61 Pa. Code § 32.2 — Exemption certificates

(a) When exemption certificates are required. A person who is required by the act to collect tax upon sales or rentals of tangible personal property or taxable service shall, in every case in which he has not collected tax, have available for Departmental inspection a valid, properly executed exemption certificate which was accepted in good faith or, in lieu of the certificate, the following: (1) Evidence that the property sold or rented is not tangible personal property or a taxable service as defined by the act. (2) Documentary evidence that his customer is the United States or an instrumentality thereof, the Commonwealth, or a political subdivision or instrumentality of the Commonwealth. (3) Documentary evidence that he was required to deliver the property sold, rented or serviced to a destination outside this Commonwealth for use outside this Commonwealth, and that he did, in fact, so deliver the property. (b) Relief from tax liability. A seller or lessor who accepts in good faith an exemption certificate which discloses a proper basis for exemption upon its face is relieved of liability for collection or payment of tax upon transactions covered by the certificate. (1) Disclosure of proper exemption basis. For a certificate to disclose a proper basis for exemption, it shall meet the following requirements: (i) The certificate must be an officially promulgated exemption certificate form, or a substantial and proper reproduction thereof. (ii) The certificate shall be dated and executed in accordance with the instructions published for use therewith, and must be complete and regular in every respect. (iii) The certificate shall state a proper exemption reason. (2) Acceptance in good faith. An exemption certificate to be accepted in good faith shall also meet the following requirements: (i) The certificate shall contain no statement or entry which the seller or lessor knows, or has reason to know, is false or misleading. A certificate accepted by a seller or lessor, in the ordinary course of his business, which on its face discloses a valid basis of exemption consistent with the activity of the purchaser and character of the property or service being purchased, shall be presumed to be taken in good faith. (ii) A seller or lessor is presumed to be familiar with the law and regulations regarding the property in which he deals. When a seller or lessor has accepted a blanket exemption certificate, each transaction between the parties is considered a separate claim for exemption thereunder, and the seller or lessor shall, therefore, exercise good faith in each transaction, in order to avoid liability for the tax. (iii) The certificate shall be in the physical possession of the seller or lessor, and available for Departmental inspection, on or before the 60th day following the date of the sale or lease to which the certificate relates. When a certificate is not made available for Departmental inspection on or before that time, the seller or lessor shall prove to the satisfaction of the Department, by means of evidence other than an exemption certificate, that the sale or lease in question is, in fact, exempt. In the absence of proof the transaction will be deemed taxable and assessed as such. (c) Penalties for misuse of exemption certificates. False or fraudulent statements made upon an exemption certificate by a person, whether a seller, lessor, buyer, lessee or a representative or agent of the persons, is a misdemeanor, upon each separate conviction of which the offender may be sentenced to imprisonment not exceeding 1 year, a fine not exceeding $1,000, or both, together with costs of prosecution. In addition, severe civil penalties are provided by law for misuse of exemption certificates by any person. Reference should be made to section 268(b) of the TRC (72 P. S. § 7268(b)). (d) Forms of certificates. The following exemption certificate forms and instructions have been promulgated by the Department: (1) Forms for general use. The Department form entitled Sales and Use Tax Exemption Certificate may be used for: (i) Unit exemption. This exemption shall be used for all single sales or leases of tangible personal property. (ii) Blanket exemption. This exemption shall be used for claims of exemption upon sales and leases of tangible personal property in a series of transactions between parties. (2) Forms for purchase of motor vehicles. The following form is designed for purchase of motor vehicles, and is not valid for purposes other than that for which it is designed: Form REV-191 Vehicles Sales and Use Tax Return. This form shall be used for claims of exemption upon the purchase or lease of a motor vehicle, trailer, semitrailer or tractor which is required by law to be registered with the Bureau of Motor Vehicles, and shall accompany the application for title. Authority The provisions of this § 32.2 issued under section 6 of The Fiscal Code (72 P. S. § 6). Source The provisions of this § 32.2 amended November 5, 1982, effective November 6, 1982, 12 Pa.B. 3905; corrected December 19, 2003, effective January 4, 2003, 33 Pa.B. 6222. Immediately preceding text appears at serial pages (293450), (267691) and (215825). Notes of Decisions The Sheraton Hotel was required to obtain documented proof of an occupant’s entitlement to the hotel occupancy tax exemption in order to obtain the exemption. Egner v. Commonwealth , 557 A.2d 1157 (Pa. Cmwlth. 1989). Cross References This section cited in 61 Pa. Code § 32.22 (relating to sales to the United States Government or within areas subject to the jurisdiction of the Federal Government); 61 Pa. Code § 32.25 (relating to steam, gas, electricity, fuel oil and kerosene); 61 Pa. Code § 33.3 (relating to cancellations, returns, allowances and exchanges); and 61 Pa. 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