Indiana DOR Determines Sales Tax Exemption for Rental Equipment Used on Customer’s Job Site

The Indiana Department of Revenue Nov. 16 determined in a letter ruling that Taxpayer’s rental equipment will be exempt from sales and use tax. Taxpayer, a conveyor and equipment manufacturer, sought a ruling regarding whether their rental equipment to be used on a customer’s manufacturing and production job site were exempt from sales tax. The DOR noted: 1) the manufacturing exemption test requires two steps, which are direct use and direct production of other tangible personal property; and 2) Taxpayer’s cranes, aerial lifts, and booms would be used in the direct assembly of food processing, packaging, and conveyor equipment. Therefore, ...