Sales Tax Articles
Sales Tax State Activity Update - March 2008
Pennsylvania Isn't "Fabricating" This Special Resale Exemption
In-state contractors that perform some fabrication of their projects that are ultimately slated for installation in another state should be aware of a special resale exemption for materials used outside of the state. The Office of Chief Counsel reissued the opinion on this topic on January 17, 2008.
Essentially, if an installer purchases materials for custom projects and conducts some fabrication on the property within PA, before completing the project in another state, then the contractor can purchase the property with a "special resale" exemption from the PA sales tax.
However, the contractor should be aware it is more than likely that the state where final installation of the real property project is completed will be looking for their share of the sales tax or accrued use tax on the price or value of the property.
While the opinion does not provide any particular guidance regarding the resale exemption, it is presumed that the Contractor would use the Pennsylvania Exemption Certificate Form Rev 1220.
The full text may be accessed on the Pennsylvania Department of Revenue Website.
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