Pennsylvania Issues Documentation Requirements on Fuel Oil, Kerosene, Natural Gas and Propane Sales

The Pennsylvania Department of Revenue recently issued an information notice on the sale of fuel oil, kerosene, natural gas and propane.  Motor fuel is not subject to sales or use tax if it is subject to Pennsylvania liquid fuels, fuels or alternative fuels taxes.  If the fuel is sold for off-road use, the fuel is not subject to the liquid fuels, fuels or alternative fuels taxes, but is subject to Pennsylvania sales tax unless an exemption applies.

The Department of Revenue generally requires that the exemption be supported by a valid exemption certificate.  The Department’s new published position will not require an exemption certificate for transactions where:

  • The fuel product is delivered to a single residence and is billed to the individual at the address of the residence.
  • The sale at retail is of less than 11 gallons of kerosene, unless purchased through a commercial account.  The vendor shall also have no reason to believe the purchase is not for residential use.
  • The sale of propane gas is in 20 pound tanks, unless purchased through a commercial account.  Again, the vendor shall also have no reason to believe the purchase is not for residential use.

Taxpayers are cautioned that the Department retains the authority to require sellers, under audit, to obtain statements from customers if taxable use is in question.  Sellers should continue to document exempt sales through an exemption certificate or other documentation if the sales do not meet the conditions stated by the Department.

If you are interested in the Department of Revenue's information notice, or have other questions about Energy and Natural Resources, in general, contact one of our Industry Group professionals.

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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

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