Section 60.9. Premium cable services

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

Premium cable service—

(i) That portion of a cable television service; community antenna television service; or other distribution of television, video, audio or radio service which meets the following criteria:

(A) Is transmitted with or without wires to purchasers of the service.

(B) Consists substantially of programming uninterrupted by paid commercial advertising, such as full-length movies, sporting events, pay-per-view television service and audio and radio broadcasting.

(ii) Examples of premium cable services include Home Box Office, Cinemax, Showtime, Prism, The Disney Channel or commercial music service.

Nonpremium cable service—That portion of a cable television service; community antenna television service or another distribution of television, video, audio or radio service which does not qualify as premium cable service, including the following: installation and repair of nonpremium cable service; tier packages with no premium cable service; additional premium cable outlets up to an accumulative number of ten for an indiviudal customer; public television or radio services; local origination programming which provides a variety of public service programs unique to the community; programming which provides coverage of public affairs issues which are presented without commentary or analysis such as Congressional proceedings and programming substantially related to religious subjects.

(b) Scope.

(1) Effective October 1, 1991, and continuing to December 31, 1991, the sale at retail or use of cable television services; community antenna television service or other distribution of television, video or radio service, with or without the use of wire, in excess of the minimum or basic charge were subject to tax. The following are examples of services which were taxable under this category: premium cable channels; tier packages; additional cable television outlets; installation charges made in connection with providing taxable cable television services and separately-stated charges for television, audio and radio equipment, including remote controls, or receivers. The following are examples of services which were not taxable under this category: minimum or basic cable, video and radio services and charges for the installation of minimum or basic service.

(2) Effective January 1, 1992, the sale at retail or use of premium cable service delivered to a location in this Commonwealth is subject to tax. In addition, the sale, rental or lease of television, audio or radio equipment, including remote controls, receivers, for use in connection with premium or nonpremium cable service is subject to tax.

(c) Purchase price.

(1) The total charge for premium cable services including charges for:

(i) Installation and repair of the premium cable service.

(ii) Upgrading to include additional premium cable service.

(iii) Downgrading to exclude all or some premium cable service.

(iv) Additional premium cable outlets in excess of the accumulative number of ten for an individual customer.

(v) Franchise fees relating to premium cable service.

(vi) Other charges related to premium cable service.

(2) If the charge for the cable service includes a charge for both premium and nonpremium cable service and the charge for nonpremium cable service is not separately stated, the entire charge for all cable services including nonpremium cable service is subject to tax.

(d) Exclusions.

(1) Premium cable services are exempt if purchased by qualified charitable organizations, volunteer fire companies, religious organizations and nonprofit educational institutions, except if used in an unrelated trade or business. The services are also exempt if purchased by the Federal government or its instrumentalities; or the Commonwealth, its instrumentalities or subdivisions including public school districts.

(2) The vendor of premium cable television services may claim the resale exemption upon its purchase of tangible personal property which is transferred to its purchaser or a third party in the performance of its premium cable television services. The vendor may also purchase premium cable services from another provider which the vendor resells to its customer. The vendor may not claim the resale exemption upon its purchase of administrative supplies or the purchase of another taxable service which it may use in the performance of its premium cable television services.

(i) The following are examples of property which may be purchased exempt for resale when used in the performing of premium cable television services:

(A) Remote control.

(B) Receivers.

(C) Amplifiers.

(3) Persons who are engaged in the business of providing basic and premium cable services and are entitled to claim the processing exemption should make reference to § § 32.1, 32.32 and 42.1 (relating to definitions; manufacturing; processing; and definitions).

The provisions of this § 60.9 adopted January 8, 1993, effective January 9, 1993, 23 Pa.B. 186.