Industrial machinery sales tax exemption (Tennessee)

The Tennessee Court of Appeals recently affirmed a chancery court’s conclusion that a taxpayer qualified for an industrial machinery sales tax exemption. The taxpayer at issue rented hygienically clean textiles to its customers for a single use, after which the textiles were retrieved to be sanitized by the taxpayer so they could be rented out again. The Department asserted that the taxpayer was not “processing” tangible personal property because it did not transform materials into a different state or form than their original existence.

Source: kpmg.com

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