There are many opportunities to take advantage of sales tax exemptions in the manufacturing industry. Here are quick tips to uncover more and sometimes unexpected manufacturing exemptions for your company.
The Illinois Department of Revenue has issued a general information letter regarding whether commercial printing is considered “manufacturing” and if the state’s manufacturing exemption applies to electricity consumed to run printing machinery.
Effective July 1, 2017, graphic arts machinery and equipment are included in the Illinois manufacturing and assembling machinery and equipment exemption. Graphic arts equipment was previously included in a different exemption.
Effective July 1, 2017, Utah enacted a sales and use tax exemption on purchases or leases of certain machinery, equipment, and repair or replacement parts by qualifying automobile manufacturing facilities in the state.
A ventilation system purchased by a beet processing plant was denied a manufacturing equipment exemption from Wyoming sales and use tax because it did not qualify as machinery that operated directly and predominantly in manufacturing.
Effective November 16, 2016, the Iowa Department of Revenue adopted amendments to its regulations concerning the state’s manufacturing exemption, which was expanded to include replacement parts and supplies earlier in the year.
Arizona modified the exemption criteria for the qualified manufacturing or smelting business exemption as it applies to the state’s transaction privilege and use tax deduction of electricity and natural gas sales.
Purchases of shipping labels and printer ribbons by a manufacturer of medical devices did not qualify for an exemption from Indiana use tax since the products did not constitute an integral and material part of the finished product.
The Michigan Department of Treasury will not follow the decision of Central Michigan Cementing Services LLC v. Depart of Treasury, an industrial processing case, in similar circumstances for other taxpayers.
Effective July 1, 2016, Virginia’s sales and use tax exemption for tangible personal property purchased or leased for use directly in research or development in the experimental or laboratory sense was expanded.