93-011

Response July 16, 1993

Request

April 21, 1993

State Tax Commission

Commissioners

Heber M. Wells Building

160 East 300 South

Salt Lake City, Ut 84134

Re: Advisory opinion on exemption from sales tax

Dear Commissioners:

As tax advisors for XXXXX, we are writing to request an advisory opinion on the application of the sales tax exemption for manufacturing equipment to the following facts and circumstances.

XXXXX is planning to build a bagel manufacturing center where they will manufacture all of the dough which is distributed to each of their retail stores for final baking. The new manufacturing facility will not have any retail operations but will operate solely as a production center. XXXXX currently produces the bagels on a much smaller scale on the premises of one of their retail outlets. The new facility will greatly expand their bagel producing capacity and will enable them to meet their expansion plans of four or five new stores in the upcoming year.

It is our understanding that the bagel making equipment will be exempt from sales tax because it falls within industry number 2051, bread and other bakery products and is an expansion of current capacity. We would appreciate your ruling confirming exemption from sales tax by XXXXX. We appreciate your help with this matter. Please contact me at XXXXX if you have any questions.

Sincerely,

XXXXX

MEMORANDUM

TO: XXXXX, Director

FROM: XXXXX, Secretary

DATE: XXXXX

SUBJECT: Request for Advisory Opinion - No. 93-011DJ

Attached is a request for an advisory opinion from XXXXX for XXXXX. Will you please review the request of XXXXX regarding the application of the sales tax exemption for manufacturing equipment.

Please prepare the response for signature by the Commission as per the guidelines established by them.

Thank you.

July 16, 1993

XXXXX

Re: Advisory Opinion - Qualification of Machinery and Equipment for Sales Tax Exemption - Manufacturing

Dear XXXXX:

Your request (copy attached) for an advisory opinion as to whether certain equipment qualifies for sales tax exemption was referred to the Auditing Division for their analysis.

The division's staff recommendation is as follows:

Based solely upon the information contained in your opinion request, the described equipment meets the criteria for the exemption as outlined in Administrative Rule R865-19-85S (copy attached).

Based upon the facts presented in your letter, we are in agreement with the Auditing Division's recommendation. Obviously, if there are deviations from these facts, this opinion may be negated.

For the Commission,

Joe B. Pacheco

Commissioner