Motor Grader Was Exempt Manufacturing Machinery in Nebraska

Monday, March 24th, 2014


The Nebraska Supreme Court recently ruled that a taxpayer's purchase of a motor grader was exempt even if the grader was not used more than 50% of the time in manufacturing.

The taxpayer was a manufacturer. It used a motor grader to maintain haul roads and to maintain the inventory stockpile areas.

Nebraska exempts sales of machinery to manufacturers for use in manufacturing. The Department of Revenue's policy was that machinery was exempt only if more than 50% of the machinery's use was in manufacturing.

The Court ruled that the machinery did not have to be used in manufacturing more than 50% of the time. The statute exempts machinery used in manufacturing. It does not specify a percentage of time the machinery must be used for manufacturing. Any amount of use in manufacturing is therefore enough. Because maintaining inventory stockpile areas was a use in manufacturing, the motor grader was exempt.

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