Pennsylvania Code & Bulletin

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The Pennsylvania Code website reflects the Pennsylvania Code changes effective through 54 Pa.B. 1806 (March 30, 2024).

61 Pa. Code § 32.3. Sales for resale.

§ 32.3. Sales for resale.

 (a)  Sales for resale exempt. A transfer for a consideration of the ownership, custody or possession of tangible personal property or the rendition of taxable services for the purpose of resale is exempt from tax. Transfer for the purpose of resale shall include the following:

   (1)  The transfer of tangible personal property or rendition of taxable services on, or purchase of, repair parts for property which is:

     (i)   To be sold, rented or leased in the regular course of business. However, the sale of malt or brewed beverages or liquor to a person who is a retail dispenser or a holder of a retail liquor license under The Liquor Code (47 P. S. § §  1-101—9-902), does not qualify for the resale exemption.

     (ii)   To be physically incorporated as ingredient or constituent into other personal property which is to be sold in the regular course of business or transported in interstate commerce to a destination outside of this Commonwealth.

   (2)  Personal property purchased or having a situs within this Commonwealth solely for the purpose of being processed, fabricated or manufactured into, attached to or incorporated into personal property and thereafter transported outside of this Commonwealth for use exclusively outside the Commonwealth.

 (b)  Presumption of taxability. Every sale of tangible personal property is presumed to be at retail and therefore subject to tax. A purchaser claiming the resale exemption shall therefore establish that the specific property purchased is to be resold. A purchaser who uses or consumes property purchased for resale or who disposes of property purchased for resale in a manner other than by resale becomes the ultimate consumer or user of the property and shall pay a use tax with respect to the taxable use.

 (c)  Use by vendor of property in the conduct of business subject to tax. A vendor who consumes or otherwise uses tangible personal property in the conduct of the vendor’s business is the ultimate consumer or user of the property, and sales made to him for the consumption or use is subject to tax. For example, the tax is applicable to the sale of display cases and similar merchandising equipment to hotels, food markets, stores and similar persons using the property in the conduct of their business. Similarly, the sale of a carbonator to a soda fountain operator for making soda or carbonated water is subject to tax. The sale of carbon dioxide to a soda fountain operator is considered a sale for resale and is not considered taxable.

 (d)  Withdrawal from stock for vendor’s own use subject to tax. The withdrawal by a vendor for personal use of goods in stock held for resale is a taxable use and is subject to tax.

Cross References

   This section cited in 61 Pa. Code §  32.4 (relating to isolated sales); and 61 Pa. Code §  47.1 (relating to coin-operated amusement devices).

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