EFTA01129784.pdf

Note: See also TP-64, Notice to Taxpayers Requesting Information or Assistance from the Tax Department. The publication you requested begins on page 2 below. EFTA01129784 New York State Department of Publication 852 i Taxation e•j (12/97) , and Finance Sales Tax Information For: CI Manufacturers O Processors O Generators O Assemblers O Refiners O Miners and Extractors O Other Producers of Goods and Merchandise New York State and Local Sales and Use Tax EFTA01129785 EFTA01129786  TABLE OF CONTENTS INTRODUCTION 1 PART I - GENERAL INFORMATION The Production Exemption 2 Production Processes Defined Manufacturing 2 Processing 3 Generating 3 Assembling 3 Refining 4 Mining 4 Extracting 4 Beginning and End of the Production Process 5 Purchases That Qualify for the Production Exemption 7 Purchases That Do Not Qualify for the Production Exemption 8 Differences Between the State and Local Production Exemptions 8 Research and Development 10 Waste Treatment Equipment 12 PART II - PI IRCI IASF.S BY A MANUFACTURER Raw Materials 14 Machinery and Equipment 14 On-Site Assembly of Production Machinery and Equipment 14 Rigging Services 15 Installing, Repairing, Maintaining, and Servicing Production Machinery and Equipment 16 Plumbing Fixtures and Electrical Components Used in the Installation Of Exempt Production Machinery and Equipment 17 Gas, Electricity, and Other Energy Sources 17 Motor Fuel 19 Diesel Motor Fuel 19 Parts Used in Production 20 Tools Used in Production 20 Supplies Consumed in Production 21 Cartons, Containers, and Packaging Materials 22 Labels and Tags 23 Palletize( System Used in Production 23 Quality Control 24 Safety Apparel and Safety Supplies 25 Storage and Demurrage Charges 25 Food Processing Equipment 25 Process Piping 26 Foundry Equipment 26 EFTA01129787  TABLE OF CONTENTS PART III - SALES BY A MANUFACTURER Tangible Personal Property 27 Bulk Sales 27 PART IV - INSTALLATIONS OF MACHINERY & EQUIPMENT TREATED AS A CAPITAL IMPROVEMENT 29 PART V - MISCELLANEOUS ACTIVITIES Tangible Personal Property Manufactured, Processed, or Assembled by the User 30 Manufacturers as Contractors 31 Property Donated to an Exempt Organization 32 Filing for a Refund or Credit 33 PART VI - CHART A Gcncral Summary of the Production Excmption 34 PART VII - CHART B Examples of Taxable and Exempt Purchases by a Manufacturer 35 APPENDIX A Determining Electricity Used in Production 43 APPENDIX B Meat Processing Machinery and Equipment 45 APPENDIX C Legislative History 47 APPENDIX 1.) Glossary of Terms 50 Taxpayer Assistance (Telephone Numbers and Addresses) Back Cover EFTA01129788  INTRODUCTION This publication contains information about exemptions from New York State sales and compensating use taxes (including the' % tax imposed within the Metropolitan Commuter Transportation District or MCTD), and local sales and compensating use taxes available to certain manufacturers of products for sale. It covers cxcmptions available on purchases of • machinery and equipment • parts, tools and supplies • fuel and utilities • installation services • repair and maintenance services This publication also contains information about the exclusion from sales and use taxes relating to purchases of raw materials for resale, the exemptions available for purchases of property and services used in research and development, and the exemption available for eligible donations of property. The application of the compensating use tax to certain uses of tangible personal property purchased by producers of goods for sale is also covered in this publication. The production operations eligible for the cxcmptions outlined in this publication arc those that produce goods for sale by manufacturing, processing, generating, assembling, refining, mining or extracting operations. This publication does not discuss the specific exemptions available to the following industries: Farming. For information on the exemptions available to farmers, see Publication 844, Sales Tax Information for Farmers. Fishing. The specific exemptions available to operators of commercial fishing vessels are not covered in this publication. Please contact the Tax Department for additional information on these exemptions. Film and Motion Picture Producers. For information on the specifics of the exemptions and exclusions as they apply to film or motion picture producers, please see Publication 28, A Guide To Sales Tax For The Film Industry. MCTD. In instances where the term New York Stale is mentioned within this publication relating to the imposition of sales and use taxes, the term includes the Metropolitan Commuter Transportation District, or MCTD (which is comprised of the counties of Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk and Westchester, and the City of New York). The information presented is current as of this publication's print date. In instances where there seems to be a discrepancy between the information presented and the Tax Law or regulations, the law and regulations govern. Telephone numbers and addresses for obtaining forms, publications, or other information appear on the back cover of this publication. 