How does a construction contractor claim the exemption for building machinery and equipment?
A construction contractor may purchase building machinery and equipment and services thereto that will be transferred to a governmental agency or institution of purely public charity pursuant to a construction contract exempt from Sales and Use Tax by tendering a Pennsylvania Exemption Certificate (form REV-1220) to the vendor. The exemption certificate should be properly executed, given to the vendor within sixty days of purchase, and should contain the following statement: property or services qualify as building machinery and equipment, and will be transferred pursuant to a construction contract to [name of tax-exempt entity] and, if an institution of purely public charity, “holding Sales Tax exemption #75-[tax-exempt number].” A contractor who, in addition to his construction activities, also sells tangible personal property is required to register with the PA Department of Revenue for the collection and remittance of Sales Tax on the sale price of the tangible personal property.
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