SUT-80 - Industrial Machinery Exemption for Manufacturers

Tennessee allows for an exemption of sales tax on industrial machinery purchased by a qualified manufacturer or processor. The industrial machinery must be necessary to and primarily used for the fabrication or processing of a product for resale and consumption off the premises. The manufacturer must be authorized by the Department of Revenue for this exemption. The application for industrial machinery authorization can be found here. Upon receipt of the Industrial Machinery Exemption certificate, a manufacturer may purchase industrial machinery and some services exempt from sales or use tax. The qualified manufacturer will also qualify for reduced sales tax rates or total exemption on the purchase of energy fuel and water used in the manufacturing facility.

Contractors hired to install industrial machinery for qualified manufacturers must also apply to the Department of Revenue for their own industrial machinery authorization number for each project.

Reference: Tenn. Code Ann. § 67-6-206.

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