Response
December 1, 1989
XXXXX
Re:
Sales Tax - Clean Rooms
Dear
XXXXX:
This
letter is in response to your February 16, 1989 request for a Tax Commission
ruling on whether a "clean room" is tangible personal property and
whether XXXXX is entitled to exemption on fuels and electricity purchases. You also wanted to know if "clean
rooms" could always be treated as manufacturing machinery and exempt under
Sales Tax Rule R865-19-85S and §59-12-104(16).
Although
your inquiry was framed as a request for declaratory judgment, Tax Commission
policy is to initially treat all such inquiries as requests for advisory
opinions. As such, it was referred to the Tax Commission's Auditing Division
for their analysis and recommendation. The division recommendation is as
follows:
1. The "clean rooms," as manufactured
by XXXXX and described in their present literature, are personal property.
2. Your client, XXXXX is a manufacturer who is
entitled to make tax-free purchases of fuels and electricity for use in
manufacturing "clean rooms."
3. Auditing Division staff cannot make a
recommendation that "clean rooms" are always manufacturing machinery
or equipment. Whether they qualify depends entirely on the use made of them by
XXXXX's customers.
Based
on the facts presented in your letter, we are in agreement with the Auditing
Division's recommendations. Obviously, if there are deviations from these
facts, this opinion may be negated.
If
you do not agree with this determination, you may appeal to the Tax Commission
for a formal hearing. The results of that hearing would constitute a
declaratory judgment and be appealable to the Utah Supreme Court. A notice of
appeal rights is attached.
For The Commission,
Joe
B. Pacheco
Commissioner