• For Immediate Release
• December 19, 2011

Pennsylvania – CHEP Pallets Exempt as Wrapping Supplies

Commonwealth Court ruling clarifies status of non-returnable pallets.

On October 13, 2011, the Commonwealth Court in Pennsylvania ruled to reverse an assessment against Proctor & Gamble. During audit, the state had rejected the company’s claim that CHEP pallets were exempt as “wrapping supplies”, asserting instead that the pallets are taxable as “returnable containers”. The pallets are rented by P&G from CHEP, USA but after use they are returned to CHEP for reconditioning.

The Commonwealth ruling established that the CHEP pallets are exempt as wrapping and packaging. They agreed with P&G that the pallets were not returned after use since they went to CHEP, USA. Companies that have paid Pennsylvania sales and use tax on pallets are eligible to file for refunds effective immediately.

If you would like additional information on this topic or have any questions, please contact the taxdesk@ustaxrp.com