1 EFTA01129789  PART I - GENERAL INFORMATION The Production Businesses that produce tangible personal property, gas, electricity, refrigeration, or steam (products) for sale are Exemption entitled to certain exemptions Gum New Yusk State and local sales and compensating use taxes. For purposes of this publication, we will refer to these exemptions, collectively, as The production exemption the production exemption. applies when products are produced for sale using one The production exemption applies only when products are or more of the qualifying produced for sale. This includes the mass production of production processes standardized items, as well as the production of items based on a customer's specifications. The exemption is for certain purchases of machinery, equipment, parts, tools, supplies, utilities, and fuel used us consumed in the production process. Tangible personal property, utilities or fuel purchased for use in activities that take place before the production process begins, or after the production process ends, do not qualify for exemption. Production Production is the means by which products are created using one or more of the following operations (or production Processes Defined processes): • manufacturing • processing • generating • assembling • refining mining • extracting Manufacturing generally results in the creation of a product Manufacturing that is substantially different in form, character, composition, and usefulness from its components. Example 1. A dressmaker purchases bolts of cloth from a textile manufacturer and uses patterns to cut the cloth into bodices, sleeves, and skirts. The dressmaker then stitches 2 EFTA01129790  those pieces together to form dresses. This is a manufacturing operation. Example 2. A steel manufacturer combines iron with carbon to make commercial steel. This is a manufacturing operation. Processing Processing generally results in a change in the nature, shape, or form of materials. Example 3. A textile manufacturer dyes bolts of cloth in different colors. The dyeing of the cloth is a processing operation. Example 4. As part of the production of decorative landscaping stone, chunks of rock are passed through a series of rock crushers which reduce the chunks into smaller sizes. This is a processing operation. Generating Generating is the creation of a product (such as electricity, steam, or refrigeration) by means of a natural or chemical process. Example 5. Hydroelectric power is produced by directing the course of water so that the water falls or flows over turbine blades. The action of the water falling or flowing over the blades creates energy. This energy is conveyed to a generator where it is converted into electrical energy (hydroelectric power). The production of hydroelectric power is a generating operation. Assembling Assembling is a manufacturing operation, or an adjunct to a manufacturing operation, that produces goods by fitting together various parts to make a complete product. Example 6. A beer keg is made by welding aluminum discs together and attaching a plate and a tap to the welded aluminum. The production of the beer keg is an assembly operation. Example 7. A manufacturer of television sets purchases cabinet components that are assembled to create television cabinets. The manufacturer also purchases picture tubes, circuitry boards, and other components. These components are assembled to create the internal mechanism, which is then installed in the cabinets to create complete television sets. This is an assembly operation. 3 EFTA01129791  Example 8. A wreath is made by covering a wire form with felt material and gluing pine cones, assorted dried leaves, berries, and dried flowers to the felt. This is an assembly operation. Refining Refining is the operation by which impurities or unwanted elements are removed from a product. Example 9. Production of gasoline, motor fuels, and fuel oils from crude oil is a refining operation. Example 10. Producing salt compounds by replacing all or part of the hydrogen acid content in raw, unrefined salt is a refining operation. Mining Mining is the operation by which minerals are removed from the earth through either surface excavations (such as open-pit mines and strip mines) or underground excavations. Mining includes any activities involved in the removal of the minerals from their original location. The preparation, washing, cleaning, or other processing of the minerals at the mine location is also part of the mining operation. Example 11. Producing building stone, slate or limestone num a Tidily is a ht4/ d I of;k mining operation. Example 12. Dissolving an underground salt deposit with water and pumping the salt out of the ground is a solution mining operation. Extracting Extracting is a manufacturing operation, or an adjunct to a manufacturing operation, in which oil, gas, or mineral deposits are removed from their natural underground reservoirs. Example 13. A company extracts iron ore in both open pit and underground mines. After the ore is extracted from the earth, rock, foreign materials, and other unwanted elements are sorted out. The ore is then crushed and washed. The removal and processing of the ore to remove its iron content is an extracting operation. Example 14. Cutting and removing coal from the face of a coal seam is an extracting operation. 4 EFTA01129792 Beginning and End It is important to identity when the production process begins and ends since property, utilities, and fuel used in activities of the Production that occur before the production process begins, or after the Process production process ends, are not eligible for the production exemption. The point at which production begins and ends depends upon the procedures used in a particular operation. Manufacturing. Processing, In manufacturing, processing, and assembling operations, the and Assembling Operations production process generally begins when the materials that serve as raw materials for the process are received at the production site. The activities of receiving, unloading, and storing raw materials are considered a part of the production cycle as long as the raw materials are not weighed, inspected, measured, tested, or inventoried before being placed in the production line. Example 15. A manufacturer of paper products orders raw material from a supplier. When the materials are received at the plant, the cases are