What does Illinois Private Letter Ruling ST 18-0006-PLR conclude about Manufacturing Machinery & Equipment?

Plain-English summary

A recycling company planning a new single-stream recycling processing facility in Illinois asked the Department of Revenue whether its planned sorting and processing operation counted as "manufacturing" for sales and use tax purposes, and whether the machinery it planned to buy and install would qualify for the Retailers' Occupation Tax (ROT) and Use Tax (UT) exemption for manufacturing machinery and equipment under 86 Ill. Adm. Code 130.330.

The Department agreed with almost everything the taxpayer proposed. It ruled that the described process of taking mixed residential and commercial recyclables (paper, cardboard, glass, plastics, metals) and running them through drum feeders, screens, air separators, magnets, eddy current separators, trommels, ballistic separators, optical sorters, conveyors, and balers to produce marketable raw-material commodities is "manufacturing" under the rule, because it substantially and significantly changes valueless mixed waste into materials with a different form, use, and marketable name. As a result, the equipment used in that line (items 2 through 17 of the taxpayer's process description, plus the drum feeder in item 1) qualifies for the exemption and is not subject to ROT or UT.

The one piece of equipment the Department did NOT exempt was the front-end loader — the machine that first scoops and "fluffs" incoming raw material on the tipping floor before it goes into the drum feeder. The Department reasoned that, whatever fluffing effect the loader has, its primary function is to convey, handle, or transport material before it enters the production cycle, which 86 Ill. Adm. Code 130.330(d)(4) treats as a non-exempt pre-production activity rather than manufacturing.

This is a Private Letter Ruling (PLR), not a General Information Letter (GIL) or regulation of general application. It binds the Department only as to the specific taxpayer who requested it, and only to the extent the facts the taxpayer described (the layout and function of the equipment, the sequence of processing steps, and the absence of prior audit or litigation on the issue) were accurate and complete.

What this means for you

Recycling and materials-recovery facility operators

If your facility's equipment performs a similar role to the equipment described here — screens, air/density separators, magnets, eddy current separators, trommels, ballistic separators, optical sorters, conveyors that move material through the line, and balers that compress the finished commodity for sale — this ruling shows the Department's reasoning for treating that equipment as exempt manufacturing machinery. But watch the boundary the Department drew: equipment whose primary job is to receive, handle, or convey raw material before it enters the production process (like the front-end loader here) was treated as non-exempt pre-production/material-handling equipment, even though it performed some processing function.

Business owners and equipment purchasers

Before assuming an exemption applies to your own purchases, remember this ruling turned on a very specific, itemized description of each machine's function in the process (17 numbered steps). If you want certainty for your own operation, the ruling shows that a Private Letter Ruling request under 2 Ill. Adm. Code 1200.110, with a similarly detailed factual description, is the way the Department expects taxpayers to seek that certainty — a general reading of this PLR is not itself authorization to self-apply the exemption.

Accountants and tax professionals

The Department applied the two-pronged manufacturing exemption test from 35 ILCS 120/2-5(14) and 35 ILCS 105/3-5(18) (the property must be manufacturing/assembly machinery or equipment, and it must be used primarily — over 50% of the time — in manufacturing), plus the substantial-and-significant-change test in 86 Ill. Adm. Code 130.330(b)(2), and the pre-production/post-production carve-out in 130.330(d)(4)(C). Note that the Department explicitly stated it had not previously issued guidance on this specific recycling-equipment question in the prior ten years, so this PLR (while binding only on this taxpayer) is one of the few data points on how the Department analyzes recycling-line equipment under the manufacturing exemption.

Common questions

Q: Does this ruling mean all recycling equipment is exempt from Illinois sales and use tax?
A: No. The Department exempted the specific equipment described in the taxpayer's 17-step process (screens, separators, magnets, trommels, ballistic separators, optical sorters, conveyors, and balers) because it found that equipment was used primarily in a process that substantially and significantly changes waste material into marketable recycled commodities. It specifically declined to exempt the front-end loader used earlier in the same line.

Q: Why was the front-end loader treated differently from the drum feeder right next to it?
A: The Department found the drum feeder's rotating drum with cleats performs an integral fluffing/processing step within the manufacturing line. The front-end loader, by contrast, was found to primarily convey, handle, or transport raw material before it enters the production cycle — a pre-production function excluded from the exemption under 86 Ill. Adm. Code 130.330(d)(4).

