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News & Tips

Here you can read up on significant developments in the world of sales and use tax. Find the latest legislative updates and helpful tips to keep you in compliance across all 50 states. You can filter news items by topic and/or a jurisdiction of interest.

Texas Court Rules Reusable Chemical Containers are Tax Exempt in Manufacturing

A Texas appeals court held that reusable chemical containers, plus related cleaning, delivery, and pickup services, can qualify for the manufacturing exemption from sales and use tax. The ruling offers important guidance for manufacturers using returnable containers in production and distribution.

Washington Appeals Court Rules Gas Does Not Need to Physically Touch Products to Qualify for Exemption

A Washington Court of Appeals decision held that natural gas used in semiconductor manufacturing can qualify for a tax exemption even without direct physical contact with the product. The ruling clarifies how Washington interprets the gases-and-chemicals exemption and could affect other manufacturers claiming similar relief.

Illinois Denies Manufacturing Exemption for Renewable Natural Gas Facility

An Illinois private letter ruling (ST 25-0008-PLR) concludes that equipment used to clean and upgrade landfill gas into pipeline-quality renewable natural gas does not qualify for the manufacturing machinery and equipment exemption because it is treated as taxable gas treatment delivered through pipelines.

Ohio Board Voids Use Tax Assessment Against MGQ Terminal on Manufacturing Exemption Grounds

The Ohio Board of Tax Appeals ruled that equipment used by a river terminal qualified for the manufacturing exemption, voiding a use tax assessment. The decision provides important guidance on how Ohio applies manufacturing exemptions to processing and material-handling activities.

Arizona Court of Appeals Case Clarifies “Processing” in Manufacturing Exemption

An Arizona Court of Appeals decision clarifies what activities qualify as “processing” under the manufacturing exemption, offering important guidance for manufacturers seeking sales and use tax relief on equipment and materials.

Alabama Reduced Machine Rate Applied to Propane and Oxygen Purchases to Process Metal

The Alabama Tax Tribunal ruled that propane and liquid oxygen used in cutting metal qualify for the reduced 1.5% machine rate under state sales and use tax laws. Get the key takeaways and what this means for manufacturers and processors.

Local Tax Does Not Apply To Louisiana Pipe Manufacturer’s Sales

A recent ruling confirms that pipe manufacturers in Louisiana are exempt from local sales tax on qualifying manufacturing equipment and supplies under the state’s manufacturing exemption — reducing tax burden for producers.

Alabama Reduced Manufacturing Sales Tax Rate Denied for Wet Yard Equipment

Alabama’s Department of Revenue rejects the use of the 1.5% manufacturing tax rate for “wet‑yard” equipment used outdoors. Learn why the reduced rate doesn’t apply and how to determine eligibility for manufacturing exemptions.

Quality Control Equipment Qualifies for Texas Manufacturing Exemption

Texas exempts sales and use tax on machinery used for quality control in manufacturing operations—provided it is necessary and essential to test or inspect products destined for sale. Learn how to claim the exemption.

Indiana DOR Says No Exemption for Chef Attire

Indiana\’s Department of Revenue rules that chef attire is not exempt from sales tax. Learn how this impacts restaurants, uniform policies, and compliance.

Utah Enacts Exemption for Facilities that Manufacture Qualifying Energy Storage Devices or Equipment

Utah enacts a new sales tax exemption for facilities that manufacture qualifying energy storage devices or equipment. Learn who qualifies and how to claim it.

Kentucky Court Ruling Opens Sales Tax Exemption for Small Food Manufacturers

A Kentucky court ruling explains sales tax exemptions for small food manufacturers. Learn how this decision impacts businesses and tax compliance in the state.

Wyoming Extends Sunset Date for Manufacturing Exemption

Wyoming has enacted legislation that extends the sunset date for the state’s manufacturing sales and use tax exemption.

Missouri Manufacturing Exemption Does Not Apply to Company Making Custom Products

The Missouri Department of Revenue (DOR) issued a letter ruling stating that the state’s manufacturing exemption for sales and use tax does not apply to a company that performs custom machining and laser services for parts and materials.

Texas Issues Guidance on the Taxability of Disposable Collars for Dessert Cups

The Texas Comptroller has issued a private letter ruling discussing the taxability of disposable collars for dessert cups.

Testing Equipment Involved in Manufacturing Process Exempt from Sales Tax in Virginia

A taxpayer in Virginia was entitled to a refund for paid sales and use tax on testing equipment.

Washington State Rules that Packaging, Packing, and Distribution Machinery Does Not Qualify for Manufacturing Exemption

A taxpayer protested Washington State auditors’ conclusions that a facility operated by the taxpayer was not entitled to a manufacturing exemption for equipment used at a facility.

Sales and Use Tax Clarified for Samples by Manufacturers and Retailers

The West Virginia Tax Department has issued guidance on the sales and use tax implications for samples distributed by manufacturers and retailers.

Washington Issues Guidance on Taxability of Items Manufactured for Own Commercial or Industrial Use

The Washington Department of Revenue has issued guidance regarding the tax treatment of items that are manufactured for a business’s own commercial or industrial use.

Tennessee Appeals Court Supports Chancery Court in Overturning Revocation of Manufacturing Exemption

On September 6, 2023, the Tennessee Appeals Court at Nashville issued a majority ruling upholding the Chancery Court’s decision in the case Alsco, Inc. v. Tennessee Department of Revenue, number M2022-01019-COA-R3-CV.

Illinois DOR Rules Company’s Freezing & Cooling Machinery is Exempt

In a private letter ruling issued on June 2, 2023, the Illinois Department of Revenue ruled that an Illinois company’s machinery was exempt from sales tax due to its role in preserving and maintaining food to be sold.

Specific Items used by Auto Parts Manufacturer Qualify for Indiana Manufacturing Exemption

The Indiana Department of Revenue (DOR) determined that certain items purchased by an auto parts manufacturer qualified for the state’s manufacturing exemption.

Clean Room Equipment Qualifies for Indiana Manufacturing Exemption

Indiana has issued a revenue ruling stating that equipment used in a climate-controlled clean room qualified for the state’s manufacturing exemption.

Tennessee Updates Definition of Industrial Machinery for Sales Tax Exemption

Effective July 1, 2023, Tennessee has enacted legislation that amends the state’s definition of “industrial machinery” for purposes of the state’s industrial machinery exemption.