unloaded and taken from the receiving dock directly to the storage area and placed in storage. The cases arc counted as they are unloaded for the sole purpose of verifying the number of cases received with the number of cases shown on the shipping manifest. The raw materials are taken from storage as needed and placed directly in the production line. In this case, the production process begins with the unloading of the raw materials at the receiving dock. If the raw materials are weighed, inspected, measured, tested, or inventoried before they arc placed in storage, then the production process begins when the materials arc placed in storage. Example 16. The facts are the same as in Example 15, except that the raw materials are taken from the receiving area to a testing area in the plant where they are counted and tested for quality. From the testing area, the materials are transported to the storage area and placed in storage. In this case, the production process begins with placing the raw materials into storage. The production process for manufacturing, processing, and assembling operations ends when the product is completed, packaged, and ready to enter the stream of commerce. (The on-site assembly of machinery or equipment at the site of the purchaser will sometimes be recognized as a continuation of 5 EFTA01129793 the manufacturing process. See On-Site Assembly of Production Machinery and Equipment on page 14.) Example 17. A manufacturer who sells products by the pallet load has a palletizer system. The system consists of a pallet loader or palletizer (the machinery that automatically arranges cases into layers and stacks them on pallets), and the conveyor system which feeds the cased products into the palletizer. The system is used to prepare pallets containing one or more products. The finished product is labeled, packaged, and palletized before being shipped or placed into storage to await shipment. The pallets are transferred to the purchaser along with the products that are being sold. The palletizer system is part of the production line, and the production process ends when the finished product is palletized. An interruption in the production cycle before the product is finished and ready for sale does not terminate the production process. Example 18. A manufacturer who supplies private label food products sells the product by the pallet load. The finished products are placed in unlabeled cans and stored until purchase orders are received. When orders for a particular brand label are received, the product is returned to the production line where the brand label is applied to the container. The containers are then cased and palletized for shipment. The production process ends when the product is palletized and ready for sale. Any activities that occur after the product is completed and in the form and packaging in which it will be sold are not part of the production process. This includes transporting the completed product from the production line for storage or shipment. Example 19. A manufacturer of charcoal briquettes places the finished products into sacks which are then sewn closed. The sack is the packaging in which the finished product is sold. The sacks are transferred to storage to await shipment. When au ()flier is received, the number of bags ordered is loaded onto a wooden pallet and secured to the pallet for shipment. Upon delivery, the product is unloaded and the pallet is returned to the manufacturer. In this situation, the production process ends when the sacks are sewn closed. The activities involved in palletizing and preparing the product for shipment are not part of the production process. 6 EFTA01129794 Refining Operations In refining operations, the production process begins when the raw materials are received at the production site, provided the raw materials are not weighed, inspected, measured, tested, or inventoried before entering the production line. Generally, the production process is deemed to end when the product is ready for sale. Example 20. Production of gasoline, motor fuels and fuel oils from crude oil is a refining operation. Example 21. Producing salt compounds by replacing all or part of the hydrogen acid content in raw, unrefined salt is a refining operation. Mining and Extracting In mining and extracting operations, production begins with Operations the activities involved in preparing the production site for use Example 22. After a gas producer selects a drilling site, the site is prepared by clearing the terrain and building access roads. Clearing the land and constructing access roads is the beginning of the production process. In oil, gas and solution mining operations, the production process ends at the point of sale to the first commercial purchaser (the first person to whom the product is sold for compensation). In other mining operations, the production process ends when the product has been processed at the site and is in the form and condition in which it will be sold, including any packaging. In extracting operations, the production process ends when the product has been processed at the site and is in the form and condition in which it will be sold, including any packaging. Purchases That The production exemption applies to purchases of machinery and equipment used directly and predominantly in the Qualify for the production process. Purchases of parts, tools, and supplies Production may also qualify for exemption. Purchases of certain Exemption maintenance and repair services performed on exempt production machinery and equipment, and on exempt parts, tools, and supplies, may qualify for exemption as well. 7 EFTA01129795  The production exemption also applies to purchases of fuel, gas, electricity, refrigeration, and steam, and