Pennsylvania Code › Title 61 - REVENUE › Part I - Department of Revenue › Subpart B - General Fund Revenues › Article II - Sales and Use Tax › Chapter 47 - RENTALS › Section 47.17 - Lease or rental of vehicles and rolling stock

Current through Register Vol. 54, No. 28, July 13, 2024
(a)
Introduction.
This
					 ruling supersedes Rulings Numbers 74, 76, 77, 78 and 132, and becomes effective
					 upon the date of issue (See 6 Pa.B. 9 (January 2, 1976)). Upon its effective
					 date, the 16 2/3% exemption under former Ruling No. 76, pertaining to charges
					 for gasoline, is no longer in effect. This ruling also pertains to the
					 taxability of rolling stock for the period from March 4, 1971, through October
					 16, 1974. Prior and subsequent to this period, rolling stock was and is
					 specifically excluded from taxability by statutory amendment. See subsection
					 (c)(1)(i)(B).
(b)
Definitions.
The following words and terms, when used in this
					 section, have the following meanings, unless the context clearly indicates
					 otherwise:
Lease agreement
-A contract whereby the
						lessee obtains or has the right to possession or custody of a vehicle in
						exchange for lease payments.
Lease payments
-Full consideration paid
						or delivered or promised to be paid or delivered to the lessor for a lease
						period under a lease agreement, whether it be money or otherwise, even though
						consideration is separately stated and designated as payment for service,
						maintenance, insurance, repairs, depreciation or otherwise.
(i)
Maintenance, insurance or repairs
					 obtained by lessee.
When a lessee is required pursuant to a lease
					 agreement to provide or obtain maintenance, insurance or repairs, any payment
					 made by the lessee to a vendor other than the lessor for maintenance, insurance
					 or repairs shall be included by the lessor as part of the lease payments for
					 the purpose of computing tax, unless tax was charged by the vendor who provided
					 the maintenance, insurance or repairs.
(ii)
Gasoline charges.
Separate sales of gasoline by a lessor to a lessee are not subject to tax. A
					 transfer of gasoline to a lessee is not considered to be a separate sale unless
					 the bill or sales invoice to the lessee separately states the number of gallons
					 of gasoline transferred, and either the charge per gallon or the total charges
					 made for gasoline. Charges for gasoline computed on the basis of the mileage a
					 leased vehicle is driven, rather than upon the actual quantity of gasoline
					 transferred to the lessee, are therefore subject to tax.
Lease period
-The interval of time
						established by the lessor and lessee which occurs between successive lease
						payments in accordance with the lease agreement, but this interval may not
						exceed 31 days. In circumstances when the lessor and lessee establish an
						interval between successive payments which exceeds 31 days, the Department will
						assume lease periods on a month-to-month basis beginning with the first day of
						the first complete month subsequent to the execution of the lease
						agreement.
Lessor
-A person who is engaged in the
						business of leasing or renting vehicles.
Public utility common carrier
-A public
						utility common carrier is a public utility which is registered as a common
						carrier with either the Pennsylvania Public Utility Commission or the
						Interstate Commerce Commission and is organized to perform, and does, in fact,
						perform services affected with a public interest, and which holds itself out to
						the general public to carry goods or persons without discrimination and for
						compensation. An independent contractor (that is, one who reserves the right to
						refuse to serve any person at his discretion and the power to fix his rates or
						charges by individual contract with the person or persons with whom he
						contracts) is not a common carrier.
Resident
-A person who is domiciled in
						this Commonwealth, maintaining a permanent place of abode within this
						Commonwealth and spends in the aggregate more than 60 days of the year within
						this Commonwealth, incorporated under the law of the Commonwealth, authorized
						to do business or doing business within this Commonwealth, or maintaining a
						place of business within the Commonwealth.
Rolling stock
-A device which is used
						exclusively upon stationary rails or tracks, including, but not limited to,
						locomotives, flat cars, box cars, coal cars, coaches, cabooses and other
						railroad cars. Rolling stock includes the type of property described even
						though it may be owned by persons other than railroads.
Vehicle
-A device in, upon or by which a
						person or property is or may be transported or drawn, including, but not
						limited to, automobiles, trucks, trailers, tractors, power shovels, road
						machinery and agricultural machinery. The term does not include devices moved
						by human power, vehicles which are designed to travel solely through air or
						water, or a device which is used exclusively upon stationary rails or
						tracks.