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How do I properly document an exempt sale or purchase of machinery and equipment used for manufacturing, production agriculture, or coal and aggregate mining?
- Manufacturing or assembling machinery and equipment used primarily in the process of manufacturing or assembling of tangible personal property for wholesale or retail sale or lease, including graphic arts machinery equipment to be used primarily for graphic arts production. 35 ILCS 120/2-5(4), (14); 35 ILCS 105/3-5(6), (18). Effective July 1, 2019, the manufacturing machinery and equipment exemption includes production related tangible personal property. See 35 ILCS 120/2-45.
- Farm machinery and equipment used primarily for production agriculture. 35 ILCS 120/2-5(2); 35 ILCS 105/3-5(11).
- Coal and aggregate exploration, mining, off-highway hauling, processing, maintenance, and reclamation equipment. 35 ILCS 120/2-5(21); 35 ILCS 105/3-5(16).
A manufacturer may claim a tax exemption on sales or purchases of the following tangible personal property to be used for any of the following exempt purposes:
The seller must use Form ST-587, Equipment Exemption Certificate, to document an exempt sale or purchase and must maintain a copy of Form ST-587 in its records. 86 Ill. Adm. Code Sections 130.305(m), 130.330(f), 130.350(f), 130.351(f).
Note: “Used primarily” has been interpreted to mean used over 50% of the time. 86 Ill. Adm. Code 130.330.