Sales Tax Articles
Sales Tax State Activity Update - June 2008
Georgia Manufacturing Exemption is now "Directly Necessary"
Georgia's legislature recently passed House Bill 237 amending the exemption from sales and use tax for purchases of machinery and component parts used by manufacturers. This newly enacted legislation, which makes changes to code section 48-8-3(34) is effective January 1, 2009.
The outcome of this amendment has expanded the exemption's scope so that it now exempts machinery and equipment which is "necessary and integral" to the manufacture of tangible personal property. Previously, the sale of new or replacement machinery had to be "used directly in" manufacturing in order to be exempt, and equipment was not part of the exemption, therefore, some pieces of machinery or equipment, which may not have been directly involved in the manufacturing process and were not exempt under the prior language, could now qualify for the exemption.
The bill also revised the exemption for the sale of repair and replacement parts for the machinery in the same manner by inserting "necessary and integral" and removing "used directly in" manufacturing. Further, waxes was added to code section 48-8-3(34)(A) in the sale or use of repair or replacement parts.
The full bill may be accessed on the Georgia General Assembly Website.
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