Pallets By Themselves Not Considered Containers

In Procter & Gamble Paper Products Company v. Commonwealth, No. 768 F.R. 2009 (Pa. Commw. Oct. 13, 2011), a panel of the Commonwealth Court held that wooden pallets by themselves used in shipping were not considered "containers" and therefore cannot be considered returnable containers subject to sales tax upon their rental and use.

The taxpayer manufactured various products and assembled its "unit loads" of products on wooden pallets to facilitate delivery to its warehouse. The taxpayer rented its pallets from a company that operated a pallet and container pooling service. A pallet consisted of a wooden frame with open slates along the bottom for lifting by forklifts and parallel wooden boards with space between them attached to the top of the frame. To create its unit loads, the taxpayer used machinery to place a cardboard slip directly onto the pallet to add stability and prevent shifting during shipment. Products were then stacked on top of these two items and