Tenn. Comp. R. & Regs. 1320-05-01-.106 - INDUSTRIAL MACHINERY

(1) Persons who wish to make purchases or leases of industrial machinery shall apply to the Commissioner of Revenue for authority to make such purchases exempt from tax. This application shall give such information as the Commissioner may require. If the Commissioner finds from such information that the applicant is entitled to make purchases or leases of industrial machinery, authority shall be permanent in nature and shall continue until such time as the business ceases operation or until such time as the business changes in character such that it is no longer operating within the scope of its original application. Any misrepresentation made on the application by the taxpayer will subject the taxpayer to any applicable tax, penalty and interest.

(2) Authority must be obtained prior to the purchase in order for the machinery to qualify as industrial machinery for tax purposes. However, if authority is not obtained prior to the purchase the Commissioner may allow retroactive application of the authority upon a showing sufficient to the Commissioner that the failure to obtain authority resulted from:

(a) A major restructuring of the business or the business having gone through a change in ownership; or

(b) A death of a key person in the tax area of the organization; or

(c) The entity having been misled by state officials which indicated that authority to purchase industrial machinery was not required; or

(d) Any other grounds that the Commissioner finds satisfactory to allow retroactive application of this exemption.

(3) Persons who have obtained authority from the Commissioner to make purchases of industrial machinery shall provide their vendors with a copy of their authority or a copy of a fully completed Streamlined Sales Tax certificate of exemption which must include the manufacturer's exemption authorization number included on the certificate issued by the Commissioner, and such purchases shall then be exempt from tax.

(4) Persons to whom the Commissioner has extended special written permission to make purchases for their own use under a certificate of resale pursuant to 1320-05-01-.68(4) must obtain authority from the Commissioner as provided in this rule prior to making purchases of industrial machinery, but may provide their vendors with a copy of the special permission extended under 1320-05-01-.68(4) in lieu of the authority to purchase industrial machinery.

(5) Persons seeking to purchase industrial machinery must comply with the provisions of this rule in order to obtain the exemption provided at T.C.A. § 67-6-206(a). Failure to do so shall subject such purchases to tax.

Notes

Tenn. Comp. R. & Regs. 1320-05-01-.106

Original rule certified June 7, 1974. Amendment filed March 3, 1983; effective June 15, 1983. Amendment filed February 17, 1988; effective May 29, 1988. Amendment filed June 28, 2000; effective September 11, 2000. Amendments filed June 28, 2016; effective 9/26/2016.

Authority: T.C.A. §§ 67-1-102, 67-6-102, 67-6-206, and 67-6-402.