In Win for Contractors, High Court Upholds Tax Exemptions for Traffic Signal Components

By: Aleeza Furman

Roy Cohen is quoted in The Legal Intelligencer about the Pennsylvania Supreme Court’s affirmation that poles, mast arms and pedestal bases are “traffic signals” and exempt under the Tax Reform Code. Cohen Seglias represented Kuharchik Construction in the matter, which originated from the company’s 2015 petition to the Board of Finance and Revenue. Roy notes that “…it’s an important decision for people in the industry because it brings clarity to the sales tax and use tax … and it will make a more level playing field for public bidding.”

Electrical contractors working for the state no longer have to pay state use tax on certain components of traffic lights after the Pennsylvania Supreme Court on Thursday upheld a lower court decision that poles, mast arms and pedestal bases constitute “traffic signals” and are therefore exempt under the Tax Reform Code.

According to one of the lawyers on the winning side in the case, the decision reinforces a trend of the Commonwealth Court allowing for broader interpretation of tax exemptions for construction materials and will provide better guidance to companies working for the state on whether their materials are subject to sales tax.

“All in all I think it’s an important decision for people in the industry because it brings clarity to the sales tax and use tax … and it will make a more level playing field for public bidding,” said Roy Cohen of Cohen Seglias Pallas Greenhall & Furman. Cohen and co-counsel Lisa Wampler and Sydney Pierce represented Kuharchik Construction Inc., which initially raised the issue in a 2015 petition to the Board of Finance and Revenue to review the use of taxes imposed against it.