Pennsylvania Taxes Sales of Electronically Delivered Items, Exempts Timber Equipment, Plans Amnesty Program

Jul 21st, 2016

Pennsylvania recently enacted a bill clarifying how it taxes electronically delivered items. Under the new law, canned software, video, photographs, music, books, and other media are included in the definition of "tangible personal property." The state taxes sales of "tangible personal property," so these items are taxable unless an exemption applies. The new definition is effective August 1, 2016. Note that these items qualify as tangible personal property even if they are electronically delivered or streamed to the customer.

The bill also exempts machinery, equipment, and supplies used in timber production and harvesting. This exemption applies to businesses that primarily produce and harvest trees to make wood, paper, or energy.

In addition, the bill provides that the Department of Revenue will offer an amnesty program before June 30, 2017. The amnesty program will allow participating taxpayers to avoid paying interest, penalties, or fees on eligible taxes owed to the state.