Ohio – Caustic Solution To Repair Dies Was Taxable

SALT Report 3466 – The Ohio Board of Tax Appeals determined that the taxpayer was liable for use tax on a caustic solution used as part of a die’s preparation process.  Ohio Adm. Code 5703-9-21(C)(4) provides a tax exemption for the purchase of “machinery, equipment, and other tangible personal property used during the manufacturing operation that control, physically support, produce power for, lubricate, or are otherwise necessary for the functioning of production machinery and equipment and the continuation of the manufacturing operation” but also states that “tools, equipment, and supplies made or purchased by the manufacturer for use in maintaining, installing, repairing, or cleaning its property, real or personal, are taxable.”  Therefore it was determined that because the caustic solution was used to prepare the dies for use after manufacturing operations have ceased and was not necessary for the continuation of the manufacturing operation, it was part of the “repair process” and was not tax exempt.

For Further Information:

OH Board Of Tax Appeals No. 614