Capital Equipment Exemption

To qualify for the exemption, the equipment must be used for one of the following:

• To manufacture, fabricate, mine, or refine products that are ultimately sold at retail
• To electronically transmit information sold to retail customers from an online database
• To generate electricity or steam to sell at retail

Examples:

• Machinery and equipment used to operate, control, or regulate the production equipment
• Machinery and equipment used for research and development, design, quality control, and testing activities
• Environmental control devices that regulate temperature, humidity, light, or air pressure when those conditions are essential to and are part of the production process
• Materials and supplies used to construct and install machinery or equipment
• Repair and replacement parts for qualifying equipment
• Delivery and installation charges for qualifying equipment
• Materials used for foundations that support machinery or equipment
• Materials used to construct and install a special-purpose building used in the production process
• Ready-mixed concrete trucks where the concrete is mixed as part of the delivery process

The following types of material and equipment are not considered capital equipment:

• Farm machinery, logging equipment, or equipment used in aquaculture
• Motor vehicles for road use
• General building materials
• Machinery or equipment used to receive or store raw materials
• Machinery or equipment used in the transportation, transmission or distribution of petroleum, liquefied gas, natural gas, steam or water through pipes, lines, tanks or mains
• Telecommunications equipment and parts used to provide telecommunications services
• Food preparation equipment
• Machinery or equipment used to provide:
  • Laundry and dry cleaning services
  • Motor vehicle washing, waxing, and cleaning services
  • Building and residential cleaning, maintenance, and disinfecting and exterminating services
  • Detective, security, burglar, fire alarm, and armored car services
  • Pet care and grooming services
  • Lawn care, fertilizing, and other landscaping services
• Other machinery or equipment that is not essential or used in the production process