Arizona Sales Tax on Manufacturing and Machinery Arizona: Sales Tax Handbook

Arizona:

Are Manufacturing and Machinery subject to sales tax?

While Arizona's sales tax generally applies to most transactions, certain items have special treatment in many states when it comes to sales taxes. This page describes the taxability of manufacturing and machinery in Arizona, including machinery, raw materials and utilities & fuel. To learn more, see a full list of taxable and tax-exempt items in Arizona.


Machinery
EXEMPT
In the state of Arizona, they are considered to be exempt only if used directly in the manufacturing, processing, fabricating, job printing, refining or metallurgical operations.

Raw Materials
EXEMPT
In the state of Arizona, the tax only applies to the materials which are utilized and ultimately consumed (not incorporated) in the process of manufacturing property. This being said, the materials which have been incorporated into manufactured property are considered to be qualified for the resale exemption.

Utilities & Fuel
TAXABLE
Sales of utilities & fuel are subject to sales tax in Arizona.


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Source: http://www.salestaxhandbook.com/arizona/sales-tax-taxability/manufacturing-and-machinery