Shrink those taxes: PA Tax Exempt Form

How to Fill Out a PA Tax Exempt Form

Hello there, welcome to my blog! Today I’m going to show you how to fill out a PA tax exempt form, also known as REV-1220. This form is used to claim an exemption from sales and use tax, hotel occupancy tax, public transportation assistance tax, or passenger car rental tax in Pennsylvania. If you’re a business owner, a nonprofit organization, or a public utility service provider, you might be eligible for some tax breaks. But first, you need to know how to fill out this form correctly and avoid any penalties or audits.

1. What is a PA tax exempt form?

A PA tax exempt form is a document that certifies that the purchaser or lessee of certain property or services is exempt from paying some or all of the taxes imposed by the Commonwealth of Pennsylvania. There are two types of PA tax exempt forms: unit exemption certificates and blanket exemption certificates. A unit exemption certificate is used for one transaction only, while a blanket exemption certificate is used for multiple transactions with the same seller or lessor.

2. Who can use a PA tax exempt form?

Not everyone can use a PA tax exempt form. Only certain entities and individuals that meet specific criteria can claim an exemption from tax. When a REV-1220 form is filled for a transaction, it benefits both the purchaser and the seller. Here’s how:

• Purchaser: The purchaser can claim exemptions from tax for various reasons. These include:
  • The property or service will be resold or rented in the ordinary course of business.
  • The property or service is being directly used in manufacturing, mining, dairying, processing, farming and/or shipbuilding.
  • The purchaser is a government entity, instrumentality or political subdivision; municipal authority; cooperative Agricultural Association; electric cooperative; credit union.
  • The purchaser is located in Keystone Opportunity Zone or Expanded Zone and has been approved under the KOZ regulations.
  • The purchaser is providing goods and services under a construction contract with an exempt entity: a charitable organization, government entity, or a firm in designated KOZ.
  • The purchaser is a religious organization, volunteer fireman’s organization, Nonprofit educational institution, charitable organization, direct pay permit holder, individual holding a diplomatic identification card, school district, or tourist promotion agency.
• Seller: Properly completed exemption certificates provide a valid reason for the exemption and are accepted in good faith to relieve the vendor from the collection of tax. This means that the seller is not responsible for collecting sales tax on transactions where a valid exemption certificate has been provided.

Some examples of people who have to fill the form for different reasons are:

• A manufacturer who purchases raw materials or parts that will be used directly in producing goods for sale. They have to fill the form with reason 1 and check the box for manufacturing.
• A nonprofit educational institution that purchases books or supplies for its students or teachers. They have to fill the form with reason 4 and check the box for nonprofit educational institution. They also have to provide their exemption number assigned by the PA Department of Revenue.
• A religious organization that purchases furniture or equipment for its place of worship or office. They have to fill the form with reason 4 and check the box for religious organization. They also have to provide their exemption number assigned by the PA Department of Revenue.

To find out more about the different types of exemptions and the requirements for each one, you can check out the instructions on the back of the PA tax exempt form or visit the PA Department of Revenue website.

3. How to fill out a PA tax exempt form?

Filling out a PA tax exempt form is not too hard, but you need to be careful and accurate. Here are the steps you need to follow:

1. Select the type of exemption certificate you want to use: unit or blanket.
2. Select the type of tax you want to claim an exemption from: state or local sales and use tax, state or local hotel occupancy tax, public transportation assistance taxes and fees, or passenger car rental tax.
3. Select the reason for your exemption and provide the necessary information. For example, if you are a reseller, you need to enter your sales tax license number or wholesaler certificate ID number. If you are an exempt organization, you need to enter your exemption number.
4. Enter your name and address as the purchaser or lessee of the property or services.
5. Enter the name and address of the seller or lessor of the property or services.
6. Sign and date the form. If you are using a blanket exemption certificate, you also need to enter the expiration date of the certificate, which cannot exceed three years from the date of issue.
7. Keep a copy of the form for your records and give the original to the seller or lessor.

4. Where to send a PA tax exempt form?

You don’t need to send a PA tax exempt form to the PA Department of Revenue. You only need to give it to the seller or lessor of the property or services you are buying or leasing. The seller or lessor is responsible for keeping the form on file and reporting the exempt sales or leases to the PA Department of Revenue. However, if you are claiming an exemption for a motor vehicle, trailer, semi-trailer, or tractor, you need to use a different form and send it to the PA Department of Transportation, Bureau of Motor Vehicles. You can find more information about this on the PA Department of Revenue website.

5. Tips and tricks for filling out a PA tax exempt form

Here are some tips and tricks to help you fill out a PA tax exempt form correctly and avoid any problems:

• Make sure you use the latest version of the form, which you can download from the PA State Police website.
• Print or type clearly and legibly. Do not use abbreviations or acronyms.
• Fill out all the required fields. Do not leave any blanks or write “N/A”.
• Provide accurate and complete information. Do not make false or misleading statements.
• Use a separate form for each seller or lessor, unless you are using a blanket exemption certificate.
• Review the form before signing it. Make sure it reflects your true and correct status as an exempt purchaser or lessee.
• Update your information if it changes. If your exemption status, license number, address, or other information changes, you need to notify the seller or lessor and provide a new form.

I hope this blog post was helpful and informative. Thanks for reading!