The Georgia Department of Revenue has adopted a sales and use tax rule that relates to exemptions for manufacturing machinery and equipment. This new rule provides and exemption from sales tax for machinery and equipment, including repair and replacements parts, necessary and integral to the manufacture of tangible personal property in a manufacturing facility. The rule is effective December 9, 2009 and will apply to transactions that occur on or after January 1, 2009.
Under the new rule, the definition of “manufacture of tangible personal property” is amended to be used synonymously with “manufacturing” and means a manufacturing operation, series of continuous manufacturing operations, or series of integrated manufacturing operations, engaged in at a manufacturing plant or among manufacturing plants to change, process, transform, or convert industrial materials by physical or chemical means into articles of tangible personal property for sale, or further manufacturing, that have a different form, configuration, utility, composition, or character. The definition of “packaging operation” was also amended under the new rule. It is defined as bagging, boxing, crating, canning, containerizing, cutting, measuring, weighing, wrapping, labeling, palletizing, or other similar processes necessary to prepare or package manufactured products in a manner suitable for sale or delivery to customers as finished goods, or suitable for the transport of work in process within or among manufacturing plants for further manufacturing, and the movement of such finished goods or work in process to a storage or distribution area within a manufacturing plant. (Reg. Sec. 560-12-2-.62, Georgia Department of Revenue, effective and applicable as noted)