HLB Gross Collins Varied

Georgia—Sales and Use Tax: Consumable Supplies Added to Manufacturing Exemption

Georgia legislation has been enacted affecting the sales and use tax exemption that applies to (1) the sale, use, or storage of machinery or equipment necessary and integral to the manufacture of tangible personal property; and (2) the sale, use, storage, or consumption of industrial materials or packaging supplies. Under the amendments in the legislation, “consumable supplies” are expressly included within the definition of “equipment,” an item that is covered by the exemption. Previously, consumable supplies were expressly excluded from the definition of “equipment.”   Effective Date is July 1, 2014.

As amended by the legislation, the definition of “consumable supplies” means tangible personal property (other than machinery, industrial materials, packaging supplies, and energy) that is consumed or expended during the manufacture of tangible personal property. The qualifying phrase “regardless of whether the items would otherwise be considered consumable supplies” is removed from a list of items given as examples of what qualifies for the exemption as necessary and integral to the manufacture of tangible personal property. The items listed as examples are machinery or equipment used to provide safety for employees working at a manufacturing plant, such as safety machinery and equipment required by federal or state law, gloves, ear plugs, face masks, protective eyewear, hard hats or helmets, and breathing apparatuses.