Certain Shrink-Wrap and Palletizing Equipment Exempt

Wednesday, December 7th, 2016

 
 
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Indiana
General

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.

http://www.in.gov/legislative/iac/20161130-IR-045160515NRA.xml.html


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