Equipment Used to Grind and Calibrate Work Rolls Exempt in Indiana

Wednesday, May 21st, 2014


The Indiana Tax Court recently ruled that a taxpayer could purchase exempt the equipment it used to grind and calibrate work rolls.

The taxpayer ground and calibrated work rolls. These work rolls were used in steel, aluminum, and paper mills. The work rolls functioned like giant rolling pins to create the correct thickness, surface, flatness, and luster of sheets of paper or metal. When a mill bought a new work roll, the roll was blank and needed to be ground and calibrated before the mill could use it. Mills would also take old work rolls to the taxpayer to have them refurbished for a new use.

Indiana exempts sales of manufacturing machinery, tools, and equipment. These items must be directly used in the production of tangible personal property. If the equipment is used to repair an existing good rather than to create a new good, this exemption does not apply.

The only question in this case was whether grinding and calibrating the work rolls produced a new good. The Tax Court determined that it did produce a new good. First, the court determined that the work done to the roll was substantial and complex, creating a new tool, capable of being used in different ways from the original roll. Second, the grinding and calibration added significant value to the work roll. Third, the work done to a roll (new or old) created a product that performed as well or better than a brand new work roll. Fourth, the work was not merely routine maintenance. These facts all showed that the taxpayer produced a new good by grinding and calibrating work rolls. Because the taxpayer produced a new good, the equipment used to grind and calibrate rolls was exempt as manufacturing equipment.

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.

Texas Releases Detailed Guidance on Exempt Organizations

Thursday, October 18th, 2018 -The Texas Comptroller has released a publication that provides detailed information on how sales and use tax a...

Telephone Answering Services Taxable in Arkansas

Tuesday, October 16th, 2018 -The Arkansas Department of Finance and Administration recently ruled that the service of answering calls on be...

Washington Provides Guidance on Lodging Tax for Online...

Friday, October 12th, 2018 -The Washington Department of Revenue released updated guidance that provides tax reporting information for bed...

Economic Nexus in West Virginia

Wednesday, October 10th, 2018 -The West Virginia State Tax Department announced that it will require remote sellers to begin collecting sales...

Idaho Provides Guidance on the Exemption for Medical...

Monday, October 8th, 2018 -The Idaho State Tax Commission recently released guidance that explains Idaho's sales and use tax laws for buy...

Arkansas Does Not Follow Federal Law on Foreign Income

Friday, October 5th, 2018 -The Arkansas Department of Taxation and Finance recently released an opinion that says the state does not conf...