Tax Applied to Caustic Solution Used to Clean Manufacturing Dies in Ohio

Wednesday, September 3rd, 2014

 
 
Manufacturing machinery.
Share
Link
Ohio
General

The Ohio Board of Tax Appeals ("Board") recently ruled that a taxpayer had to pay tax on a caustic solution used to clean dies.

The taxpayer purchased a caustic solution to use on dies used in manufacturing. The solution removed aluminum residual that collected in the die during a manufacturing run. If left in the die, the residual could create problems in later manufacturing runs. The taxpayer applied the solution to the dies between manufacturing runs. Sometimes, if a problem occurred during a manufacturing run, the taxpayer would stop that run to apply the solution.

Ohio exempts purchases of certain tangible personal property used during manufacturing operations. This exemption applies to items that control, physically support, produce power for, lubricate, or are otherwise necessary for production machinery to function and for the manufacturing operation to continue.

The Board ruled that the caustic solution was taxable. The solution was not necessary to continue the manufacturing operation. In fact, the taxpayer only used the solution when the dies were taken out of the manufacturing operation - when a manufacturing run had finished or had been stopped. Because the solution was only used when the manufacturing process had stopped, it was not necessary to continue the manufacturing operation.

https://ohio-bta.modria.com/casedetails/55696


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...