Connecticut State Department of Revenue Services

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Ruling 89-265, Machinery

You have requested a determination as to the applicability of the sales and use tax to X Continuous Thickness Gages. In addition, we have discussed the issues with Audit Division personnel who had previously advised you of the possible taxability of the gages.

We have reached a conclusion regarding the specific types of gages to which you refer, assuming the following facts, stated in your letter:

  • the gages are mounted on the rolling mills or processing lines;
  • the operators cannot produce the finished product without the gages in operation and working correctly;
  • the gages measure the product on a continuous, and not an intermittent or random, basis.

Based on the above information, we conclude that these gages are machines used directly in the manufacturing process and/or quality control machines used exclusively in the manufacturing production process, and are therefore exempt from sales tax under Conn. Gen. Stat. § 12-412(34), Conn. Agencies. Regs. § 12-426-11b, and other relevant agency rulings.

We wish to emphasize the relatively narrow scope of this opinion. If X Gages are sold for applications or uses other than those specifically referred to in your letter, such as post-production measuring, random testing, off-line applications, and the like, such sales would probably be taxable. Any computer-operated control equipment sold with the gages would be deemed taxable, as well.

LEGAL DIVISION

December 7, 1989