Consumable Supplies Added to Georgia Manufacturing Exemption

Georgia has enacted new legislation pertaining to the sales and use tax exemption that applies to the sale, use, or storage of machinery or equipment necessary and integral to the manufacture of tangible personal property; and the sale, use, storage, or consumption of industrial materials or packaging supplies. Per the legislation, “consumable supplies” are expressly included within the definition of “equipment” as covered by the exemption. Previously, consumable supplies were expressly excluded from the definition of “equipment.” Per the legislation, the definition of “consumable supplies” means tangible personal property (other than machinery, industrial materials, packaging supplies, and energy) that is consumed or expended during the manufacture of tangible personal property. Previously, “equipment” was excluded from the definition. Also, the qualifying phrase “regardless of whether the items would otherwise be considered consumable supplies” is removed from a list of items given as examples of what qualifies for the exemption as necessary and integral to the manufacture of tangible personal property. The examples listed in the legislation are machinery or equipment used to provide safety for employees working at a manufacturing plant, such as safety machinery and equipment required by federal or state law, gloves, ear plugs, face masks, protective eyewear, hard hats or helmets, and breathing apparatuses.(H.B. 900, Laws 2014, effective July 1, 2014)

Posted on May 30, 2014