SALT Report 3201 – The Arizona Department of Revenue released a Taxpayer Information Ruling LR13-008 (July 15, 2013) addressing the taxability of gear box oil used in a manufacturing machine process.
The Arizona Department of Revenue ruled as follows:
“Taxpayer’s purchase of gear oil used in the main drive gear box of machinery or equipment that bends, shapes and cuts metal bars as part of a manufacturing process, is subject to use tax. (An Arizona vendor that sells gear oil that is used by the purchaser in this function is subject to transaction privilege tax on the income derived from these sales.) “
For Further Information: