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Purchase Price. (1) Effective October 1

Effective October 1, 1991, the sale at retail or use of employment service services undergoes tax. (1) An employe reporting to work at an area in this Commonwealth undergoes tax. (2) An employe reporting to operate at a place outside of this Commonwealth is not subject to tax, unless the employe is designated to work in this Commonwealth. (3) If the employe lies in this Commonwealth, it is presumed that the employment company service goes through tax unless paperwork supports the reporting to a location outside of this Commonwealth. (c) Examples of taxable services. The following are examples of taxable work services: (1) A Pennsylvania resident contacts a Pennsylvania supplier and is put with a company at a place in this Commonwealth. (2) A Pennsylvania resident contacts an Ohio supplier and is placed with an employer at an area in this Commonwealth. (3) A Pennsylvania company contacts a supplier outside this Commonwealth and accepts an employe for its area in this Commonwealth. (4) A New York resident contacts a New york city supplier and is placed with an employer at a location in this Commonwealth. (5) A Pennsylvania vendor paid on a per hour rate interviews and advises a possible employe to a company. (d) Examples of services which are not work agency services. The following are examples of services which are not employment service services: (1) A Pennsylvania resident contacts a Pennsylvania vendor and is positioned with a company at an area outside of this Commonwealth. (2) A Pennsylvania resident contacts a New york city vendor and is placed with a company in New Jersey. (3) A New york city resident contacts a Pennsylvania vendor and is put with an employer at an area in New York. (4) A Pennsylvania employer contacts a supplier outside of this Commonwealth and accepts an employe for its out-of-State location. (e) Purchase price. (1) Effective October 1, 1991, through December 31, 1991, the purchase cost of employment service services subject to tax is the gross fee. (2) Effective January 1, 1992, the purchase rate of employment company services based on tax is the service charge if the employe expenses are individually stated; otherwise, the gross cost goes through tax. (3) If the purchase cost is canceled or renegotiated, tax is due on the adjusted purchase price. If a modification to the tax occurs, the supplier is permitted to offset the adjustment versus existing tax liabilities. (4) If the purchase price is paid on an installation basis, the tax is due on the full purchase rate and is payable at the time the buyer accepts the contract or within 30 days of approval of the agreement. (f) Exclusions. (1) Employment service services are exempt if purchased by certified charitable organizations, volunteer fire business, spiritual organizations and nonprofit universities, except if used in an unrelated trade or business. The services are also exempt if acquired by the Federal government or its instrumentalities; or the Commonwealth, its instrumentalities or subdivisions consisting of public school districts. The manufacturing, mining, processing, utility, farming, dairying, farming, horticulture or floriculture exemption does not apply. (2) Employment services offered by theatrical work agencies or movement picture casting bureaus. (3) Farm labor. (4) A vendor of employment service services might declare the resale exemption upon its purchase of tangible personal effects which is moved to its purchaser or a 3rd party in the efficiency of its employment service services. The vendor might likewise purchase work firm services from another company which the supplier resells to its consumer. The supplier might not declare the resale exemption upon its purchase of administrative materials or the purchase of another taxable service which it may use in the efficiency of its employment agency services.
Source

The provisions of this § 60.5 adopted January 8, 1993, efficient January 9, 1993, 23 Pa. B. 182.

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