61 Pa. Code § 31.14

Current through Register Vol. 54, No. 24, June 15, 2024

Section 31.14 - Taxes paid purchases resold (TPPR)

(a) If a contractor later resells a particular item to a nonexempt customer with respect to which he has paid sales tax at the time of purchase, he shall nonetheless collect the full sales tax upon his retail price from his customer, and he shall report the tax collected to the Department. He may, at the time he reports the tax, take a credit on account of "Taxes Paid-Purchases Resold" (TPPR) against the tax which he has collected equal in amount to the tax which he paid to his supplier, provided that he paid the tax to his supplier within 3 years of the date of resale. He shall indicate upon his return the amount of tax which he has paid to his suppliers upon items sold which he is crediting against the tax collected from his customer on account of TPPR. It is not sufficient merely to report and remit tax upon the "markup" without indicating to the Department upon his return the amount of credit which he has taken.

Example: "X" Company purchases 100 sinks during the month of August at $70 per sink. "X" pays tax to its supplier upon all of the sinks, since "X" does not know or have good reason to know that all or any specified number of them will be sold. Later "X" uses 60 of the sinks in construction activities, and sells 40 of them over-the-counter at a retail price of $100 per sink. "X" collects sales tax of $240 upon the sale of these sinks.

(b) In reporting the tax upon its return, "X" Company shall show the following with respect to these transactions:

(1) Total Gross Sales	$4,000.00
(2) Total Nontaxable Sales	-
(3) Net Taxable Sales	4,000.00
(4) Total Amount of Tax Collected	240.00
(5) Less 1% Commission	2.40
(6) Net Amount of Tax Collected	237.60
(7) Amount of Use Tax Incurred	-
(8) Total Tax Due	$237.60
Less TPPR	168.00	69.60
The TPPR figure represents the amount of tax paid to ''X'' Company's supplier upon the sinks which ''X'' resold (40 X $70 X 6%). Item (8) shall be inserted upon the return form on the ''Total Tax Due'' line, the TPPR amount being inserted in front of the total amount in the rules column, thus:
(8) TOTAL TAX DUE (line 6 plus line 7)-TPPR $168.00		$69.60

61 Pa. Code § 31.14

The provisions of this § 31.14 adopted April 14, 1972, effective 4/14/1972, 2 Pa.B. 667.

This section cited in 61 Pa. Code § 31.11 (relating to definitions); 61 Pa. Code § 31.15 (relating to reciprocal credit for taxes paid other states); 61 Pa. Code § 46.3 (relating to construction contractor installing stained glass windows); 61 Pa. Code § 46.7 (relating to nonresident contractors); and 61 Pa. Code § 46.8 (relating to industrialized housing).