Q: Can I rely on this ruling for my own business?
A: No, not directly. This is a Private Letter Ruling, which under 2 Ill. Adm. Code 1200.110 binds the Department only with respect to the specific taxpayer who requested it, and only to the extent that taxpayer's facts were correct and complete. Other taxpayers, even those with very similar equipment, cannot rely on this letter as authority for their own tax treatment; they would need to request their own PLR or GIL, or consult a tax professional about how the underlying statutes and rule apply to their specific facts.

Q: Does this ruling stay valid forever?
A: No. The letter itself notes that a PLR is revoked and ceases to bind the Department 10 years after issuance under 2 Ill. Adm. Code 1200.110(e), or earlier if there is a pertinent change in statutory law, case law, rules, or in the facts on which the ruling was based. This ruling was issued July 11, 2018.

Citations and references

Statutes and rules:

• 35 ILCS 120/2-1 (Retailers' Occupation Tax imposition on retail sales of tangible personal property)
• 35 ILCS 120/2-5(14) (ROT manufacturing machinery and equipment exemption)
• 35 ILCS 105/2 (Use Tax imposition)
• 35 ILCS 105/3-5(18) (UT manufacturing machinery and equipment exemption)
• 86 Ill. Adm. Code 130.330 (definitions and requirements for the manufacturing machinery and equipment exemption, including the "primarily used" test at (d) and the pre-production/post-production exclusion at (d)(4)(C))
• 2 Ill. Adm. Code 1200.110 (Private Letter Ruling procedure, binding effect limited to the requesting taxpayer, and 10-year expiration under subsection (e))

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2018.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2018/st-18-0006-plr.pdf

Original ruling text

ST 18-0006-PLR 07/11/2018

MANUFACTURING MACHINERY & EQUIPMENT

Machinery and equipment used in a recycling processing facility to produce recycled material
for wholesale or retail sale qualifies for the manufacturing machinery and equipment
exemption. See 86 Ill. Adm. Code 130.330. (This is a PLR.)

July 11, 2018
Re: Private Letter Ruling Request – Retailers’ Occupation Tax, Use Tax and Exemptions as
applied to Recycling Facilities
Dear Xxxxx:
This letter is in response to your letter dated May 15, 2018, in which you requested
information. The Department issues two types of letter rulings. Private Letter Rulings (“PLRs”) are
issued by the Department in response to specific taxpayer inquiries concerning the application of a
tax statute or rule to a particular fact situation. A PLR is binding on the Department, but only as to the
taxpayer who is the subject of the request for ruling and only to the extent the facts recited in the PLR
are correct and complete. Persons seeking PLRs must comply with the procedures for PLRs found in
the Department’s regulations at 2 Ill. Adm. Code 1200.110. The purpose of a General Information
Letter (“GIL”) is to direct taxpayers to Department regulations or other sources of information
regarding the topic about which they have inquired. A GIL is not a statement of Department policy
and is not binding on the Department. See 2 Ill. Adm. Code 1200.120. You may access our website
at www.tax.illinois.gov to review regulations, letter rulings and other types of information relevant to
your inquiry.
Review of your request disclosed that all the information described in paragraphs 1 through 8
of Section 1200.110 appears to be contained in your request. This Private Letter Ruling will bind the
Department only with respect to COMPANY, for the issue or issues presented in this ruling, and is
subject to the provisions of subsection (e) of Section 1200.110 governing expiration of Private Letter
Rulings. Issuance of this ruling is conditioned upon the understanding that neither COMPANY, nor a
related taxpayer is currently under audit or involved in litigation concerning the issues that are the
subject of this ruling request. In your letter you have stated and made inquiry as follows:
On behalf of our client, COMPANY (FEIN – ###/ IBT – ###) (“ACRONYM” or the
“Company”), please allow this to serve as a request for a Private Letter Ruling as
authorized by the Department of Revenue pursuant to 2 Ill. Adm. Code 1200.110 with
respect to the inquiry detailed below. If the Department has any questions relating to
the facts described, please contact the undersigned.
The firm of FIRM(the “Representative”) is authorized to request the Private Letter Ruling
on behalf of the Company. An executed power of attorney is attached. Taxpayer
identifying information is set out as follows:
COMPANY
CONTACT
ADDRESS

