Application of Sales Tax on Infectious Disease PPE & Safety Equipment:

The Michigan Department of Treasury recently issued guidance addressing the application of the sales and use tax industrial processing exemption for purchases of personal protective equipment (PPE) and safety equipment used to prevent infectious diseases. Michigan allows an exemption from its sales and use tax for purchases of PPE and safety equipment used and consumed in an industrial processing activity. The exemption applies if all the following criteria are met:

  1. The PPE and safety equipment are purchased by the industrial processor or another person engaged in an industrial processing activity on behalf of an industrial processor, including purchases made directly by an employee of an industrial processor,
  2. The PPE and safety equipment are used for the safety of the employees or other authorized personnel, and
  3. The PPE and safety equipment is used in an industrial processing activity.  

Based on this guidance, the following types of PPE could be eligible for exemption if used in an industrial processing activity: respirator masks, safety glasses, ear plugs, ear muffs, safety gloves, steel-toed safety boots, bump-cap helmets, and other equipment and apparel that protects employees and authorized personnel.

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