Tax exemption sought for fire products in Pa.

Tuesday, July 1, 2003

HARRISBURG, Pa. - In early June, legislation that would exempt fire safety equipment from being taxed had yet to report out of Pennsylvania’s House Committee on Finance, where it was introduced April 8. The session was scheduled to break for the summer at the end of June, after press time.

The bill, H 1098, would amend the state’s Tax Reform Code of 1971 to “exclude smoke detectors, fire extinguishers and other fire prevention and fire safety equipment from the sales and use tax.”

“In one form or another this bill usually comes up in every legislative cycle,” said Dale Eller, executive director of the Pennsylvania Burglar and Fire A-larm Association, an organization representing 150 dealers and suppliers of security equipment and services. “And it’s never come out of committee. It becomes dormant each legislative cycle.”

Eller believes the bill could have a positive impact on the fire safety systems industry, but its language needs to be more specific, he said.

“The way this is written, a consumer could go to Home Depot and buy a smoke alarm and that would be tax exempt, too,” Eller said.

“If we’re talking about an installed system,” he said, “the dealer now pays the six percent sales tax based on the wholesale value of the system. My interpretation of the law is that the dealer would not have to pay the tax on the wholesale value.”

Bill supporters say fire equipment is not like other consumer goods that are typically taxed, so it should be exempt.

“This legislation is a necessity under the Pennsylvania Constitution because this equipment is not a luxury item,” said Rep. Anthony DeLuca, D-Allegheny County, who introduced the bill.

Most Pennsylvania fire departments are volunteer, and firefighters often raise funds by selling fire safety equipment.

DeLuca, who is chairman of the state Volunteer Fire Caucus, said the question needs to be addressed, “especially since Sept. 11.”

Pennsylvania imposes a six percent state sales tax on taxable goods and services. Exemptions from sales tax include food (not ready-to-eat), clothing, drugs, textbooks, resale items and residential heating fuels.

A local sales tax of one percent is also collected on the sale of taxable goods and services in Philadelphia and Allegheny counties. Tax is not due on sales from these counties if the property is delivered to an out-of-state location.

A random sampling of other states indicates the issue is mixed. For example, Illinois taxes the equipment if it is used in a manufacturing process. In Maine, there is no exemption. In Connecticut, all fire safety equipment is exempt.