Beginning on July 1, 2014, manufacturers and certain research and developers may qualify for a partial exemption of sales and use tax on certain manufacturing and research and development equipment purchases and leases. To be eligible for this partial exemption, you must meet all three of these conditions:

  • Be engaged in certain types of business, also known as a “qualified person.”
  • Purchase “qualified property.”
  • Use that qualified property for the uses allowed by this law.


The list of criteria to qualify for the manufacturing exemption can be quite complex. We suggest you take the time to determine if your business and purchases or leases qualify.

Qualified person

A “qualified person” means a person who is primarily engaged (50 percent or more of the time) in those lines of business described in the North American Industry Classification System (NAICS) Codes 311100 to 339999, inclusive, 541711, or 541712 published by the United States Office of Management and Budget (OMB), 2012 edition. (See Understanding Your NAICS code on Industry Topics tab)

These industries generally include those primarily engaged in the business of all forms of manufacturing, research and development in biotechnology, and research and development in the physical, engineering, […]