61 Pa. Code § 32.25 - Steam, gas, electricity, fuel oil and kerosene

(a) Definitions. The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise:

Commercial use-The use or consumption within that portion of a structure or other area which is for use other than a residential use.

Residential use-The use or consumption within that portion of a structure used as a home, dwelling, private residence, condominium, housing cooperative, mobile home, camper, summer home, motor home or similar place of abode. The term includes the use or consumption by a condominium association or housing cooperative association which acts on behalf of residents who are using the units as their personal residence.

(b) Scope.

(1) The purchase or use of steam, natural and manufactured gas and electricity, through a metered device; bottled gas; fuel oil; or kerosene by a residential purchaser solely for the purchaser's own residential use is exempt from tax.

(2) The purchase or use of steam, natural and manufactured gas and electricity, through a metered device; bottled gas; fuel oil; or kerosene other than by a residential purchaser for the purchaser's own residential use, is presumed to be made for a commercial use and is subject to tax, unless the purchaser is entitled to claim an exemption under subsection (d).

(3) The purchase or use of steam, natural and manufactured gas and electricity, through a metered device; bottled gas; fuel oil; or kerosene; by a residential purchaser for both the purchaser's own residential use and a commercial use is presumed to be made for commercial use and is subject to tax. If the purchaser tenders a "Sales and Use Tax Exemption Certificate" (Form REV-1220) to the vendor indicating thereon, at "other" on the reverse side of the form, the annualized percentage of the total gallons, kilowatt hours, metric feet, and the like, used by the purchaser solely for the purchaser's own residential use, the seller may accept the certificate in good faith and charge tax only upon the remaining portion of the purchase. Residential purchasers who utilize this procedure are required to tender supplemental exemption certificates to the seller if the annualized percentage of exempt use changes following the filing of the original exemption certificate. The residential purchaser shall retain the information supporting the estimate of taxable and nontaxable use.

(c) Equipment and supplies. The purchase, use, lease, repair or maintenance of equipment and supplies, such as propane tanks, wire, meters, panel boards, switch gear and similar property by either a residential or commercial purchaser for use in connection with the consumption of steam, gas, electricity, fuel oil or kerosene is subject to tax, unless the purchaser is entitled to claim an exemption under subsection (d).

(d) Exemptions.

(1) Resale. The purchase of bottled gas, fuel oil or kerosene by persons who will resell the property to others in the ordinary course of the purchaser's business is exempt from tax. Likewise, the purchase of steam, natural and manufactured gas or electricity by persons who will resell the steam, natural and manufactured gas or electricity through a metered device in the ordinary course of the purchaser's business is exempt from tax. The purchase of steam, natural or manufactured gas or electricity which is resold by a method other than through a metered device is not a purchase for resale and the purchaser is not permitted to claim the resale exemption. The purchase or lease of equipment and supplies by persons who will resell or lease tangible personal property in the ordinary course of the purchaser's business to others is exempt from tax.

(2) Other exemptions.

(i) The purchase of steam, natural and manufactured gas and electricity, through a metered device; bottled gas; fuel oil; or kerosene; by the United States Government, or the Commonwealth, its instrumentalities and political subdivisions is exempt from tax. Other purchasers may be entitled to claim a direct use exemption. Reference should be made to the applicable sections of this title for a more detailed explanation of the exemption as follows:

(A) Exempt organizations-§ 32.21 (relating to charitable, volunteer firemen's, religious organizations and nonprofit educational institutions).

(B) Dairying-§ 32.31 (relating to dairying).

(C) Manufacturing, processing-§ 32.32 (relating to manufacturing; and processing).

(D) Farming-§ 32.33 (relating to farming).

(E) Public utilities-§ 32.34 (relating to public utilities).

(F) Mining-§ 32.35 (relating to mining).

(G) Printing-§ 32.36 (relating to printing and related businesses).

(H) Photographers, photofinishers-§ 32.37 (relating to photographers and photofinishers).

