An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in sales and use tax, further providing for exclusions from tax.

2025-2026 Regular Session Introduced by Valerie Gaydos and 6 co-sponsors

The bill refines which goods and services are exempt from Pennsylvania sales and use tax, clarifying and potentially expanding exclusions.

Summary of HB 2494 (Session 2025-2026) — Pennsylvania Tax Reform Code: Sales and Use Tax Exclusions

Purpose and intent

HB 2494 proposes amendments to the Tax Reform Code of 1971 (Title: An Act amending the act of March 4, 1971, P.L. 6, No. 2) related to sales and use tax.

The core aim is to modify and clarify exclusions from Pennsylvania sales and use tax, potentially expanding, narrowing, or refining categories that are not taxed.

Key provisions and changes proposed

The bill targets specific exclusions within the Sales and Use Tax provisions of the Tax Reform Code of 1971.

While the exact text of changes is not provided here, typical reforms of this nature may address:

Clarifying definitions of items or services that are exempt from tax.
Expanding exemptions for particular classes of purchasers (e.g., individuals, nonprofits, government entities).
Adjusting the treatment of certain transactions (e.g., digital goods, professional services, durable medical equipment).
Modifying thresholds, duration, or applicability of exemptions for certain sectors (e.g., manufacturing, agriculture, energy-related purchases).
Aligning exclusions with federal standards or other states’ practices to reduce administrative ambiguity.

The bill’s focus is specifically on exclusions, meaning it does not create new tax rates or broad tax base changes, but rather refines what is not taxed.

Who or what would be affected

Taxpayers who rely on excluded items or services from sales and use tax would experience direct effects.

Businesses making purchases or selling exempt goods/services could see changes in compliance requirements, record-keeping, and tax calculation.

State and local revenue could be affected depending on the scope and breadth of the exclusions.

Tax administrators would need to interpret and enforce any new or clarified exclusions, potentially updating guidance and forms.

Procedural and timeline aspects

The bill is introduced and carries a slate of co-sponsors, indicating bipartisan or cross-aisle support typical of tax reform proposals.

As with most proposed amendments to the Tax Reform Code, steps would include committee consideration, potential amendments, floor debate, and votes in both legislative chambers, followed by any required governor action.

If enacted, the amendments would take effect on a specified effective date, which would be stated in the final enacted text (e.g., immediately upon enactment or a future date).

Potential impacts to watch

Revenue impact: Changes in exclusions can widen or narrow the sales tax base, affecting state and local revenue.

Administrative impact: Businesses and tax administrators may need to adjust systems, training, and compliance processes.

Economic impact: Exclusions can influence consumer prices and purchasing behavior for the affected items or services.

Clarity and compliance: Precise definitions in the bill will shape how easily taxpayers determine eligibility for exclusions.

If you can provide the exact text of HB 2494 or an official summary, I can tailor this overview with precise provisions, dollar amounts, dates, and the exact scope of each exclusion.