17 NCAC 07B .1905          SALES TO TIRE RECAPPERS

(a)  Sales to tire recappers of camelback or other rubber products, cement and rubber solvent, cord fabric, wheel weights and other items of a similar nature which enter into or become an ingredient or component part of the recapped tires or are attached to and delivered with the tires to the customer are exempt from tax.

(b)  The gross receipts derived by a utility from sales of electricity to tire recappers for use in connection with the operation of the recapping plant are subject to tax at the rate set in G.S. 105-164.4.  Sales of other fuel, except piped natural gas, to tire recappers for use in connection with the operation of the recapping plant are exempt from sales tax.  Sales of piped natural gas are exempt from sales tax and are subject to the excise tax imposed by Article 5E of G.S. 105.

(c)  Sales to tire recappers of mill machinery, or parts and accessories therefor, for use exclusively in the recapping process are exempt from sales tax.  Sales to contractors and subcontractors of mill machinery or mill machinery parts and accessories for use by them in the performance of contracts with manufacturing industries and plants and sales to subcontractors purchasing mill machinery or mill machinery parts and accessories for use by them in the performance of contracts encompassed in such contracts with manufacturing industries and plants are exempt from sales tax. Such mill machinery or mill machinery parts and accessories must be for use by tire recappers in the production process, as the term "production" is defined in 17 NCAC 07D .0102(a)(1), to qualify for the exemption from sales and use tax when purchased by such contractors or subcontractors.  Contractors and subcontractors may obtain Streamlined Sales and Use Tax Agreement Certificate of Exemption, Form E-595E, from the Taxpayer Assistance Division, North Carolina Department of Revenue, to be executed by them and furnished to their vendors in connection with such purchases as the vendor's authority to apply the exemption.  The following items when sold to tire recappers for use exclusively in the recapping process are considered to be mill machinery or mill machinery parts and accessories within the meaning of the Sales and Use Tax Article:

(1)           wire brushes;

(2)           mold lube;

(3)           curing tubes and rims;

(4)           molds and matrices;

(5)           buffing equipment;

(6)           buffing discs;

(7)           buffing rasps;

(8)           rasp teeth;

(9)           crayons for marking tires;

(10)         tire trimmers;

(11)         boilers;

(12)         tire handling equipment used exclusively between the beginning and ending steps of the recapping process;

(13)         inspection spreaders used exclusively to inspect casings being recapped;

(14)         spinners used for applying cement used on casings being recapped;

(15)         pre‑condensing tanks for air lines used for applying cement, dusting buffed casings, and inflating curing tubes;

(16)         casing balancers used exclusively in balancing casings to be recapped;

(17)         tread builders used to apply tread rubber to casings being recapped;

(18)         air compressors used exclusively in retreading or recapping process;

(19)         dust collectors;

(20)         knives, stitchers, rollers, shears, awls, and splicing tools used to perform work on the ingredient material or the manufactured product;

(21)         thermometers, pyrometers, and durometers used in testing mold heat and cure hardness of the rubber used in the recapping process;

(22)         bagging and debagging equipment;

(23)         sprayers used exclusively in the recapping process;

(24)         matrix loaders;

(25)         steam traps and valves used in steam lines for curing molds; and

(26)         mold cleaners.

(d)  The following are examples of items which are subject to the applicable statutory state and local sales or use tax when sold to tire recappers for use or consumption:

(1)           motor vehicle jacks;

(2)           tire tools not used between the beginning and ending recapping processes;

(3)           balancing machinery used after recapping process is completed;

(4)           equipment used to remove tires from the rim before the recapping process begins;

(5)           administrative equipment such as office supplies, file cabinets and other office equipment;

(6)           cleaning compounds for janitorial and sanitary purposes;

(7)           uniforms for employees;

(8)           advertising materials;

(9)           lubricants, repair parts and accessories for motor vehicles;

(10)         inspection bags; and

(11)         gloves.

(e)  The lists in Paragraphs (c) and (d) of this Rule are not intended to be exclusive but are for illustrative purposes only.  If there is any question as to the tax status of any item not on the lists, it may be submitted to the Secretary of Revenue for a determination as to the applicable rate of tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; 105‑264; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. October 1, 2009; July 1, 1999; October 1, 1993; June 1, 1992; October 1, 1991; May 1, 1985.