Section 47.18. Totalizator equipment

(a) Definitions. The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise:

Corporation—A corporation licensed under section 203 of the Race Horse Industry Reform Act (4 P. S. § 325.203).

Prevailing market price—The price which the equipment will bring if offered for sale in the open market at the time the equipment is brought into this Commonwealth.

Resident—A natural person, partnership, corporation, association or other entity which is domiciled, maintains a place of business or is authorized to do business in this Commonwealth.

Totalizator company—A business providing electronic totalizator equipment to a corporation.

(b) Scope. A totalizator company shall conform with the following:

(1) Charges to a corporation. A totalizator company which provides electronic totalizator equipment to a corporation in connection with parimutuel betting is deemed to be rendering a nontaxable service. Therefore, charges made by the totalizator company to a corporation in connection with rendering its nontaxable service is exempt from sales and use taxes.

(2) Purchases by a resident totalizator company. A totalizator company is considered to be the consumer of equipment, materials or supplies, and services thereto, which it uses in the rendition of its nontaxable service. Accordingly, a totalizator company shall pay sales or use tax of this Commonwealth in accordance with this subsection:

(i) Purchases involving delivery within this Commonwealth. A purchase of taxable property and services which involve delivery within this Commonwealth is subject to sales or use tax at the effective rate of tax upon the full purchase price, including charges for delivery. Credit will not be granted for taxes illegally imposed and paid to states other than the Commonwealth.

(ii) Purchases involving delivery outside of this Commonwealth but later brought into this Commonwealth:

(A) Purchases within 6 months. Property, including property upon which a taxable service has been performed, which has been brought into this Commonwealth within 6 months of the date of purchase or service is subject to tax at the effective rate upon the original purchase price, including charges for delivery. See subsection (c).

(B) Purchases beyond 6 months. Property, including property upon which a taxable service has been performed, which has been brought into this Commonwealth beyond 6 months of the date of purchase or service, is subject to tax at the effective rate of tax upon the original purchase price of the property or service including charges for delivery.

(3) Purchases by nonresident totalizator company. Notwithstanding subsection (b), when a nonresident totalizator company brings property, including property upon which a taxable service has been performed, into this Commonwealth in connection with the establishment of a permanent residence, the totalizator company shall pay use tax of the Commonwealth with respect to the property in accordance with this subsection:

(i) Purchases within 6 months. Property, including property upon which a taxable service has been performed, which has been brought into this Commonwealth within 6 months of the date of purchase, is subject to tax at the effective rate on the original purchase price, including charges for delivery.

(ii) Purchases beyond 6 months. Property, including property upon which a taxable service has been performed, which has been brought into this Commonwealth beyond 6 months of the date of purchase, is exempt from Commonwealth sales or use tax.

(4) Fair rental value. There is no authority under the TRC by which a totalizator company may pay tax upon the basis of the fair rental value of property which is subject to tax.

(c) Credits against tax. A totalizator company may take credit against tax owed to the Commonwealth, under subsection (b)(2)(ii) with respect to equipment, materials and supplies which are taxable in this Commonwealth equal to the tax legally due and paid to another state upon the equipment, materials and supplies by reason of a tax similar to the tax imposed by the Commonwealth. Credit will not be granted unless the other state grants similar tax relief to persons who have paid tax to the Commonwealth. A listing of the states granting similar relief may be obtained from the Department (Attn: Legal Bureau) upon request. Credit cannot be taken for sales tax paid to Canada.

The provisions of this § 47.18 adopted July 15, 1977, effective July 16, 1977, 7 Pa.B. 1982; amended March 19, 1993, effective March 20, 1993, 23 Pa.B. 1322. Immediately preceding text appears at serial pages (59269) to (59270) and (117865).