Pennsylvania Code › Title 61 - REVENUE › Part I - Department of Revenue › Subpart B - General Fund Revenues › Article II - Sales and Use Tax › Chapter 32 - EXEMPTIONS › NONBUSINESS EXEMPTIONS › Section 32.21 - Charitable, volunteer firemen's and religious organizations, and nonprofit educational institutions

Current through Register Vol. 54, No. 28, July 13, 2024
(a)
Purchases for use by exempt organizations.
The exemption to
						which an exempt organization shall be entitled is limited and does not extend
						to all purchases by the exempt organization. The Department may issue an
						assessment against an exempt organization for sales and use tax owed on
						nonexempt purchases, whether or not an exemption certificate or declaration of
						sales tax exemption was tendered to the vendor. Moreover, the exemption is
						personal and is not transferable to another. Individuals making purchases of
						tangible personal property on behalf of the exempt organization are not
						entitled to claim the organization's exempt status.
(1)
Payments.
The purchases
						referred to in subsection (a) shall be billed to, and paid for by, the exempt
						organization.
(2)
Taxable
						and exempt purchases.
The exemption applies to the purchase and use of
						tangible personal property or services billed directly to the exempt
						organization, including office supplies, motor vehicles, food and beverages,
						fund raising supplies, utilities and furniture with the exception of the
						following:
(i)
Unrelated trade or
						business.
Tangible personal property used in the performance of an
						unrelated trade or business. Examples of taxable purchases are the following:
(A) The purchase of kitchen equipment by a
						hospital in operating a cafeteria for use by the general public.
(B) The purchase of tables, chairs and a
						refrigerator by a volunteer fire company in operating a bar or
						restaurant.
(C) The purchase of
						liquor or malt beer by an exempt organization which is licensed by the Liquor
						Control Board.
(ii)
Materials and supplies.
Materials, supplies and equipment used
						and installed in the construction, reconstruction, remodeling, repair and
						maintenance of real estate so as to become a permanent part thereof. However,
						materials and supplies used for routine maintenance and repair of real estate
						are exempt from tax. "Routine maintenance and repair" means minor repairs and
						regular maintenance performed to restore or preserve real estate or to prevent
						deterioration resulting from ordinary wear and tear.
(A) Examples of taxable purchases are the
						following:
(I) A church's purchase of a
						furnace which will be installed by its membership.
(II) A volunteer fire company's purchase of
						building blocks which will be used by the organization to construct a new
						firehouse.
(III) A hospital's
						purchase of five light fixtures to replace the existing fixtures in the
						administrative offices.
(IV) A
						private school's purchase of wall-to-wall carpeting which the school will have
						installed by someone other than the seller.
(B) Examples of materials and supplies
						qualifying as routine maintenance and repair are the following:
Paint, paint brushes
Light bulbs
Floor wax
Carpet shampoos
Replacement window panes
Cement to repoint bricks
Patch asphalt
Roofing tar
Expendable mops, brushes
(C) Tools and equipment for routine
						maintenance and repair are taxable.
(iii)
Equipment
. Equipment
						used but not installed in the construction, reconstruction, remodeling, repair
						and maintenance of real estate. Examples of taxable purchases are the
						following:
(A) A school's purchase or repair
						to a lawn mower or snowblower.
(B)
						A church's purchase of a hammer and saw.
(C) A hospital's purchase or repair of a
						floor polisher.
(iv)
Hotel and motel occupancies
. Charges for occupancy of a hotel,
						motel or similar establishment. Example: Church "A" is billed $100 for 2 days
						use of a conference room at Motel "X." Church "A" would be required to pay
						Hotel Occupancy Tax upon the $100.
(v)
Purchases on behalf of
						others
. Purchases by an exempt organization acting as a collection
						agent for its membership. An example of a taxable purchase is as follows:
College "B" engages the services of Photographer "Y" to
						  photograph the individual members of the senior class. Photograph "Y" bills
						  College "B" which, in turn, bills each senior. College "B" shall be required to
						  pay tax to Photographer "Y" unless College "B" itself is licensed with the
						  Department for the collection and remission of sales tax upon its billing to
						  each senior.