of
26   money from the tax under Article XI of the act under section 6
27   of the act of November 29, 2004 (P.L.1376, No.178), known as the
28   Alternative Fuels Incentive Act, shall be no less than the
29   amount transferred under section 6 of the Alternative Fuels
30   Incentive Act for the 2025-2026 fiscal year.

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1      Section 5.   This act shall take effect July 1, 2026, or
2   immediately, whichever is later.




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