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HB 2395

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 Aaron Bernstine and 9 co-sponsors

The bill would modify which goods and services are excluded from Pennsylvania sales and use tax, altering the tax base and exemptions.

Referred to Finance
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WeVote Research Nonpartisan
Bill Summary · HB 2395

Summary of HB 2395 (Pennsylvania, 2025-2026)

Purpose and Intent

HB 2395 proposes amendments to the Pennsylvania Tax Reform Code of 1971 (39 Pa. C.S. et seq.), specifically within the sales and use tax provisions. The bill aims to modify exclusions from sales and use tax, altering which goods and services—or under what circumstances—are taxed or exempt. The exact policy drivers are not stated in the provided summary, but the focus is on refining or expanding/restricting exclusions to better tailor the tax base.

Key Provisions and Changes

Note: The summary below reflects the bill’s stated focus on “exclusions from tax” within the sales and use tax section of the Tax Reform Code of 1971. Specific numerical details (rates, dollar thresholds, or defined terms) would be drawn directly from the bill text; the following highlights denote typical categories such provisions address.

  • Exclusions from Tax: The bill amends existing exclusions from the Pennsylvania sales and use tax. This could involve:

    • Adding new items or activities to excluded status (either as permanently excluded or during certain conditions).
    • Modifying the scope of current exclusions (e.g., materials, services, or transactions previously taxed may become excluded, or vice versa).
    • Defining or clarifying eligibility criteria for exclusions (e.g., certain organizational, educational, or nonprofit contexts).
    • Adjusting how and when exclusions apply (e.g., to residential vs. commercial transactions, or to specific purchaser types).

  • Administration and Compliance: Changes to exclusions typically interact with reporting, exemption certificate requirements, and enforcement. The bill may include:

    • Requirements for purchasers to provide exemptions documentation.
    • Clarifications for sellers on which transactions qualify for exclusion.
    • Potential alignment with other state tax exemptions or with federal tax treatment to reduce ambiguity.

  • Technical Corrections: The bill may address drafting cleanups or align terminology with current law to reduce ambiguity in the application of exclusions.

Who Would Be Affected

  • Taxpayers Subject to Sales and Use Tax: Businesses and individuals making taxable purchases within Pennsylvania could gain or lose exemptions depending on the final form of the exclusions.
  • Sellers and Vendors: Retailers, vendors, and service providers would need to assess applicability of exclusions, adjust invoicing, exemption certificates, and recordkeeping.
  • Tax Administrators and Taxpayers’ Compliance Partners: State Department of Revenue and associated tax professionals would implement, monitor, and enforce the revised exclusions.

Procedural and Timeline Aspects

  • Legislative Status: The bill is sponsored by multiple members (including Jeff Olsommer, Ryan Warner, Jonathan Fritz, Shelby Labs, Thomas Kutz, Brian Smith, Joe Hamm, David Rowe, and Michael Stender) as co-sponsors. The current status (committee referrals, amendments, floor votes) would determine its progression toward enactment.
  • Effective Date: If enacted, the bill would specify an effective date for the new or revised exclusions, as well as any phased implementation or transitional provisions.
  • Transitional Provisions: There may be provisions addressing how purchases made before the effective date are treated, or how to handle ongoing contractual obligations.

Practical Considerations

  • For businesses and taxpayers, a close reading of the final bill text will be essential to determine:
    • Which specific goods or services are newly excluded or reclassified.
    • Any changes to exemption certificate requirements.
    • Any impact on state revenue projections and budgetary considerations.
  • Stakeholders should monitor committee hearings and fiscal notes for details on fiscal impact, administrative burden, and implementation timelines.

If you would like, I can summarize the bill’s exact language once you provide the text or a link to the bill, and extract precise items, dates, and any fiscal notes.

Compiled from official sources — confirm details with the bill’s official record.

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