(ii) The exempt purchaser or lessee shall complete and submit to the seller or lessor an exemption certificate, completed under § 32.2 (relating to exemption certificates), as to that portion of the total purchase qualifying for exemption.

(3) Exemptions provided by statutes other than the sales tax law.

(i) The purchase or use of steam, natural and manufactured gas and electricity through a metered device; bottled gas; fuel oil; or kerosene and equipment and supplies by the following organizations is exempt from tax:

(A) Municipal authorities created under the Municipal Authorities Act of 1945 (53 P. S. §§ 301-322).

(B) Electrical cooperative corporations created under 15 Pa.C.S. §§ 7301-7359 (relating to electrical cooperative law of 1990).

(C) Agricultural cooperatives under the jurisdiction of the Cooperative Agricultural Association Corporate Net Income Tax Act (72 P. S. §§ 3420-21-3420-30).

(ii) An organization claiming an exemption under this paragraph shall insert the section of the applicable statute under which it is claiming the exemption on an exemption certificate, which the organization shall submit to the supplier.

(4) Examples.

(i) The purchase or use of steam, natural and manufactured gas, electricity, bottled gas, fuel oil or kerosene, by a contractor during the construction of a residential home is subject to tax.

(ii) The purchase or use of steam, natural and manufactured gas, electricity, bottled gas, fuel oil or kerosene, by one person for use by another person is subject to tax. This includes the purchase by a corporation for use by a corporate officer, employe or stockholder.

(iii) The purchase or use of steam, natural and manufactured gas, electricity, bottled gas, fuel oil or kerosene, by an apartment complex for use by the tenants is subject to tax, unless the apartment complex resells the property or service through a metering device to the individual tenants.

(iv) The purchase or use of steam, natural and manufactured gas, electricity, bottled gas, fuel oil or kerosene by a condominium association or cooperative housing association for use by the residential owners or tenants is exempt from tax. The exemption also applies to the residential owners or tenants share of "common area expenses" for the entire complex. A condominium association or a cooperative housing association is required to pay tax on that portion of the purchase of steam, natural and manufactured gas, electricity, bottled gas, fuel oil or kerosene purchased for use by commercial businesses and residential owners who lease their premises to others as well as "common area expenses" for the commercial businesses and leased premises.

(v) The purchase and use of electricity and natural gas by an accountant who maintains an office in the accountant's residence would require an apportionment of the use of the utility service between the residence and the office. To apportion the usage, an analysis of the exempt usage shall be made. Any reasonable method of apportionment may be used. For example, the accountant may estimate the exempt use of gas to heat the residence by comparing the square footage of the residence with the square footage of the office. The accountant may estimate the exempt use of electricity by comparing the consumption of electricity in the residence with the total consumption of electricity in the office. The exemption for gas and electricity, expressed as a percentage, would be claimed by the accountant through the use of an exemption certificate tendered to the vendor.

(vi) The purchase and use of steam, natural and manufactured gas, electricity, bottled gas, fuel oil or kerosene by a person engaged in the business of manufacturing, processing, farming, dairying, printing, mining, rendering a public utility service, photography or photofinishing, may require apportionment between taxable and exempt use if a portion of the purchase is used directly in one or more of these business operations. To apportion the usage, an analysis of exempt usage shall be made. Any reasonable method of apportionment may be used. For example, the purchaser may estimate the exempt use of electricity through each meter by analyzing the electrical consumption of each item of equipment used directly by the purchaser in its manufacturing operation. This analysis should be annualized to reflect consumption during the entire calendar year. The resulting percentage of exempt use may be claimed by the purchaser upon the total monthly purchase of electricity through that meter. The exemption upon the purchase of electricity, expressed as a percentage, would be claimed through the use of an exemption certificate tendered to the vendor.

Notes

61 Pa. Code § 32.25

The provisions of this § 32.25 amended March 19, 1993, effective 3/20/1993, 23 Pa.B. 1322; amended September 24, 1993, effective 9/25/1993, 23 Pa.B. 4505.