The Pennsylvania Department of Revenue recently issued a letter ruling stating that a college qualifying as a purely public charity is not liable for sales and use tax on a contract for the purchase and installation of an artificial playing surface or sod. A qualifying public charity is exempt from tax on its purchases that qualify as building machinery and equipment. The letter ruling stated that the organization would be required to pay sales and use tax on its purchases of items other than building machinery and equipment if it performs construction contract activities itself. However, since the college is utilizing a construction contractor to perform the installation of the artificial playing surface, sales and use tax is not due on the contract price as it is considered a construction contract. The college’s contractor is responsible for paying sales and use tax on the materials used in performing the construction contract and may include tax paid in the cost of materials, but not as a separate line item at invoicing. (Pennsylvania Department of Revenue, Legal Letter Ruling No. SUT-05-005, March 28, 2005)