Sales Tax Articles
Sales Tax State Activity Update - March 2007
A Weighty Issue in Washington for Food Processors
The Washington Department of Revenue Appeals Division ruled that weigh/price equipment, pallet jacks and their replacement parts were used directly in manufacturing to the extent they measure and transport manufactured products.
A vertically integrated seller of food products operates a multi-step production process across several locations to produce food for sale to grocery stores and distributors.
Initial processing is performed at one location and in-process food products are shipped to a second location and temporarily stored in coolers before undergoing further processing for sale. At the second location, weigh/price equipment are used on several production lines and pallet jacks are used to move the in-process food product between processing stages.
The Appeals Division determined that weigh/price equipment were used in a manner consistent with the meaning of "measure" for purposes of the manufacturing exemption. The decision keyed on the ordinary understanding of the term "measure", which is understood to include weighing.
The Appeals Division also established that pallet jacks were used in a manner consistent with the meaning of conveying/transporting the product for purposes of the manufacturing exemption. It follows that both weigh/price equipment and pallet jacks are exempt from sales and use taxes.
This full text may be viewed on the Washington State Department of Revenue website.
(Washington Dept. of Revenue Appeals Division, Det. No. 05-0151, 25 WTD 127, 12/06)
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