Pennsylvania Tax Refund: A Contractor’s Win and a Partial Loss

A local contractor faced a setback when an initial appeal for a sales‑and‑use tax refund was denied due to insufficient documentation. After amassing more detailed records, the contractor re‑filed and the Board of Finance and Revenue (BFR) revisited the case.

What Qualifies for a Refund?

The BFR determined that construction‑related purchases—specifically building machinery and equipment used directly on construction projects—meet the definition of “construction services.” These items are eligible for a tax refund.

What Does Not Qualify?

Expenses that fall outside the construction scope, such as:

• Computer services
• Water purchases

were ruled ineligible for a refund under the state’s tax regulations.

Outcome

The contractor received a partial refund. This case underscores the importance of meticulous record‑keeping and a clear understanding of which expenditures can be reclaimed under Pennsylvania tax law.