New Jersey – Taxability of Machines Used to Produce Ingestible Energy Strips

SALT Report 1608 – The New Jersey Division of Taxation issued a Letter Ruling regarding a Taxpayer’s purchase of a machine that is used in the production of “energy strips.”  Energy strips are ingestible dietary supplements that provide increased energy to the consumer.
Each energy strip will be packaged individually inside of a foil pouch and sold to the consumer as a 4 count sleeve. The machine will be used by Taxpayer to assemble the 4 foil pouches together with the insert card, mechanically wrap and glue the paper sleeve around the pouches, and imprint a lot code and expiration date onto the paper to create the final product which will be sold to the consumer.
The Department determined that since the product will only be sold as a four-count sleeve and will not be available as individual foil pouches, the machine is used to assemble the product pouches into the form in which it will be purchased by the ultimate consumer. Therefore, the machine qualifies for the exemption under N.J.S.A. 54:32B-8.13(a).
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