HB 2373 — 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
 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 and for establishment of revenue-neutral
12      reconciliation; and providing for reporting and for
13      transfers.
14      The General Assembly of the Commonwealth of Pennsylvania
15   hereby enacts as follows:
16      Section 1.    Sections 1101(b) and (h) and 1101.2 of the act of
17   March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
18   1971, are amended to read:
19      Section 1101.    Imposition of Tax.--* * *
20      (b)   Electric Light, Waterpower and Hydro-electric
21   Utilities.--[Every]
22      (1)   Except as provided under clause (2), every electric
23   light company, waterpower company and hydro-electric company now
 1   or hereafter incorporated or organized by or under any law of
 2   this Commonwealth, or now or hereafter organized or incorporated
 3   by any other state or by the United States or any foreign
 4   government and doing business in this Commonwealth, and every
 5   limited partnership, association, joint-stock association,
 6   copartnership, person or persons, engaged in electric light and
 7   power business, waterpower business and hydro-electric business
 8   in this Commonwealth, shall pay to the State Treasurer, through
 9   the Department of Revenue, a tax of forty-four mills upon each
10   dollar of the gross receipts of the corporation, company or
11   association, limited partnership, joint-stock association,
12   copartnership, person or persons, received from:
13      [(1)] (i)    the sales of electric energy within this State,
14   except gross receipts derived from the sales for resale of
15   electric energy to persons, partnerships, associations,
16   corporations or political subdivisions subject to the tax
17   imposed by this subsection upon gross receipts derived from such
18   resale; and
19      [(2)] (ii)   the sales of electric energy produced in
20   Pennsylvania and made outside of Pennsylvania in a state that
21   has taken action since December 21, 1977 which results in higher
22   costs for electric energy produced in that state and sold in
23   Pennsylvania unless the action that was taken after December 21,
24   1977 is rescinded according to the following apportionment
25   formula: except for gross receipts derived from sales under
26   [clause (1)] subclause (i), the gross receipts from all sales of
27   electricity of the producer shall be apportioned to the
28   Commonwealth of Pennsylvania by the ratio of the producer's
29   operating and maintenance expenses in Pennsylvania and
30   depreciation attributable to property in Pennsylvania to the

20260HB2373PN3162                   - 2 -
 1   producer's total operating and maintenance expenses and
 2   depreciation.
 3      (2)   Beginning with the first day of the first full month
 4   after the effective date of this clause and ending on the first
 5   day after the end of the sixth full month after the effective
 6   date of this clause, the rate of tax under clause (1) and
 7   section 1101.2 shall be zero mills.
 8      * * *
 9      (h)   Benefits to Consumer.--
10      (1)   For purposes of this article, the reduction in the taxes
11   imposed under subsections (a) and (b) shall derive to the
12   benefit of the consumer purchasing services from said utilities.
13   Said benefit shall be provided in the form of a reduction in the
14   State tax surcharge. Failure to pass through the reduction to
15   the consumer shall subject the public utility to a civil penalty
16   of at least one thousand dollars ($1,000), but not more than
17   five thousand dollars ($5,000), and such additional relief as
18   the court may deem appropriate.
19      (2)   For purposes of this article, the entire benefit of the
20   tax holiday under subsection (b)(2) and section 1101.2(b) shall
21   derive to the benefit of the consumer purchasing services from
22   said utilities. Said benefit shall be provided in the form of
23   the elimination of the State tax surcharge, which shall be
24   clearly reflected in each consumer's bill. Failure to pass
25   through the entire benefit of the tax holiday to the consumer
26   shall subject the public utility to a civil penalty of at least
27   one thousand dollars ($1,000), but not more than five thousand
28   dollars ($5,000), and such additional relief as the court may
29   deem appropriate.
30      * * *

20260HB2373PN3162                  - 3 -
 1      Section 1101.2.   Establishment of Revenue-Neutral
 2   Reconciliation.--[Notwithstanding] (a)   Except as provided under
 3   subsection (b), notwithstanding the provisions of 66 Pa.C.S. §
 4   2810(c)(1) (relating to revenue-neutral reconciliation), the
 5   rate of tax established under 66 Pa.C.S. § 2810(c)(2) for the
 6   period beginning January 1, 2002, shall continue in force
 7   without further adjustment for periods beginning January 1,
 8   2003, and thereafter, and the Secretary of Revenue shall not
 9   deliver any further reports under 66 Pa.C.S. § 2810(c)(3).
10      (b)   Holiday.--Beginning with the first day of the first full
11   month after the effective date of this subsection and ending on
12   the first day after the end of the sixth full month after the
13   effective date of this subsection, the rate of tax established
14   under 66 Pa.C.S. § 2810(c)(2) shall be zero mills.
15      Section 2.   For the purposes of implementing the tax holiday
16   under sections 1101(b)(2) and 1101.2(b) of the act, an electric
17   light company, waterpower company and hydro-electric company
18   shall separately report its monthly gross receipts subject to
19   tax under sections 1101(b) and 1101.2(b) of the act to the
20   Department of Revenue and shall not be taxed upon gross receipts
21   received during said months if the requirements of section
22   1101(h)(2) of the act are satisfied.
23      Section 3.   For the 2026-2027 fiscal year, the transfer of
24   money from the tax under Article XI of the act under section 6
25   of the act of November 29, 2004 (P.L.1376, No.178), known as the
26   Alternative Fuels Incentive Act, shall be no less than the
27   amount transferred under section 6 of the Alternative Fuels
28   Incentive Act for the 2025-2026 fiscal year.
29      Section 4.   This act shall take effect July 1, 2026, or
30   immediately, whichever is later.

20260HB2373PN3162                  - 4 -