Recycling Activity Not Eligible for Manufacturing Exemption in Indiana

The Indiana Department of Revenue found a taxpayer’s purchases of tangible personal property did not qualify for the manufacturing activity. The taxpayer disassembles articles for the scrap components to sell them to scrap buyers. The state found that the taxpayer does not add new parts to the articles being disassembled, but instead removes parts and separates them into groupings. As a result, the state determined that this recycling activity did not constitute manufacturing since no new article is produced. (Letter of Findings No. 09-0311, Indiana Department of Revenue, November 25, 2009)

Posted on December 10, 2009