gas, electric, refrigeration, and steam services used directly and exclusively in the production process. The purchase of machinery or equipment used by a subcontractor to perform part of a production process may also be entitled to exemption as production machinery and equipment. Purchases That Do Purchases of tangible personal property, fuel, and utilities used in activities that occur before the beginning of the Not Qualify for the production process are not eligible for the production Production exemption. In addition, purchases of tangible personal Exemption property, fuel and utilities used in activities that are incidental or ancillary to the production process are not eligible for the production exemption. Incidental and ancillary activities include functions such as: purchasing, transporting, and testing raw materials: general office and collection work; clerical work related to production (such as preparation of work records, production records, and time records); and maintenance and janitorial services used to keep premises clean and in condition for operation of the production process. Also excluded from the production exemption are purchases of tangible personal property, fuel, or utilities used in activities that occur after the production process ends (such as displaying, selling, casing, loading, or delivering finished goods). Differences Between Not all purchases that are exempt from the New York State portion of the sales or use tax are exempt from the tax the State and Local imposed by the local jurisdiction in which the purchase Production transaction takes place. Exemptions The differences between the New York State production exemption and the exemption provided by the localities are discussed in this section. 8 EFTA01129796 Machinery and Equipment Purchases of machinery and equipment used directly and predominantly in the production process are exempt from both New York State and local sales and use taxes. Parts Purchases of parts are exempt from both state and local sales and use taxes, when the parts are to be installed on exempt production machinery or equipment. Tools and Supplies Purchases of tools and supplies to be used directly and predominantly in production are exempt from both state and local sales and use taxes. Installation, Repair and The services of installing, repairing, maintaining, or servicing Maintenance Services exempt production machinery, equipment, parts, tools, and supplies are exempt from New York State sales and use taxes. These services are also exempt from the local sales and use taxes imposed within New York City, when the services are delivered in New York City. However, these services are subject to the applicable local sales and use taxes, when delivered outside New York City. Note: Prior to September I, 1996, New York City imposed a sales tax on the services of installing, repairing, maintaining, or servicing exempt production machinery, equipment, apparatus, parts, tools, and supplies. The City provides a refundable credit against the City's General Corporation Tax (GCT) and Unincorporated Business Tax (UBT), respectively, for the amount of City sales tax (plus interest) paid on such services. The credit is available only for those taxes and related interest paid on or after January 2, 1995 (although the payment may relate to a taxable transaction that took place before January 2, 1995). Coal, Gas, Electricity, Purchases of coal, gas, electricity, fuel oil, and other energy Fuel Oil, and Other Energy sources (other than motor fuel or diesel motor fuel) qualify Sources for exemption at the time of purchase when such energy sources are to be used directly and exclusively in the production process. These purchases are exempt from state sales and use taxes, and local sales and use taxes other than the local sales and use taxes imposed within New York City. The appropriate state and local sales taxes must be paid at the time motor fuel or diesel motor fuel is purchased. If the fuel is used directly and exclusively in the production process, a refund or credit of the state sales tax paid may be applied for. If the fuel is purchased outside New York City, a refund or credit of the local sales tax paid may be applied for as well. 9 EFTA01129797  Note: There is no exemption from the 4% local sales tax imposed in New York City on purchases of fuel, gas, electricity, refrigeration, steam, and related services used or consumed in production. Taxpayers who have paid the 4% local tax imposed in New York City on electricity and electric services used in qualifying manufacturing, processing or assembling operations are entitled to claim a refundable credit, equal to the amount of the tax paid, against the City's General Corporation Tax (GCT) or Unincorporated Business Tax (UBT). Research and The purchase of tangible personal property used directly and predominantly in research and development in the Development experimental or laboratory sense is exempt from sales and use taxes. Research and development in the experimental or laboratory sense means research which has as its ultimate goal: • basic research in a scientific or technical field of endeavor; • advancing the technology in a scientific or technical field of endeavor; • developing new products; • improving existing products; or • developing new uses for existing products. This exemption does not apply to expenses incurred to build or maintain facilities that are used in research or development, or the cost of desks, typewriters, and other office machinery or equipment used in administering research or development work. It also does not apply to the ordinary testing or inspection of materials or products for quality control, efficiency surveys, management studies, consumer surveys, advertising, promotions, or research in connection with literary, historical, or similar projects. Purchases of fuel, gas, electricity, refrigeration, and steam, and of gas, electric, refrigeration, and steam services are exempt if used or consumed directly and exclusively in research and development in the experimental or laboratory sense. The portion used for heating and lighting the building (or the facility where research and development take place) is taxable. The purchase of laboratory equipment used directly and predominantly in research and development is exempt. 