Pre-Production Loading Equipment Taxable in Indiana

Wednesday, January 4th, 2017

 
 
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Indiana
Manufacturing

The Indiana Department of Revenue ruled that equipment for loading materials from storage into a hopper was not exempt.

The taxpayer manufactured fertilizer. The equipment was used to load raw materials for fertilizer production from storage into a hopper. From the hopper, the materials flowed onto a conveyor belt and then into a mixer.

Indiana exempts equipment for direct use in manufacturing. Direct use requires that the equipment immediately affect the manufacturing process. Here, the equipment did not immediately affect the process because the process began in the mixer, not the hopper. As a result, the equipment was taxable.

http://www.in.gov/legislative/iac/20161228-IR-045160555NRA.xml.pdf


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