A Washington Manufacturer of Electronic Products was liable for use tax on chemicals utilized in the etching of patterns on wafers used in the manufacturing process. In order to qualify for the tax exemption, the primary purpose of the chemical must be to create a chemical reaction through contact with an ingredient of the new product being manufactured for sale. The primary purpose of the chemical in this case was to control the etching process. Part of the chemical was used in a chemical reaction producing a polymer that contains substrate materials. The taxpayer did not establish that the presence of these materials was necessary for the manufacturing process and as a result, could not establish that the chemical’s primary purpose was to react with the substrate materials. In addition, the chemicals did not create a chemical reaction through contact with an ingredient of the new product being manufactured for sale. The manufacturer is therefore liable for use tax on the chemicals as they did not meet requirements for the processing exemption. (Tax Determination No. 08-0243, Washington Department of Revenue, September 12, 2008, released August 18, 2010)