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PA Businesses w/Refrigeration Cases – Planning Opportunity

Posted by salestax on February 11, 2009

PA recently put forth a Legal Letter Ruling regarding the sale, service and installation of Commercial Regrigeration Equipment. 

Synopsis: 

If you’re a purchaser of this type of equipment for use in your business, if it is installed and integrated into a central cooling system, then you can buy it without sales tax.  However, if you’re buying a unit that has a self-contained cooler and doesn’t need to be hooked up to anything externally to keep it cool, then it’s taxable.

Installers/Repair persons:  If working on the self-contained coolers, then you can charge sales tax on your service to install and repair.  However, if you break out the labor costs, then only the parts are taxable.  Alternatively, if you’re working on the kind that need external hook-ups to keep it cool, then you must pay tax on all of your parts and not charge the customer any extra sales tax on their invoice.  BUT, for cash flow purposes, buy all of your repair parts exempt from sales tax for resale and then remit tax on the cost of the items used for the repair/installation on the latter.

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