Finance Committee Approves Bills Providing Tax Exemptions for High-Tech

The Senate Finance Committee today (June 20) approved two bills introduced by Committee Chairman Scott Hutchinson that would provide tax exemptions to spur economic growth and job creation among Pennsylvania’s high-tech businesses.

Senate Bill 760 establishes a tax exemption for equipment purchased by data centers and their tenants.

To be eligible for the sales tax exemption, data center owners and operators must have a minimum payroll of $1 million and make capital investments of $35 million in a county with a population less than 250,000 or $60 million in a county with a population greater than 250,000.

“This sales tax exemption helps to incentivize the presence of data centers and related industries, such as computer equipment manufacturers and energy providers in Pennsylvania, creating capital investment and high paying jobs as a result,” Senator Hutchinson said.

Senate Bill 770 exempts help desk and other tech support services from the sales and use tax. 

As part of the Fiscal Year 2016-17 budget, Pennsylvania’s sales and use tax was amended to include digitally downloaded books, video, apps, music and other electronic media or programing. Not only were the initial purchases included, but so were the “maintenance, updates and support” of these items. This tax on maintenance, updates and support inadvertently led to the taxation of tech support services like helpdesks or troubleshooting services.

“My bill removes the term ‘support’ from the definition of taxable tangible and excludes services that provide advice or guidance from the sales and use tax,” Senator Hutchinson said. “Technology is everywhere in today’s economy. Businesses all over the Commonwealth, from big to small, use technology to help run their operations. Left unaddressed, this inadvertent tax on support services will severely harm the technology industry and businesses all across the state.”

The bills now go to the full Senate for consideration.

Contact:          Justin Leventry           (717) 787-9684