In Ohio, sales of certain dairy equipment and supplies, including cleaning equipment, are now exempt from sales and use taxes provided it is used as part of a continuous manufacturing operation to produce milk, ice cream, cheese, yogurt, or similar…
Texas Rules Equipment Repairs Taxable
Repairs performed on certain machinery at a concrete manufacturer’s plant did not qualify for an exemption from Texas sales and use tax. Since the machinery was incorporated into the structure of the plant, it qualified as an improvement to real…
Florida Expands Research and Development Exemption
Florida expanded the exemptions previously offered for research and development to include all machinery or equipment used predominantly for these purposes.
Storage Tank Roof Not Eligible for Manufacturing Exemption in Texas
A taxpayer’s installation of a floating roof over a storage tank was not eligible for an exemption as equipment used in the manufacturing process. It was determined that the tank in question was used primarily for storage and the taxpayer…
Virginia Taxpayer with Multiple Divisions Denied Industrial Manufacturing Exemption
A taxpayer who operates a business consisting of three divisions: 1) conveyor sales and services, 2) a machine fabrication shop, and 3) sales of industrial supplies, was not considered to be an industrial manufacturer, and thus, was not eligible for…
Nevada Voters Approve Exemptions for Farm Machinery & Vehicle Trade-Ins
Exemptions relating to farm machinery and vehicle trade-ins were recently approved by Nevada voters. The new amendment to the Nevada Sales and Use Tax Act exempts from state and local tax the “value of any used vehicle taken in trade…
Power Plant Expansion Equipment not Exempt in Utah
The purchase of machinery and equipment for an electricity generating power plant was not eligible for exemption under Utah law. The law stated that purchases must meet multiple requirements in order to qualify for exemption, including falling under specific range…
Arkansas Regulation Addresses Labor
The State of Arkansas has added a new regulation that clarifies the treatment of labor charges that stem from equipment used in manufacturing. According to the new regulation, the service of installing, altering, adding to or replacing machinery is exempt…
Ohio Mining Rule Amended
In order to conform to a statutory amendment, an Ohio sales and use tax regulation has been amended. Effective December 12, 2006, the regulation was amended to indicate that machinery, equipment or other personal property used or consumed primarily for…
Chemicals Used For Cleaning In Manufacturing Process Subject To Tax In Missouri
In a recent Missouri Letter Ruling, the state indicated that chemicals used in the manufacturing process do not qualify for a tax exemption.
Machine and Materials Used In Final Testing Exempt In Kansas
In a recent Kansas private letter ruling, the state indicated that the purchase of the radial fatigue machine was deemed integrated production equipment and, therefore, exempt from Kansas retailers’ sales tax. The machine was used by a wheel manufacturer to…
Washington Exemption Enacted For Farm Machinery
Effective July 1, 2006, Washington provides a sales and use tax exemption for eligible farmers that use replacement parts for qualifying farm machinery and equipment. A replacement part is a part that replaces an existing part, or which maintains a…
Medicines Used for Agricultural Production Animals Exempt In Virginia
Effective July 1, 2006, Virginia provides a new sales and use tax exemption for medicines and drugs sold to a veterinarian, provided they are used or consumed directly in the treatment, care, and medication of agricultural production animals or for resale to a farmer for direct use in producing an agricultural product for market.
Illinois Digital Photography Printer System Exempt
The Illinois Department of Revenue issued a private letter ruling concluding that a computer and printer system for printing digital images qualifies for exemption from state\’s sales and use tax as graphic arts machinery and equipment used primarily for graphic arts production.
North Carolina Privilege Tax Imposed on Mill Machinery
A North Carolina privilege tax has been imposed on the purchases of mill machinery and related parts or accessories for use, storage, or consumption by a manufacturing industry or plant. The tax also applies to contractors or subcontractors whose purchases…
Repair or Replacement Parts Taxable in Kentucky
A manufacturer claimed that screws, gaskets, couplings, fittings, and fasteners were exempt as industrial tools, machinery, or as a result of their use within a qualified enterprise zone. The Board of Appeals, however, rule in favor of the Department of…
Illinois Taxes Materials Spoiled or Damaged in Manufacturing
According to a General Information Letter from the Illinois Department of Revenue, spoiled or damaged ingredients do not qualify for the state’s manufacturing exemption. Raw materials which are spoiled or damaged in production are taxed on their cost price. Materials…
Louisiana Exempts Machinery and Equipment Acquired to Repair or Replace Equipment Damaged in Hurricanes Katrina and Rita
The Louisiana Legislature enacted a full sales and use tax exemption for machinery, equipment, repair parts, and repair services purchased, leased, or rented to replace or refurbish equipment damaged as a result of Hurricanes Katrina or Rita. This exemption is…
Arizona Examines Out-of-State Printing.
A recent opinion of the Arizona Court of Appeals affirmed the Tax Court’s decision that out-of-state printing services are not subject to use tax. A taxpayer in the business of publishing telephone directories contracted with out-of-state printers for printing services…
Washington Revises Advisory On Machinery and Equipment Exemption.
In response to questions concerning items eligible for the machinery and equipment exemption, the Washington Department of Revenue has issued an excise tax advisory answering these common inquiries. In the language of the machinery and equipment exemption, machinery and equipment…
Washington Rules That Business and Occupation Tax Manufacturing Rate Did Not Apply.
The Washington Supreme Court found that a manufacturer of canned chili was not subject to the Business and Occupation tax manufacturing rate of taxation, but instead could be taxed at a lower Business and Occupation rate related to perishable meat…
Virginia Rules that Imaging Devices Did Not Qualify for Exemption.
In a ruling by the Virginia Tax Commissioner, it was stated that the industrial manufacturing exemption does not apply to imaging activities. A company whose primary business activity was to image paper documents and microfiche into source documents via CDs…
Florida Court Rules on Property Used in Prototype
A Florida Court of Appeals affirmed a trial court\’s decision that tangible personal property incorporated into research and development prototypes are tax exempt as research and development costs.
Tennessee Rules That Taxpayer Did Not Qualify as a Manufacturer.
A Tennessee Court of Appeals ruled that a taxpayer who operated a concrete block manufacturing facility and a retail sales office that sold the blocks on the same property, did not qualify as a manufacturer. The court found that the…