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Pennsylvania exempts defibrillators and related accessories from sales and use tax on the grounds that they alleviate physical incapacities. Therapeutic devices are “devices designed for the use of a particular individual to correct or alleviate a physical incapacity, and a medical supply is tangible personal property used in the alleviation or treatment of injury, illness, disease or incapacity and is consumed during its use.” Since an AED (automatic external defibrillators) is used to correct abnormalities in the heart's electrical system, an AED and its hard paddles are therapeutic devices and are exempt from tax. The disposable electrodes are also exempt because they are consumed during use. Additionally, adaptors and cables are exempt if designed exclusively for use on the exempt AED, along with batteries being exempt if purchased from a medical supply house. (Legal Letter Ruling No. SUT-05-011, Pennsylvania Department of Revenue, May 10, 2005)

(02/13/2007)

The Pennsylvania sales and use tax is applied primarily to those activities enumerated in Article II of the Tax Reform Code. The web-based service of providing exemption certificates for customer completion and other sales tax compliance services are not specifically listed as taxable. The material exchanged between the taxpayer and the client in such a web-based service is not considered tangible personal property. (LR SUT-05-033)

(10/17/2006)

Pennsylvania restaurants that provide free meals to employees or patrons are not subject to sales and use tax. In addition, no use tax is due on restaurant purchases as long as the food is obtained from wholesalers, distributors, grocery stores or other non-eating organizations. However, the restaurant is liable for use tax on soft drinks provided free to employees or patrons. (Legal Letter Ruling No. SUT-05-004, Pennsylvania Department of Revenue)

(08/18/2006)

A letter ruling clarified that a taxpayer's purchases of natural gas qualify for the manufacturing exclusion and are not subject to Pennsylvania sales and use tax when directly used in the production of electricity. Other items such as machinery, equipment, parts and supplies, are also considered non-taxable when used in the production of electricity. (Pennsylvania Department of Revenue, Legal Letter Ruling No. SUT-05-003, February 23, 2005)

(04/12/2006)

The Pennsylvania Department of Revenue recently issued Legal Letter Ruling No. SUT-05-004, which stated that free meals provided by a restaurant to its employees or patrons were not subject to sales and use tax. The Department of Revenue concluded that the free meals were not subject to tax on the statutory language that a basis for use tax is the provider’s acquisition of the property or services provided. In the case of the restaurant’s provision of free meals to its employees, the restaurant’s tax basis is the restaurant’s acquisition of the food that was incorporated into the free meals. The letter ruling states that assuming the restaurant purchases the food incorporated into the meals from food wholesalers, distributors, grocery stores or other non-eating establishments, the restaurant’s purchase of the food is nontaxable; therefore, there is no tax basis. However, use tax is due on any soft drinks provided free of charge to the restaurant’s employees or patrons. (Pennsylvania Department of Revenue, Legal Letter Ruling No. SUT-05-004, March 28, 2005)

(04/22/2005)

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