§ 31.44. Computation of tax.
(a) Purchase price. The tax is computed upon the full amount of the purchase price of a vehicle less the trade-in deduction. A deduction from the purchase price shall be permitted for an amount equal to the amount of a trade-in allowed on the purchase, if the trade-in occurs at the same time of the sale. A separate or independent sale of a vehicle is not considered a trade-in, even if the proceeds of the sale are immediately applied by the seller to a purchase of a vehicle from the buyer. The following items are included in the amount of the purchase price:
(1) Federal Excise Tax, since it is not a tax at the retail level.
(2) Financing and insurance charges, unless the charges are separately stated as a separate item upon the customer’s invoice.
(3) Delivery or freight charges for delivery of a vehicle from a manufacturer or distributor to a dealer whether or not they are separately stated upon the customer’s invoice. Delivery charges from the dealer to the customer whether or not they are separately stated upon the customer’s invoice.
(4) Warranty or ‘‘service’’ charges.
(5) Charges for preparation of or additional work upon a vehicle.
(6) Additional accessories or equipment placed in or upon the vehicle by the dealer even though the charge may be separately stated upon the customer’s invoice.
(b) Transactions not at arm’s length. When because of affiliation of interests between the seller and purchaser, or for another reason, the purchase price stated is not indicative of the true value of the vehicle, the purchase price shall, for purpose of the imposition of this tax, be determined as the prevailing market price of the vehicle.
(c) Alternate imposition of tax. Alternate imposition of tax shall conform with the following:
(1) Registered dealers of motor vehicles, trailers or semitrailers. A person may elect to pay tax equal to 6% of the fair rental value of a new or used vehicle, if the following exist:
(i) The person is registered as a Registered Dealer with the Bureau of Motor Vehicles.
(ii) The person acquires the motor vehicle, trailer or semitrailer for the purpose of resale.
(iii) The person uses the motor vehicle, trailer or semitrailer for a taxable use during a period not exceeding 1 year from the date of acquisition to the date of resale.
(iv) The motor vehicle is not used as a wrecker, parts truck, delivery truck, or courtesy car.
(2) Time limits. If the motor vehicle, trailer or semitrailer is used for a taxable use beyond 1 year from the date of acquisition, the taxpayer shall be liable for a tax on the prevailing market price of the vehicle at the time of acquisition. The taxpayer will be allowed a credit equal to the tax paid due to the taxpayer’s election to pay alternate tax. Dealers actively and principally engaged in the business of selling new or used motor boats, aircraft or similar tangible personal property may not utilize this election to pay alternate tax.
(3) Persons not establishing permanent residence or business. A person, including a resident of this Commonwealth or a member of the military service who designates an address in this Commonwealth as the person’s home of record, may elect to pay tax equal to 6% of the prevailing market price of a vehicle if the person purchased the vehicle 6 months or longer prior to its first taxable use in this Commonwealth.
Source The provisions of this § 31.44 adopted September 29, 1972, effective September 30, 1972, 2 Pa.B. 1816; amended March 19, 1993, effective March 20, 1993, 23 Pa.B. 1322. Immediately preceding text appears at serial pages (59259) to (59260).
Cross References This section cited in 61 Pa. Code § 31.7 (relating to use tax); 61 Pa. Code § 31.41 (relating to definitions); 61 Pa. Code § 31.41a (relating to scope); 61 Pa. Code § 33.2 (relating to purchase price); and 61 Pa. Code § 60.16 (relating to Local Sales, Use and Hotel Occupancy Tax).
No part of the information on this site may be reproduced for profit or sold for profit.
This material has been drawn directly from the official Pennsylvania Code full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.
