October 8, 1991
TO: TAX COMMITTEE NO. 32-91
PENNSYLVANIA MEMBERS
RE: PENNSYLVANIA SALES TAX ON COMPUTER SERVICES
__________________________________________________________
Pennsylvania recently enacted the attached legislation,
effective October 1, 1991, which expands the state sales and use
tax to cover, among other things, certain computer services.
Flexible computer services include "computer processing, data
preparing or processing services", which are defined to include
services such as "providing processing and preparation of reports
from data supplied by the customer or a specialized service, such
as data entry; making data processing equipment available on an
hourly, time-sharing or other basis; computer time-sharing and
leasing or rental computer time; computer tabulating and
calculating services; data entry, processing or verification
services; key-punch services; or optical scanning data services."
In the attached Sales Tax Bulletin, the Pennsylvania
Department of Revenue interprets the computer services tax to
apply to "management and maintenance of financial information
using computerized record keeping operations, such as stock and
bond ownership, mutual fund shareholder accounting and ownership;
and investment portfolio transaction information."
The Institute's Tax Committee will discuss what actions
should be taken regarding this tax at its upcoming October 10
meeting. If you will be unable to attend the meeting or would
like to provide us with your views by telephone, please call
Keith Lawson (at 202/955-3585) or David Mangefrida (at 202/955-
3521).
We will keep you informed of developments.
Keith D. Lawson
Associate Counsel - Tax
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