The State of Pennsylvania has issued a Letter Ruling clarifying that a contractor’s purchase of building machinery and equipment used in conjunction with a Federal Government contract are exempt from tax. The Letter Ruling defined that the term building machinery and equipment applies to the purchase of five types of equipment when purchased for one of ten different building systems. The five types of equipment are generation equipment, storage equipment, conditioning equipment, distribution equipment, and termination equipment. The Letter Ruling also stated that 72 P.S. Section 7201 further defines the term to include other various items. The construction contractor must provide its vendor with an exemption certificate (Form REV-1220) within 60 days of the purchase. If the contractor’s purchase includes both exempt and non-exempt items, it is the responsibility of the vendor and the contractor to maintain sufficient records to allow the Department of Revenue to make a proper determination. (Legal Letter Ruling SUT-05-002, Pennsylvania Department of Revenue, January 28, 2005)