PA Notes


Sales & Use Tax - Building and Pole Signs: The sale of a building or pole sign may qualify as a “construction contract,” where the vendor installs the sign to become permanently affixed to the real estate. While no tax is required to be collected by the vendor, tax may still be due on any materials used by the vendor in the performance of the construction contract. Ruling No. SUT-03-043 (reissued April 21, 2010).

Sales & Use Tax - Manufacturing of Electricity: Purchases of natural gas, machinery, equipment, parts and supplies used directly and predominantly to produce electricity at a generating peaking power facility qualify for the manufacturing exclusion from PA Sales & Use tax. Ruling No. SUT-05-003 (reissued February 23, 2010).

Sales & Use Tax - Installed MRI Equipment: The Department of Revenue has reissued a ruling that installed magnetic resonance imaging (MRI) equipment remains tangible personal property, so that the vendor/lessor is required to collect sales tax on a lease to the ultimate consumer, and qualifies for the “resale” exclusion on the initial purchase of the equipment. [Note: This issue is currently being litigated by our firm.] PA Ruling No. SUT-05-008 (reissued May 20, 2010).

Amended Corporation Tax Return Regulations: On June 19th, the Department of Revenue finalized its amended corporation tax return regulations. Among other things, the regs have been updated to recognize that Act 119 of 2006 replaced the archaic settlement process for corporation tax returns with a process of assessment akin to that used in other taxes. The amendments provide updated guidance on the filing of amended returns, and the procedure for the filing of a report of change following a change to a taxpayer’s federal return.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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