The DOR ruled that sales of materials, tools, fuel, and machinery to a contractor engaged to build a wind turbine that will provide electricity to a manufacturing facility are exempt from sales tax if the materials, tools, etc..., become part of the wind turbine. However, they are taxable if consumed and used before the turbine actually furnishes electricity to the facility. The sale of the wind turbine itself is also exempt from sales tax. The Department concluded that the wind turbine qualifies as a machinery used in an industrial manufacturing plant, and thus the sales are exempt under Mass. Gen. L. ch. 64H § 6(r) and Mass. Gen. L. ch. 64H § 6(s) because all of the electricity generated by the wind project will be used solely by manufacturer to provide power to its facility and the manufacturer will not otherwise sell any of the electricity to any third party. Massachusetts Letter Ruling 12-7.
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