In a case of first impression, a panel of the Commonwealth Court
concluded that a professional employer organization (PEO) did not
sell help supply services within the meaning of the Sales and Use
Tax. All Staffing, Inc. v. Commonwealth, No. 325 F.R. 2006
(Pa. Cmwlth. Jan. 5, 2010). Therefore, an assessment of Sales Tax
was stricken.
The taxpayer provided human resources-related services to
clients through the mechanism of placing the clients' employees
on the payroll of the PEO. The taxpayer placed the entire payroll
of a client on the taxpayer's payroll; it left no one behind
and it never added additional employees. The client retained
direction and control over the activities of all individuals, made
all hiring and related decisions, and always hired additional
personnel from sources other than the taxpayer. The court held that
the assessment was in error because the Pennsylvania Department of
Revenue assessed the charges made by the taxpayer to the client
