City of Philadelphia v. Commonwealth

“The purpose of the public utility exclusion is obviously to save the public utilities, and thus the public, the cost of the use tax which would undoubtedly be passed on to the public utility where facilities were constructed for it.” Commonwealth v. Public Constructors, 432 Pa. 589, 248 A.2d 29, 31 (1968). If a private project provides for the public in lieu of the government doing so, tax consideration is logical and appropriate.

This logic underlies the decision of this Court in Public Constructors, which held if one is to avoid 100% of the tax, 100% of the project must benefit the public —…