Supplies and Consumables Used in Manufacturing are Exempt from Illinois Sales and Use Tax Beginning July 1, 2019
Recent tax legislation has expanded the manufacturing exemption to once again include production related tangible personal property. Illinois gives manufacturers a sales tax exemption for purchases of machinery and equipment used in manufacturing or assembling. The new tax law includes supplies and consumables in the definition of machinery and equipment for the exemption.
For example, in addition to supplies, manufacturers can buy various items exempt from sales tax if the items are related to the production of property including:
- Lubricants and Adhesives
- Hand Tools
- Protective Apparel
- Fire and Safety Equipment
Meeting Exemption Requirements
A manufacturer’s use of the item also must meet existing requirements for its purchase to qualify for the exemption. For example, the property must be primarily used in manufacturing and assembly and the product or good manufactured or assembled must be for wholesale, retail sale or lease. The Department of Revenue must issue rules on how to take the exemption and how it will be administered.——————- Disclaimer: The information contained in this Blog (the “Blog”) is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. In no event will BB or its partners, employees or agents, be liable to you or anyone else for any decision made or action taken in reliance on the information in this Blog or for any consequential, special or similar damages, even if advised of the possibility of such damages.