PA SALES TAX.
Payments for some services and supplies are exempt from Pennsylvania sales tax.
Payments for some services, machinery and supplies are exempt from Pennsylvania sales tax. Expenditures directly related to the “mining” process are exempt from Pennsylvania sales tax. The exemption includes activities such as drilling, cementing, and fracking. Interestingly, items not directly related to the “mining” of oil and gas are not exempt. These non-exempt items include equipment such as oil tanks, machinery not directly used for well completion such as snowplows, and services such as painting. Under state rules an air filter for a drilling rig would be exempt; an air filter for a rig used to service existing wells would not be exempt.
The issues can be complex. A publication from the PA Department of Revenue that states the law and give answers to frequently asked questions is available here….