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Virginia Administrative Code
Title 23. Taxation
Agency 10. Department of Taxation
Chapter 210. Retail Sales and Use Tax
12/3/2024

23VAC10-210-761. Innovative high technology industries; application of industrial manufacturing exemptions.

The industrial manufacturing exemptions are explained in detail at 23VAC10-210-920. Generally, those items exempted from the tax include materials that become a component part of finished products, machinery and tools (including computer hardware and software) that are used directly in production, power used to run exempt machinery, tangible personal property used directly in production line testing and quality control, and the materials, containers, labels, etc., used for the packaging of finished products. As stated in 23VAC10-210-920, the exemption applies only to the manufacture of products for sale or resale; thus, items used primarily in the production of products for ones' own use are not entitled to the industrial manufacturing exemption. The preponderance of use test, which is applicable to tangible personal property used both in a taxable and exempt manner by an industrial manufacturer, is explained in 23VAC10-210-920.

Statutory Authority

§§ 58.1-203, 58.1-609.5(6) and 58.1-609.5(7) of the Code of Virginia.

Historical Notes

Derived from VR630-10-49.2 § 2, eff. March 15, 1987, retroactive to December 1, 1986.

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