Certain Shrink-Wrap and Palletizing Equipment Exempt

Wednesday, December 7th, 2016

A nurse pushing a gurney in a hospital.

Indiana recently ruled that equipment used to shrink-wrap and palletize certain products was exempt.

The taxpayer produced and distributed soil and landscape materials to major home-and-garden stores. The customers required the products to be delivered shrink-wrapped and on pallets.

Indiana exempts equipment directly used in the production of tangible personal property. This includes equipment used from the point of first operation or activity to when the item has been altered to its completed form. The process includes packaging, if required to get the item to its completed form.

Because the taxpayer's clients required items to be wrapped and on pallets, the completed form of the product included the shrink-wrap and pallets. As a result, the equipment used to shrink-wrap and place soil and materials on pallets was directly used to produce the items in a completed form. Therefore, the equipment was exempt.


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.

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