Can a commercial dry cleaner qualify for Tennessee manufacturing exemptions?
No. The Tennessee law provides certain exemptions from sales and use tax to manufacturers. Industrial machinery is exempt from sales and use tax, and utilities used by manufacturers are subject to tax at reduced rates (T.C.A. Section 67-6-206). To qualify for these exemptions, a taxpayer must be principally engaged in the fabrication or processing of tangible personal property for resale. Dry-cleaning and laundry services do not constitute ” fabricating or processing tangible personal property for resale.” The purpose of laundry and dry-cleaning services is to restore an item to its original state, not to change it into a new state or form. Additionally, cleaning services are addressed by Tenn. Code Ann. Section 67-6-102(25)(F), which clearly states that the laundering or dry-cleaning of any kind of tangible personal property constitutes a taxable service. Thus, a commercial dry cleaner cannot qualify for Tennessee manufacturing exemptions.
