Sales & Use Tax Refunds

Sale & Use Tax regulations read accordingly… “consumed as an essential and integral part of the integrated production process.” To define “integral part” we must determine where production actually start, where does it actually end? What actually constitutes production? Questions as to whether or not a product is “consumed” and/or really becomes a “part” of another product. Do any of these items ultimately become a part of another product? How closely related is products tooling and ware ability and what actually determines consumption’s final use? On the surface, these might be simple questions, however, the language and definitions are not absolute. They are, in fact, a matter of interpretation, and therefore a clear understanding of the regulations and laws is required before making that decision. Each state requires complete and accurate documentation when determining the exempt status of “parts” used in the manufacturing or processing of a product. Most states require documentation of all equipment consumption, requiring that each piece of equipment be included as to the watts or kilowatts, amps volts, MCF, or CCF of a particular motor that is connected to that utility meter. That means everything, both that which is used in manufacturing and that which is not. How items are used in conjunction to one another can determine manufacturing status. Items that are generally considered not manufacturing are, for example, lights, refrigerators, office and administrative equipment, HAVC for general comfort, outdoor lighting, etc.

In some cases we have determined that items you deem as waste, can and have been reclassified as a by-product and end up resold as recycleable, thus additional exemptions and more profit. NTC can document this information and provide the state(s) with the necessary information to obtain the maximum refunds and or exemptions.