Ruling 91-7

Manufacturing Air Compressors

FACTS:

Company purchases air compressors which serve various purposes in its manufacturing production process. One compressor is used solely to blow a part out of a die so that the part is not required to be handled in order to move it to the next production stage. The compressor is not used for any other process.

Two other air compressors are used primarily for sandblasting by blowing beads onto a part for the final finishing stage of production. Incidental to this use is that these two compressors are used for a portion of the time (approximately 40%) to power machines on the production line.

ISSUE:

Whether air compressors may be purchased exempt from sales tax when they are to be used directly in the manufacturing production process.

RULING:

Assuming that Company qualifies as a manufacturer, its use of the air compressors described herein qualifies for an exemption from sales and use taxes as machinery used directly in the manufacturing production process pursuant to Section 12-412(34) of the Connecticut General Statutes and Sections 12-412-11b(a)(9) and (11) of the Regulations of Connecticut State Agencies. Under these circumstances, the compressors have a direct effect on the finished product to be sold.

When an air compressor is used directly in the manufacturing production process, such as the die blowing and sandblasting described herein, the fact that the air compressor also powers machinery (i.e. is used indirectly in the manufacturing production process) does not affect its tax exempt status.

LEGAL DIVISION

April 2, 1991