The expanding oil and gas industry has given rise to multiple questions regarding the treatment of corporation tax, pass-through business tax, sales tax, employer withholding tax, etc. Recognizing this, the Pennsylvania Department of Revenue (Department) has updated its website to address some frequently asked questions regarding oil and gas taxation. To access these questions, simply go to the Department's Customer Support webpage, scroll down to the Featured Support Category for Oil and Gas Taxation Issues and select the applicable tax. The Department currently has listed several questions that include, but are not limited to, the following:
- How does Pennsylvania treat intangible drilling costs incurred by an individual taxpayer through an investment in a PA oil and gas partnership?
- Can I deduct percentage depletion from royalties I receive?
- Does natural gas drilling equipment qualify for a sales tax exclusion?
- How does a partnership or PA S-Corporation deduct depletion?
- Can I deduct any expenses from my gas lease?
Please be cautioned that the Department's guidance in responding to each of these questions may not necessarily be binding upon audit or supported by current tax law.
Should you have any questions regarding oil and gas taxation issues, contact the State and Local Tax professionals at Schneider Downs.
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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.