Sales Tax State Activity Update - November 2008

Pennsylvania Manufacturing Exemption Blowing in the Wind

Under the Tax reform code of 1971, the Office of Chief Counsel from the Pennsylvania Department of Revenue has determined that the generation of electricity through the use of wind turbines, generators and transformers qualifies as manufacturing.

The production of electricity through the use of wind turbines was initially requested for advice on whether it would qualify as manufacturing. Additionally, advice was also requested regarding the treatment of a power producer’s purchase of machinery, equipment, and supplies to be used in an integrated plant.

As a result of the conclusion, the Chief Counsel, for the purpose of Pennsylvania Sales and Use Tax, determined that the production of electricity through the use of wind turbines qualifies as manufacturing. Furthermore, machinery, equipment, parts, and foundation predominantly and directly used in the production or generation of electricity is also exempt from Pennsylvania Sales and Use tax.

The full text of the Chief Counsel’s advice may be accessed at the Pennsylvania Department of Revenue Web site.
(Pennsylvania Sales and Use Tax Ruling SUT-00-190, December 12, 2000 (Reissued October 7, 2008)

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