Taxability of Cleanroom Construction Materials in Texas

Thursday, September 15, 2011

The Texas Comptroller recently issued a ruling discussing the taxability of certain materials used in the construction of pharmaceutical biotechnology cleanrooms. Property that is necessary or that has been adapted to reduce contamination or to control airflow, temperature, humidity, chemical purity, or other environmental conditions or that otherwise qualifies as production machinery will be exempt from tax under Tex. Tax Code Sec. 151.318(b)(3) and (q-1). Property that falls within this exemption includes movable cleanroom partitions, lighting fixtures, piping used to move gas and liquids, and electrical supply and control equipment. Property that is used to construct permanent non-movable components of the cleanroom, such as walls, flooring, and roofing do not qualify for the exemption.

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