Sales Tax Articles
Sales Tax State Activity Update - July 2008
49% Manufacturing Revenue? Sorry, No Exemption in Nebraska
The Nebraska Department of Revenue released a ruling that clarifies the sales and use tax exemption for manufacturing and machinery equipment for persons engaging in the business of manufacturing.
Effective July 1, 2008, the sales and use tax exemption for manufacturing and equipment shall be available only to manufacturing businesses that derive 50% or more of their annual revenue from the manufacture of tangible personal property.
In order to qualify for the Sales and Use tax exemption of manufacturing machinery and equipment, businesses must meet two qualifications:
- the purchaser must be engaged in the business of manufacturing as described above, and
- the machinery and equipment must be used in manufacturing.
On the contrary, businesses whose derive 50% or more of their revenue from activities other than manufacturing or contractors who receive more than 50% of their total revenue from their sale of property, service, or tangible personal property are not included in this manufacturing exemption.
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