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Bill would grant new charities two‑year conditional sales‑tax exemption, department says
Summary
House Bill 2305 would allow newly formed charities to obtain a conditional two‑year sales‑and‑use tax exemption while they work to meet Pennsylvania's five‑pronged HUP test; the Department of Revenue highlighted safeguards including a possible clawback and audit tools.
The committee heard testimony on House Bill 2305, which would create a conditional sales‑and‑use tax exemption for newly formed charities for their first two years of operation to help address barriers created by Pennsylvania’s five‑pronged HUP test for institutions of purely public charity.
Ryan Froman, chair of the Board of Appeals, told the committee that federal 501(c)(3) status does not automatically satisfy Pennsylvania’s constitutional and statutory standards for a sales‑tax…
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