Section 50 IAC 10-1-6 - "Qualifying machinery and equipment" definedAuthority: IC 6-1.1-12.1-13; IC 6-1.1-31-1
Affected: IC 6-1.1-12.1
Sec. 6.
(a) "Qualifying machinery and equipment" means tangible property used in the direct production, manufacture, fabrication, assembly, extraction, mining, processing, refining, or finishing of other tangible personal property as follows: (1) As used in this subsection, "production, manufacture, fabrication, assembly, extraction, mining, processing, refining, or finishing" is a comprehensive description of the various means of production and circumscribes all of the operations or processes by which a finished product is derived.(2) As used in this subsection, "direct", within the phrase "used in the direct production, manufacture, fabrication, assembly, extraction, mining, processing, refining, or finishing of other tangible personal property", means an essential or integral part of the operation or process that leads to the creation of other tangible personal property.(3) The conversion of a solid waste or a hazardous waste into energy or other useful products constitutes use in the direct production, manufacture, fabrication, assembly, extraction, mining, processing, refining, or finishing of other tangible personal property.(b) Personal property will be qualifying machinery and equipment when it is used within the process that chronologically begins with the material handling equipment that carries or moves the raw material from its on-site storage location to the first machine or production step and ends with the material handling equipment that carries or moves the finished product from its final machine or production step to the in-plant finished good storage site.(c) Examples of personal property that may be considered qualifying machinery and equipment include, but are not limited to, the following: (1) Computer equipment, if used directly to control equipment directly used in the manufacturing process.(2) Laboratory equipment, if used directly to test the tangible personal property being produced.(3) Testing and inspection equipment, including quality control equipment, used to ensure the specifications or quality of the tangible personal property being produced. However, the equipment must be used:(A) as part of the production process; and(B) to test or inspect the tangible personal property being produced.(4) Shelves, racks, or other temporary storage facilities or containers used to transport or convey work-in-progress from one (1) step in the production process to another step in the production process, or for the temporary storage of work-in-progress between one (1) step in the production process to another step in the production process.(d) Examples of personal property that will not be considered qualifying machinery and equipment include, but are not limited to, the following:(1) Computer equipment, if used for such functions as administration, payroll, bookkeeping, drafting, production scheduling, or inventory control.(2) Furniture and fixtures, such as office furniture, telephones and telephone equipment, break room fixtures, and employee lockers.(3) Maintenance equipment used to repair production equipment.(4) Licensed transportation vehicles.(5) Warehouse racks, shelving, or other equipment used to store either raw materials or finished goods.(6) Equipment used in research and development, including computer equipment used in research and development.(e) If computer equipment, or other personal property, is both used in direct production and is also used for purposes other than direct production, an allocation shall be made between its use in direct production and its use for purposes other than direct production.Department of Local Government Finance; 50 IAC 10-1-6; filed Feb 8, 1996, 5:30 p.m.: 19 IR 1295; errata filed Feb 9, 1996, 11:05 a.m.: 19 IR 1372; filed Dec 21, 2000, 2:11 p.m.: 24 IR 1303Filed 11/2/2020, 9:34 a.m.: 20201202-IR-050190636FRA