Manufacturing production machinery is exempt from state and local sales tax, as well as machinery or components bought to upgrade or replace existing machinery; additionally, the exemption covers the re-manufacturing of aircraft engines and components.
The concept of exempting production machinery has been extended to warehouses and distribution centers; their primary material handling equipment is exempt from sales tax if the company invests $5 million or more in a new or expanded facility. Computer equipment that is purchased or leased for use at the facilities of a high technology company is exempt when the total amount of the purchase (or lease) value exceeds $15 million.
Machinery, equipment, and materials purchased and used in a clean room of Class 100 or less are exempt. Electricity interacting directly with a manufactured product is exempt if the total cost of the electricity is more than half the cost of all materials used (including electricity) in making the product.