ST 18-0006-PLR
PAGE 2
Statement of Facts
Taxpayer Information
This Private Letter Ruling (“PLR”) is requested to determine the Retailer’s [sic]
Occupation Tax and Use Tax consequences of actual business practices of the
Company. The Company is not currently the subject of litigation or audit regarding the
application of this exemption to purchases made in Illinois. To the best of the
knowledge of both the Company and Representative, the Department has not
previously ruled on this or a similar issue for the taxpayer or any predecessor. The
Company, and any of its representatives, have not previously submitted the same or
similar issue to the Department of Revenue (the “Department”) and withdrawn before a
letter ruling was issued.
Description of Company’s Business Operations
COMPANY is a recycling company that accepts and processes residential and
commercial materials and commodities such as paper, glass, plastics, and metals. The
Company receives materials from related entities, third party waste haulers, and other
customers. It performs a variety of activities to prepare these materials for sale through
its advanced processing and sorting systems. Examples of materials processed include
post-consumer paper, cardboard, plastic, clear and colored glass, aluminum, steel, and
tin. Once processed these materials are sold to businesses such as paper mills,
manufacturers, and other industries as a supply stream of high-quality raw materials
needed for efficient operations.
Material Facts Relating to PLR Request
The Company is contemplating an expansion of its recycling infrastructure by opening a
new single-stream recycling processing facility in Illinois. COMPANY’s processing of
raw recycling materials will employ state-of-the-art equipment components such as
Motor Control Centers, automated machinery for processing (such as optical sorters,
magnets and eddy currents, rotating trommels, advanced screens) and self-regulated
conveyors and balers.
Transfer vehicles with trailers entering and exiting the site are weighed on the site’s
truck scale. Trucks are then directed to the tipping area to unload the raw material.

1. Raw material on the tipping floor is first fluffed by a Front-End Loader machine (the
   loader bucket picks up the raw material and drops it and mixes the raw material)
   before feeding it into the Drum Feeder. This is a necessary first step so that the
   material is not compacted and will better separate through the entire remaining
   production process. The drum feeder has a large rotating drum with cleats that
   further breaks up clumps of compacted raw material and further fluffs the material
   into a lower density and transforms it into a metered, steady stream of liberated
   materials.

ST 18-0006-PLR
PAGE 3

2. The Drum Feeder discharges the material onto a pit conveyor, then an incline
   conveyor which transfers material onto a weigh conveyor fitted with belt scales to
   continuously weigh the material being processed.
3. The material is then sent across an OCC (old corrugated cardboard) Screen- an
   advanced elevated star screen technology by which OCC is automatically removed
   from the stream and conveyed to the OCC Conveyor after going through a quality
   control (QC) station. OCC QC inspectors manually remove any contaminants, which
   are conveyed to the contaminants conveyors ending at a rejects compactor. Mixed
   rigid plastics and bulky metals are also separated and removed at this step in the
   process.
4. The remaining raw material (after passing the OCC screen) is split into two parallel
   streams and conveyed to the Glass Breaker Screens. The Glass Breaker Screens
   have metal rotating discs designed to break the glass down to a smaller size which,
   after falling through the screen, is conveyed to the glass processing area which uses
   light-heavy density material separation to clean the glass of paper shreds and
   contaminants before glass is stored in a concrete bunker.
5. Raw material apart from the glass is then conveyed to the WalAir Separators,
   which use air blowers and rotating drums to perform a light-heavy density material
   separation to split the material into three streams. The heavy bulky materials are
   separated out first and are conveyed to a drum magnet to recover and separate
   ferrous metals and the remainder, is sent down a contaminants conveyor to a
   Compactor. The second fraction is mostly Containers (plastics, small ferrous, and
   aluminum) and is sent to the Trommels (see #7 on enclosed schematic)
6. The third materials (predominantly newspaper) from the WalAir Separators are
   conveyed to two Optical Sorters which automatically perform a quality control of the
   newspaper and eject contaminants by the use of optical scanning and compressed
   air. The newspaper is conveyed to a long, slow moving staging conveyor before
   being conveyed to the baler. The ejected contaminants are combined with the
   Containers stream headed to the Trommels. The Optical Sorters also use air
   blowers and suction hoods/ductwork to extract the low density plastic film (such as
   plastic grocery bags) which are discharged onto the Contaminants conveyor headed
   to the Compactor.
7. The (mostly) Containers stream is then processed through two rotating Trommels
   that perform a sizing separation of three streams (six in all – 2x3).
8. Each of the six streams of material from the Trommels are conveyed to a Ballistic
   Separator that performs three separations: smaller fines material (which is
   accumulated and then conveyed to the glass processing line), overs fraction 2D
   material (mostly Mixed Paper which is discharged onto optical sorters that perform
   an automated Quality Control of the Mixed Paper to eject contaminants) and
   Cardboard (conveyed to meet with cardboard separated in step #3 above).

