Taxpayer's Purchase of Mist Coolant Taxable in Indiana

Wednesday, April 2nd, 2014

 
 
Share
Link
Indiana
General

The Indiana Department of Revenue ("Department") recently released a letter of findings determining that a manufacturer owed tax on its purchases of mist coolant.

The taxpayer manufactured and installed floating dock systems, boat lifts, and similar items. To make posts for docks, the taxpayer used a horizontal drill. The taxpayer purchased an air powered mist coolant to keep this drill cool.

Indiana exempts sales of machinery, tools, and equipment used directly in manufacturing tangible personal property. An item is used directly in manufacturing if it has an immediate effect on the article being produced.

The Department held that the coolant did not qualify for this exemption. The taxpayer did not provide any evidence that the coolant had an immediate effect on the dock post being made. The taxpayer only showed that the coolant affected the drill. The taxpayer therefore owed tax on its purchase of the coolant.

http://www.in.gov/legislative/iac/20140326-IR-045140088NRA.xml.html


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.

Washington Penalty Reduction Program

Monday, May 21st, 2018 -Businesses that apply to register with Washington's Marketplace Fairness Penalty Reduction Program by June 30,...

Cloud Software No Longer Taxable in Indiana

Thursday, May 17th, 2018 -Effective July 1, 2018, cloud software will no longer be taxable in Indiana. Indiana taxes the sale, lease,...

Sales Tax Increase in the Historic Triangle Region of...

Monday, May 14th, 2018 -Effective July 1, 2018, there will be an additional one percent (1%) regional sales and use tax imposed in the...

Sales by Charitable Organizations Generally Exempt in...

Friday, May 11th, 2018 -The Arkansas Department of Finance and Administration recently addressed the taxability of sales made by a non...

Credit Card Convenience Fees Taxable in New York

Wednesday, May 9th, 2018 -The New York Department of Taxation and Finance recently ruled that convenience fees for credit card purchases...

Farming Exemption Does Not Apply to Residential Gardening...

Monday, May 7th, 2018 -The Arkansas Department of Finance and Administration ruled that a utility vehicle used for residential garden...