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Labor to Repair Baking Pans Exempt in Florida


Manufacturing

The purchase of repair labor to re-glaze and straighten baking pans used by bakeries, as well as the purchase of replacement baking pans with a three-year depreciable life, is exempt from Florida sales and use tax as repairs to an integrated production line.  The exemption for repairs to an integrated production line is available to certain industries under Standard Industrial Classification (SIC) Industry Major Group Numbers.  The business activity of bakers is included in this classification.  Additionally, food and kindred products are specifically listed as eligible for the exemption, making bakers eligible for the exemption.  The exemption on repairs is limited to “labor charges for the repair of, and parts and materials used in the repair of and incorporated into, industrial machinery and equipment.” “Industrial machinery and equipment” is defined as tangible personal property with a depreciable life of three years or more. The baking pans have a three year depreciable life.  Therefore they can be considered industrial machinery and equipment as opposed to consumable supplies.  Straightening and re-glazing the pans are activities that fall within the repair exemption.  The baking pans are considered to be physically and functionally integrated with the ovens during the baking process since the ovens cannot perform their function of making baked products without the baking pans.  (Technical Assistance Advisement, No. 12A-013, Florida Department of Revenue, May 8, 2012)

(06/12/2013)
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