ST 18-0006-PLR
PAGE 4
Containers (bottles and cans) and contaminant rejects are conveyed to the Backs of
the Ballistic Separators and then to the Container Processing area.

9. The material from the Backs of the Ballistic Separators are gathered together and
   conveyed to the Container processing line. This line begins with a rotating Drum
   Magnet which removes ferrous material that is then conveyed to a storage
   container.
10. The material that passes by the Drum Magnet is sent to two in-line Eddy Current
    Separators which use eddy current fields to eject non-ferrous metals material
    (mostly aluminum cans). The second Eddy Current Separator performs a Quality
    Control of the ejected stream from the first Eddy Current, before the non-ferrous
    metal is conveyed to a dedicated non-ferrous Baler.
11. After the Eddy Current separation process, the remainders are conveyed to an
    Optical Sorter designed to remove any residual paper from the material stream. The
    ejected paper is conveyed to meet with the Mixed Paper stream from above #8.
12. The pass material from the above Optical Sorter is conveyed to the PET Optical
    Sorter which ejects PET (polyethylene terephthalate) plastics material. The PET
    material is run through a second quality control optical sorter to remove any
    contaminants before being discharged in a slow-moving staging conveyor and then
    baled.
13. Pass material from the PET Optical Sorter is conveyed to the HDPE Optical Sorter
    which ejects HDPE (high-density polyethylene) plastics materials. The HDPE
    material is run through a second quality control optical sorter to remove any
    contaminants before being discharged in a staging conveyor and then baled.
14. Pass material from the HDPE Optical Sorter is conveyed to the PP Optical Sorter
    which ejects polypropylene plastics material. The PP material is run through a
    second quality control optical sorter to remove any contaminants before being
    discharged in a staging conveyor and then baled.
15. Pass material from the PP Optical Sorter is mostly contaminants/ or reject material
    but before being sent to a Compactor, the material is conveyed to a Residue
    Recovery Optical Sorter designed to eject out any residual recyclables to be
    discharged and conveyed back to the beginning stages of the system (at #4 above)
    for another chance of being recovered.
16. The pass material of the Residue Recovery Optical Sorter is residue/rejects material
    and is conveyed to a diverter hopper feeding one of two compactors.
17. All recyclable material from the reversing staging conveyors are ultimately conveyed
    onto one of two baler in-feed conveyors, which meters the material into the balers.
    Balers then compact the materials, creating compressed bales of recycled
    commodities, which are wrapped with bailing wire, ready for sale.

ST 18-0006-PLR
PAGE 5

Through systematic processing, the Company takes raw materials which are not usable
in their incoming state and manufactures products for which not only is there a market,
but which indeed are sold.
Requested Ruling
The Company requests that the Department rule that the described recycling activities
are regarded as manufacturing. Further, to the extent that the activities are declared to
be manufacturing, the equipment used in that process shall fall within the Retailers’
Occupation Tax and Use Tax exemption for machinery and equipment.
Statement of Law
Statutes, Rules, and Rulings:
35 ILCS 120/2-1
35 ILCS 120/2-5
35 ILCS 105/2
86 Ill. Adm. Code 130.330
The Illinois Retailer’s Occupation Tax (“ROT”) and Use Tax (“UT”) impose a tax on
persons engaged in the business of making retail sales of tangible personal property
(TPP). 35 ILCS 120/2-1; 35 ILCS 105/2. The ROT and UT rules provide however, an
exemption for certain property, if it satisfies a two-pronged test:

1. That property is manufacturing or assembly machinery and equipment, and
2. The property is used primarily in the process of manufacturing. 35 ILCS
   120/2-5(14); 35 ILCS 105/3-5(18).
   For the purposes of the exemption, manufacturing or assembly “machinery” means
   major mechanical machines or major components of such machines contributing to a
   manufacturing or assembling process. 86 Ill. Adm. Code 130.330(c)(2). “Equipment”
   includes any independent device or tool separate from any machinery but essential to
   an integrated manufacturing or assembling process. 86 Ill. Adm. Code 130.330(c)(3).
   Machinery and equipment does not include foundations for, or special purpose buildings
   to house or support, machinery and equipment. 86 Ill. Adm. Code 130.330(c)(5).
   The exemption requires that the machinery and equipment is used primarily (over 50%
   of the time) in the manufacturing or assembling of TPP whether it is a finished product
   or an article for use in the process of manufacturing or assembling a different article of
   TPP by procedures commonly regarded as manufacturing, processing, fabricating, or
   refining. 86 Ill. Adm. Code 130.330(d). However, the exemption does not apply to
   machinery or equipment used primarily in pre-production or post-production activities.
   86 Ill. Adm. Code 130.330(d)(4)(C). Further, the manufacturing process is the
   production of any article of tangible personal property by procedures commonly
   regarded as manufacturing, processing, fabricating or refining that substantially and

