PEO Did Not Sell Help Supply Services

The Commonwealth Court en banc affirmed a panel decision that a professional employer organization (PEO) did not provide help supply services taxable for Sales and Use Tax purposes, but on different grounds. All Staffing, Inc. v. Commonwealth, No. 325 F.R. 2006 (Pa. Commw. Dec. 2, 2010), aff'g All Staffing Inc. v. Commonwealth, 987 A.2d 849 (Pa. Commw. 2010). The PEO provided human resources -related services to clients by placing the client's employees on the PEO's payroll, enabling the PEO to deliver services at a competitive cost due to the savings realized with a single payroll data system and specialized knowledge applied to a large number of clients. The PEO performed all aspects of human resource administration. The Department assessed the taxpayer for the fee it charged to its clients, but did not impose tax on the reimbursement from the client to the taxpayer for the employee payroll and related benefits costs. The court held that the PEO's activities did not