Section 41.5. Integrated plants

(a) Whenever a person is engaged in a recognized integrated business composed of a series of operations which either collectively constitute manufacturing, or individually constitute one or more of the operations specified as manufacturing in section 201(c)(2), (3), (4) or (5) of the TRC (72 P. S. § 7201(c)(2), (3), (4) or (5)), the first production stage is deemed to commence with the first stage of production in the series, and production is not deemed to end finally until the completion of the product in the last operation of the production series.

Example. The X Company is engaged in mining coal and iron, making steel ingots and fabricating various products from steel. The company’s first production stage for the purposes of the tax commences with the first stages of production in the mining of coal and iron, and the final stage of production is the completion of the fabrication of its end products. The exemption applies to the purchase and use of property and services to be used directly in any of the mining, ingot making, and steel fabricating operations in this integrated business.

(b) The operations of manufacturing conducted by the manufacturer include the following:

(1) The production and transmission of electrical power for use in other manufacturing operations.

(2) The production and transmission of gases, air and steam for use in manufacturing operations, including the production of electric power.

The provisions of this § 41.5 adopted September 8, 1972, effective September 9, 1972, 2 Pa.B. 1686.