Equipment Used to Grind and Calibrate Work Rolls Exempt in Indiana

Wednesday, May 21st, 2014

 
 
Share
Link
Indiana
General

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.

http://www.in.gov/judiciary/opinions/pdf/05141401tgf.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.

Washington Penalty Reduction Program

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

Fuel Used to Heat Detached Garages Taxable in Maine

Monday, May 21st, 2018 -Maine Revenue Services recently released a publication explaining that sales tax applies to fuel that is used ...

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...