Ga. Comp. R. & Regs. R. 560-12-2-.64 - Energy Necessary and Integral to Manufacturing
(1)
Purpose. This Rule addresses
the sales and use tax exemptions for energy used in manufacturing.
(2)
Definitions. The terms
defined in Rule
560-12-2-.62 entitled
"Manufacturing Machinery and Equipment, Industrial Materials, and Packaging
Supplies" apply to this Rule. In addition, for purposes of this Rule:
(a) "Competitive project of regional
significance" means the location or expansion of some or all of a business
enterprise's operations in Georgia where the Department of Economic Development
determines that the project would have a significant regional impact.
(b) "Energy" means natural or artificial gas,
oil, gasoline, electricity, solid fuel, wood, waste, ice, steam, water, and
other materials necessary and integral for heat, light, power, refrigeration,
climate control, processing, or any other use in any phase of the manufacture
of tangible personal property. The term excludes energy purchased by a
manufacturer that is primarily engaged in producing electricity for
resale.
(3)
Exemption under O.C.G.A §
48-8-3.2.
(a)
Requirements. Except as
otherwise provided in this paragraph, the sale and use of energy are exempt
from sales and use tax if the energy is:
1.
necessary and integral to the manufacture of tangible personal property
and
2. sold, used, stored, or
consumed at a manufacturing plant in Georgia.
(b)
Energy used to produce
electricity. This exemption does not apply to energy purchased by a
manufacturer that is primarily engaged in producing electricity for
resale.
(c)
Sales and use tax
for educational purposes. Energy otherwise exempt under O.C.G.A §
48-8-3.2 is not exempt from the sales and use tax for educational purposes levied
pursuant to Part 2 of Article 3 of Chapter 8 and Article VIII, Section VI,
Paragraph IV of the Constitution or from local sales and use taxes for
educational purposes authorized by or pursuant to local constitutional
amendment.
(d)
Phase-in
period. Except as provided in subsections (b), (c), and (e) of this
paragraph, such sale and use of energy qualify for a phased-in exemption in
accordance with the following schedule:
1.
Transactions occurring during the 2013 calendar year qualify for a 25 percent
exemption.
2. Transactions
occurring during the 2014 calendar year qualify for a 50 percent
exemption.
3. Transactions
occurring during the 2015 calendar year qualify for a 75 percent
exemption.
4. Transactions
occurring on or after January 1, 2016, qualify for a 100 percent
exemption.
(e)
Competitive projects of regional significance.
1.
Energy necessary and integral to
manufacturing. Beginning April 19, 2012, manufacturers qualifying as a
competitive project of regional significance are exempt from all state and
local sales and use tax on the sale and use of energy that is necessary and
integral to the manufacture of tangible personal property, except as provided
in subparagraphs (b) and (c). The phase-in period set forth in subsection (d)
does not apply.
2.
Energy
used in construction. In addition to the exemption in O.C.G.A. §
48-8-3.2, for projects approved by the Department of Economic Development during the time
period of January 1, 2012 through June 30, 2019, sales of energy used for and
in the construction of a competitive project of regional significance are
exempt from all state and local sales and use tax pursuant to O.C.G.A. §
48-8-3(93), including sales and use taxes for educational
purposes.
(4)
Exemption from the Special District Transportation Sales and Use Tax and
the Special District Mass Transportation Sales and Use Taxes.
(a)
Requirements. Except as
otherwise provided in this paragraph, the sale and use of energy are exempt
from the Special District Transportation Sales and Use Tax (O.C.G.A. Title 48,
Chapter 8, Article 5) and the Special District Mass Transportation Sales and
Use Taxes (O.C.G.A. Title 48, Chapter 8, Article 5A, Parts 1, 2, and 3) if the
energy is:
1. necessary and integral to the
manufacture of tangible personal property and
2. sold, used, stored, or consumed at a
manufacturing plant.
(b)
No phase-in period. This exemption is not subject to a phase-in
period.
(c)
Energy used to
produce electricity. This exemption does not apply to energy purchased
by a manufacturer primarily engaged in producing electricity for
resale.
(5)
Scope
of the exemptions: Necessary and integral to the manufacture of tangible
personal property. Energy used for any purpose at a manufacturing plant
is considered necessary and integral to the manufacture of tangible personal
property. This includes, for example, energy used:
(a) to operate machinery or
equipment;
(b) to create conditions
necessary for the manufacture of tangible personal property;
(c) to perform an actual part of the
manufacture of tangible personal property;
(d) in administrative or other ancillary
activities that are located and performed at the manufacturing plant;
(e) in related operations that convey,
transport, handle, or store raw materials or finished goods at the
manufacturing plant; and
(f) for
heating, cooling, ventilation, illumination, fire safety or prevention, or
personal comfort and convenience of the manufacturer's employees at the
manufacturing plant.
(6)
Examples.
(a) A manufacturer
uses fuel gases to perform repairs for unrelated parties at a Georgia
manufacturing plant. The fuel gases are not exempt because they are not used in
the manufacture of tangible personal property and, therefore, do not meet the
definition of "energy."
(b) A
manufacturer uses fuel gases to perform repairs to its own machinery and
equipment at a Georgia manufacturing plant. The fuel gases are exempt to the
extent provided in this Rule because they are used in the manufacture of
tangible personal property.
(7)
Certificates of Exemption.
(a) Any person making a sale of energy that
is necessary and integral to the manufacture of tangible personal property must
collect sales and use tax unless the purchaser furnishes the supplier with a
properly completed Certificate of Exemption or a direct pay permit.
(b) Where a Certificate of Exemption or
direct pay permit has not been previously obtained and submitted and tax is
remitted on the sale of exempt energy, the purchaser may apply to the
Commissioner for a refund of such tax.
(8)
Transaction date. For
purposes of this Rule, a transaction occurs on the date of purchase or, in the
case of energy billed on a monthly basis, on the billing date.
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.