Manufacturing and R&D machinery and equipment

From the 2024 DOR Tax Exemption Study

82.08.02565; 82.12.02565 - Manufacturing and R&D machinery and equipment Description Manufacturers and processors for hire are eligible for a sales and use tax exemption on purchases of manufacturing machinery and equipment (M&E) used directly in a manufacturing operation, research and development operation, or testing operation. Charges for installing, repairing, cleaning, altering, or improving the machinery and equipment are also exempt. Property with a useful life of less than one year, hand tools, and consumable supplies do not receive an exemption. Manufacturing, research and development (R&D), and testing operations for cannabis or cannabis related products are also not eligible for the exemption. "Manufacturing operation" means the manufacturing of articles, substances, or commodities for sale as tangible personal property. “Research and development” means activities performed to discover technological information, and technical and nonroutine activities concerned with translating technological information into new or improved products, processes, techniques, formulas, inventions, or software. The term includes exploration of a new use for an existing drug, device, or biolo