North Dakota Administrative Code › Title 81 - Tax Commissioner › Article 81-04.1 - Sales and Use Taxes › Chapter 81-04.1-01 - General Rules › Section 81-04.1-01-23.1 - Recyclers

Current through Supplement No. 393, July, 2024
Recycling means collecting or recovering solid waste material
				  and processing it so it becomes a raw material or another product for sale. The
				  recycling process begins at the point where the raw materials are first
				  received at the recycling facility and includes all direct processes prior to
				  transporting the product from the facility. To qualify as recycling, the solid
				  waste must be processed. Collecting or transporting waste materials without
				  processing them is not recycling.
Recycling machinery and equipment are exempt from sales and
				  use taxes if the machinery or equipment:
1. Is used solely in the process of recycling
				solid waste that will become a raw material for manufacturing or that will
				become a product for sale at retail or wholesale; and
2. Is used in a new recycling facility or in
				a physical or economic expansion of an existing facility.
Machinery and equipment used directly in recycling of
				  tangible personal property include pulverizers, shredders, balers, granulators,
				  separators, and conveyors. Motor vehicles used to collect material to be
				  recycled do not qualify for the exemption. Items consumed or destroyed in the
				  recycling process, but which do not become a part of the finished product, are
				  not considered recycling machinery or equipment and are subject to sales tax
				  when purchased for use by the recycler.
Requests for approval to buy recycling machinery or equipment
				  without paying tax or for refunds of tax paid on machinery or equipment that
				  qualifies for the exemption must be made in writing to the tax commissioner.
				  The tax commissioner reserves the right to make an onsite inspection prior to
				  granting permission to purchase qualifying machinery or equipment without
				  paying tax or prior to approving a refund. An onsite inspection by the tax
				  commissioner does not preclude an audit of the taxpayer's books and records.
The tax commissioner shall respond to each exemption request
				  in writing stating whether or not the machinery or equipment qualifies as
				  exempt recycling machinery or equipment. The recycler may provide the approval
				  letter to equipment and machinery suppliers to avoid paying sales or use tax on
				  approved equipment.
If a recycler purchases equipment before requesting a sales
				  tax exemption, it must pay all applicable sales and use taxes at the time of
				  purchase; however, the recycler may apply to the tax commissioner for a refund
				  of taxes paid on qualifying equipment. When a recycler applies for a sales or
				  use tax refund on qualifying machinery and equipment, the exemption application
				  must include documentation showing the amount of tax paid.
General Authority: NDCC
					 57-39.2-19
Law Implemented: NDCC
					 57-39.2-01,
					 57-39.2-02.1,
					 57-39.2-04,
					 57-39.2-04.3,
					 57-39.2-25,
					 57-40.2-02.1,
					 57-40.2-04,
					 57-40.2-13