10 EFTA01129798  Laboratory equipment includes, but is not limited to, items such as vacuum pumps, microscopes, centrifuges, measuring devices, electronic measuring equipment, or laboratory glassware (linkers, tubes, flasks and so forth). It also includes heating, cooling, and humidifying equipment used directly and predominantly to maintain a controlled atmosphere in a room or rooms used exclusively for research and development projects, and fuel or utility services to operate the equipment. Purchases of Parts, Tools, Purchases of items such as screws, nuts, bolts, aluminum and Supplies tubing, and similar supplies, for use in making laboratory models of experimental equipment (such as lasers), are exempt if the construction is performed in-house (that is. by the purchaser's own labor force) and the items become component parts of the equipment heing developed. The purchase of special tools, dies, jigs, and similar items is taxable when these items are purchased for use by an in-house machine shop to make special experimental equipment for a specific research project. The purchase of small tools (such as pliers, wrenches, and screwdrivers) is exempt when these tools are purchased for use by the scientific and engineering staff directly and predominantly in research and development. For example, a tool that is used by a scientist to calibrate and adjust exempt laboratory equipment may be purchased without payment of sales tax if this is the predominant use of the tool. Purchases of repair parts are exempt when the parts are used by the purchaser's own labor force to repair exempt machinery or equipment used in research and development. Examples of repair parts are vacuum tubes, transistors, diodes, replacement parts for vacuum pumps, and x-ray equipment. If repairs are made by an outside vendor, the cost of the materials used is exempt if the cost is separately stated on the bill, however, the cost of labor for the service is subject to state and local sales tax. In addition, charges for installing, servicing, or maintaining exempt equipment are subject to state and local taxes. Purchases of Packaging Purchases of tangible personal property such as gas cylinders, Materials protective packaging materials (such as foam rubber), and similar items, are exempt when the items arc used to protect materials from injury, contamination, shock, or other damage EFTA01129799  while such materials are in the research facility or are being moved to another research facility for further research and development. The exemption does not apply if the items are used to protect materials while they arc being transported after completion of the research and development operations. Purchases of Stationery Purchases of stationery, pencils, pens, ink, scientific Supplies and Writing notebooks, logbooks, and similar supplies, are exempt when Implements used directly and predominantly in recording qualifying research and development experiments by scientists, engineers, and technicians. Purchases of Printing The cost of printing supplies used in producing scientific Supplies reports and articles by the research staff is exempt when these publications arc printed in-house, and arc used by the research staff in research and development. Purchases of Laboratory 11used directly and predominantly for qualifying research Furniture and development, the purchase of laboratory furniture such as desks, laboratory tables, stools, benches, sinks, and storage cabinets, is exempt. However, purchases of desks, typewriters and other office machinery or equipment used in administering research or development work are not exempt. Purchases of Technical Technical books and journals purchased for the scientific and Books, Journals, Etc. cnginccring staff for use in qualifying research and development operations are exempt. However, the purchase of an information service that is subject to tax under Tax Law Section 1105 is not exempt The Exemption Document An Exempt Use Certificate, Form ST-121, should be given to to Use the vendor when making the tax-exempt purchases described in this section. Waste Treatment The purchase of machinery and equipment qualifies fur exemption from all state and local sales taxes when purchased Equipment by a manufacturer and used directly and predominantly in treating, burying, or storing waste materials, when over 50% of the waste results from the manufacturer's own production processes. Waste treatment equipment includes the monitors and analyzers that are built into a system designed to prevent water or air pollution, and that are essential to the operation of the system. 12 EFTA01129800 Building materials which become part of a capital improvement used as a waste treatment facility are not eligible for the production exemption. (See Part IV for information on capital improvements.) Examples of exempt equipment: dust collecting filters through which air is passed, used by a manufacturer whose production functions include grinding; waste treatment equipment at a manufacturing plant which treats both sanitary waste and effluent from an industrial process, where more than 50% of the waste being treated is a product or by-product of the production process; a mobile filter press designed to refine liquid industrial waste is used by a manufacturer to extract solids from the liquid waste created by the manufacturer's's production process, and then pump the filtered water back into the production system; and an enclosed system used in a manufacturing plant to prevent the escape of particulate dust and gases that arc generated in the Course of inciting down scrap steel used in the manufacturing process. 