Rule 560-12-2-.105 - Machinery-Remanufacturing of Aircraft Engines or Aircraft Engine Parts or Components(1)Definitions. For purposes of qualifying for the exemptions provided for by O.C.G.A. § 48-8-3(34.2), and as used in this Regulation, the following definitions and explanations of terms shall apply: (a) The term "machinery" means an assemblage of parts that transmits forces, motion, and energy one to another in a predetermined manner to accomplish a specific objective.(b) The term "packaging operation" means bagging, boxing, crating, packaging, wrapping, labeling, palletizing, and other similar processes used by the remanufacturer to enclose or containerize remanufactured products in a manner suitable for sale or delivery to customers.(c) The term "remanufacture of aircraft engines or aircraft engine parts or components" means the substantial overhauling or rebuilding of aircraft engines or aircraft engine parts or components on a factory basis. Substantial overhauling or rebuilding of aircraft engines or aircraft engine parts or components means the disassembling, repairing, renovating, reassembling, reconstructing, inspecting, or testing, thereby restoring the aircraft engine or aircraft engine parts or components to their original state or an upgraded state. Such term includes a packaging operation when it is a part of a continuous remanufacturing operation; and the conveyance of work in process or finished units from one remanufacturing operation to another in the same plant facility. Such term does not include: storage; delivery to or from the plant; delivery to or from storage within the plant; repairing or maintenance of facilities; research; developmental testing; random or sample testing of materials or products; or cleaning when not part of a continuous remanufacturing operation.(2)General Requirements for the Remanufacturing Machinery Exemption. In order to qualify for the remanufacturing machinery exemption provided for in O.C.G.A. § 48-8-3(34.2), the property being purchased or leased must have the character of machinery at the time of the sale or lease, or consist of components which, when assembled, will have the character of machinery; the machinery must be used in the remanufacture of aircraft engines or aircraft engine parts or components; the machinery must be used directly in the remanufacturing operation; and the appropriate Certificate of Exemption under this Regulation must be obtained or provided. The exemption is not applicable to machinery used indirectly in the remanufacturing operation, or to auxiliary equipment and appurtenances or to materials or items to be incorporated into real estate construction. The Commissioner may allow an Application for Certificate of Exemption required by this Regulation to be filed subsequent to the purchase or lease of the machinery.(3)New and Existing Remanufacturing Plants.(a) Any person making a sale or lease of machinery which is used directly in the remanufacture of aircraft engines or aircraft engine parts or components and which is incorporated for the first time into a new remanufacturing plant located in this State shall collect the tax imposed thereon by O.C.G.A. §§ 48-8-1, et seq., as amended, unless the purchaser or lessee furnishes the vendor with a certificate issued by the Commissioner certifying that the purchaser or lessee is entitled to purchase or lease such machinery without paying the tax.(b) Any person making a sale or lease or machinery which is used directly in the remanufacture of aircraft engines or aircraft engine parts or components and which is incorporated, as additional machinery, for the first time into a remanufacturing plant presently existing in this State, or which is purchased or leased to replace machinery in a remanufacturing plant presently existing in this State, shall collect the tax imposed thereon by the O.C.G.A. §§ 48-8-1, et seq., as amended, unless the purchaser or lessee furnishes the vendor with a properly completed Certificate of Exemption (Form ST-5).(c) Any purchaser or lessee of machinery which is used directly in the remanufacture of aircraft engines or aircraft engine parts or components and incorporated for the first time into a new remanufacturing plant located in this State who desires to secure the benefit of the exemption provided by O.C.G.A. § 48-8-3(34.2) shall file an Application for Certificate of Exemption (Form STAERl) with the Commissioner, which shall include a schedule of machinery to be purchased or leased, a full description of the usage of the machinery in the remanufacturing operation, and the cost of each item of machinery In addition thereto, the Commissioner may require such other information as deemed necessary for the determination of the claim for exemption. These requirements are applicable to all purchasers and lessees, including holders of direct pay permits under Regulation 560-12-1-.16.(d) Upon approval of an application for the first time into a new remanufacturing plant, the Commissioner will issue a Certificate of Exemption for Remanufacturing Machinery (Form ST-AER2) for presentation by the purchaser or lessee to the machinery suppliers, whereupon the purchaser or lessee shall be relieved from payment of the tax and the machinery suppliers shall be relieved from collection of the tax.(4)Specific Applications.(a) When an otherwise exempt piece of machinery has multiple or interchangeable molds, dies, chucks, bits, or other tooling, only one such item per position on the machine will be recognized as an exempt component of an exempt machine.(b) Additional items which may qualify for the exemption include, but are not limited to, electrical components, including transformers, between the motor control center and exempt machinery and between exempt machinery; process piping, exclusive of hangers and supports, between exempt machinery; computer hardware and software which control exempt machinery; compressors that power exempt machinery; boilers which produce steam to be used by exempt machinery; and testing or monitoring machinery which is part of the continuous remanufacturing operation and which tests or monitors all of the materials or work in process, provided that, machinery used in random or sample testing cannot qualify for the exemption.(c) Examples of some common items that do not qualify for the exemption include, but are not limited to, foundations, supports, catwalks, hand tools, items used for protection or safety, and parts used in the repair, refurnishing, or reconditioning of machinery.Ga. Comp. R. & Regs. R. 560-12-2-.105
O.C.G.A. Secs. 48-2-12, 48-8-3(34.2), 48-8-38.
Original Rule entitled "Machinery-Manufacturing of Aircraft Engines or Aircraft Engine Parts or Components" adopted. F. Feb. 10, 1997; eff. Mar. 2, 1997.