§ 351.5. Exemptions.
(a) General. First sales of petroleum products to purchasers listed in subsection (b) who are exempt from liquid fuels taxation or to purchasers for off-highway use do not generate petroleum revenue, provided that the sales are documented as set forth in subsection (d).
(b) Purchasers to whom exempt first sales may be made. The following are purchasers to whom exempt first sales may be made:
(1) United States Government.
(2) Commonwealth of Pennsylvania and its political subdivisions.
(3) Nonprofit elementary and secondary schools as defined in 61 Pa. Code § 315.2 (relating filing requirements).
(4) Volunteer rescue squads, volunteer fire companies and volunteer ambulance associations.
(5) Second Class County Port Authorities.
(c) Exempt use. First sales of petroleum products not actually used on the public highways to propel motor vehicles do not generate petroleum revenue. However, products for which the actual use is unknown are presumed to be taxable until it has been ascertained that the product will be used off-highway; see subsections (d)—(g) for exemption and adjustment procedures.
(d) Documentation. To substantiate an exempt first sale the selling oil company shall obtain a completed exemption certificate (Form REV-1385) or other documentation containing equivalent information. This form is available from Tax Information Service, Department of Revenue, Strawberry Square, Harrisburg, Pennsylvania 17127. The selling oil company shall also mark the invoice for that sale with the notation: ‘‘Exempt Sale—Not Subject to Oil Company Franchise Tax,’’ or similar language.
(e) Subsequent documentation of exemption. An oil company shall pay the applicable Oil Company Franchise Tax on petroleum products if it does not have an exemption certificate or other documentation containing equivalent information at the time of the sale. If an oil company later receives the certificate after the sale has been reported and the applicable tax has been paid, it may then adjust a subsequent month’s tax report (See Instructions, Form REV-1386) to reflect the additional documented exempt sale. This form is available from Tax Information Service, Department of Revenue, Strawberry Square, Harrisburg, Pennsylvania 17127.
(f) Liability for taxable sale or use of products previously claimed exempt. The seller is not responsible for the Oil Company Franchise Tax if a purchaser executes an exemption certificate or provides other documentation containing equivalent information at the time of the purchase even if the purchaser subsequently resells the petroleum product or uses it for a taxable purpose. In such a case, the purchaser is deemed to be an oil company and shall report and pay applicable tax with respect to that transaction, even though he has no Oil Company Franchise Tax Account Number.
(g) Fraudulent exemptions. A purchaser who intentionally provides an oil company with false or fraudulent documentation of exemption, thereby enabling that oil company to obtain a credit or exemption, or a purchaser who fraudulently receives a credit for taxes paid, will be liable to pay to the Department 200% of the credit obtained plus interest as provided in § 351.7 (relating to reporting and payment).
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