Do a Georgia manufacturer's light bulbs, lamps, and building-attached light fixtures qualify for the manufacturing machinery and equipment exemption?

Plain-English summary

A Georgia manufacturer purchased bulbs, lamps, and light fixtures for both manufacturing and administrative areas. Some items had specific applications, while most were for general use. The light fixtures were attached to a building, although the taxpayer said they could be removed without damaging the fixture or building.

The Department distinguished replaceable lighting from attached fixtures:

• Bulbs and lamps used in manufacturing qualify. Whether disposable or designed for continuous, repetitive use, a bulb or lamp used by a manufacturer to make tangible personal property at a manufacturing plant meets the definition of manufacturing equipment.
• Attached light fixtures do not qualify. Lighting fixtures attached to a building or land are fixtures and therefore real property. Both machinery and equipment definitions exclude real property, so the manufacturing machinery-and-equipment exemption does not apply.

What this means for you

Manufacturers buying lighting products

Classify the component and its use separately. A bulb or lamp used in the manufacturing process can qualify even when it is a consumable supply. The surrounding fixture attached to the facility does not qualify under this ruling.

Facilities and tax departments

Removability without damage did not change the Department's result for the attached light fixtures described here. The ruling treats lighting fixtures attached to a building or land as real-property fixtures.

Administrative-area lighting

The holding is limited to bulbs or lamps used in the manufacture of tangible personal property at a manufacturing plant. The ruling does not say that every bulb purchased by a manufacturer, including general administrative lighting, is exempt.

Common questions

Q: Are disposable bulbs too short-lived to count as equipment?

A: No. The Department said bulbs and lamps qualify whether readily disposable or designed for long-term continuous or repetitive use, if used in manufacturing.

Q: Why can a consumable bulb qualify as equipment?

A: The cited equipment definition expressly includes consumable supplies, and the ruling identifies bulbs and lamps consumed during manufacturing as such supplies.

Q: Does an attached light fixture qualify if it can be removed without damage?

A: Not on these facts. The Department classified light fixtures attached to a building or land as fixtures and real property, which are excluded from qualifying machinery and equipment.

Q: Are bulbs used only in offices covered by the holding?

A: The ruling's affirmative answer is for bulbs and lamps used by a manufacturer in manufacturing tangible personal property at the plant. It does not extend that holding to purely administrative use.

Q: Can another manufacturer rely on this ruling?

A: No. It is limited to the requesting taxpayer and the facts presented, and later factual or legal changes may produce a different result.

Citations and references

Statutes and regulations:

• O.C.G.A. § 48-8-3.2(a)(1), (3), (4), (7), (10), and (14) -- consumable supplies, equipment, fixtures, machinery, manufacturer, and real property
• O.C.G.A. § 48-8-3.2(b) -- manufacturing machinery and equipment exemption
• O.C.G.A. § 48-8-3.2(d)(1) -- beginning and end of manufacturing
• Ga. Comp. R. & Regs. r. 560-12-2-.62 -- manufacturing definitions and exemption

Source

• Landing page: Georgia Sales & Use Tax Letter Rulings
• Original PDF: LR SUT-2017-19

Original ruling text

Georgia Letter Ruling Number: LR SUT-2017-19
Topic: Manufacturing Exemption
Date Issued: December 14, 2017
This letter is in response to your request for guidance on the application of Georgia sales and use tax to certain
purchases made by [Redacted] (“Taxpayer”).
Facts as Provided by Taxpayer
Taxpayer is a [Redacted] manufacturer located in [Redacted], GA. Taxpayer purchases bulbs, lamps, and light fixtures
for use in Taxpayer’s manufacturing and administrative areas. Typically, most bulbs, lamps, and light fixtures are
purchased for general use; however, some are purchased for specific applications. While the light fixtures at issue are
attached to a building, the removal of a fixture would not damage either the fixture itself or the building to which the
fixture is attached.
Issue(s)
1.

Are bulbs and lamps qualifying manufacturing machinery or equipment?

2.

Are light fixtures attached to a building or land qualifying manufacturing machinery or equipment?

Analysis
Georgia levies and imposes a tax (subject to certain specific exemptions) on the retail purchase, retail sale, storage,
use, or consumption of tangible personal property, certain enumerated services, and utilities.1

Manufacturing Exemptions
Georgia offers several sales and use tax exemptions specific to the manufacturing industry. Only those entities meeting
the definition of a manufacturer can qualify for these exemptions. 2
A “manufacturer” is a person or business, or a location of a person or business that is engaged in the manufacture of
tangible personal property for sale or further manufacturing. To be considered a manufacturer, the person or business,
or the location of a person or business, must be:
•

Classified as a manufacturer under the 2007 North American Industrial Classification System Sectors 21, 31,
32, or 33, or North American Industrial Classification System industry code 22111 or specific code 511110;
or

•

Generally regarded as a manufacturer.

