Manufacturing Machinery & Equipment FAQs

The exemption applies to all purchases, leases, or rentals made on and after January 1, 2006. The invoice date should be used to determine the date of purchase, lease, or rental. In addition, lease payments invoiced on and after January 1, 2006, for manufacturing machinery and equipment that is being leased pursuant to a lease agreement entered into prior to January 1, 2006, are exempt. For machinery and equipment that is manufactured or assembled in stages, the exemption applies to progress billings made on and after January 1, 2006.

Manufacturing machinery and equipment used both for manufacturing and for other purposes is exempt.

Yes, provided the electricity is exclusively used by the manufacturer for its manufacturing purposes. If the electricity is sold by the manufacturer or used for purposes other than its own manufacturing, such machinery and equipment is not qualified manufacturing machinery and equipment and is not exempt from tax.

No. The statutory definition of manufacturing specifically does not include the purification of water.

No. Machinery and equipment used only for research and development purposes is not exempt from tax.

No. Supplies such as rags, cleaning compounds, cutting oils, solvents, sand and glass beads for sand blasting, beakers and test tubes, and other similar items that are consumed during the manufacturing process are not exempt from tax.

No. The cement mixer becomes part of the truck and the exemption does not apply to licensable motor vehicles

Yes. The exemption applies to these items when purchased and used by a manufacturer to transport, convey, handle, or store either raw materials or components used in the manufacturing process, or the manufactured goods themselves.

Yes. Tools which are powered by electric, battery, or pneumatic sources, whether hand-held or bench-mounted, are exempt when purchased by a manfacturer and used more than fifty percent of the time in a manufacturing capacity. However, tools that are powered solely by human effort are not exempt.

Yes. Certain items used in the operation of qualified manufacturing machinery and equipment are exempt. Such items must attach to the machinery or equipment and facilitate its operation or function, such as drill bits, saw blades, sanding belts or shields. Qualifying items do not include consumable supplies such as solvents or cutting oils

No. The exemption is limited to purchases made by manufacturers. The Option 2 (or Option 3) contractor is not a manufacturer. Therefore, the Option 2 (or Option 3) contractor must pay sales or use tax on its cost of the press

No. Form 17 can only be used by exempt entities listed in Nebraska Sales and Use Tax Regulation 1-012.02C.

The exemption is limited to purchases made by manufacturers. The Option 1 contractor may purchase the equipment tax-free (for resale) by issuing the vendor a resale certificate. When the Option 1 contractor subsequently invoices the manufacturer for the work performed, the manufacturer will purchase the equipment exempt from tax by issuing an exemption certificate to the Option 1 contractor.

Yes. Items used to maintain the normal operation of qualified manufacturing machinery and equipment are exempt

As of January 1, 2006, charges for the installation of qualified manufacturing machinery and equipment are exempt from tax.

Yes. The production of distiller's grain is considered to be manufacturing, and the purchase of the machinery and equipment used in the production of ethanol or distiller's grain can qualify for sales tax exemption.

Yes. Tire chains are exempt as accessories purchased for use with qualifying manufacturing machinery or equipment (the forklift).