Concentric Network Corp. v. Commonwealth, 897 A.2d 6 (Pa. Commw. Ct. 2006)

The petitioner purchased equipment required to route customer data to its intended destination and to analyze incoming data at such destination. As petitioner did not own its own wirelines, it bought services from telecommunications carriers. The petitioner demanded a refund of sales and use tax paid on the purchase of data transport services or data lines. The court held that, as the operations performed by the equipment did not fall within the definition of "manufacturing" in the Pennsylvania Tax Reform Code of 1971, the equipment purchases were taxable. In contrast, equipment purchases by cable companies and facilities-based Internet service providers are not taxed. The court reasoned that this dichotomy did not violate the Uniformity Clause of the Pennsylvania Constitution (Pa. Const. art. VIII ยง 1), because such entities were regulated to a different degree than non-facilities based Internet service providers like the petitioner.

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