Effective July 1, 2023, Virginia is extending the sales and use tax exemptions for purchases of materials, machinery, and other items used in certain portions of oil and gas operations, specifically drilling, extraction, and processing of natural gas and oil and the reclamation of the well area.
Va. Code § 58.1-609.3, the statute containing these exemptions, has been in existence since 1994 and was originally dated to sunset on July 1, 2022. Now with the signing of H.B. 2334 by Virginia Gov. Glenn Youngkin, the statute with its exemptions for the oil and gas industry has been reenacted and its sunset date extended to July 1, 2024.
Oil and gas companies operating in Virginia and receiving the benefit of this extension to these exemptions should already have their calendars marked with the new effective and sunset dates and plan their purchases of production equipment and supplies accordingly.