Barley Snyder Secures Landmark Victory in Realty Transfer Tax Case: Commonwealth Court Rules Property Division Under Entity Transactions Law Not Subject to Tax

Lancaster, Pa. – Barley Snyder has successfully represented Kunj Harrisburg LLC and its affiliated entities in a significant realty transfer tax case before the Pennsylvania Commonwealth Court (Kunj Harrisburg LLC, et al. v. Com. of PA.). In a ruling issued January 10, 2025, the Court reversed a prior decision by the Pennsylvania Board of Finance and Revenue, which had upheld realty transfer tax assessments on property deeds executed in 2018.
 
The case centered on five deeds that memorialized the division of real property under the Pennsylvania Entity Transactions Law (“ETL”), which streamlines business reorganizations and divisions. The Department of Revenue had imposed realty transfer taxes totaling more than $90,000, claiming the deeds represented taxable transfers of property. Barley Snyder argued that the deeds were purely confirmatory and did not constitute transfers because the ETL division did not cause a change in the beneficial ownership.
 
Ultimately, the Commonwealth Court agreed, ruling that the deeds did not meet the definition of a taxable “document” under the Realty Transfer Tax Act. Specifically, the Court determined that the deeds did not result in a transfer of title or beneficial interest in the property, but rather, reflected the division of interests within the same ownership structure, without triggering tax liability.
 
“We are thrilled with the Court’s decision,” said Matthew M. Hennesy, Barley Snyder partner and chair of the firm’s Litigation Practice Group, who represented Kunj Harrisburg LLC and its affiliates in this case. “This is a just outcome for our client, and the ruling provides significant clarity for property owners and businesses that will allow them to enjoy the full benefit of the procedures included in the ETL.”

The case underscores the importance of understanding Pennsylvania’s realty transfer tax laws, particularly in the context of business restructurings and divisions under the ETL.
“This ruling reflects our firm’s commitment to excellence and dedication to our clients,” said managing partner Jennifer Craighead Carey. “I congratulate partners Matt Hennesy, Alex Puskar, Derek Dissinger, and the entire Barley Snyder team for their exceptional work in securing this positive outcome for our client and achieving this impactful decision.”

About Barley Snyder
Barley Snyder is a law firm based in Pennsylvania with more than 130 attorneys practicing from offices located in Lancaster, York, Reading, Harrisburg, Lebanon, Malvern, Hanover, Gettysburg and Schuylkill Haven, Pa., and Hunt Valley and Columbia, Md. The firm serves businesses, individuals and organizations in all major areas of civil law including business, employment, immigration, employee benefits, finance & creditors’ rights, intellectual property, litigation, estate planning and administration, real estate, tax, construction, environment and energy, health care, education, municipal authority, hospitality, senior living, cybersecurity and food and agribusiness. www.barley.com | @BarleySnyder

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