Rule 560-12-2-.103 - Material Handling Equipment and Racking Systems(1) For purposes of qualifying for the exemption provided for by O.C.G.A. § 48-8-3(34.1), and as used in this Regulation, the following definitions and explanations of terms shall apply: (a) The term "distribution facility" means a warehouse, facility, structure, or enclosed area which is used primarily for the storage, shipment, preparation for shipment, or any combination of such activities, of goods, wares, merchandise, raw materials, or other tangible personal property.(b) The term "primary material handling equipment" means the principal machinery and equipment used to lift or move tangible personal property in a warehouse or distribution facility located in this State. Depending upon whether or not it is the principal machinery and equipment used to lift or move tangible personal property, the following items may be considered primary material handling equipment: 1. conveyers, carousels, lifts, positioners, pick-up-and-place units, cranes, hoists, mechanical arms, and robots;2. mechanized systems, including containers which are an integral part thereof, whose purpose is to lift or move tangible personal property;3. automated storage and retrieval systems, including computers which control them, whose purpose is to lift or move tangible personal property; and4. forklifts and other off-the-road vehicles which are used to lift or move tangible personal property and which cannot be legally operated on roads and streets.(c) The term "primary material handling equipment" does not include parts or equipment used to repair, refurbish, or recondition other equipment, but does include equipment, as defined above, which replaces in its entirety other primary material handling equipment.(d) The term "racking system" means any system of machinery, equipment, fixtures, or portable devices whose function is to store, organize, or move tangible personal property within a warehouse or distribution facility, including, but not limited to, conveying systems, chutes, shelves, racks, bins, drawers, pallets, and other containers and storage devices which form a necessary part of the facility's storage system.(e) The term "warehouse" means a facility, structure, or enclosed area which is used primarily for the storage of goods, wares, merchandise, raw materials, or other tangible personal property.(2) For purposes of qualifying for the exemption provided for by O.C.G.A. § 48-8-3(34.1), the following general requirements shall apply: (a) Except as otherwise provided in this Regulation, effective for deliveries which occur on or after July 1, 1994, the tax does not apply to sales of primary material handling equipment used directly for the handling or movement of tangible personal property in a warehouse or distribution facility located in this State, when the following conditions are met: 1. the equipment is part of an expansion of an existing warehouse or distribution facility or part of the construction of a new warehouse or distribution facility in this State;2. the total value of all real and personal property purchased or acquired by the taxpayer for use in the expansion or new construction of the warehouse or distribution facility is worth 10 million dollars or more (See paragraph (4)). Purchases made over a period of time, even though made in anticipation of an expansion, without definite plans will not be considered an expansion of an existing warehouse or distribution facility; and3. the purchaser has obtained a Certificate of Exemption as provided in subparagraph (c) of this Regulation.(b) Except as otherwise provided for in this Regulation, effective for deliveries occurring on or after July 1, 1995, the tax does not apply to sales of racking systems used for the conveyance and storage of tangible personal property in a warehouse or distribution facility located in this State, when the following conditions are met: 1. the equipment is part of an expansion of an existing warehouse or distribution facility in this State or part of the construction of a new warehouse or distribution facility in this State;2. the total value of all real and personal property purchased or acquired by the taxpayer for use in the expansion or new construction of the warehouse or distribution facility is worth 10 million dollars or more (See paragraph(4)). Purchases made over a period of time, even though made in anticipation of an expansion, without definite plans will not be considered an expansion of an existing warehouse or distribution facility; and3. the purchaser has obtained a Certificate of Exemption as provided in subparagraph (c) of this Regulation.(c) To obtain such Certificate of Exemption, the purchaser or lessee must submit an Application for Certificate of Exemption (Form ST-WD1). The application shall include a schedule of equipment to be purchased or leased, a full description of the usage of the equipment, and the cost of each piece of equipment. The Commissioner may require the purchaser or lessee to furnish such additional information as deemed necessary to determine whether the requirements and qualifications for the exemption are met.(3) Effective July 1, 1995, in order to qualify for the exemption provided for by O.C.G.A. § 48-8-3(34.1), a warehouse or distribution facility must not make retail sales from such family to the general public which equal or exceed 15% of the total revenue of the warehouse or distribution facility. A taxpayer who has qualified for the exemption provided for by O.C.G.A. § 48-8-3(34.1), or obtained a Certificate of Exemption therefor, shall be disqualified from receiving such exemption as of the date the taxpayer's warehouse or distribution facility makes retail sales to the general public equal to or greater than 15% of the total revenues of the warehouse or distribution facility. In the event that a taxpayer has obtained the benefit of the exemption contained in O.C.G.A. § 48-8-3(34.1) at a time when the warehouse or distribution facility made retail sales to the general public which equaled or exceeded 15% of the total revenues of the warehouse or distribution facility, the taxpayer may be required to repay any tax benefits received under said Code section or under this Regulation on and after the date such taxpayer became disqualified from receiving such exemption, and to pay penalty and interest at the rates provided for by law on such tax amounts.(4) Effective January 1, 1997, the total value of all real and personal property purchased or acquired by the taxpayer for use in the expansion or new construction of the warehouse or distribution facility must be worth 5 million dollars or more. Purchases made over a period of time, even though made in anticipation of an expansion, without definite plans will not be considered an expansion of an existing warehouse or distribution facility.Ga. Comp. R. & Regs. R. 560-12-2-.103
O.C.G.A. Secs. 48-2-12, 48-8-3(34.1).
Original Rule entitled "Material Handling Equipment" adopted. F. Aug. 19, 1994; eff. Sept. 8, 1994.Amended: F. Sept. 5, 1995; eff. Sept. 25, 1995.Amended: Rule retitled "Material Handling Equipment and Racking Systems". F. Feb. 10, 1997; eff. Mar. 2, 1997.