(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).
