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

Wednesday, July 10th, 2013

New Jersey

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 or call 866.578.8193.

Vehicles Used to Transport Materials between Facilities...

Wednesday, August 15th, 2018 -The Arkansas Department of Finance and Administration recently ruled that a vehicle used to transport in-proce...

Economic Nexus in Washington

Monday, August 13th, 2018 -Effective October 1, 2018, certain out-of-state businesses will be required to collect and pay Washington sale...

Economic Nexus in Michigan

Thursday, August 9th, 2018 -Effective October 1, 2018, certain out-of-state sellers will be required to collect and pay Michigan sales or ...

Georgia Suspends Tax on Jet Fuel

Wednesday, August 8th, 2018 -Effective August 1, 2018, Georgia no longer collects state level sales and use tax on jet fuel. Georgia tax...

Employment Services Contracts for Permanent Employees Not...

Monday, August 6th, 2018 -The Ohio Board of Tax Appeals recently addressed whether contracts entered into by an employment services agen...

Alarm Systems and Monitoring Not Taxable in Missouri

Wednesday, August 1st, 2018 -The Missouri Department of Revenue recently released a ruling determining that (1) security, fire, tornado, an...