Pennsylvania Tax Refund: A Contractor’s Win and a Partial Loss

A Pennsylvania contractor sought a refund for sales and use tax that was paid by mistake on several purchases. The original appeal was turned down because the contractor had not shown enough proof of what was bought or how it was used. After gathering more documents, the contractor appealed again and the Board of Finance and Revenue (BFR) reviewed the case anew. The BFR agreed that some items, like building machinery and equipment used directly in construction projects, should qualify for a refund. These purchases fit the definition of “construction services” and therefore were eligible to get back the money paid in tax.However, not all of the contractor’s expenses were considered eligible. Services that involved computer work and even the purchase of water did not meet the criteria for a construction‑related refund. The BFR ruled that those costs were outside the scope of what can be reclaimed under the state’s tax rules. In the end, the contractor received a partial refund. The decision shows how important it is to keep detailed records and understand which expenses can actually be claimed back under state tax law.