Section 32.5. Multi-state sales

(a) Transactions where delivery is made to locations within this Commonwealth. Where delivery of taxable property or services is made to locations within this Commonwealth, the transactions shall be subject to tax. Delivery in this Commonwealth to a nonresident purchaser does not make the transaction exempt.

(b) Transactions where delivery is made to locations outside this Commonwealth. When tangible personal property is sold, leased or serviced within this Commonwealth and the vendor, lessor or serviceperson is obligated to deliver it to a point outside of this Commonwealth, or to deliver it to a carrier or to the mails for transportation to a point outside this Commonwealth, sales tax does not apply. However, where tangible personal property under a sale, lease or service is delivered in this Commonwealth to the buyer or lessee or their agent, other than an interstate carrier, the tax applies, notwithstanding that the buyer or lessee may subsequently transport the property out of this Commonwealth.

Examples:

Henrietta Higgins, a speech pathologist, purchased disposable laboratory supplies from a Commonwealth retailer. The retailer delivers the supplies (cost and freight) to Providence, Rhode Island. Title to the supplies passed to Higgins at the Commonwealth point of shipment, but sales tax does not apply because delivery is made out-of-State.

Ahab Inc., a maker of specialized steel in this Commonwealth, supplies harpoons to Neptune Inc., a Massachusetts fishing concern. The harpoons are delivered to Neptune Inc.’s agent (freight on board) Harrisburg, Pennsylvania for ultimate delivery in Massachusetts. Sales tax applies to this transaction because delivery is made and title passes in this Commonwealth.

(c) When vendor, lessor or serviceperson shall collect tax. A vendor, lessor or serviceperson engaged in business activity within this Commonwealth shall collect the tax imposed by the act with respect to the following transactions:

(1) Where property is shipped from a point outside this Commonwealth to a point within this Commonwealth.

(2) Where property is shipped from a point within this Commonwealth to another point within this Commonwealth by a route a portion of which is outside this Commonwealth.

(3) Where property is purchased and delivered within this Commonwealth even though the purchaser subsequently transports the property to a location outside this Commonwealth with the following exceptions:

(i) Property purchased or having a situs within this Commonwealth solely for the purpose of being processed, fabricated or manufactured into, attached to or incorporated into personal property and thereafter transported outside this Commonwealth for use exclusively outside this Commonwealth shall be deemed to be a resale and therefore is not subject to tax.

(ii) The sale at retail or use of motor vehicles, trailers or semitrailers, or bodies attached to the chassis thereof sold to a nonresident of this Commonwealth to be used outside this Commonwealth which are registered in a state other than this Commonwealth within 20 days after delivery to the vendee is not subject to tax.

(d) Maintenance of records. A vendor, lessor or serviceperson making sales of tangible personal property exempt from the tax set forth in this section shall maintain records of the transactions, together with documents evidencing the delivery of the tangible personal property to a destination outside this Commonwealth. The documents include waybills, bills of lading, insurance or registry receipt issued by the United States Post Office, mail orders, shipping orders or other data pertinent to the purchase and delivery.

(e) Property is not exempt by reason of being used in interstate and foreign commerce. Unless property is otherwise exempt by reason of this section or this chapter, the sale or use of tangible personal property in this Commonwealth shall be subject to the tax notwithstanding the fact that the purchaser is engaged in interstate or foreign commerce or that the property may be intended for use in interstate or foreign commerce.

(f) Interim storage of property to be used exclusively outside this Commonwealth. Effective March 4, 1971, the interim storage in this Commonwealth of property purchased outside this Commonwealth for use outside this Commonwealth and upon which no work or services are performed is a taxable use. The use tax shall be based upon the original purchase price of the property. The storage charges are exempt from tax.

The provisions of this § 32.5 amended November 8, 1985, effective November 9, 1985, 15 Pa.B. 4038. Immediately preceding text appears at serial pages (40262) to (40264).

Notation

Authority

The provisions of this § 32.5 issued under section 270 of the Tax Reform Code (72 P. S. § 7270).