Kinsley Constr., Inc. v. Commonwealth, 031606 PACCA, 106 FR 2004

Docket Nº:106 FR 2004
Party Name:Kinsley Construction, Inc., Petitioner v. Commonwealth of Pennsylvania, Respondent
Case Date:March 16, 2006
Court:Court of Appeals of Pennsylvania

Kinsley Construction, Inc., Petitioner


Commonwealth of Pennsylvania, Respondent

No. 106 FR 2004

Court of Appeals of Pennsylvania

March 16, 2006

Argued: December 12, 2005.



AND NOW, this 16th day of March, 2006, it is ordered that the above-captioned opinion filed January 9, 2006, shall be designated OPINION, rather than MEMORANDUM OPINION, and shall be reported.


JOSEPH F. McCLOSKEY, Senior Judge.

Kinsley Construction, Inc. (Petitioner) is a Pennsylvania corporation engaged in business as a commercial contractor. Kinsley does a significant amount of business involving the sale of pre-cast sound barrier panels. This appeal involves pre-cast sound barrier panels and steel I-beams used to hold the panels in place which were sold to the Commonwealth of Pennsylvania (Commonwealth). The sales by Petitioner to the Commonwealth were made pursuant to three contracts between the parties. The contracts specified the work to be done and the physical characteristics required of the sound barriers that were sold.

The sound barrier panels at issue are pre-made concrete slabs that are five inches thick. The panels vary in size from approximately four to sixteen feet in height and they are approximately eleven feet wide. The steel I-beams at issue in this case are approximately twenty-three feet high and generally have a base of either twenty inches by sixteen inches or a base of eighteen inches by eighteen inches. The I-beams are held in place by being bolted to the roadbed and can be removed by being unbolted and lifted out of position with a crane. The sound barrier panels are only held in place by friction and their own weight and can be lifted out with a crane.

Petitioner paid sales and use tax on the sound barriers in the amount of $70,429.39 and sales and use tax on the I-beams in the amount of $61,448.84. After timely appeals were filed and heard, both the Board of Appeals and the Board of Finance and Revenue denied Kinsley’s request for a refund of the tax paid on the pre-cast sound barrier panels and the I-beams used to hold them in place. The Board of Finance and Revenue’s decision concluded that the sound barriers “do not fit within any of the categories of building, machinery and equipment. Consequently, as the exemption only applies to purchases of building machinery and equipment, the panels are considered to be a real estate structure and subject to tax.” Accordingly, the Board of Finance and Revenue denied Petitioner the refund. Petitioner now appeals to this Court.1

Section 202(a) of the Tax Reform Code of 1971 (Code), Act of March 4, 1971, P.L. 6, as amended, 72 P.S. §7202(a), imposes a six-percent tax on the sale at retail of tangible personal property. The tax is collected by the vendor from the purchaser.Sale at retail is defined, in pertinent part, asany transfer, for consideration, of the ownership, custody or possession of tangible personal property,…whether such transfer be absolute or conditional and by whatsoever means the same shall have been effected. Section 201(k) of the...

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