What is the definition of industrial processing and who qualifies?
A – Industrial processing is the activity of converting or conditioning tangible personal property by changing the form, composition, quality, combination, or character of the property for ultimate sale at retail or for use in the manufacturing of a product to be ultimately sold at retail. Industrial processing begins when tangible personal property begins movement from raw materials storage to begin industrial processing and ends when finished goods first come to rest in finished goods inventory storage. An industrial processor therefore is a person who performs the activity of converting or conditioning tangible personal property for ultimate sale at retail or use in the manufacturing of a product to be ultimately sold at retail. Taxpayers often find it difficult to determine which activities constitute industrial processing versus shipping, receiving, warehousing or administrative activities for example. This is a major area of focus by State auditors. Our analysis and insight into
