PA Tax Tips - Sales & Use Tax Exclusions for Manufacturing, Fabricating, Compounding, Processing and “Other Operations”

more+
less-

In the January 2011 edition of the PA Tax Law News newsletter, we offered a broad overview of the production-based exemptions under Pennsylvania’s Sales & Use Tax, Capital Stock and Franchise Taxes, local Business Privilege Taxes and Real Property Tax. This article focuses on a more detailed discussion of the activities qualifying under the Pennsylvania Sales & Use Tax exclusions for Manufacturing, Fabricating, Compounding, Processing and “Other Operations.”

The Tax Reform Code provides a specific listing of activities qualifying as “processing” and a general definition for “manufacture.”

Specifically Defined “Processing”

The Legislature has defined “processing” to include a number of somewhat narrowly proscribed activities, many of which were added after tax auditors challenged their qualification under “manufacturing” or other more broadly-defined exclusions. These activities include the Cooking, Baking or Freezing of Fruits, Vegetables, Mushrooms, Fish, Seafood, Meats, Poultry or Bakery Products and packaging for wholesale distribution; the Electroplating, Galvanizing, Enameling, Anodizing, Coloring, Finishing, Impregnating or Heat Treating of Metals or Plastics; the Production, Processing and Bottling of Non-alcoholic beverages for wholesale distribution; and twenty additional categories of activities which are listed in the January article.

Specifically Deemed “Manufacture”

The statute provides that “manufacture” shall include, but not be limited to, specific activities, including publishing, printing, mining, quarrying, research and several other activities also listed in the January article.

Specifically Deemed Not to be “Manufacture”

The statute also specifically indicates that “manufacture” shall not include: constructing, altering, servicing, repairing or improving real estate; repairing, servicing or installing tangible personal property; producing a commercial motion picture; and the cooking, freezing or baking of fruits, vegetables, mushrooms, fish, seafood, meats, poultry or bakery products.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

Tax

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© McNees Wallace & Nurick LLC | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.
×
Loading...
×