Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.02 - IDAHO SALES AND USE TAX ADMINISTRATIVE RULES › Section 35.01.02.080 - LUMBER MANUFACTURING

Current through August 31, 2023
Sections
				63-3622,
				63-3622D,
				63-3622HH, Idaho Code This rule is
				intended to illustrate the application of the production exemption to the
				lumber manufacturing industry. The provisions of this rule are based upon the
				usual methods of doing business used in the industry generally. Factual
				differences in the manner in which a specific taxpayer may conduct its business
				can result in determinations different from those stated in this rule. In cases
				not covered by this rule, the general principles stated in Rule
				079 of these rules will control.
				Some equipment may be used for more than one purpose. Determinations of
				taxability will be based upon the equipment's primary use. This rule is limited
				in application to the manufacturing of rough and finished lumber and does not
				encompass the manufacturing of plywood, particleboard, veneer, or paper
				products. (3-31-22)
01.
Nontaxable Activities
. Generally considered as nontaxable
			 activities are the following: (3-31-22)
a.
			 Log receiving including log loaders, cranes, and front end loaders.
			 (3-31-22)
b. Log deck/log pond
			 including log loading equipment and boats moving logs from the storage area to
			 the debarker; sprinkler equipment when used for prevention of product
			 deterioration; and devices used to detect metal in logs. (3-31-22)
c. Debarking equipment used to strip bark
			 from logs including conveyor equipment for moving debarked logs further into
			 the mill or for conveying bark when bark is used as boiler fuel or when
			 conveying bark to a further processing stage. (3-31-22)
d. Chipper, used to produce chips including
			 chip storage bins and pneumatic conveyors. (3-31-22)
e. Mill deck, as used for grading and cutting
			 to length. (3-31-22)
f.
			 Headrig/shotgun, as used for sawing logs. (3-31-22)
g. Edger, as used for edging rough lumber.
			 (3-31-22)
h. Trimmer, as used for
			 trimming to length. (3-31-22)
i.
			 Resaw, as used for producing the proper thickness. (3-31-22)
j. Green chain, as used to determine
			 according to size and species the amount of time required in the dry kiln.
			 (3-31-22)
k. Dry kiln, as used to
			 reduce moisture content. This exemption encompasses fire brick, steam pipe and
			 fans inside the kiln but does not include improvements to real property.
			 (3-31-22)
l. Unstackers.
			 (3-31-22)
m. Planers, as used for
			 finishing, grading and grade stamping of specialty products.
			 (3-31-22)
n. Boiler when used for
			 the generation of steam used to operate production equipment.
			 (3-31-22)
o. Powerhouse when used
			 to generate power used to operate production equipment. (3-31-22)
p. Waste collection, as used for the
			 collection of waste products for use as fuel for the boiler, generally referred
			 to as hog fuel. (3-31-22)
q. Lumber
			 wrap and steel strapping used for packaging material. (3-31-22)
r. Pollution control equipment when required
			 by a state or federal agency. (3-31-22)
s. Equipment used primarily to install exempt
			 equipment. (3-31-22)
t. Equipment
			 used primarily to fabricate exempt equipment. (3-31-22)
u. Safety equipment and supplies required by
			 a state or federal agency and used in a production area. (3-31-22)
v. Equipment and supplies used in the
			 performance of a quality control function which is an integral and necessary
			 step in maintaining specific product standards. (3-31-22)