December 30, 1991
TO: TAX COMMITTEE NO. 40-91
UNIT INVESTMENT TRUST COMMITTEE NO. 47-91
PENNSYLVANIA MEMBERS
RE: PENNSYLVANIA REPEALS SALES TAX ON CERTAIN COMPUTER SERVICES
__________________________________________________________
As we previously informed you, Pennsylvania enacted
legislation, effective October 1, 1991, which expanded the state
sales and use tax to cover, among other things, certain computer
services. (See Institute Memorandum to Unit Investment Trust
Committee No. 35-91, Tax Committee No. 32-91 and Pennsylvania
Members, dated October 8, 1991.) After the legislation was
enacted, several of the Institute's Pennsylvania members sought
clarification that the expanded sales and use tax on computer
services did not apply to services provided to investment
companies or to entities that provide such services to investment
companies.
Recently, Pennsylvania amended its sales and use tax,
adopting the attached provision suggested by the Pennsylvania
members. As amended, the statute provides that taxable computer
services shall not include, at a minimum, services that are part
of electronic fund transfers, electronic financial transactions
or services, banking or trust services; or management or
administrative services, including transfer agency, shareholder,
custodial and portfolio accounting services, provided directly to
a regulated investment company ("RIC") or a real estate
investment trust ("REIT") or to an entity that provides such
services to a RIC or REIT. The amendment is effective January 1,
1992.
We will keep you informed of developments.
Keith D. Lawson
Associate Counsel - Tax
Attachment