Sales Tax Articles
Sales Tax State Activity Update - March 2007
New York Caught Between a Rock and an Exemption
The New York State Department of Taxation and Finance ruled rock crushing equipment is exempt from sales and use tax provided it is used predominantly in the production of tangible personal property for sale.
A taxpayer in the business of recycling construction debris uses rock crushing equipment to grind the debris into reclaimed aggregates and topsoil for sale.
In some cases, the reclaimed aggregates and topsoil are given away free of charge. In accordance with New York Sales and Use Tax Regulations, the Department determined the activities qualified as processing for purposes of exemption from sales and use tax.
In order for the rock crushing equipment to qualify for exemption, it must be used directly and predominantly (i.e. more than fifty percent of the time) in the production of tangible personal property for sale. The taxpayer is responsible for establishing that the production of reclaimed aggregates and topsoil for sale is the predominant activity.
This full text may be viewed on the New York State Department of Taxation and Finance website.
( New York Commissioner of Taxation and Finance, Advisory Opinion TSB-A-07(3)S, 2/8/2007)
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