Manufacturing Sales and Use Tax Rule Review – Action Needed


As part of the required review of its rules, Ohio Department of Taxation has proposed revisions to OAC 5703-9-21, the manufacturing sales tax rule. This is the first time since the rule was promulgated in 1989 that changes have been proposed. A memorandum from OMA tax counsel Mark Engel of Bricker & Eckler provides background and details of the rule and the proposed changes. In 1989 the legislature enacted a sweeping revision to the manufacturing sales tax exemption to provide more certainty and reduce the amount of litigation associated with the tax exemption. At the same time, the Department of Taxation promulgated a rule providing guidance, including examples, regarding the application of the new rule. The rule revisions were the result of a lengthy process in which both industry and the department worked out provisions acceptable to both parties. OMA and its members were heavily involved in the creation of this rule. Now for the first time since the rule was first enacted, the department is preparing for a required rule review. This is an opportunity for manufacturers to work together to revise portions of the rule that have been troublesome over the past two decades. All members who would like to work through the OMA to review this very important and impactful rule please contact OMA’s Rob Brundrett. 4/20/2017