Dust collection equipment used as part of a recycling system in the manufacture of plastic products used in horticultural packaging qualified for a manufacturing exemption from Ohio sales and use tax

They qualify because the equipment was used to handle or temporarily store scrap that was intended to be reused in the manufacturing process. The exemption also applied to overhead cranes used to install tooling into the manufacturer’s thermo-forming machines and to load injection molds into injection molding machines because the cranes facilitated, physically supported, and were otherwise necessary for the functioning of production machinery and equipment and the continuation of the manufacturing process. However, cranes used in the manufacturer’s maintenance and tool rooms were not exempt because they were not essential to the manufacturing process. Also, purchases of heaters that were attached to the ceiling in the manufacturer’s plant were subject to tax because the heaters were purchased as equipment and not as part of a construction contract. If tangible personal property is incorporated into real property under the terms of a construction contract, the contractor is the consumer of the personal property and is liable for tax on the purchase unless the property is otherwise exempt. (Landmark Plastic Corp., Ohio Board of Tax Appeals, No. 99-K-499, March 31, 2000)

Posted on June 15, 2000