BUSINESS EXPERTise: Finance/Tax

featuring Thomas A. Bowen
Pennsylvania Chamber of Business & Industry: Catalyst

Q: What is the impact of the PA Supreme Court’s decision to require charities to meet the “constitutional” tax exemption test before considering the statutory test?

A: The Pennsylvania Supreme Court recently held that to qualify for property and sales tax exemptions, a charity must first meet the constitutional standard it established in 1985 (“HUP test”) before and in addition to the statutory standard enacted in 1997 (“Act 55 test”). Mesivtah Eitz Chaim of Bobov v. Pike Co Bd of Asmt Appeals, 44 A.3d 3 (Pa. 2012), concerned real estate taxation of a religious summer camp, though it applies to sales and use taxation and every entity seeking status as an Institution of Purely Public Charity (“PPC”) such as non-profit health care, education, senior living, social, recreational and arts organizations.

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