New Jersey Recycling Equipment Exemption Applies to Equipment that Could Have Non-exempt Uses

Wednesday, July 10th, 2013

 
 
Share
Link
New Jersey
General

The New Jersey Tax Court recently determined that recycling machinery was exempt even if it could be put to non-exempt use.

The taxpayer had a tree removal, tree trimming, land clearing, and tree recycling business. The taxpayer bought an excavator, which it used to feed trees and tree products into a tub grinder to create mulch at its recycling facility. The tub grinder was exempt recycling equipment. Although the excavator was mobile, the taxpayer did not move it from its place in the recycling facility. The taxpayer also bought a skid loader to move the mulch from the tub grinder to piles for storage or transfer to customers.

New Jersey exempts sales of equipment used "exclusively to sort and prepare solid waste for recycling or in the recycling of solid waste." The exemption does not apply to conventional motor vehicles or to equipment used after the first marketable product is produced. The Division of Taxation had previously interpreted the exemption to apply only to equipment that could only be used for recycling.

The Tax Court determined that the excavator and the skid loader qualified for exemption. Relying on the plain meaning of the statute, the court held that the recycling exemption applied to equipment even if it could be used for other things. As long as the equipment was not actually used for anything other than recycling, it qualified for exemption. Because the excavator and skid loader were exclusively used in recycling, it did not matter that they could potentially be used for other things. Both the excavator and the skid loader were integral parts of the recycling process that produced mulch and were therefore exempt.


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 www.ttrus.com or call 866.578.8193.

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...

Iowa Supreme Court Determines Taxable Carpentry Services...

Wednesday, January 9th, 2019 -The Iowa Supreme Court has recently addressed the taxability of various installation services. The taxpayer wa...

Tax Applies to Metallurgical Coke in Illinois

Monday, January 7th, 2019 -Illinois recently ruled that use tax was due on purchases of metallurgical coke. The taxpayer was a business t...