ST 18-0006-PLR
PAGE 6
significantly changes some existing material or materials into a material with a different
form, use or name. 86 Ill. Adm. Code 130.330(b)(2).
Analysis of Grounds for Requested Ruling
We have examined the relevant statutes, regulations, and guidance issued by the
Department. Unfortunately, the Department has not issued any letter rulings or
guidance on this topic within the last ten years that the taxpayer or state can rely on.
However, as stated above, the sale or use of manufacturing and/or assembly machinery
and equipment used primarily in manufacturing is exempt from the ROT/UT. 86 Ill.
Adm. Code 130.330.

1. The Front-End Loader Machine and Drum Feeder are exempt from ROT/UT.
   To qualify for the ROT/UT manufacturing exemption, TPP must satisfy the two-pronged
   test provided for by statute. The front-end loader and drum feeder clearly satisfy the
   requirement that it be machinery and equipment provided by the state. The front-end
   loader is a piece of heavy machinery that picks up raw materials deposited on the
   tipping floor and “fluffs” the previously compacted materials moving them to the drum
   feeder. This equipment performs a step integral to the recycling process as this
   process separates the raw material into the various individually recyclable components
   that will be sortable by the processes that follow. After this initial step, the front-end
   loader dumps the separated material into a drum feeder, which is a large rotating drum
   with cleats, or sharp projecting spikes, that further fluff and break apart any remaining
   compacted materials into their component parts. After the compacted raw material is
   broken apart into a steady stream of components, the drum feeder unloads its contents
   to be conveyed for further processing. As a result, this machinery satisfies the first
   prong of the exemption.
   The front-end loader and drum feeder also satisfy the second prong relating to a
   primary use in the manufacturing process. These machines are used exclusively in the
   processes described above, and therefore meet the greater than 50% use requirement.
   Furthermore, although the processing of compacted materials into component parts
   does not result in a finished product, it nevertheless is a manufacturing process with
   results in an article for future use in manufacturing, processing, fabricating, or refining.
   The resulting product is significantly changed from useless waste material into
   component parts of individual value and use. With both prongs satisfied, the front-end
   loader and drum feeder qualify for the ROT/UT manufacturing exemption.
2. The Screens, Sorters, Separators, Trommels, and Magnets are exempt from
   ROT/UT.
   After the initial processing by the front-end loader and drum feeder, the Company uses
   a series of screens, sorters, and other equipment to isolate and process individual types
   of recyclable materials into marketable raw materials for sale. These machines also
   conform to the requirements for the manufacturing exemption and thus are not subject
   to ROT/UT.

ST 18-0006-PLR
PAGE 7

To isolate materials such as cardboard and glass, the Company uses two specially
designed mechanical screens. An OCC Screen is a piece of machinery that
automatically removes cardboard from the full material stream for compacting and
baling. Glass Breaker Screens use large metal rotating disks that break glass and
separate the pieces from the remaining materials and the resulting glass shards are
stored for later sale.
Additional machinery is used to separate other valuable material from the material
stream. WalAir Separators use blowers and drums to separate lightweight materials
from heavy or bulkier ones. Drum magnets separate ferrous metals while an Eddy
Current Separator uses eddy currents fields to eject aluminum and non-ferrous metals
from the flow of materials. Trommels are large rotating pieces of machinery which
perform a size separation of the materials passing through the stream which works in
conjunction with a ballistic separator that performs three separations: glass, paper and
containers (bottles and cans). Finally, the Company uses optical sorters to remove
newspaper, as well as polyethylene terephthalate (PET), high-density polyethylene
(HDPE), and polypropylene plastics to be bailed.
These machines each satisfy the first prong for the exemption. Each machine
contributes to the process of taking a valueless waste material, and separating, sorting,
crushing, breaking, and bailing recovered valuable resources into marketable goods for
sale as input material for industrial clients. Furthermore, the second prong is satisfied
as these machines only serve the manufacturing processes described, they have no
separate use independently. Finally, the result of both processes is the transformation
of waste into material of a different form and use, marketable and useable by a variety
of industries as valuable raw material. Thus, the screens, sorters, separators,
trommels, and magnets are exempt from ROT/UT under the manufacturing exemption.