13 EFTA01129801  PART II - PURCHASES BY A MANUFACTURER Raw Materials Raw materials used in production and certain supplies, such as chemicals and catalysts which become physical components of the final product for sale, may be purchased for resale and are therefore not subject to state or local taxes. Use Form ST-120, Resale Certificate, to purchase raw materials and qualifying supplies without paying sales tax on the purchase. Machinery and To be eligible for the production exemption, machinery and equipment must be used directly and predominantly (more Equipment than 50% of the time) in the production of tangible personal property, gas, electricity, refrigeration, or steam for sale. Partial usage in administration or distribution phases will eliminate the machinery or equipment from qualifying for the production exemption, if the non-qualifying usage amounts to more than 50% of total usage. For example, a computer used by a book publisher predominantly (that is, more than 50% of the time) to produce and edit manuscripts on magnetic tape would be eligible for the production exemption. If a computer performs similar editing operations, but is used predominantly to perform general office work, credit and collection, purchasing, or any other nonproduction activity, the computer would not be eligible for the production exemption. Form ST-121, Exempt Use Certificate, should be used to claim the exemption from sales tax on the purchase of machinery and equipment used directly and predominantly in the production process. On-Site Assemhly of Charges for on-site assembly of exempt production machinery and equipment by the manufacturer of the Production machinery or equipment, or the manufacturer's subcontractor, Machinery and are considered pan of the selling price of the machinery or Equipment equipment in those instances where it is demonstrated that the machinery or equipment, by virtue of its size, weight, or other physical factors, could not be completely assembled before 14 EFTA01129802  delivery. Thus, such charges and are also eligible for exemption from sales tax. On-site assembly is completed at the point where the machinery or equipment becomes a finished unit. Once assembly of the unit is completed, any further charges are considered to be charges for installing, maintaining, or servicing machinery and equipment. When the machinery or equipment is exempt production machinery and equipment, any additional installation charges are exempt from New York State sales and use taxes. If the on-site assembly is performed within New York City, the additional installation charges will be exempt from the local tax as well. If the on- site assembly is performed in any other locality (other than New York City), the additional installation charges will be subject to the applicable local sales or use tax. For more information, see the section on Installing, Repairing, Maintaining, and Servicing Production Machinery and Equipment beginning on page 16. Example. Equipment is produced and assembled in a manufacturer's plant up to the point where further assembling would make transportation to the customer impossible. The unassembled equipment is then delivered to the customers location where it is welded or bolted together by the manufacturer. This on-site assembly is a continuation of the manufacturing process, and any separately stated charge for such assembly is considered part of the selling price of the equipment, rather than a charge for its installation. Thus, if the equipment qualifies as exempt production equipment, the on-site assembly charge by the manufacturer is also exempt. Rigging Services A manufacturer may employ the services of a rigging company to perform tasks such as transporting, hoisting, and erecting qualifying production machinery and equipment at the manufacturer's plant site. The application of sales tax to various rigging charges appears below. The following charges are exempt from state sales tax and from the sales tax imposed within New York City, but are subject to all other local sales taxes: original installation of equipment reinstallation 15 EFTA01129803  • erection of equipment • re-erection of dismantled equipment, platforms. pedestals or buildings • connection of equipment to outlets • re-connection of equipment to outlets • millwright services including leveling, aligning, setting, and putting equipment into operating condition The above services arc exempt from all state and local sales and use taxes if the services performed result in a capital improvement. (See Part IV for additional information on capital improvements.) The following charges are not subject to any state or local sales taxes when the charge is separately stated on the invoice or other billing document: • dismantling • disconnecting • hoisting and lowering • loading and unloading skidding relocating equipment A manufacturer may rent equipment for self use in performing rigging services. These equipment rentals are subject to state and local sales or use tax. Installing, Charges to install, repair, maintain, or service exempt production machinery and equipment are exempt from state Repairing, sales and use taxes, and from the local tax imposed within Maintaining and New York City. However, such charges are subject to the Servicing applicable local sales or