Cryogenic Systems Exempt as Manufacturing Equipment in Illinois

Tuesday, September 24th, 2013

 
 
Share
Link
Illinois
General

An Illinois Court of Appeals recently ruled that a taxpayer's cryogenic systems were exempt from use tax as manufacturing machinery.

A taxpayer leased cryogenic systems to its customers. The systems stored liquid gases and converted them to a gaseous state. The taxpayer's customers then used the gases either in a manufacturing process or for delivery to medical patients.

Illinois imposes a use tax on the use of tangible personal property in Illinois. However, it exempts the use of machinery used primarily in manufacturing. "Manufacturing" includes the production of an article of tangible personal property for use in manufacturing.

The Department argued that the taxpayer owed use tax on the systems because they were used primarily for storage rather than manufacturing. The taxpayer argued that because the systems converted liquid gas into a gaseous gas, the systems were exempt as manufacturing equipment.

The Court ruled that the cryogenic systems were used primarily in an exempt manner. The conversion of liquid gas into gaseous gas (a form of tangible personal property) was a manufacturing process. This was the systems' primary use. The fact that the systems were also used for storage did not prevent them from qualifying for the exemption.

http://www.state.il.us/court/R23_Orders/AppellateCourt/2013/4thDistrict/4120973_R23.pdf


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.

Data Survey Services Not Taxable in South Carolina

Monday, June 24th, 2019 -The South Carolina Department of Revenue recently ruled that business data survey services were non-taxable pr...

Senior Center Cafeterias are Taxable in Missouri

Friday, June 21st, 2019 -Missouri's Director of Revenue recently issued a letter ruling taxing the sale of cafeteria food by a 501(c)(3...

Hot-Air Balloon Rides in Missouri are Taxable When...

Wednesday, June 19th, 2019 -Missouri recently released a letter ruling addressing the taxation of hot-air balloon rides. The taxpayer was ...

Nevada Exempts Certain Medical Equipment

Monday, June 17th, 2019 -Effective July 1, 2019, Nevada will exempt durable medical equipment, oxygen delivery equipment, and mobility ...

Participatory Sports are Taxable in New York

Friday, June 14th, 2019 -The New York Division of Tax Appeals recently denied a refund claim made by an instructor-led indoor spin clas...

Marketplace Facilitators to Collect Tax in Vermont

Thursday, June 13th, 2019 -Vermont recently passed a bill requiring marketplace facilitators to collect and remit sales tax on retail sal...