3. Conveyors are exempt from ROT/UT.
   Conveyors are located throughout the manufacturing process, moving the fluffed
   material into the drum feeder and feeding them into the pit conveyor, to the incline
   conveyor which transfers material onto a weigh conveyor, to the OCC conveyor through
   to the glass breaker screens to the glass bunkers or WalAir separators. From here
   conveyors move contaminates to a compactor and remainders to Optical sorters, then
   newspapers to balers and the rest of the work in process materials to Trommels and
   Ballistic Separators on to, depending on the material, optical sorters, drum magnets,
   and eddy current separators, and finally to compactors or balers. Conveyors are an
   integral part of the manufacturing process, moving our client’s raw materials/inputs from
   the first stage of the process to the last stage of manufacturing process (packaging),
   where materials are compressed and baled, ready for customers to purchase. As such,
   conveyors qualify for the ROT/UT manufacturing exemption.
4. Balers are exempt for ROT/UT.

ST 18-0006-PLR
PAGE 8
The balers are the final part of the processing stage, where the commodities are
packaged, as part of the integrated manufacturing process, compressing and wrapping
with baling wire the various recycled commodities, ready for sale to customers. As
such, bailers qualify for the ROT/UT manufacturing exemption.
Authorities Contrary to Requested Ruling
As mentioned previously, the State has not issued any letter rulings or guidance on this
topic within the last 10 years that the taxpayer or state can rely on.
Conclusion
The single stream recycling process which will be implemented in Illinois by COMPANY
should be considered manufacturing and the equipment, beginning with the front-end
loader fluffing materials through the balers performing compacting and wrapping of
ready for sale commodities, purchased and used within the process should qualify as
exempt manufacturing equipment under 86 Ill. Adm. Code 130.330. Equipment used
within the integrated manufacturing line produce [sic] products which are sold to paper,
plastic, and bottle manufacturers who further process these items for sale.
We respectfully request a letter ruling on the issues presented in this letter. Thank you
for your time and consideration in this matter. If you have any questions, or require
additional information, please feel free to contact me.
DEPARTMENT’S RESPONSE:
Machinery and equipment that is used primarily in the manufacturing or assembling of tangible
personal property for wholesale or retail sale or lease is exempt from Retailers’ Occupation Tax. See
86 Ill. Adm. Code 130.330. The manufacturing process is the production of any article of tangible
personal property, whether such article is a finished product or an article for use in the process of
manufacturing or assembling a different article of tangible personal property, by procedures
commonly regarded as manufacturing, processing, fabricating, or refining which changes some
existing material or materials into a material with a different form, use or name. These changes must
result from the process in question and be substantial and significant. See Section 130.330(b)(2).
The Department is of the opinion that the recycling process you describe in items 2 through 17
under “Material Facts Relating to PLR Request” qualifies as manufacturing under the provisions of 86
Ill. Adm. Code 130.330 and that the machinery and equipment used in that process qualify for
exemption from the Retailers’ Occupation Tax and Use Tax. In addition, the drum feeder described in
item 1 qualifies as manufacturing machinery under the rule. However, the front-end loader described
in item 1 does not qualify as manufacturing machinery under the rule. The Department is of the
opinion that, regardless of any fluffing the front-end loader may perform, the primary use of the frontend loader is to convey, handle, or transport materials prior to their entrance into the production cycle
in accordance with 86 Ill. Adm. Code 130.330(d)(4).

ST 18-0006-PLR
PAGE 9
The factual representations upon which this ruling is based are subject to review by the
Department during the course of any audit, investigation, or hearing and this ruling shall bind the
Department only if the factual representations recited in this ruling are correct and complete. This
Private Letter Ruling is revoked and will cease to bind the Department 10 years after the date of this
letter under the provisions of 2 Ill. Adm. Code 1200.110(e) or earlier if there is a pertinent change in
statutory law, case law, rules or in the factual representations recited in this ruling.
If you have further questions concerning this Private Letter Ruling, you may contact me at
(217) 782-2844. If you have further questions related to the Illinois sales tax laws, please visit our
website at www.tax.illinois.gov or contact the Department’s Taxpayer Information Division at (217)
782-3336.
Very truly yours,

Richard S. Wolters
Chairman, Private Letter Ruling Committee
RSW:SJM:bkl