Exemption from Pennsylvania sales tax

PPL Electric Utilities charges Pennsylvania sales tax on the electricity that businesses use unless they claim a portion as tax-exempt.
To exempt electricity use from sales tax, you must send an exemption certificate to PPL Electric Utilities, which we are required to keep on file for the Pennsylvania Department of Revenue. Tax-exemption certificates must be updated every five years.

What electricity use is tax-exempt?
Section 32.25 of the Pennsylvania Tax Code states, “The purchase of … electricity by a person engaged in the business of manufacturing, processing, farming, dairying, printing, mining, rendering a public utility service, photography or photofinishing, may require apportionment between taxable and exempt use if a portion of the purchase is used directly in one or more of these business operations.”
Electricity use for offices, shipping and receiving areas, storage areas and warehouses, security systems, and lighting for access roads, entrances, exits and parking lots is subject to sales tax.
The Revenue Department holds that no manufacturer is 100-percent exempt from sales tax on electricity use because some of their electricity use is not directly related to manufacturing. Unless you have a separate account for all of your administrative needs, qualify as a non-profit corporation or have a KOZ exemption, the Revenue Department will not accept a claim for 100 percent tax exemption.

How to qualify for a tax exemption
To exempt a portion of your electricity use from sales tax you must fill out a Pennsylvania Exemption Certificate and send it to PPL Electric Utilities, Industrial & Commercial Services, 827 Hausman Rd., Allentown, PA 18104.
In addition to completing all of the information on the certificate, you must include your PPL Bill Account number, a brief explanation of the nature of your business, the percentage of electricity use you are claiming as tax-exempt and a brief description of how you determined that percentage. The name on the certificate must match the name on your PPL Electric Utilities account.

Non-profit exemption
A qualifying non-profit organization pays no sales tax on the electricity use. PPL Electric Utilities must have a copy of the Pennsylvania Sales Tax Exemption certificate and the Pennsylvania Holding Exemption certificate on file if you are claiming status as a non-profit organization.

KOZ exemption
If you are claiming 100 percent exemption as a Keystone Opportunity Zone customer, PPL Electric Utilities must have a copy of the KOZ certificate you received from the Revenue Department.