Businesses that are primarily engaged in providing services or in the operation of retail outlets, generally including,
but not limited to, grocery stores, pharmacies, bakeries, or restaurants, are not considered manufacturers.3
Manufacturing Machinery and Equipment Exemption
The sale, use and storage of machinery or equipment that is necessary and integral to the manufacture of tangible
personal property are exempt from sales and use tax.4 The manufacture of tangible personal property begins when
industrial materials are received at a manufacturing plant and ends once the packaging operation is complete and the
tangible personal property is ready for sale or shipment. 5

1

O.C.G.A. §§ 48-8-1, 48-8-2(31)(A), and 48-8-30.
O.C.G.A. § 48-8-3.2(b). Ga. Comp. R. & Regs. r. 560-12-2-.62(3).
3
O.C.G.A. § 48-8-3.2(10). Ga. Comp. R. & Regs. r. 560-12-2-.62(2)(j).
4
O.C.G.A. § 48-8-3.2(b); Ga. Comp. R. & Regs. r. 560-12-2-.62(3).
5
O.C.G.A. § 48-8-3.2(d)(1); Ga. Comp. R. & Regs. r. 560-12-2-.62(2)(i).
2

Georgia Letter Ruling Number: LR SUT-2017-19
Topic: Manufacturing Exemption
Date Issued: December 14, 2017
Page 2 of 2
The following definitions are relevant to this discussion:
“Consumable supplies” means tangible personal property, other than machinery and industrial materials, that is
consumed or expended during the manufacture of tangible personal property. The term includes items that are readily
disposable. The term excludes packaging supplies and energy.6
Bulbs and lamps that are consumed or expended during the manufacturing process are consumable supplies.
“Equipment” means tangible personal property, other than machinery and industrial materials, that are generally
designed for long-term continuous or repetitive use. The term includes consumable supplies. The term also includes
components, and repair or replacement parts. This term excludes real property.7 Whether designed for long-term
continuous or repetitive use, or readily disposable, bulbs and lamps are manufacturing equipment. Real property is
specifically excluded from the definition of equipment.
“Fixtures” means tangible personal property that has been installed or attached to land or to any building thereon and
that is intended to remain permanently in its place. Fixtures are classified as real property. Examples of fixtures
include, but are not limited to, plumbing, lighting fixtures, slabs, and foundations. 8 Lighting fixtures attached to a
building or land are fixtures. Fixtures are real property.
“Machinery” means an assemblage of parts that transmits force, motion, and energy one to the other in a predetermined
manner to accomplish a specific objective. The term includes repair or replacement parts. The term excludes real
property and consumable supplies.9 Real property is specifically excluded from the definition of machinery.
“Real property” means land, any buildings attached to the land, and any fixtures attached to such building or land. 10
Fixtures attached to a building or land are real property.

Ruling(s)
1.

Whether readily disposable, or designed for long-term continuous or repetitive use, a light bulb or lamp used by
a manufacturer in the manufacture of tangible personal property at a manufacturing plant meets both the statutory
and regulatory definition of qualifying manufacturing equipment.

2.

As evidenced by the specific exclusion of real property from both the statutory and regulatory definitions of
qualifying machinery and equipment, Georgia’s manufacturing machinery and equipment exemption does not
extend to real property or fixtures to real property. Light fixtures attached to a building or land are real property
and as such are not qualifying manufacturing machinery and equipment.

The opinions expressed in this ruling are based upon the information contained in your request and limited to the
specific transactions, facts, circumstances, and taxpayer in question. Should the circumstances regarding the
transactions change or differ materially from those represented, this ruling may become invalid. Subsequent statutory
or administrative rule changes or judicial interpretations of the statutes or rules upon which this ruling is based may
subject similar future transactions to different tax treatment than that expressed in this ruling.

6

O.C.G.A. § 48-8-3.2(a)(1); Ga. Comp. R. & Regs. r. 560-12-2-.62(2)(a).
O.C.G.A. § 48-8-3.2(a)(3); Ga. Comp. R. & Regs. r. 560-12-2-.62(2)(c).
8
O.C.G.A. § 48-8-3.2(a)(4); Ga. Comp. R. & Regs. r. 560-12-2-.62(2)(d).
9
O.C.G.A. § 48-8-3.2(a)(7); Ga. Comp. R. & Regs. r. 560-12-2-.62(2)(g).
10
O.C.G.A. § 48-8-3.2(a)(14); Ga. Comp. R. & Regs. r. 560-12-2-.62(2)(n).
7