OUR THOUGHTS ON:

Pennsylvania Contractors Installing Financial Institution Security Equipment

State and Local Tax

By Matthew Dodge

In the latest Tax Update from the Pennsylvania Department of Revenue, the Department announced that its auditors will enforce compliance among contractors installing financial institution security equipment. Contractors under audit who are not in compliance with the Department’s regulation on the proper method to bill purchasers can expect an assessment.

The sale of installed financial institution security equipment is not taxable to the purchaser as provided by Pennsylvania regulation. It is the contractor’s responsibility to pay tax on the equipment and any associated materials used in the installation. The Department has stated that contractors incorrectly charging sales tax on the sale and installation of financial institution security equipment will not be relieved of their tax liability on the cost of materials and equipment.

The regulation lists many examples of financial institution security equipment. Some of the more common examples include: cash terminals, access control systems, alarm systems, surveillance and security systems and vaults. If your business sells and installs security equipment to financial institutions, care should be taken to review your invoicing records to assure compliance with Pennsylvania’s regulation and avoid future assessments.

© 2011 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2018 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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