Aaron Giles _ Pennsylvania Sales Tax Exemptions

The Pennsylvania sales tax exemption for manufacturing offers both manufacturers and processors an exemption on purchases of tangible personal property, including machinery and equipment, predominantly used directly in manufacturing or processing operations per PA Code 32.32. This Pennsylvania sales tax exemption for manufacturing also applies to repair parts for machinery and equipment, as well as supplies that are directly used or consumed in the manufacturing or processing operation.

PA Code 32.1 defines manufacturing as, “an integrated series of operations which places personal property in a form, composition or character different from that in which it was acquired.” Some examples of activities that qualify as manufacturing are compounding, fabricating, and processing. PA Code 32.1 also defines the manufacturing operation as, “the series of production activities, beginning with the first production operation and ending with the packaging of the product for the ultimate consumer.” Since this definition limits the scope of the manufacturing operation to the first stage of production through the packaging of the final product for sale, activities such as collecting, weighing or storing raw materials and loading or delivery of the packaged goods to the customer do not qualify for the Pennsylvania sales tax exemption for manufacturing.

Read More