Indiana’s Manufacturing Exemption Requires "Direct Use" in Production

Monday, April 2nd, 2018

Skid loader on farm.

The Indiana Department of Revenue (DOR) recently ruled that a skid loader did not qualify for the state manufacturing exemption.

The taxpayer was an Indiana company that sold fertilizer and provided spreading services for farmers. The taxpayer purchased a skid loader exempt from tax under the manufacturing exemption. The taxpayer argued that the exemption applied because the equipment was used to move materials into the fertilizer blending process. The DOR did not agree that the taxpayer was in the business of fertilizer production, but addressed the claim anyway.

Indiana exempts equipment for direct use in production. The exemption applies to equipment that has an immediate impact on the article being produced. The ruling determined that skid loader was taxable because loading materials is a "pre-production activity" that does not have an immediate impact upon the production of fertilizer. The ruling also briefly discusses a claim for the resale exemption. However, the claim was denied because the equipment in question was used by the taxpayer, and was not resold.'s Manufacturing Exemption Requires "Direct Use" in Production

About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at or call 866.578.8193.

New York Adopts New Economic Nexus Rule

Wednesday, January 23rd, 2019 -Effective January 2019, a retailer located outside of New York is required to collect use tax if, during the p...

New Commercial Farmer Certification Process in Louisiana

Monday, January 21st, 2019 -Effective January, 15, 2019, the Louisiana Department of Revenue has a new certification process for commercia...

Service Repairs to Petroleum Storage Tanks Exempt in...

Friday, January 18th, 2019 -Louisiana's Board of Tax Appeals recently ruled that repairs on petroleum storage tanks were not taxable. ...

Nevada Exempts Feminine Hygiene Products in 2019

Wednesday, January 16th, 2019 -Last year, Nevada voters approved via ballot measure changes to the Sales and Use Tax Act of 1955. Voters amen...

Cleaning of Beer-Tap Lines Not Taxable in Ohio

Monday, January 14th, 2019 -The Supreme Court of Ohio recently ruled that cleaning beer-tap lines is not taxable. The taxpayer was...

Louisiana Court of Appeals Finds Marketplace Facilitators...

Friday, January 11th, 2019 -The Louisiana Court of Appeals has recently addressed the sales tax liability of marketplace facilitators. A c...